There are people out there who prefer to rent an apartment than own a house. For them, the American dream is being able to call building maintenance to repair a dripping faucet or clogged toilet instead of hanging around the house for several days waiting for the plumber.
They prefer to hear a doorman wish them a pleasant day instead of programming the burglar alarm when they leave for work. They’d rather watch paid professionals care for their surroundings than have to drag the lawnmower out in the heat of summer or shovel snow in the dead of winter.
Peter Leokum, who has lived in a Center City, Pa., high-rise, for 16 years, puts it like this:
“I never worry about flooded basements or electrical power outages, as you would if you owned a house. If there ever was a problem, they have 24-hour maintenance on site, so all I’d need to do is call one number and the matter would be taken care of quickly.”
Allan Domb, who sells condos in Center City high-rises for a living, calls these people “professional renters.” They are young professionals, with or without children, who don’t have time to worry about a whole house, or else they’re empty nesters who have moved from a suburban home back to the city.
Builders and real estate agents say it has never been easier to buy a home, but the share of households headed by renters and homeowners was the same in the first quarter of 1996 — 65 percent homeowners versus 35 percent renters — as it was in the fourth quarter of 1978, the first year the Census Bureau took the survey.
Those percentages have changed only slightly over the years.
There was a slight uptick in the number of homeowners earlier this year, according to Census statistics, but the increase did nothing to alter the 65-35 ratio.
Often, it is assumed that people rent because they can’t afford to own. Many fit that profile — renting while they squirrel away enough money to buy a house or dreaming of homeownership but never quite having the discipline to save enough to realize the dream.
But renters live in apartments for a variety of reasons, most having to do with lifestyle. A recent survey of 2,700 tenants by a San Francisco apartment management company found that 36 percent liked the flexibility that apartment living offered.
The survey also showed that 75 percent had no plans to move and that only 12 percent expected to buy a home.
Stephanie Friedman is “ecstatic” with her apartment, where she has lived for the last two years, and doesn’t plan to move anytime soon.
She owned a condo in Center City for 10 years, next door to her grandfather. When he died, she decided to move, and, rather than buy another condo, she decided to rent. Her apartment fits her tastes and lifestyle.
“I wanted something with a fireplace and high ceilings,” Friedman said. “It was smaller than the building that housed my condo — 60 units instead of 330 — and the apartments were individual, instead of cookie-cutter. They have a European look.”
Major concerns were security and convenience.
“I need to be in the city because I travel a lot,” Friedman said, “and I can get to the train and airport more easily from here. “It gives me more time to spend going to restaurants or with friends, some of whom rent like I do and some of whom own,” she said.
Roz and Av Canter were homeowners, too. The last house they owned was a townhouse in Ardmore, Pa. Two years ago, they and their adult children moved to a recently renovated 1920s complex in Germantown, Pa.
“It was a lateral move rather than downsizing,” said Roz, who commutes almost every day to her travel business, Flyways & Byways, in Shillington, which is near Reading, Pa. “Our apartment is 2,500 square feet, which is larger than many houses and certainly bigger than our Ardmore townhouse.”
The typical house has about 1,900 square feet of living space, an increase of about 200 square feet since the late 1970s. And apartment builders have kept pace. The typical apartment being built in 1995 had about 1,040 square feet, compared with 860 square feet in 1978.
The Canters are representative of a growing segment of the rental market — aging baby boomers. According to recent surveys by M/PF Research, of Dallas, 30 percent of all apartments are occupied by someone over the age of 50, and 18 percent by someone over 65.
Renters also are becoming more affluent. According to Robert J. Sheehan of Regis Sheehan & Associates in McLean, Va., which tracks the rental market nationwide, about 1.1 million more renters had annual incomes above $50,000 in 1993 than in 1989.
“Part of the explanation is the general rise in incomes nationally,” he said. “Another factor is the aging of the baby boom generation. Baby boomers continue to move toward the highest-income age groups.”
There are income-tax advantages to owning a house, of course. Mortgage-interest payments continue to be deductible, and there is talk that the maximum limits on such deductions, reduced in 1986, might be raised again. Surveys by the National Association of Home Builders have shown that the deduction can make the difference between owning and renting for low- and middle-income people, not for those in higher-income tax brackets.
“The luxury rental-housing market will continue to benefit from aging baby boomers who elect to remain renters for the next several years at least,” Sheehan said.
For almost a decade boomers have been the primary influence on the development of the luxury-home market. Boomers turned the kitchen/great-room complex into, in the words of Joan McCloskey, an editor at Better Homes & Gardens, “the living room of the ’90s.” They also have been responsible for such innovations as home offices, his-and-her showers, and fully equipped, state-of-the-art media rooms.
Many apartment developers are incorporating these innovations into new buildings.
As they become empty nesters and grow less eager to live in “single-family homes with their time-consuming and expensive maintenance costs and taxes,” aging boomers will be heading to luxury apartments with the same amenities they had as homeowners, according to Heather Finlay, a partner in JPI 2000, an Irving, Texas, developer of luxury apartment complexes.
“The home of the future may very well be a luxury apartment community, where residents meet each other along idyllic garden walkways, measure their energy consumption by person, and have instant access to computer databases with movies on demand 24 hours a day,” Finlay said.
Also working in favor of renting is the slow appreciation of single-family houses over the last decade.
“It’s been pretty flat for a while, and, after inflation, prices have actually fallen since late 1989 and 1990,” economist Mark Zandi said.
This has made investment in homes less attractive to many high-income people, especially older ones.
Most apartment dwellers don’t own cars, and that’s been a boost not only to public transportation but to downtown retailers. A combination of apartment dwellers and retail and commercial space provides a major source of investment opportunities.
