“Manhattanization” is what one article has recently labelled the up cropping of towers, or buildings with fifteen or more stories, in many U.S. cities, including Baltimore. Comparing the relatively small city of Baltimore to Manhattan signals the changing landscape of charm city, due in large part to developers and urban planners excited to see growth in the area. The number of renter-occupied housing units is slightly higher than owner-occupied units, with the share of homeownership between 2008 and 2012 showing a near 50/50 split. To accommodate the growing trend of renting over buying, the Downtown Partnership estimates that nearly 6,000 new units will need to be added by 2017. A majority of the new units are expected to incorporate sustainable design elements – another growing trend in Maryland.
A number of possible explanations for the growing preference of renting were summarized during a recent webinar by the Economic Alliance of Greater Baltimore (EAGB):
- Young renters desire flexibility in housing choices;
- Would-be homeowners cannot afford a down payment;
- Home ownership as an investment has become less attractive; and
- Older renters desire low maintenance housing with nearby amenities.
This common, growing renting preference is despite the increasing cost of renting relative to home ownership. Studies by RealtyTrac found Baltimore to be the most favorable U.S. city for home buyers. Home buyers in Baltimore pay $1,160 less than renters per month. This is nearly four times the cost of home ownership in the city, when comparing average rental rates to average monthly mortgage payments. So, while some renters are choosing to pay higher rents in exchange for flexibility and luxury amenities, the renters who would own a home if it weren’t for the expensive down payment are not really making a choice. They were nearly out of choices, and soon those choices will be privatized.
Buzz around the city indicates that Baltimore is gearing up for a future as a startup hub with hybrid industries of health, education, and information technology. If the city’s wishes are granted, living in Baltimore could become a Silicon Valley scenario in terms of increasing rental rates due to a booming local technology industry. Considering the typical earnings of people in such industries, and the young age of many tech entrepreneurs, it’s likely this preference for renting will continue along with increasing rental rates.
The renters I mentioned whose last hope is to rent may end up displaced, and, adding to the uncertainty, a new housing program is being tested in Baltimore and other cities to privatize public housing. The program is an attempt to improve conditions of public, low-income housing, but many are concerned the program “means diminished safeguards for current residents.” In summary, Baltimore is looking at higher paying jobs, greener architecture, and increasing private investment, which could potentially come at the expense of displacing current residents.
Do you think Baltimore can move up without pushing some of its already struggling residents further down?
Credits: Images by Jade Clayton. Data linked to sources.