Atlanta is experiencing a tremendous growth spurt. In the last year, the city has added half a million residents, ranking as the sixth largest such growth in the nation. With so many new residents coming, it’s no wonder that Atlanta has become a hotspot for the US rental market. According to Norada Real Estate Investments data, almost 50% of households in Atlanta are renters. Similarly, RentCafe reports a record number of rental inquiries on their platform has occurred in the last twelve months.

Clearly, Atlanta has become highly attractive to renters — but what’s behind this trend, and can it be expected to continue? 

Renting vs. Buying

The major reason for Atlanta’s rental market surge will probably not surprise you: affordability. The housing market has been soaring all across the United States, making it increasingly more difficult for aspiring homeowners—especially younger ones—to find a house within their budget. By comparison, the rental market is much more affordable, even in a major metropolitan area like Atlanta.

For example, the average monthly rent in Atlanta is about $1,500 for a one-bedroom apartment, which is lower than several comparable cities such as New York, San Francisco, or Los Angeles. Some Atlanta neighborhoods, such as West End and East Atlanta Village, might offer rent as low as $1,200 to $1,400 monthly. Now compare this to the average mortgage payment in Atlanta, which is over $2,300 and rising. The financial advantages of renting are clear for young professionals or couples just starting out.

Cost of Living and Economic Opportunities

In addition to reasonable rental prices, the overall cost of living in Atlanta is relatively low, with common expenses like food, fuel, transportation and healthcare being more affordable than elsewhere in the States. This allows residents who rent more opportunities to enjoy a high quality of life without straining their finances too much.

Atlanta’s surging job market is another reason the city is particularly attractive to renters. In recent years, the city has become a hub for technology, film production, and logistics, providing abundant opportunities for young entrepreneurs and professionals. Some larger companies operating in Atlanta include Coca-Cola, Delta Airlines, and several lucrative tech startups. When moving for a job, it often makes sense to rent instead of buying a home (in case things don’t work out at said job), which is another reason for the bolstered rental market.

Some neighborhoods in Atlanta have also undergone rapid development and growth, which draws the attention of both developers and home-buyers, increasing the opportunity for more rental units to be built. The same goes for infrastructure developments such as transportation networks and “smart city” initiatives, which help drive up Atlanta’s livability rating and attract more people.

Insurance Costs

Another point in favor of renting in the state of Georgia is the dramatic difference in insurance costs. Georgia’s average yearly homeowner’s insurance premium is around $2000, which is already lower than the national average. But as The Zebra’s Kristine Lee points out, Georgia’s average renter’s insurance premium is a mere $235 annually — almost ten times cheaper. The low cost of getting coverage against lost possessions and liability issues can make a big difference.

What Atlanta is Doing to Increase Affordable Housing

Unfortunately, the high demand for Atlanta real estate is a two-edged sword, even for the renter’s market. Experts predict a sustained growth trajectory for the city’s real estate market, but rising property values can make accessibility and affordability an issue.

Atlanta’s city council has not ignored the realities of renting in the city. To help cope with increasing demand and keep housing affordable for residents, the council has undertaken a number of initiatives, mostly aimed at low—and moderate-income residents.

One such initiative is an inclusive zoning ordinance, which requires developers to set aside a portion of new residential units for low-income families. This policy is designed to promote mixed-income communities and help avoid the issue of economic segregation in Atlanta.

The city has also allocated funds to support more construction and preservation of affordable housing through several public-private partnerships. Other initiatives include providing tax reductions and other incentives for housing developers.

Finally, Atlanta’s city council seeks ways to repurpose underutilized city-owned properties to create more affordable housing. Unused land and buildings can be converted into residential units, further easing the housing shortage and providing more opportunities for renters.

Atlanta’s real estate market will continue to evolve as the city’s population increases and its economy grows. While this might be challenging for potential and aspiring homeowners, it couldn’t be a better time for renters.

Published by: Holy Minoza