Report: Renters contributed $5.2 billion to Inland Empire economy


Renters are rocking the Inland Empire economy, to the tune of billions of dollars, according to a new report. Apartment business in the Inland Empire has contributed $5.2 billion to the regional economy...

Renters are rocking the Inland Empire economy, to the tune of billions of dollars, according to a new report.

Apartment business in the Inland Empire has contributed $5.2 billion to the regional economy in 2013 - from which the latest data is available, according to The National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA).

The report, authored by Stephen Fuller, Ph.D., of George Mason University’s Center for Regional Analysis, also said that same apartment business also supported 45,500 jobs in that year.

Figures were calculated by looking at revenue from apartment construction, operations and resident spending in Riverside and San Bernardino counties.

“The reason this number has relevance is that it allows the renter to gain full value for what they contribute to the economy,” Fuller said. “Renters in many cities, maybe not Los Angeles, are not viewed as important as homeowners ... What I’ve done is measure what the average renter household contributes to the economy.”

And there’s more value to come, observers say. With demography shifts, attitudes toward home buying changing and people still a bit spooked from the aftermath of the Great Recession, there’s simply a lot of people out there wanting to rent, and that’s fueling some of the numbers.

“The percentage of households that are renters are increasing compared to owners and so renters will become even more important economic forces in the local economy as their number increases,” Fuller said.

In many communities throughout the country, the national average shows home ownership has dropped about 4 percentage points since 2008, and renters have gained those 4 percentage points each at the national level, with each percentage point being about a million households.

John Husing, chief economist for the Inland Empire Economic Partnership business advocacy group, said that with the regional housing market flat, “what you’re seeing is large numbers of people, either by choice or by need, going into the apartment market.”

“It’s not a surprise, the market has been very, very strong,” Husing said.

The average regional monthly rent was at $1,204 in the fourth quarter of 2014 for properties with 100 or more apartment units. The figure is up from $1,142, from the same period in 2013, according to the report.

Recently, in a list of the best cities for renters across Southern California put out this year by the personal finance website Nerdwallet, Loma Linda ranked third on the list with a high number of renters and a quality university providing jobs.

Fuller said the demographic trends show younger households, with people just out of college, “may not be able to afford a mortgage, or may not want one either.”

“At least 4 million households are renters today, and those would have been owners 10 years ago, before the recession,” Fuller said.

Randall Lewis, executive vice president of the Lewis Group of Companies, which builds and manages apartment complexes throughout the Inland Empire, echoed Fuller’s assessment on what he’s seen in the local region.

“Our (rental) occupancy this year versus five years ago is up 1 to 3 percent,” Lewis said. “One of the key strategies of our company has always been to be market-driven and be able to react quickly to shifts in the marketplace, so as we’re seeing the strength in the market, we will (build) 3,000 to 4,000 apartment units in the next five to six years (in the region).

In the past decade, Lewis said the Lewis Group has build just under 9,000 units. Lewis said demographic changes driving the trend include more one and two person households, fewer kids, and more retirees.

“Our company is making a major commitment to do more apartments because of this market opportunity,” said Lewis, who added that the development company is still very much committed to the for-sale market .

“We believe a large part of the population still wants to own a home,” Lewis said. “It’s just that home ownership rates have gone down in the last few years and we expect they’ll probably stay that way at the current levels.”

Lewis’ development company has recently opened several apartment properties in the area, including the Enclave at Homecoming and Santa Barbara, both in Rancho Cucamonga, and is halfway complete with it’s Homecoming in the Preserve community in Chino.

A new report from the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA), included a look at the impact the apartment rental business had on the Inland Empire. The data below is from research by economist Stephen Fuller, of George Mason University’s Center for Regional Analysis.

In the Inland Empire:

· The economic impact from the apartment industry totaled $5.2 billion, supporting 45,500 jobs.

· The economic impact of local apartment construction totaled $427.0 million.

· The economic impact of local apartment operations totaled $1.1 billion.

· Apartment construction and operations supported $451.4 million in personal earnings for workers.

· Renter spending in the region contributed $3.7 billion to the local economy.

· The total economic contribution of the apartment industry and its residents in the state totaled $139.1 billion and supported 1.3 million jobs.


Neil covers the economy for the Inland Valley Daily Bulletin, The Sun and the Redlands Daily Facts. Reach the author at %3Ea%2F%3C6000ps4000psswengnal1000pssorepsin4000pslien%3E%22sorepsiN%20lieN%20liaM-E%22%3Deltit%20%22%3Btuo-esae%20s14000ps0%203000psnoitisnart-tikbew-%20%3Btuo-esae%20s14000ps0%203000psnoitisnart%20%3Benon%203000psnoitaroced-txet%20%3B%29471%20%2C021%20%2C28%28bgr%203000psroloc%20%3Bxp16427240002564000ps22%203000psthgieh-enil%22%3Delyts%20%226000ps4000psswengnal1000pssorepsin4000pslien3000psot2000ps%22%3Dferh%20a%3C or follow Neil on Twitter: @ReporterNeil.

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