More Remote Work Leads to Lower Rents in Urban Areas

As the US enters into its third month under various stages of stay-at-home orders due to the coronavirus pandemic, rents nationwide decreased .2 percent for one-bedrooms to $1,217 on average.

Compared to last year, rents for one- and two-bedroom homes decreased .5 percent according to a report from Zumper. Two-bedroom rentals stayed at the same average price of $1,473.

Since stay-at-home orders went into effect in mid-March, many companies allowed office employees to work remotely from their homes. The shift from commuting into offices to working remotely may have caused the decrease in rental prices, as employees are shying from metropolitan areas with high price tags.

San Francisco leads the rental price decrease as the city with the biggest drop in rent prices since last year. The median price for one-bedroom apartments in San Francisco is $3,360, down 9.2 percent from this time last year. The dip in price is the lowest rent seen in San Francisco since March 2017.

Other major cities which were affected the most include New York City, Boston, and San Jose. New York City saw a 1.0 percent dip to $2,950 for one-bedroom apartments and 2.4 decrease in rent to $3,220 for two-bedroom apartments this year. Boston had a 2 percent decrease to $2,450 for one-bedroom apartments and 1.8 percent decrease to $2,900 for two-bedroom apartments. San Jose experienced a less dramatic decrease in rents, with a .4 percent decrease to $2,420 for one-bedrooms and 1 percent decrease to $2,950 for two-bedroom apartments since last year.

The pandemic’s effect on rents may affect urban areas more, as renters were unable to use city amenities during quarantine. Proximity to local restaurants, bars, coffee shops, parks, and libraries would not be useful if they were all closed to the public. The closings, plus the lack of a commute due to remote work at home, most likely made living in city centers with expensive rents less appealing to renters.