In-Depth

Is Renting On The Rise After Harvey?

Losing a home to a flood is devastating. Does renting make more sense for homeowners in Houston who keep getting flooded?

Guadalupe Mares grew up in the Hidden Forest neighborhood just north of I-10 East and still lives in the same house with her mom and brother.

Harvey flooded it to the roof.

“To this day, the outside of the house is done,” Mares said. “Just the inside, we’re still working on it.”

She said they plan on staying here, despite the frequent flooding. Water previously entered the house during Tropical Storm Allison in 2001 and Hurricane Ike in 2008.

The property’s 2018 value dropped to a third of last year’s, entirely due to structural damage.

“My mom, I guess she’s just hard-headed,” Mares said. “It was her first house that she owned and, you know, being an immigrant from Mexico coming over here, she worked really hard to get her dream house.”

But is it worth it in an area that floods often?

Mares said they like the neighborhood because it’s quiet and the neighbors are friendly. On top of that, it’s affordable.

But instead of owning, would they be better off renting? If it ever floods again, they wouldn’t have to worry about rebuilding; they could just move.

Mares doesn’t think it would make much of a difference.

“Seeing all my stuff, like my prom pictures, my baby pictures, my graduation pictures, my diploma, everything – not even mine but my brother’s as well, my mom’s stuff – everything was just destroyed and it was just really hard,” she said. “So I feel like even if you’re renting or owning the house, you still go through the same thing.”

Are More People Renting?

Right after Harvey, thousands of homeowners moved into apartments and rental homes while their houses were repaired.

It’s hard to say how many stayed renters. But what is known is that the apartment industry did not see an exodus of tenants this year – at least not on a net basis. 

Bruce McClenny, president of ApartmentData.com, said apartments have seen really good numbers in 2018.

“And I wasn’t expecting that at all,” he said. “I was expecting more of a flat based upon an expectation that more renters who were homeowners would be moving out.”

But again, it’s hard to say what the cause is because Houston’s economy is robust, and lots of people are moving here and renting.

Meanwhile, home sales have been growing as well.

“Nothing indicates that our market has shifted in any significant amount from ownership to rental due to Harvey,” Ed Wolff, president of Beth Wolff Realtors, said. He points out that 2018 is on pace to be another record year for home sales.

“For people who’ve been used to living in a home that they owned and are now in a rental situation, after three to five months they start recognizing what they liked about home ownership,” Wolff said.

Michelle Pawelek, senior director at Greystar Real Estate Partners and the 2018 president of the Houston Apartment Association, said from speaking to apartment managers, it doesn’t seem that very many former homeowners stayed renters.

“We were hopeful that they might see the quality of apartments had changed, that lifestyle, the amenities available, lock-and-leave communities, all the services, and that people would want to stay,” Pawelek said. “But we have really experienced the mass of people moving back into their homes.”

What’s more, according to the Houston Association of Realtors, condo and single-family home lease volumes have overall declined this year.

Jim Gaines, chief economist at Texas A&M’s Real Estate Center, said, sure, for people who want to live in flood-prone areas, renting may be better than owning.

But people who are ready to settle down will still buy, and in Houston, flooding will always be a risk, no matter where you live.

“You may or may not get hit,” Gaines said. “If you get hit, it’s catastrophic. But it could hit one side of the street and not the other.”

That’s why, he said, for anyone buying a house in Greater Houston, flood insurance is crucial.

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Florian Martin

Florian Martin

Business Reporter

Florian Martin is currently the News 88.7 business reporter. Florian’s stories can frequently be heard on other public radio stations throughout Texas and on NPR nationwide. Some of them have earned him awards from Texas AP Broadcasters and the Houston Press Club. Florian is a native of Germany. His studies...

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