For months, we have seen in the data how the large-scale shifts coming out of the Pandemic have impacted the housing markets around the country. In terms of rents, tenants have left big expensive places, such as San Francisco, Silicon Valley, Boston, or Manhattan, thereby leaving behind high vacancy rates, plunging rents, and massive churn by the stayers-behind that are chasing that free upgrade to a nicer apartment, as landlords are trying to keep their units filled.

And we have seen in the data that this outflux has created, conversely, a large-scale influx in the destination places, usually less expensive markets, and have driven up rents in those markets.

But there is a troubling component to this shift. Rents are plunging in places with some of the highest household incomes, and they’re soaring in places with much lower household incomes, thereby shifting the housing affordability crisis to people who can least afford it – and it has done so in a matter of months.

The table below lists the 16 counties (of the 100 largest counties) with year-over-year rent declines in February between 10% and 24%. It also shows the median 1-BR asking rent and the median household income, based on a new study by Zumper on the affordability issues that the shifts have caused.

Just to make a point about nothing being universal, there is also a county on the list with a large year-over-year rent decline and one of the lowest rents and one of the lowest household incomes in the US ($41,800): Hidalgo County in Texas.

In terms of median household incomes, San Francisco ($124k) and the Silicon Valley counties of Santa Clara ($133k) and San Mateo ($138k) top the list, and they also top the list in terms of rent declines. For these folks that stayed behind, renting has gotten a lot less unaffordable, so to speak. (If your smartphone clips the sixth column on the right, hold your device in landscape position).

1-BR rent Y/Y % HH Income
1 San Francisco County CA 2,663 -24% 123,859
2 Santa Clara County (Silicon Valley) CA 2,196 -21% 133,076
3 Suffolk County (Boston area) MA 2,000 -20% 77,558
4 San Mateo County (Silicon Valley) CA 2,195 -19% 138,500
5 Kings County (Brooklyn) NY 2,108 -18% 66,937
6 New York County (Manhattan) NY 2,955 -17% 93,651
7 Middlesex County (Boston area) MA 1,918 -17% 107,056
8 Hudson County (along Hudson River, facing Manhattan) NJ 1,900 -16% 78,808
9 King County (Seattle) WA 1,595 -15% 102,594
10 Queens County (Queens) NY 1,825 -14% 73,696
11 Hidalgo County (McAllen, border) TX 605 -13% 41,800
12 Norfolk County (SW of Boston) MA 2,095 -12% 107,361
13 Alameda County (Oakland) CA 1,995 -11% 108,322
14 Lake County (Chicago area) IL 1,235 -11% 92,511
15 District of Columbia DC 2,107 -11% 92,266
16 Hennepin County (Minneapolis) MN 1,260 -10% 82,369

And most of the 16 counties that had year-over-year rent whoppers between +10% and +22% are the ones with relatively modest median household incomes, compared to the most affluent counties. Particularly stunning is the 22% rent surge in Detroit and Indianapolis where median household incomes are at the low end of the spectrum, and this is going to hurt.

 1-BR rent Y/Y % HH Income
1 Baltimore County MD 1,445 22% 77,358
2 Wayne County (Detroit) MI 1,050 22% 50,753
3 Marion County (Indianapolis) IN 996 22% 50,458
4 Pierce County (Tacoma) WA 1,450 21% 79,243
5 Fresno County CA 1,175 21% 57,518
6 El Paso County CO 1,150 16% 72,830
7 Kern County (Bakersfield) CA 925 16% 53,067
8 Oakland County (Detroit area) MI 1,109 16% 81,190
9 Monroe County (Rochester) NY 1,160 14% 62,103
10 DeKalb County (Atlanta) GA 1,452 13% 63,652
11 San Bernardino County CA 1,550 13% 67,903
12 Shelby County (Memphis) TN 950 12% 52,614
13 Gwinnett County (near Atlanta) GA 1,283 10% 72,109
14 Duval County (Jacksonville) FL 1,005 10% 58,415
15 Bexar County (San Antonio) TX 970 10% 58,964
16 Sacramento County CA 1,425 10% 72,017

There is another element here. Some of the counties on this list are geographically near very expensive housing markets with high household incomes, such as the counties of Kern and San Bernardino to the Los Angeles and San Diego urban areas; or the counties of Sacramento and Fresno to the San Francisco Bay Area, indicating that people move to less expensive cities that are within a few hours’ drive from where they used to be.

Given the huge populations, such as in New York City, Los Angeles, or the Bay Area, they can easily distort the rents in smaller less expensive markets. And as rents drop in expensive cities and soar in cheaper cities, the difference between the two collapses to where at some point, the move isn’t worth it anymore.

The chart shows the difference between 1-BR rents in San Francisco and Sacramento, which has collapsed by 50%, and the difference between 1-BR rents in San Francisco and Fresno, which has collapsed by 46%:

What has essentially taken place is a shift of renters from the most affluent counties to the less affluent counties, and once that shift started gaining momentum, rents surged in those receiving counties.

Some of these people who moved retained their jobs but had shifted to working from anywhere; and they brought their high household incomes with them, and they’re used to the much higher rents in their expensive markets, and they’re bidding up the rents and they still think they’re getting a deal.

But at the receiving end of these shifts are renters with relatively modest household incomes that now have to compete with an influx of renters with high household incomes, and they’re now facing massive and unaffordable rent increases.