Priced Out of Buying, Some Renters Pay to Renovate
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Here's your Money Briefing for Friday, December 9th. I'm Daniela Cheslow for The Wall Street Journal, filling in for J.R. Whelan. Sky-high housing prices have made it harder for people to think about buying their homes. But renters still want to love where they live, and they're willing to pay for it.
There is a value that people get from enjoying their space, being able to have a place where they can come home, feel relaxed, or maybe even host. So even if it doesn't make financial sense, it's hard to say that it makes zero sense.
On today's show, our personal economics reporter Imani Moise will talk about why people are spending to spruce up homes they don't own. That's after the break.
Housing affordability in the U.S. is at a low. One real estate consulting firm found that in September, buying a single-family home cost $888 more a month than renting. You might think that tenants wouldn't want to spend much to improve their temporary digs, but Wall Street Journal personal economics reporter Imani Moise found that increasingly, they are. She's been speaking to renters who are investing in nesting. And she joins me now. Hi. Hi. Thanks for having me. Thank you for being here. You've been talking to renters who are investing in their homes as if they own the place.
How are U.S. housing affordability trends driving renters to renovate?
Why are they doing that?
Renters in urban centers like New York City, like Los Angeles, what they're seeing is home prices rise so quickly that they're kind of becoming discouraged and losing faith in their ability to become a homeowner in the foreseeable future. I talked to one renter who actually tried to buy a house in 2015, but that fell apart. It was construction delays, but prices have appreciated over 40% in New York City since then. So she actually described her apartment as a luxury and said she plans to invest in it and make it her home.
You spoke to some folks who are doing improvements at home. What kind of changes are they making to their rentals?
The first place a lot of renters start is with temporary wallpaper, just because it's really affordable and you could install it yourself. And the way it's marketed, they say that it doesn't damage your walls, which doesn't put your security deposit at risk. You're also seeing people look for other easily reversible changes that they can make, like swapping out the hardware on your cabinets or your drawers, doorknobs, and even temporary floors. Right.
Really, temporary floors, like putting on linoleum tiles?
Yeah, it could be carpeting, tiles. There's been a lot of advances in the technology that makes these things more removable than the paste or the grout that used to be required to install these things.
Does this make financial sense for renters?
It depends on what you mean by financial sense. There is a value that people get from enjoying their space, being able to have a place where they can come home, feel relaxed, or maybe even host. So even if it doesn't make financial sense, it's hard to say that it makes zero sense.
What do experts say in terms of how to keep the costs reasonable or even how to convince your landlord to pay for part of it or all of it?
The thing to keep in mind when you're renting is that lease agreements typically require you to return your unit to the state that it was on move-in day. So, if you do want to make changes, that means if you do that on your own, you'll have to pay the cost of reversing all of those changes. However, if you want to make improvements and you can convince your landlord that the improvements are beneficial to you and the landlord as a property owner, they may offer to chip in or even reduce your rent for making those improvements.
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