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Industry Trends

Rising Rents in Traditionally “Affordable” Areas: The Impact on Mobility

For Mobility Leaders, housing affordability has remains a key consideration in talent mobility strategies. By moving employees to lower cost regions, companies save money and employees improve their quality of life. But recent data shows that rents in traditionally affordable areas are on the rise.

USA Today cites the Bank of America Institute’s analysis of check, debit, credit card and other types of rent payments by tens of millions of customers which showed that rents in the most affordable U.S. zip codes rose 7.6% last year. This surpassed increases in areas with mid-range (4.4%) and high-end (3.4%) homes.

Hidden Costs

Since the pandemic, employees have flocked to more affordable cities like Indianapolis, Columbus, and Duluth to avoid high rents in larger metros. However, this increased demand has pushed up rents in these markets. For example, a young professional in Duluth cited a $155 monthly rent increase on a modest unit with no amenities, forcing her to downsize to a smaller unit.

This trend creates several challenges for mobility leaders:

  • Predicting Costs has become increasingly complex: Even data from last year may not show the full picture of extreme rent inflation in previously affordable markets.
  • Erosion of employee satisfaction and retention: Without proper attention and care, some mobility programs may put excessive financial stress on relocating employees leading to burnout and increased turnover.

Evolving Mobility Strategy

Employees on the lower end of the pay scale are feeling the crunch the most. According to Harvard’s Joint Center for Housing Studies, 83% of renters earning under $30,000 annually spend more than a third of their income on rent. That number climbs to 80% for those in the lowest income category.

Rent is rising fast in even the most surprising of markets:

  • Wichita, KS is expected to lead the nation with a 9.8% rent increase in 2025 according to RealFacts.
  • Cleveland, OH and Kansas City, MO will witness 3.5%–5.3% hikes according to BiggerPockets and Apartments.com.

What Can Mobility Leaders Do Now?

To combat the impacts of rising rents, mobility leaders may want to consider:

  • More frequent cost-of-living adjustments, especially in fast-changing markets.
  • Increased relocation stipends or temporary housing benefits to insulate employees against initial rent shocks.
  • Partnering with an experienced relocation management company to aid employees in finding stable, reasonably priced housing options.
  • Providing financial wellness resources to relocating employees to help them budget and plan effectively.

If you need help navigating the affordable housing puzzle, reach out to CapRelo. We provide mobility leaders with expert guidance and comprehensive support to navigate the rental process. We tailor our services to meet individual needs, offering in-depth needs analysis, area tours, pre-screening properties, and lease negotiations. With access to a network of extensively trained destination rental specialists and virtual home-finding tools, we will ensure your employees enjoy a seamless and efficient rental experience.