How Renter Occupations Vary by Apartment Building Size
The size of an apartment property can tell you a lot about how its tenants earn a living. Larger assets typically mean larger incomes.
Residents in dense urban cores are typically employed in better paying high-skill jobs. This makes sense, as high-paying jobs are typically concentrated in downtown areas. Such jobs include those in science, technology, engineering and mathematics (STEM), management, business, finance, design, arts and media activities. For purposes here, we’ll refer to these as STEM-Plus occupations.
Given their urban location and ability to afford higher rents, a greater share of residents in large (50+ units), amenity-rich apartment buildings are employed in STEM-Plus jobs.
By contrast, the relatively more suburban small properties with lower rents cater to workers employed over a broader range of occupations and wages. For small property (5 to 49 units) operators, pricing apartment inventory that targets workers in occupations ranging from ‘roots to STEM’ makes for sensible market strategy.
As show below, residents employed in high-skill STEM-Plus occupations comprised 32 percent of all workers living in large apartment buildings in 2014. This was also the single most concentrated group of workers across all apartment property types — small or large. In comparison, only about 22 percent of small building residents were employed in STEM-Plus jobs.
Source: Chandan Economics, 2014 American Community Survey
Small property residents were skewed more toward medium- to low-skilled activities such as sales and office support, local services, construction and maintenance, and production and transportation occupations.
Further, because small property renters tend to be younger, and earlier in their careers, they also have lower average wages compared to large building renters. As shown below, this is true across all occupational categories, but most pronounced in STEM-Plus jobs, where a combination of worker age and a premium for urban location results in large apartment residents earning nearly 38 percent higher incomes on average compared to their small building counterparts.
Source: Chandan Economics, 2014 American Community Survey