What defines an affordable zip code? If you are a renter, you likely want to pay the least amount of rent possible in an area with a high median household income. We took all of Texas' zip codes that have $/sf rental data from Zillow.com. Then we multiplied the $/sf rental rates with an average unit size of 850 sf. Next, we divided the zip code's median household income by the yearly rental cost of an 850 sf unit. By this crude measure, the most affordable zip codes are the zip codes with the lowest annual rental cost as a percentage of median household income. Our results are below:
What might explain these results? First, the zip code might have older multifamily housing stock with lower rent levels. Second, the zip code might have larger housing units (larger than 850 sf) which would make the total rent level a higher percentage of median household income. Finally, the zip code might have new multifamily supply and also a really high median household income.
The zip codes with the highest $/sf rents in the table above are Austin's 78746, Houston's 77024, and San Antonio's 78257, each of which are outside of their respective city's inner ring. Downtown zip codes didn't make the cut. Although downtown zip codes are rising in terms of median household income, these higher density areas also tend to have the highest rent levels, making them much less affordable. Finally, a curious result was that the least affordable zip code in Texas was Austin's 78705. This is the zip code that is home to the West Campus neighborhood and the University of Texas. The incredibly high rent levels, combined with a very low median household income (due to all of the students) made this zip code the least affordable on our list.
If you are interested in narrowing down specific sites by zip code, feel free to give Site Identify a try. Site Identify allows you to search for development sites in specific zip codes, and can even pinpoint sites based on zoning, acreage, year built, land use, and value. If interested in learning more, Click Here to Schedule an Online Demonstration.
The official Site Identify blog
David Morin (co-founder)