Study: What Do Coffee Shops and Rent Prices Have in Common?
Looking to move to a new neighborhood? You might want to pay attention to the coffee shops in the area—they can tell you more than you might realize.
It’s not necessarily a direct correlation, but a recent report from RentHop shows that the number of coffee shops in a neighborhood can actually be an indicator of the rent prices there. The study, which aimed to explore the connection between coffee shops and rent prices by analyzing RentHop’s rental data along with business data from Datafiniti, found that there is, in fact, a relationship between the two.
“[Coffee] is somewhat of a luxury item, especially if you consider the cost of fancy cafes serving espresso and pour over drinks (generally referred to as third wave coffee),” RentHop’s blog explains. “For this reason, some measure of coffee shops could be useful as a barometer of city and neighborhood cost.”
The study compared coffee shop data with median rent data in 7 different cities: New York, San Francisco, Los Angeles, Washington, D.C., San Diego, Chicago, and Atlanta. If you look simply at the amount of coffee shops versus the median rent prices, the lists match up pretty closely…
Adjusting for population made the results a little more nuanced (you can see the results of that data in the chart below); this is likely affected by neighborhoods that are less residential and have more office buildings, where coffee shops are also prevalent.
The report also did a deep dive into Manhattan neighborhoods, where, again, there was a definite relationship between the amount of coffee shops and rental prices, but the results were also nuanced. The majority of the neighborhoods examined (28 in total) had median rent prices that, when ranked, matched up with the number of coffee shops per capita, though some notoriously expensive neighborhoods (like the Soho and Union Square areas) stood out from the pack. You can see the full report—with breakdowns of rent vs. coffee shops in all 28 different Manhattan neighborhoods analyzed—on RentHop.
Coffee shops certainly aren’t the only indicator of rent prices—there’s a lot more to factor in—but it does seem that the number of coffee shops in a neighborhood can give you an idea of what the rent might be like there.