Report: Rents Continue to Rise, Vacancy Rates Continue to Fall
According to a new report from REJournals.com, the Columbus market for apartments continues to be hot. With the steady increase in regional population comes increased demand for rentals, which is resulting in both higher prices and lower vacancy rates. The report points out that the hottest areas for builders includes both suburban locales (Dublin, Hilliard and Upper Arlington) as well as urban areas like The Short North and The University District.
“We are fortunate to have an occupancy rate of over 97% on The Foundry apartments at Jeffrey Park in Italian Village,” stated Sean Cullen, Project Manager at Jeffrey Park, when asked about their ongoing development plans. “We’re working to deliver the next phase of three-story pod building units at Jeffrey by May or June in 2017.”
The national report noted that while 3,200 new apartment units were added in Central Ohio in 2015, builders were only on track to add 2,100 new units in 2016. Cullen said that in their experiences, delays could be attributed to the tightening of project financing, and backlog issues with various local municipalities on their reviewing and permitting processes.
“Despite the new units, apartment vacancy rates are falling throughout the Columbus market, with Marcus & Millichap reporting that this rate will hit 3.2 percent by the end of 2016,” stated Dan Rafter, author at REJournals.com. “That’s down from 4.5 percent in 2015.”
While more affordable land acquisition in less prime neighborhoods could be key to building apartments with lower rental pricing, many developers want to continue to focus on the hottest areas for building, at least in the short term.
“Staying within the periphery of the Downtown market is key especially along the North Fourth Street corridor through Italian Village and Weinland Park,” said Cullen. “Numerous restaurants and retailers are bullish on these two areas due to the proximity to Downtown, OSU, and the additional residents moving into these neighborhoods.”
Bloomberg View columnist Noah Smith penned a related piece last week that calls for the construction of more expensive housing as a cure for cities that have a problem with expensive housing.
“Allowing more market-rate housing in large established cities is a good way to bring down the cost of living, not just for high earners, but for the poor and working class as well,” explained Smith. “Progressives should support higher density, not more restrictions, if they want to help the most economically vulnerable city-dwellers.”