Apartment Glut Forces Owners to Cut Rents in Much of U.S.

[Judi Lynn]

Apartment Glut Forces Owners to Cut Rents in Much of U.S.
By DAVID LEONHARDT

Published: November 29, 2003


MEMPHIS, Nov. 25 — Renting an apartment in much of the country these days can feel a little like waking up on your birthday.

Waiting for the tenants in some building lobbies around Memphis every morning are free cups of Starbucks coffee. In the Atlanta suburbs, people who move into one garden-style apartment building receive $500 gift certificates to Best Buy, the electronics chain. In Cleveland, Denver and many other cities, landlords have been giving new tenants gifts worth $1,000 or more: one, two or even three months of rent-free living.

While rents have continued to rise in many big cities on the coasts, including New York and Los Angeles, they are falling in more than 80 percent of metropolitan areas across the country. Low interest rates in recent years have persuaded many families to move out of rented apartments and buy their first homes at the same time that developers have been putting up thousands of new rental buildings, leaving many landlords desperate to fill apartments.

The portion of apartments sitting vacant this summer rose to 9.9 percent, the highest level since the Census Bureau began keeping statistics in 1956.

"I've been doing this for 30 years, and this is the worst rental climate I've ever seen," said Leonard Richman, president of the Sunshine Corporation, which manages almost 4,000 apartments in Memphis. "Rents have gone down to where they were about three or four years ago. (snip/...)

http://www.nytimes.com/2003/11/29/business/29RENT.html?th

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[Occulus]

1. Whoever wrote this article

has obviously never taken a look at rents in college towns.

I've never been able to find a two-bedroom in my town for less than $475/mo, plus utils. Some even range into the $600/mo area; these are generally unkempt, dirty, student apartments.

Additionally, collegetown landlords are all to willing to violate every bit of the law they think they can get away with violating if it means they get to keep the deposit. It's common practice here.

[jmcgowanjm]

2. Proves the point

I live in a college town also.

Check out the price of homeowning
against the rental prices in your collegetown.
I'm sure the variance in $ will show that
the generalization of stable/falling
rents hold.

BTW-we got a $650 rental for a friend
and thought it was a good deal.

She moved from it 2mths ago and the
place was rented within 2 weeks.

That said, I don't see how landlords
can make it unless they have no debts/
mortgages outstanding.

[1monster]

3. Huh? That's cheap!!!

You can't touch a one bedroom appartment in this tourist/college town for under $700.00 a month. Unless, of course, it is way out of town and a real dump besides. Even one room with kitchen privileges go for $600.00 plus. The average is $800.00 to $1500.00 per month.

Count your blessings.

(edit: added a "this" in front of tourist/college

[maxanne]

4. This sure isn't happening

anywhere in New England. We have a terrible housing shortage. There is one town to the north of me, where there is a lot of affordable rental property - BUT, it's a dying mill town - and there aren't any jobs. People are coming from all over the country to live there, because of the cheap rents - only to find there isn't any work.

[jmcgowanjm]

5. That's what I'm saying

Everyone's looking for the cheap housing
and the good jobs.

The 2 generally don't go together.

In other words Boomtowns/Collegetowns
along w/ East/Left Coasts are the
exceptions in housing.

And yes, housing is relatively
cheap here in NWArk but
so is the pay.

One of the reasons my Canuck friend left.

[Art_from_Ark]

30. Low pay in NWArk

You got that right-- almost no unions, intensive competition with a steady stream of newcomers (including both legal and illegal immigrants), and the dominance of low-wage megacompanies.

But are you sure about the low housing costs? Last time I looked for a rental place there (which was a long ago), I could get a one-bedroom apartment for about $200 (in a crappy part of town where there were always drunkards and fights), but a semi-decent one-bedroom in a nicer part of town was $300 and up. Rental townhouses were going for $475 or more.

[loudnclear]

6. Haven't seen any reductions in rent in this area...only increases!

But the greedy ultimately cut off their noses and bleed on the rest of us.

[NJCher]

7. I think it's true

I have had to wait longer for the ideal tenant to come along, meaning that sometimes I have to lose rent. Never had to do that before. My places are rented out to nice people now but I'm careful to nurture those relationships and make sure everyone's happy. I make repairs instantly and I also send nice gifts on the holidays and other occasions. If a check bounces, I'm patient and nice about it.

My dad is also a landlord but he has hundreds of rentals. Sometimes he doesn't wait for the ideal tenant and it shows. The incidents of bad behavior, destruction to the premises, etc., are telling.




Cher

[Orangeone]

8. I believe it

After the start of the economic down turn, there were a lot of "for rent" signs on apts and "for sell" on SUV's. The rents are still high, because it's the SF bay area, but prices seemed to have flattened.

[Demobrat]

10. I think prices are inching down slowly here

but they're still nowhere near where they were before the dotcom boom.

[Demobrat]

9. In Phoenix they're giving people free rent and computers

to get them to sign a six month lease. I get letters from realtors begging me to sell my condo there, but it took a few months to find a nice tenant.

[Uben]

11. Dallas

I have 158 units in North Dallas in the high-tech sector. The massive lay-offs by Ericsson and Nortel, and many other telecom firms has our occupancy rates down 30%. We are reluctant to lower rents because we want to maintain a certain class of clientelle, basically, the yuppies. We have made special offers to senior citizens, ie free first months rent, and a few more promotional events.

Just my luck, the city of Dallas also had Spring Valley Rd tore up in front of the place for the last 18 months digging a tunnel under another major thoroughfare!

On the bright side, Texas Instruments is building a 3 billion dollar microchip plant a few miles away, and that should help fill us back up. That's a couple of years away, but hey, we CAN see light!
The City of Dallas also just completed a 1.2 million dollar beautification project on the small lake that borders the back of our property, so that is a good draw, also. The apts are paid for, so we can weather the slack period.

[ariesgem]

12. In Pasadena, CA

The rents are skyrocketing. I manage 2 buildings and at one building close to a "yuppie area" called Old Town Pasadena, the rent for a old 70's style 2-bed apt went from $815 to $1250 in ONE YEAR.

I lived in Roswell, GA for a couple of years and I remember getting alot of apartment for $650.00.

I wish I could've brought that apartment with me when I moved back to Cali. :)

[grasswire]

14. so......

....my rent hasn't been raised in 7 years, but it is now higher than comparable units are renting for as owners are offering discounts and deals. Should I ask for lower rent? I would love to know if new renters are getting lower rent deal than I am.

[gttim]

35. Just south of Roswell

I am changing apartments. I am going from 770 square feet to 1000 in a one bedroom. Large kitchen, dinning room/office, a huge great room with a fireplace and two french doors going out to a deck, a huge bedroom with a massive walk in closet. Complex is on the river. My rent is dropping from $700 to just under $600. Older property, but nice with a new management company. And I am getting some free rent up front. Most places here in Atlanta, except A+ quality complexes, are offering lots of perks.

Current apartment company has done nothing but piss me off for the last year, and have the nastiest assistant manager, Monica Kaufman look-a-like, bitch working there. Poor maintanence, unenforced rules, and a severe drop in tenant quality did not help either. I had seven people living in the one bedrooom next to me, but they would not do anything to enforce the 2 adult maximum. I have been there for three years, and they have made no effort to keep me. They have a huge Free Rent sign up front, however. Dumb management company.

[theoceansnerves]

13. orange county, ca

our two bedroom went from $950 to $1100 in a two year period. and we live in a pretty bad neighborhood. nothing but increases in this area.

[The Zanti Regent]

15. Ha, Try Los Angeles

My rent is now $1,385/mo for a SINGLE. Every year, it increases by the maximum permissible amount. On top of that, I have to pay ALL utilities!

There are 4 1-bedroom apartments here going for $1,600+ and we're in the Mid-Wilshire area

[abelenkpe]

16. I know, what is up?

If only the apartment glut would hit our neighborhood. That'd be sweet. I cannot afford to move within my own neghborhood. To get the same size two bedroom would run around 2100! It's evil, 'cause I love this neghborhood, but with those rental prices it would be a better deal to just buy a place. I moved in right after the earthquake so my rent is reasonable as a result. Sounds horrible, but I would love a three bedroom...or maybe just another bathroom, what do I have to do, wait for another earthquake? You're not paying water or trash are you? That's be criminal, but not surprising around here.

[The Zanti Regent]

19. Yes, I am paying ALL Utilities AND services

I am paying roughtly $50 for Water monthly and $35 for the Trash collection.

On top of all other utilities, and now Arnold wants to deregulate electricity and sell the DWP

[abelenkpe]

23. No, say it isn't so

Can Arnold do that? Can he sell LA's municipally controlled DWP? I knew about the hideous deregulation plans, but selling the DWP would be outrageous. Absolutely monsterous! Is there anything we can do to stop him? Where did you hear about these plans? Have I been living under a rock (unfortunately a distinct possiblity.) You'd think more people would be upset about that.

Bummer that you have to pay Water and Trash. It's odd how each fourplex/complex is handled differently. One of my neighbors pays no utilities, but then his landlord equipped their building with solar panels. Cool, huh? Hopefully you can benefit from rent control. There is a lady living down the street from me who has been in her apartment since the 60's that is only paying $80 for an apartment others are paying $2000 for....crazy world.

[The Zanti Regent]

25. Wake up and snort the steroids!

All the time Riordan, er, Dickie REAR-END, was mayor, his goal was to sell the DWP, and that was written into the orignal power deregulation bill. That was stopped cold thanks to the greed of ENRON

Now, what the WHORE PRESS won't report, but Indymedia does, is a certain little closed-door meeting Dickie REAR-END had with Arnold, Ken Lay and Michael "Jew with Nazi Principles" Millken. Of course, this SECRET MEETING involved the planned withdrawl of a lawsuit filed by Cruz Bustamante against Enron for 9 billion dollars. Your Whore Press was too busy bullshitting about Laci Peterson to think about telling you...

Sure as his word, the second thing Governor Steroid Addict did was to withdraw Cruz's lawsuit, thereby increasing the state deficit by another 9 billion dollars. Add the 4 billion by the so called Car Tax rollback and Asshole Arnold has added 13 billion to the state Deficit.

Now Asshole Arnold is making deep cuts in Mental Health, disabled services, and Education. He also wants us to vote for an 20 billion dollar bond initiative to tide us over, now WHO DO YOU THINK is gonna make out on this--HINT--MICHAEL "THANKS TO MY JUNK BONDS, I DESTROYED THE MIDDLE CLASS IN AMERICA" MILLKEN, that's WHO!

Oh, Arnold really doesn't have to worry, since his Zell Miller turncoat type pals, Shelley and Lockeyer are doing everything they can to help him. They'll look the other way as Diebold fucks with the machines. Remember, Shelley mandated that touch screen machines issue paper receipts in 2006, NOT 2004. Wonder why he did that? Now you know!

Rear-End, Steroid Boy, Ken Lay, Millken, Lockeyer and Shelley should all be arrested and tried for HIGH TREASON!

[abelenkpe]

37. if only

the likes of Ken Lay and Michael Milken would be forced to truly pay for their crimes. Unfortunately it seems that stealing a banana from Wal Mart will cost the average joe their job and potentially put them in jail while stealing millions from 'the people' will get you a pat on the back from the fat cat club. This talk about Ahnold selling the DWP really has me worried though. Wouldn't he need to put such a proposition to a vote? Or can he sell our public utilities without the OK from the citizens who would be most effected? Is he also trying to sell the municipally owned Power company's in Northern California?

And yeah, that announcement about touch screens issuing paper reciepts in 2006 didnt exactly make me feel all warm an cozy either. I think my initial response was more along the line of: 'Those Bastards! How convenient.'

Ugh. Anyway, if you know of any articles outlining Ahnolds evil plans to sell our power company lemmeno. I would gladly paper our neighborhood with such information. Gotta do something to try and wake people up.

[oustemnow]

31. Holy smokes, Zanti!

And I've never really thought of mid-Wilshire as a particularly pricey area.

Something's definitely up with the LA rental market. I've been looking to move pretty much since the summer, and have been deterred for most of that time because of lack of time/energy to look at places, and because I wasn't really taken with any of the places. In the last month or so, however, I've noticed a real dearth of affordable, decent places to even look at. It's perplexing, as it would seem that,if anything with the lagging economy, rents should be going down.

[Chomskyite]

17. I'm finding this to be true in Baton Rouge

. . . but then who the hell wants to live here except those of us who are too lazy to move?

[hyphenate]

18. I was living in Southern California

In the San Gabriel Valley for 12 years. During that time, the rent went from $675 for a one bedroom to $850. Then, in 2002, the owners sold the complex to this really big realty management company. In two months, my rent went from $850 to $1150. These people were complete asses. I ended up leaving because there was no way I was going to be able to afford $1150 for the apartment, which needed a new stove, a new dishwasher and new flooring. It looked like a slum because they'd never done any work on it. (I didn't mind--they left me alone, and I liked that part.) In addition, jobs dried up and without a car, there were few places I would be able to get to without a car. :(

I ended up moving back east to Massachusetts, where I now have the apartment above an old friend, who is only charging me $650 for a two bedroom. And he's been forgiving the last couple of months when I've had absolutely no money when the unemployment extension petered out. I wish Congress would get their act together and approve funds to keep those of us who were on unemployment going. But no, they'd rather argue about a handful of f**king judges instead.

[Beaker]

20. Guess the rent...?

My wife and I rent out the top floor apartment of our house, and we aren't lowering our rent- we just raised it in October, and the tenant(a young single woman) just re-upped for another year. We live a half block from an expensive private college on Chicago's far north side(North Park neighborhood), and haven't had a problem with getting and keeping tenants in the 5 years that we've rented it out. It's a semi-furnished 5 room/1 bedroom apartment with a large walk-in closet, heat and cooking cas included, dishwasher, front and back decks, DishNetwork Everything package(includes all the movie channels) included in the rent, as is free use of the basement laundry...basement storage available, Pets are allowed(one dog, or up to 2 cats)...

care to "guess the rent"?

(BTW- we live in the downstairs apartment, we're not "absentee landlords")

[grasswire]

22. don't tease us....

....inform us!

[Beaker]

27. $675/month.

with an increase to $700.00 in September '04 written into the lease.

[shrike]

32. Where have you been all my life?

When I was still renting I would have kissed feet for an apartment like that, at that price in Chicago. I'd have borne your child and I'm too damn old to have kids.

[BiggJawn]

21. Maybe mine won't go up...

Every freaking other thing in this region is going up (except my salary)
I pay $425 for a 2-bedroom+"living room" with a tiny kitchen(no room for a microwave) and paper-thin walls. No utilities, no "free cable" or dish, no internet. but it's a quiet small town and no hassles...

[Skittles]

24. ALL YOU PEOPLE WHO HAVE BEEN RENTING FOR YEARS

threaten to move out when your lease is up and either get your rent reduced or move to another apartment. You can save a LOT of money.

[The Zanti Regent]

26. I hate to tell you this, but the Wobblies are dead.

The Apartment Associaltion of Greater Los Angeles (Howard Jarvis' extortion ring) controls all the housing market in Los Angeles. Fat chance that will happen...

[Beaker]

28. Not always.

If a tenant ever "threatened" to move out, I'd be more than happy to accomodate them.

[Skittles]

34. you sound like a great landlord

maybe tenants don't LIKE being RIPPED OFF. They get the obligitory letter when rates are raised, but they never receive a letter WHEN THE RATES SHOULD BE DECREASED. Hello: RIPOFF

[Beaker]

38. I am, thanks.

I even fed, water, & walk the tenants dog(no charge) when they're out of town. Our previous tenant moved in when she was single...she got married, he moved in, and the only reason they ultimately left was because they were having a baby and needed a bigger place.
Even though they moved in November, I only lost a half months rent, and then only because I needed the time to paint/clean the place.

But I have a question re: your post-
"...but they never receive a letter WHEN THE RATES SHOULD BE DECREASED. Hello: RIPOFF...

I'm not sure that I'm following you- when do you feel it is that rental rates: "...SHOULD BE DECREASED"? and in your opinion, what constitutes a "rip-off" when it comes to housing?

[T Bone]

29. There are exceptions of course, but not around here

Exceptions would be small towns, college towns, etc, butI can see just from the signs out front of places there is a glut here. If I was in the rental market now around here I would find an area I liked where there are a lot of vacancies and start playing them off against each other, but here is how I would do it...Offer 6-8 months rent up front for a 12 month lease, I think you would find some rental 'magnate' who would go for it. But it would leave you no leverage for service or repairs. That would be the drawback. Maybe you could swing something where you paid 3 months rent now and the last three months in months 10,11, and 12?

Be creative if you are renter in one of these markets. They should have to bargain with you. God knows there are plenty of landlords who have screwed over people for years. Of course you could always ask the potential landlord if he is a registered DUer to make sure you weren't screwing with an honest landlord.

[Must_B_Free]

33. Hard to believe this story - rent is up here...

Rent is up in Waikiki and even in the most remote parts of the island of Oahu.

[CivilRightsNow]

36. Just moved to the Dallas Metroplex..

And that article is spot on. You can get brand new 2 bdrm. apartments for 750 a month, it's unreal to me after living in California in the Bay Area and Sacramento. Plus they throw in atleast a month of free rent. I've even seen places offering 3 months. Plus, deposits are 200-300 bucks, unlike cali where you were expected to atleast make a deposit that was as much as one months rent.

If you are looking for a nice 1k sq ft 2 bdrm in a fairly new (80s &90s built) complex,it is very easy to find them in the 550-650 range. Then again, Id never live in one of those rat motels in any major city and much prefer to live on the outskirts. After dealing with the ridiculously bad freeway systems in Cali, Dallas is like the autobahn.

Infact, we've been looking at some great lofts, that I didnt even know they had anywhere outside of SF and NYC.. fantastic 20 ft ceilings, brownstone walls.. really chic places that are atleast 1k sq ft for 700-850 a month in the young vibrant areas of downtown Dallas.

I miss the beauty of California as well as the fantastic people we met there. However, being in the IT industry and going from working at lucent for 80K a year to working for one of the few startups that didnt go bust for 40K a year doing alot more work, we had to get out of there. I was on unemployment until it expired and continued to search for a halfway decent position for almost a year. I had 1 interview and Im definately not short on experience. Infact, I got more response when I dumbed down my resume.

Here in Dallas, Im proud to report that in 1.5 months, I went on 3 job interviews and was offered two of the positions with salaries of 50 and 57K. I was seriously beginning to wonder in California if Id ever be able to afford to buy a house and settle down considering the exhorbitant cost of housing and the fact that salaries are not higher in california anymore. That is a huge myth. If I had to leave, Im glad I got out before Ahnold runs it completely into the ground. Maybe in 15-20 years the prices will be forced to decrease and Ill finally be able to afford to live in the state I truly love. I think right now, they are are just sucking the last bits of money out of the inhabitants.

Here in Dallas... it's a renter's paradise.