There’s a great in-depth article on local rent increases in today’s Seattle Times: Soaring rents force lifestyle changes
For renters and homeowners, market forces are permanently altering the familiar face of many neighborhoods. While wealthy newcomers are helping to revitalize neighborhood business districts, the reality is that many renters, saddled by stagnant wages, are being forced to reexamine lifestyle choices and, in some cases, move out of Seattle altogether.
Low housing inventory, a growing population of young tech-company workers and changing attitudes about when to buy a home are all contributing to rent increases throughout the Seattle metro area.
Translation: Some developers of rental units are cashing in on the fact that “the dream of home ownership” is no longer the default aspiration of many Americans.
The article also includes a nifty interactive rental cost map, but given that they’re using Zillow as the source of their data, I’d take the exact numbers with a rather large grain of salt.
What’s fueling rent increases most is development itself, said Jonathan Grant, the Tenant Union’s executive director. If almost all new units cater to wealthier tenants, he said, increasing supply is no path to getting rents to go down or even level off.
“The reality is that these units are high-cost, and often these were taken out of affordable-housing stock,” Grant said. “That’s why you see this theory of supply and demand being turned on its head.”
Sorry Mr. Grant, but that makes no sense. You can price rental units in your new development as high as you want but you simply won’t have any renters if the demand isn’t there. Supply and demand has not been “turned on its head.” It’s working exactly as one would expect: new development supply simply isn’t keeping up with increased demand.
Earlier this summer, The Seattle Times asked readers how they were coping with rising rents, and dozens responded.
Some told us they’re reconsidering whether they’ll ever be able to save enough money to buy a house if they want to stay in the Seattle area.
…
Homebuying may never be in the future for some who stay in the Seattle area because they’ll never be able to save enough for it.
Here we go again with the overblown concerns about being priced out forever. Yes, there will be some periods during which some people who could have afforded to buy a home under ideal circumstances will no longer be able to, but for the most part, if you can’t afford to buy a home in the city or neighborhood of your choosing, it’s probably because you simply aren’t making enough money. The rental market is not conspiring against you.
Pro tip: In places where rents are expensive, homes are expensive too.
What I would love to see in a follow-up story is more exploration of what’s driving the strong demand for high-priced rental units. If I were to venture a guess, I’d say it probably has at least something to do with this:
