These 7 Cities Are Dropping Rent Due to COVID-19
COVID-19 has impacted many sectors of the economy, which, affects rent prices in several cities across the United States. Unlike a year ago, which saw rent growth continuing its upward climb, Apartment List’s most recent report shows low rent growth and even declines in some cities.
The COVID-19 recession, with its job layoffs and furloughs, continues exerting a financial hardship on tenants. Reduced income makes it difficult to pay monthly rents and utilities without assistance from landlords or agencies. In addition to other economic factors, these realities are driving down rent prices, but especially in these seven U.S. cities:
San Francisco, Calif.
- Rent growth since March: -4.7%
- Median cost of a two-bedroom apartment: $2,956
New York, N.Y.
- Rent growth since March: -3.9%
- Median cost of a two-bedroom apartment: $2,466
San Jose, Calif.
- Rent growth since March: -2.8%
- Median cost of a two-bedroom apartment: $2,609
- Rent growth since March: -2.4%
- Median cost of a two-bedroom apartment: $1,358
- Rent growth since March: -2.3%
- Median cost of a two-bedroom apartment: $1,545
- Rent growth since March: -2.0%
- Median cost of a two-bedroom apartment: $2,082
- Rent growth since March: -2.0%
- Median cost of a two-bedroom apartment: $1,271
Why these cities?
Scott K. Choppin, Founder of workforce housing developer Urban Pacific, says the rent-growth decreases boils down to two factors: economics and higher housing costs.
Economics and industry
The Apartment List report indicated one common denominator linking states’ declining rent growth — an economic dependency on tourism, entertainment, dining and similar services. “Cities with high travel industry concentration, such as Las Vegas and New York, are seeing low rent growth and even decline,” Choppin says.
“These sectors have been hard-hit, due to COVID-19’s shelter-in-place and quarantine mandates. While some states have been cautiously re-opening, the process has been slow.”
Anthony De Guzman, Co-founder of online mortgage company Breezeful, adds, “COVID-19 has had a greater impact on the service industry and its unemployment rates, leaving many unable to pay their rents, and encouraging some to move in with friends and family.” Fewer people renting apartments means higher vacancy rates. This, in turn, has led to landlords lowering rents in an attempt to attract more tenants.
Higher housing costs and market corrections
Choppin explained that higher pre-COVID rents and supply shortages are also potential causes for the rent-growth declines, as markets correct downward to more reasonable rates. “Those cities with higher housing costs are seeing not only low rent growth, but an actual decline in rents. Examples of this would be San Francisco and New York,” he says.
Choppin and De Guzman indicates that rent-growth decreases would likely continue for at least two or three years, depending on how well the economy and employment rebound.
4 ways to ease the burden of rent payments
To protect renters through the end of the year, the Centers for Disease Control and Prevention (CDC) issued a moratorium on evictions of residential tenants until the end of the year. However, the CDC has made it clear that tenants must continue paying rents during this period. For those who find themselves cash-strapped and struggling to meet monthly rents, the following ideas could help.
1. Talk to your landlord
Opening discussions with building owners and managers is the first step to take when it comes to rent concerns. But many renters don’t do this because of a mistaken belief that the landlord won’t listen or won’t work with them. Keep in mind that landlords would rather keep good tenants in place than work to find new ones. And, not all landlords are huge, bottom-line-oriented, corporate businesses. In truth, smaller investors own close to half of the residential rental units in the United States. Tenants who approach landlords in a calm and business-like manner have a good chance of working out a deal that is acceptable to both sides.
2. Consider rent-assistance programs
Municipal, county and state assistance for pandemic relief is available, depending on monetary and other needs. Some organizations that can help provide local assistance information include the National Low Income Housing Coalition, JustShelter.org and 211.org.
3. Examine creative options
Many landlords may need a hand with their buildings and property. They might not have full-time help when it comes to support or maintenance. Tenants can try offering a non-cash service (repairs, lawn maintenance, marketing or administrative assistance) in place of cash payment for rent. Another creative solution could involve asking the landlord to waive extra fees, such as pet charges or amenities costs, until cash-flow issues are more positive.
[ Read: How to Negotiate Rent With Your Landlord ]
4. If all else fails, understand the legalities
Though leases are in place for a reason, talking with a local lawyer might be a good idea, especially when it comes to issues such as rent, the laws underlining potential evictions and the possible consequences for breaking a lease. For those who might not afford legal fees, it’s a good idea to check into free or reduced-rate legal services.
We welcome your feedback on this article. Contact us at email@example.com with comments or questions.
Image Credit: Alexi Rosenfeld/Getty Images