Apartment rental rates rising sharply
Since Joshua Evans moved back to Chattanooga last year with his wife and young child, he has been looking to buy or rent a house to move out of the home his family is sharing with his in-laws.
The 28-year-old retail clerk says he has a reasonable credit score and steady job, but like many young couples Evans and his wife are struggling to find affordable housing in Chattanooga as home prices and rental rates increase.
“It’s getting ridiculous and unfortunately many low- and middleincome folks can’t afford to live the American dream in what used to be the best mid-sized city in America,” Evans said. “Every time we find something within our budget we can purchase, some property management or investor snaps it up, makes a few fixes and rents it out at a huge premium price.”
A new survey of apartment rents by the online rental listing service Zumper found that the median monthly price for a one-bedroom apartment in Chattanooga jumped by 13.2 percent to $770 a month in the past year, or nearly five times the average 2.9 percent increase in workers’ income over the past 12 months.
Chattanooga apartment rates still average 36.5 percent less than the national average price of $1,208 for a one-bedroom apartment in the top U.S. metro cities and local rental rates are still less than onefourth the prices charged in San Francisco, the nation’s most expensive city for apartments.
But since the Great Recession ended nearly a decade ago, apartment rates have generally risen faster than wages for most workers.
Crystal Chen, author of The Zumper Blog, said the growth of Chattanooga’s economy and living appeal in the region are boosting the number of people wanting to live in the Scenic City.
“Demand for rental housing in Chattanooga is increasing, due to factors like new job opportunity being available, so more people are relocating there, and in general, more people in the area are starting to rent rather than own,” Chen said. “Some may be downsizing or just less committed to staying in one area so renting gives them the opportunity to move easily.”
Construction of new homes and apartments, although up from a year ago, is not keeping pace with demand, at least yet. More than 1,000 apartment units are currently under construction or development in Chattanooga, but many are in the downtown or North Shore area and are priced above the current median price for rental units, pushing up average prices in the market.
The new Market City Center in the 700 block of Market Street, for instance, has added a new luxury rental option in the central city. But the one-bedroom units start at $1,263 per month.
“New construction is being built in Chattanooga but until the new rental stock is movein ready, rents will remain high, especially in the summer moving season,” Chen said.
The median sales price of homes sold by Chattanooga Realtors in the first half of 2018 rose 11.7 percent to a record high of $201,000, according to the Greater Chattanooga Realtors association Multiple Listing Service.
Young people who have been living with their parents are increasingly finding jobs and moving out on their own. But Chen said rising home prices are leading many longtime renters to stay put, at least for now.