As vacancy rates dip below 5 percent, landlords are not only raising rents, but they are offering fewer concessions, such as short-term and long-term leases.
By Elizabeth M. Economou
Special to The Seattle Times
Angi Ramos and her former college roommate Laura Waltner have been looking for months for a place to call “home.”
They’ve been trawling websites and have inspected a half-dozen units.
They’d prefer a newer building in Capitol Hill or Queen Anne — vibrant neighborhoods with lots of young people, restaurants and nightlife. Their search so far for a two-bedroom apartment under $1,500 a month has yielded only slim pickings.
“One unit had a great common area,” says Ramos, “but the washing machine was in the kitchen and the dryer was in one of the bedrooms.”
New, attractive buildings, such as the Illumina Lake Union Apartments, are full and expensive, says Ramos. Still, she says, the landlord suggests they check back every month to see when there might be an opening.
Similarly, when Hoa Do set out to find an apartment earlier this year, she says she did not expect to pay as much as $850 per month to rent a vintage studio near Seattle University. What’s more, the college senior regrets that her landlord would not relent on a nine-month lease.
“As a student, I prefer to pay month-to-month, because I never know if I will be studying abroad, or going home to visit family,” says Do, who is from Vietnam.
It’s a story being repeated all over Seattle. As vacancy rates dip below 5 percent, landlords are raising rents and offering fewer concessions or perks.
According to Apartment Insights, a web-based information service, the vacancy rate in the Seattle metro area hasn’t been this low since the latter part of 2007, and rental incentives are drying up in downtown Seattle, Capitol Hill and downtown Bellevue.
“The rental market is changing quickly from a renter’s market to a landlord’s market,” says Cassie Walker Johnson of Windermere Property Management, Lori Gill & Associates. Vacancy rates in highly desirable neighborhoods, such as Capitol Hill, Queen Anne and Fremont, are about 3 percent, the lowest in Seattle, she notes.
In contrast, rental markets with vacancy rates above 6 percent include SeaTac, Federal Way and Kirkland, according to Apartment Insights.
Landlord Christopher T. Benis, who is also a partner in the law firm Harrsion, Benis & Spence and represents tenants and landlords alike, calls the market “balanced.”
“We are raising rents now that we can, but all we are doing is trying to get them [rents] back to 2007 levels,” says Benis, who owns rental properties in Seattle.
Tenants ought to shift their attitudes to reflect the changes, he says. “If they [tenants] think they can look at 20 properties and then come back to the ‘best one,’ that best one will probably be long gone.”
Little in the way of new development and declining home values contribute to a tight rental market.
Tom Cain, president of Apartment Insights, says fewer than 1,870 units are scheduled for completion this year, about 60 percent of last year’s level, and less than one-third of the 6,349 units built in 2009.
Walker Johnson, who specializes in leasing single-family dwellings, condos and small apartment buildings, says population growth is also driving down vacancy rates.
“About 75 percent of my new tenants are moving here from all over the nation to work at larger corporations who are hiring in our area,” she says.
Telltale signs of just how far the pendulum has swung include tenants plunking down more than the list price on rental homes and signing longer leases to qualify for a desired property.
“We are starting to see multiple applications in some situations,” says Walker Johnson, who expects to see hikes of up to 10 percent for rental homes from May through September.
For a Queen Anne family, the possibility of a rent increase on a four-bedroom Craftsman, where they’ve been living for nearly a year, weighs heavy.
“We feel the renewal negotiations are a huge strategy game, and we are fearful we will have to leave ‘our home’ or accept an increase that we simply don’t feel comfortable with economically,” say the husband and wife, who are not being identified due to ongoing negotiations with their landlord.
“This year, you have to jump when you find the right home, unlike a few years ago when properties languished on the market, for months, in some cases.”
Lawyer Lauren Sancken, who signed a one-year lease in April for a Capitol Hill flat with a patio garden and a spectacular view of the Space Needle, says she wishes she had signed a lease extension to lock in her rate.
“It is far more competitive than I expected, especially when several people are willing to submit applications and deposits right away. I found myself offering cookies, muffins, just to try to get a bit of an advantage on places that I really liked,” says Sancken.
Not surprisingly, tenants with limited means are being hit the hardest, says Jonathan Grant, executive director of the Tenants Union of Washington State.
“Many low-income tenants displaced by the foreclosure crisis, sometimes evicted by no fault of their own due to a landlord’s default on their mortgage, are now finding an even tighter market, while many former homeowners are returning to renting after losing their homes,” says Grant.
Adding insult to injury, many of those low-income tenants will have an eviction on their record from the foreclosure, further complicating their ability to secure housing, he says.
Ramos says she is not daunted. “We are willing to wait for a good one,” she says.