Apartment Rents Decline as Vacancies Hit Record

April 6 (Bloomberg) -- U.S. apartment rents dropped in the first quarter and the vacancy rate remained at a record as unemployment near a 26-year high limited tenant demand.

Actual rents paid by tenants, known as effective rents, declined 1.5 percent from a year earlier, Reis Inc. said in a report today. Asking rents fell 1.6 percent, according to the New York-based property research firm. Vacancies were unchanged at 8 percent, the highest level since 1980, when Reis began tracking the number, said Victor Calanog, director of research.

U.S. rental demand has slumped as employers cut 8.4 million jobs since the start of the recession in December 2007. The bigger drop in asking rents than effective rents in the first quarter signals that landlords are pricing their properties lower at the outset and minimizing concessions, Calanog said.

“Landlords are saying: ‘Even before we talk about the free month off, and even before we talk about the free gym, we want to lower the asking rents to get you through the door,’” he said in a telephone interview.

The U.S. unemployment rate was 9.7 percent for the third straight month in March, the Labor Department said April 2. The economy added 162,000 jobs in the month, a sign the labor market may be recovering.

Actual rents fell year over year to an average of $967 in the first quarter, Reis said. Asking rents dropped to $1,027.
Rent rates rose less than half a percent from the previous quarter, the first sequential growth since the three-month period when Lehman Brothers Holdings Inc. filed for bankruptcy.
The net change in occupied space, a measure of leasing known as absorption, grew by 20,424 units, the most for the first quarter since 2000, according to Calanog.

“The perception that labor markets are stabilizing is probably enough to tip the demand for apartments,” he said.
Effective rents fell the most, year over year, in Las Vegas; San Jose, California; Phoenix; Seattle; and San Francisco, according to Reis.

Rents paid by tenants climbed the most in Colorado Springs, Colorado; Washington, D.C.; San Antonio; and Dayton, Ohio.

This article appeared at http://www.bloomberg.com/.

Don't Buy The Myths!

The National Multi-Housing Council recently published a study entitled: "Don't Buy The Myths - Renting Can be A Smart Investment."  Here's the bullet points.  Check out the full study at http://www.nmhc.org/.

Myth #1  I'll reduce my tax bill if I buy a home.

Myth #2  Paying rent is throwing away money.  I could be building equity.

Myth #3  My mortgage payment will be less than my rent.

Myth #4  As an owner, my housing costs will remain constant.  I won't have to worry about rent increases.

Myth #5  Investing in a house is a safe investment.

Myth #6  I can't afford not to buy with these low interest rates.

Myth #7  I know I'll make money on my house because I plan to stay there for at least five years.

Myth #8  Buying a house will force me to save and help build a nest egg for retirement.

Myth #9  I know buying is better for me because I used an on-line "Buy vs. Rent" calculator.

Now more than ever, renting makes sense!

It's Time We Stop Abusive Landlords!

The ATA supports the creation of Tenants’ Ombudsman offices in all fifty United States. The purpose of these offices will be to serve as a central point for residential renters to officially voice and register complaints about specific landlord and housing abuses leading to enforcement action.

The ATA recommends that the Office of Ombudsman be an administrative and quasi-judicial function of either the Governor’s Office or Attorney General’s Office of each state. Along with the creation of the Office of Ombudsman, the ATA recommends legislation and regulations that would allow the Ombudsman to bring civil or criminal action or sanctions, including fines, penalties or imprisonment against abusive landlords and landlords who fail to provide for safe, clean and habitable facilities.

All too often, landlords get away with actions contrary to existing law and regulations in their relationships with tenants. The ATA believes that effective enforcement at the state level is needed now to protect the well being of residential renters throughout the United States.

Apartment Crime Prevention Programs

Many apartment owners and law enforcement agencies in the U.S. are promoting a crime prevention program known as "Crime Free Multi Housing".

This program calls for the certification of rental properties by meeting certain physical condition and social standards designed to enhance a property's safety. These standards include security management, exterior lighting and door, window and lock guideline compliance.

We believe this program is generally in the best interest of residential renters. Where we differ with apartment owners, however, is in the "Crime Prevention Lease Addendum" that is considered an integral part of the program. In summary, the Lease Addendum puts all the responsibility for crime prevention on the tenant. We'd like to see the Lease Addendum upgraded to include the landlord's responsibilities as well. This would include legally binding assurances that the property's physical crime prevention standards are maintained and that reported crime occurances are communicated to tenants as they occur.

The ATA believes that it is the landlord's, and not the tenant's, primary responsibility to maintain an apartment community that is safe, habitable and secure.

You can view a copy of Arizona's Lease Addendum by following this link:
www.crimedoctor.com/crimefree2.htm