Nery Alaev

American rents to rise by 8% this year 

The phenomenon of rising rents is occurring across the United States, with iconic metropolis New York City seeing rents rise faster than renters’ salaries.

I’m looking into this phenomenon today, the areas affected and the reasoning behind the increases.

Major jumps

New York and San Francisco, which has become a breeding ground for tech start-ups in recent years, remain the most expensive cities to rent in the country.

San Francisco’s asking prices stand at a premium $3,530 for a one-bedroom apartment available in September, with New York standing at $3,160. Secondary cities such as Oakland, Jacksonville and Fresno have all seen increases of over 15% each.Nery Alaev

Harvard University’s Joint Center for Housing Studies and Enterprise Community Partners, a group that focuses on affordable housing, found that more Americans will be spending over half of their income on rent will rise by over one million people in the next decade. The projected increase highlights the severity of price rises.

Supply and demand

The reasoning behind the increases, provided by a survey by Rent.com of more than 500 property managers in the USA, is that low housing stock has allowed for a scenario where less compromise is needed and closing a deal at a higher price is possible

More than 46% of property managers surveyed reported a decrease in rental vacancies in Rent.com’s survey.

This percentage is in tangent with the statistic that the second quarter of 2015 saw vacancy rates in the U.S. for rental housing at 6.8% – the lowest it has been in almost two decades.

Such figures point towards an increase in power for managers and landlords, with prospective tenants losing out as a result.

Nery Alaev

Nery Alaev is the current Director of ESN Investments GmbH, which engages in acquisition and development of commercial and residential property in Germany and Austria.