Tuesday, July 8, 2014

Apartment prices are up, availability is down

June 25, 2014 
It's a tough market in Rockingham County 
By Corinne Holroyd cholroyd@e agletribune.com 

Renters in New Hampshire are paying more for their apartments and there are fewer to go around. The New Hampshire Housing Finance Authority recently published its annual report on residential rental costs, surveying more than 30,000 two-bedroom rental apartments rates. Part of the study found how much each county’s apartment rates have gone up, and Rockingham County currently sits atop the median gross rental cost list at $1,229 per month, 3.5 percent higher than in 2009, the last time the authority did a survey. This increase is due to the county’s location: close to Massachusetts for commuters and Interstate 93 according to Alex Hathaway, the incoming president of the Apartment Association of New Hampshire.
“Proximity to (Interstate) 93 is a big deal for that particular county because it’s like an artery going right through there,” he said. Rising rental prices are following a Massachusetts trend. In 2009, Boston apartment prices rose “upward of 10 percent.” “It’s like a sonic wave,” Hathaway said. “It starts in downtown Boston and people say, ‘I can’t afford to live in downtown Boston,’ so they move to Somerville. They’ll progressively go farther out and then the New Hampshire state line is there.” William Ray of HFA said he has seen a trend of people moving farther from work in order to find more affordable housing. “Where the growth in rental costs are is what we see as ‘drive until you can afford’ kinds of markets,” he said. Low-income residents, however, may not be able to afford that option.
New Hampshire has the 11th-highest housing costs in the nation, according to Laurel Redden of Housing Action New Hampshire, which works to keep and make public policies to create affordable housing. With increasing rental costs, low-income residents have less to spend on things like transportation. “Statewide, it takes $20.18 per hour — almost $42,000 annually — to be able to afford a decent, market-rate, two-bedroom apartment and still have enough left over for other necessities like food, transportation and healthcare,” Redden said. “... That means more households in New Hampshire are paying more of a percentage of their available income for housing, and that means they have less and less for other amenities.” 
As a part of trying to keep rental costs low, Housing Action NH has worked to keep laws like the state’s workforce housing law in place. “Every year, it seems to be under attack and every year that’s something we work on to preserve,” Redden said. Currently, Housing Action NH is 24,000 units short for available and affordable housing, and the slump in constructing housing also “puts pressure on the rental market” and will prevent the situation from going anywhere soon, according to Ray. “There’s not been a lot of growth in rental housing, so that, I think, is going to be around for a while,” Ray said. The lack of available land, as well as the more financially appealing options, has prevented landowners from building new rentals, he said. Instead, owners are upgrading amenities, adding to rental costs in the process. “It’s really forcing property managers to be creative in what they’re providing,” Hathaway said. Meanwhile, available housing has decreased by 3.2 percent for two-bedroom apartments, leaving more of a demand for what little there is and boosting prices. With fewer apartments available in the state, the demand for them “puts pressure on the rental market,” Ray said. The demand, he said, also comes from the rise in people facing foreclosure, aging residents who want to stay in the state in apartments and the difficulty of owning a house. “It’s a lot easier for people to commit to a 12-month lease than a 30-year fix,” Hathaway said. The trend may go toward more families building accessory dwelling units — or apartments in basements, separate buildings on the property or other places in the home — to fill the gap. These, however, will depend on local regulations, Ray said. For now, rental costs will stay where they are. “We don’t see those rents coming down in the near future,” Ray said.

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