Depending on how you slice it, rental data on Capitol Hill can tell a few different stories. Real estate analyst Mike Scott, one of the most cited sources on rent trends in the region, says a recent spike in Seattle rent is only a small part of a less alarming trend.
Dupre+Scott Apartment Advisors says their dataset shows rents in Seattle went up around 2.3% a year on average since 2000 while owner/investor costs like property taxes and utility expenses rose at higher rates. Rent increases also ebbed and flowed during that time, especially during the Great Recession.
“Rents are impacted by a lot of things, like the economy and how much competition there is from new supply, to name just two,” Scott wrote in his most recent weekly column.
Still, rents are undeniably on the rise. Average rents in Seattle rose 8.3% last year, according to Dupre+Scott data. Scott says that spike can largely be accounted for by the opening of new units with better amenities. But even when new units are taken out of the equation, average rents still rose 7.5% over the past year.
On Capitol Hill, the situation is even more dramatic. Average rents went up 12% from 2013-2014 and have climbed 38% since 1998, according to a recent report from KUOW. This May utilizing a much smaller set of data, CHS reported that the median one-bedroom ad listing in Craigslist had climbed to $1,795 per month. A tenant would need to make at least $72,000 a year for that apartment to remain affordable, assuming a 30% affordability threshold.
Last year, Seattle had the fastest rising rents among major U.S. cities and rents on Capitol Hill were rising even faster. CHS reported that average rent in the neighborhood had reached $1,557, a 12% increase in just one year.
Capitol Hill’s construction boom is no doubt playing a factor in the neighborhood’s rising rents. Greater Capitol Hill will be home to at least 600+ new apartment units in 2015 as the most recent wave of ongoing construction projects finally finish up. A recent report from Dupre+Scott projects 729 new units will open in 2016 and 707 in 2017. In all likelihood, the true number will be even higher as the Dupre+Scott report doesn’t count microhousing, subsidized/nonprofit housing, or buildings that have under 20 units.
Silicon Valley tech workers are also playing a part in pushing up real estate costs. According to a recent report from Redfin, every 1% increase in tech hiring in Seattle results in a roughly
1% .5% increase in home prices beyond average appreciation.
Scott’s repositioning of his analysis comes as city officials seem more and more determined to do something to curb future rent increases in the city. The mayor’s Housing Affordability and Livability Committee is examining solutions like a housing bond program to build housing on city-owned land and private property acquired by nonprofits.
At the request of the City Council, the city recently released a plan that would require developers to create more affordable housing inside new buildings and/or pay a fee that would fund thousands of new affordable apartment units.
Rolling back the state ban on rent control has been a rallying cry for City Council member Kshama Sawant in her bid to represent the newly created Council District 3.