JOHNSON CITY, Tenn. (WJHL) – New data from the Northeast Tennessee Association of Realtors shows that rent in the Tri-Cities is now 50 percent higher than before the pandemic.
A release from the association said multi-family housing is the new “hot ticket” in commercial real estate, according to President Rick Chantry.
The association reported the sale of 15 multi-family housing complexes so this year. At this time last year, there were only two of those transactions.
Additionally, the local multi-family vacancy rate is lower than the national average, and the second lowest in East Tennessee.
That is driving rent higher, up to 50 percent in single-bedroom units.
Don Fenley, a local housing market expert, does not expect rent to come down anytime soon. He said outside investors are buying up property and raising prices.
“As long as the demand is there, the landlords and the investors are going to look at maximizing their profits,” Fenley said.
Briar Worley, a Johnson City renter, said her apartment complex was recently bought out and increased rent for her unit by $275.
“Someone from out of state came in and bought out our apartment complex,” Worley said. “Average rent, depending on what part of the building you lived in, [increased by] $150 to $300 a month.”
Chantry said simple supply and demand economics is also to blame for the rent hike. Rentals are in high demand, but low vacancy means the price goes up.
The association said inventory is down 21.8 percent from last year.
But Chantry said the housing boom, with its supply and demand similar issues, is playing a role in the rent hike.
“The house sales are down so then people have to rent,” Chantry said. “The rents are going up because of the fact that it’s costing more for the houses.”
Worley said tenants in her building are having difficulties finding cheaper places to rent.
“Everyone’s rent is going up. People are trying to find cheaper places to live,” Worley said. “There aren’t any cheaper places to live.”
Fenley said one investor told him the sudden change is because rent in the Tri-Cities has traditionally been low.
“His response was, look – people here have been paying very low rent for a long time and they know it. The market’s changed,” Fenley said.
He said some renters may look to move in with family or find roommates if they live alone.
In Johnson City, others are looking for help.
A Good Samaritan Ministries case worker said they receive about two new applicants every day for electric and water bill assistance.
“With these rentals, part of your lease is keeping the power on, so that’s where we try to help,” they said.
With some low income renters being priced out of their apartments, Chantry said wages need to reflect the rising housing costs.
“I would say that to the folks out there that do the hiring, we may have to see our wages go up too to keep people here in the area,” Chantry said.
Chantry said more housing is coming to the Tri-Cities, but it’s not affordable housing.
He said home builders are still dealing with high supply costs, so higher-priced homes make more financial sense to build than affordable housing.
He said the government or another entity needs to step in with grants to make affordable housing construction more viable.