Rents are set to squeeze Brits’ pockets even more in the next five years, according to new forecasts that predict the rise in costs will continue to outpace wage growth.
Research by estate agents Savills estimates that average rents across the country will have risen by 9.5 per cent by the end of 2023 – and will rise by an average of more than three per cent a year every year after that up to 2028.
The agency predicts the average monthly rent will have risen 18.1 per cent by the end of 2024 – with higher than average increases in London and the south.
Up to the end of September, rents have risen by more than a quarter to 26 per cent since March 2020, when the first Covid lockdown began – and rises will only taper off when prices hit an ‘affordability ceiling’.
At that point, landlords will be hard-pressed to hike prices further – and rises could be outpaced by wage growth by 2027, bringing about a long-awaited reprieve for those who do not own their own home.
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Savills predicts that landlords will continue to sell up as high interest rates wreak havoc on their mortgages – and that there could be a serious deficit in the number of properties available for the next few years.
Demand for rental properties has also outstripped supply – with the high interest rates keeping otherwise ready-to-buy renters from taking out mortgages.
Emily Williams, director in the Savills residential research team, said: ‘Homes to rent continue to be in significant short supply. The end of a series of national lockdowns sparked increased rental demand in mid-2021 that has consistently outstripped supply ever since.
‘At the same time, the rising cost of debt has impacted the profitability of many mortgaged landlords. This, together with a changed tax and policy environment, is forcing an increasing number to sell their properties.
‘It’s very difficult to see where an increase in rental supply will come from in the next couple of years.
‘Any significant increase in stock in the sector will be delayed until 2026 and beyond, when interest rates have fallen more substantially.’
Households are spending more than a third – 35.3 per cent – of their income on rent, the agency believes, the highest level in 18 years.
In London, the figure is even higher – with households spending 42.5 per cent of their income on were they live. Rents in the capital have soared 31 per cent in the last two years alone.
It now expects built-to-let projects to lead the way in creating a new supply of private rental properties.
The Homelet Rental Index reports that the average UK rent now sits at £1,283 a month – up 9.56 per cent year-on-year.
Estate agents Zoopla, meanwhile, said in its most recent rental market report in September that the average renter has seen costs rise by £2,800 in the last three years.
The problem is exacerbated in Scotland, where landlords are using a loophole in the Scottish Government’s rent control scheme to hike rents by an average of 12.7 per cent when they bring new tenants on board.
The scheme protects existing tenancies from having their leases raised by more than three per cent upon renewal.
The rental market is more competitive than ever, with average prices in the capital at the highest price of anywhere in the country.
But as Londoners fork out a significant proportion of their monthly paycheque on renting their homes, are they really getting their money’s worth?
London-based letting agents Bob Makler, pointed out the difference between plush prisons around the world and expensive, but not particularly inviting, rooms to let in England’s capital.
The viral video, which has 6.1 million views and shows the tiny, dark and dingy rooms in the London area, left city-dwellers in dismay.
After seeing the more homely alternatives behind bars, one person stating they were being conned by rental costs.
Makler’s video lays bare how uninspiring the rental market in London can be – as it’s not particularly easy to tell the difference between the jail cells and the rooms to let.
It comes after Rightmove revealed earlier this month that average monthly rent in London was £2,627 – a 12% rise from 2022.
Makler kicks off the game with a fairly bare and bleak room, coupled with a bed frame sitting close to the dreary brown carpet and a green board on the wall.
He initially assumed the dreary looking space was a prison ‘straight away’, but it turned out to be a London rental property.
The tiny abode would set a prospective tenant back a whopping £900 every calendar month.
Next up on the list, is another light-deprived room, however the estate agent quickly guessed the snug confine is located in London.
He quipped: ‘It’s tiny, it’s gloomy and it’s dull you would be right in guessing that it is a London rental.’
Renting the box room furnished with bed, side cabinet and a yellow would set you back £859 every month.
A bright orange room that boasts books, electronics and a seemingly comfortable bed was among the series of pictures.
But if you thought this looked like a university student’s accommodation you would be sorely mistaken, as this is a New Zealand prison.
The snap of the Otago Corrections Facility in New Zealand is mistakenly labelled by the estate agent as a Norwegian prison.
But regardless of location, the jail down under has been named as one of the world’s most luxurious, according to the Otago Daily Times, and is referred to as the ‘Milton Hilton’.
The final snap leaving tenants in tears is a dull box room with a view directly into a brick wall.
Discussing the room, Makler said: ‘The room looks tiny, the best looks solid, the window looks like it doesn’t open fully.
‘I would have said prison but once again I would have been wrong as this is a London rental property for 700 pounds per month.’
Shocked viewers flooded the comments, with one person joking: ‘Them having Harry underneath the stairwell, makes so much more sense now.’
Another joked: ‘How much is a pint in a prison?’
One viewer said they would ‘rather commit a crime,’ than rent in the British capital.
A disheartened renter quipped: ‘The crazy thing is, in prison you would be surrounded by criminals everywhere and still be safer than in London.’
Sharing their scarring London rental experience, a viewer wrote: ‘I stayed for a night in one of like these in London. So traumatic haha.’
Certain tenants claimed it was ‘easy’ to determine a London rental room and a European prison, jesting: ‘Prisons actually have to give inmates a certain level of humane treatment, unlike landlords.’
In the beginning of the viral video, Makler stated one room was a German prison, however this appears to be inaccurate.
The plush and cosy room is actually a snap of Långholmen Hotel in Stockholm, Sweden. The Scandinavian hotel and hostel was previously previously a prison.
If the affordability of college tuition is becoming an issue, then just wait until the cost of room and board comes up.
Rents for off-campus student housing across the U.S. are near all-time highs, according to Yardi Matrix, a commercial real estate data analytics firm. The average cost to rent a bed in off-campus student housing is nearly $846 per month, while year-over-year rent growth in the sector is up more than 6 percent.
Yardi Matrix anticipates “record-high rents” for the 2023-24 school year for privately operated housing complexes aimed at college students.
“Rent growth in the student housing sector continues to be the envy of the commercial real estate industry,” said the Yardi Matrix national student housing report. The survey did not cover the cost of housing in on-campus, college-run student dormitories.
The Yardi Matrix studied nearly 900,000 beds across neighborhoods near 200 universities. The firm argued that much of price increases have come on account of pre-leasing, the process of reserving units and leasing them before they come to market, allowing them greater control over rent prices.
“Student housing rent growth during the leasing season tracked pre-leasing, with operators pushing rents early on in response to rapid pre-leasing,” said the report.
Just over 95 percent of student housing beds among the 200 universities covered in the report were pre-leased. September 2023 pre-leasing rates were higher than 2019, 2020 and 2021, with 56 percent of markets pre-leasing 99 percent of their beds, according to Yardi Matrix.
The markets that saw the largest year-over-year growth of pre-leased student housing properties include University of Southern Mississippi (19.1 percent), University of South Alabama (13.2 percent) and Ohio University (12.8 percent).
Perhaps most significantly, a whopping 33 markets saw double-digit rent growth as of September 2023, including some of the more well-known universities in the nation: Purdue, Arizona State, Clemson and University of Georgia, which all boast total undergraduate enrollments between 22,000 and 65,000 students.
Brian Pascus can be reached at bpascus@commercialobserver.com
I’m a single mum with two children and work part-time at my local supermarket.
Over the past few years, I have been buying good quality fascinators from charity shops and boot sales whenever I spot them.
Typically, I buy them for between £3-5, they are all in good condition and are bespoke labels.
I have now amassed some 100 hats of all shapes, sizes and colours – and my plan is to keep snapping them up whenever I spot them between now and next Easter.
It’s for a business idea I want to set up where I rent these hats out for weddings and events, such as horse racing days. I live within 15 minutes of a major racecourse.
Fascinators are one of those items that us women often spend a small fortune on, wear once and they end up gathering dust in the loft.
I want to rent them out locally – and I think £15 is a fair price. I can meet people with the fascinators when they are going to the racecourse or one of the local churches near-by and collect them from a designated point the next day. I’m not looking to send to them by post.
My idea is that if I can get 10 of these rented out each weekend between April and October – peak wedding and race season – I can make a nice side-income to supplement my part-time wage.
However, I don’t know how to spread the word. I’m not particularly social media savvy – what are your tips?
If I did rent out 10 hats a weekend for six months, would I need to pay tax? Should I charge people a deposit, in case of any damage sustained or I don’t get the fascinator back? And if so, how can I facilitate that?
Dave Fishwick, This Is Money’s business doctor, replies: I can see you are passionate, and that is such an essential part of starting any business – if you have passion, drive and determination, you can usually find a way of making it work.
My advice is firstly, you must go fishing where the fish are! That means you need to be seen in the most cost-efficient way possible in all places that anyone would be looking for a unique hat for a special day.
It’s easy to think that when you hire something, it’s money for nothing for the product, but I have a dear friend called Franz, who has been in the hire business for many years, and a hire fee certainly isn’t for nothing.
Leasing and hiring always look good on paper, but the logistics of delivering, insuring and looking after products with relatively small margins can be challenging.
Apart from the usual costs and overheads of running a business, other expenses include loss and damage, cleaning costs and general wear and tear to the product, which can’t be reclaimed from deposits.
You should charge deposits because if you don’t, some of your products will not be returned.
Ideally, the hire charge, which you should charge upfront with the deposit, should cover the cost of the product and a reasonable profit so if they don’t return it, you’ve effectively sold it to them and you don’t lose out.
With higher-value products like vehicle hire, you can’t expect the customer to outlay this much money and card fees would become unrealistically high to take and refund large amounts.
This can be dealt with using pre-authorisation, which doesn’t take money from the customer’s account but would allow you to access a pre-agreed amount if they don’t fulfil their end of the hire agreement.
Another problem with hiring is that while you might think it should be clear-cut that the deposit will cover any damage, you might find that the person who hired it might argue the point, saying that something just fell off it rather than admit that they’ve damaged it.
A hire company needs to keep signed copies of a hire agreement, setting out its terms and conditions for the contract to be legally enforceable.
I advise hiring a hat from your biggest competitor, watching how they deliver the product, taking a close look at their contracts, policies and procedures and perhaps borrowing the agreement’s wording.
They will have spent considerable money having it drawn up.
You’ll have to decide if you’re only going to accept cash or if you’re going to use other payment methods like payment apps and card services.
Bear in mind that these services usually charge fees, so I would recommend that you use cash in the initial trial stages rather than setting up accounts with payment service providers immediately.
My advice is firstly, you must go fishing where the fish are! That means you need to be seen in the most cost-efficient way possible in all places that anyone would be looking for a unique hat for a special day.
Social media is the best way to market your idea: it will cost you more in time than money, which is generally preferable for an early-stage business, especially one intended to operate on a small scale.
You say you’re not social media savvy, but I imagine you are on at least one or two platforms.
There are college courses to learn about social media, but you’ll probably know as much by asking your kids. Also, post an advert in the supermarket where you work.
Some social media platforms like Instagram are image-focused, which would suit your products.
Quality photographs and pictures are crucial to promoting anything. Facebook and WhatsApp are more focused on friend networks.
I also advise you to contact your local race course, perhaps set up a small stall on event days, and link up with race course Facebook groups. Contact local wedding planners and attend wedding fairs. All should be helpful to promote your business.
Whether the income is taxable would depend on the part-time income from your job in the supermarket. If the total income from the supermarket and profit from hat rentals is more than the Personal Allowance (currently £12,570), the amount above the Personal Allowance is taxable.
You are allowed to deduct the higher of the relevant actual expenses and £1,000 to determine the profit on hat rentals.
For example, if you rent out ten hats for £15 for six months, the income from rent would be £3,900.
If the expenses relating to the rents were only £750, you could deduct the higher figure of £1,000 to get a profit on the rentals of £2,900.
This would be the figure you would add to your supermarket wage to determine your total income. You would be required to complete a personal Tax Return if the total income is over the Personal Allowance.
Another thought is that perhaps you could start branching out into renting out men’s hats and use all the same marketing to advertise both at no extra cost.
You could supply male and female hats to a couple, earning double the money without additional costs.
Recently, I found it very difficult to rent a quality traditional City banker’s bowler hat to wear at the Bank of Dave Netflix film premiere, and I needed to buy one just for the event.
You could see if it’s more profitable to sell some hats rather than just hiring them out. Perhaps try it as an experiment.
You have already bought many hats from the car boot sales, So I say give it a try, but don’t take on too many overheads or costs initially if you can help it and, most importantly once again, my most valuable piece of advice is: Go fishing where the fish are! Good luck.
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Parents and pet owners are paying as much as £460 per month more for rent and bills, it’s claimed.
The claim comes from website Confused, which asked 2,000 UK renters about their current living situation.
Some 33 per cent currently have a pet at their rental property, while around three in 10 have children. Of these, 13 per cent have had to pay their landlord an additional bond or deposit, and 10 per cent had to pay an extra cleaning fee.
The site claims parents are more financially penalised. It says parents have paid as much as £286, on average, to their landlord for deposits or bonds, while those with pets paid around £236, on average. And when it came to cleaning fees, parents have had to pay £174, on average, compared to £151 from those with pets.
When looking at average costs for all renters, monthly rent is currently around £586 per month. But three in four of all renters said that this has increased, on average, by £77 in the past 12 months.
On top of rental costs, ‘essential’ bills such as electricity and council tax are costing renters around £352, on average, each month.
Some 82 per cent of renters said they have experienced issues – damp and mould (44 per cent); issues with their boiler or heating system (41 per cent); plumbing (40 per cent); wear and tear (26 per cent); broken or faulty appliances (23 per cent).
There was some positive news for landlords.
For renters whose landlord sorted issues out for them, 32 per cent say that these were fixed between two and five days. Around one in 10 waited for more than a month to get issues fixed.
The majority of people surveyed said they have a very good (37 per cent) or somewhat good (32 per cent) relationship with their landlord – although 42 per cent do also think that landlords or estate agents are taking advantage of renters in the current financial climate.
According to the research, the introduction of the Renters Reform Bill seems to be welcomed by the majority of renters. Some 54 per cent of the survey respondents said they think the Bill will protect tenants.
A spokesperson for Confused says: “Our latest data shows how renters with pets or children may be paying more than others – which could seem unfair. But potential new rules for landlords could mean that this changes in the near future.
“With the introduction of the Renters Reform Bill soon in England, both landlords and tenants should have greater clarity on their living arrangements and financial commitments. And although this doesn’t exist elsewhere in the UK just yet, it doesn’t mean similar rules won’t apply in future. These changes should mean that some tenants won’t be financially penalised, leaving them with some additional income during a difficult and expensive time.”
Inflated interest rates may have made real estate in already-overpriced Toronto completely unaffordable to all but the ultra-wealthy in recent months, but even if mortgage and tax bills on the average Toronto home now amount to upwards of $7,000 per month, prices have yet to drop to match the decline in market activity.
Sales for both condos and homes in the GTA have been tanking, but even with these figures down a shocking amount from where they were last year, experts are not expecting prices to fall in line — in fact, they’re expected to get much higher.
The latest report from the Toronto Regional Real Estate Board (TRREB) states that while high lending rates have slowed the perennially red-hot market, population growth is expected to spur further demand and keep prices high.
We’re all first hand experts of this.
— педик made of spicy bear meat 🐻 (@TapeDeckChris) July 28, 2023
As TD Economics said in July, record immigration targets are contributing to a population surge that is in turn causing “textbook demand shock” and raising prices for goods and services across the board — during a time of unprecedented inflation, no less — especially in our already-pressed real estate market.
“Despite the market being better-supplied with listings, the average selling price was up year-over-year,” TRREB wrote on Wednesday.
The newest stats from TRREB show that even in the face of ridiculous mortgage rates, home prices in the GTA won’t budge. Chart from TRREB.
“The consensus view is that borrowing costs will remain elevated until mid-2024, after which they will start to trend lower. This suggests that we should start to see a marked uptick in demand for ownership housing in the second half of next year, as lower rates and record population growth spur an increase in buyers.”
This, of course, will mean ever-higher prices, as has historically been the case for Toronto in recent memory, aside from that welcome little COVID blip.
While the number of homes sold across the Toronto area was down 7.1 per cent year-over-year in September, the average selling price was up 3 per cent. And, the number of homes on the market was markedly higher than this time last year, too.
Sales activity is slightly down, but new listings are way up, and more demand is only going to make demand stronger, competition more fierce and prices, higher, regardless of interest rates. Chart from TRREB.
TRREB, meanwhile, is involved in a class-action suit that alleges they and other industry stakeholders have been price-fixing realtor commission rates for more than a decade.
But given that we’re in one of the most overvalued housing markets in the world that only a market crash could help remedy, the allegations, if true, may be among the least of our concerns.
House prices fell at their fastest rate since 2009 last month as the ‘downward spiral’ continues, a new survey of estate agents and surveyors found.
The poll by the Royal Institution of Chartered Surveyors (RICS) of its members in August showed the most negative reading since February 2009 as demand from buyers and agreed sales fell sharply.
In contrast in the rental sector rents are being pushed up by a ‘yawning gap’ between demand and supply, RICS said.
A net balance of -68 per cent of those surveyed reported house prices had fallen in their region – falling from -55 per cent in July.
The net balance measures the difference between the percentage of surveyors seeing rises and falls in house prices.
House prices are dropping in almost all parts of the UK, with the West Midlands, East Midlands, East Anglia and the South East seeing the greatest falls, RICS said.
Northern Ireland remains the only area in which more surveyors report prices are rising than falling, the poll found.
The report follows Halifax’s latest index showing the average UK home is now worth £279,569 after seeing £14,000 wiped off its value in one year.
Property prices will continue to tumble in the short-term in the face of higher mortgage rates with ‘little prospect of any turnaround in the immediate future’ RICS said.
Demand from homebuyers remained subdued with net balance of -47 per cent of surveyors reporting a decline in enquiries over the month – the weakest reading since the start of the pandemic.
All parts of the UK continued to see a fall in demand from new buyers.
Meanwhile, demand for rental properties is soaring across the country as tenants compete for fewer properties and landlords sell up and leave the sector.
A net balance of 60 per cent of surveyors expect rental prices to be driven higher in the next three months, RICS said.
RICS chief economist, Simon Rubinsohn, said: ‘The latest round of feedback from RICS members continues to point to a sluggish housing market with little sign of any relief in prospect.’
Alec Harragin, director of Savills head office in London, added: ‘Whilst inflation seems to be on its way down, and mortgage rates may have peaked, affordability will remain stretched.’
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More homes are going up for rent, as stubborn owners increasingly shift from selling to letting when they don’t get the price they want.
Two years of near-double digit rent increases have seen renting become increasingly expensive, with demand from tenants far outstripping the supply of homes.
The average rent in the UK as of July this year is £1,243, according to the HomeLet rental index – a 10.3 per cent increase on the same time last year.
However, the number of homes to rent has been creeping up across the UK over the course of the past year, according to a number of letting agents contacted by This is Money – so could the pace of rent rises start to slow down?
According to the estate agency group, Connells, which has more than 1,200 branches represented by 80 brands across the UK, the number of rental homes has increased by 8 per cent since March this year.
Stephen Nation, lettings director at Connells Group, says: ‘The sales market hasn’t been enough to tempt the majority of landlords and the rental market remains an attractive option.
‘This means we are actually seeing a slight increase in the supply of available rental property compared to last year.
‘However, demand from applicants is still outstripping supply, and as we enter the late summer an upward pressure on rents continues in some areas.’
The estate agent Hamptons says there are now 17 per cent more homes on the rental market than there was at this time last year.
However, its data also shows that the year-on-year comparison masks a big drop in the amount of properties for rent towards the tail end of the pandemic lockdowns.
There are still 43 per cent fewer rental homes on the market than there were in 2019, with every region of the country recording a fall of at least 25 per cent, and Scotland leading the way with a 65 per cent drop.
David Fell, a senior housing market analyst at Hamptons believes that rent rises are unlikely to subside until mortgage rates begin to fall.
He says: ‘While the small increase in stock may take the edge off rental growth, as long as mortgage rates remain elevated, rents will continue to reflect the large jump in landlord’s mortgage costs.
‘It’s hard to see rises in rents begin to stall or even reverse until lower mortgage rates reduce the squeeze on investors and potentially tempt in some new landlords. Until then it will be tough and expensive to find somewhere to rent.’
It is in London where we may begin to see rent rises begin to slow down first.
There were 39 per cent more rental properties on the market in July 2023 compared to last year, according to London-based letting agent, Chestertons.
Meanwhile, it says the number of new renters entering the market has fallen by 5 per cent.
Chestertons says that with more properties to choose from and slightly less competition, renters in the capital often now have the upper hand during price negotiations.
This shift in power has seen 88 per cent more landlords than this time last year being willing to reduce their asking rent in order to secure a tenant for their property.
Richard Davies, chief operating officer at Chestertons, says: ‘Earlier in the year, London was suffering from a severe lack of rental properties.
‘However, with the sales market proving challenging, many would-be sellers have decided to put their property up for rent rather than sell.
‘This has temporarily boosted the number of rental properties and prevented rents from continuing the double-digit increases that we have witnessed since 2021.’
Similarly, agent Knight Frank reports that a long-awaited supply increase in the London lettings market is underway.
It says the number of lettings instructions in July in London was 18 per cent higher than the same month last year, and the highest for any single month since October 2020.
Jon Reynolds, head of north and east London lettings at Knight Frank, said: ‘Some of the stock that has gone across from lettings [to sales] has sold, but we are unquestionably seeing more stock come back to lettings.’
Knight Frank says that rental value growth has continued to calm as supply improves, but it’s still strong by historical standards.
In prime outer London, which includes sought-after areas such as Wimbledon, Battersea and Wapping, rents grew 12 per cent in the year to July, which exceeded the growth of 11 per cent seen over the entire decade before the pandemic.
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Residents of California’s inland cities, long considered cheaper alternatives to the state’s expensive coastal metros, are beginning to feel the effects of the state’s housing affordability crisis.
Typical rent prices have shot up by as much as 40% in places like Bakersfield, Fresno, Visalia and Riverside in just three years, according to data from economists at the real estate listings company Zillow.
While rent in these cities remains considerably lower than the Bay Area or Los Angeles, they’ve seen the largest increases in rent across the entire state, putting sudden pressure on lower-income residents who rely on the lower costs of living of these areas.
In both Bakersfield and Los Angeles, average rent rose by a little over $500 since the start of the pandemic. However, because Bakersfield rents were vastly cheaper to begin with, that $500 increase has a much harder impact.
The average income in Kern County is around $25,000, according to the latest US Census data, while the average LA County resident makes about $38,000.
The sudden explosion in inland rent prices can be traced back to the COVID-19 pandemic and, more generally, California’s already-existing housing crisis that has long pushed residents to more affordable cities inland and outside of the state.
The state’s densely populated coastal areas saw a large loss of educated white-collar workers. Many left the state entirely, while others migrated further inland.
Nicole Bachaud, a senior economist on Zillow’s research team, explained that places like Riverside or Bakersfield “provide opportunities for homeownership, especially in the world of remote work.”
As millennials seek out homeownership, they’re confronted with a market that is increasingly inaccessible. According to other data from Zillow, the typical mortgage payment in the Los Angeles area represents around 84% of someone’s average monthly income. While that burden is 10% down from last year, it still represents a significant barrier to homeownership.
As property owners sold off their rentals to migrating homebuyers, inland communities started to see a shortage of one-bedroom units, increasing competition among renters.
Bachaud notes that rent prices saw their largest increases around 2021 driven by “a lot more rental demand, especially in places that had previously been more affordable.”
While these historically affordable areas have provided accessible homebuying opportunities for newcomers, the large influx of people searching for housing has created financial strains for lower-income residents.
Shanti Singh, communications and legislative director for the Tenants Together coalition, described the situation as a “perfect storm,” creating a “chain of displacement.”
“People fleeing evictions and unaffordable rent hikes and housing in LA go further out, and then people from Bakersfield gets displaced,” she said.
Singh explains that in places like the Central Valley, “historically, there has not been as many city-level tenant protections, if any,” putting pressure on renters which only grew during the pandemic.
“If you were already struggling to pay your rent before COVID, and then you have losses of income caused by the pandemic and, on top of that, your landlord is responding to inflation by hiking your rent: that is a homelessness and displacement time bomb,” Singh said.
While the root of this widespread crisis is a shortage of affordable housing supply, tenants’ rights organizations and activists have pushed for measures to address the immediate strain of rent hikes confronting tenants.
Singh described a wave of tenants’ unions organizing in areas like the Central Valley within the last year. In June, activists campaigned for a rent control program in Fresno, which ultimately was unsuccessful.
Echoing a similar belief as Fresno city officials, Chapman University professor Joel Kotkin said, “the problem with rent control is that it solves the issue in the short-term, but it makes it very unappealing for developers to build new housing.”
Still, Singh emphasized another perspective, saying that rent control is a “long-term formula for stability.”
“There are positive outcomes that come out of keeping tenants stable in their communities,” she said. “It’s not the entire solution, of course, we just need to build more affordable housing.”
A report by the California Department of Housing and Community Development published in 2000 estimated the state would need to build 220,000 additional units each year for 20 years to satisfy the state’s then-growing population.
Still, more than two decades later, California has not caught up to that goal. Last year, which saw the highest number of units produced since 2008, the total count of housing built was still about 100,000 units short of meeting that number.
That same year, the department announced that 2.5 million new homes would need to be built over the next eight years, amounting to 315,000 units a year, to meet needs across the state.
Cities such as Bakersfield, Visalia, and Fresno have responded by approving approximately 15% more housing units in 2021 and 2022 compared to the two years before the pandemic, according to data from the California Department of Housing and Community Development.
“We really need to focus on building more affordable housing that’s able to be maintained through programs like subsidized government loans that are also going to be able to help builders create affordable homes to fill the need for renters,” said Bachaud.
Kotkin, and other experts, propose additional measures, such as reforming regulations like the California Environmental Quality Act, or CEQA, to allow the building of new communities outside of the dense urban metros.
“The state regulatory environment has made it very difficult to build affordable housing of any kind,” he said.
Kotkin points to the success of places like Irvine and Ontario Ranch, communities developed with a focus on sustainability and targeted for remote workers, as an example of what he describes as “smart sprawl.”
“I think there could be a very good future for the Inland Empire and the Central Valley. It’s really the kind of place where California can reinvent itself,” said Kotkin.
“What we have to do is make sure that the housing prices and rent don’t go so high that people want to leave.”
A Sarpy County woman says her apartment rent is pricing her out of her home. Tanya Ekoga says it jumped from $525 a month to $800 in the same year. With a lack of affordable housing in the Omaha metro, she’s worried about her next move.Ekoga lives in one of the eight units in an apartment building in Sarpy County. “Every time we see each other, we’re like, ‘Are you staying, are you going?’ Because they want us to sign a lease on the 800. That just puts us into a bind,” Ekoga said. In April, the Lyft driver said she was notified about the rent increase. “My money’s not guaranteed,” Ekoga said. “I can go out and drive or whatever, but what if my car breaks down? How am I going to come up with that $800?”Ekoga said she wonders how many of her neighbors are going to come up with the money too.”They get checks once a month, from the state, like SSI, SSD,” she said.The complex is managed by Real Deal Realty. The company declined an interview and would not provide a comment.There’s at least one thing that points to why Ekoga is seeing her rent go up: The apartment’s property valuation. A search on the Sarpy County website shows it went from $398,000 in 2022 to $517,660 in 2023. “Over the last handful of years, we have seen that what people are paying for the apartment properties has been increasing,” Ekoga said. Tim Ederer is the senior commercial real estate appraiser for Sarpy County. His office sets valuations for complexes like Ekoga’s, based on the rental market.”We’re not trying to predict what the market’s going to be doing in the future. We are kind of reacting to what the market has already done,” Ederer said.Ederer said an increase in valuation can lead to an increased tax bill for the property owner. He said that, along with other factors like inflation, an increase in insurance payments and maintenance, are leading to a hike in rental prices. “The people that own the apartment complexes are operating a business. And in order for that business to stay viable, they do need to cover the expenses that the property is experiencing,” Ederer said.That leaves tenants like Ekoga faced with new expenses and a lot of uncertainty.”It’s just a big jump,” Ekoga said about her raised rent. Get the latest headlines from KETV NewsWatch 7
A Sarpy County woman says her apartment rent is pricing her out of her home. Tanya Ekoga says it jumped from $525 a month to $800 in the same year. With a lack of affordable housing in the Omaha metro, she’s worried about her next move.
Ekoga lives in one of the eight units in an apartment building in Sarpy County.
“Every time we see each other, we’re like, ‘Are you staying, are you going?’ Because they want us to sign a lease on the 800. That just puts us into a bind,” Ekoga said.
In April, the Lyft driver said she was notified about the rent increase.
“My money’s not guaranteed,” Ekoga said. “I can go out and drive or whatever, but what if my car breaks down? How am I going to come up with that $800?”
Ekoga said she wonders how many of her neighbors are going to come up with the money too.
“They get checks once a month, from the state, like SSI, SSD,” she said.
The complex is managed by Real Deal Realty. The company declined an interview and would not provide a comment.
There’s at least one thing that points to why Ekoga is seeing her rent go up: The apartment’s property valuation. A search on the Sarpy County website shows it went from $398,000 in 2022 to $517,660 in 2023.
“Over the last handful of years, we have seen that what people are paying for the apartment properties has been increasing,” Ekoga said.
Tim Ederer is the senior commercial real estate appraiser for Sarpy County. His office sets valuations for complexes like Ekoga’s, based on the rental market.
“We’re not trying to predict what the market’s going to be doing in the future. We are kind of reacting to what the market has already done,” Ederer said.
Ederer said an increase in valuation can lead to an increased tax bill for the property owner. He said that, along with other factors like inflation, an increase in insurance payments and maintenance, are leading to a hike in rental prices.
“The people that own the apartment complexes are operating a business. And in order for that business to stay viable, they do need to cover the expenses that the property is experiencing,” Ederer said.
That leaves tenants like Ekoga faced with new expenses and a lot of uncertainty.
“It’s just a big jump,” Ekoga said about her raised rent.
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