Rising-rent trend finding temporary home in Dubuque
Telegraph-Herald (Dubuque, IA), 2014-04-19
average rent prices The following monthly rate averages were obtained from separate listings of apartment openings. The vacancies listed might vary by agency. Averages from an inventory of vacancies in Dubuque kept by Greater Dubuque Development Corp. : - One-bedroom or efficiency: $601.89 - Two-bedroom: $846.97 - Three- or four-bedroom: $976.77 Averages from an inventory of vacancies kept by the Dubuque Housing and Community Development Department : - One-bedroom: $475 - Two-bedroom: $638 - Three-bedroom: $837
Rents are escalating nationwide, as landlords struggle to keep up with an ever-increasing demand for apartments.
Though Dubuque has not been immune from rising rents and lower- than-ideal vacancy rates, local experts say the market remains healthy.
"We're seeing a lot of transition in the market, a lot of growth, and we're seeing a new interest in a burgeoning market, which is apartments in a live (and) work environment," said Rick Dickinson , president and CEO of Greater Dubuque Development Corp.
Rent prices climbed 6 percent nationwide from 2000 to 2012, according to a recently released report from Apartment List, a rental housing website, which used inflation-adjusted figures. In that same time frame, average income among renters dropped by 13 percent.
The national rental unit vacancy rate went from 8 percent to 4.1 percent in the past five years. With increased demand, landlords were able to charge more for their coveted units.
Dubuque's rental scene appears to be a microcosm of its national counterpart. Jerry Maro , president of the Dubuque Landlords Association , said the arrival of IBM and its 1,300 employees in 2009 had a significant impact on local rental units. A vacancy rate that had been hovering at about 5 or 6 percent plummeted to about 2 percent, he said.
Since then, rental prices at Maro's units, predominantly in the midtown area, have risen.
"Mine, personally, probably increased roughly 10 percent," he said.
And though Maro couldn't say so definitively, he predicted similar price increases throughout the city.
Dickinson acknowledged IBM's arrival was met with a surge in rental prices in some areas. But he said it was a short-lived trend.
"I think there was some gouging going on when the IBM project was announced, but that quickly faded because the market took over," he said, noting that many of the overpriced rental units were of poor quality. "The marginal products, the poorly maintained products (that were) overpriced, they're just dead on arrival."
Higher rent prices are a "double-edged sword," according to Maurice Jones, Dubuque's economic development director.
"It's a sign of strong economy when you start to see rents go up " (but) it's a very delicate balance that you have to be careful with," he said.
Any conversation with prospective Dubuque employers inevitably turns to the issue of housing, Jones said.
"It, of course, has an impact on economic development," he said. "When you recruit businesses into the community, housing is a very important part of that. " We're trying to bring people into the community. Having affordable housing opportunities available is very critical."
Alvin Nash , director of the city's department of housing and community development, said if there is a major concern locally, it's the lack of quality rental units. Though many apartments are available, Nash said there is a need for well-maintained properties.
"I think in Dubuque there is a demand or a need for quality affordable units, rather than just run-down units or something that's not kept up well by landlords," he said.
Maro said the trend toward rising rents soon should change. The lowered vacancy rates motivated landlords to build, with hundreds of new units cropping out on the West End and the city's Millwork District .
"Over the last two to three years, (landlords) added about (1,000) rental units in Dubuque ," Maro said. "The city and the Greater Dubuque Development Corp. said we don't have enough rental units. Contractors started building, and that's been the result."
According to city records, the number of local rental units has climbed from 8,100 in 2008 to 9,022. Maro said he believes rental prices could soon plateau or even decrease as the vacancy rate creeps back toward 10 percent.
"When you add (1,000) rental units to a town that's only increased in population about 1 percent, I think at some point we're going to have a higher vacancy rate," he said.
The Associated Press contributed to this story