Real Estate News

Tacoma's rents keep going up ... and up ... and up

The Grand on Broadway, a new apartment building in Tacoma, seen earlier this year. Rising rents in the city and area continue to make news and affect those seeking affordable housing.
The Grand on Broadway, a new apartment building in Tacoma, seen earlier this year. Rising rents in the city and area continue to make news and affect those seeking affordable housing. phaley@thenewstribune.com

Following up on Thursday's news that the median price of homes sold in March was just under $350,000 in Pierce County, it's worth noting how much rents continue to rise in Tacoma and the area.

Most Pierce County and South King County markets have "posted outsize gains," in a year over year comparison, according to a Marcus and Millichap commercial real estate research report released Wednesday.

The increases were led by North Tacoma, which at $1,303 a month was up 12.2 percent annually, the report stated. Next came SeaTac/Burien, which increased 10.2 percent to $1,313 a month.

A report by Apartment List shows Tacoma's median, two-bedroom rent at $1,540, above a national average of $1,170.

A third report found Tacoma was in the top 10 for fastest rising rents in smaller cities in the United States. The apartment search website RentCafe said in its March report that local rents increased "by a hefty 8.3 percent year over year, reaching $1,209 a month.”

RentCafe recently pointed out that gentrification was contributing to Tacoma's rising rents.

The company analyzed gentrification in more than 11,000 ZIP codes nationwide. It defined gentrifying areas as those having experienced the highest growth in median home value, median household income and the share of residents with a bachelor’s degree or higher since 2000.

Tacoma's 98402 was listed as having one of the nation’s 20 most rapidly gentrifiying ZIP codes. The area includes most of Tacoma’s downtown, a bit of the eastern part of the Hilltop and the western portion of the Dome District. It also includes the western shore of the Thea Foss Waterway.

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Not all increases are for the same reason nationally. Lack of supply is blamed in the RentCafe report for the rise in rents in Tacoma and Reno, Nevada, another city in the top 10 for fast rising prices. In other cities, such as Orlando, Florida, “rising rents are a sign of economic recovery, after suffering a longer downturn period than larger markets.”

This isn't the first time Tacoma's been on the radar for its high rent rates. End-of-year reports in 2017 noted the dramatic rise that came in just one year.

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According to Trulia, a real estate-data firm, median rents in Tacoma rose an estimated 8.8 percent from 2016 to 2017 — to $1,785 per month according to the report — the biggest increase by its measure in the nation. (No. 2 was Sacramento at 8.3 percent.)

Amid all this, a national campaign is pushing to spread the word about the housing crisis.

Home1, billing itself as a nonpartisan movement created by the marketing firm and media company Public Interest, has a new video that spotlights some of the more startling numbers on its website: http://home.one/

Among the findings cited:

Half of those who rent can't afford it, and one out of four spend more than 50 percent of their income on rent.

Someone is evicted in the United States every 11 seconds.

Half of Baby Boomers in line to retire in the next 15 years will have no retirement savings. And most will live on Social Security, getting an average of $1,341 a month.

And it’s not just those retiring or planning to do so who are in trouble.

“For the first time in our nation’s history, people with good jobs can’t afford homes,” Stephen Whyte, founder and managing director of Seattle-based Vitus, said in a statement for Home1’s launch. “In my 25 years in affordable housing development, I have seen this issue grow from a conversation into a full-blown national crisis."

Vitus develops affordable housing in Washington state and nationally across more than 20 states. The company is a key partner of the Home1 movement to bring attention to the need for more affordable housing.

In a recent phone interview with The News Tribune, Whyte compared the movement to former Vice President Al Gore’s efforts to shine a light on climate change in the early 2000s.

“When Al Gore was leading the charge for awareness on climate change, he had his movie and promotional campaign," Whyte said. "I think that was transformative."

“We don't see affordable housing any different in terms of level of crisis it represents, and we are seeking to use a similar campaign to raise awareness to support change in laws and regulations,” Whyte said.

And there is now a concern spreading among generations of ever being able just to buy.

Housing financer Freddie Mac Multifamily on Wednesday released a report stating that nationwide, 67 percent of renters "view renting as more affordable than owning a home, including 73 percent of baby boomers (aged 53-71).

“Similarly,” the report noted, “67 percent of renters who will continue renting say they will do so for financial reasons — up from 59 percent just two years ago."

Western states gained special mention in the report: “Those living in the West feel the impact of rent increases more than other regions, with 64 percent saying they are now spending less on other essentials due to changes in their rent.

"Additionally, renters living in the West perceive homeownership as more difficult to attain than other regions, with 51 percent believing homeownership is less accessible than three years ago.”

According to David Brickman, executive vice president and head of Freddie Mac Multifamily, “Half of baby boomers who rent do not anticipate owning a home in the future, with a growing number of Generation Xers following suit.”

Debbie Cockrell: 253-597-8364, @Debbie_Cockrell
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