Lewis and Clark County rent increase rate among highest in nation | Local
Lewis and Clark County is among the U.S. counties with the fastest rent growth rate in the past two years, according to a recent story in the Washington Post.
The county posted a 36.5% rent increase from the first quarter of 2020 to the first quarter of 2022 and had an average rent of $1,263, the April 21 story said. It was not the highest rent in Montana, but the highest percentage increase.
Rents rose a record 11.3% nationally last year, according to real estate research firm CoStar Group, the Post reported. CoStar is forecasting another 6% rise in U.S. rents this year, which reportedly is about double pre-pandemic norms.
The Post said rents were going up as more people were looking to live on their own after being cooped up with others during the pandemic, the increasing cost of homes made ownership difficult, rent freezes put in place during the pandemic had expired and telecommuting has allowed people to move from pricey “hotspots” to more affordable areas.
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Michael O’Neil, executive director of the Helena Housing Authority, had seen the April 21 article.
“It certainly is not good news, but the information really confirms what we have been seeing,” he said. “We’ve been seeing this crisis build and the pandemic has made it a real emergency. The fire has come over the top of Mount Helena and we need all hands on deck.”
The housing authority is a quasi-government nonprofit agency established in 1938 to provide affordable housing to low-income families, the elderly and disabled.
O’Neil said he’s been seeing unprecedented rent increases and building owners who long participated in programs no longer wanting to be involved. And some longtime landlords are selling to others because of the high prices they can get.
“I’ve been involved in housing in Helena for 30 years and I’ve never seen anything like it,” O’Neil said.
O’Neil said it is pretty common now to see rents go up $200-$300. He also said there is the matter of supply of rentals in the community.
“We know Helena, Montana, is a wonderful place to live and in the post pandemic world where you can live anywhere, people are moving here,” he said.
“It creates a real challenge for our working families and people on fixed incomes,” O’Neil said of higher rents.
William Staffeldt, president of the Helena chapter of the Montana Landlords Association Inc., said in the aftermath of the COVID-19 pandemic there have been so many people moving to Montana that it has caused a real demand for rentals. He said he posted an available unit on Facebook in September and within 36 hours had more than 300 applicants.
“Montana has been way lower than the national average for so long,” said Staffeldt, who has 23 units, adding he was looking at a 10% increase after not having raised rents in five years.
Silver Bow County went up 3.1%, with an average rent of $624. Cascade County went up 6.5% during the same time, with an average rent of $831, according to an interactive map posted with the story.
Gallatin County increased 18.6% in those two years, with the average rent at $1,881; Missoula County had an 18.9% increase to $1,218 and Yellowstone County had a 14.7% rent increase during that time period, with the average rent at $1,149.
Ravalli County had a 6.3% hike, making for an average rent of $782 and Flathead County had a 7.4% increase to $887, the Post found.
Chambers County, Alabama, had the largest rent increase percentage during the time period, with 44%, bringing its average rent to $1,156. Second highest was Rockdale County, Georgia, with 40% and an average rent of $1,423. Third was Collier County, Florida, with 39%, having an average rent of $1,991 and Lewis and Clark County was tied for fourth with Limestone County, Alabama, which had an average rent of $912.
The price estimates are for multifamily rentals in counties with at least 1,000 units.
The Post story by Abha Bhattarai, Chris Alcantara and Andrew Van Dam said rents are increasing at a faster rate than they have in decades, making it costlier for many Americans.
About two-thirds of families owned their homes as of the end of 2021, according to the U.S. Census Bureau, but the same release shows a majority of Black and Hispanic families rent their homes or apartments, while just over a quarter of their white peers do.
The U.S. Census Bureau listed the median rent for Lewis and Clark County from 2016-2020 to be $863 and 71.8% of the 31,943 housing units (as of July 2019) to be owner occupied. The median household income in 2020 dollars is $66,062.
Staffeldt said the goal is to make housing affordable and for people to make three to four times what they pay in rent.
“The rents around Montana are still really dang reasonable,” he said.
He said rents are now about $900 to $1,200 for a two-bedroom apartment, he said, adding that houses can go higher than that.
Staffeldt said a rule of thumb was to always pay 1% of the value of a house in rent. So if a starter home sells for $300,000, than means the rent should be $3,000.
“Our homes are still way below that,” he said.
Staffeldt noted other costs, many of which impact landlords, are going up as well.
“You still have to make a profit on your rentals, or why bother having them?”
O’Neil said the city of Helena is encouraging affordable housing and Lewis and Clark County commissioners oversee funding that goes out to whole network of social service providers.
But he said efforts need to be taken on a state level for affordable rents in Montana, perhaps a low-income tax credit to help build or preserve housing.
“We need innovative ways to develop private-public partnerships to develop more housing,” O’Neil said. “We need to get back to where people can get an affordable place to live, we need to get back to affordable homeownership. It’s the Montana way and the American way.”
Assistant editor Phil Drake can be reached at 406-231-9021.