Apartment rental rates rising

Falling vacancy rates and low housing affordibility are forcing apartment rental prices to their highest level in nearly a decade.

A midyear 2007 study released by Apartment Realty Advisors-EquiMark shows a 6.7 percent price increase from last year. The average price for a one-bedroom, one-bathroom apartment in Salt Lake County sits at $606 per month with the apartment vacancy rate at 4.1 percent. The cheapest apartment, a studio, costs $449 per month. The highest average cost of an apartment, three bedroom, two bath, is $915 per month, the report said.

Vacancy rates in the past 10 years were highest in 2002 at 10.9 percent and have steadily dropped. According to the report, apartment vacancy rates have fallen and rental prices rose for Utah, Davis and Weber counties, as well.

It's now a landlord's market for apartment prices, said L. Paul Smith, executive director of the Utah Apartment Association. He said landlords are now able to raise rents to cover increasing insurance costs and higher taxes that they have been unable to pass along.

Apartment prices have risen 5 percent over the past five years, while housing prices have risen 40 percent in the past five years, Smith said, noting it's more affordable to be a renter than a homeowner.

Smith said lower vacancy rates mean landlords are offering fewer concessions to entice tenants, such as paying for utilities or offering a month's free rent.

In 2005, about 51 percent of apartment property owners along the Wasatch Front offered incentives to tenants. As of June 2007, however, only 7.5 percent were offering incentives.

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E-mail: csmith@desnews.com