Think Rentals Are Tough? City Expert Agrees

novacancyThe population in Corvallis has increased 11.5% since 2000 and continues to rise. So what does this mean for present day and future apartment availability in the incredibly tight local market?

Bob Loewen, housing specialist for the City of Corvallis Housing Division, addresses the thought
that we may not have a problem, saying, “Lately, people in Corvallis have noted that there are a lot
more ‘for rent’ signs, thus Corvallis doesn’t need any more rental units constructed. The thing is, I
consider the market still relatively tight at a 2.7% vacancy rate. The rental market has changed as
more units have become available in the past year, but in my opinion, more are still needed.”

A 4 to 7% vacancy rate is considered “balanced” which means that renters have more choices available to them with steady rental rates. Three years ago, the vacancy rate was less than 1%. Today, the vacancy rate is approximately 2.75%, but it continues to fluctuate constantly. And this doesn’t even take into account the fact that people will sometimes not even consider Corvallis because the rental market is known to be incredibly difficult – especially in the lower price brackets.

That said, what do these vacancy rates mean and how do they affect us? If vacancy rates rise above 5%, monthly rents are usually reduced and include incentives offered by landlords such as lower deposits or free cable. If the vacancy rates go below 4%, however, these incentives are usually not offered. If the vacancy rate goes below 2%, landlords usually do not negotiate on rental terms and may even increase rent. If the vacancy rate is below 1%, the market is then considered “tight” which means that rents increase and there are fewer choices for renters.

Some say that an apartment shortage means less people would be motivated to live here, but is that really a good thing? Many people, for instance those who are against the Witham Hill Oaks project, may think that less housing opportunity could mean less traffic and more pedestrian and cyclist safety. This does not account for an increased number of commuters into Corvallis and more pollution.
Regardless, since our population is increasing every year, building more apartment units seems
inevitable. Additionally, having an apartment shortage also has many nigh-unavoidable drawbacks
— rent continues to increase, landlords who do not maintain their properties have less incentive
to do so and people have fewer apartments to choose from which causes them to live in surrounding
areas.

So what’s being built today? Jared Voice, associate planner of the City of Corvallis Housing
Division, says that Development Services has issued building permits for roughly 140 new apartment-type dwelling units and there are approximately 369 apartment-type units currently under building permit review. Loewen also says that OSU will open a new residence hall in 2014 which will add capacity for approximately 320 students; but they are also closing some co-ops, resulting in a loss of capacity of about 200 students. If the controversial Witham Hill Oaks housing project is approved, it will also provide housing for up to 900 OSU students. There will be two more City Council meetings taking place before final approval of this project, as follows:

• Tuesday, Feb. 18: Public hearing before the City Council on these conditions.
• Monday, March 3 or Monday, March 17: Review formal findings and final vote.

These new apartment units could increase the vacancy rate, but population increase and constant
fluctuation of the economy, make it hard to predict whether the vacancy rate will actually increase
or not.

by Jennifer Smith

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