There’s no doubt that Philadelphia is in the middle of a building boom, with more than 20 high-rises currently under construction. But a new report confirms what many have pointed out before: High-end apartment construction isn’t meeting the demands for affordable rental options in Philly.
According to a recent report released by real estate website Zillow, 68.9 percent of new construction in Philly since 2014 has been on the high-end, with these apartments averaging about $1,795 per month.
That means a little less than 15 percent of new construction is available for renters looking for low-end or more affordable options, i.e. more in the $1,102 average monthly rent range.
Now, overall, median rent in Philadelphia grew 3 percent in the last year. That doesn’t sound too terrible, but Zillow went further and broke it down between high-end and low-end apartment rates.
The researchers found that the median rent for low-end apartments has risen pretty dramatically in the past year by 17.9 percent. That’s more than double the increase of high-end apartment rates: 6.7 percent.
This trend isn’t just a Philly phenomenon, though. The report found similar results in all 15 major metro markets that they analyzed. They write:
As rent overall continues to grow, rents are growing faster across the board among low-end apartments as demand for more affordable rentals stays hot. But rather than build more units at the bottom end of the market to meet this demand, apartment developers have instead focused their efforts on adding more supply at the high end.
What's worse, there's little chance that renters looking for more affordable options will see relief any time soon. The lack of low-end supply units will only continue to push rent prices up, the researchers say.
The findings coincide with another report released yesterday that ranked Philadelphia as the 5th worst city in the U.S. for renters. Out of 150 cities analyzed, Philly was 144th in rental affordability.
- Mapping the 29 high-rises currently under construction [Curbed Philly]
- Report: Philly is the 5th worst country in the nation for renters [Curbed Philly]