Jefferson City —
According to Apartments.com, rent has increased by 2.6% in the past year, making the average rent in Columbia $960 per month for a one-bedroom apartment.
However, it could be more depending on the area. Conrad Hake, the Program Director for Love Columbia, a local housing nonprofit, said the number of vacancies in the city is increasing rental prices.
“Simple supply and demand in economics is a big factor,” Hake added, “Our vacancy rate in Columbia, as of the 2020 census, was 5%. So that means there are fewer properties available for people to rent.”
Hake explained that fewer listings in mid-Missouri allow prices to increase, allowing landlords to request double the deposits from renters and require renters to have a higher credit score than usual.
Jane Williams, Love Columbia co-founder, said, “We’re seeing as high as 650, which is often even higher than what a bank would require for giving a loan.”
A housing study in 2022 from RKG associates indicated a vacancy rate of around 5% in Jefferson City, with 24% of all vacancies being unavailable for rent.
Paul Prevo, the owner of Market Ready Reality, said the aftermath of the 2019 tornado that swept through the city plays a major role in Jefferson City’s vacancy rate.
“I’ve seen some issues with Jefferson City not being able to resell some of the properties that require extreme remodeling to come back into compliance with code to be remodeled, rehabbed, and re-rented,” stated Prevo.
Property managers in Columbia also point to the increase in insurance costs, utilities, and maintenance as the main reasons many residents spend more than 30% of their income on rent, which is the suggested maximum one should spend on housing.
Hake stated, “The latest census data shows 50% of renters or homeowners in Columbia were paying over 30 percent of their income in rent. So that’s a pretty high number, and we’ve only seen that increase as rent increases.”
According to Prevo, COVID-19 played a key role in the post-pandemic increase in rental prices, since many landlords lost money during that time. Prevo explained, “When you figure that if you have a $500,000 mortgage on a duplex or triplex, that extra 2% a year, again 2% from the following year, really starts to add up in property taxes, which increase by 10 to 12 to 14% a year. All that enters into increasing rent to cover your cost. You may charge 20% more rent than you did three years ago, but you make less on the property.”
Despite a potential slowdown in rent increases in 2024, residents will continue to pay more in rent.
“You’re still going to see an increase in maintenance costs, utilities, the ability to build affordable apartments, and all that’s going to enter in. There are also things the city council is looking at implementing that are phenomenal in theory but will probably also have an impact on rental prices.”
We will have more details on what city leaders are doing to combat the housing crisis on Thursday, February 8th only on KRCG 13 live at 10 pm.