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Multifamily Owners Drop Rents to Energize Sagging Occupancies

AUSTIN-Tenants seize the opportunity to live in newer complexes as rents drop to fill properties. Overall, rents dipped 4.7% last year in a market that delivered 9,438 units and now has another 10,700 under construction.

By Tim Green | Updated on February 03, 2002

AUSTIN-Falling apartment rents are luring Austin renters to higher-class properties. Effective rents–the monthly check plus free months and other incentives–fell 4.7% in 2001. Rent reductions, however, didn’t stop the occupancy rate from falling to 90.5% at the end of the year from 96.5% in December 2000.

The rent changes have prompted some tenants to trade apartments built in the 1970s and 1980s in closer-in neighborhoods for newer apartments in suburban neighborhoods. Their new rents may still cost more than in the urban core, but rent reductions have made them more affordable, Greg Willett, M/PF’s director of research projects, tells GlobeSt.com.

The biggest rent reductions have come in the suburban submarkets where building has been most intense. Rents in the far northwest submarket dropped 10.7% in 2001 and 9.8% the far north submarket. Of the 9,438 apartment units added to the market in 2001,3,000 were in the far north and far northwest submarkets and 1,865 were in the northern suburbs (Round Rock, Georgetown and Pflugerville).

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