New affordable housing is hard to find in Midland-Odessa, as a recent study from RentCafe shows that 100 percent of the new apartments completed in 2015 were high-end units. Nationally, 75 percent of all apartments that came on the market last year were priced at luxury levels.
Considering how much the new construction in the single-family market is lagging, the limited number of new affordable rentals could be eroding would-be homeowners’ future buying power.
By the end of last year, 6 metro areas stood out, having built only high-end large apartment buildings … Midland-Odessa, TX is a pretty pricey metro area in terms of rent, with 9 total properties completed, all high-end, charging an average monthly rent of $1,501, which is $402 more than the overall average rent.
Why are developers building so many new luxury apartments? Considering demand for rentals and the overall economic efficiency of multi-family development, it makes financial sense. The Midland-Odessa apartment market surely fits into the overall strategy for developers:
Lured by rising rents, the prospect of steady income and stable cash flows, developers are rushing to build apartments that appeal to more sophisticated generations of renters. The new wave of rental properties offers more than just apartments for rent, it offers an upscale lifestyle. In addition to top-quality interior finishes, high-end appliances, beautiful building architectures, designer landscaping, and coveted locations, they also provide exclusive access to resort-style amenities, first-class fitness centers, concierge services, socializing opportunities and other resident services.
But, for Midland-Odessa, there’s an added wrinkle: Considering the jobs market in West Texas, as well as rising housing prices throughout the state, could it be wise to flood the market with only high-end apartments? An 800 percent increase in high-end apartment inventory over the period of three years is quite a leap by any stretch of the imagination, and it could have negative effects:
While lower-income households have been struggling with rising rates for decades, middle-income renters are affected the most by this trend. The rent crunch is climbing up the ladder to middle-income renters. With fewer affordable options, many double-income professionals who used to populate the urban cores are being priced out of the areas where they want to live. They are forced to choose between spending more than they can afford on rent and utilities, or settle for older buildings, in less attractive locations.
What do you think of this trend toward luxury rentals? Does Midland-Odessa need more affordable apartments?