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Saturday, July 16, 2016

Housing Crisis?

Tony Redington has conducted a survey and analysis of the number and kind of living spaces available in Burlington right now, considering the 1400 new units under construction, and discovered two things:

1. Despite what advocates of unconscionable development continue to repeat: the vacancy rate is rising and rising. It is not 1%, as the city has been saying for so long; it is actually rapidly moving toward 3%

2. Unless we raise the minimum wage ($15, $20?), working people will not be able to afford the housing that is available. The vacancy rate will likely rise even further the more units are built, and the housing crisis, which is really an affordability crisis, not a housing crisis, will not be addressed at all.

Here is Tony's report:

7/15/2016

Ample Rental Housing Availability in Burlington Today
...rental vacancy rate possible upward rise to “glut” status?


With a first hand experience of searching for an apartment just five years ago in Burlington
when there were practically none, a snapshot of available apartments today—129 tabulated—
shows a surprising number of apartments in most neighborhoods which confirms two recent
studies showing a 2.5% vacancy rate moving to a “healthy” 3-5% vacancy range for
Burlington and Chittenden County.
There is a myth about a current housing crisis because of no housing available to rent--we
just need to build more units and that will alleviate half the crisis (the other half being
households being able to afford rentals). Well, the lack of housing units available is just that,
a myth, and the 1,400 units built, under construction and well into the permitting process 2014
to date in Burlington alone suggests there more likely exists an increasingly healthy vacancy
rate and a possible oncoming housing glut. A a return to the drought of years past—just ask
landlords and they express concerns over lack of rental demand in this market when they
know projects are rapidly coming on line. Even with the current level of vacancy rental costs
very likely will not rise and in fact decline modestly in the coming months.
A survey of apartments for rent through newspaper and online sites like Craigslist is a quick
and easy way to gauge housing availability and median prices in a small housing market like
that of Burlington. The last census counted about 10,000 rental units and the 129 units
tabulated here represent 1.3% of the 2010 inventory. Here are the results as found without
adjusting for costs of utilities (most do not include electric or heat). The July 11-12 survey is
not exhaustive but the numbers do reflect what a person seeking a rental would likely find at
this time.
Survey of 129 Apartments for Rent Listings Online July 11-12, 2016
Bedroom Size Number Price Range Median (Middle) Price
0 (studio) 14 $700-$1,400 $968
1 38 $700-$1,900 $1,050
2 43 $700-$2,600 $1,050
3 26 $799-$2595 $1,825
4 or more 8 $875-$2,900 $2,400
Note Bright Street Coop and 237 Pearl Street were clearly in process of renting up their
respective projects.
Clearly the 129 units are an “indicator” as apartment brokers generally have many units that
are not placed onto online availability. The two most recent authoritative private surveys over
the past year revealed about a 2.5% average vacancy rate for Burlngton and the Chittenden
County with an upward trend.
Housing Affordability and the $15 Minimum Wage
The impact of minimum wage changes on apartment affordability are quite dramatic. A
minimum wage worker income ($9.20 minimum wage in Vermont today) is approximately
$20,000 a year, so a median rent efficiency (studio) apartment would consume about 60% of
income. For a couple earning minimum wage, a one bedroom median rent apartment would
consume about 32% of total income. With a minimum wage of $15 the percentages drop to
37% for a single person renting a median priced studio apartment devoted to rent working at minimum wage, and 20% for two minimum wage workers for a median priced one-bedroom
rental.
There are other important factors favoring an increased vacancy rate and some rent
reductions from resultant market forces. These include not only additions to the rental
inventory—about 900 units from the Ireland Grove Street and Cambrian Rise (Burlington
College lane project) but also from the drop of as many as 1,000 students in rental housing
since the peak year of 2010, and a slight decline in under 65-age population for the current
2010-2030 projection period for the County as a whole.
Two major housing needs? First, deep subsidy rental “voucher” type assistance which
enables renter choice—the federal government has cut these by about 1,000 units since
2000. Perhaps the State and even the City might move to fill this gap. Second, there
remains and will continue a major need for senior housing and a continuum of senior housing
ranging from apartments, assisted housing, group homes and finally nursing homes of various care levels.
Apartments available websites
Here are three popular websites to find rental housing in Burlington and Chittenden County:

Burlington housing market rental websites:
Craigslist: https://vermont.craigslist.org/search/apa?postal=05401
Apartments.com:
http://www.apartments.com/apartments/burlington-vt/?
Bissonnette Properties:
http://bissonetteproperties.com/august-rentals/

Tony Redington
TonyRVT99@gmail.com
July 15, 2016

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