Local rental housing supply set to grow in coming years
Demand for housing in our region remains as voracious as ever, with the rental market seeing the most robust growth in terms of new units of inventory. In King, Pierce, Kitsap and Snohomish counties, there are more than 137,000 rental units currently in development.
Seattle in particular will be seeing a surge of apartment developments in the next few years. Beacon Hill, Mount Baker, Columbia City, Georgetown, Rainier Valley and other neighborhoods in the South Seattle have 8,766 apartment units in the pipeline. This is an increase of 247% over the area’s current 3,545 existing units.
This far exceeds development in other Seattle neighborhoods, with only the Central District coming close to this level of construction. That neighborhood currently has an inventory of 2,360 apartments, but has 4,148 units in its pipeline.
The high rate of construction is certainly warranted, as the Seattle metro has one of the lowest housing vacancy rates anywhere in the country. The tri-county area of King, Pierce and Snohomish counties has just a 5.4% vacancy for rental and owned homes.
That low vacancy rate doesn’t just include typical studios, one- or two-bedroom apartments, either. The city has long seen demand for micro-apartments, or “aPodments” as well. These tiny units average just 177 square feet, with many including just a sink and access to a shared kitchen, though some larger units may have a kitchenette too. The average rent for one of these units is $921, including internet and utilities.
These confined quarters are particularly popular among students, given their resemblance to a typical dorm room. Those working minimum-wage jobs may also opt for a micro-apartment, given the increased affordability and proximity to public transportation and amenities in the city.
Currently, the entire portfolio of aPodment-branded micro-apartments is on the market — 23 buildings comprising 1,402 units. Despite the trade-offs tenants must make with these smaller living spaces, aPodments reported an occupancy rate of about 99% in June.
For investors, this particular niche could prove quite profitable, though much of the appeal of micro-apartments is their relative affordability compared to more traditional units.
A listing price for the buildings has not been made public yet, although tenants are hoping a nonprofit housing organization might purchase the buildings instead, keeping rents affordable into the foreseeable future.
The growth trajectory for apartment housing is not just local to Seattle. Bellevue currently has 17,111 existing units, with 11,454 in the pipeline. North King County, including Northgate, Shoreline and Bothell has 19,714 units, with 11,939 on the way.
The thirst for rental housing in the Seattle metro is unlikely to be quenched anytime soon, and developers are taking note by building and investing in new rental communities of all different types.