Perhaps at this point, changes in rental rates are only newsworthy when rents stabilize or decrease. But as has become the norm for the past few years, residential rents in Salt Lake City continue to increase.
According to two recent reports by Apartment List, an online rental marketplace, rents in Salt Lake continue to rise faster than the national average, while incomes for blue-collar workers remain stagnant. In fact, in Salt Lake rents are rising at a faster rate than even white-collar salaries.
Based on Apartment List’s July 2017 monthly rent report, rents in Salt Lake City have increased 1.8 percent over the past month and are up 4.3 percent since July 2016. In comparison, rents in nationally increased 0.5 percent over the past month and 2.9 percent over the past year.
The report’s authors note that median rent prices in the city are still more affordable than the national median. In Salt Lake City the median two-bedroom rent is $1,030 is compared to the national average of $1,150. Despite the comparably more affordable rental costs, rents in Salt Lake have repeatedly been among the fastest rising in the nation since 2015.
Statewide rents are increasing. According to Apartment List rents statewide grew 3.7 percent over the past year. Despite adding several hundred new residential units to the market in the past year, Salt Lake leads in statewide in rental rate growth. That coupled with the fact that Salt Lake City accounts for nearly half of the multifamily units under construction along the Wasatch Front, suggests the city’s rental market could still just be catching up to pent-up market demand.
Nationally rents are increasing while salaries aren’t. A June 2017 report by Apartment List found that for service workers and blue-collar workers rents are rising while incomes aren’t. Report authors measured “inclusive wage growth” by evaluating post-rent wages (the wages left after deducting median rent costs). The report authors found that nationally between 2005 and 2015, only white-collar or knowledge-based workers saw wage increases in line with rental increases. According to the report’s authors, post-rent wages for knowledge workers increased by 6 percent compared to 7 percent decrease for service workers and a 5 percent decrease for blue-collar workers.
“In most metros, rents increased steadily while wages stagnated, leaving blue-collar and service workers with less post-rent income in 2015 than in 2005,” wrote Sydney Bennet for Apartment List.
In the Salt Lake metro area, inclusive wage growth between 2005 and 2015 followed a slightly different pattern than the national trend. In Salt Lake, overall post-rent wages increased 5.8 percent, with service workers leading the three groups in post-rent wages. After deducting median rent costs, wages for service workers rose 4.5 percent in the ten year period. While post-rent wages for knowledge workers increased by just 2.5 percent, significantly less than the 6 percent growth rate nationally.
After deducting median rent costs, wages for service workers rose 4.5 percent in the ten year period. While post-rent wages for knowledge workers increased by just 2.5 percent, significantly less than the 6 percent growth rate nationally.
Locally, blue collar workers fared about as well as their national counterparts. Salt Lake’s post-rent wages for blue-collar workers decreased 4.9 percent compared to 5 percent nationally.
Despite only modest gains in wages, the knowledge-based employment sector grew the fastest in the Salt Lake region in the ten year period. Employment in the knowledged-based sector increased 35.2 percent between 2005 and 2015. The job growth in the knowledge-based field was more than double 15.5 percent growth rate of the service sector. Blue-collar employment grew by a modest 2.6 percent.
Although 83 percent of metros experienced overall post-rent wage growth, only 7 percent experienced post-rent wage growth for blue-collar, knowledge and service workers.
Apartment List’s data suggests that in Salt Lake, knowledge-based workers may have greater difficulty finding affordable housing than their national counterparts. While service workers in the region appear to fare better than in other parts of the country.