Renter and Economy the Big Losers in Current High Plateau of Burlington Rents Compared to Plattsburgh Market
A combination of historic market forces—all harming the renter and the economy—leaves Burlington renters paying thousands of dollars more each year for the same or even sometimes inferior apartment than renters across the lake in Plattsburgh. While the difference in rents—Burlington over Plattsburgh—is in hundreds of dollars monthly the annual cost of a median rent is $4,200 higher in Burlington for a 1-bedroom (1-BR) apartment, $8,100 for a 2-BR apartment.
Certainly over decades a collusion involving real estate interests, banks, rental property owners, yes, even the large non-profit housing sector all have played—and continue to play—a role in reaching the high rent levels and unfortunately those same interests have a stake in maintaining those high rents regardless to how overall this is a self-inflicted wound to both to the renters (with particular pain to low and moderate income).
From the early 1990s through the early years of the recovery from the Great Recession in 2010-2012, the Burlington housing market featured notoriously low vacancy rates as both population and student numbers grew in the County a the City. Suddenly, thanks in part to mayoral leadership and growth moderation in the County, rental housing supply increased and so did vacancy rates reaching healthy 3-5% levels about 2016-2017. Today with about 1,000 new apartments coming on line and student populations, flat since 2010 at UVM, likely to slowly decline, pressures will likely build to lower rents.
My first look at Plattsburgh versus Burlington rents occurred in 2011 when considering a move from Montreal back to the Burlington area. Took a look at both Plattsburgh and Burlington rents at that time and those in Plattsburgh were significantly less than Burlington. In 2011. Burlington and Chittenden County rental vacancy rates as measured by Allen and Brooks surveys each year generally were 1-2%. When I sought an apartment in late 2011 there were literally no apartments which were decent on the market. Needing a studio or 1-bedroom (1-BR), there was a 2 BR available here and there but about twice the 1-BR rent. Suffice to say did come across a 1-BR which had not yet been put on the market at a reasonable cost. Will leave further history on rent and landlord relations moot at this point.
Plattsburgh like Burlington does have a large number of 4-5 bedroom apartments termed “student housing” on Craigslist. Plattsburgh is about half the Burlington population of 42,000. As part of exploring rental housing in Burlington I have from time to time over almost three years undertaken “snapshot” rental vacancy tabulations by price and bedroom size in a two-three day period. This involves examining available vacant units primarily on craigslist, but also on various websites—Bissonnette Properties, Trulia, MyBurlingtonApartment, etc. The snapshot surveys began in mid-2016 just when significant numbers of new apartments began to come on line. Follow up snapshot inventory numbers show about a 3% annual increase in median 1-BR rents and 5.6% increase in 2-BR rents.
Give credit to Mayor Miro Weinberger for opening up Burlington for private development of housing, a rising tide which now appears a flood with more than 1,000 housing units coming on the market (Cambrian Rise [Burlington College property site], Bayberry [SD Ireland site on Grove Street] and City Hall Place numbers alone top 1,000). Note rents surveyed generally did not include heat and electric so one might add, for example, about $100 to a 1-BR and $125 for a 2-BR to adjust a median rent as offered to a median rent with all utilities included.
Here are the 1 and 2 br numbers BTV, Plattsburgh and 2019 HUD FMRs used for all housing assistance (HUD Fair Market Rents include all utilities):
Rents
1 Bedroom 2 Bedroom
Burlington $1,140 $1,575
(March 2019 Snapshot Survey)
Plattsburgh 790 900
(May 2019 Craigslist survey)
Rent Difference: Monthly 350 675
Yearly $4,200 $8,100
HUD FMR (2019) (Source: Rentdata.org)
Burlington $1,044 $1,341
(Burlington-South Burlington Metropolitan Statistical Area (MSA)
Plattsburgh 810 1,052
(Clinton County)
Rent Difference: $234 $289
Note:U.S. Department of Housing and Urban Development (HUD) FMR (Fair Market Rent) tables by location are published each year and are approximately 80% of median rents. These are the maximum rent that HUD will subsidize for a Section 8 Voucher (affordable housing assistance). The FMRs are updated annually.
Some preliminary thoughts. Apparently the past tight market for housing in BTV may have led to bidding wars for private apartment sales with the student housing pricing somewhat inelastic and essentially zero vacancy rates overall in the rental market (now 5-7% or more in the pure private sector) resulting in high capital cost and therefore very high rents in BTV (forcing many to live in outlying areas). The market now has about 1,000 units on tap (Ireland's Bayberry, Cambrian, and about 60 units behind COTS by Redstone--plus about 250 units in the currently stalled City Place).
Both cities probably have comparable property tax rates and cheap natural gas via pipelines. So, we have overcapitalized housing (nice depreciation!). Until the price of private purchasing of rental housing comes down and/or CHT-Cathedral find HUD or other sources to reduce their acquisition costs, rents like Plattsburgh remain far off.
Then there are the other "soft" actions--activist tenant unions, better communications on pricing/tougher negotiation by tenants, etc. CDBG could be brought into play.
Key is a housing plan (there is none) at the state level and Region/City levels which recognize these realities and work on bringing market rents in line with Plattsburgh--looking a little more into the market there (the loss of population/air base a factor in current low rents?).
Note there are a number of good landlords and apartment owners who buck the "all the market will bear" approach to renting and whose rents for quality units are below the median numbers with quality housing.
Just building more housing which is capital intensive because of the once tight market (which inflated the rents and squeezes the tenants) is one sure way not to solve the problem of the current high plateau of rents. Still the offering of a free month of rent with an initial lease at Bayberry, a one year reduction of about 8% in the rent is an encouraging sign of a rental retrenchment in Burlington.
Be aware that as a former state housing director I did deal in New Hampshire in a number of new/rehab housing projects where I encountered honest and fair minded developers and do not assume these folks are anything but effective and efficient builders of needed housing. That said, conditions and individual owners can vary across the spectrum! I view the HUD Section 8 New/Rehab program (initiated by Nixon) with 20-25 year commitments of affordable housing assistance as perhaps the most successful housing development programs to date.
Tony Redington TonyRVT99@gmail.comMay 6, 2019
