RALEIGH – Triangle rent prices were among the highest in the nation last month, a new report from Apartment List finds. Meanwhile, renters are still feeling squeezed by a housing market where homes are hard to come by, whether for sale or rent.
Durham ranks fifth and Raleigh ranks 13th among the nation’s 100 largest cities for the month-over-month percentage increase in rental prices, according to the latest data from Apartment List.
Those prices have jumped dramatically in the last month, according to Apartment List’s data set, and many Triangle residents are finding it challenging to find housing.
In Durham, rent grew by 2.6% last month and 15.7% in the last year, with the median rental price across the entire data set of $1,460 per month. Compared to July 2021, when the median rental price was $1,263 per month, typical rent is now nearly $200 more per month than it was a year ago.
And in Raleigh, prices have increased, on average, by 1.9% in one month’s time, with an increase of 15.7% since last year, according to the data. In the city, the median monthly rental price across the data set is now $1,532. That’s a jump of $208 per month compared to July 2021, when the median monthly rental price in Raleigh was $1,324.
Since March 2020, and the onset of the spread of the COVID-19 pandemic in the United States, rents in Raleigh have jumped 33.1% and 30.9% in Durham, according to the data.
Back then, the median rent in Raleigh was $1,151, and the median rent in Durham was $1,116 per month.
Triangle rent prices rise, renters are squeezed
Kim Johnson moved to the Triangle in 2004 so her husband could attend law school. Eventually, they bought a home in Durham, Johnson said in an interview with WRAL TechWire this week. But the couple divorced in 2019, and they decided to sell that house.
“I wish I hadn’t,” said Johnson. Instead, Johnson and her three children moved into a rental property.
Seven months later, the property owner told Johnson that she intended to sell the house, and offered her a deal: $2,000 to mutually terminate the existing lease.
But that offer came after the landlord first tried to illegally evict her, Johnson said.
“She wanted me out, she’d owned the home for years and she wanted to sell,” said Johnson. “We had a lease, and yet she was desperate to fix up the house and sell, and she was really, just, done wanting to be a landlord, saying it wasn’t worth it, and she wanted to get out.”
To Johnson, it sounded like a good deal. She would get paid to leave the property, owned by a landlord who no longer wanted to be a landlord and who had tried to evict her and her children.
What happened next
She took the deal.
“I agreed that I would be out by the end of the month having no idea that there would be a huge problem finding a house,” said Johnson. She began searching for a house, applying to a half-dozen properties.
But none of them accepted her application, and her moving date was coming soon. On the day she had agreed to be out of the property, the movers were packing her things into the truck. It was 4:30 p.m., and they didn’t know where they were going to move.
“It was terrifying,” said Johnson. “I am privileged as a white woman to never have been in a homeless situation before, so it was humbling, but it was also just terrifying.”
What’s happening in rental markets
Johnson isn’t alone.
One source that requested anonymity told WRAL TechWire that they’d moved here from California in 2016 in order to have the chance to buy a home in which to raise their child.
“Our hope was to be able to have a better, more affordable life, with the possibility of buying a house, which we could not do in the Bay Area,” they told WRAL TechWire.
And they didn’t move with nothing. In fact, they moved with what they believed were ample savings, funds that they planned to use for a down payment on a home once they found a neighborhood they liked and built a local network.
So they rented a home in Chapel Hill.
“That landlord sold the place out from under us after seven months,” they said. “The cost of moving was more expensive than we expected. Moving is so expensive.”
Their savings took a hit, from paying rent, from paying to move, from putting down a deposit on a new rental.
Not just rising Triangle rent prices
That was five years ago. But it keeps happening, they told WRAL TechWire.
“We have had this happen to us every year,” they said. “We’ve now lived in five places where the landlord decided to sell the property.”
Investors and home flippers continue to flock to the Triangle’s hot real estate market to seek returns, and many see the region’s price appreciation and economic development, along with the rate of rent growth, as attractive investments.
“We’ve never been in a place longer than 12 months,” they said, which is incredibly destablizing for their family and for their finances.
“And our savings is gone,” they said. “We’ve had to use all of that, which was supposed to be for a down payment, every time that we move or for deposits and everything.”
When COVID-19 began to spread, both adults in the household lost their job. “We’re both 45 years old, and he’s working as a waiter, and we just can’t seem to get out of this situation in Durham,” they told WRAL TechWire. It all seemed so attainable in 2016, and even in 2019, this dream of buying a home, they said. But not anymore.
“We’ve spent every penny of our savings on rent, on moving,” they said. “And I know that I’m not the only one who is going through this.”
Wages and Triangle rent prices
Here’s a statistic that might sum up just how much renters are feeling squeezed: a North Carolinian would have to work 90 hours per week at the current federal minimum wage of $7.25 per hour to rent the typical one-bedroom apartment.
“This is sobering,” said Jamie Paulen, a Triangle-area attorney who often represents tenants in legal matters. “Rent has been outpacing wages for a long time. It’s not sustainable.”
The report, Out of Reach, finds that in no U.S. state, metropolitan area, or county can a full-time minimum-wage worker afford a modest two-bedroom rental home. Only in 91% of counties could these workers afford a one-bedroom apartment.
Here’s what’s affordable in North Carolina, according to the report, which tracks the maximum fair market rent for a two-bedroom property, assuming that the resident would not pay more than 30% of its income on rent or utilities: $997 per month.
But to meet that criteria, where rental rates, plus utility costs, do not exceed 30% of household income, a North Carolina household must earn $3,325 monthly or $39,897 annually.
That’s an equivalent of an hourly wage of $19.18, assuming a 40-hour work week all 52 weeks of the year.
Harder in the Triangle
But wages would need to be much higher in many of North Carolina’s cities and counties, the report found, including in the Triangle.
Two of the three areas where wages are most needed to be increased in order to provide adequate wages to meet current rental market rates are in the Triangle.
For Raleigh’s metropolitan statistical area, a worker would need to earn $23.52 per hour to affordably live in a two-bedroom apartment, and in the Durham area, a worker would need to earn $23.06 per hour, the report found.
“People don’t realize how tight things have gotten,” said Paulen. “People live in substandard housing, and people can live in these conditions and still be expected to pay their rent every month.”
Triangle rent prices another benefit for landlords
That’s because, said Paulen, North Carolina’s statutes are more friendly to landlords than they are to tenants.
“There isn’t any rent control,” said Paulen. In fact, not only is there no rent control, it’s actually prohibited under current state law, said Paulen, as no local jurisdictions can establish rent control policies by statute.
That means, said Paulen, at the end of the lease period, a landlord can raise the rent. It means that, at the end of the lease period, a landlord can sell the home. A landlord can even sell the home while there’s an existing valid lease on the property, as long as the new owner also accepts the valid lease. But if a home is sold, the new owner is under no legal obligation to renew a tenant’s lease once it concludes.
“Without the power to withhold rent, without the right to counsel, without the ability for local municipalities to implement rent control, and with the housing market that we’ve had,” said Paulen. “It’s been a tremendous challenge for tenants.”
“If people cannot afford their rent, then who is going to be a tenant?” Paulen said.
– WRAL’s Ali Ingersoll contributed to this report