What is causing rents to rise?
The cost of everything is going up lately. Cars, fuel, and groceries are rising at their highest rates in 40 years. Unfortunately, rising costs have affected the cost of housing as well. Nationwide rents have increased an average of 14.3% in the last 12 months. EagleRidge is not immune to these rising costs and over this past year, we have had to raise the rents at many of our communities. These increases are in response to dramatic increases in our utility costs, property taxes, special assessments, and property maintenance.
We analyzed a group of 15 properties and compared the first five months of expenses to last year. The charts below show some of our biggest increases:
The increases are not limited to gas, lawn, and snow. Since 2019, both the City of Fargo and City of West Fargo have increased the charges found on water bills, and electricity costs have increased 14%.
In addition to utilities, special assessments and property taxes have a large impact on rent. Northern Lights, a property in West Fargo, was recently special assessed for $359,670 for construction on Sheyenne Street. This bill alone tacks on an additional ~$50/unit to the monthly rental rate, if spread out over 3 years. At Maple Grove Townhomes, another property in West Fargo, our property taxes have increased approximately 26% since 2019
At EagleRidge, we are grateful for our tenants and are honored they trust us with their housing needs. We do our best to provide clean, safe, and welcoming communities that residents love to call home. We will continue to do our best to control our rental increases during these challenging times.
Properties analyzed: Tuscany Villas, Maple Ridge, Maple Ridge Villas, The Cedars, Shadow Wood Townhomes, Town Square, Summit Ridge, Stonemill Apartments, Stonemill Villas, Stonebridge Villas 1, Stonebridge Townhomes, Signature Apartments, Stonemill Townhomes & Twin Homes, Maple Grove, Diamond Creek.
Sources: YardiMatrix (April 2022). National Multifamily Report: April 2022.