Apartment rents in Connecticut soared by the double-digits in the last year, squeezing tenants in a market with dwindling leasing alternatives and more rent hikes expected at least through the end of the year.
In the Hartford metro area, which includes Hartford, Tolland and Middlesex counties, estimated rents rose nearly 11% in the last year, according to apartmentlist.com, which tracks trends in the rental market. The median rent for a one-bedroom apartment, or the middle of the rent range, was $1,244 in February.
The increases, which are affecting a broad cross-section of incomes, come as little surprise to renters, such as Becky Kuzmich and Adarsh Nagarajappa.
The couple moved into their one-bedroom apartment in Middletown last summer after a bruising search with limited options and a lot of competition. Their monthly rent is $1,475.
Kuzmich and Nagarajappa briefly considered renting a two-bedroom at $1,700 or $1,800 a month, but they thought it was a bit of a stretch for their budget.
Since then, Kuzmich accepted a new job as a recruiter and is working at home full time, and Nagarajappa, a mechanical engineer, has gone to a hybrid work schedule. Their apartment has a small den outfitted for work and a modest workspace in the bedroom, but they now want a larger, two-bedroom apartment.
“A year ago, when we were looking for this place, for $1,700 or $1,800 we could have found a (two-bedroom) apartment,” Nagarajappa said. “Now, it is close to $2,000 or more.”
The couple has toured six apartments so far and looked at a couple dozen online. They’d like to stay in the Hartford area and now hope to keep monthly rent at $2,000 for a two-bedroom apartment and certainly no more than $2,300.
“At this point, any place that has an opening that doesn’t cost our entire paychecks, we’ll live in it,” Kuzmich said.
‘It’s crazy’
Nationally, apartment rents have surged in the last year, rising 18% on a year-over-year basis as of February, apartmentlist.com reported, with Connecticut at nearly 12%.
In Connecticut, the New Haven metro area, which includes all of New Haven County, led all of the state’s metros, with a more than 16% jump in the same time period, according to apartmentlist.com.
Experts say the increase in rents is being driven by a confluence of factors, including a shortage of all types of housing, accelerated by the pandemic.
Brian A. Marks, senior lecturer in the economics and business analytics departments at the University of New Haven, said the sparse inventory of single-family houses for sale — the aftermath of the hot market spurred by the pandemic — has stalled the move of renters who might be looking to purchase.
As a result, there are fewer apartments available. New rental construction in Greater Hartford and elsewhere in Connecticut is booming but is still playing catch-up after years of little building, Marks said.
In Hartford, for example, about 2,700 new apartments in and around downtown have been either completed since 2013 or are now under construction with the help of state-taxpayer backed loans and other investments.
There was a slight dip in occupancy in 2020 at the start of the pandemic, but occupancy percentage recovered and is now in the mid-90s, according to the Capital Region Development Authority, which oversees the state investments.
Millennial demand for apartments with amenities also is a factor, as is the 40-year high in inflation.
“We are absolutely seeing these pressures on the cost side due to inflation, especially in the area of energy,” Marks said. “Landlords are seeing their costs go up.”
For apartments now under construction, supply-chain disruptions have pushed up costs and delayed delivery of everything from windows to appliances. Those costs may eventually be passed on in higher rents.
Marks said he expects rents to keep rising at least through the end of the year, and that may force even more people to decide to seek out roommates.
That was the decision Jason Styra made six months ago.
Styra, an account manager for an IT consulting firm, moved to downtown Hartford in 2018 but relocated to the suburbs a year or two ago.
Styra decided to move back downtown last summer. He was surprised to find his old, one-bedroom apartment near Union Station that had been $888 a month was now “12 and change.”
He opted to move into an apartment at the Colt complex near downtown and share costs with a friend and save money.
“It makes it easier if you have a roommate,” Styra said. “But for those people who want not to have a roommate in their 30s, it’s a little precarious,” Styra said. “It’s a different rental market than it was two years ago. It’s crazy.”
Housing safety nets ending
The dramatic upswing in rents is intensifying concerns for the state’s neediest families and how they will deal with the added financial pressure.
According to the Partnership for Strong Communities, a nonprofit whose goal is to expand affordable housing and end homelessness, for every 100 “extreme” low-income households, there are just 42 rentals available and affordable to them.
“While more jobs are available now, some of the households who lost jobs and income for a time during the pandemic are still trying to catch up,” Kiley A. Gosselin, the partnership’s executive director, said. “Many of these households were already living paycheck to paycheck with little or no savings.”
Gosselin said household members may now be working again — even making more money than they previously had earned.
But “the goal posts continue to move with respect to rental increases and the effects of inflation on necessities like groceries and transportation,” Gosselin said.
The U.S. Census household PULSE survey for the week of March 4-12 found that 25% of Connecticut renters said “that they had slight or no confidence that they could make next month’s rent.” It was even higher for Black respondents, at 40% and 37% for Hispanic respondents.
“With pandemic-related housing safety nets like UniteCT and the eviction moratorium reaching their ends at the same time rent is increasing,” Gosselin said, “we expect to see evictions and housing loss continue to increase.”
