The coronavirus pandemic has caused most rents in the Seattle area to stagnate, though they’re falling for the least-expensive apartments, according to data from analytics firm RealPage. One neighborhood — West Seattle — is seeing especially sharp cuts, according to landlords and property managers, though not just from the pandemic.
Overall, in the Seattle-Bellevue-Everett area, May asking rents were nearly the same as they were a year ago, averaging just under $1,900, whereas before the pandemic, rents were up nearly 5% year-over-year in the area. RealPage looks at effective asking rents, which include advertised discounts offered by landlords and property managers to entice new tenants to ink a deal, like one month of free rent.
The big slide has been among the least-expensive properties, where May asking rents were off 0.8% compared with a year earlier, to an average of $1,518. Rents for apartments near Boeing offices and factories in Renton and Everett were also down, by as much as 3.1%. The company recently announced cuts of almost 10,000 jobs in Washington state.
Still, even national landlords with huge luxury portfolios are sweetening deals to close contracts. A statewide eviction moratorium and ban on rent increases have kept area renters in their apartments and slowed demand.
Essex Property Trust, which owns 10,343 apartments in the Seattle metro area, is offering two to four weeks of free rent across its properties. Equity Residential, which owns 8,442 apartments around Seattle, saw traffic and leads fall 50% in March and 20% in April, according to Securities and Exchange Commission filings. Equity is offering $99 security deposits and is allowing new tenants to end leases in the first three months without penalty if they lose their jobs.
The amount tenants actually pay could be even less than the advertised deals. Average rents on newly-executed leases around Seattle fell 4.5% in May from a year earlier, as apartment managers offered unadvertised concessions and negotiated down rents to fill vacancies, according to RealPage.
But rent payments haven’t slid appreciably despite the largest job losses in close to a century, largely because state and federal coronavirus aid for unemployed workers. Nationally, roughly the same percentage of renters are making June payments as did in 2019, according to the National Multifamily Housing Council.
“Either with their stimulus check, or with their employment, they’re still able to pay rent,” said landlord Dana Frank, who owns properties in Capitol Hill, the Central District and Columbia City. “People still have the income.”
In West Seattle, landlords and tenants say the biggest pressure on rents isn’t the pandemic, but a concurrent crisis: The closure of the West Seattle bridge.
The bridge, which was bearing 100,000 cars and 25,000 transit riders across its span every day, closed March 23 after engineers discovered rapidly growing cracks. The structure might collapse unless braced soon, according to a study commissioned by the city.
Even during the stay-at-home order, the bridge closure is snarling traffic and lengthening commutes for those West Seattle residents who are still required to head into the office. The bridge is expected to remain closed until at least 2022.
“In my 30 years of owning buildings, I’ve never experienced what I’m experiencing in West Seattle,” said landlord Morris Groberman, who owns four buildings in West Seattle and several dozen other apartments across the region. “It’s absolutely bleak.”
At his West Seattle properties, he’s offering one month of free rent and six months of free parking for new tenants. He has cut rents by 5% at one building, the Nelsonian. At another, the Windhill, he expected to lease two-bedroom units for nearly $2,500 after they were renovated. Instead, they’re fetching $2,050. At the 30-unit Garden Terrace, in the heart of the Alaska Junction, he’s been unable to fill five units vacated in the past three months, he said.
In his portfolio as a whole, he said, vacancy rates are running under 2% and lease signings have stayed steady despite the pandemic. “It’s only West Seattle that’s causing me a whole lot of pain.”
Sierra Slade moved to West Seattle from Anchorage at the beginning of March to take a new job as a commercial insurance underwriter. She rented a two-bedroom, two-bathroom Alaska Junction apartment, confident she could find a roommate to help shoulder the cost of her $2,000 lease.
Despite nearly a dozen calls with interested roommates, she said no one has wanted to brave the commute when they return to work.
“It will go very well, and then they’ll say, ‘Oh, I timed my commute, and I don’t want to be that far away because of the bridge closure,'” she said. The double rent payment, she said, is coming out of her savings.
Other West Seattle tenants are fleeing the neighborhood.
West Seattle tenant John Cannon, a driver for XPO Logistics, said he sought to break his lease in favor of a new place closer to his Renton office after the bridge closure bloated his one-way commute from 20 to 90 minutes.
“I lived through the building of the West Seattle Bridge from 1981 to ’84, and it was a nightmare,” he said. “I am not going through that again.”