Trouble finding a Tri-Cities apartment to rent? Here’s why

If you’re looking for an apartment to rent in Tri-Cities — be prepared to wait in a long line.

With the vacancy rate at less that 2 percent, Tri-Cities is one of the most competitive rental markets in the nation.

Tri-Cities was ranked 16th in the U.S. for toughest markets out of 125 markets surveyed, according to one the apartment listing service, RentCafe.com.

For the first three months of the year, 97% of apartments were full. And of the few apartments available, there were 18 potential renters for each one.

“Normally, pressure is taken off rental market when there is turnover, but now that doesn’t happen,” said James Young, director of the Washington Center for Real Estate Research at University of Washington.

The squeeze is in large part because the rental market is intrinsically intertwined with the housing market, which is breaking records for all-time high prices and all-time low availability.

Young told the Tri-City Herald that the typical flow is that people get a good job and save up, then buy a house. But with first-time buyers being all but shut out of the market, they are renting apartments for much longer.

“If units are not turning over anymore, rents will go up and there will be a shortage of housing in general,” Young said.

The average cost to rent an apartment in Benton and Franklin counties last fall jumped 11% in a year.

Washington Center for Real Estate Research’s fall apartment survey showed that of the more than 10,000 apartment units surveyed in Tri-Cities, the vacancy rate was 1.2% in Kennewick, 1.7% in Richland — and in Pasco only 0.5% of apartments were open.

That meant in Kennewick about 50 apartments were available at that point, another 70 Richland and fewer than 10 in Pasco.

Young said that a good rule of thumb is that apartment vacancy rates should be 3% to 5% — under 3% is extremely tough.

Tri-Cities has seen a vacancy rate of less than 3% since 2017 based on the center’s reports.

Cheney, Ellensburg, Pullman and Washougal were the only cities in the state with vacancies of more than 3% last year, according to the center.

By comparison, the National Multifamily Housing Council said that in 2020 the national average for apartment vacancy was 8 percent.

At the Park Place apartments near Howard Amon Park, 40 percent of the 102 units were reserved even before they were finished being built, the leasing agent told the Herald.

Hundreds of more apartment units were under construction in the Tri-Cities over the past year.

Some of the large complexes in the works include The Vicinity at Horn Rapids and Willow Pointe apartments in Richland, and The Columbia at River Walk along the Columbia River in east Pasco.

Long-haul rental market

The rental market isn’t likely to loosen up if the housing market is an indicator.

In January, the median home price in Tri-Cities was $354,000 and houses were on the market for just eight days.

By the end of March that price jumped to $358,000 and houses were snapped up in six days, according to the Tri-City Association of Realtors.

Young told the Herald that for a home to be considered affordable for first-time buyers it needs to be priced at $277,000 in Benton County and $285,000 in Franklin County.

“You’ve got a huge issues to make it affordable for first-time buyers — no builder can build there for that,” he said of the Tri-Cities.

A quick search on Realtor.com on May 12 showed that for all of Tri-Cities, there were only 10 single-family homes that were priced under $300,000.

“In places like Tri-Cities, you run into a bigger problem — the expectation that people have,” Young said. “If you go to a place like Tri-Cities you want to buy a bigger house than you can buy somewhere else.”

The cost of land and materials alone — particularly costs of lumber — prevents entry-point homes from being then creates the domino effect of keeping home prices high and apartment vacancies tight.

What about developers jumping in and building more apartments and condos? It isn’t as simple as that, Young explained.

With the price of land reaching highs in Tri-Cities, he said that it is harder for new developers to get in and build small and work their way up to bigger projects.

Plus, building apartments comes with inherently more risks given the length of time it takes to build them.

“You have to make sure there is a market for all of them that you build,” Young said. “You must make sure you have demand for all of them.”

Cost of rent

The average cost to rent an apartment in Benton and Franklin counties last fall was $1,115 for all bedroom sizes — which was about 11% more than it was in fall 2019 when the average was $1,000.

However, lease prices vary widely throughout Tri-Cities.

Studio prices ranges from $705 in Pasco and up to $934 in Richland.

One bedroom units start at $905 to $1,018 and two bedrooms begin at $1,104 and go up to $1,292 throughout the area.

While Tri-Cities rentals are a far cry from the west side of the state, where the average rent is $1,800 in the Seattle area, it still is more expensive than neighboring counties.

Rents average $741 in Yakima County, $896 in Walla Walla and $901 to the north in Spokane.

This story was originally published May 17, 2021 at 5:00 AM with the headline "Trouble finding a Tri-Cities apartment to rent? Here’s why."