There’s Still Room For Multifamily Rent Growth
September 22, 2017 | Erika Morphy | GlobeSt.com
The share of households with incomes that can support the average effective multifamily rent in the Washington DC region has dropped from 54.2% in 2006 to 50.9% in 2016. Nonetheless, JLL says in a research note, half of all households can afford the region’s average effective rent, and a significant share of households have incomes that can support much higher rent levels. It’s conclusion: there is still room for rent growth even though class A rents in the region have grown 3.2% annually, on average, over the past decade.
The reason, of course, is the large percentage of high-income earners: 28%, 29% and 39% of households in Washington DC, Suburban Maryland and Northern Virginia, respectively, earn more than $125,000 annually. Indeed, the share of households with incomes greater than $75,000 grew from 45.6% in 2006 to 53.6% in 2016.
As a rule of thumb: Households with incomes of $125,000 can afford monthly rents of $3.50 per square foot.
