Chapel Hill’s rents increased by 0.7 percent during May and have been on the rise since February, according to a report by Apartment List, a California-based platform with rental listing and research.
The Town has exhibited a yearly growth rate in rents of 1 percent, greater than the state’s 0.9 percent and the country’s 0.8 percent. According to the report, Chapel Hill's median rent for a two-bedroom apartment is $1,248, $54 above the national average of $1,194.
The Apartment List estimates the monthly rental price from census statistics and a growth rate calculated from its listed housing. It also controls for biases in sample makeup and data’s time lag.
Chris Salviati, Apartment List’s housing economist, said the Town’s rent growth keeps up with a seasonal pattern.
“The summer is usually peak moving season for a lot of people,” he said. “So, heightened demand from more people moving leads to higher rent growth in the industry.”
However, the Town’s situation can be unusual compared to many other markets in the country that have experienced softened rent growth due to the pandemic.
“The COVID-19 pandemic is really creating softness in a lot of places, where rents may be staying flat or coming down a little bit,” he said. “That doesn't seem to be the case in Chapel Hill, where rents are actually up over the past couple of months.”
Flattened rent growth is often seen in local economies that depend heavily on tourism or service industry, such as in Las Vegas, while college towns with economies “rooted in the universities” can be more resilient to the broader trend, Salviati said.
Nonetheless, he said that prolonged economic downturn can result in less affordable housing options in the Town.
“If folks are facing financial hardship, then a lot of their households might have been making ‘downgrade’ moves or moving into more affordable housing,” he said. “It can be harder to fill the vacancies in more expensive rental units, but the affordable housing market might remain pretty tight through all of this.”
In response to the pandemic’s impact, the Town of Chapel Hill has updated its Rental and Utility Assistance Program to provide rental and homeownership assistance, said the Town's Affordable Housing Manager Nate Broman-Fulks.
Residents in urgent need of rent relief may be eligible for a one-time payment up to $2,000, which can include security deposits, utility connections, rental payments and arrears.
In addition, the Town has also developed an affordable housing work plan for projects and community engagement for fiscal years 2018-2020.
Planned items, for instance, include the development of 2200 Homestead Rd, a mixed-income housing project which the Town plans to start constructing in 2022.
Broman-Fulks said that the Town works to meet housing needs in both the pandemic and long-term development.
“We have been able to balance addressing these immediate needs, as well as to also remain focused on our long-term goals and keep those projects moving forward at the same time,” he said.
Although the pandemic has brought uncertainties in predicting housing trends, the Town’s rent growth is dependent on students’ demand, said Salviati.
“It is a pretty small market that is really heavily driven by the student population, which definitely has an impact on rent growth,” he said.
Salviati said that if less students return in the fall, the Town’s rent growth will be softened.
To offset the pandemic's impact on residents' ability to pay rent across North Carolina, Gov. Roy Cooper suspended evictions and extended prohibition of utility shut-off via an executive order set to expire June 20.
“North Carolinians need relief to help make ends meet during the pandemic,” Cooper said in a May 30 press release. “Extending housing and utility protections will mean more people can stay in their homes and stay safe as we all work to slow the spread of this virus.”
In the same press release, N.C. Attorney General Josh Stein said the order may help those in financial distress avoid homelessness.
“North Carolinians want to pay their rent, but for far too many people – through no fault of their own – that’s just not possible right now,” Stein said. “We are in unprecedented times that call for unprecedented action."
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