Five Reason Why You Got a Rent Increase

Posted on March 22, 2024 by David J Decker

There you are, being a good tenant, paying your rent on time, taking good care of your place and what’s this – a rent

increase? What gives?

Here’s Five Reasons Why You Got a Rent Increase.

What about the property management staff? You go to work and while you’re gone, they go to work too. Cutting the grass, clearing the snow, trimming the bushes, clearing litter, leaves and more. You got an increase last year, shouldn’t they? Where is that going to come from?
What about the increases in cost to fix stuff? Buy a house and most financial counselors will advise that you budget about 2% of the home’s value for repairs and maintenance – more if it’s older. For an apartment costing $100,000 that’s $2,000. But $2,000 isn’t going to go very far if a furnace or roof needs replacing. What’s more, these costs have been going through the roof. Almost all building materials have increased in cost faster than inflation.
What about property taxes? Two things are sure – death and taxes. Make that three things: death, taxes and tax increases.
What about economic activity? Are there new employers in town bringing in more workers and thereby increasing competition for housing?
Did your property get repositioned? You may not have been paying attention, but maybe the landlord upgraded the landscaping, painted the exterior or replaced the parking lot. Even if none of those upgrades touched the four walls of your apartment, it still cost a lot of money and made your home a more desirable place to live.

Rent increases are a reality of the inflationary world we live in.

Rents Likely to Keep On Increasing

Posted on July 22, 2019 by og@siteadmin

GlobeSt.com reports that June 2019 saw a spike in rent prices across the US, increasing about 0.826%. You can view the entire article here. Yes, 0.826% is less than 1%, but on an annualized basis this change would result in an increase in rents of about 10%. And this after years of increases, all faster than the rate of inflation.

Part of the problem is the cost of new construction. Few new single-family homes have been built owing to affordability problems. This in turn has driven up prices on existing single-family homes. Price escalation causes increased demand for housing alternatives like apartments.

Another source of trouble is the government interference we’ve thoroughly documented in this space. Government regulation and constraint on development has increased the cost of construction and limited the supply of additional housing, again putting pressure on rents.

What it means is that, like it or not, fair or not, rent prices are going to continue increasing. Of course, if you live in an area with rent control, then you probably won’t be able to find an apartment at all.

That is why we are grateful to be able to offer beautiful (and affordable) apartments in 14 cities and towns across Southeastern Wisconsin. Contact Decker Properties to arrange a visit, or call our office at (262) 785-0840 with your apartment question.

Hand Over Those Apartments!

Posted on July 11, 2019 by og@siteadmin

2019 07 10 apartment being torn down 300x199 - Hand Over Those Apartments! Like a broken record, we’ve been discussing the increasing rents that have been happening all over the country, and now even all over the world. It’s an international problem.

And never mind that part of the cost problem stems from government interference and constraints on new development. Regardless, governments increasingly feel compelled to step in to “solve” the problem they were guilty of helping to create in the first place.

The latest government intervention comes to us compliments of our German friends in Berlin. There, the government is proposing to actually confiscate apartments owned by private landlords! The premise is that any landlord owning 3,000 rental units or more would be subject to confiscation.

Doesn’t anyone remember the miserable apartments blocks in the former Soviet Union? Or how about the Cabrini Green public housing in Chicago that was plagued by sniper fire between the towers prior to the development finally being demolished?

I’m not sure what services governments are good at providing, but I’m certain that housing isn’t one of them. When one thinks about excellent service, is it Federal Express that comes to mind or the US Postal Service?

One correction that needs to be noted. I said that rising rents were an international problem. That’s not quite true. Housing costs in Japan have been stagnant for decades. That’s partly due to a stagnant population. But in Japan, there is less government regulation and constraint on development and as a result, more housing is created. Japan has a population roughly half that of the US. Last year in Japan, about a million housing units were built, a typical year. Last year in the US, 1.25 million housing units were built.

Get the picture?

I’m thinking you had better line up one of the beautiful new apartments at the Wilson Heights Apartments in Hartford before the government confiscates them and ruins everything! Call our main office at (262) 785-0840 to arrange a tour of your next apartment.

Squeezed By High Rent

Posted on January 31, 2018 by og@siteadmin

scissors cutting a budget gif 300x300 - Squeezed By High Rent We’ve been talking a lot about how rents have been increasing faster than inflation. We’ve mentioned articles in the Wall Street Journal. Now to bring it all home, the Milwaukee Journal Sentinel has made a similar report in a recent article Households squeezed by high rents.

The article notes that there’s large segments of the population paying 50% or more of their income for rent. That’s going to make it tough to meet other obligations like utilities, car care and food. And it’s a precarious place to be. One missed paycheck and you could be out on the street.

Time for some solutions

Continue reading →

Bad Moon Rising

Posted on December 19, 2017 by og@siteadmin

witch on a broomstick 300x270 - Bad Moon Rising I see a bad moon a-rising
I see trouble on the way
I see earthquakes and lightnin’
I see bad times today
– – Creedence Clearwater Revival, 1969

OK, so now you know that I’m an old guy. But most people rate this one a classic, so you’ve probably heard it too. The thing about a classic, it always seems timely.

So the bad moon that’s rising today is your rent. Our friends at Apartment Therapy recently had this headline to share: Rent on the Rise: Prediction Says It’s Going Way Up in 40 of the 50 Biggest Cities. You can click on the headline to read the full article.

But here’s the gist of it: The good news is that job growth has come to just about every city, large and small. The bad news is that same expansion of employment brings with it increased population and increased competition for housing and in most areas, new construction has not kept up with demand. Continue reading →

Inflation? What Inflation?

Posted on January 20, 2017 by og@siteadmin

US homeownership rate

It’s like a game of Where’s Waldo? All the new in regards to inflation seems to be good. Yet do such reports reflect what is going on in your pocket book?

A recent Census Bureau quarterly update on residential vacancies and homeownership shows continued decline in home ownership. Continue reading →

Nearly half of renters in the US are struggling to afford their monthly payments

Posted on February 1, 2016 by og@siteadmin

Here is an excerpt of an article that I found interesting that I would like to share with you.

Experts generally recommend keeping your housing costs around 30% of your monthly income. But the number of “cost-burdened” tenants — those who spend more than 30% of their income on rent — rose to 21.3 million people last year, according to Harvard’s Joint Center for Housing Studies.

Of those, more than 26% are “severely cost burdened” and spend more than half of their income to cover rent.

Here’s the problem: Continue reading →

The Good, The Bad and the Ugly of the Rental Crisis Part 2

Posted on November 28, 2015 by og@siteadmin

Rental Crisis Control Group

We’re back here at Rental Crisis Headquarters, reporting in on the latest in the Rental Housing Crisis. Last time we shared the good news and the bad news about The Crisis. But we left a chapter unwritten. Because as anyone knows, there’s never just a good and a bad. There’s always the good, the bad and the ugly.

And this time, the bad is so ugly that when it looks out the window, it gets arrested for mooning. It’s so bad that even Hello Kitty wants to say goodbye. And as we said before, it’s just chew your arm off ugly. So here it is, the Ugly of the Rental Crises:

1. Rents are going to go up. Way up. So you’ll need to make a budget. Continue reading →

The Good, The Bad and the Ugly of the Rental Crisis Part 1

Posted on November 12, 2015 by og@siteadmin

The Good, The Bad and the Ugly of the Rental Crisis

On October 7, we posted an article called the Rental Crisis in the US.

To summarize, there is an influx of new renters across every demographic segment. This is driven by young millennials entering the market for the first time, but also by baby boomers seeking rental alternatives when previous generations might have selected a condominium.

Home ownership that was at unprecedented highs is also returning to historical lower norms. In the mean time, wage growth has stagnated. The result is higher demand for apartments.

While all of this may be interesting, the far more relevant question is, how will this impact me in my home? That’s the topic of our posting today. Consider this your introduction to The Good, The Bad and the Ugly of the Rental Crisis.