Inner Loop apartment rents tumbled by as much as 16% in 2020

Novel at River Oaks
Novel at River Oaks, shown under construction in this May 2020 photo, is one of several Inner Loop apartment projects opening at a time when rents have suffered during the economic downturn. (Matt Dulin/Community Impact Newspaper)

Novel at River Oaks, shown under construction in this May 2020 photo, is one of several Inner Loop apartment projects opening at a time when rents have suffered during the economic downturn. (Matt Dulin/Community Impact Newspaper)

It might have been a banner year for single-home sales in Houston, but 2020 was unkind to the much of the region's apartment market, especially its usually thriving Inner Loop.

"We're seeing a combination of a kind of urban flight and Houston's uncanny ability to deliver massive amounts of new inventory at the worst possible time," said Bruce McClenny, president of ApartmentData.com, which provides analytics to the multifamily industry. "It's a pretty devastating drop."



As of Dec. 31, rents had fallen by double-digit margins over the previous 12 months in three key markets: Downtown, Highland Village-Upper Kirby-West University, and Montrose-Museum District-Midtown. Those three markets also added over 3,300 new apartment units during the same time period, pushing occupancy rates down to around 84% or lower. In other core areas, such as Heights-Washington Avenue and Med Center-Brays Bayou, rents did not fare much better, falling by 9.4% and 8.6%, respectively, and the Heights saw occupancy rates drop to close to 82%.

There were over 12,000 unoccupied apartment units out of 79,000 in those five Inner Loop markets at the end of 2020, and roughly 7,700 more units are under construction.

"I would hope that these operators in those areas—at some point, you can’t lower rents anymore. They just have to wait for people to show up," McClenny said.


That means waiting for Houston's job market to recover the 147,000 estimated jobs that were still lost as of the end of 2020.

By contrast, however, some suburban markets, such as Sugar Land, Pearland and Clear Lake, showed stable or even slight increases in rent in 2020, suggesting increased demand and a transition away from urban-centered lifestyles amid the pandemic, McClenny said. Workforce housing in the Class B and C levels also showed stability in rents and occupancy rates despite fears of widespread evictions, though ApartmentData.com does not track eviction rates.

"The rental assistance has helped some, the moratorium has helped some, but there are still many operators worried—operators who owe money to banks and lenders—and they will be looking to get some kind of direct relief," he said.
By Matt Dulin
Matt joined Community Impact Newspaper in January 2018 and is the City Editor for Houston's Inner Loop editions.


MOST RECENT

New details could emerge soon on the potential use of underground tunnels to carry flood water in Harris County, and officials voted May 11 to dedicate an additional $3.26 million to study efforts along Buffalo Bayou. (Kelly Schafler/Community Impact Newspaper)
County commissioners expand scope of flood tunnel study as next phase nears completion

New details could emerge soon on the potential use of underground tunnels to carry flood water in Harris County, and officials voted May 11 to dedicate an additional $3.26 million to study efforts along Buffalo Bayou.

The boudin board at Studewood Grill comes with large-shred cheddar cheese and saltines. (Courtesy Studewood Hospitality)
Studewood Grill plots May 22 grand opening in the Heights

The "rustic American" eatery will focus on prime beef and fresh seafood dishes along with a full bar that specializes in whiskey, bourbon and classic cocktails.

Residents will have until May 2023 to obtain a Real ID. (Courtesy Adobe Stock)
US Department of Homeland Security extends Real ID deadline until 2023

Drivers will have until May 2023 to get the Real ID, which will be required for adults boarding a U.S. commercial flight.

Susan Bailey was elected president of the American Medical Association in June 2020. (Courtesy American Medical Association)
'I am convinced we will beat COVID': American Medical Association President Susan Bailey discusses vaccine successes, myths, challenges

Bailey was elected president of the American Medical Association in June 2020. Much of the organization's focus during that time has been on vaccine transparency and distribution.

The new Adult Education Center will be located at 6515 Irvington Blvd., Houston. (Rendering courtesy Cre8 Architects)
Harris County Department of Education to build new facilities, renovate administration building

The $36.1 million improvements include a new adult education facility, a new middle school and interior renovations to the department's existing Ronald W. Reagan Administration Building.

Pfizer vaccines could become available to kids 12 and up as soon as next week. (Courtesy Adobe Stock/Graphic by Justin Howell/Community Impact Newspaper)
FDA expands Pfizer vaccine authorization to children ages 12 to 15 years old

This is the first time people under the age of 16 have been granted access to a coronavirus vaccine.

The deadline is May 17 for residents to protest their appraised property values set by the Harris County Appraisal District earlier this year, and officials are encouraging protesters to take online options into account. (Courtesy Pexels)
Harris County residents have until May 17 to protest property values

High demand for residential properties along with a shrinking inventory of homes translated into a roughly 8%-10% increase in residential values on average across the county this year

Brandon Nguyen owner of D&Q The Beer Station on Richmond Avenue, can guide overwhelmed newbies and beer veterans alike on the selections at his one-stop shop. (Matt Dulin/Community Impact Newspaper)
Craft Beer Guide: 14 places to celebrate American Craft Beer Week in Houston

Craft beer week runs from May 10-15, and our guide fills you in on the local breweries in Houston, including which ones are dog friendly, which ones have in-house kitchens and which ones have outdoor seating.

ExxonMobil moved employees from its Springwoods Village campus to a Hughes Landing to cure a default on a Montgomery County tax abatement. (Courtesy ExxonMobil)
ExxonMobil resolves tax abatement default; Home Depot distribution center taking over superfund site; and more top Houston-area news

Read the most popular business and community news from the past week from the Houston area.

The University of St. Thomas is a private Catholic college in Houston. It also has a microcampus in downtown Conroe. (Emma Whalen/Community Impact Newspaper)
University of St. Thomas offering free tuition to first 500 students who apply

The online degrees are in the following fields: cybersecurity, network technology, electronic technology, general business, and alcohol and drug dependency counseling.

houston firefighters rally
Appeals court rules in favor Houston firefighters in collective bargaining case

The 14th Court of Appeals ruled in favor of the fire union in a case that originated when the city and the union failed to reach an agreement on a labor contract in 2017.