Metro Denver area rents rose slightly in the first quarter, bringing the average rent to $1,544 per month, according to the Apartment Association of Metro Denver.
Association officials say the uptick is just an adjustment, and that overall rents have remained stable in the last couple of years.
“Metro Denver’s multifamily market has left behind the effects of the pandemic and re-established its course of sustained growth, with vacancy at pre-COVID levels," said Terrance Hunt, Vice Chairman of Newmark, in a statement. "We believe that the second and third quarters will experience continued strong rent growth, as the spring and summer months generally outperform winter months in Denver’s seasonal rental market.”
Rents in Q1 2020 averaged $1,536 and $1,510 in Q4.
“This slight increase is very typical for the first quarter,” said Mark Williams, association executive vice president, in a statement. “Over the past 10 years, the Q1 rent increase has averaged a very predictable 2.2%.”
The vacancy rate tightened slightly to 5.5%, dropping .3% quarter-over-quarter.
“Economic vacancies increased to 14%, which is the highest since the second quarter of 2018,” the report states. “Economic vacancy includes discounts and write offs, so some of this increase could likely be attributed to the pandemic and subsequent impact.”
Rental discounts and concessions stood at 7.9% Q1, up from 4.4% last quarter.
The association reports more than 371,000 apartments in the metro Denver area, with another 27,000 on the way in the next two years. The association’s Apartment Insights’ new construction report shows over 140 apartment buildings are in some stage of construction.
The report also took the time to point out that “nearly one-third of the cost of rent is driven by regulation.” Association members have taken a position against the new licensing for long-term rentals proposal in front of the Denver City Council. So has its sister organization the Colorado Apartment Association.
“The rental licensing program is yet another regulatory action that will increase the cost of renting in Colorado,” said Drew Hamrick, general counsel and senior VP of government affairs, in a statement. “Particularly problematic is the requirement that rental housing providers obtain one license per parcel, as opposed to one license per rental housing provider. It is the equivalent to requiring that plumbers have a different license for each sink. The requirement that rental units be inspected, even when there is no complaint or indication of a problem with the unit, is an unnecessary increase in the cost of providing housing.”
The council is set to vote Monday on the issue.
The quarterly Vacancy and Rental Rate Report is authored by Ron L. Throupe, Ph.D. of the University of Denver Daniels College of Business, and Jennifer L. Von Stroh of Colorado Economic and Management Associates.