Alejandro Resendiz Guerrero works on a portion of the Monroe Street Market… (Matt McClain/FOR THE WASHINGTON…)
The weary apartment hunters of Washington, who have been plagued in recent years by rising rents, fewer vacancies, pickier landlords and periodic bidding wars, are about to get a welcome respite.
Thousands of new rental units under construction are scheduled to open in the coming months, the first such wave of new building in the area since the financial crisis hit in 2008.
The coming surge — a whopping 6,000 new units by the end of this year — will give prospective renters a slew of new options and could even halt the upward march of monthly rental payments, according to developers, analysts and real estate professionals.
“There’s going to be a paradigm shift,” said Rick Gersten, chief executive of Urban Igloo, a company that helps connect renters with local landlords. “People are going to have more choices. It’s going to be more difficult to retain tenants.”
During the economic downturn, developers drastically scaled back production of multi- family projects. But construction has come roaring back, with developers last year alone breaking ground on nearly 15,000 apartment units from Landover to Northeast Washington to Manassas — the most in nearly two decades, said Greg Leisch, chief executive of the Alexandria-based research firm Delta Associates.
Much of the building is taking place in the District, including the hot H Street NE corridor and the Mount Vernon Triangle area. But units are also springing up in the close-in suburbs of Fairfax in Northern Virginia and Bethesda and Silver Spring in Maryland.
The vast majority are “Class A” units aimed at young professionals eager to live in walkable communities near shopping and public transportation, developers say. Many boast a profusion of modern amenities, such as open floor plans and granite countertops — even waist-high mini-showers for bathing the well-groomed dog.
The projected number of new units would be more than double the number that went on the market in the Washington area during each of the past two years. And by national standards, the coming boom is exceptional — by comparison, only about 2,500 new units are expected to go on the market in New York City this year.
“We don’t even have demand in an entire year for 6,000” new apartments, Leisch said. “That’s going to disrupt the equilibrium in the market.”
The result, Leisch said, probably will be a slight decrease in average rents by the end of the year, with the potential for additional decreases in 2013. In addition, some landlords could be forced to offer concessions to entice new tenants, such as a free month’s rent.
Still ‘very expensive’
But even with the swelling supply of new apartments, finding an affordable home in the Washington region will remain a challenge, analysts said. The average monthly rent in the District is $1,501, according to Reis Research, a commercial real estate research firm. By comparison, people pay $868 a month in Atlanta, $928 in Austin, $1,085 in Seattle and $1,113 in Miami. Nationwide, the average monthly rent is $1,081.
“It will continue to be a competitive market,” Leisch said. “The rents will ease a bit. . . . But all this is relative. It’s still going to be very expensive compared to the rest of the country.”
In recent years, would-be renters have increasingly encountered higher rents, along with a shrinking universe of vacancies. Janne Clare, 50, moved to the District in July to start a new job. A Boston native who spent the past decade in Santa Monica, Calif., Clare said she began the apartment hunt as soon as she got back to the East Coast. “I literally jumped up in the morning and looked at listings.”
Five sweltering weeks, one shady Craigslist experience and almost 30 apartments later, she found her dream place: a refurbished, early-20th-century condominium in Dupont Circle. She will pay $3,500 a month, which she thought was a fair price.
“I fell in love with Capitol Hill,” Clare said. “But it was too expensive.”
Stephanie Doctrow, 22, had a Georgetown apartment-share picked out before starting her internship in the District. But when she knocked on the door last weekend, she realized the situation was not going to work.
Doctrow is now living on a friend’s couch, combing Craigslist and social media.
There’s a simple explanation for the tight market. The basic laws of supply and demand have been tilted in the landlords’ favor, with too many renters for too few desirable apartments. That has led to an unsatisfying trade-off for many prospective tenants — cough up far more money than expected in an already expensive market or compromise on factors such as location, amenities or the number of roommates.