Plenty of commercial brokers across the Midwest have expressed concerns that too many of the new apartment developments that developers are bringing to the market are unaffordable to the majority of renters.
More evidence to support this concern came out this week from national apartment search site RENTCafe. The company found apartment construction hit an all-time high last year. And much of this new construction consisted of luxury units with high-end amenities and even higher-end prices.
RENTCafe analyzed how much it costs to rent a high-end apartment in the 30 biggest cities in the United States. The results? In many cities, high-end apartments are priced way above what most renters can afford each month.
This doesn’t have to be terrible news. After all, high-end apartments are designed to cater to the wealthiest of renters. The challenge comes when luxury apartments dominate the neighborhoods in which renters – especially younger ones – want to live, and when there aren’t enough lower-cost apartments to come close to meeting demand.
Consider Chicago. The city’s most popular neighborhoods are filled with new luxury apartments. Many of the people who’d like to rent in these neighborhoods are priced out, and have to settle for neighborhoods located farther from the city’s urban core.
So, how much do luxury apartments tend to rent for in the United States? RENTCafe found the national average rent in a high-end apartment building came in at $1,640. That’s about $490 more than the average monthly apartment rent in a low-end building, meaning that it would cost a renter about $5,800 more a year to live in the typical high-end apartment.
But this only tells part of the story. In many of the biggest U.S. cities, high-end apartments rent for much more than $1,640 a month. In Chicago, the average rent for a high-end apartment is a far more intimidating $2,261, according to RENTCafe.
In no surprise, Manhattan boasts the most expensive high-end apartments, with the average luxury unit renting for $4,416 a month, according to RENTCafe.
In Detroit, the average high-end apartment will cost $1,652 a month, while in Nashville, that figure comes in at $1,513 a month. And in Columbus, you can rent a high-end apartment for an average of $1,319 a month, a relative bargain.