Students anticipating the usual raise in their apartment rent for next year may be surprised that some downtown landlords are in fact lowering some of their prices for next year.
“For apartment renting on the whole, it’s been quite some time since the price has decreased,” said controller for Steve Brown Apartments Scott Watson.
While Steve Brown’s rental prices will not be set until mid-November, Watson said overall prices are decreasing for their units for the first time since he started working for Steve Brown 10 years ago.
“Rents increase or decrease depending on a whole number of factors: taxes, utility costs, supply and demand,” Watson said.
City Council President and downtown Ald. Mike Verveer, District 4, said the increase in new student apartments downtown is increasing the supply of apartments and is causing landlords to remain competitive by lowering or stabilizing rents.
“Without a doubt I have anecdotal reports from both landlords and tenants that for the first time in recent memory student rents are stabilizing or even decreasing because of the large number of vacancies in this rental season,” Verveer said.
Landlords who do not invest an adequate amount in their apartments will be forced to maintain their buildings to be successful in what Verveer called a “renters’ market.” In past years when there was a “landlords’ market;” landlords have been able to raise their rent every year and were allowed to do so because Wisconsin does not have any rent control laws.
“For 40,000 students the vacancy rates have been practically nil for many years. Landlords could ask for whatever rent they wanted,” Verveer said. “It will force landlords to invest in their properties, new kitchens, new bathrooms and investing money in deferred maintenance.”
Verveer said incentives such as historically low interest rates on construction and mortgage loans have lured many developers to build new apartments downtown.
Because Steve Brown is charging less in many of his buildings, Verveer said he may ask the city to lower his real estate property assessment, which is used to determine property taxes.
Some landlords don’t expect their taxes to lower, however, so they may not consider lowering their rental prices.
A rental consultant for Madison Property Management, which owns more than 100 buildings downtown, said she doesn’t expect their rents to decrease next year.
“Generally they all go up somewhat. The only time we’ll decrease rent is at the end of the season when we have late specials,” she said.
Also a representative from a rental company that owns more than 30 buildings downtown, said while rent prices have not been finalized for the next school year, she doesn’t think they will lower rents.
