For Atlanta renters feeling frustrated that new apartment options are disproportionately luxurious beyond their means—well, there might be something to that.
Metro Atlanta was among the most active regions in the country last year when it came to the high-end apartment sector, reflecting a trend from Texas to mid-Atlantic states and beyond, a new analysis has found.
Across the metro, nine out of 10 new Atlanta rentals qualified as “luxury” in 2017, meaning the Yardi Matrix rental intelligence compendium classified them as Class B+ and above, according to a new report by RentCafé. (The data covered apartment projects finished in 2017 with 50 units or more).
That’s good—or bad—enough for No. 9 in the country.
But at least Atlanta isn’t Las Vegas or St. Louis, where 100 percent of apartment projects last year crossed the high-end threshold.
The trend toward luxury isn’t showing signs of cooling off much in Atlanta.
Per RentCafé, preliminary numbers from the first half of 2018 show that 84 percent of apartments in the pipeline are high-end. As local developers have previously stated, the rising costs of land acquisition, materials, and labor are playing a role.
So what’s going on here, broadly speaking?
“A couple of years ago high-end buildings [on a national level] represented around half of the entire share, [but] recently these projects gained more popularity,” a RentCafé rep wrote in an email. “Based on the high demand, developers shifted toward building more luxury rental buildings. In 2017, the construction of luxury rental properties had risen to 79 percent of all apartment construction in the U.S.”
None of this is to suggest, however, that apartment development is enjoying the unbridled building and leasing success of earlier post-Great Recession years.
Per an earlier report based on Yardi Matrix data, apartment construction on a national level is slowing down in 2018, with an estimated 283,000 new units expected to be completed—or 11 percent fewer than last year—as of August.
Locally, apartment construction in the City of Atlanta is down by 2 percent, with just 6,048 new units expected to materialize by the end of the year. Last year, the city delivered 6,191 new rentals, per the report.
That dip seems minuscule compared to metro-wide apartment construction, however.
Despite an increasing population, metro Atlanta’s predicted 9,547 new rentals this year would represent a 13 percent plunge compared to 2017, per the Yardi Matrix study.