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GROWING PAINS: Shortage of long-term rental properties raises lease payments

Shortage of long-term rentals in the Highland Lakes

Like other apartment complexes in Marble Falls, The Residences at Panther Hollow, 501 Panther Hollow Drive, has reached occupancy capacity. The Highland Lakes is experiencing a scarcity in rental properties as well as price hikes because of supply and demand. File photo

After renting for a year, Kristen Hensley was so pleased with her experience at The Residences at Panther Hollow Apartments at 501 Panther Hollow Drive in Marble Falls that she excitedly pursued renewing her lease for another year. However, when told she would face a rent increase of over $300, her excitement quickly disappeared.

“I anticipated a modest increase in rent for the new lease; however, I was shocked when I saw the new rates,” Hensley said in an email to DailyTrib.com.

Previously, Hensley paid $1,334 a month for her two-bedroom apartment. Now, her same apartment with no added amenities costs her $1,678 monthly, a 26 percent increase. Comparatively, the average rent for a two-bedroom apartment in Austin is $1,603, according to a May 2021 report by ApartmentList.

Hensley began searching for other apartments in the area but found that, because of housing demands, all apartment complexes in Marble Falls are at max occupancy.

“I’m grateful to have a place to live,” Hensley said. “But now, I’d be fine living anywhere that was safe and clean if it meant not worrying about how to come up with an extra $350 a month.”

After being told by property managers that the price hike was fair and with no other options, Hensley signed the new lease, knowing it would cause a huge shift in her monthly budget.

The high demand for rental housing often results in price hikes, which put a strain on local renters, said Jordan Vann, Realtor at Re/Max of Marble Falls.

“You factor in supply and demand, and anyone can hike up prices because of the lack of choices,” Vann said. “Rentals in the area have become grossly unaffordable.”

In the Highland Lakes, long-term rentals include a mix of single-family homes, apartment complexes, condos, townhomes, and duplexes.

Apartment complexes are more common in cities like Marble Falls and Burnet, whereas condos, townhomes, and single-family homes make up the majority of long-term rentals in places such as Horseshoe Bay, said Joan and Mark Blankenship, owners of TJM Realty Group Inc., a rental property management company in the Highland Lakes.

Recently, single-family housing developments such as Gregg Ranch, situated just south of Marble Falls, and plans for a townhome development along Mormon Mill Road have indicated more permanent housing is coming to the area. However, these opportunities cater to homebuyers rather than renters.

According to the Blankenships, this shortage is somewhat cyclical. When occupancy rates rise to more than 95 percent, developers and investors will likely step forward to build new apartments, like the proposed 192-unit rental development called parcHAUS in Marble Falls, which could be one step closer to materializing if granted conditional use permits during the Marble Falls City Council meeting June 1.

However, developers admitted during a Planning and Zoning Commission meeting in May that completion of the project is more than a year away, especially considering the exceedingly high cost of lumber and other construction materials. These raised prices can also affect repairs and improvements made to existing rental units, which can contribute to higher rental prices as well, the Blankenships explained.

“This is the tightest supply (of rentals) that we have seen in our 20-plus years of doing business in this area,” the Blankenships said in an email to DailyTrib.com.

In Bertram, single-mother Sara Werner began looking for a new apartment just last month. Currently, she pays $750 for a two-bedroom, one-bath apartment at The Montgomery Apartments on FM 1174 North in Bertram. Upon hearing that her monthly rent would be raised to $850, she began looking for a new home with better amenities for herself and her son.

“I like it here, but there’s some things that could be changed,” Werner explained. “We don’t have washer and dryer connections available to us, and I don’t have a full-size stove. Appliances are low-end, but I’m pretty sure these are the only apartment complexes in Bertram.”

Werner found three listings by private renters in the area, but they were all out of her price range. The most affordable place she could find was a one-bedroom efficiency-style home, priced at $1,100 a month.

There are likely several factors contributing to the rental shortage, the Blankenships explained. For one, Texas is experiencing extremely competitive real estate sales. Single-family homeowners often receive multiple offers above their asking price within the first week of the listing, which could incentivize property owners to sell rather than dip into the rental market.

Additionally, the pandemic has highlighted work-from-home opportunities for many employees across the country. Areas like the Highland Lakes might draw more interest for homeowners and renters as some businesses move to remote work models, which makes living in metropolitan areas less of a necessity.

“This means that people who once lived in Houston, Dallas, or Austin can now live in Marble Falls, Burnet, or (Horseshoe Bay) or on Lake LBJ and still earn a living,” the Blankenships said. “We have seen an influx of tenants whose lives fit this description.”

Although the chances seem slim, Werner is going to continue looking for a new apartment until her lease expires in August, which is when the raised rent would go into effect.

With time, occupancy rates will drop as more developments are constructed, the Blankenships said. Apartment complexes will begin offering incentives to prospective tenants, like reduced security deposits. Tenants will move from older, less expensive complexes to new ones, and this will give renters with smaller budgets more opportunities.

“We have been here before, and we will be here again,” the Blankenships said.

This story is part of a series on post-pandemic growth in the Highland Lakes. “Growing Pains” stories will be posted online throughout the month of June on DailyTrib.com. The series kicked off with a story on growth in the June issue of The Picayune Magazine.

brigid@thepicayune.com

3 thoughts on “GROWING PAINS: Shortage of long-term rental properties raises lease payments

  1. Current wages for hourly workers aren’t in sync with cost of living increases. Prices rise for everything and your paycheck doesn’t. Now combine that with covid, a divorce or medical emergency. Can you imagine any of these scenerios that might then lead to the need for more affordable rentals. We all are tied to hourly wage shortfalls. We should all care if hourly wages can’t after 40+ hrs a week afford you housing ,some food and utilities.

  2. Without affordable housing employers can’t recruit and hire hourly workers. I think it is time for city governments to recruit and incentivize builders to create affordable apartments throughout Burnet County with the stipulation of fair rent increases.

  3. The Marble Falls housing market is out of control. Of course, the property management thinks a $300+ per month increase is fair. Why wouldn’t he think that? There is no reasonably priced housing for middle income people inn Marble Falls. Of course, the apartment complexes are full–Austin is moving in. We now have the Austinites doing the same thing to Marble Falls that the Californians did to Austin.

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