Rents in Baton Rouge have hit an all-time high, and as for when they will drop back down seems to be anyone’s guess as home prices also continue to climb.
The average rent for a two-bedroom apartment in Baton Rouge has jumped from $1,055 in 2019 to $1,139 in 2021, an 8% increase, says Andrew Fitzgerald, senior vice president of business intelligence for the Baton Rouge Area Chamber. While fourth-quarter 2021 data is not yet available, the city saw its highest rents on record in the third quarter, he says, at $1,184.
As homes become more expensive, potential homeowners are more inclined to rent, which is part of what’s driving up lease rates, says Craig Davenport of Cook, Moore, Davenport and Associates.
|
|
|
When home sales increase like we’ve seen in Baton Rouge, the occupancy rates for apartments usually drop, he says. But now, there’s an increase in both.
“We don’t know why, because it’s not like last year when we saw an increase in jobs in the area,” Davenport says. “Maybe it’s construction jobs from Amazon. Some may have to do with government subsidies. More people have more money to spend.”
Rents rose across the country by an average of 14% in 2021, The Washington Post reports, and Americans expect them to rise by another 10% this year.
The need for affordable housing is also growing in the Baton Rouge market, Davenport says, and there’s a number of complexes under construction including a $15 million development in the Scotlandville area.
But when interest rates rise this year, homes will become even more expensive and drive rents up further, Davenport says. Factor in the uncertainty of COVID-19 variants and another hurricane season, and there’s no telling when rents will stabilize.
|
|
|
The only surefire way to lower housing costs is to build more houses, Fitzgerald says, but there’s been controversy in some parts of the region in terms of moratoriums on development.
“With Louisiana,” Davenport says, “it’s tough to look forward.”
This story originally appeared in a Jan. 31 issue of Daily Report. To keep up with Baton Rouge business and politics, subscribe to the free Daily Report e-newsletter here.