- Real Estate
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Feb. 9, 2021
Despite an increase in apartment construction, there still are fewer options for renters at the start of this year than there were in 2020.
The semiannual vacancy survey from the South Dakota Multi-Housing Association found an overall vacancy of 6.6 percent in January.
That’s the lowest since July 2017 and reflects the average of market rate and subsidized housing.
Among market rate properties, vacancy dropped from 7.6 percent in July to 6.4 percent in January. Of 14,573 units reported, 931 were vacant.
“The decrease in vacancy is primarily due to people moving into the area,” said Denise Hanzlik, executive director of the association.
“However, there are those that maybe lived together due to the pandemic, and they are now getting back on their own.”
Leasing did not seem to slow much during the pandemic. It just changed, she added.
“Now, you see more online applications, self-guided tours and leasing sight-unseen — proving the resilience of our rental property owners and managers throughout the last year.”
That was the case at Lloyd Cos., where vice president of residential property management Ashley Lipp said occupancy levels are the highest they have been in more than five years.
“This has set us up well for 2021 as there are a number of new projects coming online, and right now it seems like we can’t build them fast enough to keep up with the demand,” she said.
“We are just turning the corner and entering our busy leasing season, but I am expecting a very active year.”
The city of Sioux Falls issued $169.7 million in permits for new apartment construction in 2020, up from $65.6 million in 2019 and $92.6 million in 2018. Most of those 1,571 units aren’t reflected yet in the vacancy survey.
For Department of Housing and Urban Development properties, the decrease in vacancy was significant. It went from 3.8 percent in July 2020 to 1.3 percent vacancy in January 2021.
That’s the lowest vacancy for HUD properties in more than 15 years of surveying.
Tax credit housing also dropped from 10.9 percent vacancy in July to 9.1 percent in January.
Historically, tax credit has a higher vacancy because of the lengthy qualification process required — meaning those units are vacant longer, though they may have an application holding them, the report noted.
Despite an increase in building new apartments, there still are fewer options for residents at the start of this year than there were in 2020.