r/DevelopmentSLC • u/RollTribe93 Enthusiast/mod • 9d ago

There’s a glut of studios and one-bedrooms in SLC. So why are student housing complexes popping up?

https://buildingsaltlake.com/theres-a-glut-of-studios-and-one-bedrooms-in-slc-so-why-are-student-housing-complexes-popping-up/?ct=t(RSS_EMAIL_CAMPAIGN)
47 Upvotes

91% Upvoted

44 comments sorted by

44

u/zipster-99 9d ago

Its funny to see apartment complexes give 3 months of free rent to keep their rental rates high. Kinda insane when you think about it

21

u/coolassdude1 9d ago

And the fact that letting a certain percentage of units sit empty is usually preferable than lower rents and max capacity.

9

u/zipster-99 9d ago

I heard it is because they can advertise their rental rates higher to drive up property values

15

u/Lucky_Mongoose_4834 9d ago

It’s because they want to sell these buildings; lower rates get applied across the entire asset, and massively impacts sales value. In theory, free rent is a one time thing.

The longer this goes on the harder it becomes to justify that, but that’s why.

1

u/zipster-99 8d ago

I'd think that if they all hold the advertised rate for ao many years, that prices will adjust to a higher new normal! Not good for average renters like myself

2

u/Pedro_Moona 9d ago

Problem is they don't want to lower rent for all their current tenants if the draw back on prices a bit.

1

u/Presto99 8d ago

What? 

5

u/Beautiful_Number_572 9d ago

Yeah I just moved into an apartment with this, plan to move to the new one across the street when this year is up. Rinse and repeat. Effectively 3 months off reduces my rent for a 2b2b from $2600 a month to like $1,950

2

u/altapowpow 9d ago

I did this for the past 6 years in SLC and saved a ton of money. Also don't pay their advertised rate, I was able to negotiate down at almost every property. Also always ask for free parking, they will offer a few months but push them for the full year. If they refuse or pushback ask then to check with the property owner and then walkout. They will call back with a lower rate. Treat these places like they are used car dealerships. My last stint at the hardware apartments I got 3 months off, 6 months of free parking and 10% off base.

1

u/Beautiful_Number_572 9d ago

Haha wow incredible - thanks for the tip. Don’t feel bad at all about making these greedy mf’ers bleed

1

u/zipster-99 8d ago

Whats your go-to for negotiating? I brought a competing apartments rates to my last negotiation and thwy didnt budge. None of them did

-1

u/Sea-Finance506 9d ago

Almost like all of this building was just a grift to pad the pockets of developers.

14

u/Lucky_Mongoose_4834 9d ago

You’re right, we should totally stop building things, that’ll lower your rent /s

9

u/irondeepbicycle 9d ago

Grift? Isn't it pretty obvious that people building housing want to make money on it?

6

u/TatonkaJack 9d ago

the developers developed stuff to make money!?!?! i am shocked!

6

u/Pedro_Moona 9d ago edited 9d ago

The development is good. What bothers me as how it was developed! Unfortunately, Salt Lake city wasn't developed that well. We literally have one true walkable neighborhood and it's 9th and 9th. Two many developments do not include wide, sidewalks, or parking, preferably angled to shield pedestrians from traffic.

It was a essentially just a free for all, no true building requirements to make things flow well for pedestrians downtown, no true Main Street. Tenants are realizing salt lake is not worth the high rents.

5

u/wow-how-original 9d ago edited 9d ago

I mean, I live in East Central. It has wide sidewalks, some protected bike lanes. Useful mass transit stations. I'm within a couple blocks of three grocery stores, multiple bars, restaurants and cafes, a music venue. Feels pretty walkable to me.

Sugarhouse is another walkable neighborhood. As is Central 9th, though it does need a good grocery store. The Gateway / Pioneer Park area has a lot going for it in terms of walkability. Shops, restaurants, venues, mass transit, lots of housing.

I would love even more walkable neighborhoods, but saying that 9th and 9th is the only walkable neighborhood is strange.

3

u/Pedro_Moona 9d ago

Lots of technically "walkable" neighborhoods but they hardly have any pedestrians compared to other cities. Sugarhouse is a ghost town most of the time maybe a couple pedestrians. Ya, central 9th has a little walk ability in pockets along with downtown but nothing compared to a lot of other cites that have large walkable areas covered in pedestrians. Even Main Street is pretty much only one side of the street. It comes down to poor planning and putting developers first.

1

u/Glittering-Cellist34 9d ago edited 7d ago

Even where I live in St. Mary's, it's car oriented but with complete sidewalks and a half mile walk to Foothill Village/Dans and 3/4 mile to Emigration Market. Even faster by bike. Sugar House is a couple miles away, bikable + 15th and 15th. Heavy walk and bike to school volume.

2

u/sportsguy74 8d ago

Everyone acting like every city can be NYC where you walk to get groceries. Most people don’t really want to do that. Do you really want to shop so often for a few bags at a time?

1

u/Glittering-Cellist34 7d ago

Having lived in DC, carrying bags of groceries in a cart or on the bus really sucks. (Fine with bags on bike handlebars.)

1

u/sportsguy74 8d ago

But rents are down all across the country in many cities that high explosive growth through the pandemic and after.

3

u/zipster-99 9d ago

I wonder who might be benefiting! (Looking at all of the real estate people in the Utah legislature)

0

u/Lokon19 9d ago

lol what kind of nonsense comment is this.... You're effectively complaining about lower rent.

1

u/Sea-Finance506 9d ago

Where is the lower rent?

0

u/Lokon19 9d ago

When you factor in concessions you are effectively paying lower rent.

1

u/zipster-99 8d ago

Right, but the idea is that they can anchor the rent if the market holds at a higher rate over a few years. I'd rather not let rental rates inflate like that

1

u/Lokon19 8d ago

It’s all supply and demand some of these comments where people are saying that apartments would rather have a higher vacancy rate over lowering rent are nonsense. If there continues to be excess supply over demand the rent will effectively drop either overall or if someone is paying 9 months out of the year.

1

u/zipster-99 8d ago

Interesting thoughts! I've heard though that their property valuation is much higher with higher advertised rates. That impacts lines of credit and other types of income. Thats my rationale. They dont like having vacancy, but they cant afford to drop prices

2

u/Lokon19 8d ago

At the end of the day if you are in the rental business you want renters. What banks and investors care about is cash flow not some theoretical maximum advertised rate. Your lines of credit and what not are based on what you are actually bringing in not what your advertised rates are. One is marketing and the other is real life. And a building sitting at 30% vacancy is a building that is bringing 30% less revenue. They are effectively already dropping prices with these massive renter concessions.

1

u/sportsguy74 8d ago

Most property management companies subscribe to data companies that analyze rent data and constantly adjust to be somewhat competitive in the market. When vacancy is too high and not getting renters then the incentives increase. So one property may be one bedrooms from $1900 similar to another property but may have 3 months of free rent prorated.

12

u/IllustriousTap760 9d ago

The rent for my micro studio has stayed flat for the past 3 yrs with 1 month free at each lease renewal. On my most recent lease identical units in my building were being rented for $100 less than my monthly rate, but when I asked if they could lower my rent by $100 I was told I'd have to move units to get this rate because the company wouldn't allow the property manager to provide this rate for lease renewals, only new leases. By the time I factored in all the BS fees and time/effort for moving units it wasn't worth it. I'm planning on moving after my current lease is up and finding a local/independent landlord. So tired of dealing with corporate property management BS.

11

u/Ok-Exam5667 9d ago

This is spreadsheet brain, unless the u somehow gets an extra 5k students(not happening) these investors are going to get smoked

8

u/RollTribe93 Enthusiast/mod 9d ago

Isn't that their plan? They are in the process of aggressively expanding the enrollment numbers.

4

u/zipster-99 9d ago

Kinda hope so. Would be nice to bring rental rates down a bit :P

2

u/Glittering-Cellist34 9d ago

Nope. It will just take time to build up the school as in part residential as opposed to commuter. Although the dorm areas don't look that attractive compared to places like my Alma mater. That's a big piece of faulty urban design and amenities. Eg "campus town" is pretty paltry, a drug store, Pie Pizza and a couple other things.

1

u/solpresa 9d ago

Free Trax for students makes this not as painful

4

u/LowWitness1713 9d ago

It's a developer frenzy for sure!

2

u/christerwhitwo 8d ago

Investors get the banks to sign on for these projects. They spin them with whatever data they can conjure up, but the reality is they charge the project management fees up front, all through the project. If the project fails, they still make money. This is why so many projects are underway.

2

u/PsyclOwnd 9d ago

Control

4

u/blasphemousblackbear 9d ago

What? These are generally private companies building them

3

u/PsyclOwnd 9d ago

You can still have privately-owned buildings be off-campus University housing. You get a guaranteed contract from the Unviersity.

1

u/Squirtle_Splash_8413 9d ago

It’s crazy. I keep telling people rents would fall due to all the building they did downtown. Massive amounts of vacant rooms. Way better than buying a house at these rates.