The scarce availability of affordable housing in Springfield has been a common cause of stress for locals hunting for a place to live. There’s been a drastic change in the housing market, especially in the last three years. Not only are there fewer places to rent, but people have been getting worse accommodations for more money, renters say.
Caylee Williams has been looking for listings for a duplex, house or townhome every day for the last two months in Springfield and surrounding areas. Since her current lease isn’t up until June, she’s had a very hard time finding a place to rent.
Listings evaporate within days of being listed, she said, and can’t be held until June due to high demand. That’s if there’s availability at all, as many units have waitlists.
She currently shares a studio apartment with her boyfriend and large dog.
“My boyfriend and I have opposite work schedules, so we’ve been wanting to find a place with at least one bedroom so we don’t have to listen to each other while the other sleeps,” Williams said. “And it’s been proven way harder this year than in years past.”
The majority of Springfield’s population lives in rental units, and yet most community conversation revolves around homeownership. The relentless heat in the housing market has some renters feeling frustrated and hopeless.
Williams wants a place with a yard and fence so she can get her large dog out of apartments, but she says places in her price range (under $900 a month) usually don’t have air conditioning or heating, or don’t accept pets — especially dogs over 20 lbs.
Williams and her boyfriend would like to buy a house, but they don’t have enough credit to get a loan.
“At this point, I’ve had at least three family members tell me their mortgage payments are as much or less than what these places are asking for rent,” Williams said. “I’ve been out of school for two years building my career while also working another part-time job. My partner works long overnight hours, with mandatory overtime most weeks — and we still can’t find anything at a reasonable price.”
Back in 2019, Williams signed a lease for a $580-per-month studio with washer/dryer availability and a balcony at a complex over 20 years old. A year and a half later, a studio at the same building goes for $680 a month — with no washer/dryer or private outdoor space.
Rent prices in Springfield have climbed significantly since 2019
Williams is not alone in her struggle to find affordable rent in Springfield. Rents have been climbing steadily in recent years, aggravated by the pandemic and resulting demands on housing.
The starkest rent spikes are for 2- and 3-bedroom units, which have risen 3 and 9 percent respectively since this time last year. That’s according to data from Zumper, the largest privately held rental platform in North America.
That’s only the tail of a long trend of rising rents. Since the start of 2019, rent has skyrocketed 56 percent for a 2-bedroom unit and 83 percent for a 3-bedroom unit.
These rental trends are affecting a huge percentage of the local population. While Springfield has historically been a homeowner-friendly region with low real estate prices, a smaller and smaller chunk of city dwellers live in owner-occupied homes. In 2011, 46.3 percent of Springfieldians owned their homes. That figure dropped to 42.4 percent in the latest Census report, however.
The hot rental market takes toll on low-income renters
Springfield Tenants Unite (STUN) is a tenant advocacy organization led by a wide range of poor and working-class tenants that come together to promote safe, accessible and affordable housing in Springfield. Darlene Steele, a member of STUN, has lived in Springfield since 1987 and has had many experiences with trying to find affordable housing.
“I’m technically homeless and I have been since 2017,” Steele said. “I have a situation where I live with an elderly woman and take care of her in exchange for rent, but if she died tomorrow I would be homeless. My struggles have been due to various circumstances. I have an eviction history, I owe City Utilities money — I have barriers that make it pretty much impossible to access any kind of rental let alone an affordable rental.”
Steele said developers seem to be targeting college students rather than focusing on the need of low-income renters.
“Gentrification is happening,” Steele said. “Downtown is geared towards college students or young professionals without kids who don’t want a house and it’s all outrageous rents. You’re talking $1,000-$1,500 for rent, right? I mean, what average working person can afford that? Especially if you’ve got a family.”
Most affordable and most expensive neighborhoods in Springfield
Zumper data indicates the most affordable neighborhoods in Springfield for renters include Walnut Street, Webster Park-Shady Dell and Midtown.
Neighborhoods with the highest rents in Springfield include Southeast Springfield, the Rountree Area and Phelps.
Another problem Steele has experienced as a tenant is the increase of property management companies and the decrease of individual landlords, which has created a disconnect for renters. Steele would like to see improved communication in the housing industry.
“The first priority is people, not profit,” Steele said. “If you’re in the business of providing rentals, then you’re in the business of housing people but the problem is there aren’t a lot of individual landlords. The real problem is that most of them are corporations — nameless, faceless corporations … There’s been such a disconnect. It didn’t use to be this way.”
In Steele’s experience, individual landlords tend to be easier to work with because they’re more understanding and “a little more human about it.” If a company is managing hundreds of houses it’s more challenging to make sure the properties stay safe because there are many things to take care of.
Steele believes some landlords see tenants as “expendable,” because in today’s competitive market there’s always a renter next in line. Eviction isn’t an easy thing to have to go through. Life just happens sometimes and large expenses come out of nowhere and can create a snowball effect.
It’s a landlord’s market, but some say prices are out their control
Landlords are definitely benefiting from the hot market.
Julie Vanvig Burnell is a property owner analyst, an investor and a licensed real estate agent in Springfield. She owns a real estate firm and works with many investors. According to Burnell, the rental market is relatively tight due to many factors.
“First of all, we have had an influx of individuals relocating into this area because we’ve had a number of job opportunities open up that didn’t exist before,” Burnell said. “We have also had people relocate here for economic, political and cultural reasons — we’re a more conservative area, that’s appealing to people that may live on the coasts. So we simply have more people moving in. We have a fixed number of residences, addresses and places to live.
“So we have more people moving in. We have more buyers in the market driving the prices up, we have an increase in overall value which has led some investors to sell, meaning that when there are fewer houses you can get more for them.”
Burnell said the high prices, though, are simply a product of market forces. Inflation has caused the cost of goods and services to rise.
“The biggest problem that we have as landlords though is we have to raise rents this year because all of our costs have gone up,” Burnell said.
Landlords’ taxes and insurance have increased along with everyone else’s and some landlords carry a mortgage on a house. Also, the cost of services — for example, trash and recycling — have gone up due to the rocketing price of fuel. All of these costs pass through to the rent. Burnell has also experienced an increase in the costs of repairs due to the scarcity of building materials and building contractors.
“So it’s not that rents are more expensive. It’s that the world is more expensive and the rental market has moved along with it,” Burnell said. “We value our tenants and want to provide safe and affordable housing, but we can’t offer a property at a loss and the margin that most landlords have between their gross expenses and their rents is not much different.”
If a tenant doesn’t pay their rent that month or does damage to a property, landlords have to absorb that and sometimes the damage can exceed the damage deposit.
“So let’s just say, for ease of numbers, I have a $100,000 house that I rent for $1,000 a month. I might have a $600 mortgage payment and then I might have to pay $75 a month in insurance … $25 a month in trash … and $75 a month in mowing — and those are just my maintenance costs,” Burnell said. “So we’re now at $800. That means my maximum profit margin on that property — if nothing ever breaks — is $200 a month. But say you run a plastic fork down the garbage disposal, now I have to replace your garbage disposal. A garbage disposal costs $200 at Lowe’s … And then I have to pay my handyman another $100 to go and put it in. I’m now $100 in the hole.”
Also, this doesn’t include liability insurance in case somebody gets hurt on the property, bank fees like accounting, the landlord’s time or the ads they may run on housing sites to rent out a property.
“The margin for most property owners is relatively narrow and so tenants who’ve never owned anything, who’ve never had those issues, don’t understand that the landlord isn’t just standing there collecting a check — the landlord has bills,” Burnell said. “Over the last two years, for people who have held property for a while, there was a period of time where if someone didn’t pay we had no recourse. Whether the tenant pays the rent or not the mortgage is still due, taxes are still due, we still have to provide all of our services.”
Should renters expect any relief looking forward?
Another real estate agent in Springfield, Bryan Smith, has seen a trend of issues for hopeful renters — not only locally but also nationally. He believes builders got scared off because they lost a lot of money due to the financial crisis of 2008, which resulted in not enough homes built in the last 12 years to fulfill the need of Springfield’s increasing population.
“Things still have been competitive because, number one, they can’t build enough houses to fulfill the shortage in a short space of time,” Smith said. “It’ll be years before the building catches up to the demand. And number two, those really low-interest rates have started to rise and the federal government said they’re going to keep raising them throughout this year.”
Smith said these market forces could continue driving the cost of homes up, making housing even less affordable in the future. But projecting market conditions is a risky game. “Nobody has a crystal ball,” he said.
Since the cost of building has increased, it’s been more of a challenge to create new rentals with affordable monthly rates. Smith offered advice for renters looking to buy in this demanding market.
“Don’t give up. Get a plan. Any house rents for more than the mortgage payment. Call an agent, they can help …even if you’re not ready yet”, Smith said. “If you have to continue renting, try to leverage what you have. Try to keep good existing rental relationships. Keep a list of past references. Work on your credit. Make sure your landlord is reporting to the credit bureaus. Don’t buy any new pets … they can make it very difficult to qualify for new leases.”