The online listing for a two-bedroom, two-bath condo in the Green Hills neighborhood in Nashville went up on a Thursday, with plenty of color photos. It wouldn’t be available till September, and the owner was advertising in May, earlier than she usually did.
Two days later, Tamara Graham was sorting through more than 50 responses, including some from out-of-towners willing to rent sight unseen. “This is more than I’ve ever had,” she says. Graham and her husband are small investors who rent out five one- and two-bedroom Nashville condos.
Across town in Bellevue, Karen Hardin was packing her belongings and preparing to move from her apartment. She liked the one-bedroom, one-bath apartment unit with a balcony, a wood-burning fireplace and a large walk-in closet, and she had lived there for 14 years.
Monthly rent that started out at $624 in 2008 had gradually increased; that was to be expected. This spring, however, she learned that the price of another year’s lease was 50% higher rent.
Hardin, 60 and on disability, was shocked. She also says, “I understand the landlord’s side. They’ve bought the property” and want a return on their investment. She says she’d probably move in temporarily with family until she can find another place and is considering finding a roommate.
Welcome to the tug of war between supply and demand for rental property in Tennessee’s capital city. The price of renting in and around Nashville has jumped in the past year as more people move here and the pace of construction slows due to labor and supply shortages. Renters often compete with aspiring homeowners and real estate investors for a place to live.
The Washington Post reported this spring that nationally rents rose at a record 11.3% last year, and they continued to rise in the first months of 2022. The Post used estimates from CoStar, a commercial real estate information company, that projected rents to rise by 6% nationwide in 2022.
Moreover, the National Low Income Housing Coalition (NLIHC) says there’s no state with enough affordable homes available for extremely low-income renters. There are more than 233,000 such households in Tennessee, NLIHC says, and a shortage of more than 127,000 affordable and available rentals.
The maximum annual income for an extremely low-income Tennessee family of four is $26,200. For every 100 extremely low-income households in Tennessee, there are 46 affordable and available rental homes, according to NLIHC. The gap between demand and supply is smallest in West Virginia, with 61 units per 100 households.
In Nashville, the Metropolitan Housing and Development Agency serves about 30,000 people in more than 13,000 families, MDHA Director of Communications Jamie Berry says. MDHA, established in 1938, also manages federally funded community development and homeless assistance programs on behalf of Metro government. To foster urban growth, the agency oversees 11 redevelopment districts that guide development through design and land-use zoning controls, a recent MDHA news release says.
“Our payment standards are based off of fair market rents published by (HUD), and they aren’t always competitive with current Nashville market rents,” she says. “We also have landlords who have sold their units/properties because of the increase in property values.”
MDHA also is helping build apartments, adding 679 units since 2017. They include mixed-income developments, affordable housing developments and workforce developments.
Just last week, MDHA hosted a grand opening for its newest mixed-income development, the Randee Rogers Apartments at 1419 Rosa L. Parks Boulevard, close to Germantown, downtown Nashville and MetroCenter.
The 100 apartments include one-, two- and three-bedroom units and offer Whirlpool appliances, quartz countertops, walk-in closets, a fitness room, community room, parking garage and computer lab. Half of the units are subsidized/affordable, according to an MDHA press release.
The apartments were built on land that MDHA already owned and had used as a training center. Using MDHA land helped hold down the cost of building the apartments, one way to foster development of affordable rental units. But the shortage takes time to remedy.
Meanwhile, people continue to move to Nashville.
Using information from the U.S. Census Bureau, the Nashville Area Chamber of Commerce estimates that from 2020 to 2021, the Nashville MSA (including Davidson and 13 surrounding counties) had a net in-migration of about 13,234 people, says Karl Houston, the Chamber’s vice president of marketing and communications.
That translates to about 36 people moving a day to the Nashville region for that time period, fewer than the number of people moving here about five years ago, but still a lot of transplants.
More than half of the newcomers came from the Chicago, Los Angeles and New York areas, Houston says.
Hardin, in Bellevue, says, “I’m one of the lucky ones” because she can temporarily stay with family until she finds another place. “I do have that cushion.”
But the rent increase has brought stress and mental anguish, she says. She has considered living pretty much anywhere from the Kentucky state line to the border with Alabama, but says she needs to stay near Bellevue to help care for her elderly mother.
Graham, the small investor who had 50 people respond to an ad for the two-bedroom condo, focused on four potential renters and chose one. Then, someone else called to ask if she was the owner (yes) and if she was advertising on Facebook (no).
Someone had appropriated all the photographs she had originally posted, along with the address and other information, and asked for a $1,350 deposit on a condo they didn’t own. Graham immediately notified Facebook, which removed the ad.
Her online ads now state the property is only available through specific sites and to beware of scammers.
“People desperate for housing will go to great lengths to find it,” she says, “and this experience taught us that it’s important for us to help make sure people know how to protect themselves.”