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Denver rent gains continue to lag behind suburbs since the pandemic

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For years, developers have focused on building luxury condominiums in downtown Denver. It targets young professionals who want to live closer to their workplace and center of action.

And while that pipeline is still full, the strongest rent gains since the pandemic are coming in the suburbs and beyond. The latest survey of the apartment search engine “Apartment List”.

In the first year of the pandemic, apartment rents in downtown Denver fell 3.7%, but rose 1.8% in surrounding suburbs. After the economy reopened, rents picked up everywhere. But the preference for renting in the suburbs has only accelerated.

Denver apartment rents have risen 16% since March 2020, while metropolitan suburban rents have risen an average of 25.1%, according to Apartment List.

That preference is consistent with what is happening nationwide. Of the 39 metropolitan areas surveyed, 33 recorded faster rent growth in suburbs than in central cities. And the farther away, the faster the rent grows. Nationwide, core city rents are up 16.8% since the start of the pandemic, and rents within 15 miles of the core are up 23.5%. Rents from 15 miles to 30 miles increase by 26.8% and above 30 miles by 30.1%.

Why hasn’t rent growth caught up in core cities? In the early days, some tenants sought to escape what they perceived to be a higher risk of contagion in denser areas. Bars, restaurants, clubs, and other establishments have closed or restricted hours, further reducing the attractiveness of the downtown area. As more employers embrace remote work arrangements, the appeal of being close to the office has waned.

“A long commute from a remote suburb might seem a lot more reasonable if you can only endure it twice a week. For this reason, they seem to be choosing to give up the convenience of being close to the city.

Another factor is that central urban areas continue to see a supply of new apartments, while more remote areas are relatively less. Projects take years to plan and complete, but builders are not moving fast enough to take advantage of stronger demand in remote areas.Denver’s Share of apartment construction dropped, but still dominant.

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