Despite many states and cities choosing to increase the minimum wage in the last five years, the wage is not keeping pace with the cost of living. As a result, many low-income workers struggle to find affordable rental units; particularly in large metro markets such as Seattle. If properties are priced at rates workers earning minimum wage cannot afford, they will move on to cheaper units and then finally out of big cities to rural areas or smaller cities such as Bellingham, WA where rent is more affordable. Rental property management companies are tasked with maintaining the delicate balance between raising rent according to demand and keeping prices at levels the market can bear. Bellingham’s rental property management market illustrates this point well.
Bellingham, WA rental market statistics
Though new Bellingham apartment units have been built and more are in the works, the demand for rental housing remains high. A report recently issued by www.apartmentlist.com stated that the area’s average rental price for a two-bedroom unit has gone up five percent since this point in 2017, coming in at $1,120. It is interesting to note that while this price is an increase, a report issued by the low-income housing coalition states that a fair monthly rental price for a Whatcom County two-bedroom apartment is $1,028 per month. A recently issued federal report pertaining to Bellingham market trends states nearly 1,500 new apartments must be constructed by the end of 2020 to meet demand that will be created by new people moving to Bellingham.
The connection between the minimum wage and rental property management
Only 22 counties out of more than 3,000 across the United States provide a wage high enough for those making minimum wage while working 40 hours per week to afford a one-bedroom apartment. Each of these 22 counties has a minimum wage higher than the federal minimum wage of $7.25 per hour.
The state of Washington is in the top 10 of states with the most significant shortfall between renters’ wages and the wage required for a two-bedroom unit. Yet Whatcom County is not alone in lacking affordable housing for renters. The sad truth is the United States does not have one county in which an employee working 40 hours per week for minimum wage can cover the rental cost of a two-bedroom apartment.
Whatcom County minimum wage
An individual earning the $11.50 minimum wage while living in Whatcom County has to work nearly 70 hours per week to afford a local two-bedroom unit at the fair market rate. If such a person were willing to live in a one-bedroom apartment, he or she would have to work 53 hours per week at minimum wage. Those who are paid an actual living wage as opposed to the minimum wage find rent affordable. As an example, a single person in Whatcom County can afford a one-bedroom apartment if they earn $15 per hour or more.
The challenge for rental property management companies is to provide rental units at rates that reflect market demand and what the market will bear. Furthermore, alterations in demand necessitate corresponding changes in rental unit prices. Rental property management companies that find a happy medium between demand and minimum wage will ultimately achieve a solution that proves mutually beneficial to both parties.
Son-Rise Property Management has been serving the property management needs of Bellingham and Whatcom County since 1996. Contact us today to see how we can help you find a rental property for your family or manage your rental properties.