Rising rents, high demand spur apartment building locally
The current trend of higher rents and increased demand for apartments is something local experts say they’ve expected for several years.
Experts say two factors are affecting the situation. There is greater demand for rentals from people in Denver’s increasingly expensive housing market, and more demand from southern Colorado people who can’t afford houses or prefer to rent instead of buy.
The situation is spurring construction activity in the Colorado Springs area, with several planned expansions of existing complexes or building of new complexes.
Some complexes also are renovating to compete with newer units.
Laura Nelson, executive director of the Apartment Association of Southern Colorado, said the area has added between 500 and 700 units annually since 2013.
“The vacancy rate is five percent,” she said. “Some would like that a little bit higher, to be more healthy. When you get down around three percent or two percent, that’s crisis mode.”
Nelson said rents, also high in Denver, have started to decrease.
“It’s a market correction, because they built a lot of apartments,” she said. “Whether that will happen here, and when, is hard to say. But we can’t overbuild, because we have so many military tenants, and a deployment cycle will leave us with a lot of vacancies.”
Laraine Saldivar is one of the tenants fueling the trend. She moved into the Blue Dot Place on Nevada Avenue when it opened in downtown Colorado Springs at the end of January.
“I looked for an apartment for a couple of months,” she said. “I looked all over town. I work downtown, so I wanted to be closer to it. But the apartments that were available were still very expensive and didn’t have the amenities.”
The Blue Dot Place has 33 units and 21 are occupied. Monthly rents range from $1,100 to $1,850.
“The rent was more than I expected, but it’s the only place that provides everything I want,” Saldivar said. “The best apartments are going fast, and I think when you find something good, it’s going faster.”
The trend is affecting Pueblo to a lesser extent.
Rod Slyhoff, president of the Pueblo Chamber of Commerce, said rents are higher than they were a year ago but not excessively so, and demand hasn’t been strong enough to stimulate apartment construction.
