Apartment occupancy up: Average 1 bedroom rent $679 a month in Tyler in first quarter

Published on Friday, 13 June 2014 21:01 - Written by Kelly Gooch, kgooch@tylerpaper.com

Before Wyman Elrod moved to Tyler from Dallas, he researched his housing options online, considering things such as price and location. 

The 61-year-old, who moved to Tyler to assist his elderly parents, said he wanted a garage and a two-bedroom, two-bath unit.  

He ended up at the recently opened Palomar Apartments, where he has been since early December, primarily because of its proximity to his parents. His father died in February, but his mother still lives nearby. He will continue to live near his mother when he moves into a house later this month.

Elrod represents the numerous renters that influence Tyler’s occupancy rate.

The occupancy rate for the first quarter of 2014 was 89.5 percent — a 1.6 percentage point increase from the last quarter of 2013, a 2.2 percentage point increase from the third quarter of 2013, and a 2.7 percentage point increase from the second quarter of 2013, according to a Tyler area rental survey produced by the Tyler Apartment Association. Although it is higher than the second, third and fourth quarters of 2013, it is still not as high as the first quarter of 2013, when the occupancy rate was 90.9 percent.

In Beaumont, a similar-sized city, the occupancy rate is 90.1 percent, excluding student, senior and income-restricted properties, according to the Apartment Association of Southeast Texas. And in Wichita Falls, the apartment vacancy rate for 2013 was 11 percent (89 percent occupancy), according to the city.

Data from the Tyler area rental survey, in which about 60 properties participated, shows that the overall average rent for a one-bedroom in the first quarter of 2014 in Tyler was $679, while the overall average rate for a two-bedroom was $834. 

In Wichita Falls, the highest average rent in the city is $1,100 per month, with some rents as low as $300 per month, city of Wichita Falls Planner Leo Mantey said via email.

Tyler Apartment Association President Sandey Coker, who manages three properties — Towne Oaks, a property for seniors, Towne Oaks East and Cambridge Oaks duplexes — said occupancy drops during the summer months at some properties due to students moving out at the end of May, and first-quarter numbers are typically higher because people tend to not move around the holidays.

Various housing projects have been built in recent years or are planned. One such development is Forest Meadows North, on North Broadway Avenue, near Lake View Apartment Homes and Pinnacle at North Chase. All three opened in the past four years.

Also planned is Saige Meadows, off U.S. Highway 69, near Interstate 20, and in south Tyler, Palomar Apartments opened in August.

Next month, the city’s Planning and Zoning Commission and City Council are expected to consider a zoning request that would allow another apartment complex to be built.

The proposed complex, which includes plans for 264 units, would be west of the Roy Road and Rhones Quarter Road intersection, with sole access to Roy Road.

City of Tyler Planner Kyle Kingma said there are plans for fencing to be placed alongside property lines.

Additionally, there is a desire to create a water feature at the site, said Bob Breedlove, with Brannon Corp.

Breedlove could not pinpoint an exact timeline for the project, but said construction could potentially start within the next year.

Kingma said the applicants have met with concerned neighbors and are requesting that the area be zoned “planned multifamily residential district” to allow for the complex.

The zone change request is tentatively scheduled to go before the Planning and Zoning Commission on July 1 and then to the City Council on July 23.

Breedlove said via email that he thinks Tyler was chosen for its quality life style, schools and hospitals. The lower property taxes play a large role in the selection, he said.

Aside from that proposed project, a groundbreaking recently occurred for Saige Meadows.

Lisa Stephens, development team leader, previously said Saige Meadows will be a mixed-income community and the second development in Tyler for Anthem Builders LLC, a real estate company specializing in the development of affordable housing.

The owner of Austin-based Anthem Builders is one of the principals of The Pinnacle Housing Group, the Miami company that brought Pinnacle at North Chase to North Broadway Avenue.

Lindsey Wolfson, with Anthem Builders, said via email that as an affordable developer, various factors help dictate the entry into a new market, such as industries and job opportunities; services, such as restaurants, shops, grocery stores, gas stations and other conveniences; school districts; high opportunity areas — areas with access to good schools, safe neighborhoods, healthy environments as well as economic opportunities; guidance from city officials; and absorption — whether there is a need for affordable multifamily housing.

Tom Mullins, president and chief executive officer of the Tyler Economic Development Council, said right now every sector of the economy, including retail, home sales and manufacturing, is strong and growing, and it appears developers believe Tyler is a reasonable investment and they can fill new units in a practical period of time.

“You’ve got the economy improving, more jobs being created, more people, people moving into Tyler/Smith County — together, all of that is placing demand on housing options,” he said.

Mullins said some people think the older population is the largest population in Tyler and Smith County when it is actually people in their mid-30s. However, he said there are apartments for seniors with some assisted living feature.

So he said there are two things going on: Younger families will either rent a house or go to an apartment until they can save enough for a down payment on a house, and there is an aging group of baby boomers that are starting to downsize into smaller homes such as a condo or apartment.

“The demand is coming from the economy growing, more jobs created, more people moving here than those two age groups that tend to be renters instead of owners,” Mullins said.

The Tyler/Smith County Metropolitan Statistical Area is seeing a population growth of 3,500 people annually, he said. That includes people moving into the area as well as organic population growth.

Mullins said there also is a growing student population. He estimated that Tyler has about 20,000 full-time college students plus thousands more that are part-time.

“That’s a fast-growing segment of the rental population, too,” he said.

As far as the future, he said the local economy is the general indicator of what the occupancy rate will be.

However, Ms. Coker said she is concerned that new apartment properties that come in can hinder existing properties.

She said she knows of some properties that are giving away things or having specials, and two out of her three properties have vacancies.

“It hurts us all. What it does (is) it puts more units out there. The more units you have the harder it is because you’ve got more of a challenge,” Ms. Coker said.

Even if it is a luxury property, there are people who will be able to afford it, she said.

“I think it’s great for Tyler to grow, but … if we get more units in it will cause more vacancies,” Ms. Coker added.

But John Deibel, owner of Hunter’s Glen and The Establishment, said his properties have a low turnover rate, and he is satisfied with the occupancy rates there.

And while he is aware of the competition and what they’re doing, he said he doesn’t spend a lot of time comparing.

 

Business Editor Casey Murphy contributed to this story.