This biweekly sponsored column is written by the experts at Gordon James Realty, a D.C.-based property management company that specializes in managing condos, single-family homes and multi-family properties in the metro region. Please submit any questions in the comments section or via email.
Last week, rental home search site Zumper named D.C. the fourth most expensive city in the country for renters, and predictably, Georgetown and Foggy Bottom ranked as the priciest neighborhoods in the city.
But, these aren’t the neighborhoods where we’ve been seeing the most interest from tenants.
While the traditionally favored neighborhoods remain popular and among the city’s most expensive, prices in these neighborhoods have remained relatively flat. And we’re finding we get the most tenant interest in neighborhoods that had limited demand just 10 years ago.
These hip neighborhoods, including H Street, NoMa and the U Street corridor, satisfy renters’ desire for new construction or newly renovated properties in edgier, artsy neighborhoods with easy Metro access. That’s especially true of younger professionals, who make up a significant percentage of the DC rental market.
Just a few years ago, many of these neighborhoods had an abundance of developable property available for new or renovated residences and retail. The result is that these new residential units have started leasing as a wave of new restaurants, shops and nightlife options open, contributing to an exciting, bustling vibe.
Though D.C. rents have declined slightly in the past year as inventory has increased, costs remain high. Affordability likely remains a factor that is pushing renters to neighborhoods where they can have the lifestyle they desire for a little bit less cash.
Rents in these increasingly amenity-rich neighborhoods aren’t cheap anymore, but they’re still somewhat cheaper than the old favorites. So renters often can find a newer place in a location with a lot going on, at a relative discount.
Using the Zumper report as a guide, renting the median one-bedroom apartment in the neighborhood it called “H-Street-NoMa,” among the city’s hottest neighborhoods, is still 20 percent cheaper than Georgetown’s median-priced one bedroom and 9 percent cheaper than Dupont’s.
In the Southwest Waterfront, an area poised for continued renaissance with the construction of the extensive Wharf mixed-use project, the median-priced one-bedroom apartment costs 27 percent less than the median one-bedroom in Georgetown and 18 percent less than Dupont Circle.
And, many of the hipper neighborhoods’ new and renovated buildings are stocked with stainless appliances, wood floors, stone countertops and other high-end finishes that tenants love. The buildings have also been designed with current trends in mind and luxuries that sell, including concierge service, billiard rooms, rooftop pools, state-of-the-art electronics and on-site dog parks.
According to Alexandria-based Delta Associates, which researches the local housing market, buildings with these types of amenities and a great location are most likely to remain full, even as more and more units become available. In the next few years, the firm expects neighborhoods such as H Street to have lower vacancy rates and greater rent growth than the region as a whole.
Of course, as prices in these hot neighborhoods continue to rise, young, hip tenants may start looking for less expensive options, just like buyers have. And that may create a new crop of up-and-coming neighborhoods.
Interested in what the market is like region-wide? You can find more information about what parts of the metro area fare best among renters, along with projections about vacancy rates and rental prices, in this article about the health of the D.C. metro apartment market.
The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of HillNow.com.