This story will be updated.
CINCINNATI (WXIX) — Rents are rising in all three states faster than anywhere else in the country, according to a new report from Redfin.
June data showed Greater Cincinnati overtook Seattle, Austin and Nashville for the nation’s fastest rising rents over the past 12 months. The Tri-State came in fourth behind those same cities in the May report.
Rent increases appear to be stabilizing nationally. After a stellar start to 2022, median asking rents overall rose just 14% from last June, the lowest annual increase in nine months. Rents rose just 0.7% from May, the smallest month-over-month gain of 2022.
Redfin’s chief economist, Daryl Fairweather, attributes slowing rent growth to tenants feeling the pinch of inflation. “With the price of gas, food and other commodities soaring, renters have less money to spend on housing,” Fairweather explained.
But Greater Cincinnati rents appear to be warming up rather than falling. Rents in the area rose 39% last year and 5.9% since May.
Greater Cincinnati’s median asking price of $1,815 remains about $200 below the national average and ranks 38th among the 50 most populous metropolitan areas.
But the area’s rents remain higher than regional peer cities like Indianapolis ($1,499), Columbus ($1,689), St. Louis ($1,553) and Kansas City ($1,434). Year-over-year rent increases in these cities were also relatively modest.
The only comparable city with higher rents is Nashville, where the median asking price hovers around $2,176, a 30.5% year-over-year increase.
Cincinnati saw a 124% increase in multi-family building permits in the year ending March 2022, and the supply of new apartments in Cincinnati is expected to set a record this year.
Rents rose nationwide after the pandemic because more people chose to live alone and rising mortgage interest rates froze potential buyers in the housing market, according to the Deputy Chief Economist of Redfin, Taylor Marr.
These problems have been compounded in Midwestern markets like Cincinnati, which had relatively little slack in their rental markets before the pandemic due to decades of below-average new construction and modest population growth.
But some cities are coping with demand pressures more effectively than others. Fairweather named Minneapolis as a city that has successfully modulated restrictive zoning to expand the supply of multi-family units.
Minneapolis saw a year-over-year rent price decline of 7% while ranking seventh in most multi-family building permits issued, according to June data from Realpage.
“To combat soaring rents, more cities should follow Minneapolis’s lead,” Fairweather said. “Minneapolis eliminated single-family zoning in 2018 and last year got rid of a rule that required residential developers to include parking spaces. Now builders can replace parking spaces with more units, increasing supply and therefore releasing some upward pressure on rents.
Changing parking minimums is a solution advocated by Cincinnati transit advocate Brad Thomas in an Enquirer op-ed that garnered attention last weekend.
“Parking minimums add additional costs to housing, make filling more difficult and encourage driving. Removing parking minimums will help us repopulate the city,” Thomas explained. “It wouldn’t prevent parking lot owners from offering parking, but it wouldn’t require them to do so either. At the very least, we should reduce or eliminate parking requirements around high-frequency transit.
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