Savannah: rental market surges in price, plummets in inventory

Savannah: rental market surges in price, plummets in inventory

By Zoe Nicholson, Savannah Morning News, Ga. (TNS)

Troy Warren for SavannahNewsAndTalk.Com

Jul. 27—Lili Ugarriza was running out of time and luck.

She found out a month ago the Ardsley Park house she’d been renting for the past year was going to increase $900 a month in price. She said she tried to extend the lease until December, but her landlord declined. Then, Ugarriza got a text: she had 60 days to move out.

Since mid-June, the Colombia native has been in a mad dash to find a place for her and her partner to live. Showings are canceled within 45 minutes of the appointment time, landlords want an immediate $1,000 deposit to secure the lease, places that were once affordable have become out of reach in a matter of months.

“There are some places that I literally saw two years ago… and you were asking for $1,000 less… it’s been terrible,” she said.

Because she doesn’t have a car, Ugarriza needs to live within biking distance of her work near Forsyth Park. That ZIP code — 31401 — is one of the most expensive in the city, averaging more than $2,000 a month for an apartment, according to data company RentCafé.

Across the Savannah metropolitan area, rent has been steadily rising during the post-COVID housing bubble. Between June 2020 and 2021, the average rent increased 11% to $1,200, according to RentCafé.

“Lack of affordability is just a huge trend. And it’s been an increasing trend not only in Savannah but nationally,” said Jeff Kole, a Savannah-area property manager who has operated and managed apartments for years.

While the average income for a Savannah resident was $25,664 in 2019, according to the U.S. Census, a person would need to make at least $34,800 to afford a one-bedroom apartment, according to the Chatham Housing Coalition. More than half of the city’s renters are cost-burdened or forced to pay more than one-third of their income on housing every month, according to the city.

Over the past three decades, the rising cost of living has outpaced income levels 2-to-1, according to findings from the city’s Housing Taskforce, which was formed to address the affordable housing crisis in Savannah and the surrounding region.

But construction and labor costs have risen, too, making affordability hard to achieve for developers and property managers, as well.

“You’re paying more for land, you’re paying more for construction, something has to give and it’s making it next to impossible, if not outright impossible, to develop affordable rental housing,” Kole said.

And without government intervention or other avenues for help, the problem is only going to get worse in Savannah, according to Kole.

A minimum wage employee in Savannah would need to work 98 hours every week — or 14 hours a day — to afford the average one-bedroom apartment in the city, according to the National Low Income Housing Coalition.

“But this is not just a problem for minimum wage workers, but for most workers in the area,” Dan Threet, a data analyst with the NLIHC, said.

A Savannah household would need to earn about three times the minimum wage in Georgia, currently, $7.25 an hour, to afford a two-bedroom apartment, according to the NLIHC’s annual report, Out of Reach, which focuses on how much workers need to earn to afford housing.

Entry-level salaries for some workers in healthcare, office administration, security and logistics all make less than $20 an hour, according to the Georgia Bureau of Labor Statistics.

“We’re talking about really common occupations like nursing assistants, cashiers, janitors and cleaners, home health aides, retail sales people, many of whom have been performing really essential frontline services during the pandemic, but for years haven’t been paid enough to afford their homes,” Threet said.

Even Ugarizza, a social media manager who also relies on her partner’s income to pay rent, had a hard time finding an affordable apartment near Forsyth Park.

“I’ve been looking and it’s insane,” she said last week. “The same (three-bedroom) apartment I was living in a year and a half ago is $2,400 right now. And it was $1,800 last year.”

The reason for the skyrocketing prices is simple, Kole said. “The bottom line is it’s demand.” If a landlord can get $2,400 for an apartment, why not charge that?

“Before 10 years ago, properties were not leasing for $2 a square foot, that’s the norm now for new properties,” he said.

Inventory has plummeted since 2020, too, according to local realty data.

In July 2020, the Savannah Area Realtors Assoc. knew of 125 active rental listings in Effingham, Bryan and Chatham Counties. This year, there are 60.

“It’s just bottomed out,” Steve Candler, CEO of the association, said.

And when renters are able to secure housing, upfront costs and qualifying criteria are barriers to signing the lease, the city’s housing taskforce found.

“While high rents are a challenge, another problem confronting low- and moderate-income renters from being able to rent quality housing is having to pay a deposit along with first and last month rent. Easily reaching $2,000 to $3,000 upfront—money that many of these renters do not have,” the taskforce reads.

The pandemic put millions of people out of work, and sent millions more children home from school. The combination of childcare and income loss left many Chatham County residents without the money to pay for rent, utilities and other housing needs, according to Jennifer Darsey, direct services and impact director at United Way of the Coastal Empire (UCWE).

UWCE has helped more than 7,000 families with housing-related needs in the year since COVID arrived in Savannah, using money raised by the community and distributed as part of Congress’ COVID relief bills. Assistance amounts ranged from $1,500 for one month’s rent, to $23,000 for up to 15 months of rent or utility assistance, Darsey said. “But after that, the money is gone. That type of crisis intervention assistance is now gone. So how are you going to sustain your household?”

Time for talk about affordable housing is done. Savannah City Council must take action

Because the rental assistance money UWCE distributes is part of the U.S. Dept. of Treasury’s COVID relief fund, it’s not a permanent solution for families struggling to stay afloat.

The agency is trying to connect clients with area partners and resources to ensure once they get their immediate financial needs handled, they can sustain themselves without further help. For anyone who needs this type of help, Darsey directs clients to the UWCE’s 2-1-1 helpline.

But getting families to a level of security is a big task, Darsey said. “The need is big, and the need is bigger than any one organization… For every one client we help, there are 10 more waiting.”

Savannah isn’t alone in this affordability crisis. Metropolitan areas nationwide have become unaffordable for low-income workers, who typically make up a city’s hospitality and working-class, Threet said.

Workers who can’t afford housing are left with two options, Threet explained: move farther out of the metropolitan center and spend more on transportation, or spend more than 30% of their income — the threshold for affordability — on housing.

“There’s a wealth of research that shows that so-called ‘cost burdened’ renters often have to cut back on other basic necessities like food, medical care, transportation, or education for their children,” Threet, the data researcher, said.

For renters like Ugarriza, the cost of buying a car and paying for insurance and upkeep is more expensive than living downtown and finding a place within biking distance.

For low-income renters, though, the problem may become more dire as the days pass.

Eviction protections have saved many renters from being ousted during the pandemic due to nonpayment, but the federal moratorium is set to end at the end of the month. Kole, Darsey, and several others told the Savannah Morning News they’re not sure what will happen, but they suspect many will be forced from their housing.

“Something’s got to give,” Kole, who serves on the board of the Chatham Housing Coalition, said. “So (the city) is looking for strategies to bring some more affordability.”

The city’s housing taskforce just completed its yearlong study to identify solutions to the housing crisis, including building more public housing, finding more properties that will accept vouchers, and creating a nonprofit to coordinate the creation of more affordable options in the city and county.

“But one thing is,” Kole continued, I think people are much more aware, now maybe more than ever, about the magnitude of the affordability problem. And it’s going to take a variety of strategies to minimize the problem, but not one thing is going to cure the problem.”

Zoe covers growth and how it impacts communities and infrastructure in Savannah. She is a South Carolina native with a penchant for whimsical stories and belly laughs. Find her at, @zoenicholson_ on Twitter, and @zoenicholsonreporter on Instagram.

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By Troy Warren

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