Mar 12, 2024 - Real Estate

Why rents in Cleveland are so high

Change in asking rent by apartment type, Q4 2022 to Q4 2023
Data: CoStar; Note: CoStar rates multi-family buildings on architectural design, structure, amenities, site and certifications; Chart: Alice Feng/Axios

Rent prices are too damn high in Cleveland, with asking prices for both middle-tier and high-end units rising through 2023, according to real estate firm CoStar Group.

Why it matters: Until supply catches up with demand in Northeast Ohio, renters are unlikely to catch a break.

The big picture: Demand for more affordable apartments is helping to keep middle-of-the-road rent prices elevated, Jay Lybik, CoStar's national director of multifamily analytics, tells Axios.

Yes, but: A flood of new construction nationwide is pushing down rents at the high end, where there are often more apartments than renters who want them.

  • That means the renters with the deepest pockets are more likely than others to score a deal.

What's next: It could be a few years before there's enough demand to soak up the excess supply overwhelming markets like Austin, Texas, and Phoenix, Lybik says.

Zoom out: CoStar's data is echoed by the latest Zumper National Rent Report, as reported by the New York Times.

  • Cities with construction booms like Austin; Albuquerque, New Mexico; and Scottsdale, Arizona (a Phoenix suburb), were among the communities with the biggest rent decreases in 2023.

By the numbers: In Cleveland, where demand is still outpacing supply, the median one-bedroom asking rental price rose 16% last year, to $1,270.

  • Columbus also saw asking rents rise by 17%, among the biggest increases in 2023.

The intrigue: Cleveland has historically incentivized development with a standard 15-year tax abatement for new construction.

  • But the abatements have a cost — the Cleveland Metropolitan School District has lost out on more than $200 million in tax revenue from 2017-2023 due to them, Signal Cleveland reported yesterday.

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