Rent has increased the most in the least expensive areas, Zillow report finds

The financial consequences of the pandemic hit low-income renters particularly hard, but rent prices increased more in the least expensive areas than in the most expensive areas over the last year, according to a Zillow report.

In the Philadelphia metropolitan area, rents in the highest-priced zip codes rose about 1% on average in February compared with the same time last year. But rents rose about 5% in the lowest-priced zip codes.

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Across the country, rents seem to have reached their bottom nationwide, according to the Zillow analysis. They rose slightly for a second month in February. But rents were up only 0.5% last month compared with the same time last year. In comparison, rents were growing at an annual pace of 3.7% in February 2020.

Because of uncertainty over how the pandemic would affect vacancy rates, some landlords used incentives to try to rent out apartments. They have offered months of free rent, reduced rents, distributed gift cards, waived or reduced security deposits, waived application fees, and offered free parking.

“While the pandemic has cut into demand for rental housing, that has only translated into declining rents in expensive markets, and most acutely at the top-end of those markets,” Zillow senior economist Jeff Tucker said in a statement. “This past year saw widespread adoption of work-from-home policies, especially for higher-income renters who previously paid top dollar for proximity to their workplace. Demand for these rentals took a hit as many leapt into home ownership, while the flow of new renters entering these sub-markets dried up, at least temporarily.”

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In the New York metropolitan area, one of the country’s most expensive rental markets, rents in wealthier neighborhoods fell by nearly 12% in February compared with the same time last year, according to Zillow. Over the same period, rents in the least expensive neighborhoods rose by nearly 2%.

Rents in the Boston metropolitan area dropped about 10% in the most expensive areas and dropped 0.7% in the least expensive areas. Around the nation’s capital, rents fell about 3% in the most expensive areas while rising roughly the same amount in the least expensive areas.

Rents in housing markets that are typically more affordable are rising for everyone, but they are rising more in neighborhoods that have traditionally been more affordable.

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Tenants across the country and in the Philadelphia area are struggling to pay their rent after losing jobs or hours because of the pandemic. The nationwide eviction moratorium imposed by the Centers for Disease Control and Prevention is set to expire at the end of the month.

More pandemic rental assistance is coming to tenants nationwide as states and counties begin distributing federal funds in the latest COVID-19 relief package. Tenants in Philadelphia and its collar counties either can apply for assistance now through their county governments or will soon be able to apply. New Jersey tenants can begin applying for rental assistance Monday at 9 a.m. at https://njdca.onlinepha.com/.