From January 2021 through November 2023 average apartment rent in Lakewood, CO increased 27% from $1,498/mo to $1,904.
Metro Denver apartment rent inflation has outstripped income gains by a higher margin than in any other major city in the U.S. since 2009, according to a study from Clever Real Estate subsidiary Real Estate Witch.
From 2009-2021 rents in the Denver area have increased 82%!
The terms ‘market rate’ and ‘market price’ are sometimes used to imply that free market dynamics will establish rent levels affordable by most people in Lakewood. These brief comments are intended to disabuse anyone of such incorrect assumptions.
‘Market rate’ and ‘market price’ are terms used at least 18 times in Lakewood’s recently updated Strategic Housing Plan draft document. However, the reader of Lakewood’s plan is left to infer what these terms mean since they are never defined.
As best we can infer, the terms are synonymous and when referring to rental housing, mean:
the rental or lease rate that maximizes the lessors revenue over a span of time.
Basically, the highest rent a landlord can achieve without leaving the unit vacant for too long is market rate.
The term market-rate refers to housing where rents are set at the highest level that property owners/managers believe they can charge based on market area demand and this type of housing is generally not subsidized by government funding or other housing programs. The terms high-end housing and luxury housing are used interchangeably to refer to market-rate housing intended for the most well-off renters.
We know that market rent is not ‘average’ rent because Lakewood refers to ‘average market rent’ on page 141 which distinguishes ‘market rent’ from being an arithmetic average. We also know it does not refer to affordable or otherwise subsidized rent because various charts compare market price to those rent categories.
Key points about ‘market rate’ or ‘market price’ rent used in Lakewood’s Strategic Housing Plan:
- They are mentioned frequently (18x) by Lakewood’s draft housing plan.
- The terms are not defined anywhere.
- They are not averages.
- They are not considered ‘affordable’.
- They include $150/mo for parking, pet and storage fees in the urban infill category.
- It is assumed urban infill like BPW will have 4,000 sq ft of ground floor commercial space.(It doesn’t.)
- 3% annual rent inflation is assumed.
- Belmar Park West (BPW) will charge market rate rents.
- Lakewood makes no mention of national litigation alleging major landlords active in Lakewood colluded on raising rents.
- If a landlord says they charge market rate rent, that does not mean an average, affordable or discounted rate.
- Always try to get a better deal then market rate rent.