Houston's rental market is tighter than it's ever been.
When Emmy-award winning TV host Rosie Nguyen accepted a job to move from her hometown market of Salt Lake City to Houston, she and her husband, Jason, had to find a new home. And they had to find it fast.
"We wanted a pet-friendly, two-bedroom, two-bathroom apartment near The Loop,” Jason said. "We wanted to live in a city neighborhood that's walkable, so we can enjoy all the activities on offer in Houston." Their budget was about $2,500 per month. A tall order, as Houston's rental market is more competitive than ever, with prices skyrocketing to historic rates, and more and more renters sparring for fewer available spots.
Whether you're moving to Houston from another city or looking to upgrade neighborhoods, 2022 is proving to be a tough one for renters. Surging inflation coupled with an imbalance in the supply and demand ratio are driving prices up. The population of the city has also ballooned by 19 percent since 1980. This trend was exacerbated by the pandemic, as people migrated from coastal hubs like Los Angeles, Seattle and New York City to states like Utah, Arizona and Texas.
But even before COVID-19 created a new world order, Harris County was the number one destination for emigrating Californians—especially those from Los Angeles—moving to Texas, according to a 2021 study by StorageCafe. Many people are drawn to the state by "low taxes, cheap houses and a low-regulation lifestyle," according to this Kinder Institute report.
Housing costs continue to outpace wages in Houston, the report added. From 2018 to 2019, the median household income rose from $39,281 to $41,231, while median sales prices for homes shot up by $9,900 during the same period. Meanwhile, the number of Harris County units that rent for $1,500 or more increased, according to the Kinder Institute's 2021 State of Housing Report.
Houston-based realtor Alexandra Torres, a team leader at Arise Realty Group, has experienced these changes firsthand. She decided to move from her home, an apartment near downtown, when the management tried to raise her rent by about $200 per month. Torres helps clients buy and rent homes, so she thought she could negotiate. "But the management was firm," she said. "Things have really changed since the beginning of the pandemic."
It's important to know that most landlords in Houston expect a family to earn three times their prospective rent. "So, you should set your price range before shopping and stick to it," said Kim Dixon-Dudley, owner and broker of Houston-based Kimberly Lane Properties. "Otherwise, we tend to give in before we see what we can get within our budget."
Setting a budget will also help determine where you'll find your next rental. Dixon-Dudley said that EADO—East Downtown—is especially hot right now due to its central location, easy access to new restaurants and entertainment. The Heights, Rice Military and Greater Third Ward are also popular. If you're relocating from a coastal metropolis, these neighborhoods offer dining, cultural events and nightlife.
Because it's getting harder to find rentals in Houston proper, Dixon-Dudley said she's also seeing families hunting for a lease in Katy. It's still a car city, she explained, and "downtown living is challenging, due to limited parking." Sure, Houston has decent public transportation, but it's not nearly as comprehensive as the likes of New York. So, if you're coming from the East Coast you'll want to temper expectations. "You can expect a higher quality of life," she said, "if you avoid the commute from The Woodlands to The Medical Center."
But try not to let limited parking, availability and rising costs discourage you. Houston's rental market is still more accommodating than many cities in the U.S. In a BestPlaces.net comparison, Houston's average rent was a little over $200 less than Austin's ($1,518 compared to $1,730). It's also more affordable than Dallas and Phoenix, where average rental prices are around $1,660. In Dallas, 4.7% of apartments were vacant, compared with a scant 2.4% in Phoenix.
"More than anything, you've got to be tenacious"
Pearland-based realtor Ray Aguilar, who works with JL Wyatt Properties, said that there's no such thing as an undesirable neighborhood within Houston city limits. "No matter where you look, there are lots of people who want to live there," Aguilar said. So, you may want to broaden your search to include suburban areas like Pearland, Manville or Meridiana.
"You'll get more bang for your buck," Aguilar said, "and, they're closer than you think. East Pearland used to be considered a rural area. Now, it's practically an extension of Houston." You'll be hard-pressed to find a two-bedroom apartment for under $2,000, he added. "But for that price point, you'll get more space in a suburb than you will in the city."
Aguilar said that if you can buy, now is the time. "Prices will continue to rise," he said, "as scarcity of building materials and supply chain challenges continue to drive up construction costs." But the low number of homes for sale means that fewer renters are making the leap to owning. "So, there are even fewer available rentals for a growing number of renters," he said. "More than anything else, you've got to be tenacious."
Dixon-Dudley said you should work with a realtor or an apartment locator to help with your search. Besides knowing their market, they often have relationships with property owners and managers, and they know what documentation to submit, she said. So, you can be more competitive when applying. For instance, if you've got a dog, Dixon-Dudley said that you should write a pet resume that includes training and references.
"On average, rental units are getting 10 to 15 applications," she said. "If one document is missing, or not filled out correctly, you could miss out on your favorite apartment."
Torres said that it's good to be prepared.
"The three things you need to beat the competition are good credit (650 or above), verification that you earn three times your monthly rent, and a bank statement that shows some significant savings," she said. "And it helps if you don't have any judgments against you in housing court."
The Nguyens didn't hire an apartment locator, but they were advised by one. When the Nguyens visited Houston, they had 11 showings lined up during a 48-hour period. "We saw all of them," Jason said. "It was a whirlwind tour, and exhausting."
They eventually found their dream apartment near The Loop. They applied—application fees usually run between $150 and $300 each—and were approved. But they couldn't rest yet, as a number of other important decisions followed. Jason said there weren't any hidden costs, but you should buy renters' insurance, and you may need to get extra insurance to cover damage caused by wind and flooding.
"Check the floodplain map, as Houston, which sits at sea level, is prone to flooding," Jason said. The Kinder Institute's 2021 State of Housing Report recorded three 500-year floods in the region during the past 20 years. The areas most affected are often near bayous and other bodies of water. "This makes renters' insurance necessary, even if the property owner insures the building. Tenants' belongings aren't covered in most policies held by property owners," Jason added.
You will also want to find the right electricity supplier. "In Salt Lake City, there was only one electric company," Jason said, "so the choice was made for you. But in Houston, there are hundreds. They all have their own deals, as well as their reputations." Winter Storm Uri left a trail of devastation in its wake. "Some providers offer really cheap deals," Jason said, "but they didn't handle outages equally."
You can browse rentals at www.har.com. When you find one you like, scroll to the bottom of the page to see the monthly cost for electricity during the past year. Then, visit www.powertochoose.com to see which energy company best suits your needs. A quick search for zip code 77091 revealed that 169 companies offered service beginning at 9.6 cents per 1,000 kilowatt hours. Check contract terms, as some providers want a multi-year contract to lock in rates.
While finding a rental in Houston in 2022 may be a daunting task, it's not impossible.
"Once Rosie accepted the position, it took about two weeks to find our apartment," Jason said. "Knowing how difficult it is to find a rental right now, we really lucked out."
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