Plano South | July 2023

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2023 HOME EDITION

THE BREAKDOWN

RISING RENTS

As of July 6 Plano has 38,380 total multifamily units. The average price throughout the city is $1,731.

Multifamily rent prices in Plano have risen at a similar rate to those around Dallas- Fort Worth in the last ve years. Plano rents have risen 37.46% since 2017, and rents in the metroplex have risen 39.69%. Data for 2023 is taken as of July 6.

SRT TOLL

Plano

Dallas-Fort Worth

75025

75024

Total units

Average rent

$2K $1.8K $1.6K $1.2K $1.4K

$1,731

11,516 7,181 5,610 4,854 4,752 4,467

$1,887 $1,739 $1,592 $1,589 $1,591 $1,784

75023

DNT TOLL

75093

$1,252

75074

75075

$1,510

$1K

PGBT TOLL

$1,081

2017

2019

2021

2023

RETURNING TO NORMALCY Multifamily occupancy rates in Plano have started to decrease after reaching 95.3% in late 2021. Data for 2023 is taken as of July 6. Plano Dallas-Fort Worth

Salvation Army has seen an increase in the need for its rental assistance services. “Both in Dallas and Collin County, aordable housing is becoming less and less accessible,” Masih said. The Salvation Army provides ser- vices to those facing nancial or hous- ing instability. Masih said the Salvation Army used to serve around 30 households a day. That number has risen to hundreds since the beginning of the pandemic. Rental prices are just one part of the puzzle for Salvation Army as Masih has seen the cost of living rise in other areas as well. “We’re talking about the price of food and utilities; all of that has gone up as well,” she said. “If wages are stag- nant in an area and your rent and cost of living goes up, you’re not going to be able to aord that apartment.” Plano’s business community has also been impacted by high rents and costs of living. “Rental costs, housing costs and just sheer inventory is a huge factor in Plano being able to nd enough talent to work,” Marsalis said. Finding housing for service workers in Plano has long been a problem due to relatively high rents and low housing supply, and that problem is now “being compounded” by rising rents, Marsalis said. She added certain industries embrac- ing work-from-home or hybrid models of employment haven’t been impacted as strongly. The service and educa- tion industries, which don’t have that option, are seeing much of their work- force “reskilling,” or looking to enter dierent professions, Marsalis said. What’s next? Since the initial rent spike in 2021, rent prices have started to level o. In Plano, the average rent has

occupancy rates have been starting to return to normalcy in recent months while still remaining below pre-2021 rates, according to MRI. About 6.7% of apartments in Plano were vacant as of July 2023, while 8.6% were vacant in June 2020. Occu- pancy rates reached as high as 95.3% in November 2021. Kelle Marsalis, Plano Chamber of Commerce CEO and president, said high occupancy rates and rents are not a new issue in Plano. “Housing has always been an issue, even before the recent spike in housing and rental costs,” she said. The cause The largest cause of rising rental prices is rising demand, said Jason Simon, Apartment Association of Greater Dallas director of government a airs. “The supply and demand is still kind of out of whack,” Simon said. Real estate agent Pamela Harrison, who works in several cities around North Texas, has seen that demand rsthand when listing rental properties in the area. “Every time I put a property on the market for a lease listing, it’s up to 20-plus applicants,” she said. “When people can’t nd what they want to buy, they rent.” Harrison credits some of the high demand to the boom in population. Dallas-Fort Worth added more than 170,000 residents from July 2021-July 2022, according to U.S. Census Bureau data. Simon added other factors, such as rising property taxes and insurance rates for owners and management companies, have also contributed to rising rents. The eect With rents continuing to rise, the

95% 96% 94% 93% 91% 92% 90%

93.3%

91.7%

91.6%

91.5%

2017

2019

2021

2023

SOURCE: MRI APARTMENT DATACOMMUNITY IMPACT

Studio

+30%

Mortgage lenders suggest no more than 30% of annual income should go toward rent. The following shows the recommended income to aord an average rental property in Plano. THE 30% RULE

$16,284

$54,280

1 bed

+30%

$19,488

$64,960

2 beds

+30%

Average annual rent Recommended annual income

$26,376

$87,920

decreased from $1,781 in July 2022 to $1,731, while occupancy rates are start- ing to return to normalcy. Still, Simon said renters are still feeling the eect of the higher rents. “There is some leveling o, but I don’t know how much that is really felt because things have gotten pretty high,” he said. Simon said one way to alleviate the high costs is to meet the high demand. “I don’t know that it necessarily presents as many challenges as it does opportunities,” Simon said. “It’s really just continuing to provide housing that is as aordable as possible given the demand.” That high demand provides a unique challenge for Plano. The city is over 95% built out, Plano Director of Plan- ning Christina Day said.

“Around 2010, it became harder and harder to build housing here because we were just running out of land,” she said. “Commercial land is usually more valuable than residential land, but in Plano, we have the inverse.” One strategy to help meet the high demand has been to focus on redevel- oping commercial areas that feature a residential component, such as the mixed-use Collin Creek Mall develop- ment, Day said. The rst residential units in this development expect to open next year. “We have limited opportunities,” she said. “But we’re trying to take advan- tage of the opportunities we do have.”

For more information, visit communityimpact.com .

PLANO SOUTH EDITION • JULY 2023