Influx of units calms rental market

Influx of units calms rental market

To put it mildly, the Charlottesville real estate market has suffered a beating in the last year. Mid-year sales slumped in 2007 even as the lending nightmare continues to unfold. All bad news—if you are into the whole home-ownership deal. But Charlottesville renters, especially those connected to UVA, haven’t suffered the slings and arrows of outrageous markets quite like their home-owning brethren.

Wade Tremblay, general manager of Wade Apartments, says that he’s seen a slight
dip in rent prices, specifically around the University area.

"The only thing that really affects rents is typically the supply," says Rick Jones of Management Services Corporation, a major player in rentals around UVA. According to Jones, student rentals are fairly insulated from the larger housing market, though the increasing supply of rental units has kept prices from rising substantially. "I think a lot of people’s rents go up slightly, a couple of percents."

Wade Tremblay tells a slightly different story. Tremblay, the general manager of Wade Apartments, says that he’s seen a slight dip in rent prices, specifically around the University area.

"In the student housing world, up to this year, the market has been very strong," he says. "This year, we’ve had somewhere between 800 to 1,000 new beds created, most notably the GrandMarc project." GrandMarc Apartments, between 15th Street and Virginia Avenue, recently added around 600 beds to the market. "We’ve seen a softening in the student housing area, particularly since Christmas."

That’s when GrandMarc began advertising its units. Tremblay says that after he watched his student rental units fill up at the same rate as the past two or three years, it then slackened.

"I think what you’ve seen [in new construction], particularly around Grounds, has been the result of the new University-area zoning for high density," says Tremblay. In 2003, the city rezoned areas, including parcels close to UVA, to encourage high-density construction. Tremblay says the influx of new housing is a reaction to that change, though he doesn’t think the mini-boom in student-oriented housing will last.

According to Tremblay, construction costs have increased 50 percent in the last two years. "We have not seen anything approaching a 50-percent increase in rents," he says. "When those things don’t move relatively in harmony, the construction market will slow down until the rental market catches up."

Jones, however, says he hasn’t seen a glut of rental units drastically affecting prices. "There’s a lot of growth in terms of people new to the market who are going to fill new beds," he says. "Those new units are being absorbed fairly quickly."

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