For many, the rent really is too damn high, and it looks to be getting worse

Experts say that will increase homelessness

A deep-dive tour of the Albuquerque rental scene
Photo by @tierramallorca
Looming over the purchase of every home is a government office that precisely records the transaction and a comprehensive statistical machine that absorbs all the relevant data, spitting out all kinds of interesting market-tracking reports on the other end. That's the reason we were able, just last week, to write the headline "Downtown median home sale price cracks $300k for third time in eight months." You've doubtless seen similar stories elsewhere.

Rental data, on the other hand, is basically the wild west. The monthly transactions need not be reported to anybody. Online listing services are not generally disposed to open their data vaults to nosy journalists. Some, like Zillow, charge to list, which can skew the data before it's even collected. And while the U.S. Census asks about rental data and generally provides quality information, it is far from an up-to-the-minute source.

So when Jonas Bordo, the CEO of a Silicon Valley rental listing startup called Dwellsy, got in touch recently offering a comprehensive statistical look at Albuquerque rentals, we jumped at the chance.

Why do we care so much about something that is not so obviously connected to Downtown affairs? Because the price of housing has a very clear relationship to homelessness (DAN, 7/16/20). To make a long story short, addiction and mental illness are certainly factors, but plenty of people with major afflictions like that are still able to keep a roof over their heads. The cheaper that roof is, the easier that will be, and the more directly that translates into fewer of the problems associated with homelessness - problems that are disproportionately shouldered by greater Downtown.

Why does Bordo care so much? Like any tech CEO worth his salt, he is hoping to grow his company, and getting good data into the hands of journalists who will mention the name Dwellsy in their stories is an efficient way to do that. (And good data it is. The company appears to have more rental listings in Albuquerque than Zillow, despite being founded only in 2019, and they don't charge to list.)

Still, if frequently-updated and comprehensive data winds up informing actual solutions to the housing affordability crisis that has left so many people camping out on our streets or in other less visible but still highly vulnerable housing arrangements, that's okay with Bordo.

"You can't fix what you can't measure," he told us.

So today, thanks to an unusual alliance between DAN and a tech startup, we offer you a tour of Albuquerque rental prices using seven months of 2021 data covering over 3,000 listings, broken out by zip code.

Here's what we learned:
Prices are trending up, but not everywhere
With the caveat that seven months of data is not as reliable as, say, two years, it does seem clear that prices are going up (others have noticed the broader phenomenon as well), particularly with one and two-bedroom units in the second quarter of 2021.

But break down the zip codes, and you get a twist on the story:
Some zip codes, like this one in the Northeast Heights that has had 300 listings so far this year, are pretty flat:
It's the same story in the International District, which has a very high number of rentals (more below):
But over on the Westside, prices are rising quite dramatically. This zip code is representative:
Greater Downtown is in the middle range for one-bedrooms, higher up for two-bedrooms
Note: We've omitted 87104 here because the smaller number of listings make the prices quite volatile. 
Rentals are concentrated in certain parts of town
These numbers can be a bit volatile if a major landlord who works in a particular part of town suddenly starts listing all their rentals at once, Bordo cautions, but there are nonetheless a few broad-stroke signs that point to where exactly where rentals are most concentrated in the city.

The International District, for example, has 7 percent of the city's population and 16 percent of the listings. The Westside, meanwhile, has about 25 percent of the city's population and 6 percent of the listings. Both trends show up in Census data as well.
For many renters, housing costs far exceed the government's definition of 'affordable'
For close to a century, federal housing programs - including the famous Fannie Mae and Freddie Mac - have pegged 30 percent of income as a gold-standard measure of housing affordability. More than that, they say, and a person is "burdened."

The 30 percent figure is extra important because a prominent 2018 study showed that 32 percent is a major inflection point for homelessness. Cities where people spend roughly 22 percent of their income on rent tend to see a homelessness rate of .16 percent. By the time people pay 32 percent of income, the rate rises a tenth of a percentage point. But by 42 percent, the rate of increase doubles.

The good news is that households making the city's median household income or above (roughly $54,000) can comfortably afford a place to live. The bad news is that some 30 percent of city households take in less than $35,000 per year, and their options are very limited.

Let's take another look at the citywide prices:
This time we've added what the 30 percent threshold looks like if you make minimum wage (green) and $15 per hour (orange). At $15, studios at least are well within reach. However, adding a kid or two into the mix means the one or two-bedroom unit you'd probably need is unaffordable, particularly during the last three months of price increases.

But there's a problem with this chart: The experts don't say that 30 percent of income spent on rent is the magic number. They say 30 percent of income spent on housing is the magic number. Some apartments include utilities in the price of rent, but others don't. For the sake of using a conservative and round number, let's say utilities are going to cost the average renter $100 per month. Add that cost to the chart, and it looks like this:
In other words, a household of one making $15 per hour will likely have a very difficult time affording a studio, much less a one-bedroom.

Minimum wage earners are even more out of luck: They couldn't even afford July's lowest-priced studio in the entire city ($595, including the $100 for utilities) nor the lowest-priced one-bedroom ($575, also with $100 for utilities).

Moving to different parts of town won't help you much either. Thirty percent of a $15 per hour full-time job won't be enough on the Westside:
It won't be enough in the International District, home of the least expensive rents in the city, averaging $678 for a one-bedroom and $738 for a two-bedroom:
And it definitely won't be enough in the city center:
As the rental market evolves, we'll keep following the monthly affordability numbers. Look for them in the Real Estate Index, published on the third Wednesday of the month.
Downtown Albuquerque News covers greater Downtown, which we generally define as the area created by I-40, the Rio Grande, and the railroad tracks. We publish weekdays except for federal holidays. If someone forwarded DAN to you, please consider subscribing. To subscribe, contact us, submit a letter to the editor, or learn more about what we do, click here. If you ever run into technical trouble receiving DAN, click here.
Copyright © 2021 Downtown Albuquerque News, All rights reserved.


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