Milwaukee rents still 11% above pre-pandemic levels as inflation wanes
The city, and much of the country, are still recovering from spikes in housing costs that occurred in 2021.
Talis Shelbourne
Dana Smith, 57, said he was shocked when his rent went up $100, given the conditions of his home.
Smith lives in a home run by Berrada Properties in the Brown Deer area. He said the home has mice, a leaking sink and extensive water damage in his living and bathroom maintenance that have not been addressed.
“What my rent going up for when they ain’t fixed nothing in the house?” he said.
Like many around the country, he found out about the increase during his lease renewal.
Rob Warnock is a researcher at Apartment List, where he tracks rental market trends.
Using an average of median rents from units marked as leased, Warnock and others were able to calculate housing costs using census data to estimate utility costs and rent data from their online platform.
Warnock said rents are still recovering from a spike two years ago and are only beginning to stabilize now.
Milwaukee rents spiked during 2021
Housing costs in the city remained steadily below $750 until the middle of 2020, and it even dipped to some of the lowest medians in five years at the end of 2020.
However, as the threat of the pandemic emerged during the spring of 2021, housing expenses rose more than $100 during the summer for one-bedrooms. And they reached a peak of more than $1,000 for two-bedrooms, a five-year high from the rough median of $860 in 2017.
Rents were not only impacted by inflation but also represented the rise of inflation, Warnock said. When the Consumer Price Index calculates inflation, it factors in the change of prices for various goods, with housing costs representing a significant percentage.
Inflation motivated some landlords to increase prices
For landlords who have already paid off their properties or secured a mortgage prior to 2021, inflation has not been much of a factor in housing costs. However, an increase in property management labor costs and the steep increase of building materials has impacted property owners.
According to a survey of 2,000 homeowners, nearly half said they delayed home projects and home maintenance due to inflation and supply chain issues.
Everything from window coverings, cabinetry and appliances to hardware, tools and even paint have been subject to inflation, making repairs and the process of prepping units to be move-in ready more expensive for landlords.
“Certainly, the cost of doing business, building homes and maintaining them, is always going to get passed down to the last person to write the check,” Warnock said. “That’s the nature of renting, for better or worse.”
Landlords also saw the opportunity to raise prices after the eviction moratorium
As the threat of COVID-19 grew, tenants were weary of moving, and due to the national eviction moratorium, they didn’t have to.
Warnock said this led to very low vacancy rates, with apartments remaining fuller than ever. On the Apartment List platform, Warnock said less than 2% of units were available at one point.
The pandemic also limited the construction of any new units, reducing supply.
The combination of low supply and low vacancies meant landlords could seek out the highest bidder for the few available units that remained.
“It’s certainly not a good scenario of affordability for renters, and it definitely involved taking advantage of the supply and demand imbalance that existed that year,” Warnock observed.
However, on balance, Warnock said he believed the moratorium was a good thing.
“While it may have had negative consequences from the economic-supply standpoint, the moratorium did a lot for people who would have otherwise lost their housing at a time when it was dangerous to do so,” he said.
Increased prices more likely to impact new rather than existing tenants
Warnock said most rent increases don’t occur while someone is currently living with their landlord.
In fact, several residents in a Reddit thread about rent increases said their rent only increased by $10-15 while they were in their building.
“Sticker shock is definitely the worst for people who have moved out and are seeking a new apartment,” Warnock said, noting that landlords typically raise prices significantly when a unit is transitioning between tenants.
That trend can be observed in looking at how median rents were impacted during the national eviction moratorium, implemented from March 2020 – August 2021. Immediately after the moratorium ended, waves of communities began moving again and price increases followed.
Smith said his increase in rent came during his renewal. “I don’t know why they raised my rent, believe me. I think they said something about the water bill. I didn’t read the lease, I just signed it — that was my mistake,” he said.
He pays $1,120 for the unit he shares with his partner and their five children.
Smith, who works as a painter and carpenter, said he is waiting until he receives his tax return to purchase a home.
Berrada Properties was not able to provide comment in time for this story.
Milwaukee County rents lower than other county rents
Compared to MIT’s living wage calculator for Milwaukee County, which estimates housing costs should be roughly $705 per month for an adult living alone, median housing costs were $185 higher for a one-bedroom apartment in January 2023.
Waukesha County and Dane County each experienced similar, but higher, housing increases; median rents in those counties were $250 and $400 higher respectively in January.
The increase reflects a climb in demand Warnock said trended across the country as people moved from urban to more suburban areas:
“Some people needed to relocate from dense, expensive areas because they had lost their jobs. Others were moving because they were suddenly working remotely and able to look at a broader range of housing than they had. A lot of people were looking for bigger spaces at a time when smaller apartments common to the cities felt cramped.”
When compared to the central city, rents increased even more in the suburban areas, leading overall housing costs in Milwaukee County for example, to trend roughly $70 higher than those in the city.
What is the outlook for 2023?
Warnock said he is expecting the rental market to improve for prospective tenants as more apartments are expected to be constructed and renting in the next year or two.
The change in supply, he said, is likely to increase the options for renters, increase vacancy rates for landlords and lead to lower prices overall.
“It’s kind of a welcome sight for a lot of places that experienced really rapid rent increases in the last two years,” he said.
How you can get help
Community Advocates: 414-270-4646, renthelp@communityadvocates.net, online application.
Legal Aid Society: 414-727-5300, question@lasmilwaukee.com, online application.
Legal Action: 855-947-2529 and 414-278-7722. More info on their Eviction Defense Project is available online.
Mediate Milwaukee: 414-939-8800, apply@mediatemilwaukee.com.
Milwaukee Rental Housing Resource Center: (414) 895-7368, info@renthelpmke.org.
Social Development Commission: 414-906-2700 and 414-963-2684, info@cr-sdc.org.
Talis Shelbourne is an investigative solutions reporter covering the issues of affordable housing, environment and equity issues. Have a tip? You can reach Talis at (414) 403-6651 or tshelbourn@jrn.com. Follow her on Twitter at @talisseer and message her on Facebook at @talisseer.