Area leasing carries hefty price tag

Leasing a home in the Tri-parish area does not come cheap. Just ask any of the thousands of people renting apartments, duplexes and single-family houses in the Houma-Thibodaux region.

“I think people are leaning more toward renting because of financing problems in getting a home,” Houma-Thibodaux Apartment Association President Amy Smith said in response to the observation that rentals have increased in demand.

According to a survey commissioned by the National Apartment Association and conducted by Harris Interactive, 76 percent of consumers questioned said that renting was a more favorable option to home ownership – reflecting a 5 percent increase in the appeal of rentals since 2008.

Traditional wisdom once held that home buying was preferred. After all, one could build equity and use the property as an investment. It was viewed as a decision to keep money paid on a mortgage in one’s controlling interest as opposed to handing cash over to a landlord so that person could make a living while owning the property.

On the other hand, homeownership comes with added costs related to maintenance, repairs, higher insurance rates and property taxes.

Renting, some would argue, carries the knowledge that part of a monthly payment includes having the assurance that if an air conditioner goes out – or any other unexpected maintenance or fix-up issues arise – repairs and replacements are only a telephone call away with no out-of-pocket money involved. Plus, there is no lawn to mow, hedges to trim or driveway to seal.

Either way, the consumer is basically purchasing shelter. But consumer satisfaction might be changing as landlords and property managers make sure they get their piece of the market.

“While some might want to declare the housing crisis over, consumer patterns of behavior are showing otherwise,” National Apartment Association president Douglas Culkin said in a printed statement. “The findings in this survey mirror what our members are seeing throughout the country, especially in areas of the country that are experiencing the first signs of economic recovery.”

Culkin indicated that the tightening of family budgets could be behind the decision to rent rather than buy. He added that those who have had to make a cross-country move to find or secure a job claimed it was easier when a rental was involved over having to sell one house and finance another.

But what about areas like coastal Louisiana, which mostly missed the economic hardships the rest of the nation knew since 2008, then suffered its own hard blow after the April 20 Deepwater Horizon explosion and oil spill, followed by a 139-day moratorium on offshore drilling?

Casual conversation with long-time residents and property managers reveals an overall opinion that rental property in the area came into sudden demand after Hurricane Katrina forced many displaced New Orleans residents to the Houma area and other locations through the south and Midwest. Consumer demand during that time saw prices increase, but they never came down.

“I have found from the time that I moved here in 1967 that rents have always been high,” said Ron Brooks of Patterson Real Estate in contrast to those that claim increased leasing rates in the Tri-parish area are a new phenomenon. “It’s always been expensive.”

Bestplaces.net comparative data reveals how the Houma-Thibodaux area stands in housing costs compared to select cities in other Gulf Coast states.

Overall housing costs in Houston are 39 percent more expensive than the price of shelter in Houma. New Orleans is also steeper at a level of 11 percent.

However, cities that often attract those attempting to avoid the first impact of hurricanes list housing costs that are lower than the Tri-parish area, including Lake Charles at 34 percent, Tupelo, Miss., at 15 percent and Montgomery, Ala., at 7 percent.

According to the Houma-Thibodaux Apartment Association, membership apartment complexes, representing approximately 4,600 units, are currently at an occupancy rate of 96 percent.

While older local complexes such as the Canterbury House Apartments and Chateau Creole list one bedroom apartments in the monthly rent range of $625 to $650, newer complexes, which boast a greater variety of amenities, post starting prices that are notably higher than longer established properties.

The five newest apartment complexes in the Houma-Thibodaux area are The Landing on Bayou Cane, Southdown Pavilion, Ansley Place, Houma Highlands and Belmere Luxury Apartments (scheduled to open on Nov. 1).

According to information received from those properties, starting rents at The Landing on Bayou Cane are $875 for a one bedroom unit, $1,135 for a two bedroom and $1,515 for a three bedroom space.

Southdown Pavilion lists the starting price for a one-bedroom apartment at $604, a two bedroom at $904 and a three bedroom at $1,256 a month.

Ansley Place begins rentals for a one bedroom unit at $895, followed by $1,071 for a two bedroom and $1,287 for a three bedroom apartment.

Houma Highlands is one of the two newest area apartment complexes. The upscale facility promotes itself as a resort-style gated community. Monthly rental prices there start at $905 for a one bedroom unit, $1,060 for the smaller of two, two-bedroom floor plans and $1,450 for a three-bedroom apartment. Houma Highlands is already planning to build a $9 million addition while still working to fill existing units.

The Belmere Luxury Apartments are not scheduled to open for another five days, but when they do renters there can expect to pay at starting levels $975 for a one bedroom, $1,190 for a two bedroom and $1,380 for a three-bedroom apartment.

One bedroom apartments that compare to those available in the Houma-Thibodaux region range in starting prices from $600 to $999 in the Houston metropolitan area, $576 to $1,450 in New Orleans and $400 to $654 in Montgomery, Ala.

A one-bedroom apartment in Lake Charles ranges in price from $570 to $985. And one bedroom rents start as low as $375 a month in Tupelo, Miss.

Historically, the more competition available meant the more manageable fees were for consumers. That might not be the case when it comes to apartment rentals.

Jennifer Stierlen of Chauvin Real Estate said that rents charged by apartment complexes have a big impact on occupancy rates. “The newer complexes are in a different market. They are out of our market value [and] according to our apartment association the new complexes don’t have as high occupancy as [older properties].”

Asked if the newer complexes are thinking too big for the available market, Smith paused, chuckled and said, “I don’t want to answer that.”

Some large companies are said to be making use of their properties in hopes of flipping them, as was popular among some single home buyers during the past decade.

Brooks said that an overall increase in insurance costs has caused many multi-unit property owners to boost rates on their tenants. During the past three months insurance premiums for many real estate rental companies along coastal Louisiana have swelled by as much as 400 percent.

“At some point in time rentals are going to soften,” Brooks said. “When demand drops the high dollar ones are going to reduce move-in costs and cut attraction deals.”

For now, the resounding answer given by property managers in the apartment business as to if rents will be coming down locally is “no.”

Houma Highlands is one of the newer apartment complexes in the Houma-Thibodaux area, and owners are already planning to build a $9 million addition. MIKE NIXON