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Home » News » Local/Regional News » Vacancy rates sign ...
Monday, May 4, 2009

Vacancy rates sign of economic times

Included in this article:      Audio     
TimesFreePress Audio
Dr. David Penn

When Ashley Teter moved to Hixson from Orlando, Fla., last year, she had every intention of living alone. After the holiday shopping season, however, her hours at her retail job dropped from 40 to 10, forcing her to look for a second job and a roommate.

“As soon as all of my hours were cut I was, like, there’s no way I can do this without help,” the 19-year-old said.

Ms. Teter picked up a second job at a call center, where she met Emily Armstrong, who became her roommate in February.

“We both decided that we needed roommates,” she said.

People across the region are arriving at the same conclusion, and those decisions help explain the rising number of residential vacancies over the past year, experts say.

The percentage of vacant residencies and businesses increased slightly in most Northwest Georgia and Southeast Tennessee counties over the past year, according to data collected by the U.S. Postal Service. Vacancies are defined as addresses where mail is not collected for 90 days.

Hamilton County’s residential vacancy rate remained essentially flat, while the business vacancy rate climbed by 1 percent.

Considering the recession, flat doesn’t sound too bad, according to Dr. Doug Bachtel, a professor of housing and consumer economics at the University of Georgia.

“Given what I’ve been hearing in the news, I would suspect it would have been higher,” he said.

But both rates are higher than national figures. According to the data, 13.2 percent of Hamilton County’s business addresses are vacant, compared with a 9.8 percent national rate. Residential rates were 4.25 percent for Hamilton County and 3 percent nationwide.

Walker County leads the region for vacancies, with 15.6 percent of businesses addresses and 6.8 percent of residences vacant.

“To use an economic term, that ain’t good,” Dr. Bachtel said.

Dr. David Penn, director of the Business and Economic Research Center at Middle Tennessee State University, said the figures may mean the region’s economic cogs are turning more slowly than those in the rest of the country. He said Tennessee lags behind national statistics on many economic indicators, including unemployment.

He also said the numbers could be inflated by a surge in new businesses earlier in the decade.

“It’s likely that new businesses are hit harder (by the recession),” he said.

On the positive side, Dr. Bachtel noted, almost every county in the region gained residences and businesses over the span. Hamilton County had 305 more business addresses and 2,489 in the first quarter of 2009 than it did in early 2008.

Chattanooga Apartment Association President Jim Biggs also sees some positive signs in the market. He said occupancy is increasing in many developments as some have lowered rent. Last winter, he said, some complexes that almost always are full had occupancy rates dip into the 70s.

“At one time, if you asked people why they were moving they’d say they were getting a roommate or moving in with their parents,” he said.

Even splitting rent won’t solve everything, according to Ms. Teter. After quitting her job at the mall, she and Ms. Armstrong now are looking for second jobs to supplement their income.

“Another job is really really hard to find,” she said. “That’s the way the country’s going right now.”

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