Chattanooga rental payments rise less than income last year, but nearly half of renters still burdened, study shows

Staff photo by Dave Flessner / Jefferson Apartments in downtown Chattanooga advertise units for rent. Despite rising rental rates, the share of cost-burdened renters dropped last year in Chattanooga and remained below the U.S. average even though nearly half of all renters are paying above the recommended 30% of their income in rent.

The share of cost-burdened renters in Chattanooga last year fell to the lowest level in more than a decade as rising wages outpaced the local increases in apartment and rental housing costs, according to a new study by Apartment List.

But more than 4 of every 10 renters in metropolitan Chattanooga - and 49.7% of all renters nationwide - still paid more than the recommended 30% of their income for housing last year.

"In spite of a low unemployment rate and increasing wages, virtually half of American renter households struggle with their housing costs," said Chris Salviati, a housing economist at Apartment List. "We are living through the longest U.S. economic expansion on record, but for many, housing costs are eating away at any celebration."

The number of cost-burdened renter households jumped by 299,000 from 2017 to 2018, and is now 2.8 million higher than it was in 2008, Salviati said.

"Although the cost burden rate has fallen meaningfully from its 2011 peak, most of that improvement has been driven by an influx of high-income households to the rental market," Salviati said.

In 19 of the 25 biggest metro areas of the country, including Memphis in Tennessee, the median rent for a typical apartment was more than 30% of the median wage.

But rental rates were generally more affordable in the metro markets around the Mid-South, according to the ApartmentList study.

Share of cost burdened renters in metropolitan Chattanooga

* 2008 - 50.3%* 2009 - 50.7%* 2010 - 49%* 2011 - 53.9%* 2012 - 49.7%* 2013 - 48.3%* 2014 - 48.8%* 2015 - 46.9%* 2016 - 53.3%* 2017 - 47.1%* 2018 - 43.8%Source: Apartment List. In 2018, the share of severely burdened renters (who spend at least half of their income on rent) rose slightly to 22.6% but those who are moderately burdened (spending from 30-50% of their income on rent) declined to 21.8% in metro Chattampg. Nationally, 24.9% of renters last year were severely burdened and another 24.9% were moderately burdened with their rent in 2018.

Chattanooga, which added more new housing units than it did jobs from 2008-2018, has fared better for renters. ApartmentList said 43.6% of the 64,279 renters in metro Chattanooga last year had to pay more than 30% of their income in housing costs.

The median rent in metro Chattanooga last year was $834 and the median renter income was $35,874.

Among those renting their home in the six-county Chattanooga metro area, 20.4% were severely cost burdened and paid 50% or more of their income in rent, while another 23.4% were moderately cost burdened and paid from 30-50% of their income for housing.

Since 2015, Chattanooga has added 3,223 apartment units in and around downtown and 1,917 beds for students at the University of Tennessee at Chattanooga. Hundreds more apartment units have also been built or are still under construction around the metro area, leading to more vacancies and move-in discounts in some apartment complexes.

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Rental cost burdens in the region1. Rome, Ga. - 56.9% with median rent of $7072. Memphis - 56.3% with median rent of $8933. Jackson - 50.5% with median rent of $761.4. Clarksville - 49.9% - median rent of $9275. Knoxville - 47.5% with median rent of $8166. Nashville - 47.1% with median retn of $1,0817. Cookeville - 47.1% with median rent of $7038. Chattanooga - 43.8% with median rent $8349. Cleveland, Tenn., - 43.6% with median rent $77010. Dalton, Ga. - 43.2% with median rent of $704Source: Apartment list. Share of renters paying at least 30% of their income for rent.

John Wise, one of the biggest downtown apartment developers, said this summer that Chattanooga's rental market has plenty of inventory "and the party is over" for developers cashing in on the appeal of downtown housing, at least for the immediate future.

But Chattanooga Mayor Andy Berke said Chattanooga remains attractive for many new residents and builders.

"I still talk with many investors who think we need more apartments," Berke said during the recent opening of the 199-unit Chestnut Flats apartment complex.

The growth in apartment living is being fueled, in part, by rising home prices. The Greater Chattanooga Realtors association said the median sales price of homes sold in the Chattanooga area in August was up 6.4% from a year ago to $200,000. The typical home sold that month in a relatively brisk 43 days.

"The lack of affordable inventory and the persistence of historically high housing prices continue to affect the housing market," said Kim Bass, president of the Greater Chattanooga Realtors. "Although inventory of affordable homes at this point remains relatively stable, it is stable at historically low levels, which may continue to push prices higher and affect potential buyers across the U.S."

Contact Dave Flessner at or at 423-757-6340.