Opinion | Want to make Iowa City more affordable? Build more high-rises

Increasing supply of apartments decreases rent.

An+apartment+building+is+seen+in+Iowa+City+on+Saturday%2C+April+21%2C+2018.+

The Daily Iowan; Photos by Megan

An apartment building is seen in Iowa City on Saturday, April 21, 2018.

Shahab Khan, Opinions Columnist


Renting in Iowa City is a nightmare. Reviews of dominant companies such as Apartments at Iowa or Apartments Near Campus reveal horror stories about roach-infested apartments, broken appliances, and notoriously predatory management. On top of that, these students end up paying thousands of dollars a month for rent.

Fortunately, in the past few years, the Iowa City City Council has approved the construction of various mid to high-rise apartment buildings. To improve the living situation, the city must focus on building more modern residential towers.

One of the more underrated elements of high-rises is their efficiency, as they use less land compared to the sprawling complexes similar to my former home on Gilbert Street. That particular complex had only space for a few dozen apartment units while taking up a large part of the street.

Contrast this with my new home, the 15-story RISE apartments, which possesses more than 300 units and was built on only one plot of land. Furthermore, the recent rezoning of the Pentacrest Gardens allowed for the construction of four new towers to begin. These towers would create space for 1,000 units and room for 2,000 students.

Tall apartment buildings end up using less space to provide more units.

As a result of this efficient land use, high-rises also end up lowering rents for students regardless of where they live. Iowa City has some of the highest rental rates in the state, largely because the demand for apartments outstrips the supply.

By approving the construction of higher density housing like the Pentacrest Gardens, lawmakers are hoping that increasing supply will placate demand and thus lower housing prices across the board.

This viewpoint is confirmed by the literature, which has found that building more apartment units decreases rent, regardless of location. One of the more interesting studies found that when you build more market-rate housing, the rents on nearby apartments decrease between 5 and 7 percent.

However, the new high-rises are unpopular among particular groups within our community. The critics postulate that these apartments are “luxury” and do not cater to the general population, as they are not considered affordable. To compound on this point, they also argue that building these high-rises will increase vacancy rates.

First, it is important to note that “luxury” ­– in the case of selling apartments – is a marketing tool used by real estate companies to attract tenants. Most luxury apartments are just brand new and have features that any new apartment would have such as stainless-steel appliances, a gym, and geothermal heating.

For example, the average rent in Iowa City for an apartment is $1,156, while living in RISE can cost you anywhere from $869 to $1,789. You can walk on to any large college campus and find countless buildings similar to RISE or the proposed Pentacrest Gardens.

Second, and most importantly, even when building new pricier apartments, you end up allowing those living in destitution to get themselves an apartment. An empirical effect recently observed has found that when 100 apartment units are built, 70 old units in neighborhoods earning below the median income open up. This allows low-income individuals to move into an apartment for a lower rate

The Iowa City housing market has treated students poorly, as they have to pay upwards of $10,000 a year just to live in a place akin to a pig pen rather than an actual apartment.

If local government officials are to make Iowa City more livable, then the construction of new high-rises must take place. Even if these prospective buildings are initially pricey, research shows that market forces will help decrease rents for those living in older buildings, making Iowa City more affordable and livable.


Columns reflect the opinions of the authors and are not necessarily those of the Editorial Board, The Daily Iowan, or other organizations in which the author may be involved.


 

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