Editorial: Rental boom

What impact will the recent boom in apartment construction have on the Lawrence rental market?

Vacant apartments used to be a rare commodity in Lawrence in August. Students returning to Kansas University often had a hard time finding suitable housing, and the university often had to open up laundry rooms and other common areas in its residence halls to temporarily house students until they could find a permanent spot.

Based on signs around town and advertising in the Journal-World, that no longer seems to be the case. Many properties still have “for rent” signs posted outside, and apartment complexes advertising in the J-W are touting various amenities and financial incentives, including a month’s free rent, to try to lure new tenants.

This is good news for renters but perhaps not such good news for Lawrence in the long term. While Lawrence decision-makers have focused considerable attention on the impact new retail enterprises may have on existing retail businesses in the city, they have been willing in recent years to approve the construction of thousands of new rental units with little discussion of what effect that might have on older rental properties. The philosophy seems to be that if developers and their financial backers think a new apartment complex will work, the city should allow the project to go forward.

Before long, however, it seems the city needs to have a discussion of the long-term impact of those developments. What is the apartment vacancy rate in Lawrence? Is it low enough to justify all the new construction, or are the new apartments simply emptying out older units? Much of the development is on the outskirts of Lawrence. Is that a desirable trend especially given that KU is the city’s central focus for rental housing?

What happens if older complexes in the central part of the city can’t maintain their occupancy rates and begin to deteriorate? What tax incentives might those property owners seek to redevelop their properties and make them more desirable to tenants? The city recently set an interesting precedent by approving an 85 percent, 10-year tax rebate for a new apartment development that replaces an older apartment complex just east of Memorial Stadium. How many other developers would like a similar deal, and is it in the public’s interest to provide that assistance?

KU provides a ready-made market for rental property in Lawrence, but there’s a limit to how many rental units the city can support. In recent years, the city has pretty much allowed private developers to set the agenda for rental expansion. It’s great that so many of those developers are willing to invest in Lawrence, but it may be time for officials to look at the long-term consequences of the current building boom.