Very common rule of economics says that whenever there is a rise in demand the price of that thing will go up for sure because there will be no enough products to fulfil the market needs and people will be willing to pay more and more. Same case happened in Houston in last few years when energy sector started to grow over there and increased the opportunity of employment in that area. Thousands of people started shifting to Houston which resulted in the increase of demand for houses and apartments. This demand gave birth to the need of multifamily business in Houston so hundreds of new projects of flats and apartments were started and completed in just no time. This large scale construction was able to fulfil the need of apartments for rent in Houston for just sometime and they also became insufficient. All these things resulted in the increase of rent in Houston and people had to pay more than $150 for small apartments per months.
Landlords have been sitting on the catbird’s seat since the demand of rented apartments has increased. This increasing demand for apartments in Houston has shown no stability in last year and people were forced to move in smaller and worse apartments because they could not afford the better ones now. People are finding it very difficult to pay the high mortgage payments and some of them even have stopped thinking about owning a house. This trend has also benefitted a lot of landlords because they have nothing to worry about and all the market is in their own hands. Average rent of an average apartment in the area of Huston is $785 per month and it has been increasing on the rate of 4.5% constantly in last few years. Some research organizations also say that the annual growth of rent in Houston is about 3% which is completely unaffordable for a middle class man. While talking about middle class people, it is very important to hear the rich people crying because of high rents of their luxury apartments. Researchers have shown that the rent of luxury apartments have increased by the rate of 95% in last year.
One reason for this increase of rent is that there is no empty land for contractors to construct apartment buildings and they have to invest large amount of money in building new apartments. All the excess land is outside the city area so they have to purchase the existing old buildings like warehouses and offices for building new ones. These buildings are first bulldozed by the contractor and then the new building is constructed over that land. This process increases the cost of every project and resultantly the cost and rent of apartments in that building also increase. This increase in rent has also given such a heart to landlords that they, sometimes, force people to pay the higher rent or leave the apartment because empty houses have become an opportunity for them to increase the rent again.