April 6, 2022
Rental Trends: What’s Ahead for the Rest of 2022?
What’s going on today
Rents are rising around the U.S., on average 12% nationally, though in many metropolitan markets, the increase has been considerably higher. The lack of new construction of multi-family units creates a shortfall in availability, while potential home buyers who have been priced out of the market and are now looking to rent drives demand. The competition for rental units has resulted in a landlord’s market with little flexibility around negotiating lease terms and conditions.
What could happen in 2022?
Expect the rental market to continue to be problematic, requiring transferring employees to make quick decisions or lose the chance to secure a desired property. The short-term rental accommodation market was also adversely affected by the pandemic with several providers leaving the business or letting their inventory go, contributing to the tight supply.
New construction of multi-family housing projects is underway. Supply chain challenges may delay their availability, but the current expectation is that the rental market will achieve some level of equilibrium.
What does this mean for Global Mobility?
Don’t try to stop your transferring employees from conducting internet searches on their own. But if your mobility program provides professional rental assistance, do encourage employees to utilize those services to streamline the process of finding a new home and settling-in. You’re not forcing corporate choices on them; you’re empowering them to delegate vetting of properties to make the search more efficient.
There has been some shift in transferring employees exploring areas near cities but not necessarily in the city to find rental accommodations with more space. You will see this when employees are either Working from Home or are in a Hybrid work situation. Many mobility teams are navigating the writing of Remote Work policies to manage this change in workforce dynamics.
How can global mobility help?
- If you do not currently provide rental assistance, consider adding the benefit of a ½- to full-day program to transferring employees who intend to rent.
- As occupancy rates hover around 97% nationally, deciding quickly has become a competitive advantage; where you need expedient move execution, consider providing cash advances to renters who need financial support.
- Virtual home-finding tours have become a valuable tool to facilitate relocations, but it’s not a perfect replacement for visiting potential properties. Consider allowing more time for the home-finding trip or temporary accommodations in areas where the rental market is particularly tight.
- A local rental agent will understand the particulars of their market and can help with lease negotiations and advocate for a diplomatic clause in the rental agreement.
Leah Johnson is Sterling Lexicon’s Director, Client Solutions, and has worked in the global mobility industry for more than 20 years. She has held management positions in business development, operations, account management, and consulting, and had the opportunity to live and work in Tokyo and Hong Kong for six years. She initiated destination services in Hong Kong for a relocation management company and directed global mobility for Goldman Sachs in the APAC region. She graduated from Colgate University, earned an MBA from the University of Alabama in Huntsville, and maintains a Senior Certified Professional (SCP) certification from SHRM.