RENT PREMIUMS + INFLATION In 2022, the premiums that survey participants expected renters to pay for apartment features and community amenities increased significantly. This reflected similar growth in rent prices across the country, as well as the U.S. inflation rate, which reached its highest point in 40 years. In 2022, the average rent premium assigned to community amenities went up by 14 percent to $66, and the average premium assigned to apartment features increased by 12 percent to $59. These increases were much larger than in 2021, when the premiums for community amenities and apartment features only went up by three percent and four percent, respectively. In
2020, year-over-year increases in average rent premiums were even smaller at two percent for community amenities and almost zero percent for apartment features. The trend in rent premiums is similar to the trend in average effective rent at apartment communities managed by Greystar, which went up by 11 percent in 2022, compared to only two percent in 2021, and declined three percent in 2020. These trends also reflect the rise in prices for other goods and services over the past few years. The consumer price index for all urban consumers (CPI-U), which measures inflation, went up by eight percent in 2022 compared to five percent in 2021 and one percent in 2020.
FIGURE 13: YEAR-OVER-YEAR CHANGE IN EFFECTIVE RENT AND EXPECTED RENT PREMIUMS FOR APARTMENT FEATURES AND COMMUNITY AMENITIES
Avg. Lease Effective Rent
14%
Avg. Rent Premium for Apartment Features
12%
11%
Avg. Rent Premium for Community Amenitis
4%
3%
0%
2%
2%
2020
2021
2022
-3%
AVANA BAYVIEW APARTMENTS Pompano Beach, FL
Only respondents who assign a feature or amenity a very high priority are asked to assign a rent premium. Source: Greystar Research, Greystar Design Survey, 2022.
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