Rent has been on the rise in recent years. With the supply and demand dynamics in urban areas, where housing inventory is extremely limited, a rapid increase in rent has become a problem for many renters in America.
One TikToker decided to investigate why her rent was increasing by a staggering $500, and the answer was shocking.
Taking Action
Ora Hardest (@oranotrita) went viral on TikTok after she recorded herself calling the landlord pretending to be a new renter to find out the going rates for apartments in her building.
Ora made this decision after she was notified that her rent would be increasing by $500 per month.
How Much Is She Paying?
Ora decided to make this phone call after her landlord notified her that her rent would be increasing from $1,300 to $1,800 per month.
According to Newsweek, rent prices have increased across the US, reaching their peak in August of 2022.
Are Rent Prices Increasing For Everyone?
“Calling my landlord to see if rent increased for everyone or just me as a long-term tenant,” text overlaid on the clip read.
In the video, Ora records herself contacting the building’s management office to inquire about the cost of a rental.
The Phone Call
“Yeah, I was just wondering if you had any two-bedroom apartments available?” she asked when a woman answered the call.
The woman on the other side of the phone notified Ora that a unit would be move-in ready by Monday.
The Difference Between the Two Rent Prices
When Ora asked about the monthly rent for the unit, the woman explained that a two-bedroom rental would cost between $1,525 and $1,875 per month.
After inquiring why there was nearly a $300 difference between those two prices, the leasing agent explained that the price depends on the phase for which a renter applied.
What Is a “Phase”?
According to the TikTok, a “phase” refers to whether or not the apartment is a newer model with renovations such as hardwood floors, new counters, and more.
The rent prices for everyone in the complex increased significantly, with Ora finding the increase “ridiculous.”
Why Rent is Rising
One contributor to the rising rents in the US is the high inflation plaguing the country. According to CNN, rent has increased by 6% since last year.
Shelter costs, which make up about 30% of CPI, have the power to drive inflation up despite it being essential items that Americans need.
The Focal Point for the Market
“Shelter inflation has been a big focal point for the market,” Bank of American analysts wrote in a note (via CNN).
These analysts believe that the high rents are likely to persist this year “and think that services inflation moderation is likely to be slower than the market expects.”
Rent Prices Won’t Drop Soon
Some economists are not expecting a drop in rent prices anytime soon. “We remain confident that [rent prices] will flatline in 2024, rather than fall,” Capital Economics analyst Thomas Ryan wrote in a recent note.
Unlike other consumer goods, rent is one thing that will probably never decrease. Once it goes up, it tends to stay up.
Landlords Are Forced to Raise Rents
Many landlords were forced to raise rents in the last two years as mortgage costs and repair costs also increased. However, a majority of localities don’t have laws that regulate how much landlords can increase rent in a single year.
Since the beginning of the pandemic, rent rates have gone up 29.9%, according to Zillow economists.
Renters Could Get a Break
While the solution to high rents is to purchase a house, that is not possible for most Americans. Housing prices are still incredibly high.
But renters might catch a break soon. As inflation cools down, rent prices will most likely stop increasing each year by an outrageous amount.
