‘They’re coming regardless’: Population growth without enough housing spikes rental prices in Clarksville

CLARKSVILLE, TN (CLARKSVILLE NOW) – Home buyers are not the only group affected by a hot housing market, as rental prices are also climbing to record highs in Clarksville. Several factors are driving up rental prices, but population growth is among the leading causes.

As the housing market remains hot, many people have turned to renting. Renters are faced with a little less hassle than home buyers when it comes to inventory availability, but the quality of what’s available may not be ideal for most.

Determining rates

Christian Black, 2021 president of the Clarksville Association of Realtors, said many of the rentals around Clarksville are locally owned, and prices are determined by the individual or property management company.

Black explained that some property managers use services such as Realtracs, which collects data on properties that have been rented in the last several months or years. For example, if you’re a property manager looking to price a two-bedroom townhome, you could search for two-bedroom townhomes on one of these services and review the results.

MORE: Will there be relief for home buyers? What’s driving housing prices in Clarksville

“You want to compare apples to apples,” Black told Clarksville Now, noting you may get over 100 results. He said property managers can filter through those results to find something that is comparable to what they have to offer.

“You try to narrow that down to maybe 10 to 20 rentals that have rented in the last couple of months. You can pull that data out, and it gives a low end and a high end, and you can price it on that line.”

Larger developers

Some of the larger developers coming to Clarksville may conduct their own market rate studies to determine what rent will be set at. When an apartment or other rental property is set at a market rate, rent is priced at a rate comparable to other properties in the area.

Black said this is a similar formula to how local property managers price properties. However, market rate studies take more factors into consideration, such as population density, projected growth, and the number of vacancies.

“So that’s kind of the way you would comp a house,” Black said.

The solution, he said, is to build more housing.

“I think we need to continue with the new developments just to keep on pace with the growth. They’re projecting 90,000 people in the next 20 years. That was a study put out two or three years ago, so that’s about 4,500 people a year coming here from other states or getting priced out of Nashville.”

Several housing developments are in the works for Clarksville, but material costs and availability have been hit hard by inflation, which has slowed the process and contributed to rising rates.

“We need to continue to develop, but at a reasonable pace in tandem with what the market is doing,” Black said.

‘They’re coming regardless’

Jeffery Tyndall, director of the Clarksville-Montgomery County Regional Planning Commission, told Clarksville Now the area has fallen behind on the amount of housing needed for the community. He explained that while there are several multifamily housing units available, not all of them are up to standard.

“We have some very substandard units that are being rented. If you put more units in the market, then those units start to become vacant because people moved to stuff that’s more adequate for their needs,” he said. “Then that unit sits vacant. That owner either has to drop their rent, or they have to put money into the unit to make it habitable or better marketable. That will trickle up eventually to everything.”

He noted that prices will eventually come back down as the population levels out and more units hit the market. Once that happens, property managers will have to compete for renters, and the increase in competition will improve Clarksville’s stock of rental housing and rental units available.

“People are not coming to Clarksville because we have houses available; they’re coming regardless. If there is no housing available, it’s going to do two things. One: it’s just going to skyrocket the already high cost of housing, and two: it’ll lead to overcrowding, homelessness, and people living in substandard conditions. So, by keeping an adequate and healthy housing stock, you avoid those things,” Tyndall said.

The Clarksville population has skyrocketed over the last 10 years and is expected to continue to grow as economic development continues and more jobs are made available. As Clarksville works to accommodate a growing population, more housing will be needed to meet growing demand and combat rising prices.