As REITs offer a mid-year take on 2009, expect to hear anecdotal tales aplenty about residents “doubling-up,” the phenomenon by which stretched-and-stressed consumers ditch their one-bedroom apartments and lease larger units with two, three, four roommates or more splitting the rent. Doubling-up is considered a multiple blow to already weakened rent fundamentals: It increases unit vacancies, decreases net operating income (NOI), shrinks the market of prospects, and puts a strain on the comparatively smaller supply of two- and three-bedroom units.
But is doubling-up real? “We have not seen this urban myth of a lot of folks who normally resided alone in a one-bedroom apartment flocking to room together in two-bedroom units,” says Tom Wilkes, executive vice president of Post Properties and president of Post Apartment Management, which operates the REIT’s 21,190 units.
Nationally, market watchers have not seen a preponderance of data pointing towards shifting renter demographics or disparate changes in occupancy or lease demand based on unit size.
One of the few national studies to shed some light on the doubling-up trends comes from Rent.com. In a June 2009 white paper, the Internet listing service (ILS) examined the metrics and search terms corresponding to approximately 450 million Rent.com searches and found increases in the use of roommate-centric search language; an upward trend in the number of searches for two-plus bedrooms; and a bump in both the minimum and maximum average rent amounts that all point toward a national doubling-up trend.