With fewer developments coming online in 2020, those looking to rent should begin putting an absorption dent in the oversupply that’s been plaguing the Baton Rouge market, ending a several-year pattern of declining occupancy rates. But make no mistake: It’s still going to be a renter’s market.
Baton Rouge already has 4,600 vacant units on the market—nearly double what the area historically absorbs over a 12-month cycle. Not included in the vacant tally are the 2,429 units that have been proposed so far for 2020, the bulk of which are being constructed in Gonzales, Addis, Denham Springs and other suburban areas.
“If we continue to pour new units in a market that isn’t growing at the pace of population, then we’re going to get a hangover,” says Wesley Moore, an appraiser with Cook, Moore & Associates. “But there’s possibly going to be a window when we’re going to absorb some of the slack we’ve been creating.”
While a construction slowdown will enable a bump in occupancy rates, the oversupply problem will continue, adds Moore, as long as new units—regardless of pace—come on the market.
Much of the oversupply problem can be traced to LSU-area student housing. While 9,000 beds have been added to that market since 2010, particularly along Burbank Drive and Ben Hur Road, LSU’s enrollment has gone up by only 3,300 students—nearly half of whom study online—over the same period. Read the full story from the latest edition of Business Report.