TERRE HAUTE — While homebuyers face higher prices in Vigo County, due to a shortage of homes for sale, renters are also in a pinch as rental costs have soared since 2020.
Rental costs have increased 27% in the past two years, according to ApartmentList.com, a California-based online marketplace launched in 2011 for apartment listings, partnering with Realtor.com and Homes.com.
“Terre Haute is definitely one of the those cities where the [COVID-19] pandemic didn’t make it cheaper” to rent, said Rob Warnock, an analyst and senior research associate at ApartmentList, unlike big cities like San Francisco and Seattle, where rent prices were drastically reduced in 2020 amid the start of the COVID-19 pandemic in the United States.
“That was similar to what we saw in Chicago, as [rental prices] got cheaper but the smaller cities within 100 miles of Chicago absorbed that and [rental prices] got more expensive,” Warnock said.
Terre Haute’s rental prices, Warnock said, have followed along with a national higher-priced home sales market.
The city’s rental prices increased just over 14% from January to October in 2021 and increased 13% for the same period in 2020.
Warnock said Terre Haute rental prices dipped somewhat in October, down about 2.5%, but that drop is attributable to seasonal conditions when fewer people move.
“From what I am seeing, Terre Haute fits the narrative as there was not a price drop during the pandemic and a return to where they were, but it was really a lot of price growth throughout the pandemic that has yet to really come down,” Warnock said.
“The seasonal shift that we see in winter, the drop we saw [in October] and the winter slump that we typically see, is pretty minor compared to the amount of rent growth that took place throughout the spring and summer,” he said, “which is why we are still seeing [prices] up 14% so far in 2021” in Terre Haute, he said.
“Looking at median rent estimates, right now the median two-bedroom apartment we see in Terre Haute is only about $200 cheaper than what we are seeing in Indianapolis,” Warnock said. “A lot of price appreciation is happening all over the place.”
Median rents in Terre Haute as of the end of October stood at $695 per month for a one-bedroom apartment and $898 for a two-bedroom apartment, Warnock said. Another data collector, rentdata.org, lists the fair market rent price in Terre Haute at $636 per month for a one-bedroom and $795 for a two-bedroom.
Chip Miller, president of Berkshire Hathaway HomeServices, Newlin-Miller Realtors, said Terre Haute has many rentals that are connected to college students. If those student rentals are put into the mix, the median price for rent increases.
“These new rentals that got built around campus [of Indiana State University], those one-bedrooms are higher than what maybe the normal market [price] would be,” Miller said.
A new one-bedroom apartment along Cherry Street next to ISU’s campus will cost more than a one-bedroom apartment in Farrington’s Grove neighborhood, Miller said.
“There is nothing like the Terre Haute MLS [Multiple Listing Service] where you can go in and look at what the median price a three-bedroom, two-bath house sold for,” Miller said, but “there is no [single] data source” for rentals in Terre Haute, he said.
“Rents are not going down,” Miller said. “On higher-end properties, things that would be $1,000 a month and higher, those are going up and are playing off the shortage of houses for sale. When there are fewer houses to purchase, then people who may move into town that want a place to buy and can’t find it, they rent something. If more people are trying to rent, then supply and demand gets out of balance and rents tend to go up a little bit.”
“I would say since COVID-19 hit here in March 2020 rents have gone up,” Miller said.
While rental costs are up, eviction court filings, which saw a bump in September, are back within normal range, according to a county court judge and attorneys who file eviction petitions in Vigo County.
A temporary federal moratorium on residential evictions for nonpayment of rent was enacted in September 2020 from the U.S. Centers for Disease Control and Prevention, citing evictions of tenants for failure to make rent or housing payments could be detrimental to public health control.
The CDC extended that twice and it was again extended by President Joe Biden’s administration through early October.
However, in August the U.S. Supreme Court struck down the CDC regulation after being challenged in court by landlords, trade associations and real estate companies.
According to the The Eviction Lab at Princeton University, which creates data and interactive tools on its website evictionlab.org, Vigo County through mid-October had 52 court eviction filings, which represents 0.32% of renters in the county. And since mid-October, filings are down 35% from the average.
Terre Haute Attorney David Frederick said when the eviction moratorium was lifted, there was an uptick in court filings for evictions, however, now “it seems pretty consistent to me, so I don’t see that it has been less but it has not been more,” he said.
“We had an uptick for a bit, but nothing like what I expected, and I think part of that is just because there is so much rental assistance out there that if you didn’t get it, you either were not doing something right or something else, but there was just money for people to be had,” Frederick said.
After forming an Indiana Eviction Task Force, the Indiana Supreme Court on Nov. 1 implemented a statewide pre-eviction diversion program to help both landlords and tenants access federal funding. The state’s high court measure mandates that trial courts offer the program service to landlords and tenants when a petition for eviction is filed.
The eviction task force, which looked at eviction filings in 10 counties, which did not include Vigo, reported from Jan. 1 through Sept. 30, 2021 that 36,018 eviction cases had been filed in Indiana, an average of 4,002 per month. The 10 counties were Marion, Lake, Allen, Vanderburgh, Tippecanoe, St. Joseph, Elkhart, Madison, Clark and Johnson.
Terre Haute Attorney R. Steven Johnson said he thinks the court’s task force study focused on counties with large apartment complexes, “counties that have a lot of corporate landlords. They may have 500 tenants or 200 in a complex and most of those people are on a federal subsidy,” Johnson said.
“So, basically, what [the new state pre-eviction diversion program] does if they file for an eviction, the landlord and the tenant can agree that they will move to get renter assistance and the eviction is automatically stayed for 90 days.
“If they get the renters assistance, the [eviction] case is dismissed. The other part of this program that is unique is it is like it was never filed. The eviction action is stricken from the record,” Johnson said.
That measure helps the tenant, according to the Indiana Supreme Court, as it is difficult for a tenant to rent an apartment in the future if they have an eviction on record.
“The people that I represent, the local landlords, I have found that they always communicate with the tenant to find out if they are eligible for any kind of assistance,” Johnson said. “Most of these [renters] are not qualified and most of the [evictions] I am doing are just people that don’t qualify for any federal assistance and are more than two months behind on rent,” Johnson said.
Johnson said he usually handles 40 or more evictions annually.
“If they are evicted, then they have a damage hearing, which is 30 to 60 days later,” he said. “I don’t see any uptick [in evictions] one way or the other. It is going along just about as it [always] has,” Johnson said.
Chris Newton, judge in Vigo County Superior Court Division 4, a court where many eviction cases are filed, said the new Indiana Supreme Court mandate will require a closer review of some cases.
“I think the [state supreme court] program applies if it is just rent and utilities,” but landlords may want tenants evicted for other reasons, Newton said. “Part of it is damage on the property, broken windows and doors, or trash that is just piled up.
“I think [the program] is a great idea ... which is probably the best way for some landlords to get paid because a lot of people are on very limited or fixed income. I think it is a wonderful idea and program, but I don’t know that is always the reason” for evictions, Newton said.