Rent, number of apartments on rise in W.Pa.

| Wednesday, April 17, 2013, 12:01 a.m.

When Kathy DiLorenzo decided to give up her home and become an apartment dweller, she found her housing costs didn‘t change drastically.

Rents for apartments in the Pittsburgh area have been on the rise, increasing faster than inflation, according to a Census Bureau report released Tuesday, and sparking a mini-boom in construction of multifamily complexes in the region.

Developers have been shifting their focus from single-family homes to capitalize on the demand and higher rents for apartments — although rents here are still cheap compared to other major metro areas.

DiLorenzo, 50, vice president of business development for Planet Depos, a court reporting company, moved into the Encore at 7th, Downtown, in 2011 after a divorce and her children left home. She also could keep her dog in her apartment.

While she made a conscious decision to rent, many apartment dwellers today have no choice. They are being forced to do so because banks have made it more difficult for consumers to get a mortgage to prevent a repeat of the huge loan losses that resulted from the housing crisis.

At the same time, the region has experienced a growth in high-paying seasonal jobs associated with the Marcellus shale development. The influx of gas-drilling workers from outside the state have added to the pressure on rentals.

Local apartment owners, such as Dave McSorley of Sterling Land Co., say rents over the past five years have increased an average of 3 percent to 6.5 percent for all bedroom units. He said a two-bedroom depending on room size, now rents for from $1,300 to $1,600.

“The Pittsburgh apartment market is characterized by high demand and strong fundamentals, with a growing employment base. All of these factors make Pittsburgh an attractive market for apartment developers,” said Mark H. Dambly, president of Pennrose, a Philadelphia based developer.

The boom in apartment construction in the region mirrors a national trend. The Commerce Department said Tuesday that apartment construction jumped nearly 31 percent in March from February to an annual rate of 417,000, the fastest pace since January 2006. By contrast, single-family home building fell 4.8 percent to an annual rate of 619,000.

There are at least six new apartments with close to 2,000 units either under construction or planned by out-of-town developers in the Pittsburgh region. And the Downtown Pittsburgh Partnership says within the next decade, 2,400 apartment units are “in the pipeline” for the Greater Downtown area.

“Everyone is looking at Pittsburgh,” said Gregg Willett, vice president of research for Dallas-based M/PF Research which monitors the national apartment scene. “They like Pittsburgh for its consistency in having high occupancy levels as well as high rentals,” he said.

Bill Gatti, president of Trek Development Group, Downtown, said he's seen the demand for units increase steadily during the past three years. “The vacancy rate has always been low,” he said. “But the turnover rate has decreased and (lease) renewal rates have increased.”

Pennrose, Dambly's company, has teamed with Ralph A. Falbo Inc. of Pittsburgh to build the 131-unit Gateway at Summerset, opening this month at the Summerset at Frick Park in Squirrel Hill with rentals ranging from $1,350 to $2,015 for one- and two-bedroom apartments.

Kevin Keane, executive vice president of Lincoln Property Co., said the high end of the market has definitely tightened.

“We have always enjoyed 95-percent occupancy,” he said. “We are now at 98-percent-plus occupancy.”

The Dallas-based company owns apartments in Pittsburgh and the suburbs with rents ranging from $1,000 to $5,000 a month. All of the properties above $2,500 a month are rented out, Keane said.

This is a good time to build apartments in Pittsburgh because rental rates have exceeded $1,000 a month, and occupancy is good,” said Todd Palcic, who has a 27-unit apartment at 907-09 Penn Ave., Downtown, under construction.

The good news for Pittsburgh is that it has a comparatively affordable rental market compared to other major metro areas, said Chris Briem, an economist at the University of Pittsburgh.

The median rent in Pittsburgh in 2011 was $682 per month, according to census data, up from $643 in 2009.

Sam Spatter is a staff writer for Trib Total Media. He can be reached at 412-320-7843 or Trib Total Media staff writer Brian Bowling contributed to this report. He can be reached at

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