There are several factors that come into play when owners, landlords, and housing boards decide how much to rent a particular space for. In Seattle it can be assumed that since inventory is low, the cost of rent is rising and will continue to do so for the next few years. The Seattle Transit Blog has an interesting take on how your rental price is determined, and why that price was decided maybe even before your apartment was built!
According to Seattle Transit, construction costs, and debt accumulated are taken into consideration, as well as what the market will hold when determining the set rent. They suggest that the cost of rent is decided before the unit is finished being built. There is a supply and demand factor in the housing price decision. If inventory is low, rent is high, but if there is a surge in construction maybe the quality of housing will decrease and renters will wind up eating extra costs. Seattle Transit suggests that if all goes well in the construction process, and attracts prospective tenants, we should be seeing an increase in supply and lower costs in housing production. Read the full story to gain a better understand of all the bells and whistles that come into play when deciding that final rental rate. Understanding that there are many factors at hand and wrapping your head around what those factors are should open the flood gates for new ideas to cut costs for renters and builders alike.