Jake and Kristin Fisher started out their marriage by buying a house — because they didn’t know any better.
“We felt like that was what we were supposed to do,” Jake Fisher said. “That’s what a married couple did.”
Now they rent an apartment — by choice.
Others may feel “stuck” in an apartment while home prices spike across the Oklahoma City area. In the past year, prices jumped 15%, according to the Metro Association of Realtors.
But apartment rents have risen here no more than usual, with one-bedroom units up 3.1% and two-bedroom units up 2.5% year over year, according to Capstone Cos.
The Fishers have a message for anyone feeling stuck as a renter.
Apartment life’s not bad. In fact, it can be pretty good.
Renting on purpose
The Fishers, who are in their late 40s, started out in a four-bedroom, two-bath house in Norman. But after several years, work drew them to Oklahoma City. He’s president and a partner in Bridges Strategies & Digital Marketing, just west of downtown. She is an administrator at Westminster School, about 5 miles north.
They landed in an apartment downtown at what is now Aviare Arts District Apartment Homes.
“The idea was to rent for a year,” he said, then decide where, and whether, to buy another house.
Seven years later, they moved — to another apartment downtown, at Level Urban Apartments. They’ve been there about a year, and are in no hurry to buy. Maybe in 2022, and if so, they want to remain close to the urban core of the city.
Fisher said they got spoiled early by apartment living, especially when it came to maintenance.
“If a light bulb went out, we’d just let them know and they’d take care of it,” he said.
The Fishers know prudent homeownership can build wealth, but for now they have other investments, and the allure of not having to make home repairs and deal with other expenses of owning a house keeps them happily renting.
The sheer time it takes to take care of a home and lawn is part of it.
“We’re so busy. She’s busy. I’m busy,” Fisher said.
Uncle Sam wants you to buy, not rent
The government wants the Fishers — and you — to own a home, not rent an apartment, especially since the national homeownership rate hasn’t recovered from the housing crash and Great Recession of 2007-2009.
In 2010 it was about 63.5% in Oklahoma County. By 2019, it was still less than 60.5%, according to the Federal Reserve.
Government intervention is largely why single-family houses dominate the housing stock.
The mortgage interest tax deduction is just one of many policies at all levels of government promoting home ownership. Entire agencies, federal and state, support it, although they also aid in the development of rental property, because homeownership lends stability to neighborhoods — by extension, to society in general.
Proponents say homeownership is the main way many people accumulate wealth, building up equity over the years, partly paying themselves each month rather than a landlord.
John Arnhart has been there, done that, and is done with it.
A house is not a bank
Arnhart, 50, owned a home for 20 years, rented an apartment the past five years, and has no intention of buying again.
“It was my wife and I. When we split, I didn’t want another one,” said Arnhart, who is in chemical sales and lives at The Trails at Rockwell, 14600 N Rockwell Ave.
He said he wanted to be able to come and go and not have to worry about a property. On the other hand, he said, owning a house does have its advantages.
“It’s in your name and you can do with it what you want, add on if you want. And you have a garage, and more storage,” he said. “It lets you spread your wings a little bit.”
But the downside to owning, to Arnhart, is what many people consider the main upside to homeownership: growing wealth.
Whatever equity accumulates is hard to access, he said, and it doesn’t add up as much as people think considering the expenses of owning and maintaining a house over time.
“I save liquid money instead of giving it to the bank,” he said, meaning a mortgage lender.
“Actually, I’m saving money, but it’s in the bank,” he said, meaning his own bank account.
Short supply
Now there’s a housing shortage. Blame the coronavirus for much of it. Lumber mills and manufacturers shut down a year ago expecting a months-long construction slowdown if not an outright housing crash.
Instead, the Federal Reserve poured money into secondary mortgage markets — another way the government encourages homeownership — to keep interest rates low. It sparked a boom in demand for houses, both new and previously occupied.
It’s also caused prices for lumber, among other materials, to explode, home prices to spike, and it’s extended the time it takes to build a house.
The Oklahoma City metro area had 475,483 single-family houses in 2017, the most recent year statistics were readily available, according to the National Association of Home Builders.
About 100,000 of them were built since 1998, according to calculations based on monthly statistics provided to The Oklahoman by Norman-based Dharma Inc., publisher of metro-area construction data.
Apartment homes comprised a fraction of construction in the same period. Just 92,297 apartment units were built here going all the way back to 1960, according to statistics from brokers William Forrest and David Dirkschneider with Capstone Cos.
“There was a large building boom between 1960-1985, followed by a lull between 1986-2000, and then there’s been a surge again starting after 2000,” Dirkschneider said.
There was more than a lull in those middle years. After the oil market collapse and real estate crash in the mid-1980s, no apartments were built at all in 1987, 1989, 1990, 1991 or 1992, according to Capstone.
Apartment occupancy here fell to 76% on average, according to CBRE. That wasn’t enough to stay afloat, and most complexes went into foreclosure.
The oil boom lifted the whole metro-area economy and fueled an apartment building boom, with 22,200 units added in the first half of the 1980s, said Mike Buhl, broker-owner of multifamily property brokerage Commercial Realty Resources Co. in Norman.
“But the decade of the 1980s proved to be the best and the worst: the richest oil and gas boom and one of the worst economic declines,” Buhl said. “The decade of the ’80s began with record growth in bank assets and profits and quickly turned into protracted losses, bank closures and mergers.
“The oil crash of 1985-86 then wreaked havoc on Oklahoma’s economy. By the late ’80s and early 1990s probably every apartment community in the metro faced some level of distress or foreclosure.”
Buhl said his first sale, in 1987, was a foreclosed apartment complex.
Forrest also was getting started about the same time, also with foreclosed apartments.
“Some of the data from the ’80s is pretty crazy as far as rents, vacancies and the low average prices per unit back then,” Forrest said. “During my career I have sold for over 50 different lenders, which mostly relates back to the ’80s and early ’90s as the majority of apartment complexes in Oklahoma went through foreclosure back then.”
It was nearly the turn of the millennium before apartment construction started to come back, and it did so prominently over the next 10 years, “taking the industry to new highs,” Buhl said. “That decade added another 12,000 units to the market and really set the stage for the next large building boom.”
Since 2011, 21,500 units have been added to the market, he said, bringing the metro-area inventory to about 103,000 individual apartments, and growing.
The surge in construction coincided with — and helped boost — downtown’s revival, which arose with the Metropolitan Area Projects. MAPS started in 1993 with a city vote to spend $350 million on a new downtown library, Bricktown canal and ballpark, low-water dams on the Oklahoma River and an NBA arena downtown.
“Just look at the progression of downtown Oklahoma City when Deep Deuce Apartments were first built in 2001, and how that has spurred numerous new high-end communities,” Buhl said. “It has transformed the skyline and helped depressed areas of downtown become thriving communities with retail, restaurants and businesses.”
Downtown embraced luxury apartment living and the urban lifestyle as part of its renaissance.
Jim Holman and Danita Rose love it.
Renaissance lifestyle
Holman, 70, owned a home in upscale Heritage Hills for 20 years. Now, he and Rose, 59, are in their fifth year together, fourth year of renting an apartment downtown, and their third year of living at 5th Avenue Lofts, 601 N Broadway Ave.
Holman, a retired automotive sales executive, and Rose, executive vice president of Oklahoma City Community College, are sold on renting. They’re in their second apartment home. They lived at Carnegie Center, 131 Dean A. McGee, for a year.
Holman said renting isn’t without its challenges, but it gives freedoms that he didn’t have as a homeowner.
“Every once in a while you can hear a neighbor. But when we hear a lawnmower running, we know we don’t own it or pay for the gas to run it,” he said.
Heritage Hills is walking distance from downtown, on the north side, but their 5th Avenue Lofts apartment has them even closer to where the action is in the urban core.
“We love to walk downtown, and its only 3/4 mile to Scissortail Park,” he said.
But luxury apartment living in Oklahoma City isn’t limited to downtown.
Amen to Amenities
Buhl said homeowners’ complaints about proposed new apartment complexes near their single-family neighborhoods are often off base if they think it will decrease property values.
“Apartment communities today have amenities like none other,” Buhl said. “From the late 1960s to early ’70s when a swimming pool was considered an amenity, today we have private parking structures, rooftop pools, outdoor lounges, business centers and elegant clubhouses. Many of the properties built today are truly lifestyle communities.”
New offerings are worlds away from “early-vintage apartments when flat mansard roofs dotted the landscape and cedar shake shingles were a preferred building material,” he said. Nowadays, apartment renters are all about the amenities.
Take 35 Degrees North Apartment Homes, 371 upscale units under construction at 2800 NW 192, by Kirkland, Washington-based Weidner Apartment Homes.
35 Degrees North, a large complex of three-story apartment buildings amid a swath of single-family homes, towers over its outlying suburban neighbors because of a rise in the land just west of the Edmond city limits southeast of NW 192 and May Avenue.
Community amenities include two swimming pools, a pool house and cabanas, a poolside grilling station and fire pits, fitness center, basketball court, pickle ball court, pet washing station, dog park and a clubhouse.
Apartments feature high ceilings; a “luxury kitchen” with tile back splash, an island, “designer” lighting, stainless-steel appliances, and granite counters; full-size washer and dryer; a patio or balcony; a soaking tub in the master bedroom; walk-in closets; ceiling fans in every bedroom; picture windows and full-view glass doors; and USB outlets.
Buhl said 35 Degrees North one-bedroom apartments rent for $1,005 to $1,105 per month, and two-bedroom units go for $1,200 to $1,275 per month.
“The reality is that all things being equal, any one of these residents could purchase a home for a similar monthly payment,” he said.
Pandemic panic
Where is the apartment industry headed in 2021?
It had its own coronavirus scare — the fear of waves of evictions of jobless renters, staved off so far by government-imposed eviction moratoriums, as well as surprising numbers of renters who managed to keep their rent paid up.
“We have seen a pretty strong bounce back from the beginning days of COVID-19 with an overall positive sentiment around the sector,” Buhl said. “While not back to pre-COVID unemployment levels near 3%, the economy has performed very well, and the apartment industry is no exception.”
What about the coronavirus-related federal moratorium on evictions? The moratorium, extended several times, is now set to end June 30.
Even with the moratorium, by the end of May statewide 30,685 eviction cases had been filed and 12,189 granted since the state declared an emergency on March 15, 2020, according to nonprofit Open Justice Oklahoma.
By the end of May, landlords in Oklahoma County had filed 11,261 eviction cases, and 3,109 had been granted; Cleveland County had 2,196 filed and 926 granted. Canadian County had 596 filed and 275 granted.
Buhl said the high number of filings relative to evictions doesn’t tell the whole story.
“Even though a landlord may have filed an eviction, doesn’t mean the tenant didn’t eventually pay the rent or enter some type of payment plan,” he said. “Oftentimes the landlord will file the eviction just to protect their interest. I think the numbers prove that out.”
“Tenants … have prioritized rent payments. Let’s be honest, if tenants on a broad scale had stopped paying rent, as many expected would happen early in the pandemic, the market would have stumbled, causing a spiral effect. But the opposite happened, and rent collections remained good and occupancy levels remained strong. Those dynamics have continued into 2021.”
Chad Straub has been on all sides of housing because of different dynamics: He was a homeowner, then an apartment renter and now rents a house.
Bad dream
Straub, 42, grew up in Edmond and lived in an apartment in Norman while attending the University of Oklahoma. He bought his first house in 2009, a three-bedroom house built in 1954 in Oklahoma City.
“Oh, it’s the American dream! I needed to get my piece of the American dream,” he remembers thinking.
In 2015, he sold the old house and used his equity and credit to buy a new one. Then came a nightmare.
Straub was working in banking regulatory compliance. He quit his job and started a business — but it failed. He had to sell his house to get by. With his job went his credit, so he couldn’t even borrow against the suddenly illiquid wealth in his own property.
“All my nest egg I had left was tied up in the equity I had in my house. I really had no choice,” he said.
He moved into an apartment. Now, he’s renting a house to get away from the noise of apartment neighbors, and for its fenced back yard for Sophie, his 11-year-old long-haired Dachshund.
As a renter, Straub is living an irony: He works selling houses as a real estate agent.
Real Estate Editor Richard Mize edits The Oklahoman’s Real Estate section, and covers housing, construction, commercial real estate, and related topics for the newspaper and Oklahoman.com. Contact him at rmize@oklahoman.com. Please support his work and that of other Oklahoman journalists by purchasing a subscription at http://subscribe.oklahoman.com.