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Feb 28

520 Bridge toll may increase rental demand

The SR-520 bridge will soon require a toll for passage across Lake Washington. 

Add to the the new toll bridge cost the increase in gasoline prices due to Middle East unrest, and drivers might be feeling rightfully put upon with a double whammie dollar increase.

Implementation of the toll for SR-520 in the next months may affect many lives – and, not just in the pocketbook. Most commutes are a pain with unpredictability often a given. Now alternate routes may experience increased congestion and increased commute times – and, of course, increased unpredictability.

Some are forecasting that the tolling of SR-520 bridge may prove to be the last straw for many commuters. Rather than increasing both the time and cost of their commute, many may just decide to move closer to work and give up the drive. And the real estate in the suburbs.

Rent closer to work?  Such choices may increase demand for rental units

Some predict concerns on the supply side of the equation, as new construction of apartments or multifamily housing  has been constrained during the recession with lenders typically asking 40% equity of total debt financing. Additionally, building permits in the Puget Sound area have dropped 16% from a year ago.

Also predicted is an increase in rental rates. Rents have remained stable the past year at an average of $1,017 even though costs have risen. Currently, the vacancy rate is only about 6%.

Sooner or later the piper will have to be paid. The future may give us an increase of people seeking rentals as they explore new choices in living arrangements… and give up the commute.

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