Apartment 133 at Parkwood Terrace has served as more than a mailing address for Marianne Clark over the past quarter-century.
It’s where she got to know her grandson when he was a toddler. It’s where her ailing brother spent the last months of his life.
The 75-year-old retiree figured the Omaha complex would be her “forever home.”
Clark even planned ahead for when her forever ended. She bought a blue-and-white biodegradable urn with a seashell carved into the front and told friends how she would like her ashes set out to sea in the Florida Gulf.
But days ago, she drove the urn she never thought she’d move from Parkwood Terrace to a new apartment complex in northwest Omaha. Had she stayed at her old place, the rent would have risen by more than 50% this month.
Omaha has long held a national reputation for affordability, but for renters, housing has become increasingly expensive, far outpacing inflation in most cases.
The average studio apartment in the metro area costs $955 a month. Adjusted for inflation, that’s a 45% increase from 2014, according to a Flatwater Free Press analysis of federal estimates.
It’s not just big-city dwellers strained by rising rent. Tenants in places like Grand Island and Kearney have seen rents spike by hundreds of dollars in the last decade.
The increased cost of maintaining, insuring and paying taxes on rental properties has driven rent upward, landlords and economists say.
But investment firms buying up apartment buildings from small-time local landlords has also spurred rent hikes in cities across the country, said John Johnson, a Marquette University Law School researcher.
That’s what happened at Parkwood Terrace.
Clark and many longtime tenants exited starting last year after the mom-and-pop landlord who owned the property for decades sold it to an out-of-state real estate investment firm.
Under the new ownership, tenants who had enjoyed below-market rent received offers to renew their leases at much higher rates.
Chase Hudson, the co-founder of Utah-based Parkwest Real Estate, said his company bought Parkwood Terrace intending to raise rents to market rate and create a higher quality of life for residents by investing heavily in improvements.
“We’re trying to enhance the value of the community and the lifestyle of the residents,” Hudson said. “It’s not our intention to just come in and be raising rents without justification.”
Clark is going with her gut to move out, even though she won’t be saving much money on rent at her new apartment. She took issue with how the faraway owners and their local property managers did business at Parkwood Terrace.
Though she’s at peace with her decision, the longtime tenant said it’s heartbreaking to leave behind the community she has known for more than a third of her life.
“I shed many tears. It’s just that there are so many memories here,” she said weeks before the move.
‘Left some income on the table’
The Belgrade family built Parkwood Terrace in the early 1990s amid a frenzy of development in Omaha’s western neighborhoods.
But as time wore on, the more things changed in west Omaha, the more they stayed the same at the 126-unit complex off 93rd Street.
The quiet surroundings, spacious apartments and consistently low rent bills meant many tenants re-signed their leases year after year.
The residents, many older than 50, often gathered for coffee on Tuesday mornings and wine and cheese on Fridays at the property’s clubhouse. It was a tight-knit community, fostered by the well-liked Jim Belgrade, who lived on site and managed the property, Clark said.
The owners emphasized retaining good tenants and “probably left some income on the table by not charging enough,” said Bob Belgrade, Jim’s brother.
In September, a letter from Jim Belgrade landed at residents’ doors informing them of a surprising change: the property would soon be under new management.
The Belgrades had agreed to sell Parkwood Terrace for $16.7 million.
The new owners, Parkwest, hired the Lund Company to manage the property and commissioned a $2.5 million facelift that included in-unit upgrades, exterior improvements, a dog park, a fire pit and a new pickleball court, Hudson said.
Founded in 2022 near Salt Lake City, Parkwest has amassed a portfolio featuring four large apartment complexes — two in San Antonio and one in Council Bluffs to go along with Parkwood Terrace.
The company’s investor-oriented website spells out its business model: buy multifamily properties, add value through renovations or redevelopment and sell them within three to seven years.
In the months before residents’ leases expired at Parkwood Terrace, they received notices that their rent would skyrocket by hundreds of dollars if they stayed, four current and former tenants told Flatwater.
Andy Vuorela, a lawyer and therapist, said the monthly rent on his one-bedroom apartment would have risen from $750 to $1,240 had he re-signed. Instead, he recently moved in with his girlfriend.
Most residents knew the Belgrades had given them a great deal and their rent would probably rise under new ownership, but the massive hike felt cold-blooded, Vuorela said.
Many older tenants on fixed incomes couldn’t bear the $500 increase and had to scramble for a new place, Vuorela said.
After years of below-market rents, the new rates put Parkwood Terrace in alignment with what comparable Omaha properties charge, Hudson said.
“That’s where sticker shock is coming from,” Hudson said. “When they get a renewal notice for a large increase, it’s really just, ‘Hey, this is where the market is now, and you’ve had the benefit of 10 years of really low rent.’”
“We feel for residents that have had to make a decision to leave the property,” he added.
Bob Belgrade blames his own “bad habit” of not adjusting longtime tenants’ rent for the whiplash they have experienced under the new owners.
“Them raising rent, it’s not greedy ownership – it’s them trying to stay up with the rest of the world,” he told Flatwater.
Tight margins
Parkwood Terrace’s rent hike is atypical since most landlords raise rates gradually. But there have been noticeable jumps in rent across the metro area since the COVID-19 pandemic began.
Rising property taxes and insurance and the inflated cost of materials and workers to maintain rental units has forced landlords to raise rents, said Rick McDonald, president of the Metropolitan Omaha Property Owners Association.
Omaha’s shortage of affordable starter homes paired with nationally high mortgage rates is keeping many young people in the rental market for longer, said University of Nebraska at Omaha economics professor Chris Decker. That added demand pushes rents higher still.
It’s a familiar picture in urban areas across the country. And while a studio apartment is still cheaper in Omaha than in Chicago or the Twin Cities, the average rent has risen at similar rates across all three metros since 2014.
Rent increases have also affected parts of rural Nebraska, especially in fast-growing smaller cities like Grand Island and Kearney.
There’s simply not enough rental housing to go around for low-income residents, so landlords can hold out for the highest bidder, said Cheryl Holcomb, director of Central Nebraska Community Action Partnership, a nonprofit that connects veterans and people experiencing homelessness with housing.
Often, three or four families pile into a single house to split the cost of rent, Holcomb said.
In Omaha, the tighter margins have chased some small neighborhood landlords out of the business in recent years, said McDonald, who owns and manages a handful of rental homes. Increasingly, out-of-state real estate investment firms are swooping in to take their place, he said.
Investment companies have been buying and selling apartment complexes for decades, but large companies like Ohio-based Vinebrook began snagging single-family homes in cities like Omaha at the tail end of the Great Recession, said Johnson, the Marquette University researcher.
Distant investment firms tend to raise rent more aggressively and evict tenants more frequently than small local landlords, Johnson said. On the other hand, the firms may be less discriminatory in choosing tenants, he said.
In Omaha, Vuorela plans to petition city leaders to limit how much property owners can legally raise rent in a single year. Tenants should have some protection against landlords jacking up rent more than 50% as they did at Parkwood Terrace, he said.
California, Oregon and several major cities have passed similar rent-increase laws in recent years, while Florida, Ohio and Montana moved to outlaw local rent control.
Susie Marquiss sees the impact of Parkwood Terrace’s ownership change and rent hike all around her as neighbors pack up and leave.
The 76-year-old retiree previously owned a home but moved to the complex eight years ago in search of community. She found it in friends like Clark and helped build it up with the homemade banana-chocolate chip muffins she delivered to sick and recovering tenants.
Marquiss signed on to stay at the complex for another year, but it hurts to watch her friends drive away in moving trucks, she said.
“All the friendships are kind of being broken. Fractured would be a good word – fractured or torn to where now we aren’t going to be in our community,” Marquiss said. “We’ll be in different places, and that is very hard.”
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