Philadelphia’s Tight Suburbs Keep Lid on Apartment Concessions

 Growing Population Further Bolsters Renter Demand

By Brenda Nguyen Costar

The percentage of suburban Philadelphia apartments offering rental concessions has hit the lowest level since the end of 2022. This follows a stretch of strong renter demand in the first half of 2024, resulting in fewer property managers offering concessions amid the spring leasing season.

As of May 2024, only 6.7% of suburban Philadelphia apartments were advertising concessions, ranging from waived fees to a month of free rent. This starkly contrasts with the 16.5% of apartments in the city of Philadelphia offering concessions.

Historically, apartments in Philadelphia's suburbs, which encompasses Bucks, Chester, Delaware and Montgomery counties, have boasted lower vacancy rates than the city. The combination of limited new housing developments and a growing population has kept apartment conditions in Philadelphia's suburbs consistently tight.

As of the second quarter, the suburban apartment vacancy rate was 5.6%, 110 basis points below the region's overall apartment vacancy rate and 370 basis points below the city's vacancy rate.

The number of apartments offering concessions has dropped significantly for both urban and suburban apartments since the end of last year. In December of 2023, more than 55% of all apartments in Philadelphia's downtown were offering rental concessions. The percentage of suburban apartments offering concessions also peaked during the same period at 18%.

While the 3,200 units under construction across Philadelphia's suburban counties will likely offer a some level of concessions during lease-up, this only accounts for 2.5% of overall inventory. With the exception of newly completed projects, concessions are likely to remain limited when compared to the city where the competition for renters remains high.

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