Oklahoma Market Studies

Client

Oklahoma Housing Finance Agency (OHFA)

Skills

Appraisal, Market Study – Affordable Housing

Project Description

Clarendon was awarded a contract with the Oklahoma Housing Finance Agency (OHFA) to provide Reviews of HUD Section 8 Rent Comparability Studies (RCS) for the State of Oklahoma.

Section 8 laws and administrative procedures require HUD to obtain and review Rent Comparability Studies (RCS) when initially renewing most Section 8 contracts and when processing some rent increase using the Annual Adjustment Factors. The market rents resulting from these studies determine the rents owners can receive and, hence greatly influence whether an owner will renew and continue providing assisted housing or opt-out of the Section 8 contract and convert to unassisted, market rent housing. The market rents set in these studies also drive HUD’s outlays for Section 8 project-based subsidy..

Market Overview

The multifamily market in Oklahoma City is showing early indications of a rebound in demand, which has slowed the increase in vacancy rates. Like many other markets, net absorption has been less than stellar due to unchecked inflation and a decline in consumer sentiment, which has affected households’ readiness to sign new leases. However, a more controlled construction pipeline has led to a rent growth surpassing the U.S. average .Prior to the most recent downturn, healthy job growth and a reduced risk of new supply contributed to lower vacancy rates. A deceleration in development has allowed vacancy rates to decrease, giving apartment owners and operators the opportunity to increase rents.

In the past, the multifamily market in Oklahoma City has seen fluctuations in vacancy and rent growth due to its ties to the energy sector. The 2016 downturn resulted in weaker performances, but the market managed to bounce back in the years leading up to the pandemic. While the local economy is making efforts to diversify, the market still heavily depends on the oil and gas industry. Efforts to diversify the local economy into sectors such as financial technology, aerospace, and biotechnology are expected to indirectly benefit the multifamily market.