Cleveland will host the Republican National Convention in July 2016. In response, hospitality firms have steadily expanded payrolls with the addition of 9,200 workers, the biggest relative gain among all employment sectors. The overall labor force will expand 1.6 percent this year, or by 16,500 new workers. Thousands of these newly employed workers are seeking rental housing, particularly in the urban core where housing prices are much higher than the metro average. In addition, the urban core’s transformation to a 24-hour city has created its own momentum. Demand Exceeds Supply High net absorption outpaced construction during the past four quarters, putting downward pressure on vacancy. Last year, average vacancy dropped 160 basis points as tenants absorbed more than 3,400 units. In the last 12-month period ending in June, nearly every Cleveland submarket posted a drop in vacancy. Net absorption is expected to end the year more than 40 percent higher, with vacancy projected to slide 50 basis points to 3.4 percent, one of the lowest levels in the country. Builders have responded by expanding the project pipeline. More than 1,700 rental units have already come on line during the past year. However, compared with almost any other major metro in the country, this is just a drop in the bucket. …
