New Construction, Same Demand: Why Rent Prices in Atlanta Are Still Climbing

Why are rents going up in Atlanta even as demand has stabilized? 

While rent prices in most of the country have hit a plateau and even dropped in some markets, Atlanta continues to see an increase in what tenants are paying for rental properties.

This is not a complaint, of course, but more of a curiosity. Demand for well-maintained rental homes in great locations has not changed. There’s plenty of new construction to offer tenants throughout Atlanta a lot of great options. 

So, why are rent prices in Atlanta continuing to climb?

We are sharing our theories, which are backed by insightful property management data. 

Here’s what we can tell you.

Strong Economic and Population Growth Drive Demand

Atlanta’s rental prices are high and going higher for a number of reasons, but perhaps the most important reason is sustained demand from a growing population and healthy job market. Atlanta has become a strategic base for major corporations, including Fortune 500 companies in the transportation, logistics, tech, and healthcare sectors. This economic momentum attracts new talent and drives population growth.

Even in periods when some U.S. cities see people moving away, Atlanta maintains positive growth through both relocation and natural population increase. The city's relatively affordable cost of living (compared to major coastal cities), cultural amenities, and job opportunities make it attractive for professionals, families, and retirees.

Some of these new residents are renters by choice and others find it economically necessary. High home prices and mortgage rates have pushed many potential buyers out of the market, making long-term renting their only viable option. This keeps rental demand consistently strong, even as supply grows.

New Construction Can’t Fully Meet Demand

It’s true that Atlanta has seen a surge in new multifamily construction in recent years. 

Thousands of new apartment units have been added to the market, and it’s easy to imagine this is enough to level off rent growth.

However, a few things are limiting the long-term impact of Atlanta’s new construction:

• Permitting and Development Are Slowing. While many projects broke ground in 2022 and 2023, fewer developments are being approved now. Rising interest rates, supply chain issues, labor shortages, and increased construction costs are all making it more difficult and expensive to build new housing. As a result, the pipeline of future inventory is shrinking.

• Geographic Distribution Matters. Much of the new inventory is concentrated in high-end urban neighborhoods where rents are already high. Meanwhile, there’s still a shortage of attainable, workforce-oriented housing in more affordable suburban and exurban areas.

• Time Lag between Starts and Completions. Even when new developments are approved, it can take two to three years for them to come online. With fewer new permits being issued today, we can expect a tightening of supply towards the end of 2025 and beyond.

  So while the city might feel like it's overbuilding now, we expect supply to tighten again, putting continued upward pressure on rents.

Rising Operating Costs Push Rents Higher

Landlords in Atlanta are facing rising expenses, and those costs are being passed along to tenants. 

Insurance premiums are increasing sharply, especially for properties vulnerable to storms or water damage. Property taxes are also climbing, particularly as local governments reassess home values in rapidly appreciating areas.

Additionally, ongoing inflation in materials and labor makes maintenance and repairs more expensive. For landlords to maintain their margins, especially those operating on thin cash flow, raising rents becomes necessary. It’s not about aggressively growing profits. Adjusting rents a bit higher is necessary just to keep up with rising costs.

These financial pressures are affecting all rental owners in Atlanta, from institutional investors managing large portfolios to local landlords with one or two properties.

Pricing Technology Allows for Strategic Pricing

We are seeing a lot of landlords and property managers using algorithms to help set rent prices based on real-time market data, occupancy trends, and competitor listings.

These tools allow landlords to quickly capture incremental increases in market rent without waiting for major shifts. Rather than staying flat during lease renewals, rents may rise slightly; $50 to $100 per month, for example, even if the market appears stable.

While this kind of precision helps landlords optimize returns, it also contributes to a steady upward trajectory in rents, especially when applied across thousands of units.

Neighborhood Trends and Pricing in Atlanta Rentals

Some of the hottest rental markets in Atlanta, such as Midtown, Old Fourth Ward, Buckhead, and West Midtown, continue to bring in high rents due to their central locations, walkability, and lifestyle appeal. These are the neighborhoods where tenants want to live, even if there are more affordable options elsewhere. So, even as new apartment buildings open in these neighborhoods, demand keeps up, thanks to renters willing to pay a premium for proximity to work, dining, and entertainment.

At the same time, many renters are being priced out of central neighborhoods and are moving to more affordable areas like South Fulton, East Point, or Gwinnett County. This "push-out" effect increases demand in suburban and exurban markets, where even modest rent increases can have a big impact on renters’ budgets.

All of this means that demand isn’t just strong. It’s spreading. The result is city-wide rent pressure.

Affordable Housing Is Disappearing

Another critical issue is the loss of affordable rental housing in the Atlanta area. Over the past several years, hundreds of thousands of affordable units have been lost due to redevelopment, market-rate conversions, or expiring subsidies. The Federal Reserve Bank of Atlanta recently reported that this has left many lower-income residents with fewer options and increased competition for mid-range rentals.

Policies aimed at preserving or expanding affordable housing exist but often move too slowly to keep up with market trends. Meanwhile, participation in subsidy programs like Section 8 has declined among rental property owners, especially when government reimbursements don’t reflect real-time market rent increases.

As the affordable housing stock diminishes, more renters are forced into the private market, driving up competition and contributing to price escalation.

Rising Retention: Renters Are Staying Put Longer

Because of high moving costs and limited affordable alternatives, many tenants are choosing to stay in place longer than they might have in previous years. This has a stabilizing effect on tenant turnover for landlords, and it also allows for more consistent rent increases over time.

With less turnover in the market, landlords can implement modest annual rent increases without fear of losing tenants. This “slow and steady” model can lead to meaningful rent growth across a portfolio over just a few years.

What Rising Rents Means for Investors and Property Owners

Understanding why Atlanta rents are rising is critical for making smart investment decisions. Here’s how rental owners can respond:

1. Invest in High-Demand Submarkets

While central neighborhoods still attract premium renters, suburban markets are seeing the strongest absorption and the least resistance to rent increases. Investors should consider rental properties in areas like Gwinnett County, South Fulton, and Alpharetta, where supply is lower and demand continues to rise.

2. Focus on Workforce and Single-Family Rentals

Luxury apartments in overbuilt areas may face short-term challenges, but workforce housing and single-family rentals remain strong performers. Single-family homes, in particular, are appealing to families who have been priced out of homeownership but want space and privacy.

3. Prepare for Continued Rent Growth

Forecasts suggest that rents will continue to rise over the next 12 to 24 months, albeit more moderately than the last few years. Property owners should build these increases into their long-term financial planning and cash flow projections.

4. Watch Operating Expenses Closely

With insurance, taxes, and maintenance costs rising, it’s more important than ever to monitor expenses and explore cost-saving strategies. Investing in energy efficiency, preventive maintenance, and technology can help reduce long-term overhead.

5. Use Technology Wisely

Dynamic pricing tools and property management platforms can improve rent setting, leasing, and tenant retention. These tools help landlords remain competitive and efficient, especially in a fast-changing market like Atlanta.

Atlanta’s Rental Market Offers Opportunities for Growth and Profitability

Despite new construction and a national cooling of rents, Atlanta’s rental market remains strong. A combination of economic growth, limited future supply, rising costs, and sustained demand is keeping upward pressure on prices. For real estate investors and rental property owners, Atlanta offers continued opportunities, especially for those who can navigate the complexities of submarket trends, tenant expectations, and operational challenges.

The best path forward is to stay proactive. By targeting the right property types in the right locations, using data to inform pricing, and planning for rising costs, rental owners in Atlanta can position themselves to thrive in a market that’s anything but average.

Working with a team like ours is also going to provide a competitive advantage. Contact us at Property Services of Atlanta, and we’ll help you maximize the rising Atlanta rents.