Sell Your Commercial Property In Birmingham, AL

Who rents in Birmingham

Birmingham is a renter-majority city. The 2020–2024 American Community Survey counts 48,386 renter households out of 88,788 occupied units, a 54.5% share. In the 2015–2019 survey the share was 55.1%, so tenure has barely moved even as the estimated population slipped from 212,297 to 198,173. Fewer residents but a steady renter share means demand is concentrated, not spread thin, and it explains why location relative to jobs matters more here than citywide averages. Our earlier piece on what drives renter demand in Birmingham covers the employer and downtown picture; this profile focuses on the numbers an owner uses to price a building.

The employment base is anchored by UAB. Its FY2022 economic impact study attributed $8.3 billion in Birmingham economic activity and 73,595 local jobs to the university and health system, and UAB reports 46,804 jobs it directly employed or supported statewide. Regions keeps its corporate headquarters downtown with operations centers in Hoover.

Rents and affordability

Median gross rent in the city rose from $837 (2015–2019 ACS) to $1,107 (2020–2024), a 32% increase. Median household income rose 23% over the same surveys, from $37,375 to $46,051. The gap shows up in cost burden: 51.6% of renter households pay 30% or more of income toward rent and utilities, and 27.8% pay half or more. For owners, that limits how hard rents can be pushed at lease renewal, especially in Class B and C buildings.

The city's median rent sits below the Jefferson County median of $1,193 but above the statewide $1,007. Professionally managed product runs higher: Cushman & Wakefield put the metro average effective rent at $1,268 in Q2 2026, with Downtown Birmingham at $1,457, Homewood at $1,244, Hoover/Vestavia Hills at $1,220 and Bessemer/Fairfield at $1,172. Year-over-year effective rent growth was about 0.3% metro-wide, though Bessemer/Fairfield posted 3.8%.

HUD's FY2026 Fair Market Rents for the Birmingham-Hoover area are $1,024 for an efficiency, $1,155 for a one-bedroom, $1,266 for a two-bedroom, $1,583 for a three-bedroom and $1,801 for a four-bedroom. Voucher programs in the metro use ZIP-level Small Area FMRs, which vary widely by neighborhood:

For a building with voucher tenants, the ZIP-level figure, not the metro number, sets the ceiling on contract rent. A two-bedroom near the medical district can support roughly $690 more per month in voucher rent than the same unit in Bessemer.

The apartment stock

Birmingham's housing is old and unusually multifamily for Alabama. Per the ACS, 35,585 of the city's 109,349 housing units, or 32.5%, are in buildings with five or more units. Of those, 9,777 are in 5–9 unit buildings, 9,848 in 10–19 unit buildings, 7,713 in 20–49 unit buildings and 8,247 in buildings of 50 or more. Buildings of 5 to 19 units hold 55% of that apartment inventory, which matches the small and mid-size buildings that dominate local trading.

The median structure was built in 1965. Year-built data show 71.6% of units predate 1980, 42.8% predate 1960, and only 7.4% were built in 2010 or later. With that age profile, roofs, plumbing, electrical and HVAC condition are central to any buyer's inspection and price, whether the building sits in Southside or Bessemer.

Vacancy is split between the rental market and long-term vacant stock. About 3,769 units were vacant and for rent, a rental vacancy rate near 7.1%, while 14,490 units, 13.3% of all housing, were classed as "other vacant," a category that includes units held off the market or awaiting repair.

New supply

The construction wave has passed. Cushman & Wakefield recorded 2,450 metro completions in 2025, followed by no deliveries in the first half of 2026 and only 289 units under construction at mid-year, all in Shelby County. First-half 2026 net absorption reached 1,251 units, and metro vacancy fell to 11.1%, down 100 basis points year over year. Submarket vacancy remains elevated in Homewood (14.7%), Bessemer/Fairfield (14.5%), Downtown (14.0%) and Hoover/Vestavia Hills (13.7%), the submarkets that took 2025 deliveries such as Colina WeHo (310 units) and Colina Hillside (475 units). The report's annual series shows completions outrunning absorption in 2023 (1,480 versus 430 units), 2024 (970 versus 830) and 2025 (2,450 versus 1,160), which pushed stabilized vacancy from 8.0% in early 2022 into the 11% range. With little new product coming, older buildings now compete mainly with those recent deliveries and with each other.

Property taxes on apartment buildings in Jefferson County

Alabama taxes property on a share of market value. The Department of Revenue lists rental and commercial property as Class II, assessed at 20%. The 10% Class III residential ratio is limited by Code of Alabama § 40-8-1 to an owner's own single-family dwelling, so apartment buildings do not qualify.

Jefferson County's tax-year 2025 millage table sets the total rate for most Birmingham districts at 72.5 mills, with Hoover at 72.6, Homewood at 75.0 and Bessemer at 68.7 in their main districts. At 20% assessment, 72.5 mills works out to about 1.45% of appraised value each year. Counties reappraise annually, reviewing about a quarter of parcels each year, and owners have 30 days after a valuation notice to protest to the Board of Equalization, according to the Department of Revenue. Taxes are due October 1 and delinquent after December 31.

Since tax collections beginning October 1, 2025, Act 2024-344 limits annual growth in taxable assessed value for Class II and III real property to 7%. The cap is removed when ownership changes or a significant improvement is added. When you sell, the buyer's tax bill can reset to a full reassessment.

Recording a deed carries a state privilege tax of $0.50 per $500 of value, excluding mortgage amounts on which mortgage tax has been paid.

Landlord rules and local compliance

Under Code of Alabama § 11-80-8.1, no county or city may enact or enforce rent control. Leases fall under the Alabama Uniform Residential Landlord and Tenant Act. A tenancy with no fixed term defaults to month-to-month (§ 35-9A-161). Security deposits are capped at one month's rent, except for pets, alterations or added liability, and must be refunded or itemized within 60 days or the landlord owes double (§ 35-9A-201). For unpaid rent, the landlord may serve a notice terminating the lease in no less than seven business days (§ 35-9A-421).

Locally, the city's business license portal states that anyone conducting business in Birmingham must be licensed before starting; confirm with the Tax and License Division how that applies to your rental operation. The council has been working on short-term rental rules. A draft reported by WBRC would require permits and business licenses and cap STRs citywide at 1,000, but it was tabled for revision in March 2026. The draft targets short-term rentals, not conventional long-term leases.

What this means if you own a building here

• A buyer will underwrite taxes at 20% of the purchase price times local millage, not your capped assessment. Model that reset before you set a price.
• Buildings near UAB and in Homewood support higher voucher and market rents than Bessemer, and those spreads, more than metro trends, drive value.
• Age is the main discount. With most of the stock built before 1980, documented capital work on systems shortens due diligence.

Skyline Capital Investments buys 5+ unit buildings across Birmingham and Jefferson County. You can estimate value with our apartment building value calculator, compare Alabama with other states on our rent control and property tax guide, or see how we structure offers on our sell your apartment building page.