Industry News | Wk of Dec 18
HOT & RELEVANT TOPICS
Flying Cars, Bike Share, and Space Tourism: How You’ll Be Traveling in 2018
We could be Ubering through the air in the near future. Uber plans to launch a flying taxi pilot program in L.A with Kitty Hawk, a hovercraft-maker backed by Alphabet CEO Larry Page. Kitty Hawk is slated to sell these cutting-edge consumer transports before the year is through, but it remains to be seen how quickly ride-share participants will be able to fly from one destination to another. Read Ryan Bradley, Erika Fry, Robert Hackett and Kirsten Korosec’s roundup on Fortune.
Congress Passes Tax Reform; Includes Critical Victories for Multifamily
Congress passed the Tax Cuts and Jobs Act today, a bill that represents the most significant change to the tax policy since 1986. But unlike 31 years ago, this reform contains many crucial victories for the multifamily industry. One win: the bill allows multifamily firms to elect to fully deduct business interest. The Act also increases the current depreciation period of 27.5 years to 30 for those choosing to retain the full deductibility. The Act’s deduction for pass-through income should also prove to be a significant benefit for the industry. Read the entire breakdown on the National Multifamily Housing Council’s website.
States Challenge Eviction Laws and Policies
The release of Matthew Desmond’s book Evicted: Poverty and Profit in the American City has renewed fervor in the debate featuring resident’s rights proponents and state and local policymakers. Nicole Upano’s article in UNITS addresses some of the concerns affecting several particular states with regard to the issue, including the debate of whether a resident can be blacklisted and whether consumer reports can include information pertaining to any “landlord-tenant” court record. The National Apartment Association anticipates the issue of evictions to be remain a priority in several local jurisdictions across the country.
IN THE NEWS
Housing Market Trends: 2017 Year in Review, 2018 Outlook
Even though rent growth is slated to soften in 2018, the trending lack of affordable rent will continue to spike. The 2018 market is also supposed to see the highest level of new-supply growth since the late 1980s. Home ownership has hit rock bottom, but increased slightly after 12 years of negative growth, and even though millennials have been purchasing homes, the overall number of renter households is still expected to keep growing. Read Mary Salmonsen’s article on Multifamily Executive.
Economy Watch: Rate Hike Suggests Fed’s Optimism About Economy
The Federal Reserve characterized the U.S. economy as strong, and a rise interest rates demonstrates that optimism. On Dec. 14, the central bank elevated the federal funds rate to the 1.25 to 1.5 range. Eight of 10 indexes that gauge economic conditions experienced positive gains in November. As the labor market continues to strengthen, the Fed has promised a continued gradual increase in federal funds rates. Read D.C. Stribling ‘s article on Multi-Housing News.
Construction Loans Not Hard to Find for Multifamily Projects
Although lending terms are gradually becoming tougher, apartment developers still can access the money they need to develop new apartments communities from banks and other lenders. The total number of construction loans from banks to apartments and other commercial properties increased by 9.3 percent for the year-over-year period ending Sept. 30, even though some big banks haven’t been as keen on the apartment sector. Regional and super-regional banks have been more active providing these types of loans than the giants. Read Bendix Anderson’s article in National Real Estate Investor.