Industry News | Wk of June 18
HOT & RELEVANT TOPICS
Maximize Resident Engagement With Energy Efficiency
A recent study by the National Apartment Association indicates that apartment residents are generally more environmentally conscious than homeowners. The 2017 study showed that both groups were interested in saving money through energy efficiency. But while 58 percent of apartment residents cited environmental reasons, only 38 percent of homeowners did. The disparity could be rooted in that apartment dwellers tend to skew younger and more urban than the average homeowner. This data creates the opportunity for apartment operators to utilize energy efficiency for its tangible benefits and to attract prospects. Read the entire article in units magazine.
One Possible Way To Resolve Rent Control Debate – Allow Short-Term Rentals
It’s two of the industry’s biggest debates rolled into one – rent control and home sharing. Could one play off the other to address both issues? With rent control a hot-button topic, particularly in California where the state is mulling the repeal of Costa-Hawkins, it has been suggested that apartments soften their stance on short-term rentals. If residents can recoup some of their rent money by offering short-term rentals through companies such as Airbnb, perhaps they’ll be able to afford the sky-high rent costs. Joseph Pimentel examines this solution in Bisnow Los Angeles.
Changing the Perception of Affordable Housing
Although affordable housing is desperately needed in various locales, many neighborhoods are hesitant to embrace the concept due to various misconceptions. In actuality, not all affordable communities are unsightly buildings with higher crime rates and lower property values. In fact, they can be a solid investment and can perform just as well as any market-rate asset. A panel last week at Apartmentalize conference discussed the need to change the perception of affordable housing to help it grow. Read IvyLee Rosario’s article in Multi-Housing News.
IN THE NEWS
In Multifamily, Bigger is Better
One of the biggest takeaways in the Census Bureau’s latest Characteristics of New Housing report is that multifamily developments are becoming increasingly larger. Among the reasons for the trend are increasingly large investors and cost, as it relates to economy of scale. Expenses are commonly lower per unit in a 150-home community as opposed to a 20-home property. This isn’t a common development issue when construction costs are at a reasonable level, but the recent hike has contributed to the trend of larger communities. Smaller communities are still in need, as they typically feature lower rents and are a solid fit for families. But the trend is pointing the opposite direction. Read Adam Deermount’s article in Multifamily Executive.
Do Multifamily Concessions Point to Softening?
Short-term concessions are on the rise, particularly in locales where lease-up pressure is the strongest. That includes many urban locales, where the slew of new development has caught up with demand. Houston and Dallas, for instance, have approximately doubled their contingent of apartments since 2015, and a rise in short-term concessions has followed. According to the National Apartment Association, Atlanta tops the list in concessions at 9.1 percent, followed by Houston (8.6) and Dallas (7.9). Read Lisa Brown’s article on GlobeSt.com.
Banks Get More Generous With Construction Loans for New
In 2017, banks were significantly cutting back the amount they were willing to lend on new projects, which made financing a significant obstacle for apartment developers. Banks are changing their tune this year, as they are more commonly taking on new customers for construction loans. Today, apartment developers are able to secure non-recourse loans that cover 50 to 60 percent of the total development cost. That type of stability was not available last year, when construction loans were getting smaller and smaller. Read Bendix Anderson’s article in National Real Estate Investor.