A couple of stories in the local press explore the burgeoning local apartment market. Here’s an excerpt from one of those stories in the Winston-Salem Journal:
During the past five years, thousands of new apartments have opened in the Piedmont Triad, and the number of people moving into them is growing.
Changes in the way people live and improvements in the economy are driving a steady, slow growth, local apartment experts say, but soft spots could stall that progress in the next couple of years.
One thing has worked in favor of the industry so far: slow home sales.
Although the real estate market is slowly picking up, banks are still tight with credit and families are reluctant to commit to mortgages until they feel confident that jobs are here to stay.
Apartment developers are taking more chances this year and will continue if they see good signs, said Carrie Langley, the Piedmont Triad Apartment Association’s director of education and membership…
At the moment, things are looking good for the local apartment business.
Ultimately, job growth could be the single most important unknown that could help — or hurt — even more.
The Piedmont Triad Apartment Association’s Langley tempers her optimism with a little superstition.
“There’s been economic and employment growth and it seems to be continuing,” she said. “I’m going to knock on wood.”
The Greensboro News & Record had a similar article focused on the Greensboro market.
The city of Miam, FL is taking a creative approach to addressing its shortage of affordable housing. They are tapping the EB-5 visa program to attract foreign development dollars:
The city will arrange for selected developments to be partially funded by a federal visa program known as EB-5, which grants green cards to foreigners who invest at least $500,000 in businesses or construction projects that create American jobs. The overwhelming majority of EB-5 investors are individuals from China eager to obtain U.S. residency…
Businesses seeking EB-5 funds typically contact middlemen—often lawyers—who run what are known as regional centers, which work with brokers in China and other countries to recruit investors, pool their investing dollars and funnel the money, often in the form of low-cost financing, to the businesses. The regional centers are paid a fee based on the amount of money they raise.
In the past year, Miami and a few other governments decided to create their own EB-5 regional centers, which allows them to select projects to help finance what would benefit the local community, charge a lower fee to the businesses and, in some cases, use the fees to supplement services such as police and firefighters…
Miami officials said they decided to start a regional center mainly to tackle its lack of affordable housing. According to an analysis prepared for The Wall Street Journal by the University of Florida’s Shimberg Center for Housing Studies, Miami-Dade County lost nearly 21,000 affordable apartments—or those that low- or medium-income people can rent without spending more than 40% of their income each month—from 2000 to 2012. In most cases, the buildings were torn down or converted to attract residents with higher incomes.
The city’s first development is actually an 83-story luxury tower, but they stated that it helped finance the creation of the regional center and that they expect many future projects to target affordable housing. In fact after getting wind of the program a veterans group and some members of the business community came out with a plan to build mixed use facility for veterans near the University of Miami hospital.
It’s turn season in student housing and NAA’s just in time with a nice “how-to” for surviving it. Here’s a taste:
1. Turn Season.
You can’t have a student housing move-in without the hectic season of turn first! Prepare, prepare, prepare and do your best to make it fun so your team can thrive during these crucial weeks before residents move in.
Isn’t this getting little-to-no sleep thing fun?!
2. Move-In Logistics.
Since move-in day is often one big day for student housing, everything must be just right to keep the check-in process smooth and organized. Create a game plan and lay out your logistics well in advance to ensure the day goes smoothly for everyone involved.
Because a happy parent is a happy life.
Take from a parent of three(!) college kids, that last sentence is spot on.
Developer Mike Kelley is proposing to build an 88-unit student housing community he’s calling Deacon Place on 11 acres within walking distance of the Wake Forest University campus:
Plans filed with the City-County Planning Board indicate the development would include 88 total units, with 76 four-bedroom units and 12 two-bedroom units, along with a 6,000-square-foot clubhouse and 1,800-square-foot pool.
“The intent is to provide students with a housing choice that offers ample green space and amenities such as a clubhouse and pool for recreational use while offering a campus-like feeling to the property,” according to the purpose statement included with the plans.
Other potential amenities include sand volleyball courts, an outdoor putting green, cafe seating at the pool, outdoor grilling areas with fire pits and a “hammock hangout area and a study great room,” the plans indicate.
The plans will require the rezoning of three parcels and the case is scheduled to be heard at the August 13, 2015 meeting of the planning board.
Across large segments of the US rents are rising faster than wages, and that’s putting pressure on more and more households:
Much of the problem is attributable to simple supply and demand. The job market has improved and millennials are entering the labor pool in force, boosting household formation. But in a structural shift for the real-estate market, new households are much more likely to be renters than buyers.
So there are more renters which is putting pressure on the current housing stock and that means rising rents.
“Rents have skyrocketed so much and incomes haven’t kept pace, so we have an affordability crisis in some of our major metropolitan areas for the middle housing market,” said Kenneth Rosen,chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley.
The squeeze is tighter in some of the “usual suspect” markets like San Francisco and New York, but even markets like Nashville are seeing it too:
Nashville is one city “getting meaningfully more expensive,” saidGreg Willett, vice president for research and analysis at MPF.
Rents there were up 5.1% in the second quarter from a year earlier, well outpacing incomes. According to separate Labor Department data, average weekly wages rose 2.4% in the Nashville metropolitan area between 2013 and 2014.
While builders have been adding new units to the market, most are luxury apartments. In response, the Nashville Metropolitan Council passed a bill July 21 ordering the local planning department to devise a zoning plan that would increase the supply of affordable housing.
If the affordability crunch isn’t addressed soon then we’ll start to see more and more cities try to do what Nashville is doing, but they might find themselves fighting an uphill battle when confronted by NIMBYism from neighborhood groups. This article about San Francisco’s struggle to find a solution to its affordable housing crunch is an excellent primer on difficult a nut this can be to crack. Private sector development is critical to this process, and hopefully cities will work with developers to address these issues, but even if they do there will still be a steep hill to climb with interest groups.
Affordable Housing Management, Inc. has begun construction of a 16-unit community in Greensboro:
Affordable Housing Management, Inc. (“AHM”) announced it recently began construction on Hope Court, a 16-unit supportive apartment community located near the intersection of Gate City Blvd. (High Point Rd) and Holden Road. The property will offer one, two, and three bedroom non-smoking apartments affordable to individuals and families earning below fifty percent (50%) of Area Median Income. Six units will be reserved for households with a disabled or formerly homeless member…
Hope Court is funded by the City of Greensboro, the North Carolina Housing Finance Agency (NCHFA) – Supportive Housing Development Program, and AHM. Additionally, grants were provided by Federal Home Loan Bank of Pittsburgh, Wells Fargo Foundation, Community Foundation of Greater Greensboro and the Lookout Foundation.
From the Triad Business Journal:
The first building of a nearly $20 million upscale complex project currently under construction in Graham is expected to open to residents in September.
The remaining six buildings of the 204-unit Watercourse Apartments are expected to be completed at a rate of one a month, Community ManagerKatherine Matkins said…
It is geared toward commuter residents, said Clifton Minsley of 10 Federal, a Raleigh-based company that will handle property management. Minsley and his brother own 10 Federal and are partners/owners in the deal. The project is owned by a group of local investors.