New Harvard Study Takes Note of Ongoing Housing Affordability Challenges; Urges Federal Action
Lower-rent housing continues to be more elusive in several states across the country, contributing to a growing affordability gap, says a new Harvard University study.
According to the Joint Center for Housing Studies at Harvard, the number of low-rent units has declined by more than 40% in seven states, and as much as 50% in the big growth states of Colorado, Nevada, and Texas.
The nation’s largest states are also seeing fewer low-income options than ever before, with such units off by 39% in Florida, and 24% in both California and New York.
The report, America’s Rental Housing 2022, also notes that rents for upscale apartments have increased by an unprecedented 14% in 2021; with moderate quality apartments witnessing a roughly 11% uptick in the same time period. Both of those categories, from 2011 to 2019, saw increases on average in the 4% range.
In fact, upscale apartment projects, due to current market trends, are only expected to increase for the foreseeable future. “While the growing demand of higher-income households in the rental market has propped up demand in recent years, it has also fueled competition with moderate and lower-income households for housing especially in supply-constrained areas,” says the report.
That demand, in turn, has “contributed to the shortage of 1.5 million rental units that are both affordable and available to households making up to 80% of the area median income.”
For those making below the area median income, the shortage of affordable and available housing is now above the 6.8-million-unit mark.
The report additionally notes that the country has witnessed a marked increase in the reinvestment of aging rental stock, an investment jumping from $43 billion in 2009 to some $79 billion two years ago.
Noting that the Biden Administration has pledged itself to increasing affordable housing at the federal level, the report concludes: “By creating a comprehensive, well-funded housing safety net, the nation has the opportunity to pull millions of households out of poverty, address longstanding inequities in housing delivery, and ensure that every household has access to a decent and affordable home.”
By Garry Boulard
In a city with a multitude of historic properties, tour guides only naturally point out the magnificent cathedrals, museums, and public vistas that define Santa Fe.
But dozens, if not hundreds, of other structures dating back to the 18th century and before, and just as architecturally interesting, also populate the city.
Such is the case with a one-story, 4,600 square foot building located at 233 Canyon Road in Santa Fe and thought to be well over 100 years old.
Sitting on a less than one-acre site, the structure is a blend of adobe, masonry, and wood, and has served as both retail and restaurant space.
Renovated just over a decade ago, the Class C building has recently served as the home to the Caffe Greco, as well as a clothing and jewelry store, and in the 1970s, a music store.
With an asking price of $3.2 million, the property is listed with Colliers International realtors in Santa Fe.
By Garry Boulard
New Mexico's Two Largest Public Universities Get Funding for a Variety of Building and Renovation Projects
Work could begin on the installation of new stadium lighting and the building of a new weight room on the main Albuquerque campus of the University of New Mexico.
Funding for the projects, approved by members of the New Mexico State Legislature, has now been signed into law by Governor Michelle Lujan Grisham.
UNM is also receiving $700,000 in support for work on the school’s outdoor stadium, The Pit.
Altogether, New Mexico’s largest institute of higher learning secured around $5 million coming out of Santa Fe to fund half a dozen facility projects. School officials had earlier requested $14 million for 13 individual projects.
The state’s second largest school, the Las Cruces-based New Mexico State University, has been approved for around $2.4 million in capital outlay funding. That funding will go for the building of new football turf and improvements to an existing softball facility.
NMSU officials had earlier asked for $15 million in capital outlay funding for nearly ten projects, including the building of new football locker room facilities.
By Garry Boulard
Nearly half of all Americans say the lack of available housing in their community is a major problem, according to a new survey, while an overwhelming 70% of younger adults believe that it is more difficult for them to buy a home today than it was for their parents a generation ago.
A report accompanying the survey, published by the Pew Research Center, additionally points to two major factors leading to the housing crunch: a slowdown in the building of new homes, and incomes that have failed to keep pace with current home price increases.
“A surge in home buying spurred by record low mortgage interest rates during the Covid-19 pandemic has further strained the availability of homes,” writes analyst Katherine Schaeffer in the document Key Facts About Housing Affordability in the U.S.
The available inventory of active housing listings has dramatically dropped from around 1.5 million in October of 2016 to just under 409,000 as of this January. That 409,000 figure represents a 60% decrease in listings since early 2020.
At the same time, the country’s median home sale price has jumped from just over $300,000 to around $408,000.
One additional factor impacting housing availability is that there are today an increasing number of homes off the market, owing to the simple fact that people are living in them and happy: some 2.1 million homes more homes were sold in 2021 over the year before.
A separate report recently issued by the Census Bureau has shown that the 1950s was the first decade of significant home ownership growth, with new suburbs being laid out across the country.
But in fact, only 55% of all Americans owned a home during the Eisenhower era, a figure that now stands at around 65.5% today.
Census figures also show the homeownership rate in Arizona at 64.5% as of last year, compared with Colorado at 63.6%, and New Mexico at 70.8%. Those figures generally aligned with a national average homeownership rate of 65.6%.
By Garry Boulard
An auction scheduled for March 30 may determine the future of a possible rail yard and multimodal facility project in the vicinity of Wittmann, Arizona.
Some 3,500 acres of Arizona State Trust Land will be up for bid in an area to the north of U.S. Route 60. Reports have indicated that the BNSF Railway Company is interested in that land for what would be, by any measure, a massive rail facility project.
The land is currently mostly vacant, with a corral area located on the eastern side of the site that includes a water well and cistern
BNSF had previously expressed interest in building a similar-sized project more than a decade ago, only to see plans for that project go to the wayside due to the economics of the Great Recession.
Now the March 30 auction, if indeed BNSF puts in the successful bid, may restart the project.
That project could see the building of what would become a logistics park along the northern portion of the land in question, with a substantial logistics center and intermodal facility built in the middle and southern sections of the site.
Additional work at the site would most likely include the construction of one or several warehouses.
A minimum bid is set at $49.1 million. Should BNSF secure the land at auction, it will still be required to request an annexation and rezoning of the land in question to get the project underway.
By Garry Boulard
One of the most well-known hotels in New Mexico is on the verge of a major renovation.
The Hyatt Regency Albuquerque is located at 330 Tijeras Avenue, catercorner from the Albuquerque Convention Center. At 21 floors, it is the tallest hotel building in the state.
Built in 1990, the structure is part of the larger Albuquerque Plaza and has been branded as a Hyatt Hotel since its opening.
Now plans have been announced to not only rebrand the hotel, but also to upgrade its nearly 400 rooms. The hotel will also see the renovation of its lobby, dining, and bar areas.
In an interview with the Albuquerque Journal, owner Jim Long disclosed that the hotel would also be rebranded as The Clyde Hotel, in honor of Clyde Tingley, long-time business and political leader who also served as the governor of New Mexico from 1935 to 1939.
The renovation project, as designed by architect Carla Davis, principal at the Albuquerque-based Accentricks Incorporated, will see the creation of a Western and Pueblo-style interior look popular in hotels during the immediate years preceding World War II.
Although an exact schedule for the work at the hotel has not yet been announced, it is thought that it will take around two years for that work to be completed.
Distinguished by its red pyramid cap, the hotel, as part of the Albuquerque Plaza, was built at a cost of $100 million.
By Garry Boulard
In a world that would have prompted head-scratching among realtors just a few years ago, the metaverse real estate market is booming, with reports indicating that sales may near the $1 billion mark by the end of this year, up from $500 million in 2021.
In existence for more than two decades, the metaverse itself is a system of three-dimensional virtual worlds that has largely been used for the development of online video games.
But in the last several years the notion of selling real estate in the metaverse has taken off among investors and those who just enjoy adventurous betting, with a kind of fever particularly heating up in recent months: according to the site MetaMetri Solutions, sales in this strange new world surpassed the $85 million mark in just January alone.
The publication Coin Desk this week found a New York digital strategist who said that while his actual home had recently more than doubled in value, the plot of land he owns in the metaverse has increased by 1,400 times.
Notes analyst Aviva Sonenreich in a column for Forbes: “The metaverse is a global phenomenon presenting real estate in a way humans have never experienced.”
Sonenreich adds: “This is real estate that is not physical, but rather, virtual.”
That means the real estate being bought and sold doesn’t exist in terms of being land or houses or buildings. It is instead imaginary real estate that is a real thing only via a digital platform.
There are, to date, four major platforms in the metaverse containing more than 268,000 parcels of land. Users plugging into those platforms bid on certain pieces of real estate, with ever-increasing bids adding to the property’s value. The bidding very much includes real estate firms and brokers trying to get a foothold in a new and alien world.
Metaverse skeptics, such as Edward Castronova, a media professor at Indiana University, have likened real estate trading in this new universe to a “pyramid scheme.” In an interview with the New York Post, the professor added that those purchasing property in the metaverse guarantees that “you and only you are the owner of this particular piece of nothing.”
Wired magazine has also expressed doubts, noting that the hype surrounding metaverse investing “has helped conceal a reality that more closely resembles early-access video games and common pump-and-dump schemes.”
But the website Motley Fool is more bullish: “Despite the severe dip in the stock market taking place right now, interest in metaverse real estate is strong.”
The site additionally says that the potential for realizing metaverse profits is a real, if highly uncertain, thing. “Metaverse real estate has many of the same characteristics of real-world real estate,” continues the Motley Fool. “It’s only a scam if you consider capitalism to be a scam.”
By Garry Boulard
Plans have now been announced for the construction of a new 336-unit apartment complex on the north side of Longmont, Colorado.
To be developed by the Indianapolis-based Thompson Thrift Development, Incorporated, the project is being called Notch66 and will go up on just over 18 acres next to a WalMart store in the 2500 block of Main Street.
As planned, the project will see the building of one-, two-, and three-bedroom units, and is being designed by the HPA Design Group of Dallas.
In a statement, Josh Purvis, managing partner with Thompson Thrift, said the new Longmont project will provide an “appealing rental option for residents desiring the style, luxury, and convenience that Thompson Thrift communities feature.”
Thompson Thrift, which specializes in upscale residential and retail projects, has previously developed the Watermark at Harvest Junction project, also in Longmont, and is currently spearheading a 319-apartment complex in Fort Collins called The Quarry.
According to the site RentCafe, the average rent in Longmont now stands at just over $1,700, an 18% increase over 2020.
By Garry Boulard
A modern skyscraper in downtown El Paso is being listed for sale for $8.5 million.
Built in 1907 as one of the city’s first high-rises, the PNC Bank Building is 7 stories high and measures around 76,000 square feet.
The structure, on a 2.8-acre site at 416 N. Stanton Street, is in a section of the city populated with modern high-rise office buildings built in more recent decades.
The home to a number of banks through the decades, including the Sunwest Bank of El Paso, the building has also provided offices for various employment services, realtors, and accountants, not to mention the Southern Pacific Railroad.
Classified as a Class B building, the structure has recently undergone a renovation.
Listed with the El Paso-based Team Juan Uribe real estate services, the building is currently 88% leased.
Last summer, the Pittsburgh-based PNC Bank’s parent company acquired for $11.5 billion the BBVA USA bank, which previously had its headquarters at the N. Stanton building.
By Garry Boulard
Real estate investors are increasingly keeping a nervous eye on events in the Russia-Ukraine war.
So says the Emerging Trends in Real Estate Global Outlook 2022 report just issued by the Washington-based Urban Land Institute.
A summary of the report notes that investor attention has for the most part “dwelled on the immediate effect of the conflict on already surging energy prices, leading inevitably to inflation lasting at higher levels for longer.”
Additional challenges may be seen simply in the sudden absence of very recent boom times: “A huge release of pent-up demand led to record volumes of investment transactions as economies reopened during 2021.”
That level of activity, contends the report, is unlikely to be repeated any time soon.
To make things even more problematic, central banks across the globe, led by the Federal Reserve, earlier this year signaled moves to tighten monetary policy as a means of checking inflation, but now such moves suddenly seem less likely, certainly in Europe.
“The industry still clings to the familiar pro-real estate investment criteria—property as an inflation hedge and the premium between yields and interest rates,” says the document, but the real challenge may now be that inflation could rise like a rocket “outside the influence and control of the central banks.”
The Urban Land Institute report, in conjunction with the company PricewaterhouseCoopers, was aired at the annual International Market for Real Estate Professionals conference in Cannes.
At that conference, Gareth Lewis, director of PwC Real Estate, remarked that coming out of the pandemic, real estate investors had exhibited “generally higher levels of confidence.”
The onset of the Russia-Ukraine war, however, said Lewis, “has created a new and more sharply focused cause for immediate concern particularly around rising inflation and interest rates, giving rise to stresses that the real estate world has not had to grappled with in earnest for decades.”
By Garry Boulard
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