So many new apartment builds - is this a good thing? (Dallas: low income, 2013)

[JlkajwlNsn]

Per Dallas news, DFW exceeded LA in new apartment builds. Is this or good or a bad thing? Could this attract low income folks and crime? Bring down home values? Increase traffic and homelessness like on the West Coast?

“More new apartments opening in D-FW than any other U.S. metro

Area’s new apartment supply will far outrank No. 2 market Los Angeles.

Dallas-Fort Worth is headed for another year of near record apartment openings — more than any other metro area in the country.

Almost 26,000 new apartments are set to open in North Texas this year, 14% more than in 2019, according to a new report from Richardson-based RealPage.

D-FW’s new apartment supply will far outrank No. 2 market Los Angeles, which is expecting 17,582 new rental units to open this year.

Nationwide, RealPage is forecasting that 370,942 new apartments will hit the market — 50% more than in 2019.

That could create problems in some markets.

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“Developers have struggled to produce enough new housing to meet demand in recent years,” Greg Willett, chief economist at RealPage, said in the new report. “However, the volume of apartments on the way in 2020 certainly could test the market’s ability to absorb a big block of additional units in a short time frame.

“The big jump in deliveries during 2020 means it’s likely that occupancy will slip a little from 2019’s record level,” Willett said. “Pricing concessions, including periods of free rent, should be common at the new properties building an initial base of residents. Rent growth should slow for existing luxury projects in neighborhoods where construction is heaviest.”

Nationwide apartment completions are expected to rise 50% this year.
Nationwide apartment completions are expected to rise 50% this year.(RealPage)
In 2019, developers opened 22,688 new apartments in North Texas. It was the third year in a row that D-FW had the most new rental units.

So far, there’s no sign of a slowdown in multifamily building in D-FW, with dozens more new projects in the works.

At the start of 2020, almost 43,000 rental units were under construction in North Texas, according to RealPage.

Apartment rents in the area were up about 3% year-over-year in the fourth quarter to a record $1,175 a month.

D-FW’s average rents are still below the nationwide average of $1,414, RealPage reports.

D-FW apartment openings will rise 14% this year.
D-FW apartment openings will rise 14% this year.(RealPage)”

[biafra4life]

A good thing? No. Necessary? I say yes.
We’ve discussed this topic a thousand times in the Dallas forum so I won’t go in depth but I saw an example that illustrates why apartments are needed.

I know a guy in my neighborhood who bought his house in 2013 for $150K (3 bed 2 bath 1700 sq ft). He just accepted an offer to sell for $250K. In six years a 15 year old suburbia tract home that should have been a starter home for a young couple not making much money, now requires a much higher income to purchase. And this jump is in Wylie, not Frisco or Allen or Southlake. This is why more and more apartments are needed. Purchasing a home is pretty much out of reach for a large segment of the population.

[TheViking85]

The apartments being built are not being built for anyone with low income, rents are high and getting higher, but the apartments are needed as the housing market has priced most young professionals out of buying a home since starter homes are largely no longer available in the more attractive employment ares.

[CREW747]

I think most people who have grown up or lived in this area for a long time started noticing the mass apartment boom.Long-term,it is concerning.If and when this area sees a downturn and cools off,it will be even more concerning...Especially in an suburb like Frisco.

https://www.city-data.com/forum/dall...-concerns.html

[RJ312]

More people are single and in transient relationships. Home ownership doesn't make a lot of sense for this group. The demand is there for apartments. When the demand for apartments is there, apartments are built.

[ChristieP]

The Millenials are the largest generation in US history. There are more of them than even the Baby Boomers. By and large, they are not in a life situation to buy houses yet, so they are happy to rent apartments.

[Wittgenstein's Ghost]

I think more economic diversity in the DFW suburbs is a good thing. The fear of low income people is absurd.

[Soccernerd]

I think it depends on where the apartments are going. Apartments near Oak Lawn or Downtown will be in high demand and will likely attract middle to high income millennials (and Gen Zers in the coming years).

There are apartment complexes going in places such as Frisco or McKinney that will likely depress home prices as they age. These aren’t attracting singles. They’re mostly attracting transient or those who are in unstable housing situations. There might also be families who are working at some of the lower paying jobs at Legacy and who don’t want to commute from more affordable areas closer into the city.

I will say that schools on GreatSchools that had a large number of apartments within their zone had lower scores. We all know that GreatSchools isn’t the perfect source, but it is something that I notice.

It’s inevitable. Obviously there’s some demand for them. Not everyone can afford to rent a house let alone get a mortgage, and people probably don’t want to commute from Sherman either.

[LeavingMA]

Originally Posted by TheViking85

The apartments being built are not being built for anyone with low income, rents are high and getting higher, but the apartments are needed as the housing market has priced most young professionals out of buying a home since starter homes are largely no longer available in the more attractive employment ares.

Correct, most one bedrooms are starting at $1,400 or more. It gets worse as I see many millennials making $50,000 paying $1,600 to rent a place. We used to get a two or three bedroom and split rent, I don't see people doing that anymore, they just have their own place. I make way more then these people and rent for way less. I could buy, but prices are still ridiculous.

[biafra4life]

Originally Posted by CREW747

I think most people who have grown up or lived in this area for a long time started noticing the mass apartment boom.Long-term,it is concerning.If and when this area sees a downturn and cools off,it will be even more concerning...Especially in an suburb like Frisco.

https://www.city-data.com/forum/dall...-concerns.html

No disrespect intended here, but I honestly think you are stuck in a bubble, like so many who post here on CD. This forum seems to skew towards the 6 figure earners in engineering/IT/Health, for whom spending over $400K for a house is normal. There have been times when I wondered where I went wrong listening to people debate the merits of Highland Park Vs Southlake, cities that I would never be able to afford. But i've since realized that you guys are the very small minority. Most people in DFW, heck in America, do not earn those types of high incomes. Which is why it would be more concerning if there were no apartments being built, because you would be essentially condemning the majority of people in DFW to having no place to live that they can afford.

You cant have replicas of Highland Park, where every home costs a million, even the condos. This country is just not filled with the big money makers to be set up that way. So yes, you will continue to see tons of apartments being built, and they are needed, because outside your little bubble, the 99% cannot afford the $500K homes in Frisco/Prosper/Plano.