New apartments putting pressure on older rental properties in the city... (Pittsburgh: sale, leasing)

[eschaton]

The Post-Gazette had this interesting article the other day. Basically, in the last three years, the city has added 4,600 new apartment units - more than in the previous 15 years combined. And nearly 3,500 more units are in the pipeline to be completed in the next two years. This building boom has slowed rental rate increases in the city considerably - which most people would consider a good thing.

However, the effect has not been felt evenly. The new luxury apartments are still having essentially no problem leasing at full capacity. But older, more dated units are seeing rising vacancy levels, which is forcing them to update units, and cut rent - or at least stop increasing rent.

There's an interesting set of graphs to go along with the article. Essentially rental vacancies remain low in the "Oakland-facing" neighborhoods like Oakland itself, Shadyside, Bloomfield, East Liberty, and Squirrel Hill. However, they are higher in neighborhoods which are more convenient to Downtown, but less to Oakland. This likely shows that even with the new higher-end apartments, Pitt and CMU students will still move into virtually any unit a short distance from the campuses if it has the right rental price.

Given a lot of the dated rental units are in chopped-up houses, I am optimistic this pressure on dated units will cause some of the 2-3 units to get converted back into single family houses. I also wonder if it may cause some of them to be converted into mini-condo buildings.

[Lost_In_Translation]

Unfortunately I see less possibility of some of these chopped units getting converted back to SFH except in maybe Squirrel Hill because the marginal cost of running a dated apartment is pretty low vs the capital loss taken selling it low enough to encourage renovation back to SFH.

[WhoIsStanwix?]

I have been seeing some conversion of homes in Friendship to SFH. I think this neighborhood is ripe for it, though not being in the Allderdice feeder hurts it somewhat. I also think we will see some conversion in Shadyside. There are some rentals in each of these neighborhoods that are so far beyond repair that any change in ownership requiring a new occupancy permit (which will likely occur as the small landlords age) might force low enough sale prices to make conversion a viable option.

[SteelCityRising]

Heh. Can someone cue my landlady in on this that increasing rent annually on a unit that hasn't been updated since the 1980's is something she should stop doing before I move out to a much nicer unit in a much nicer neighborhood for minimally more rent?

[Lost_In_Translation]

Originally Posted by SteelCityRising

Heh. Can someone cue my landlady in on this that increasing rent annually on a unit that hasn't been updated since the 1980's is something she should stop doing before I move out to a much nicer unit in a much nicer neighborhood for minimally more rent?

I’m pretty sure only you or others in your building actually moving out will clue her in.

[jay5835]

Originally Posted by SteelCityRising

Heh. Can someone cue my landlady in on this that increasing rent annually on a unit that hasn't been updated since the 1980's is something she should stop doing before I move out to a much nicer unit in a much nicer neighborhood for minimally more rent?

Originally Posted by Lost_In_Translation

I’m pretty sure only you or others in your building actually moving out will clue her in.

What L_I_T said. If you keep paying her, SCR, she'd be crazy not to keep taking it.

[eschaton]

I do wonder what will happen in the longer run to areas like this in Squirrel Hill. Squirrel Hill's old apartment stock dates back to 1920s in some cases. As new units have opened up elsewhere, the rental market has stayed healthy, but become increasingly dominated by students. But with more and more units becoming available in Oakland itself, will this "Oakland spillover" continue indefinitely?

[guy2073]

Originally Posted by SteelCityRising

Heh. Can someone cue my landlady in on this that increasing rent annually on a unit that hasn't been updated since the 1980's is something she should stop doing before I move out to a much nicer unit in a much nicer neighborhood for minimally more rent?

You could buy a duplex and live for free, there is no way I would pay as much as you do in rent.

[eschaton]

Originally Posted by guy2073

You could buy a duplex and live for free, there is no way I would pay as much as you do in rent.

Not to pile on SCR, but it's not like, as he has noted repeatedly, Polish Hill is particularly convenient to live in. I mean, it has the basics (coffee shop, neighborhood market, a few bars, etc), but he could easily find a ****ty apartment in Bloomfield or Friendship within the same price range and be able to walk within a reasonable length of time to three times as many things.

[SteelCityRising]

Originally Posted by eschaton

Not to pile on SCR, but it's not like, as he has noted repeatedly, Polish Hill is particularly convenient to live in. I mean, it has the basics (coffee shop, neighborhood market, a few bars, etc), but he could easily find a ****ty apartment in Bloomfield or Friendship within the same price range and be able to walk within a reasonable length of time to three times as many things.

The "neighborhood market" is out of business, and the coffee shop is also temporarily out of business as it undergoes an ownership change and rebranding. So right now I can walk to a records store (useless), comic book store (useless), pest management office (useless), architectural studio (useless), or three dive bars (useless).