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Consider that no one built apartments in most areas during the boom era. That and now there's a glut of SFH, townhomes, and condos in most markets as well. Since people are being foreclosed on all over the country, buying isn't an option for them. The combination of would-be homeowners becoming renters, less greed driving people to purchase homes for 20% appreciation, and the lack of new rental properties over the last 15 or so years has driven rental prices up quite nicely making it attractive. Same reason you see all the failed condo apartments conversions.
I mean, if you can rent a one-bedroom apartment for the same rent as the mortgage on a $400,000 house, why wouldn't you build apartments? I gotta wonder how much of that is pent up demand, however. $300-400k buys a lot of house in Texas.
And the fact the population is aging, and many current homeowners will be selling as they don't need the burden and demands of owning a home. There are many of these projects underway in MA, along the 128 corridor and financed by large publicly traded companies. They are usually one step ahead in the game.
Can you say "real estate bust?". Overextending to buy a home, even in the greatest neighborhood, doesn't seem to be a good strategy anymore. In fact, financially it only did because of all the tax advantages.
And the fact the population is aging, and many current homeowners will be selling as they don't need the burden and demands of owning a home. There are many of these projects underway in MA, along the 128 corridor and financed by large publicly traded companies. They are usually one step ahead in the game.
Most elderly "age in place" until their kids move them to an assisted living center. The house is paid for-no mortgage payment. Moving is a b*tch!
At least in the Bay Area, the apartments getting built seem aimed at young people who want to live in urban neighborhoods. Some of us planners have been waiting a long time for this day.
Gee, how is this possible without government subsidies like those given to home construction? Free market capitalism can't possibly fulfill the demand without government incentives.
There's a lot of sunk public capital from urban renewal/redevelopment in those downtown areas where apartments are getting built. Those billions--on mass transit, on parks, on streetscapes, on beautification, even to some extent on roads--have helped create a new market reality where it's profitable to build these buildings.
I do not know how this pertains to your areas......but here in the Jacksonville Florida area during the boom, affordable housing was no where to be found. Apartment complexes were being converted to condos at an alarming rate....so much so the bottom dropped out at the bust and many many condos could be bought at 50€ on the dollar or lower. Now we are experiencing a shortage of rental units in our area, failed condo projects are being converted back to apartments
I have been wondering how this is going to play out in the future.
There's a lot of sunk public capital from urban renewal/redevelopment in those downtown areas where apartments are getting built. Those billions--on mass transit, on parks, on streetscapes, on beautification, even to some extent on roads--have helped create a new market reality where it's profitable to build these buildings.
Wait, I thought it was just suburbs that are being subsidized! "Those billions", LOL. I have been saying that all along.
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