Speech slides: Rental Housing Association, March 2016
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Is the apartment market going bananas? Here are four stories to give you a better understanding of critical apartment market trends in the Puget Sound region
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Speech slides: Rental Housing Association, March 2016
- 34. OLD FORECAST – DECEMBER2015
- 35. OLD FORECAST – DECEMBER2015
Editor's Notes
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- The first banana story is about development
- micros & SEDUs = lower rent & incr affordability Micro production is winding down, unfortunately. But SEDU production is increasing. But limited mkt, so most new u = traditional apts. Bottom line: Traditional mkt rate apartments, SEDUs, and micros don’t provide all the affordability the City needs do provide important & substantial base. In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients So too – city needs other resources - To balance our community’s affordability needs & goals **** DO NOT GO TO NEXT SLIDE ****
- We break out Seattle into 14 neighborhoods. All will see new apartments between 2012 and 2020. Most = at least 2,000u 4 = over 4,000 units. (CH/Elke, Glke/Wall, QA, Bell/Dntn/SoLkU
- micros & SEDUs = lower rent & incr affordability Micro production is winding down, unfortunately. But SEDU production is increasing. But limited mkt, so most new u = traditional apts. Bottom line: Traditional mkt rate apartments, SEDUs, and micros don’t provide all the affordability the City needs do provide important & substantial base. In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients So too – city needs other resources - To balance our community’s affordability needs & goals **** DO NOT GO TO NEXT SLIDE ****
- We incl SEDUs in dev activity & parking ratio But we have not been counting micro housing. Micro housing activity is tapering off but SEDUs are picking up momentum And both contribute to the drop in parking ratios
- I mentioned “traditional” new construction. City has taken steps to create new types of rental housing with smaller units. Smaller units rent for less which adds to affordable stock, even for new const
- 2nd banana story = rents about peeling back the surface layer To really get to the meat --- to what really matters That’s the same for rents. Once you peel back the surface layer of rent information, You find out what the meatier issues really are
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- In addition to skew of the new ---- adjust for inflation Avg King Co rent = $146 in 1969 = $1,012 in late 2015. Actual = $1,453 --- Incl new u after 1969. Exclude those = $1,163. adjusted for inflation = just 15% higher than 1969 Another adjustment – to keep this bananas-to-bananas comparison = value added from renovation – more amenities Changes the product --- Not quite from a Prius to a Tesla But that’s the general idea Hard to determine, but a factor & narrows that 15% some
- micros & SEDUs = lower rent & incr affordability Micro production is winding down, unfortunately. But SEDU production is increasing. But limited mkt, so most new u = traditional apts. Bottom line: Traditional mkt rate apartments, SEDUs, and micros don’t provide all the affordability the City needs do provide important & substantial base. In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients So too – city needs other resources - To balance our community’s affordability needs & goals **** DO NOT GO TO NEXT SLIDE ****
- micros & SEDUs = lower rent & incr affordability Micro production is winding down, unfortunately. But SEDU production is increasing. But limited mkt, so most new u = traditional apts. Bottom line: Traditional mkt rate apartments, SEDUs, and micros don’t provide all the affordability the City needs do provide important & substantial base. In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients So too – city needs other resources - To balance our community’s affordability needs & goals **** DO NOT GO TO NEXT SLIDE ****
- micros & SEDUs = lower rent & incr affordability Micro production is winding down, unfortunately. But SEDU production is increasing. But limited mkt, so most new u = traditional apts. Bottom line: Traditional mkt rate apartments, SEDUs, and micros don’t provide all the affordability the City needs do provide important & substantial base. In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients So too – city needs other resources - To balance our community’s affordability needs & goals **** DO NOT GO TO NEXT SLIDE ****
- micros & SEDUs = lower rent & incr affordability Micro production is winding down, unfortunately. But SEDU production is increasing. But limited mkt, so most new u = traditional apts. Bottom line: Traditional mkt rate apartments, SEDUs, and micros don’t provide all the affordability the City needs do provide important & substantial base. In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients So too – city needs other resources - To balance our community’s affordability needs & goals **** DO NOT GO TO NEXT SLIDE ****
- micros & SEDUs = lower rent & incr affordability Micro production is winding down, unfortunately. But SEDU production is increasing. But limited mkt, so most new u = traditional apts. Bottom line: Traditional mkt rate apartments, SEDUs, and micros don’t provide all the affordability the City needs do provide important & substantial base. In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients So too – city needs other resources - To balance our community’s affordability needs & goals **** DO NOT GO TO NEXT SLIDE ****
- micros & SEDUs = lower rent & incr affordability Micro production is winding down, unfortunately. But SEDU production is increasing. But limited mkt, so most new u = traditional apts. Bottom line: Traditional mkt rate apartments, SEDUs, and micros don’t provide all the affordability the City needs do provide important & substantial base. In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients So too – city needs other resources - To balance our community’s affordability needs & goals **** DO NOT GO TO NEXT SLIDE ****
- Not only are land and construction costs a barrier, Expenses are also an issue Cost an average of $750/u/mo to operate newer properties in Seattle last year Add to that capital expenses and mortgage payments of probably $1,500 to $2,000 /u/mo Then easy to see why affordability Is so illusive In unsubsidized mkt rate new const
- micros & SEDUs = lower rent & incr affordability Micro production is winding down, unfortunately. But SEDU production is increasing. But limited mkt, so most new u = traditional apts. Bottom line: Traditional mkt rate apartments, SEDUs, and micros don’t provide all the affordability the City needs do provide important & substantial base. In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients So too – city needs other resources - To balance our community’s affordability needs & goals **** DO NOT GO TO NEXT SLIDE ****
- 3rd banana story is about affordability. banana = rich in potassium, vitamin C, and fiber, but weak in vitamin A, calcium, iron and zinc. The Sea apt mkt also has strengths and weaknesses When it comes to private, mkt rate, unsubsidized ppties
- micros & SEDUs = lower rent & incr affordability Micro production is winding down, unfortunately. But SEDU production is increasing. But limited mkt, so most new u = traditional apts. Bottom line: Traditional mkt rate apartments, SEDUs, and micros don’t provide all the affordability the City needs do provide important & substantial base. In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients So too – city needs other resources - To balance our community’s affordability needs & goals **** DO NOT GO TO NEXT SLIDE ****
- micros & SEDUs = lower rent & incr affordability Micro production is winding down, unfortunately. But SEDU production is increasing. But limited mkt, so most new u = traditional apts. Bottom line: Traditional mkt rate apartments, SEDUs, and micros don’t provide all the affordability the City needs do provide important & substantial base. In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients So too – city needs other resources - To balance our community’s affordability needs & goals **** DO NOT GO TO NEXT SLIDE ****
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- I guess I’ve had food on my mind lately We just published our spring newsletter And its title was Potato
- Fortunately – there have been resources Sec 8, public hsng from SHA, MFTE, tax credits, etc. Maybe most important has been past housing levies Seattle voters approved a number of times Those help non-profits – not only fill overall affordability gap But balance affordability for larger unit types Balance affordability in more neighborhoods Expand affordability well below 80% of median **** NOW CLICK TO QUESTIONS SLIDE ****