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May 8, 2014

American Dream Redefined

Time’s Sam Frizell recently examined the housing market's latest numbers, concluding that increasingly the new American dream is living in city rather than owning a house in the suburbs.

“Americans are experiencing an urban renaissance of unanticipated proportions, as young people graduate college and flock to cities, delaying buying a home and perhaps rejecting the suburban ideal altogether,” he wrote.

The article highlighted the continued decline in homeownership and multifamily’s rising share of new construction. Moreover, it called attention to the net in-migration and population growth happening in the vast majority of the nation’s major metro areas—a trend that is fueling high-rise apartment development in cities’ urban cores.  (paywall)

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Why Free Wifi Is Still an Amenity Rather than a Basic Human Right

WaPo’s Dan Zank noodles the added perk of free WiFi at a local apartment community and wonders why, more than a decade into the proliferation of WiFi networks, is free wireless Internet not available everywhere all the time? The answer: It’s complicated.


NMHC Chairman Addresses Multifamily Diversity and Inclusion in the Wake of Sterling Scandal

The racism scandal embroiling Los Angeles Clippers’ owner Donald Sterling has surfaced allegations of housing discrimination at his rental properties and raised questions about the effectiveness and reach of the Fair Housing Act, particularly for subsidized housing. NMHC Chairman Daryl Carter discusses the challenges for the industry and the ways the industry and NMHC are advancing diversity and inclusion.


Russian Investors Shift U.S. Real Estate Strategy

Russian investors have long been active in the high-end tranches of U.S. real estate markets. But rising tensions over the Ukraine are driving many Russian investors to shift their U.S. real estate strategies. For example, in Miami, many are looking for more easily disposable investments designed to generate rental income; in New York, they’ve backed off, leaving the Chinese to become the biggest buyers of apartments in Manhattan.


Dynamic Pricing Models Can Maximize Rents - But Are Apartment Shoppers Turned Off?

A recent Charlotte Observer article dug cursorily into dynamic pricing and its increasing prevalence in the apartment industry. The article prompted a follow-on article in Time about the increased use of dynamic pricing models in nearly all realms of consumer life. Beyond airlines, online retailers and car share providers, use it, too. But what about customer blow back? Bottom line: No one likes to pay more than someone else, no one also minds when they get a deal.


Catch Up on All the Action from the NMHC Research Forum

Attendees dove deep into the apartment market’s underlying demand fundamentals and emerging Millennial trends, as well as shared on-the-ground insight into the dynamics of the metro D.C. market. (Added bonus: Video from MFE on more conference takeaways.)
In Case You Missed It
A hand-selected collection of noteworthy articles on a wide variety of issues of interest to apartment executives.
The New Math of Buying vs. Renting (paywall)

A ULI Primer on Tracking Energy Use in Multifamily Buildings

How Wood Hi-Rises Could Save the Planet

NMHC’s Mark Obrinsky on Dealing with Anti-Apartment Density Fears

Opinion: Do We Need Affordable Housing or Affordable Living?

Prefabricated Microunits—Absolutely Fabulous

NMHC’s April Quarterly Survey Shows Overbuilding Fears Are Likely Overblown

Case Study: Multifamily Residential Parking Data Calculator Helps Drive Urban Development

On-Campus Dorms Scarce in the Housing Boom

Studies Suggest Strategic Landscaping Could Improve Resident Retention

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A must-read for top apartment industry professionals, Apartment Wire is a timely review of emerging trends in apartment finance, development, management and technology and more, featuring both exclusive content from NMHC's staff of experts and provocative articles from across the web.
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2014 NMHC Emerging Leaders Speaker Series - Boston
May 12 , 2014
Mandarin Oriental in Boston, MA

2014 NMHC Apartment Strategies/Finance Conference
May 12 & 13, 2014
The Fairmont Copley Plaza in Boston, MA

2014 NMHC Spring Board of Directors Meeting
May 13 & 14, 2014
The Fairmont Copley Plaza in Boston, MA


Multifamily Market Dashboard

Rising Rents Redux

Media focus continues to zero in on the issue of rising rents and shrinking affordability, with reports of bigger percentages of resident paychecks being spent on rent.

Rents have outpaced inflation as the economy recovered post-recession. A fundamental apartment demand-supply imbalance, the rising costs of new development and construction and the influx of higher quality, new product into the market have all been contributing factors. But what about household incomes?

Despite more than a decade of lost income growth, lagging household income has largely been missing from the affordability discussion. However, two recent metro-level research reports have begun to bring the issue of income stagnation to light:

  • With a focus on the Big Apple, the Capital One/Furman report acknowledged the complicated nature of the metro area’s affordability issues while highlighting that median renter household income has grown at roughly one-fifth the pace of rents. (They also developed a cool infographic to showcase the findings.)

  • In Washington, D.C., the Center for Regional Analysis at George Mason University issued a separate report showing that the overall rising costs of goods and services drove a 4.1 percent decline in real per capita income in the Capital Region, with the report  pointing to rising rental costs as a leading cause. Also interesting, nine other top 15 metros (in terms of employment) showed similar income declines.

While these reports provide some preliminary steps toward advancing the discussion, they offer an incomplete picture of the jockeying between incomes and rents.

NMHC continues to actively engage industry partners, policymakers, regulators and the media on this critical issue, underscoring that while rent growth is slowing, the issue of income stagnation remains.

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