Apartment Wire - 07/15/2015 (Plain Text Version)

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Unprepared for More Rental Demand

After completing a major demographic study projecting headship and homeownership rates through 2030, the Urban Institute concludes that demand for rental housing over the next 15 years will dramatically increase—and we, as a nation, are not prepared.

The analysis projects that from 2010 to 2030, the growth in rental households will exceed that of homeowners by 4 million, with an increase of 13 million rental households to 9 million homeowner households. That’s five renters for every three homeowners.

What’s driving the large growth in renters? It’s a perfect storm of factors—demographic and behavioral changes, recession hangover, tight credit and more. But all lead to one conclusion: Rental supply must increase.

photo credit: tanuha2001 / Shutterstock.com

BIBBY BLOG

Take Note of This Advice from the Chairman

NMHC President Doug Bibby has read a good number of commencement addresses over the years, but the one NMHC Chairman Daryl Carter delivered this year to the graduating class at Massachusetts Institute of Technology’s (MIT) Sloan School of Management is sticking with him. Here’s what’s to love in Daryl’s speech. [return to top]

TRENDS

Cities Weigh Airbnb's Effect on Rent

Websites like Airbnb are rewriting the rules for short-term vacation rentals in high-demand cities and some fear spillover into local housing markets. Is regulation needed to prevent these sites from driving housing costs higher? Discuss. [return to top]

MARKET

Conditions Ripe for REIT Privatizations

Private equity fund Lone Star’s acquisition of Home Properties could signal the return of a trend that has not been seen in recent years: a public to private conversion of a real estate company. Liquid capital markets and lower return requirements are likely to result in more such transactions. (registration required)
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TAX

NMHC/NAA Release New Like-Kind Exchange Study

As Congress seeks to overhaul the nation’s tax laws, there is a significant threat that like-kind exchanges could be eliminated or curtailed. In response, NMHC/NAA joined a broad real estate coalition to support groundbreaking research on the economic repercussions of changing like-kind exchange rules. Expect rents to rise in the wake of such action, fanning affordability concerns. [return to top]

NETWORKING

Houston Emerging Leaders Event Focused on Changing Local Economy

NMHC’s Emerging Leaders were treated to a fascinating look at the changing energy economy and the potential effect of falling oil prices on the Houston economy during a Speaker Series event on May 28. The main takeaway: Falling oil prices won’t recreate the devastating energy bust Houston experienced in the 1980s. [return to top]

FAIR HOUSING

Supreme Court Upholds Disparate Impact Liability, with Some Reservation

In a case closely watched by Fair Housing Act advocates and the Low Income Housing Tax Credit (LIHTC) community alike, the U.S. Supreme Court ruled that disparate impact liability is recognizable under the Fair Housing Act. While proponents of the policy applauded the decision as a key tool in combatting so-called “exclusionary zoning” policies, critics made note of the Court’s recognition of the policy’s limitations. Find more disparate impact resources here, including new analysis of Justice Kelly’s majority opinion. [return to top]

Multifamily Market Dashboard

Diverse Households Types Fuel Renter Growth

Harvard University’s Joint Center for Housing Studies (JCHS) 2015 State of the Nation’s Housing report showed demand for all types of rental housing continues to grow. Some of this extraordinary renter household growth is coming from age groups, income levels and family groups that were historically more inclined to own.

While households with a head of household aged 55 or older accounted for just 25 percent of all renter households in 2014, they were a much larger percentage of overall renter growth – contributing to 42 percent of the renter household growth in the preceding decade.

Similarly, the number of “family households” rose over the decade and the income distribution of renters is also shifting. Although higher-income households have historically been more likely to own, households in the highest income quartile accounted for nearly one in three net new renters from 2011 to 2014.

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