Some Apartment Markets Are Facing Challenges

Apartment rents are not growing as quickly as they had been, according to research firm RealPage Inc.

In a few overbuilt downtowns, apartment rents are starting to fall. But experts claim that demand for apartment units continues to be so strong, the trend won’t last for long.

“The story in these markets is the apartment story writ large: the high levels of apartment construction are not enough to house the 1.2 million or so new households formed each year without increased single-family construction,” says John Affleck, research strategist with the CoStar Group.

Apartment rents are still growing, but not as quickly as they had been, in markets across the country, according to research firm RealPage Inc. Rent growth is slowing the most in a handful of cities where developers have opened thousands of new apartments recently.

Rents fall in Houston

In Houston, rents dropped by 1.6 percent on average over the past year, according to RealPage. In the top “urban core” neighborhoods where developers have opened the most new apartments, rents have fallen by more than 10.0 percent. Apartment occupancy rate in the city averaged 92.9 percent in mid-2017, down 180 basis points from the high of 2015.

“There is still some pain immediately ahead for Houston, mainly reflecting that another 22,000 or so apartments will be delivered in the coming few months,” says Greg Willett, chief economist for RealPage.

However, the outlook for Houston is strong. “Once we get past early 2018, however, the completion pace will slow to a trickle in a metro likely to be experiencing robust employment growth,” says Willett. “The metro has the potential to move from performance laggard status to star positioning very quickly.”

New York City

The rents in New York City are barely growing. Revenue growth was close to zero over the 12 months that ended in mid-2017. “So not terrible, but very little rent growth,” says Barbara Denham, senior economist with research firm Reis Inc.

Developers are expected to open 20,000 new apartments in New York City this year, according to RealPage. That’s about 25 percent up from the year before. “Some further rent cuts are possible,” says Willett. “Queens will join Manhattan and Brooklyn among the areas struggling to digest sizable new supply.”

Nashville, Tenn.

Developers are now opening new apartments in Nashville at a rate of nearly 8,000 a year. That’s about double the rate of completions in 2016 and 2015, according to RealPage. The occupancy rate was 95 percent at mid-year, 160 basis points lower than it was 12 months ago.

Rents still grew by 3.4 percent in Nashville over the 12 months ended at mid-year. That’s close to twice the overall rate of inflation. But it’s less than half the rent growth compared with the year before, when developers opened half as many new apartments. “And the downtown submarket—where construction is heaviest—is suffering sizable rent cuts,” says Willett.

Rents are growing in smaller markets

Not all apartment markets are cooling off. The places where the pace of rent growth sped up the most include Colorado Springs, Colo.; Ventura County, Calif.; Tacoma, Wash. and Sacramento, Calif. Effective rents grew on average between 5.0 percent and 8.0 percent in these markets over the 12 months that ended in mid-2017.

These towns don’t have much in common, except they are located in close proximity to markets with very expensive apartment rents, including Denver, Los Angeles, Seattle and San Francisco, according to Denham.

Source: NRE Investor

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Turn breakrooms and cafes into all-day assets

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Need to confer with colleagues at Red Hat, a Boston-based cloud software company? Grab a seat near the coffee pot for a quick discussion. The small offices behind these conversation stations are enclosed phone booths where employees can make private calls without disturbing others. | AEI

Far from distracting employees, breakout areas and spaces for socialization can actually improve productivity. A casual chat over lunch can spark an idea. Bumping into a colleague on the way to the coffee pot can lead to collaboration.

“Previously, business owners didn’t want to waste square footage on plazas, multipurpose rooms, breakout areas and socializing spaces. They wanted to see how many bodies they could fit in the space,” explains David Chason, Partner of AEI U.S. Studio. “It has come full circle in the last six to eight years. Designers have always put that into our designs, but clients and business owners
are now listening to that and using square footage in a different way that affects retention of employees.”

Thoughtful renovation can turn a humdrum breakroom into a space that achieves maximum use throughout the workday. Try these tips to draw people in.

  • Pay attention to café and breakroom design. “Food draws everyone together,” says Amy Klinefelter, Interior Designer for Gresham, Smith and Partners. “Providing large gathering spaces to collaborate and eat together is a great way to draw in younger employees and retain them longer.”
  • Instead of a breakroom, look at social spaces with multiple functions in mind. Chason views these areas as the “town center” around which the workplace revolves. “We look at spaces as cities,” he adds. “You’ve got houses in the suburbs, you’ve got townhouse and skyscraper buildings, you’ve got parks, and that’s how we look at the landscape of office space for a business. You also have enclosed private conference rooms – like when you plant a hedge for privacy – and open plan workstations where everyone has a visual of each other – the same as when you live in a city with lots of neighbors.”
  • Consider white noise or other acoustic solutions for open and common areas to keep socialization from bothering people in nearby workspaces.

Brown, Schwarzenegger Celebrate Extension of Cap and Trade

A key tool to help California reach ambitious greenhouse gas reduction goals will continue for decades to come, as Gov. Jerry Brown signed an extension of the state’s cap-and-trade program on Tuesday.

Brown was joined by legislative leaders and his predecessor, Arnold Schwarzenegger, to sign Assembly Bill 398 on Treasure Island in San Francisco Bay. The legislation extends the system through which the state limits greenhouse gases from companies by creating a marketplace for emissions.

“We are a nation-state in a globalizing world and we’re having an impact,” Brown said. “You’re here witnessing one of the key milestones in turning around this carbonized world into a decarbonized sustainable future.”

More than a decade ago, Schwarzenegger stood in the same spot to sign Assembly Bill 32. That bill both set emission reduction goals for California and authorized the creation of the cap-and-trade program.

At the time, the Republican governor predicted that the law would “begin a whole new era of environmental protection in California that will change the course of history,” and that the federal government would follow the state’s lead.

More than a decade later, Schwarzenegger acknowledged that California’s emission reduction goals and cap-and-trade program stand as progressive outposts, rather than bellwethers, for federal climate policy.

“The states and the cities in America, the private sector, the academic sector, the scientists, everyone is still in the Paris agreement, There is only one man that dropped out,” he said, referring to President Trump. “But America did not drop out.”

Both Brown and Schwarzenegger made note of the bipartisan nature of the extension.

Eight Republicans legislators voted for AB 398, a move that has caused turmoil within the caucus and state party.

Schwarzenegger said that California’s economic growth should silence conservative critics who contend that the cap-and-trade program will hurt businesses.

“Don’t those conservative Republicans get the message?” he asked. “Stop lying to the people! Stop it!”

Brown openly embraced the business community in his address, noting the many business lobbyists and representatives in attendance.

“Some people say, ‘Oh my god, we don’t like those people,’ ” he said. “Well let’s face it, this is California. Our industry, our wealth, our whole well-being is the product of all these individuals and companies and organizations and cultural organizations and nonprofits, the whole thing.”

The deal to extend the program was a carefully balanced effort that also included provisions to address local air quality.

Brown has not yet signed that separate bill, Assembly Bill 617, which increases monitoring and penalties on local polluters.

Lawmakers get creative in tackling state housing shortage

Some novel approaches to tackling California’s housing crisis are continuing to gain traction in the state Legislature this year.

Take AB 73 by Assemblyman David Chiu, D-San Francisco. This bill, supported by the California Apartment Association, would incentivize local governments to zone for more housing.

The bill seeks to spur the creation of housing on infill sites around public transportation by providing incentives to local governments to complete upfront zoning and environmental review and rewarding them when they permit the housing.

“As you know, California is in the midst of an unprecedented housing crisis caused by a severe lack of new housing construction at all levels of affordability,” the California Apartment Association says in a letter supporting the legislation. “This housing shortage costs the California economy between $143 billion and $233 billion per year.”

AB 73 now heads to the Senate Environmental Quality Committee.

Another innovative bill still making its way through the Legislature is SB 35 by Sen. Scott Wiener, D-San Francisco.

This bill would create a streamlined approval process for housing in cities that are not meeting their housing goals.

“SB 35 will make it easier and faster to build housing throughout California and will stop the obstruction of housing that is all too common in California,” Wiener said in a news release.

Under SB 35, cities lagging behind their housing goals would need to streamline the developmental review process for housing projects that meet certain criteria, such as affordability, density and zoning standards.

Streamlined projects would be approved “by right,” meaning they would move forward without a drawn-out review process.

SB 35 won approval from the full Senate earlier this month and now awaits a hearing in the Assembly’s Committee on Local Government.

“A major impediment to the construction of more housing is an overly burdensome local approval process and resistance by local no-growth advocates,” CAA says in a letter supporting SB 35. “In addition, excessive litigation through CEQA process significantly increases the time and costs of constructing new housing.”

Another innovative approach to streamlining the approval process comes from Sen. Richard Roth, D-Riverside. Under SB 540, cities would identify locations for new housing, adopt specific upfront plans, conduct necessary environmental reviews and foster public engagement.

“SB 540 will help local governments do their part by establishing a process they can use to speed up the permitting of housing,” CAA said in a letter supporting the bill. “It also provides a stream of no-interest loans to help local governments with their efforts to do proactive planning, paving the way for new housing.”

The bill is now awaiting hearings in the Assembly Local Government and Natural Resources committees.

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Are You Properly Maintaining Your Homeowners Association?

How is your homeowners association holding up? Do you have buildings in need of repair? Has the HOA board set aside funds for inevitable future repairs? If you don’t know the answer to these questions, then it’s time to find out. Why? Because it’s the Board’s job to protect and maintain the association and keep it safe. Sometimes, the safety of lives is even at stake. You don’t want to wait for something bad to happen before taking action, like one homeowners association did in Florida. Read more in the article excerpt below.

Posted by: HOALeader.com

Why You Should Care About Another HOA’s Balcony Collapse

In this week’s tip, we talk about what you should do in the wake of the February collapse of a second-floor, wood balcony of a condo association in the Florida panhandle.

Thankfully, the incident caused only injuries, not fatalities. But 11 people harmed is nothing to dismiss, even if it didn’t happen in your community. It’s still smart to understand how condo associations can get to this point and what to do to prevent it from happening in your association.

“I think this serves as a great example for those associations that are deferring maintenance,” states James R. McCormick Jr., a partner at Peters & Freedman LLP in Encinitas, Calif., who represents associations. “This could have been the result of improper or faulty construction. But if this balcony fell as a result of deferred maintenance, we as an industry should use it to encourage associations to avoid this type of disaster in the future by performing proper maintenance.”

What steps should you take? Here are the first two of five:

  1. Don’t have a reserve study? Do one now. “First of all, have a reserve study with a site visit to have someone visibly inspect these types of components,” advises Mary Arnold, CMCA®, AMS®, the Austin, Texas-based national director of training and community association management support at RealManage, an association management firm headquartered in Dallas, Texas, that oversees properties in Arizona, California, Colorado, Florida, Louisiana, Nevada, and Texas.

“That way, you can plan for maintenance,” says Arnold.

  1. Check your local and state regulations.

[Continue to original article]

reserve study is an important tool to do a sort of safety check within your community – it’s also the law in California (Civ. Code §5550). It is crucial to keep you on track with maintaining your community. If the reserve study is not realistic, reserves are not being funded properly or the HOA board is choosing to defer maintenance, your association can be put at great risk. Failing to plan is planning to fail.

The best solution is prevention. Safety in a homeowners association is best achieved by Board members fulfilling their responsibilities to protect, maintain and enhance the Association, obeying the laws, and staying compliant. An HOA manager and reserve specialist can help by conducting a reserve study, periodically doing walk-throughs of the Association, and looking for issues that may become safety hazards.

Are Cool Pavements All They’re Cracked Up to Be?

The unexpected consequences of reflective paving

Asphalt Concrete is the most common pavement material, but its dark color absorbs heat.

Reflective pavement can go a long way toward reducing the urban heat island effect, but the embodied energy and emissions in some materials may present unexpected drawbacks, according to new research from the DOE’s Lawrence Berkeley National Laboratory.

The research team conducted lifecycle assessments of conventional and cool pavement materials and simulations of building energy consumption to examine the environmental impact of each material’s full lifecycle. Asphalt concrete, the most common material used for pavement, is dark and has a low albedo (a measure of solar reflectance). Cement concrete is lighter, and thus has a higher albedo, but it requires a high-temperature process that is considerably more energy- and carbon-intensive than making asphalt from petroleum. Albedo affects buildings by reflecting more or less sunlight to them and by changing the outside air temperature, though a higher reflectance is generally considered a positive as less heat is absorbed.

The researchers also compared the two types of concrete to reflective coatings as well as pavement that includes industrial waste products like slag and fly ash as a way to replace some of the energy-intensive cement in concrete. The energy and emissions associated with each pavement type’s materials and construction were paired with a regional climate model and simulated building energy consumption to determine the likely impact on buildings. The team was surprised to find that in most cases, the extra energy embodied in the cool material far outweighed the energy savings from increasing the albedo.

“Over the lifecycle of the pavement, the pavement material matters substantially more than the pavement reflectance,” explains Ronnen Levinson, a researcher in Berkeley Lab’s Heat Island Group. “I was surprised to find that over 50 years, maintaining a reflective coating would require over six times as much energy as a slurry seal. The slurry seal is only rock and asphalt, which requires little energy to produce, while the reflective coating contains energy-intensive polymer.”

Solar powered air conditioning is finally here, and it’s totally boring

by Lloyd Alter 

ecoworld

Video screen capture EcoWorld

Instead of fancy new technology, it’s all about combining improved efficiency with low cost solar panels.

For over a decade we have been writing about how solar powered air conditioning was the holy grail. AC is a huge energy suck and is needed most when and where the sun shines brightest. We have looked at absorption technologies and all kinds of fancy solutions and alternatives to traditional AC units.

But it turns out that solar powered AC is not some new technology, but simply a result of grinding out improvements in existing heat pump split units, combined with the continuing drop in the price of conventional solar panels, with a dollop of building energy efficiency improvements that reduce solar gain and resultant cooling loads.

That’s how we get to the EcoWorld Solar Hybrid Air Conditioner. Australia’s Renew Magazine calls it much more sensible than all the complicated solar powered absorption designs:

It simply uses a dedicated 1kW solar PV array to drive the air conditioner, greatly reducing the energy required from the grid. In full sun, the unit can draw as little as 30 watts from the grid while producing its rated 3.5 kW cooling/ 3.8 kW heating capacity.

EcoWorld claims that you can “stay cool or warm without the huge energy bills. Use it more often without regrets.”

passive vs grandmaPassive house or Grandma’s house?/Public Domain

What is so cool about this (sorry) is how it is not a revolution but an evolution. For years we went on about designing our homes so that we could live without air conditioning like Grandma did, which is hard when Grandma didn’t have a choice, and when we live in a warmer, more crowded world.

Now we know that a combination of solar panels, better mini splits and radical building efficiency can keep us comfy all year round.

Tags: Air Conditioning | Australia | Solar Power