Despite earlier year predictions to the contrary, rents of apartments across the country, along with the very-important renewal rates, remain on the rise, according to a new industry report. The overall market, says the research firm Yardi Matrix, continues to benefit in general from what is described as a "robust demand." The average rent last month nationally hit the $1,725 mark, up by just under 1% from April of 2023. At the same time, the single-family rental market was pegged at $2,154, up by a significant 1.3% since last spring. "Demand for apartments continues unabated due to high levels of household formation stemming from the strong job market, large numbers of immigrants, and ongoing migration to the South and West," says Yardi Matrix's National Multifamily Report. While absorption is not where it was in 2021, which is regarded in the industry as a historic peak year, "2024 started at a pace that would be on par with an average year and slightly ahead of 2022 and 2023 levels." Although month over month growth in all asset classes has been strong in such Eastern and Midwest cities as Boston, Detroit, and Chicago, the numbers have remained particularly consistent in the West, with Denver, Las Vegas, and Phoenix all posting growth rates nearing the 1% level. Denver has additionally seen a 63.9% rent renewal rate, followed by Phoenix at 63.7%, and Las Vegas at 65.7%. The lowest renewal rate in a Western city covered by Yardi Matrix was seen in Los Angeles, recording a 56.1% increase. Of the 27 cities seeing renewal rates at or above 60%, 15 are located in either the South or West, indicating the ongoing popularity of those two regions as population meccas. Other Western cities seeing increased rent growth compared with the spring of 2023 include Albuquerque, up by 1.9%, and San Jose, with a 1.1% increase. But the Western rent growth rates were not across the board: Colorado Springs, almost always a boom city, recorded a 2.3% decline, as did San Antonio. By Garry Boulard Image Credit: Courtesy of Unsplash
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Plans have now been announced for what could best be described as the long-range construction of a new terminal that will serve the growing Phoenix Sky Harbor International Airport. In a statement, Phoenix Mayor Kate Gallego took note of the airport’s ongoing rate of growth, saying it was the principal reason why “we’ll soon need a new terminal.” The Mayor added that, working with the Phoenix City Council, she was looking forward to the day when she could see the building of what she described as a “cutting edge terminal at the airport’s west end.” That west end is where Terminals 1 and 2 were once located before being demolished to make way for the new facility. The project will not be done overnight. Partly due to an environmental review process to be undertaken by the Federal Aviation Administration, among other matters, work on the terminal is not expected to launch until at least 2032. During a presentation before the Phoenix City Council, Sky Harbor aviation director Chad Makovsky noted the number of increased flights out of Phoenix to other countries, remarking: “What we intend to do is really look at an international facility in the new terminal.” According to plans, the terminal will be spacious enough to accommodate the kind of wide body planes used for extensive international flights and will also feature its own customs entrance. Plans for the new Sky Harbor terminal are part of a dynamic mix seeing the airport building and upgrading in a variety of different directions. Earlier this year, the FAA announced it was awarding Sky Harbor some $36 million in funding for upgrades at the airport's 30-year-old Central Utility Plant. The airport is additionally upgrading its existing Terminal 4, a process enhancing the efficiency of its baggage handling systems, elevators, escalators, and people movers. Opened in 1928 and shortly lauded by aviation hero Charles Lindbergh on a quick visit, the Sky Harbor airport is today one of the top ten busiest airports in the country. Last year it served more than 49 million passengers. By Garry Boulard Plans have been announced to build a new affordable housing complex on the northeast side of El Paso. The project belongs to the Housing Authority of the City of El Paso and will go up near the intersection of Bluff Trail Lane and S. Mesa Hills Drive. As planned, the project will see the construction of 104 residential units designed to serve individuals and families earning up to 80% of Area Median Income. Altogether, the Housing Authority, known by the acronym HOME, says seven two-story buildings are scheduled for construction on a site that was purchased by the authority in 2019 from the utility company El Paso Water. If all goes well, construction on the project could began towards the end of this year or in early 2025. A general completion date has been announced as sometime in 2026. In order for the project to begin, HOME must obtain a zoning change for the site from R-3 Residential to A-3 Apartment. The project has sparked some opposition from neighbors living near the 6.2-acre site, expressing concerns about potential traffic and noise issues. A City Plan Commission staff report compiled last month said that the project as currently proposed “is in character with the residential and apartment development in the surrounding area.” The El Paso City Council is expected to make a final determination on the project later this summer. One of the oldest public housing authorities in the southwest, the Housing Authority of El Paso was established in 1938 and today provides housing for more than 52,000 residents living in nearly one hundred communities. By Garry Boulard Trying to get a handle on the growing, if often mystifying, world of Artificial Intelligence, roughly a quarter of the nation’s state legislatures this spring have moved on bills regulating private sector AI use. According to the International Association of Privacy Professionals, a common theme has lawmakers particularly targeting algorithmic discrimination, a concept that the Brookings Institute has defined as “running the risk of replicating and even amplifying human biases, particularly those affecting protected groups.” The need for new laws, noted the Los Angeles Times earlier this year, is particularly pressing because AI is giving every appearance of getting bigger by the day. “As the technology rapidly advances,” observed the paper, “the ability of machines to perform tasks associated with human intelligence has raised questions about whether AI will replace jobs, fuel the spring of misinformation, or even lead to humanity’s extinction.” Legislation in California is calling for all AI developers to both assess and report on the impacts of their automatic decision-making programs. Lawmakers in Connecticut, meanwhile, have reviewed a proposal that would set up reporting requirements for developers who use AI information as a “controlling factor” in the making of any decision regarded as consequential. Legislation in Hawaii calls for the outright banning of algorithmic discrimination, with the Illinois State Legislature proposing to require AI developers to annually assess the impact of decision-making tools they use. According to an essay published by the International Association of Privacy Professionals, most of the legislative proposals “place the burden on AI developers and businesses using AI, often referred to as deployers, to proactively ensure that the technologies are not creating discriminatory outcomes in the consumer and employment context.” A bill in the Oklahoma legislature this spring would mandate that all AI developers must assess the impact of their decision-making tools. A Vermont proposal, at the same time, is simply requiring developers to use reasonable care to “avoid algorithmic discrimination.” Legislatures in North Dakota, Texas, and West Virginia have all created advisory bodies to monitor the AI systems their own statements governments may be implementing. By Garry Boulard Image Credit: Courtesy of Pixabay Former Denver Area Town Hall, Repurposed as a Home, Hits Market for a Record $10.9 Million5/10/2024 A solid more than 130-year-old brick structure in Denver is on the market for just under $11 million. Located at 400 Saint Paul Street in the city’s historic Cherry Creek North neighborhood, the house measures more than 13,600 square feet and includes four bedrooms and four bathrooms. Originally built in 1891 to serve as the main administration building for the Town of Harman before that entity was annexed by Denver, the structure was repurposed in 2010 as an upscale residence. The property has been most recently owned by Pat Hamill, chief executive officer of the Denver-based Oakwood Homes, who purchased it for $1.6 million in 2009. It was Hamill who undertook what has been described as a multi-million renovation of the property. In the process, according to the Denver Post, he restored the residence’s façade to its original state, while gutting the interior to “create a contemporary theme mixed in with the historical elements.” The building’s basement includes guest suites, a kitchen, movie theater, two wine cellars, and a wine tasting room. The property is being listed with Sotheby’s International Realty. The somewhat exclusive Cherry Creek North neighborhood has seen the average price of a home increase from around under $1 million in 2021 to more than $1.6 million today. By Garry Boulard Photo Credit: Sothebys Realty The City of Denver is in the process of acquiring a unique curved wooden ceiling structure that has for years served as a neighborhood gymnasium. The City wishes to repurpose it as migrant housing. Located at 375 S. Zuni Street, about 5 miles to the south of downtown Denver, the structure was built in 1966 and measures around 10,100 square feet. Earlier listed for sale and advertised as a "sports and entertainment building," the structure has undergone a recent change of ownership. In late 2022 it was purchased by the Denver Community Church. At the time of that $3.7 million purchase, the church said it planned to use the structure as a house of worship. The building in the Athman Park has had a storied past, earlier serving as a practice facility for the formerly named Denver Rockets basketball team. Subsequently put on the market some months later for $4.2 million, the building has recently attracted a new would-be owner in the form of the City of Denver, which has offered to buy it for $4 million. In purchasing the structure, Denver would also be buying an adjacent half-acre site. City documents have said that the facility is needed to "help shelter newcomer families," adding that the space "is a key piece of Denver's effort to keep families safely off the streets." It is thought that the building could easily accommodate up to 120 people at any given time for sheltering purposes. By Garry Boulard National Association of Home Builders Releases Extensive 10-Point Housing Affordability Plan5/9/2024 A push to eliminate what are being called “excessive regulations” is the first listed item in a 10-point plan just released by the National Association of Home Builders to reduce housing costs. “On average, regulations account for nearly 25% of the cost of a single-family home and more than 40% of the cost of a typical apartment development,” the group argues in what is almost a call to arms. Federal efforts to increase regulations of the housing industry must be “subject to greater congressional oversight,” asserts the plan, while claiming that at the local level “policies like rent control actually worsen the nation’s housing affordability crisis by discouraging new development.” In a statement accompanying release of the plan, Carl Harris, NAHB chairman, said “any policy that seeks to improve affordability without addressing the need to increase the supply of single-family and multifamily for-sale and for-rent housing is doomed to fail.” Noting that there is currently a shortage of around 400,000 construction workers, the plan also calls for greater federal support of building and construction trades education, while encouraging at the same time a greater production of sorely needed transformers and other materials. Expanding the Low-Income Housing Tax Credit will help to finance the “production of affordable housing.” At the same time, both state and local government should redouble efforts to overturn inefficient zoning rules. Both the Clean Water Act and Endangered Species Act should be updated to provide more permitting clarity and predictability. The plan additionally calls for what it describes as “reasonable and cost-effective building codes.” The 10-point plan is rounded out with a call to reduce local impact fees and expanding such federal programs as Fannie Mae and Freddie Mac to serve as secondary markets for financing new home purchases. The final point in the plan states that a simplification of the nation’s employment policies is overdue. Looking at such factors as the status of independent contractors vs. employees, overtime pay calculations, and prevailing wages, the plan suggests that employment policies should be “simple and economical enough for all-sized businesses to comply.” By Garry Boulard With the Arizona build-to-rent market booming, a Scottsdale developer has announced plans to build such a project in the city of Casa Grande. The Modus Companies, which specializes in housing development projects, says it wants to build a 426-unit apartment community called Promenade Village. The project will go up on just under 40 acres at the intersection of Interstate 10 and Florence Boulevard and represents just one more step into the build-to-rent market for Modus, which also specializes in Net Zero construction. The Promenade Village is one of a handful of build-to-rent efforts Modus is currently undertaking. Other projects include the 272-unit Sundance Station Apartments as well as the 78-unit Buckeye Village Centre, both in the city of Buckeye. The company’s increased emphasis on the build-to-rent world comes as reports have pointed to the Grand Canyon State as the number one market for such projects in the country. According to data released in the spring of 2023 by the National Rental Home Council, more than 2,000 build-to-rent homes were either in the building or planning stage in the state. In just-released figures, the site RentCafe is reporting that metro Phoenix is in the number one position, over all other metro areas nationally, for completing build-to-rent projects. It is thought that Phoenix will see the completion of some 20,000 such units within the next several years. By comparison, remarks the site AZBigMedia, Dallas has seen the construction of just over 6,500 units, and has another 6,481 build-to-rent projects currently under construction. By Garry Boulard Image Credit: Courtesy of Pixabay A state-wide nonprofit that focuses on community and economic development is expanding its efforts to include a nationally recognized historic neighborhood in Albuquerque. Launched exactly four decades ago, the New Mexico MainStreet organization spurs building and business projects on an almost street level, obtaining funding and grants for construction and renovation projects. To date, the group has coordinated its efforts with 32 separate MainStreet Districts and another dozen defined Arts and Cultural Districts. Now the group has announced a new initiative that will take in the Historic Old Town Albuquerque neighborhood, a part of the city that dates to the 1700s and includes the more than 230-year-old San Felipe de Neri Church. In a statement, J.J. Mancini, president of the Historic Old Town Association, noting that Albuquerque itself is 318 years old, said the partnership with New Mexico MainStreet will give the neighborhood the tools to "build a culturally significant, historically preserved, and vibrant Old Town Albuquerque that New Mexico will be proud of for the next 318 years." Daniel Gutierrez, director of New Mexico MainStreet, said the statewide organization is "excited to work with the Historic Old Town Albuquerque on promotion, economic vitality, and preservation elements to enhance their community." The new partnership between New Mexico MainStreet and Historic Old Town Albuquerque will more specifically focus on use of NMMS's Urban Neighborhood Commercial Corridor Initiative which focuses on projects centered on job and business creation, as well as property investment. Among the many initiatives that the New Mexico MainStreet program has taken on through the decades, one of its most prominent has been securing funding for the upgrading and preservation of historic movie houses and theaters across the state. This year the group successfully obtained a $500,000 capital outlay award for work on the Lyceum Theater in Clovis, and another $400,000 for the Lea Theater in Lovington. By Garry Boulard Americans are feeling less certain about the economic direction of the country, registering the most pessimistic responses to conditions seen since the fall of 2023, according to a new Gallup firm survey. In its Economic Confidence Index, the survey reveals that a strong 44% of respondents currently judge economic conditions as “poor,” with the next largest group at 32% saying things are only fair. The smallest response category, at 24%, categorized conditions as either “excellent” or “good.” The overall confidence level is now at minus 29, lower than the minus 20 reading reported in March. “This is the first time in five months that confidence has not seen a marginal improvement,” notes a narrative accompanying the survey, “and the first decline in economic confidence in the past seven months.” The survey, which has been generally on the downside for more than a year now, also revealed that some 67% of respondents said they thought the country’s economic condition was getting worse, compared to only 29% who said they thought things were better. Buoyant attitudes regarding economic conditions seem like so much ancient history, according to Gallup, which last saw more than 50% saying things were good or excellent in 2019 and early 2020. At the same time, the number of people categorizing economic conditions as poor have averaged out at around 45% for most of the last two years. Although unemployment at 3.9% remains at a near-historic low, only 49% of respondents said they thought it was currently a good time to get a job, down from 57% in November and 59% exactly a year ago. The latest Gallup numbers, according to the survey narrative, comes during a time when gas prices and inflation are on the rise. “Also, during this period, the stock market gave back some of its recent record gains, and high interest rates remained a financial stumbling block.” The highest overall Economic Confidence Index reading at plus 56 was recorded in January of 2000. The lowest: the minus 72 seen in October of 2008 during the early months of the Great Recession. By Garry Boulard Image Credit: Courtesy of Unsplash |
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