November 21, 2015

Luxury Apartments … Going Up In The Hood

A weekend topic on rents, affordability and the housing bubble. WWLTV in Louisiana. “Uptown remains one of the most expensive places to live in New Orleans. Realtor Greg Jeanfreau said the current growth and demand for housing in New Orleans is unprecedented. It has its plus and minuses. ‘You have people moving here from other parts of the country. To them, $500,000 is like $50,000 to us, and it doesn’t seem like that much. It’s a pretty wild time. There’s a lot of excitement, but there’s a lot of things happening and there’s people that aren’t happy about it.’”

“According to a report by HousingNOLA, rent in New Orleans have jumped 50 percent from 2000 to 2013. Home values have soared 54 percent in that same time frame. Harold Brooks said he’s feeling that pressure. For almost 20 years, Brooks has lived at a house on St. Claude Avenue near Poland Avenue in the Upper 9th Ward. It’s an area that Brooks says is increasingly gentrifying, driving up the costs of homes and rent around him. ‘You’re going to do one of two things: If you own a house, you’re going to sell it, if you’re renting, well, you’re just going to move.’ Brooks said.”

The Star Tribune in Minnesota. “Ralph Gilbertsen, 74, lives on about $900 a month from Social Security and pays around $250 for his one-bedroom apartment. The balance of his $750 rent is covered by Section 8, a federal government program that provides housing subsidies to low-income people. But Gilbertsen, along with hundreds of other residents, will have to find a new home. The Crossroads has been sold to a developer who’s spending millions of dollars to bring it upmarket.”

“It’s a scenario being played out across the Twin Cities, housing advocates say. With apartment vacancy rates in the metro area hovering around 2 percent, landlords have the market clout to raise rents and refuse vouchers, both steps that tend to force out low-income residents. ‘Crossroads is a huge example of this happening, and I think we’re going to continue to see it across the metro area,’ said Eric Hauge, an organizer with Home Line, a nonprofit tenant advocacy group. ‘It’s not illegal to discriminate against poor people.’”

The Yale Daily News on Connecticut. “I hadn’t come to the New Haven mayoral debate expecting fireworks. Everyone knew incumbent Mayor Toni Harp was going to win re-election in a landslide. But the forum had a tense moment when her opponent Ron Smith, former city clerk and Newhallville alder, criticized the new wave of ‘luxury apartments … going up in the hood.’ He cited Winchester Lofts in Newhallville as one example, whose units are unaffordable to many residents of the Elm City. ‘You know good and well,’ he said, his voice rising, ‘we can’t afford $1,900 a month.’”

The News Press in Florida. “The good news from a Zillow market report Friday was more apartments are opening across the county, slowing the rate of rising rents. The operative word is slowing. Rents continue to rise much faster than the historical norm, and faster than incomes, the Zillow October Real Estate Market Report says. ‘The owners I deal with, who read the national reports of rising rental trends, push me to raise their rents even higher. What they don’t realize is we’ve already increased them by a couple hundred dollars,’ says Larry Simons of Home Hunters USA, a leader in the local apartment market.”

Vegas Inc. in Nevada. “Las Vegas’ rental market has heated up in recent years, with investors buying cheap homes in bulk to lease out and landlords buying and building apartment complexes. The growth in rental prices, however, is far from robust, a new report shows. The median home-rental price in Southern Nevada was $1,214 a month in October, up 2.6 percent from a year earlier, according to Zillow.”

“Investors flooded Las Vegas and other hard-hit cities after the housing bubble burst to scoop up cheap rental homes. The buying binge pushed up local home values at one of the fastest rates nationally, raising fears of another bubble. Apartment investors also flocked to Southern Nevada to buy and build properties. In Southern Nevada, by comparison, investors are paying an average of $80,401 per unit for rental complexes this year, according to brokerage firm Colliers International.”

“Most of the construction today is in the southwest valley and Henderson, and some real estate pros have said developers might be overbuilding.”

Nevada Public Radio. “Keith Lynam, president of the Greater Las Vegas Association of Realtors, told KNPR’s State of Nevada that stability has returned to the Valley’s housing market. He said home appreciation is getting closer to where it should be and there are no ‘hot pockets’ of neighborhoods that are outpacing the rest of the valley. ‘It’s a great time to buy and a great time to sell,’ Lynam said.”

“However, Lynam said there are still 40,000 vacant homes in Southern Nevada that need to be dealt with. ‘We’ve got a tremendous amount of vacant homes out there that we need to address,’ Lynam said, ‘And unfortunately none of us can do anything about. It’s those people in the financial institutions that need to take an action on that.’”

The Union Tribune in California. “A new report from the federally backed National Resource Network published a long list of economically challenged cities, with a focus on California. The report spotlights our state because of its size and urbanization – and its high concentration of distressed places. The ‘Hidden In Plain Sight’ report lists 77 distressed California cities – defined as those with at least one of the following: unemployment rates above 9 percent as of 2013, where 20 percent or more adults are in poverty or where the population had declined by at least 5 percent over the last decade.”

“The report echoes data from the U.S. Census Bureau. Using the bureau’s newer supplemental poverty measure, California’s poverty rate over 2011 to 2013 was 23.4 percent, representing about 9 million people. This is the highest poverty rate of any state ‘largely due to California’s high housing costs relative to the rest of the country.’ The data is a bit old, but there’s little question that distress levels remain high in these places.”

“Urban writer Joel Kotkin, a fellow at Chapman University in Orange, fears California is becoming a ‘feudal society’ – an economic system with rich and poor and where people lack the opportunities to move into a different economic class. In his view, the state’s tax and regulatory policies are driving good blue-collar jobs to other states, while California’s land-use policies drive up the cost of housing, making it harder than ever to climb those economic rungs.”

The Kingman Daily Miner in Arizona. “David Sexton recently moved to Golden Valley from ‘Commie-fornia’ to escape government overreach, and that’s what he sees in a Mohave County zoning ordinance that would restrict the sale and relocation of manufactured homes older than seven years. ‘They’ve regulated themselves into Third-World status,’ Sexton said of California’s failing economy. ‘Old mobile homes have a following like old cars. People love them for what they are, and unfortunately, they’re both being regulated into oblivion.’”

“Sexton was among more than a dozen people who spoke Monday at the Board of Supervisors regular meeting in opposition to the ordinance that was scheduled to take effect Dec. 2. Supervisor Jean Bishop, whose district covers Golden Valley, Dolan Springs and Chloride, made a motion to postpone enforcement of the ordinance and send it back to the Planning and Zoning Commission for reconsideration or repeal. The board voted 5-0 to approve her motion.”

“The purpose of the ordinance, which was recently adopted by the board, is to make sure manufactured homes meet federal construction standards and that they’re consistent with surrounding development. Bullhead City enacted a similar ordinance a few years ago to clean up blighted neighborhoods. ‘We already have a tool called code enforcement,’ Elise Herron told the board.”

“Golden Valley resident Carmen Johnson asked for a complete repeal of the ordinance, saying it creates a hardship for low-income families wanting to move to the valley and for anyone who wants to buy a mobile home over seven years old. ‘Effectively, this eliminates growth and the creation of jobs and business,’ Johnson said. ‘It’s condemnation,’ added Margaret Wene. ‘You destroyed the values of our property, but you want to put a value on it and tax us. You’re going to destroy the valley and all the other areas.’”

“Supervisor Hildy Angius agreed with citizens’ comments about code enforcement issues and overregulation. ‘I think this is a really misguided ordinance and if it was up to me, I’d take it off now and don’t even waste any more time,’ she said.”

Bits Bucket for November 21, 2015

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