Fewer Apartments Available

Posted by: Peter Coy on March 8, 2006

Scary report out today from Harvard University’s Joint Center for Housing Studies. Here’s an excerpt from the press release:

New York City, NY – The nation is losing approximately 200,000 rental housing units each year due to demolition, significantly compounding the ongoing housing affordability squeeze gripping millions of families. New research on rental housing market dynamics from Harvard University’s Joint Center for Housing Studies finds that while the Low-Income Housing Tax Credit program and other initiatives contribute over 100,000 new units of affordable rental housing each year, that is still less than the number of low-rent units disappearing. “We are taking one step forward and two steps back as gentrification in some neighborhoods and continued deterioration in others leads to the removal of vitally needed lower-cost rental housing,” notes Nicolas P. Retsinas, director of the Joint Center.

Reader Comments

NYC Girl

March 13, 2006 8:47 PM

Eeek! But the Meatpacking District et al didn't rise out of nowhere....

Marlow

March 14, 2006 9:54 AM

In Washington State, we've had a loss of apartments as more developers are converting them to condominiums. There were so many lawsuits against builders of condo's due to shoddy construction and materials failure, and the risk is less with conversions, causing a lack of affordable rentals in Seattle. The only apartments and condos being built now are huge developments, with builders taking advantage of economies of scale.

Wes

March 14, 2006 2:40 PM

Oh boy - another argument to support the housing bubble. The early 80s was a time of tremendous apartment building and many of those complexes are nearing the end of their useful life. I see no problems with tearing down 70s and 80s vintage apartments to replace with condos or new apartment developments. To me a suburban rental has a 30-year lifespan: Years 1-10 are luxury new apartments, 10-20 are regular apartments, and 20-30 are lower income apartments.

As our love affair with everything condo wears off we should see an increase in new apartment complexes once rental demand returns.

BTW, enjoyed your look at Ma Bell in the recent magazine.

Annonymous

March 18, 2006 2:14 PM

As an accountant for one of the nations largest multifamily REIT, I have witnessed, over the past 3+ years, our company experiencing traditionally low occupancy rates. I believe the conversion of apartments to condos as just a 'pendulum swing' in the other direction. Our occupancy rates during the end of 2005 and beginning of 2006 are starting to go on the upswing.
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One of the reasons for many of the condo conversions was that the supply of multifamily units was higher than the demand. The conversions are simply an economic reaction of the supply to match the demand.
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This is mearly the opinion of a lowly acountant.

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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