Housing Experts Mostly Agree on Challenges, Seek Solutions

Many agree that today’s housing top challenges – affordability and availability – are a failure by the government to invest needed funds and create a pro-housing regulatory environment, as well as household incomes not keeping pace with the cost of housing.

A group of housing experts including national real estate organizations, community groups representing diverse communities, and renter representatives convened last week to discuss these issues and the need for policy solutions.

The group, which included National Multifamily Housing Council (NMHC) President Sharon Wilson Geno, “sought common principles aimed at broadening housing opportunity that can even act as a guide for policymakers looking to implement a set of pro-housing solutions that will help increase housing opportunities across the country,” according to an NMHC release.

Exclusionary housing policies were pointed at as a major culprit, with “many rooted in racial discrimination, and bureaucratic processes severely limit housing production,” NMHC said.

“Funding for the production and preservation of housing, especially affordable housing, remains insufficient.”

Meanwhile, the apartment industry overall saw dramatically strong demand in Q3, according to a new report from Cushman & Wakefield.

Demand grew to 89,280 units, 11% higher than the prior quarter and more than six times above last year’s mark of roughly 13,000 units and exceeding that of Q2.

“This is relatively remarkable,” Cushman & Wakefield said, because historically, the multifamily leasing season peaks, along with apartment demand, during the second quarter.

Cushman’s report pointed out that the last time third-quarter demand grew faster than the second quarter was in 2012, as the multifamily market was emerging from the Great Financial Crisis.

Operators are shifting their priorities a bit, Cushman & Wakefield said. “The clear preference has been to sacrifice face rents in favor of retaining renters and shoring up occupancy—a sharp contrast from the past few years,” according to the report.

Presently, year-over-year (YOY) rent growth has decelerated from 6.7% last year to just 1.3%.

The problem for the industry today is that surging financing costs are making it tough to produce new apartment buildings. New construction starts have pulled back significantly: fewer than 57,000 units broke ground in the third quarter, down 60% YOY, representing the lowest figure since 2012.