It’s Sick Because It’s Done By Design
A report from the Dallas Observer in Texas. "Khraish Khraish is no longer in the low-rent landlord business. Three years ago, Khraish was among several large-scale landlords targeted by the former mayor and City Council in a campaign to drive them out of business. Every single charge and accusation brought against Khraish, he and his lawyer eventually rebutted and defeated. But the damage was done."
"Is there some fundamental underlying cause or force that explains our serial failures to get anything done about affordable housing in spite of our cyclical revisiting? 'Here’s what I think is the real issue,' Khraish said. 'Everybody is paying lip service to this issue of affordable housing, but it’s not in City Hall’s best interest to have a lower rather than higher property tax base.'"
"'Even though everybody likes to say we need affordable housing, the truth is that the city does not want it. What City Hall wants is as high a median housing price as possible. The constituents who would be occupying these houses do not make political contributions and are less likely to vote than higher income constituents. So there is absolutely no political incentive whatsoever to provide affordable housing in the city of Dallas.'"
"Khraish told me something remarkable about the families to whom he has sold his former rental houses in West Dallas: 'In a couple years,' he said, 'the amount of money my homeowners are going to pay in property taxes per year is going to exceed the amount of principal and interest they must pay.'"
"'I’m telling you, it’s sick. It’s sick. And it’s sick because it’s done by design. They know that these communities in Dallas cannot afford higher property taxes, and so that’s why they raise them the most, so they can get them out. Get them out. That’s what the whole point is. How do you raise the property tax base unless you get out the existing population and build something new and shiny there? And how does that jibe with your whole supposed lip-service mantra, ‘We need affordable housing?'"
From City Lab on California. "The week before Thanksgiving, housing Twitter exploded. The focus of the debate: the significance of vacancy rates. Comedian Kamau Bell wrote, 'We've been led to believe that there’s a housing crisis in Oakland. But there are 4 VACANT units for every homeless person. This isn’t a housing crisis. It’s a crisis of greed.'"
"The contested report, 'Who’s Buying Los Angeles?' identified apartment vacancies as a more urgent issue, finding an average vacancy rate of 70 percent in 10 new apartment buildings in downtown Los Angeles. The authors noted that, despite these high vacancy rates, the apartments are not lowering their prices: 'This is what speculation looks like in practice: empty luxury towers while thousands live in desperate poverty on the streets below.'"
"Even if the new apartments in Oakland are not vacant—as in Los Angeles, there remains tremendous pent-up demand even for expensive apartments—they may as well be to the homeless and housing insecure people who live next door. In the urban core of Oakland and downtown Los Angeles, construction is rampant—Oakland has 9,300 homes under construction while downtown Los Angeles has seen 35,000 units built since 1999."
"If you’re just looking at all those cranes, it hardly looks like there’s a housing shortage. And if no one you know can afford these apartments, then for all intents and purposes, there is an over-supply."
The Moose Gazette. "Along much of the northern Front Range, renters will pay less per month if they keep renting rather than trying to buy a comparable home, according to an analysis from Meyers Research. In metro Denver, a renter who puts only 3.5% down on a median-priced home at a 4% mortgage rate will pay $511 more a month than renting a comparable property, according to Ali Wolf, who put the analysis together."
"Of the 23 metros the index tracks, 19 favor renting over buying at this stage of the real estate cycle, including Denver, which was the second least favorable market for buyers after Dallas. 'Dallas, Denver and Houston are the canaries in the coal mine. As they go, so should markets like Seattle, Pittsburgh, Kansas City, Miami, Portland and San Francisco,' Ken H. Johnson, a real estate economist at FAU and one of the creators of the index, said this summer in his report."
The Star Tribune in Minnesota. "Stunned by all the rentals popping up around the Twin Cities? Just wait until next year. Apartment developers in the Twin Cities are on track to deliver a record 6,000 new units this year and even more hitting the market in the coming year — most of them in the suburbs, according to a third-quarter report from Marquette Advisors."
"That shift to the suburbs is being driven by a glut of new units in some parts of downtown Minneapolis and a persistent shortage in many second- and third-tier suburbs. In addition to the 6,700-plus units that are expected to be built next year, developers are planning to add more than twice as many in 2021 and 2022. Two-thirds of those new units will be in the suburbs."
"'I think many have been and still do anticipate a slow down, although our market continues to be one of the strongest in the country,' said Brent Wittenberg, a Twin Cities-based vice president with Marquette. 'We are pretty well positioned as a market heading into any sort of slowdown.' Concessions, including free rent and lease bonuses, are being offered in many submarkets."
The Plainsman in Alabama. "Student housing was a recurring theme at this week’s City Council meeting, as Council members made several decisions. Mayor Ron Anders proposed that the Council ask City Manager Jim Buston and other City staff to write up a new ordinance that would put a temporary hall to the building and development of all student-housing projects to give the City time to determine how to move forward."
"'All in all, it is my opinion that we are over-subscribed for student-housing beds in our community,' Anders said. 'There is an overabundance of student beds in our market, or soon will be,' Buston said."