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The Big Lie Is That We Have Not Built Enough Apartments And New Homes

A report from Realtor.com. “The building boom in housing complexes across the country is extending to universities. Today’s college students are living the good life with amenities such as rooftop pools, private theaters, gaming rooms, and even fully wired outdoor terraces with grilling stations and cabanas.”

“‘More than anything else, the amenities race has just come from competition,’ says Dan Oltersdorf, chief learning officer at Campus Advantage, which manages about 70 student housing communities around the country. ‘With the amount of investment that’s gone into student housing over the last 10 years, off-campus developments are trying to outdo each other, so we’re seeing lazy river pools, golf simulators, climbing walls.'”

The Winston-Salem Journal in North Carolina. “Apartment complexes have become a hot commodity in Forsyth County. ‘The sudden interest in speculative apartment development is really a risk-capital response to millennial demographic and psychographic trends in the last decade,’ said Tony Plath, retired finance professor at UNC Charlotte.”

“There have been six apartment-complex purchases in Forsyth over the past three months, all by out-of-region and out-of-state buyers. ‘Investors are trying to find what few pockets of value there are left in the apartment market,’ said Mark Vitner, a senior economist for Wells Fargo Securities.”

The Idaho Statesman. “Build houses here — apartments even, says Nampa’s City Council. But no more self-storage units. Some industry leaders say Boise’s market has become oversaturated with self-storage units. They warn that if cities don’t take action, they could face an abundance of vacant and deteriorating storage buildings.”

“Nampa in particular has unwittingly become a hub for these glorified closets: In the last two years, 18 new storage unit businesses have applied for development permits. Nampa’s planning and zoning staff receives an average of one inquiry every day from developers interested in building storage.”

“After local businesses and city planners raised the issue, the City Council voted Monday to enact an emergency moratorium, preventing the city from issuing any new permits for storage units for the next six months. State law allows cities to enact emergency moratoriums in the face of an ‘imminent peril to the public health, safety, or welfare.'”

“Protection is what small-business owners Rosemary and Richard Nelson want from the city. Two years ago, the couple moved to Nampa from Southern California and bought an existing self-storage business, Karcher Storage, near the intersection of Karcher and Middleton roads. They spent $60,000 to renovate the 153 units, built over 30 years ago.”

“Within a year, another self-storage business went up less than a mile away. Then in May, the couple learned that a new apartment complex directly next door was also making plans for a self-storage business. Already, the Nelsons’ prices were the lowest in the area. Rosemary Nelson said they can’t afford to reduce them further, even as they’ve seen their vacancy rate increase by 10% over the last year.”

“‘Eventually there are going to be more and more storage facilities and it’s going to kill the whole industry,’ Rosemary said in an interview.”

The Los Angeles Times in California. “Blueground, a company first launched in Greece and backed by $28 million in venture capital, has around 115 corporate-stay units in the Los Angeles area and is adding ‘like 20 every month,’ said Christopher Tin, the company’s local general manager.”

“Blueground said it waits for tenants to move out on their own before converting units and won’t work with landlords who buy out tenants. Tin said as the rental market softened landlords have increasingly turned toward the start-up to fill vacancies. It isn’t harming affordability, he contends, in part because it isn’t immune to market conditions. In some neighborhoods where supply has swelled, Tin said Blueground has been forced to rent units below the price it paid the landlord.”

“Richard Green, director of the USC Lusk Center for Real Estate, said an increase in such concepts could indeed push prices up slightly in neighborhoods where lots of those companies operate. In theory, he said, there would be less housing for long-term tenants. And as vacancies dwindle, landlords would feel less pressure to drop rent to fill units.”

From City Watch in California. “Under Garcetti, whose first term began in 2001, Los Angeles traffic has gone from very bad to the worst in the nation to the worst in the world. We spent over $1 billion to widen the 405 Freeway from the Valley to the Westside, but the congestion on that portion of the 405 is worse. Of course, it’s worse. Whose fault is that? The liars who told the public that if they greatly increase density in the Basin, fewer people would commute from the Valley to the Westside? Blaming the liars like Pravda West (LA Times) and Garcetti’s minions of deception is like blaming the home invasion robbers after you’ve opened your front door, made tea and cookies for them and insisted that they clean your bank account.”

“The USC’s Price School of Public Policy has been advising for over a decade that Los Angeles’ growth is slowing. The data shows no upward pressure on housing prices by any increase in the home buying market. Not only is NewGeography correct that the city constantly lies about the four million population ceiling being busted, but our tiny increase in population contributes zero to housing demand.”

“The Big Lie is that we have not built enough apartments and new homes. (Housing prices and rents are increasing due to a variety of criminal frauds which are speared-headed by a City Hall that is protected by morally bankrupt judges.) We the People are the ones who are so foolish as to not ask why we had a 16% increase in homelessness in one year when the population increased only 21/100th of 1%. Don’t look to ‘Pravda West’ for the answer.”

“Garcetti’s Manhattanization Mania has been designed to funnel hundreds of billions to the 1% by targeting rent-controlled units for destruction. That is why people are suffering and dying on the streets and why Pravda West continues with its obnoxious lie that the solution is to give more money to the City Hall criminals.”

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This Post Has 47 Comments

  1. ‘The USC’s Price School of Public Policy has been advising for over a decade that Los Angeles’ growth is slowing. The data shows no upward pressure on housing prices by any increase in the home buying market. Not only is NewGeography correct that the city constantly lies about the four million population ceiling being busted, but our tiny increase in population contributes zero to housing demand’

    This City Watch website has been pointing out the 14% vacancy rate downtown for years.

    1. We the People are the ones who are so foolish as to not ask why we had a 16% increase in homelessness in one year when the population increased only 21/100th of 1%. Don’t look to “Pravda West” for the answer.

      Bingo. Everyone who has cast a “D” vote in California in the last 40 years needs to be branded on the forehead with a red-hot iron, then horse-whipped to within an inch of their lives and turned around if they try to flee the dystopian mess they’ve created and spread their pestilence to the red states. California voters have only themselves to blame for their terminal downward spiral into corrupt, trashy, disease-ridden Third World cesspool.

      1. Don’t look to “Pravda West” for the answer.

        And yesterday’s photo of the donald’s cheshire cat grin like he downed bibi’s tadpoles without spilling?

  3. ‘‘More than anything else, the amenities race has just come from competition,’ says Dan Oltersdorf, chief learning officer at Campus Advantage, which manages about 70 student housing communities around the country. ‘With the amount of investment that’s gone into student housing over the last 10 years, off-campus developments are trying to outdo each other, so we’re seeing lazy river pools, golf simulators, climbing walls’

    And bocce ball! The article singles out a College Station complex, a town that is seeing brand new student complexes go into foreclosure.

    1. Repost from the previous thread:

      “Another great reason to keep renting? You love where you live.

      If you have a great house or apartment with a reliable landlord and below-market rent, follow the adage: “If it ain’t broke, don’t fix it.”

      https://www.marketwatch.com/story/thinking-of-buying-a-home-here-are-5-reasons-to-keep-renting-2019-06-11

      I live in a building built 50 years ago with minimal amenities. I don’t want amenities. I don’t need amenities.

      REALTOR, I have so much money left after “throwing money away on rent” every month that I don’t know where to throw it.

      1. Preach on! I live in a 37 year old Class B complex. The rent did not increase for my last renewal – huzzah!

    2. “‘More than anything else, the amenities race has just come from competition,’ says Dan Oltersdorf….

      No, Dan. Such speculative bets on “luxury student housing” – words you should never see in the same sentence – come solely from trillions in Yellen Bux sloshing around the financial system searching for yield. Middle class parents in our oligarch-pillaged economy can’t even afford to send their precious snowflakes to college, let alone pay for “luxury” accommodations.

    3. By ‘competition’ he means Yellen Bux competing for a place to die.

      It is becoming rather sporty out there.

  4. ‘In some neighborhoods where supply has swelled, Tin said Blueground has been forced to rent units below the price it paid the landlord’

    Making it up in volume. Let me guess, you are a money losing startup? How original.

    Two words: flying cars.

  5. “‘Eventually there are going to be more and more storage facilities and it’s going to kill the whole industry,’ Rosemary said in an interview.”

    I wonder if it works the same way with luxury apartments… If too much supply lands on the market, it could lower prices enough to kill the whole industry.

    I know in the Wasatch Front I’m seeing way more “For Sale” signs, rentals are offering more and more freebies to induce people to sign a lease, and my landlord only increased my rent by $15 a month for next year…

    1. Lots more supply coming onto the market for sure. But also lots more demand from people. It will be interesting to see if supply overshoots demand. Utah is fastest growing state in US by population.

      1. Utah is not the fastest growing population in the USA in absolute terms. Places like Texas adding way more people.

        Yeah, if you go by %, places like Idaho and Utah rank higher but that is because the population is so tiny. But even then that % growth is way down compared to the previous decades.

        1. When you talk about growth it almost always makes sense to think in terms of percentage. But you are right: Utah was 1st in population growth since 2010 (behind D.C.) by percentage, but only 12th in total population growth by numbers (right ahead of Oregon, Massachusetts, and Nevada).

          If you just go by sheer numbers (not %) then it is 1) Texas 2) Florida and 3) California.

          Here is Census data:

          https://www.census.gov/library/visualizations/interactive/population-increase-2018.html

          1. @OneAgainstMany:

            I know this is anecdotal, but I wasn’t born in Utah. I moved here for work. That means I can just as easily pick up and leave in the future. Neither me nor my spouse particularly like it here…

            I’ve worked with colleagues in a similar situation — they weren’t born here, don’t have family here, and don’t want to be here for the long-term.

            I am curious if Utah can prevent losing residents and businesses as cost of living increases, taxes increase, pollution and congestion increase, etc.

            Past success does not guarantee future results.

          2. I am curious if Utah can prevent losing residents and businesses as cost of living increases, taxes increase, pollution and congestion increase, etc.

            Regarding the carpetbaggers that just came to make money, do they care? If they start losing Romneys and Bensons and Kimballs etc. then they might get concerned.

          3. I am curious if Utah can prevent losing residents and businesses as cost of living increases, taxes increase, pollution and congestion increase, etc.

            This is a question I have too. All signs point to green for Utah because it’s a Keynesian beauty contest and California looks worse still.

            The pollution is why we don’t live in the Salt Lake valley (we are So Utah, but as I’ve said before we pass a lot of time in the Salt Lake County and Utah County because of family).

            I also think there will be a self-reinforcing nature of the dominant religion in the area which tends to have an above-average population growth rate. There are only a handful of states that are growing as rapidly and they are either Mormon or Evangelical Christian, or have tons of immigrants south of the border coming here.

          4. If they start losing Romneys and Bensons and Kimballs etc. then they might get concerned.

            Don’t forget the Eccles, Sorensens, Millers, and Hunstmans.

    2. That’s exactly what’s happened and it’s spreading out looking for yield. This shows how QE and artificially low rates (and returns) create deflation:

      ‘More than anything else, the amenities race has just come from competition…With the amount of investment that’s gone into student housing over the last 10 years’

      ‘‘The sudden interest in speculative apartment development’…’There have been six apartment-complex purchases in Forsyth over the past three months, all by out-of-region and out-of-state buyers. ‘Investors are trying to find what few pockets of value there are left in the apartment market’

      Markets that yielded 8% return 5%, then 4%. Then they convince themselves to live on appreciation only (maybe even cash flow negative if they were honest about it). The merchant builders (the speculative development mentioned here) are flippers really, so they don’t care about returns, long term health of the market nor balance.

      ‘Nampa’s planning and zoning staff receives an average of one inquiry every day from developers interested in building storage’

      It’s the same principles as apartments. Debt financed yield chasing, speculation, flipping.

      ‘Within a year, another self-storage business went up less than a mile away. Then in May, the couple learned that a new apartment complex directly next door was also making plans for a self-storage business. Already, the Nelsons’ prices were the lowest in the area. Rosemary Nelson said they can’t afford to reduce them further, even as they’ve seen their vacancy rate increase by 10% over the last year’

      ‘Eventually there are going to be more and more storage facilities and it’s going to kill the whole industry’

      Voila! Overcapacity, lower profits for everyone, defaults, forced sales drive prices lower still. Deflation.

      1. Rosemary Nelson said they can’t afford to reduce them further

        Apparently Rosemary is a debt donkey. The debt was supposed to provide her with an income.

  6. “Within a year, another self-storage business went up less than a mile away. Then in May, the couple learned that a new apartment complex directly next door was also making plans for a self-storage business. Already, the Nelsons’ prices were the lowest in the area. Rosemary Nelson said they can’t afford to reduce them further, even as they’ve seen their vacancy rate increase by 10% over the last year.”

    Tears in my eyes….poor CA locusts

      1. This calls for an obligatory, “Learn to code!”

        Nice. But I wonder what we’re going to replace that with when tech crashes? “Learn to farm”?

          1. It’s gonna take more than 2 hours of pushing brooms this time. Airbnb ain’t gonna give that room away.

  7. Are Big Houses Making Americans Unhappy? – The Atlantic
    https://www.theatlantic.com/family/archive/2019/06/big-houses-american-happy/591433/

    (snip)

    “This finding, Bellet reasons, has to do with how people compare their houses with others in their neighborhood—particularly the biggest ones. In his paper, which is currently under peer review, he looks closely at the construction of homes that are larger than at least 90 percent of the other houses in the neighborhood. By his calculation, if homes in the 90th percentile were 10 percent bigger, the neighbors would be less pleased with their own homes unless those homes grew 10 percent as well. Moreover, the homeowners most sensitive to such shifts are the ones whose houses are in the second-biggest tier, not the ones whose houses are median-sized.”

    1. Moreover, the homeowners most sensitive to such shifts are the ones whose houses are in the second-biggest tier, not the ones whose houses are median-sized.

      Interesting. It’s the ones who can squint and pretend they really are keeping up with the Jones that are the biggest problem.

    2. “Are Big Houses Making Americans Unhappy?”

      Big mortgages are… Along with taxes, insurance and housing depreciation at $4/sqft per year…. year after painful, wallet-emptying year.

    3. I really have to take issue with Bellet’s paper. It doesn’t read to me as though he actually bothered to ask any of the homeowners that have unwittingly participated in this research the questions that he purports to be answering on their behalf. To me, he’s just sort of surmising why he thinks that they are behaving the way that they are. I guess I could be wrong, whatever.

      If this is all true, then why is demand for housing strongest at the lowest segments of pricing, and there is oversupply in the luxury market?

      Bellet needs to take into account why builders are so focused on creating supply where there is little or no demand. They’re putting up an awful lot of properties that no one is going deeper into debt to buy.

      I just don’t think that he is looking at all of the contributing factors in focusing purely on the emotions of the FBs.

      1. Bellet needs to take into account why builders are so focused on creating supply where there is little or no demand.

        I would say because the tax policy, easy lending (3.5% down), loose monetary policy, realator commissions, local property taxes all benefit by selling the bigger, more expensive houses.
        The structure is designed to create unaffordability.

        Then once you are a homeowner loanowner you are on the inside of the cartel and you’ve gotta protect your heirloom tomato plants from 4-plexes or 4 story condos. So add NIMBYism to the mix, keep-up-with-the-Jones, societal norms of that have conflated the American Dream to home ownership, and lots of crazy zoning regs/fees (including lot size and minimum house size on lots), single-family only zoning, etc. and you’ve got a ton of forces that push housing more unaffordable.

    4. Just saw that article linked on drudge.

      Like Chino, I think he didn’t do his research and just wanted to focus on the ‘keeping up with (and exceeding) the Jonses down the street’ theory.

      Yet, I think there is serious truth in the basic premise. Once our needs are met by our home, anything more becomes a case of ‘stuff owning us and not the other way around’.

      I had the biggest house on the street back in Texas. 4500 sq ft, 14 rooms, 3 fireplaces, 1500 sq ft of deck (2 levels, connecting spiral staircase), 3 card 2 motorcycle garage, 40,000 gallon pool, 24 trees in the yard, 5 separate HVAC systems, etc, etc ad nauseum.. .

      And all we did was fill that sucker up with stuff I never spent much time with. And when I did have time, I was always cleaning or doing some sort of maintenance (169 light bulbs I counted, this was before LED and just as CFLs were being mass marketed – literally a burnt out bulb to replace every single weekend).

      In short – I originally thought it was a good thing I has such a big and fancy house. I quickly learned otherwise. I came to hate it in short order. I now live in a just over half the size of that house, and we’d be fine if it was a few hundred square feet smaller. We work to keep it simple and uncluttered. I can look down over the deck and see the roof of a house that has probably 20+ rooms – it’s 3 stories, has an elevator and nearly 7000 sq ft – and I wonder… are there rooms that the owner of the house has not set foot in for more than a month. I’ll bet there are…

  10. Wow what a collection of articles powerfully summarizing the fraud that causes housing crises now

  12. It will be interesting to see the model S refresh. My father is going to upgrade his model S I think. The new S is supposed to have over 400 miles of range. Truck is supposed to be unveiled this summer. Rumor has it that it is really far out there from a design point-of-view.

    1. Truck is supposed to be unveiled this summer. Rumor has it that it is really far out there from a design point-of-view.

      IMO that’s the wrong direction. Truck buyers are very conservative. They will be all ears if it can do cool stuff like power tools and compressors all day and rock crawl at 0.1mph and out accelerate 911 turbos. But they will want it to look like a tough traditional truck, I think. The closest they should get to far-out is by making it look a bit like a miniature Tesla semi.

      1. it can do cool stuff

        I do love some expensive decked out toys myself. Just don’t claim you are virtuous, frugal and a conservationist while wasting a bundle.

      2. Here is one artist’s rendering:

        https://www.google.com/imgres?imgurl=https%3A%2F%2Fstatic.interestingengineering.com%2Fimg%2Fiea%2FJYG05Y9J61%2Fsizes%2Ftruck_resize_md.jpg&imgrefurl=https%3A%2F%2Finterestingengineering.com%2Ftesla-pickup-truck-will-cost-less-than-50k&docid=5GfrNQHC2uzVfM&tbnid=CrOUn0P1DOTQPM%3A&vet=10ahUKEwjR7OrX–LiAhVQd6wKHUlHARIQMwhzKAIwAg..i&w=744&h=389&bih=625&biw=1366&q=tesla%20truck&ved=0ahUKEwjR7OrX–LiAhVQd6wKHUlHARIQMwhzKAIwAg&iact=mrc&uact=8

        Another:

        https://www.google.com/imgres?imgurl=https%3A%2F%2Fcdn.motor1.com%2Fimages%2Fmgl%2FRALk9%2Fs3%2Ftruck.jpg&imgrefurl=https%3A%2F%2Finsideevs.com%2Fnews%2F352610%2Ftesla-pickup-truck-price-musk%2F&docid=37Sp0huJOy1XwM&tbnid=OsaoIO-neAIEQM%3A&vet=10ahUKEwjR7OrX–LiAhVQd6wKHUlHARIQMwh0KAMwAw..i&w=1280&h=720&bih=625&biw=1366&q=tesla%20truck&ved=0ahUKEwjR7OrX–LiAhVQd6wKHUlHARIQMwh0KAMwAw&iact=mrc&uact=8

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