approved just 10 multifamily buildings with a combined total of 279 apartments units this past July . Manhattan saw zero new units approved that month .
In its article , “ Why It ’ s So Hard to Find an Affordable Apartment in New York ” the New York Times bemoaned “ an invisible web of constraints ,” that prevented the production of housing and cited burdensome regulations as one of the main contributors .
In St . Paul , Minnesota , voters approved a sweeping rent control law in November 2021 to alleviate housing unaffordability . That change made it nearly impossible for builders to raise capital for the new housing units the city so desperately needed .
In the five months following the passage of the St . Paul ’ s rent control ordinance , new multifamily permits plummeted 82 % while in neighboring Minneapolis new multifamily permits increased by 68 %.
Addressing housing unaffordability is too important and too urgent to get wrong . By fostering a stable and predictable environment , we can encourage the flow of capital into the construction of new apartment buildings and the preservation of existing properties . This will lead to a greater supply of housing units , which in turn will help stabilize rents and make housing more affordable for everyone .
Like the phenomenon of atmospheric rivers , real estate capital markets are part of a complex , globally connected system . By understanding the interplay between capital , uncertainty , and regulation , policymakers can develop strategies that promote sustainable housing affordability without hindering the development of vital new housing units .
Teo Nicolais , MSRED , CCIM , CPM , CAPS , is an instructor of real estate finance and investment and real estate development at Havard Extension School and owner of the real estate investment firm Nicolais , LLC .
Is Homelessness a Housing Problem ?
This is a big question ! We think it needs to start with perception . Homelessness needs to be understood as a problem driven by a lack of access to housing . It is a market failure . People are forced out of stable housing or are unable to access it when housing markets don ’ t provide sufficient and affordable options .
A natural follow-up question is , why is housing scarce in some locations and more abundant in others ? The two core forces of economics — demand and supply — can help us understand differences by location . Generally speaking , the demand for housing is driven by population and income growth . All else equal , a growing population and higher wages will increase the demand for housing .
Without any change in supply , this increase in demand will lead to higher prices .
But we know that many metropolitan areas accommodate rapid population growth by building much more housing . In doing so , these cities ’ rents remain more moderate and their vacancy rates remain higher . In Seattle , we ’ ve had rapid population growth and only modest increases in the housing stock , which translates to a housing deficit and the associated higher prices that basic economic theory would predict .
If we assume that strong population and employment growth will continue in our region over the next few decades ( an assumption supported by estimates from the Puget Sound Regional Council ), how will we create the necessary housing to accommodate this growth ?
-Exerpt from Homelessness is a Housing Problem " by Gregg Colburn and Clayton Page Aldern . Previously published by the Sighline Instutute .
Gregg Colburn will be speaking on this topic at the AAMD Economic Conference on January 18 , 2024 at Empower Field at Mile High . See page 7 for more information . www . aamdhq . org JANUARY 2024 TRENDS | 21