Time to check in on the hypothesis that the fundamentals point to a rental/condo boom in urban housing.
Here’s rental vacancy rates:
Bill McBride comments:
A record low number of multi-family units will be completed this year (2011). Only 8,700 apartments came on the market in Q1 (in the Reis survey area). This is the second lowest quarter since Reis has been tracking completions – the lowest was 6,000 last quarter…
Multi-family starts are increasing, and that will help both GDP and employment growth this year. These new starts will not be completed until 2012 or 2013, so vacancy rates will probably decline all year.
Here’s multi-family starts and completions:
We would expect declining vacancies to continue putting upward pressure on rents, creating demand for new multi-family construction and downtown office capacity. And we are already starting to see this happen in some metros. The LV cities can preempt the squeeze on renters by zoning for greater density in and around their central business districts.
Bethlehem in particular is guilty of maintaining current density in its new zoning ordinance proposal, when increasing net density would make housing more affordable and increase the number of property owners and jobs (aka taxpayers).
Obviously a few loud people are going to have crazy things to say when you approve density-increasing development near where they live, but planners and zoners need to ignore these people and focus on getting the macro-level housing policy right.