Is the apartment market going bananas? Here are four stories to give you a better understanding of critical apartment market trends in the Puget Sound region
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
The first banana story is about development
micros & SEDUs = lower rent & incr affordability
Micro production is winding down, unfortunately.
But SEDU production is increasing.
But limited mkt, so most new u = traditional apts.
Bottom line:
Traditional mkt rate apartments, SEDUs, and micros
don’t provide all the affordability the City needs
do provide important & substantial base.
In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients
So too – city needs other resources - To balance our community’s affordability needs & goals
**** DO NOT GO TO NEXT SLIDE ****
We break out Seattle into 14 neighborhoods.
All will see new apartments between 2012 and 2020.
Most = at least 2,000u
4 = over 4,000 units.
(CH/Elke, Glke/Wall, QA, Bell/Dntn/SoLkU
micros & SEDUs = lower rent & incr affordability
Micro production is winding down, unfortunately.
But SEDU production is increasing.
But limited mkt, so most new u = traditional apts.
Bottom line:
Traditional mkt rate apartments, SEDUs, and micros
don’t provide all the affordability the City needs
do provide important & substantial base.
In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients
So too – city needs other resources - To balance our community’s affordability needs & goals
**** DO NOT GO TO NEXT SLIDE ****
We incl SEDUs in dev activity & parking ratio
But we have not been counting micro housing.
Micro housing activity is tapering off
but SEDUs are picking up momentum
And both contribute to the drop in parking ratios
I mentioned “traditional” new construction.
City has taken steps
to create new types of rental housing with smaller units.
Smaller units rent for less
which adds to affordable stock, even for new const
2nd banana story = rents
about peeling back the surface layer
To really get to the meat --- to what really matters
That’s the same for rents.
Once you peel back the surface layer of rent information,
You find out what the meatier issues really are
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
In addition to skew of the new ---- adjust for inflation
Avg King Co rent = $146 in 1969 = $1,012 in late 2015.
Actual = $1,453 --- Incl new u after 1969.
Exclude those = $1,163.
adjusted for inflation = just 15% higher than 1969
Another adjustment –
to keep this bananas-to-bananas comparison
= value added from renovation – more amenities
Changes the product --- Not quite from a Prius to a Tesla
But that’s the general idea
Hard to determine, but a factor & narrows that 15% some
micros & SEDUs = lower rent & incr affordability
Micro production is winding down, unfortunately.
But SEDU production is increasing.
But limited mkt, so most new u = traditional apts.
Bottom line:
Traditional mkt rate apartments, SEDUs, and micros
don’t provide all the affordability the City needs
do provide important & substantial base.
In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients
So too – city needs other resources - To balance our community’s affordability needs & goals
**** DO NOT GO TO NEXT SLIDE ****
micros & SEDUs = lower rent & incr affordability
Micro production is winding down, unfortunately.
But SEDU production is increasing.
But limited mkt, so most new u = traditional apts.
Bottom line:
Traditional mkt rate apartments, SEDUs, and micros
don’t provide all the affordability the City needs
do provide important & substantial base.
In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients
So too – city needs other resources - To balance our community’s affordability needs & goals
**** DO NOT GO TO NEXT SLIDE ****
micros & SEDUs = lower rent & incr affordability
Micro production is winding down, unfortunately.
But SEDU production is increasing.
But limited mkt, so most new u = traditional apts.
Bottom line:
Traditional mkt rate apartments, SEDUs, and micros
don’t provide all the affordability the City needs
do provide important & substantial base.
In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients
So too – city needs other resources - To balance our community’s affordability needs & goals
**** DO NOT GO TO NEXT SLIDE ****
micros & SEDUs = lower rent & incr affordability
Micro production is winding down, unfortunately.
But SEDU production is increasing.
But limited mkt, so most new u = traditional apts.
Bottom line:
Traditional mkt rate apartments, SEDUs, and micros
don’t provide all the affordability the City needs
do provide important & substantial base.
In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients
So too – city needs other resources - To balance our community’s affordability needs & goals
**** DO NOT GO TO NEXT SLIDE ****
micros & SEDUs = lower rent & incr affordability
Micro production is winding down, unfortunately.
But SEDU production is increasing.
But limited mkt, so most new u = traditional apts.
Bottom line:
Traditional mkt rate apartments, SEDUs, and micros
don’t provide all the affordability the City needs
do provide important & substantial base.
In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients
So too – city needs other resources - To balance our community’s affordability needs & goals
**** DO NOT GO TO NEXT SLIDE ****
micros & SEDUs = lower rent & incr affordability
Micro production is winding down, unfortunately.
But SEDU production is increasing.
But limited mkt, so most new u = traditional apts.
Bottom line:
Traditional mkt rate apartments, SEDUs, and micros
don’t provide all the affordability the City needs
do provide important & substantial base.
In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients
So too – city needs other resources - To balance our community’s affordability needs & goals
**** DO NOT GO TO NEXT SLIDE ****
Not only are land and construction costs a barrier,
Expenses are also an issue
Cost an average of $750/u/mo
to operate newer properties in Seattle last year
Add to that capital expenses and mortgage payments
of probably $1,500 to $2,000 /u/mo
Then easy to see why affordability
Is so illusive
In unsubsidized mkt rate new const
micros & SEDUs = lower rent & incr affordability
Micro production is winding down, unfortunately.
But SEDU production is increasing.
But limited mkt, so most new u = traditional apts.
Bottom line:
Traditional mkt rate apartments, SEDUs, and micros
don’t provide all the affordability the City needs
do provide important & substantial base.
In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients
So too – city needs other resources - To balance our community’s affordability needs & goals
**** DO NOT GO TO NEXT SLIDE ****
3rd banana story is about affordability.
banana = rich in potassium, vitamin C, and fiber,
but weak in vitamin A, calcium, iron and zinc.
The Sea apt mkt also has strengths and weaknesses
When it comes to private, mkt rate, unsubsidized ppties
micros & SEDUs = lower rent & incr affordability
Micro production is winding down, unfortunately.
But SEDU production is increasing.
But limited mkt, so most new u = traditional apts.
Bottom line:
Traditional mkt rate apartments, SEDUs, and micros
don’t provide all the affordability the City needs
do provide important & substantial base.
In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients
So too – city needs other resources - To balance our community’s affordability needs & goals
**** DO NOT GO TO NEXT SLIDE ****
micros & SEDUs = lower rent & incr affordability
Micro production is winding down, unfortunately.
But SEDU production is increasing.
But limited mkt, so most new u = traditional apts.
Bottom line:
Traditional mkt rate apartments, SEDUs, and micros
don’t provide all the affordability the City needs
do provide important & substantial base.
In a way – they are just like bananas - Important part of healthy diet. But just like body needs other nutrients
So too – city needs other resources - To balance our community’s affordability needs & goals
**** DO NOT GO TO NEXT SLIDE ****
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
I guess I’ve had food on my mind lately
We just published our spring newsletter
And its title was Potato
Fortunately – there have been resources
Sec 8, public hsng from SHA, MFTE, tax credits, etc.
Maybe most important has been past housing levies
Seattle voters approved a number of times
Those help non-profits –
not only fill overall affordability gap
But balance affordability for larger unit types
Balance affordability in more neighborhoods
Expand affordability well below 80% of median
**** NOW CLICK TO QUESTIONS SLIDE ****