Urbanexus Update - Issue #132

Marcus & Millichap offers a graphic summary of what is going on with inflation in the U.S. economy.

Ali Wolf, chief economist at Zonda, talks with Bloomberg’s Joe Weisenthal and Romaine Bostick on “What’d You Miss?” about the U.S. housing market. Sales of new U.S. homes dropped unexpectedly in June to the lowest since April 2020, showing a further weakening in demand against a backdrop of elevated prices and tight supply. (Source: Bloomberg)

The pandemic is not the cause of the current labor shortage, just an accelerator. A report by EMSI, a labor market data company, highlights how, as we emerge from the COVID-19 pandemic, another disruptive factor is on the horizon. The US is on the brink of a sansdemic—a lack of people that will soon impact every business, college, and region.

The wealth gap neither can, nor should, be entirely eliminated; but the United States could and should aim for a somewhat more equitable distribution.

The latest report from climate scientists provides a stark warning about how fast the planet is changing. Go to the article at the link below for the top takeaways.

The Apartment List National Rent Report national index for apartment rents increased by 2.5 percent from June to July, continuing a months-long trend of rapidly accelerating rent growth. So far in 2021, the national median rent has increased by a staggering 11.4 percent. To put that in context, in the pre-pandemic years from 2017-2019, rent growth from January to July averaged just 3.3 percent. The most recent spike continues to push rents well above where they would be if growth had remained on its pre-pandemic trend.

The data exhibit significant regional variation, and rents remain below pre-pandemic levels in a handful of the nation’s most expensive cities. But even in these markets, rents are quickly bouncing back. In San Francisco, for example, rents are still 14 percent lower than they were in March 2020, but the city has seen prices increase by 17 percent since January of this year. At the other end of the spectrum, many of the mid-sized markets that have seen rents grow rapidly through the pandemic are only continuing to boom – rents in Boise, ID are now up 39 percent since last March. Rent growth in 2021 so far is outpacing pre-pandemic averages in 98 of the nation’s 100 largest cities.

The Baychester Houses have been brightly refurbished using a federal program that could help fix America’s ailing subsidized housing situation and presents a startling contrast to the nearby Edenwald House. Side by side, the two projects make a textbook before-and-after comparison, one derelict, the other refurbished.

Yardi Matrix looked at 30 of the largest markets across the United States for its updated forecast. But, some of the biggest increases could be felt in secondary markets not captured in the report. Boise, Idaho; Reno, Nevada; and Portland, Maine, are some of the metro areas seeing fast population growth coupled with constrained supply.

Can you have it both ways? Increasingly, that seems to be what people with portable jobs are seeking. The professional world’s 15-month mass experiment with working remotely isn’t about to vanish from sight. Having the freedom to pick one’s own workplace, at least part of the week, is more alluring than ever. 

Yet even in outdoor paradises like Bend, OR, people aren’t totally shunning old routines. Some prefer the office-like tempo of a co-working space – or periodic trips back to corporate hubs in cities such as Seattle or San Francisco. For all the apparent convenience of working from home, sometimes the combined chaos of Legos, laptops, laundry, and laser printers just becomes too much. 

LinkedIn’s Glint unit has surveyed more than 300,000 employees around the world, asking what type of work environment they want most, assuming the flexibility to choose between traditional workplaces and more personal settings.  

The majority, 56%, voted for a hybrid option, allowing them to shuttle back and forth. Another 31% wanted a purely remote setting; only 13% chose what amounts to all-office, all the time. 

The Berryessa Flea Market in San Jose, CA, the largest open-air market in the United States, will be replaced by a mixed-use development. Following heated protests and a short-lived hunger strike, the San Jose City Council voted last week to approve the rezoning of the area around the city’s beloved Berryessa Flea Market to make way for a mixed-use development. The new complex will sit directly adjacent to the Bay Area Rapid Transit (BART)’s Berryessa/North San José station.

Foster + Partners has revealed the revised master plan for Centennial Yards, a sprawling development zone on the southern fringes of downtown Atlanta

Every year since 1994, RCLCO conducts a national survey identifying the top-selling MPCs through a rigorous search of high-performing communities. The top-selling community in the country is Sarasota, Florida’s Lakewood Ranch, with 1,535 sales through June, 83% ahead of last year’s pace. 

Home sales in the nation’s Top-50 exceeded expectations in the first half of 2021, with a pace that indicates the potential for a 12% increase at year’s end compared with 2020. This surge in new sales among the Top-50 is 20% above sales in the last mid-year report (note that MPCs which comprise the Top-50 change each year), and comes despite a tightening of new home inventory and reduced supply of components needed for new home construction. 

While many communities have indicated that builders are quickly running through lot allocations or even slowing new sales to meet existing needs, MPCs on this list still experienced an average individual increase of over 40% each compared to their prior period performance. 

75% of sales within the Top-50 occurred in Florida, Texas, or Nevada. Florida was the top-ranked state in terms of total sales with 34%, followed by Texas with 30%.

Regulations may have come from a good place, but the result is to make building affordable housing or increasing density, or accomplishing needed infrastructure projects, all but impossible to pull off. All kinds of procedures and regulations have been put in place so that citizens can protest and challenge any proposed change or program. Often these procedures were created for environmental reasons. In other cases, such procedural hurdles are meant to give voice to marginal people or communities.

But, it is higher-income, white people with power who have made use of these procedural obstacles — not to protect the environment so much as to protect their property values and keep their neighborhoods unchanged. Blue cities, in particular, have prized “Citizens’ Voice” and made it easy for these citizens to assert their will. 

What does a ‘15-minute city’ truly mean–and how achievable is it in the U.S.? Alan Ehrenhalt explores the complications of the popular “15-minute city” concept, asking “[w]hat exactly makes a 15-minute city, anyway? And is it a new idea or just a slogan that has been grafted onto some urbanist schemes that have been floating around for many years? "While laudable, the goal of truly creating 15-minute cities and neighborhoods in many U.S. cities, Ehrenhalt writes, is ”[n]ot impossible, but very difficult.“

The Spire condominiums on Denny Way in Seattle offer 266 spaces where drivers leave their car near the entrance, and a robotic dolly parks it. The automation eliminates space-hogging ramps and driving lanes on the eight lower levels. And this makes development feasible on a tight lot (see map.) And it also saves residents the time and hassle of descending deep into an underground parking structure.

Go to https://spireseattle.com/building/ and scroll down to see a video of the nine-level automated parking system.

In 2020, the total market share of non-site-built homes, including modular and panelized, was at 3% of single-family completions in the USA, according to Census Bureau Survey of Construction data and NAHB analysis. Roughly 11,000 single-family units were built using modular and 17,000 used panelized/pre-cut construction methods, out of a total of 912,000 single-family homes completed. NAHB expects the share to rise moderately in 2021 and in the years ahead, due to the ongoing labor shortage and the need to lift labor productivity amid declining housing affordability.

NavigatorCRE, a fast-growing Seattle proptech startup, on Tuesday said it has completed its Series A funding round of $17.2 million. Atlanta-based growth equity investor Fulcrum Equity Partners led the $17.2 million round and was joined by existing investors.

The company was founded by Seattle commercial real estate veterans who saw a huge gap in the industry’s technology and found most operators — from asset managers to brokers — have extremely limited capabilities when it comes to using the to power of data in day-to-day operations.