Ten Days of Buzz: September 16-26, 2012

Welcome back to Ten Days of Buzz! This week, we’ve got multifamily development trends, decreasing household debt, rents set by algorithms, and more…enjoy.

“There is room for further improvement before apartment and condo production return to normal, sustainable levels.”

NAHB chief economist David Crowe. Multifamily Still Trending High in Development, Dividends, GlobeSt.com, 9/16/12.

“The thing everybody grapples with is, ‘How much (debt) is normal?’ ” Rogoff said. “There will be a long memory of this crisis. It may be the biggest question mark in terms of trying to time this recovery.”

Harvard economist Kenneth Rogoff. Shrinking household debt is good sign for 2013 economy, USA Today Money, 9/17/12.

“We are seeing some of the rental buildings doing airline-type pricing but more often there is nothing available…I would advise renters to check pricing and the day of their (apartment) appointment to make sure it hasn’t changed. Another option would be to look at condo rentals. Pricing is a little more stable in the condo market.”

Maurice Ortiz, marketing director for the Apartment People. Lease rate too high? Check back later, the Chicago Tribune, 9/18/12.

“If Dallas can have a zero-waste plan, any city can. It can really be a huge opportunity to move toward a more sustainable Texas.”

Zac Trahan, Texas Campaign for the Environment. Dallas Looking at Ways to Reduce its Trash, The New York Times, 9/20/12.

“Hurn told consumers that he would provide lists of rental properties that specifically matched their needs and use his supposed expertise to find rental properties for people with eviction or criminal histories; instead, he gave consumers lists of properties that were unavailable, uninhabitable, or unsuitable.”

Jennifer Steele, Washington State Assistant Attorney General. Attorney Generals office shutters rental-referral business, Office of the Attorney General, 9/21/12.

“The NAHB Multifamily Production Index improved for the eighth consecutive quarter with an index of 54, the highest reading since the second quarter of 2005. The MPI, which measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100, rose from 51 in the first quarter to 54 in the second quarter.”

Eye on the Economy: NAHB Survey Points to Growing Optimism, RIS Media, 9/22/12.

“Gabriel Stempinski is the consummate renter. When he and his fiance Shiva Goudarzi decided to move to Portland, Ore., this spring after she got pregnant, Stempinski didn’t even consider purchasing a home; instead they found an upscale three-bedroom townhouse just outside the city center where they could live a ‘nonpermanent lifestyle’ and ‘be world citizens.'”

Roya Wolverson, writer for Time Business. Renter Nation, Time.com, 9/24/12.

“It’s hard to imagine the trend reversing itself. Every time we are a little concerned, we are pleasantly surprised by the rates at which we lease new buildings as soon as they’re open.”

Carl J. Goldberg, managing partner of Roseland Property Co. Multifamily Construction Still Moving at a Solid Clip, NJBiz.com, 9/25/12.

“This deal is the next step toward our goal of offering the broadest array of financing options to our borrowers and the investor community…We’ve settled 31 deals totaling more than $36 billion in collateral since the program’s inception in 2009.” 

Mitch Resnick, VP of Multifamily Capital at Freddie Mac. MBA: Multifamily and commercial originations jump 25% in 2Q, HousingWire, 9/26/12.

The Green Report: Micro-Housing Edition

As rents and the demand for apartments continue to climb, one trend has been popping up a lot in the news lately: micro-units. Call them what you will (apodments, micro-partments, mini-housing), the idea is certainly an intriguing one for landlords and tenants alike–just how much can you charge for a 200-300 square foot apartment, and how many of them will fit in a building? It also scores points for being an ecologically sound model: as we know, higher-density living is almost always greener than suburban life, and smaller spaces naturally take less energy to heat and cool, and can utilize smaller water heaters and other appliances.

From the New York City Mayor’s Office and the New York Times

The idea is so popular that this July, New York City mayor Michael Bloomberg announced a competition, sponsored by the city, to design the ultimate (very efficient) 275-300 square foot Manhattan apartment. But just how new is the idea of the micro-apartment? Where are they being built, and exactly how much are tenants (and landlords) welcoming the concept?

The Apartment of the Future?

While no one was blogging about how the micro-unit was the hipster thing to do in 1910, the average apartment in Seattle at that time was less than 500 square feet. After that, the American renting public oscillated over the decades–the 1930s brought the golden age of the Murphy Bed and motel-style kitchens, while the 1950s saw young couples needing more bedrooms for their Boomer children. From then on, the trend was for more space, as the American Dream became about the accumulation of wealth: cars in the garage, record collections…but in this new millennium, the era of physical accumulation has been brought to a screeching halt by one simple concept: the Cloud (see our recent Apartment Advisor recap for more on this).

Essentially, many of this year’s trends add up to a perfect climate for micro-housing. Younger renters want the flexibility of renting; they enjoy shared amenities like fitness areas, dog parks and rooftop decks, but they don’t need much space to store their belongings, since so much of their lives is on their iPhones and Kindles. They are more likely to meet friends in the city for dinner than to entertain at home (the “City as living room” is key to making micro-housing work), and in many cities, micro-housing is truly all they can afford–and it may well fulfill all of their needs.

Micro-Housing Coast to Coast

New York: While many New Yorkers have rented and shared apartments the size of an Ikea futon since long before the term micro-housing was ever coined, the fact is, there simply aren’t enough studios for the number of single people in New York–and most can’t afford the rental prices on a one-bedroom. This NYTimes article profiles several women living in micro-units, including a 170 square-foot West Village walk-up (“here is what Ms. Stolarski’s apartment does not have: a couch; tchotchkes; specks of dirt; paperwork…”) where she stores sweaters in the oven, Carrie-Bradshaw style. As for Mayor Bloomberg’s contest, we’ll be interested to see what the architects come up with; we’ll keep you posted.

Seattle: Even smaller than the apartments profiled in New York, micro-units called apodments have been cropping up in Seattle (Capitol Hill and the U-District, of course). Built by Calhoun Properties, apodments run less than 100 square feet, come “furnished,” and feature no utility or HOA fees–and not everyone is sure what to think of them at this stage in the game (check out this article over at Curbed.com). Rents run between $450 and $700, and kitchens are often shared. With interiors a bit more utilitarian than the studios featured in the New York Times, but also including rooftop decks, mirrored closets and large windows, the apodments concepts begs the question: just how small can an apartment be?

Only time (and the market) will tell if micro-housing catches on in a big way. In the meantime, will you be re-branding your mother-in-law rental a “micro-unit?” Are you selling your furniture on Craigslist right now so you can move in to a smaller space? Weigh in below.

Seattle Centric: South Lake Union, SODO Arena, and New Developments

Welcome to Seattle Centric, where we explore news that’s very near and dear to our hearts: it’s everything Seattle! From local regulations, to new apartment projects, to city-shaping news, we’ll cover the local news that affects us all. Enjoy!

South Lake Union: Rental rates lag in comparison with commercial growth

It seems like everyone has been talking about South Lake Union lately, and with good reason. Commercial growth has skyrocketed there in the past couple of years, and it shows no signs of slowing down. But is it the place to be for renters, too?

According to the Seattle PI, while rental demand in the neighborhood has jumped by 22%, and it’s a prominent neighborhood when measured against neighborhoods near tech centers in other cities, asking rents have only bumped up slightly. Compare that to tech-immersed neighborhoods in San Francisco, where rents rose 41%, and it’s clear that South Lake Union has a ways to go before it realizes it’s potential. Of course, Amazon’s proposed Denny Triangle project may be just the push the neighborhood needs to boost rents–we’ll just have to wait and see. Read more at the Seattle PI.

The SODO Arena: One step closer to a reality

The Seattle Times reported yesterday that a City Council committee has approved a plan for new sports arena in SODO, a $490 million project that would bring professional basketball and hockey teams to the Emerald City. The measure should head to the full City Council for approval on 9/24/12, with the final approval contingent on the results of an environmental study–a step that could take as long as a year.

There’s still a ways to go before the project is a done deal–if the City Council’s concerns regarding impacts on the Port of Seattle and surrounding areas (increased traffic is a big one) are addressed, and the environmental impact is found to be satisfactory, there’s still the matter of shopping for a team–but the initial approval is a big step forward for fans of the arena. Read more at the Seattle Times.

They just keep getting taller: seven-story apartment project planned for West Seattle

Image from Caron Architecture, LLC

The West Seattle Herald reports that the Design Review Board met last night to discuss a proposed seven-story, 114-unit apartment building that will take shape at 3078 Avalon Way in West Seattle. The early-stage meeting, focused on providing early design guidance, marks the first stage of the Board’s involvement in the project.

The proposed building, which will be located in an area that has seen a lot of recent development and currently incorporates a mix of single-family homes and multifamily buildings, will incorporate an underground parking garage, and will include some townhome units with direct street access. The full proposal is available online. Read more from the West Seattle Herald.

Construction has begun on a new 40-story apartment tower downtown; project will incorporate LED lights into unique design

Directly across from Paramount Theater at 815 Pine Street downtown, the Holland Partner Group is developing the 386-unit project. When it’s completed, the tower will be 444 feet tall, and will incorporate design elements evocative of Seattle’s historic theatre district of old–specifically, a wall of LED-backlit glass that will cycle through various colors. The tower’s units will range in size from 450 to 1,250 square feet. The project is expected to reach completion sometime in 2014. Read more from the Puget Sound Business Journal.

That’s it for this edition of Seattle Centric–but before you go, have you ridden the Ferris Wheel at the waterfront yet? It’s yet another reminder that our city, and our skyline, are always evolving. Maybe we’ll see you there!

Image from the Seattle PI

Ten Days of Buzz: September 1-10, 2012

Happy Wednesday! The week’s only half over and the month has only just begin, but we’ve already got plenty of good news from the rental housing sector for you…that’s right, it’s Ten Days of Buzz! This week we’ve got smoke-free developments in Virginia, new plans for Seattle’s Yesler Terrace, national vacancy rates, & more. Dig in!

“The belief that home ownership is a form of savings and preparing for retirement has become a myth..and [families] don’t want to be tethered down to home ownership.”

Les Kaplan, Milestone Development. Home ownership: An American dream in decline, The Coloradoan, 9/1/12.

“It fits with our overall strategy and theme for the Link brand, which is urban, healthy living with a big emphasis on recycling…smoke-free is something that people are starting to seek.”

David Klepser of Grubb Properties. Apartments in Tobacco Town Go Smoke Free, The Richmond Times Dispatch, 9/2/12.

“The Seattle City Council is expected to approve Tuesday a…plan to bulldoze Yesler Terrace, the city’s first public-housing project, and remake it as a high-rise neighborhood where the affluent would outnumber the poor.”

Bob Young, Staff Reporter. Seattle City Council set to approve sweeping remake of Yesler Terrace, The Seattle Times, 9/3/12

“Rents had been on fire earlier this year, but some of the hottest rental markets are starting to cool. New construction that started last year is finally coming onto the market, giving renters more choices and some relief from rising rents. Still, rents are climbing in nearly all of the major rental markets.”

Jed Kolko, Chief Economist at Trulia. Rent Spikes Begin to Ease, CNBC.com, 9/5/12.

“Overall, low vacancy levels are allowing landlords to raise rents, by the double-digits in some cases. National vacancy rates have fallen to levels not seen in years, while average rents are now at record levels in 74 of the 82 markets tracked by Reis Inc. Big-money cities include Miami, Seattle, San Diego, Chicago and Baltimore.”

Dawn Wotapka of the WSJ. Multifamily Still Doing Just Fine, the Developments Blog, 9/6/2012.

“The apartment and condo housing sector is continuing on a path of steady recovery as new construction has increased to try to keep up with current consumer demand. However, credit continues to be an issue for many developers around the country, making it difficult to keep pace with this demand.”

W. Dean Henry, CEO of Legacy Partners Residential. Builders’ Outlook on Multi-Family Rentals, Condos at 7-Year High, ECreditDaily.com, 9/8/12.

“The strength of the MPI suggests that multifamily production is likely to increase somewhat going forward…Multifamily production has already recovered substantially from a historic low of about 110,000 starts a year in 2009 and 2010 to the current annual rate of a little over 200,000.”

David Crowe, NAHB Chief Economist. New capacity may be softening rents, UPI.com, 9/9/12

“Apartment Insights reports that there are 10,450 units under construction in King and Snohomish counties. Of these, 7,137 units are set to open in 2013, with an additional 285 units poised to break ground for delivery next year, bringing the total to 7,422 units.”

Jeanne Lang-Jones, Staff Writer. Little space left in larger Seattle apartment complexes, The Puget Sound Business Journal, 9/10/12.

Fall Events Calendar: Energy Benchmarking, Budget Basics and More

Whether you’re just starting out in the business of multifamily housing, or you’re looking to network and continue your education, there are plenty of events for you to check out around the Seattle area this fall. We’e got the breakdown on some of the upcoming events from WMFHA, the RHA, and others organizations, in September and October–maybe we’ll see you there!

September

Seminar: Budget Prep and Financial Management, from WMFHA

  • When: 9/11, 9:00 a.m. – 1:00 p.m.
  • Where: The WMFHA Training Center, 18300 Cascade Ave S, Suite 131, in Tukwila
  • Who: Facilitated by WMFHA’s Executive Director, Jim Wiard, CPM
  • What: Starting at the beginning–a budget? What’s that?–and progressing quickly past the basic elements of a property budget to budget management and accounting terminology, if you need to cover a lot of budget basics without being bored, this is the class for you. Cashflow, avoiding pitfalls, and the Four Ps of Marketing will also be covered.
  • How: The seminar is $59 for members and $79 for non-members; sign up here

Seminar: The Financial Basics of Investment Real Estate, from the RHA

  • When: 9/12, 9:00 -11:00 a.m.
  • Where: The RHA Office, 2414 SW Andover St, Suite D207, in Seattle
  • Who: Presented by Bruce Kahn, CPM
  • What: This seminar will cover the basics of investment real estate financial analysis, including the basic financial indicators that will allow you to make informed decisions when it comes to investing in real estate.
  • How: Seminar costs $45; sign up here.

Conference: Washington Apartment Outlook–Projections for 2013, from WMFHA

  • When: 9/28, 12:30 – 4:00 p.m.
  • Where: The Hyatt Bellevue, 900 Bellevue Way NE, in (you guessed it) Bellevue
  • Who: Presenters include WMFHA Government Affairs Chair, Joe Puckett; Matthew Gardner of Gardner Economics; and Mike Scott of Dupre + Scott.
  • What: Who better to speak about the immediate future of rental housing than these three? Joe Puckett has represented property management companies, developers and owners of residential and commercial properties, while Matthew Gardner heads all residential commercial, economic and litigation support assignments dealing with market evaluation, market positioning, and more. Mike Scott, meanwhile, is one-half of Dupre + Scott fame (Apartment Advisor), whose clients include City of Seattle, City of Tacoma, Seattle Housing Authority, and United States Army.
  • How: $89 for members, $109 for non-members; click here to register.

 

October

Seminar: Solving Problems with Tenants

  • When: 10/10, 4:00 – 7:00 p.m.
  • Where: The RHA Office, 2414 SW Andover St, Suite D207, in Seattle
  • Who: Presented by Sue Lewis, CPM
  • What: This seminar will teach you how to keep resident issues from turning into serious conflicts, saving you time and money. Hardships, emergencies, and “bad behavior” will be addressed.
  • How: Registration is $45; click here to register

Class: Landlord & Tenant Law in King County

  • When: 10/11, all day
  • Where: The Washington State Convention Center, at 7th and Pike St., in Seattle
  • What: This day-long seminar covers all aspects of landlord-tenant law, beginning with the rental agreement–what do you need to include to ensure that things go smoothly down the road? Screening tenants while avoiding discrimination, legally executing evictions, and even avoiding lawsuits will be covered.
  • How: Click here for more information

That’s it from us today, but check out even more events at the RHA and WMFHA themselves; we’ll see you back here just after Halloween with our Winter Events Calendar. See you then!

Five Ways to…Prep Units for Autumn

Seattle’s been on a roll with this whole sunshine thing lately–we’re nearing our 1951 record of 51 days in a row of gorgeous weather! With sunshine on the mind, it’s hard to think about the impending fall…but the kids are back in school, and falling leaves are closer than we care to admit. With that in mind, it’s time for another Five Ways–and this time around, we’ve got expert tips to keep the impending season from taking you–or your gutters–by surprise. Enjoy!

1. Check–and double check–the furnace. 

We were curious, so we looked it up–the coldest day ever in Seattle was in 1950; it hit 0 (that’s zero) degrees fahrenheit that January. While the thermometer probably won’t fall anywhere near that low this fall, it will start to get chillier as the summer fades–so now is the time to check your furnaces for function and safety.

While the furnace checklist can vary depending on the type of hardware you’re using, important steps for natural gas furnaces include: cleaning and/or replacing the filter, checking the blower belt and oiling the blower motor, ensuring that vents in the unit are unobstructed, and removing all flammable objects from within the vicinity of the furnace. Need more direction? Check out this short instructional video from Studio5. And if you’d rather outsource the job, most local technicians will be happy to give your furnace a tune-up–for a fee, of course.

2. Consider weatherizing drafty or poorly insulated units.

A drafty apartment is fun for exactly no one–landlords included. Particularly in older units, you may want to nip things in the bud this fall by shoring up windows and doors before the first hint of cold weather seeps past the threshold. Again, while weather isn’t likely to get too extreme this Autumn, it never hurts to weatherize windows and cracks before winter’s set its sights on us–that’s one more thing done before the real cold sets in and you have other things to tackle.

This weatherizing guide from DoItYourself.com is a great start. Don’t let the long list of required tools and materials give you pause–they cover everything from caulking (good for sealing joints like those between foundation and siding, and for sealing the edges of vents) to weather stripping (you know it’s used on windows and doors, but we bet you didn’t know how many use-specific kinds there are…). Both caulk and weather stripping are most effective when applied to clean, dry surfaces in moderate temperatures–so you don’t want to wait until December to seal things up.

3. Clean and prep your hardworking gutters.

It sounds obvious, in a city like Seattle, to remind landlords that gutters need attention every fall–but in our moisture-loving, tree-lined city, we just can’t mention it enough. If you haven’t cleaned gutters and downspouts before–although we can’t imagine that being the case–EHow.com has easy-to-follow instructions and some helpful safety tips (never hold on to the downspout for support, for instance), and include some related articles on gutter-cleaning in different situations (steep roof, anyone?).

If your gutters seem to clog on a regular basis, you may want to consider mesh gutter covers–these filter out debris while still allowing water through. Remember, clogged and neglected gutters can cause all manner of problems in a building, including leaky roofs, rotting wood, cracks in the foundation, and even sagging driveways…in short, just plain bad news. Love your gutters, and they’ll love you back!

4. Got a fireplace? Don’t forget to sweep the chimney!

Here’s one fireplace you won’t have to clean…

We’ll paint you a lovely Autumn picture–your tenant has just come in, apple-cheeked, from the first cool hint of winter in the air. Leaves are falling, Halloween is just around the corner…it’s time for the first fire of the season. Units with fireplaces can be an easy sell to potential tenants, and with good reason–having a fireplace lends an extra bit of home feeling to an apartment, making it cozier and instantly easier to connect with.

The flip side of this, of course, is that fireplaces and chimneys must be maintained in order to be safe. As FamilyHandyMan.com explains, there is no blanket rule about how often to clean a chimney; but it must be done at regular intervals, depending on use. Their site does offer some helpful tips about how to check for potentially harmful buildups in your unit’s flue, and when a professional cleaning is necessary. For information about local regulations, contact your local chimney sweep business–it’s their job to know what’s what!

5. Prepare landscaping for colder weather.

Fall is a time of change–out in the yard as well as in the unit itself–and what with all the leaves and muck, September, October and November can be hard on the landscaping that fared so well all summer. If turfgrasses are incorporated into your unit’s yard, consider using an all-natural, slow-release fertilizer in September; the grass will store those nutrients all through the cold winter, and grow healthier come spring. Avoid planting anything delicate during this time–mud and leaves may soon cover just about everything.

Finally, as the rain makes its way back to Seattle, don’t forget to turn off any underground sprinkler systems you use. You don’t want the first frost to catch you unawares and burst a pipe that’s still in use! Frozen pipes are no fun at all. Besides, you won’t be needing that regular watering schedule…although it’s hard to imagine now!