The Good, The Bad and the Ugly of the Rental Crisis
On October 7, we posted an article called the Rental Crisis in the US.
To summarize, there is an influx of new renters across every demographic segment. This is driven by young millennials entering the market for the first time, but also by baby boomers seeking rental alternatives when previous generations might have selected a condominium.
Home ownership that was at unprecedented highs is also returning to historical lower norms. In the mean time, wage growth has stagnated. The result is higher demand for apartments.
While all of this may be interesting, the far more relevant question is, how will this impact me in my home? That’s the topic of our posting today. Consider this your introduction to The Good, The Bad and the Ugly of the Rental Crisis.
First the good news:
1. There are more choices than ever. Developers have responded to the demand and are building like crazy. The result is that there are plenty of good options in the market already, and more are coming.
2. The choices are better than ever. Modern construction features better sound insulating properties, walk-in showers (at least at our Waupun apartment complex at the Mayfair Apartments), attached garages (Washington Manor in Horicon, and The Fairways in Fond du Lac), in-unit laundry appliances and more.
3. You can still find a Waupun apartment. After World War II, when millions of soldiers came home, the housing shortage was so severe, there was nothing to be found. Similarly, in rent controlled locations, housing can be difficult to come by. But that won’t be the situation in market controlled locations, which is most of the country.
4. Your choices will include plenty of brand new apartments. There’s nothing like new. So enjoy the smell of that fresh paint!
5. Hello remodeling! Even owners of existing buildings are going to get in on the boom, upgrading older units to make them like new.
As you might expect, where these’s good news, there can also be bad news. Hey, don’t roses have thorns?
The Bad News:
1. The crisis isn’t going away. Demand marches on, but development can only proceed so fast.
2. The government isn’t going to help. In fact, the government is more likely the problem. There are any number of government agencies that do not include the moniker, “We Hate Development” in their charter, but this is the defacto condition.
3. The politics aren’t in favor of more apartment housing. Want to get an apartment project approved? You would have an easier time of it and you’d be far more popular if you just affixed the word “Leper” to your back. One of the reasons there are so many government agencies arrayed against development is that these agencies are responding to citizen concerns about further development.
4. Homeowners are still in the majority. And these are the folks calling their political representatives and government agencies to make sure no apartments get built in their neighborhood!
Bad news is one thing, but when it’s really bad, it’s just, well, ugly. And as you might imagine, there’s not just a bad side to the Rental Crisis, there’s an element to this that’s just chew your arm off ugly. In fact it’s so bad, that you’re going to have to wait for the next posting, so you’ll have a chance to prepare. Happy chewing and come back next time for the Ugly in the Rental Crisis.