Houston Business Journal: Houston Doesn't Need More Class A Apartments

[pdxtex]

Originally Posted by brian_b

I doubt any city needs more class A apartments right now. In fact, I would bet that most current occupants of class A apartments would be happy to trade many of their amenities and fake nice appliances for a lower rent bill every month, as long as they were able to keep their current location.

^^^^ I totally agree. I think a new stripped down ikea unit would be great. too many developers are trying to market their units like luxury condos, all the bells and whistles. I think big US cities with transient tech worker populations would be serviced better by building full of studio apartments (not micro units though). we need the urban version of the Toyota corolla at the moment, not the lexus. I understand builders need to recoup their costs but west coast rents are f$cking ridiculous at the moment....

[mhays]

Micro units are important too...we also have the working poor, students, retirees, etc. The more expensive the city, the more important this option is. Not so much Houston of course.

[Ant131531]

Originally Posted by mhays

Construction volumes are a lagging indicator. Even construction STARTS can be a lagging indicator, especially when the measurement is starts over a period that's now over. Show what's started in July and that's at least moderately current.

Phoenix and Philly were surprisingly high BTW.

Yeah, when did Philly's job growth become so robust? I expected it to be more closer to Chicago and Boston. Philly is doing great these days it seems. It's recovered very well. It's now the highest in the northeast corridor if those numbers are correct.

[ChargerCarl]

Originally Posted by pdxtex

^^^^ I totally agree. I think a new stripped down ikea unit would be great. too many developers are trying to market their units like luxury condos, all the bells and whistles. I think big US cities with transient tech worker populations would be serviced better by building full of studio apartments (not micro units though). we need the urban version of the Toyota corolla at the moment, not the lexus. I understand builders need to recoup their costs but west coast rents are f$cking ridiculous at the moment....

Thats because most large US cities only permit a small amount of new construction, so developers naturally focus on building luxury units which fetch the highest profit margin.

[ChargerCarl]

Originally Posted by mhays

Construction volumes are a lagging indicator. Even construction STARTS can be a lagging indicator, especially when the measurement is starts over a period that's now over. Show what's started in July and that's at least moderately current.

My guess is even with a slowdown Houston will still cream us here in LA/SF.

[pdxtex]

Originally Posted by mhays

Micro units are important too...we also have the working poor, students, retirees, etc. The more expensive the city, the more important this option is. Not so much Houston of course.

maybe the micro unit definition could be revised. something between a current unit and a studio, like 285 sq ft. I looked at some of the new units by me for fun that we 150 sq ft (micro-micro??). forget it. its even worse than a dorm room. its like a phone booth in there.

[pdxtex]

Originally Posted by ChargerCarl

Thats because most large US cities only permit a small amount of new construction, so developers naturally focus on building luxury units which fetch the highest profit margin.

well that seems to be the trend in the bay area at least. Portland is banging out new apartments on every corner it seems like. our vacancy rate is still pretty low though, about 3.5%. I don't know what magic number is for "relative" affordability, 7%? I thought Spokane might be a less competitive alternative but they are even worse, 1.5% vacancy. concerning Houston, they cite the downturn in the energy industry for a softer market but why would that matter? it seems like their economy is diverse enough that other industries would pick up the slack.

[ChargerCarl]

Im not sure what the "right" vacancy is. Tokyo is probably the most market friendly and permissive large city on Earth and their vacancy is like 12% I think. Without a doubt most coastal metros in the US are facing huge shortages though.

[mhays]

Originally Posted by pdxtex

maybe the micro unit definition could be revised. something between a current unit and a studio, like 285 sq ft. I looked at some of the new units by me for fun that we 150 sq ft (micro-micro??). forget it. its even worse than a dorm room. its like a phone booth in there.

Depends what rent levels you're trying to hit. A lot of hotel rooms and dorm rooms are 150 sf. For some people that's a way to avoid roommates or even the gutter. And they get to live close-in. And everything works.

[Eightball]

Houston Alarm Bell? Even Healthcare is Slowing down http://www.houstonchronicle.com/busi...witter-premium

[dc_denizen]

we demand class B apartments!

[mhays]

Metrics are good, but the concept shouldn't surprise anybody.

Even with some patients coming from elsewhere, and some funding coming from elsewhere, much of the healthcare market is about serving the local population. When the economy is down, people put off some things, or skip healthcare entirely especially if they're not insured.

Houston is presumably one of the cities that gets a decent amount of incoming patients from elsewhere, along with Baltimore, Cleveland, and a handful of others. But its federal NIH funding is below par. Neither is on the scale of several million locals averaging thousands per year, which the economy impacts pretty directly.

[TexasPlaya]

Originally Posted by Eightball

Houston Alarm Bell? Even Healthcare is Slowing down http://www.houstonchronicle.com/busi...witter-premium

Don't sound too sad.

From your own article:

Ross Harvison, who conducts the business survey, thinks that the slowdown is more an indication that the industry is returning to normal rather than heading into a downturn. "I think what we're seeing within the medical area is that they've been expanding for a very very long time, and eventually you do see things slow down," he says. "Right now, everything indicates that we're heading for a soft landing."

[TexasPlaya]

Originally Posted by mhays

Metrics are good, but the concept shouldn't surprise anybody.

Even with some patients coming from elsewhere, and some funding coming from elsewhere, much of the healthcare market is about serving the local population. When the economy is down, people put off some things, or skip healthcare entirely especially if they're not insured.

Houston is presumably one of the cities that gets a decent amount of incoming patients from elsewhere, along with Baltimore, Cleveland, and a handful of others. But its federal NIH funding is below par. Neither is on the scale of several million locals averaging thousands per year, which the economy impacts pretty directly.

Not sure how they are related? Houston excels at care and treatment and is average to below average at research and commercialization, save cancer research.

Essentially after 15 years over adding ~100,000ppl /year to the metro growth is slowing. Many predicted that oil would rise to more profitable levels late 2016/2017 but global demand (in general) is being revisited downwards.

[mhays]

See the article.

[TexasPlaya]

Originally Posted by mhays

See the article.

Uh huh.... Go on.