A New Approach to Public Housing
Faced with the challenges of public housing misconceptions and the affordable housing dilemma, Montgomery County introduces an innovative approach with The Laureate, poised to reshape housing perceptions.
Bridging the Housing Gap Through Public-Private Partnerships
Confronted with the hurdles of public housing stigma and the affordable housing crisis, Montgomery County introduces an innovative approach with The Laureate, poised to reshape housing perceptions.
Hybrid housing model: In the heart of Montgomery County, Maryland, lies The Laureate—a modern apartment building that uniquely combines public and private housing elements. Although it boasts upscale amenities catered to young professionals, 70% of the building is government-owned, and 30% of its units are reserved for those earning below the area's median income. The county's model, which blurs the lines between public and private housing, has inspired other regions to consider similar strategies.
Shifting Perceptions: While traditional public housing often faces negative perceptions, pushing the U.S. towards private-sector solutions like Section 8, Montgomery County is charting a different path. By merging public and private resources, the county offers a fresh solution to escalating rents and introduces the concept of "social housing." This tactic, where most residents are unaware of their public landlord, is a deliberate step to shift public housing perceptions.
The Roots of Inclusion: Located near Washington, Montgomery County's housing transformation began in the 1960s when progressive activists like Joyce Siegel propelled the Moderately Priced Dwelling Unit program. Although met with resistance initially, by 1974, this model mandating developers to include affordable units became the norm. This birthed the Housing Opportunities Commission (HOC), a unique entity wearing both developer and financier hats. This progressive mindset evolved into what's now known as “inclusionary zoning.”
Innovation in Housing Finance: Montgomery's Laureate, a product of developer EYA, integrates luxury and affordability. Addressing the concern that inclusionary zoning might deter construction, the county unveiled the $100 million Housing Production Fund in 2021. Teaming up with the HOC, they extend affordable financing to developers in return for more below-market-rate units. This approach not only increases housing availability without relying on federal subsidies but also showcases how public initiatives can strategically serve the broader community.
➥ THE TAKEAWAY
Big picture: Montgomery County offers a lesson for cities facing housing deficits: don't solely lean on inclusionary zoning. Initiatives like housing funds can stimulate construction, even when private interests waver. Collaborations between public entities and private players can craft housing solutions that prioritize community well-being. True urban success is about enhancing lives, not just tallying profits.
Do you believe blending public and private housing elements can effectively change the stigma associated with public housing?
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NYC Rolls Out New Short-term Rental Rules
Source: The Washington Post
The short-term rental landscape in New York City is on the cusp of a significant transformation due to new regulations, with major implications for platforms like Airbnb and the entire tourism sector of the city.
In the Big Apple, size doesn't always matter: Dubbed “Local Law 18”, it sets forth guidelines that could present hurdles for travelers and hosts alike. Such rules include…
Rentals can host a maximum of two paying guests, irrespective of property size or bedrooms.
Hosts must be physically present during the rental period.
All interior doors within the rental should remain unlocked.
While these rules aim to slam the door on illegal rentals, up the safety, and soothe the frenzied housing market, some travelers might think it's a bit too close for comfort.
Impact on travelers: Sean Hennessey from New York University suggests that many travelers might find the new norms uncomfortable. By the end of August, 3,250 applications were received for short-term rental listings. Out of these, 808 were reviewed with only 257 approved, and 72 rejected. Properties that violate lease terms or rent regulations are listed as prohibited from short-term rentals.
Potential penalties: Violations can cost hosts between $100 and $1,000 for the first offense, though guests won't be penalized. Airbnb, which unsuccessfully tried to challenge the law, announced that unregistered listings couldn't take new bookings after the law's activation. However, reservations made before Tuesday for stays until Dec. 1 will be honored. Thereafter, bookings at uncertified properties will be canceled and refunded.
Tourism market: While NYC's tourism market remains robust, with over 63 million expected visitors in 2023, alternative rental platforms are emerging. San Francisco-based Sonder, which isn't entirely affected by the new law, provides potential alternatives. However, it's facing challenges like a potential Nasdaq delisting. Another startup, Kindred, offers a unique model where residents swap homes. Additionally, luxury hotels, such as The Ritz-Carlton, are incorporating a short-term rental approach with offerings priced at $9,000 a night.
➥ THE TAKEAWAY
A new paradigm: The new regulations could potentially close down thousands of short-term rentals, reshaping the landscape of which properties are used for such purposes in New York City. While some hosts might have to bow out, others view the reduced competition as their most significant advantage in decades.
🔗 Read: In the ten years leading up to the pandemic, various sectors leaned heavily on low interest rates, accumulating debt for diverse purposes from luxury cars to leveraged buyouts.
Reviving City Centers: The Quest to Fill Vacant Storefronts
Source : The New York Times
In major cities like San Francisco, Washington, and Portland, the silent testament to changing times is the vast number of vacant storefronts, painting a vivid picture of the challenges city centers face.
The visible void: While large office buildings have experienced high vacancy rates, it's the barren ground floors that starkly illustrate the downtown desolation. Closed shops, handwritten closure notes, and spaces that once buzzed with life now stand silent, suggesting the need for a broader reimagining of city centers. These ground floor vacancies significantly impact the ambiance of a city and deter people from returning to what feels like a ghost town.
The pulse of the city: The ground floor is the primary space where individuals interact with the city. This level influences whether an area feels alive, bustling, and safe. It's a space of diverse experiences, from dining in a café to shopping at a boutique. For many, the ground floor serves as a reflection of urban vibrancy, and its decline symbolizes a fading heartbeat of city life.
Domino effect: A shift in how property owners profit from ground floors is essential. At present, some might find tax benefits in maintaining vacant spaces, while others fear decreasing rental rates might signal reduced profitability. However, these vacant spaces contribute to a domino effect, adversely affecting neighboring businesses and decreasing the overall sense of public safety.
The rise of online: Traditional retail faced challenges before the pandemic, especially with the emergence of e-commerce. An overenthusiasm for ground-floor commercial spaces and the push for mixed-use buildings contributed to an oversaturated market. This saturation meant that not all these spaces could sustainably remain retail-oriented.
➥ THE TAKEAWAY
Zoom out: There's a call to shift the perspective on ground-floor economics. Property developers, like Oliver Carr, view the ground floor not as a primary profit-making venture but as an added value to upper floors. Cities might need to restructure incentives, allowing varied uses for spaces and encourage smaller businesses.
Up for sale: Formerly the tallest west of NYC and linked to Al Capone, this iconic building is now on sale due to foreclosure.
Buffett's billion-dollar tune: Through his Key West-inspired melodies, musician Jimmy Buffett secured a $1B net worth, says Forbes. Here’s a breakdown of his real estate portfolio.
Google's Texas expansion: Alphabet commits to a $600M investment for a second data center in Dallas-Fort Worth.
BREIT portfolio shift: The trust has divested its stake in 3 Ravinia, a prime Atlanta Central Perimeter property, for a cool $175M.
Liquidity issues: Two big Chinese real estate companies evoke fears of a global financial impact, drawing parallels to 2008's "Lehman moment."
Silver Tsunami: Before the pandemic, developers banked on retiring baby boomers filling new senior housing. Now, they face low demand, labor shortages, and $2B in looming loans.
NY hotel surge: While hotels nationwide saw a subdued summer, New York thrived with a 10% increase in occupancy to 86% in July, as reported by CoStar.
While housing affordability is a concern in the US, it's even more challenging in other countries. In New Zealand, purchasing a home is 250% pricier than renting, in Canada 230%, Australia 150%, and the UK 100%. Is affordability in the US really as bad as it seems?
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