Biden, Co-Living Crunch, Housing Starts: November Multifamily News Roundup
The Biggest November 2020 Real Estate News
We have summarized the three biggest multifamily and real estate stories to emerge in November. Joe Biden has won the presidency and will likely expand spending on affordable housing when his term begins. Co-living companies face some difficulties as the pandemic continues, though housing starts rose more than expected in October.
Biden Wins Presidency
Joe Biden has become the president-elect. Biden will inherit a housing market altered by the pandemic. Though sales of new homes have remained strong, an eviction wave continues to loom. In the short term, a Biden administration will likely respond to the pandemic by extending the national eviction moratorium. The former Vice President has stated his support for such measures on the campaign trail.
Biden’s other housing goals include ending discriminatory housing practices, such as redlining, to increase spending on affordable housing, and to expand development by curtailing zoning for single-family housing. The various plans call for $640 billion in spending over a decade.
Co-Living Companies Face Pandemic Challenges
Co-living has proven popular in cities such as San Francisco and New York City. Typically, tenants in co-living buildings live in housing that somewhat resembles college dormitories, with small bedrooms. In exchange, companies that operate the facilities offer pre-furnished apartments, shared amenities, and programming aimed at fostering a sense of community.
Of course, the pandemic has challenged this business model and the ambitions of companies in the space. Shared amenities and community became detriments rather than selling points, and tenants began to leave the cities with the bulk of co-living apartments. In response, co-living companies have offered rent concessions and shortened lease terms. Whether these efforts will pay off remains to be seen. Ollie, a major player, was purchased by rival Starcity after experiencing tenant loss associated with the pandemic. More consolidation may be in store going forward, with the larger companies like Common using acquisitions to expand their footprint.
Housing Starts Rise in October
Numbers released in November showed that housing starts rose an unexpected 4.9% in October. The increase exceeded expectations. Purchases of homes have been driven by low rates and the appeal of larger single-family homes as the pandemic forces many to avoid normal activities. Despite this increase in starts, affordability remains an issue, as even the increased building has not kept up with demand.
- RXR Realty has announced it aims to raise $1 billion to acquire assets impacted by the pandemic. In keeping with past investments by RXR, it will focus mostly on New York City and the surrounding area.
- Some December news: a would-be acquisition of Aimco by Westdale was rejected by Aimco. Aimco referred to the offer as “grossly inadequate”.
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