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Multifamily News Roundup – April 2019

Economic Outlook

Anyone fearing an imminent recession or downturn, inspired by anything from the prospects of a worsening trade war with China to the shadows cast by recent IPO disappointments, should rest easy. Numbers released in April indicate the American economy grew a full 3.2% in Q1. Economists remain worried about consumer spending, but it is important to note that this growth occurred despite a record-breaking government shutdown and other difficulties.

A strong overall outlook does not necessarily mean real estate investors should rejoice. Some real estate indicators suggest that a downturn may come for not only for multifamily professionals, but also for the economy as a whole. Brace for today’s announcement (article behind paywall) about interest rates from the Federal Reserve to get a picture of what might come in Q2. If they ease rates, it may indicate that the central bank has a negative view of the coming year.

Affordable Housing

States have begun to take measures to address the country’s ongoing affordability crisis, beginning in February in Oregon with the passage of a statewide rent control law. It is unclear what the implications that law will have within Oregon, but it appears to have started a trend, with lawmakers in states including California, Colorado and New York also considering legislation to regulate rents or divert funds to create more affordable housing.

In the short term, rents remain strong and analysts expect publicly traded multifamily companies will continue producing strong results for investors (article behind paywall). That said, some equity analysts are wary of the impact laws may have. Proactive multifamily REIT investors should keep an eye on legislative pipelines and map which companies have invested in markets where profits might become slimmer as regulative burdens increase.


Co-living is one of the newest offerings provided by multifamily companies to renters. Although it varies depending on the building and how much tenants pay, such apartments generally include private bedrooms with shared amenities such as kitchens, laundry rooms, and cleaning services, and, if everything goes according to plan, a sense of community.

In 2016, co-working conglomerate The We Company (then simply known as WeWork) launched a co-living brand of their own: WeLive. WeLive joined the dominant incumbent at the time, Common, in providing housing in expensive communities such as New York and San Francisco. Since then, WeLive has remained confined to only a handful of cities, but Common boasts a presence in secondary markets such as Pittsburgh, Atlanta, and San Diego. The company announced further expansion this month, with ambitious plans for Philadelphia, where the company has planned to spend $100 million to build space for approximately 1000 residents. Common will compete with German venture Medici Living, which also has plans for the City of Brotherly Love. Conventional multifamily companies should take note. If co-living catches on, expensive amenities such as curated cooking classes and access to communal dog walkers could provide new revenue streams.

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