Industry News

Industry News

We work hard to stay on top of the news impacting our industry and our clients. In this section we share what we believe is most newsworthy so you don’t have to go looking for it.

Statewide rent control – what does it mean for renters and investors?

California recently passed a statewide rent control law. Given the shortage of affordable housing in the state, on the surface this new law sounds like it will be good news for renters. Co-star conducted an analysis to understand what impact this new law is likely to have on both renters and investors. The California rent control law caps allowable rent hikes to 5% plus inflation each year until 2030 and only applies to older properties (15 years or older). Their conclusions might be surprising to both renters and investors. Based on their analysis, it appears the law will provide little help to lower income renters and have minimal impact on investors. The Co-star analysis found that annual rent increases, minus inflation, for properties more than 15 years old in California averaged about 2.7% since 2012, significantly below the new rent cap of 5%. And for those who invest in newer properties, the rent cap does not apply so rents will continue to grow more substantially.

This article was originally provided through CoStar. Read the full article here.

Private industry jumping in to be a part of the affordable housing solution

The affordable housing shortage continues to be a problem of monumental proportions for California and throughout the U.S. Even with the robust housing starts data just released for October, one only needs to look at the overall housing inventory picture to confirm that we still have a long way to go to meet the nation’s housing needs. The total housing units per capita in the U.S. is still at historic lows.

We’ve recently seen moves by the government and private industry to help ease the challenges surrounding new home construction and affordable housing. The FHA recently modified its guidelines relating to the condominium approval process. This modification is intended to help address the affordable housing crisis by streamlining the approval process of condominium projects. Read more about the FHA guideline changes here.

From private industry, Apple jumped in to be part of the solution by pledging $2.5 billion to combat the housing shortage in California. According to a statement on its website, the funds will be used to;

*  build and invest in affordable housing

*  create a mortgage assistance fund for first-time homebuyers

*  put together a San Francisco Bay Area housing fund

This article was originally provided through CoStar. Read the full article here.

Experts predict continuation of growth plateau for commercial real estate borrowing and lending

The commercial mortgage borrowing and lending market as a whole ended 2018 roughly flat compared to 2017. The growth plateau is considered the result of moderation in both property value growth and building net operating income. While the market as a whole has experienced a plateau, there were sectors that experienced a fourth quarter surge. Origination for apartment properties increased 22 percent and loans made for industrial properties rose 12 percent for the year. This article was originally provided through CoStar. Read the full article here.

Latest decision to leave Fed funds interest rate unchanged positive new for commercial real estate industry

The Federal Reserve delivered positive news for the commercial real estate industry after its March meeting. The central bank’s benchmark Fed funds interest rate was left unchanged in the 2.25 to 2.5 percent range. Most experts project rates will be held steady this year with just one interest rate hike in 2020. This policy of slow / no rate hikes combined with the still-low interest rates should continue to support demand for real estate and encourage capital flows into the commercial and multifamily property sectors while boosting prices. This article was originally provided through CoStar. Read the full article here.