The U.S. Senate’s attempt to kill build-to-rent housing isn’t likely to become law, but just the threat of it is already stalling projects or stopping them before they start.
That’s according to a new Wall Street Journal story, yet another example of how dangerous politicians can be when they meddle in real estate markets.
A reader of my column on build-to-rent asked me why anyone opposes it. Good question.
Are the critics claiming that BTR developers are gobbling up land that would otherwise be used for traditional for-sale housing?
Are they saying that if BTR developers had to stop building homes to rent, they would instead build homes to sell?
Surprisingly, no. At least, I haven’t actually heard these arguments made explicitly.
Instead, what Sen. Elizabeth Warren has said is that single-family homes should be owned by individuals, not corporations. In her view, it’s OK for investors to own apartments and even townhomes, but not single-family homes.
I cannot even fathom why that would be a valid point. Clearly she doesn’t realize how classist her position is.
Why should individual buyers have a monopoly on single-family homes? Why should a home’s physical dimensions, its proximity to other homes, or any other characteristics make it unsuitable for renting?
I am well aware of the negative stereotypes of renters — that they are transient and not invested in their home and therefore don’t take good care of it or give back to the community. However, lots of tenants defy that stereotype, especially those paying market prices in build-to-rent developments.
It’s true that some renters trash their apartments. But some homeowners don’t take care of their homes either. The term “fixer-upper” doesn’t come from nowhere. Some even end up in foreclosure.
It’s not hard to find areas dominated by single-family, owner-occupied housing that are rife with social problems. Ever been to Appalachia? Or the poor parts of Detroit or Mississippi? Renters don’t have a monopoly on dysfunction.
Social problems are rooted in many things — concentrated poverty, bad parenting, childhood trauma, discrimination, segregation, pollution and the breakdown of family structure, to name a few. Social problems do not stem from families making rent rather than mortgage payments.
Liz Warren has tried hard to make homeownership more accessible to people with limited means. But there will always be folks who can’t get a mortgage or save enough for a down payment, or who just want to live in a place for a few years without buying.
There’s also a financial incentive to rent: In many areas, consumers get much more bang for the buck by renting instead of owning.
All of these folks benefit from build-to-rent housing.
Warren’s ostensible point is that renters of single-family homes are victims who have been frozen out of ownership. Yet she’s OK with rental apartments and townhouses?
The senator will never say that renters cause problems. But if that wasn’t in the back of her mind, I’d like to know what was.
What we’re thinking about: A true-crime podcast on the July 2003 assassination of City Council member James E. Davis in the City Council chambers brought me back to that dark time. I was the only journalist to interact with the killer, Othniel Boaz “Aaron” Askew, before the shocking murder. His cryptic messages still haunt me, as does the totally unrealistic thought that had I engaged with him further, the tragedy could somehow have been averted.
The first five episodes of the 10-part podcast, several of which include me, have been released. Tip: Listen on your phone to skip the ads. Send feedback to eengquist@therealdeal.com.
A thing we’ve learned: Residential buildings with one to nine units must start using the official NYC Bin for household trash starting June 1. (Bins for recycling are optional because, in theory, they have no food for rats.) The 25-gallon bins cost $45, the 35-gallon bins cost $47 and the 45-gallon bins cost $54, but owners of one- and two-family homes who receive the STAR property tax credit can be reimbursed by the city.
Elsewhere…
The City Council will not publicly release its analysis that found 35,000 homes could be built on small lots by reforming the construction code as the Council proposed on April 24.
So, kudos for the proposal but thumbs down for the lack of transparency. Apparently we will have to wait for the introduction of the bill to find out what’s in it.
A quote in the press release did reveal one target for reform, concerning stairs: “The proposed changes, particularly those related to single-stair buildings, will help unlock new housing production by making more mid and small-sized projects financially viable,” said Maddie DeCerbo, director of urban planning for the Real Estate Board of New York.
REBNY, like the Council, declined to elaborate.
Closing time
Residential: The most expensive residential sale recorded Tuesday was $10 million for a 3,483-square-foot sponsor-sale condominium unit at 83 Thompson Street in Soho. The Juracich Team with Corcoran had the listing.
Commercial: The most expensive commercial transaction was $64 million for a 126-unit student housing property at 3260 Henry Hudson Parkway in the Bronx. The Real Deal reported on the sale-leaseback deal by Columbia University to Fetner Properties and PGIM.
New to the Market: The highest price for a residential property hitting the market was $18 million for a 3,786-square-foot new development condo at 32 Walker Street in Tribeca. Peter Zaitzeff and Samantha Germano of Serhant have the listing.
Breaking Ground: The largest new project filed included three permits totaling 253,269 square feet at 521 East 132nd Street, 122 Bruckner Boulevard and 20 Brook Avenue in Mott Haven. Each permit has 99 units and 14 stories. Sam Wieder filed the permits on behalf of Anshel Fridman.
— Matthew Elo