Affordability mandates add to construction costs too. Some 43.8% of developers reported that typical projects within jurisdictions with inclusionary zoning allowing the earmarking of a certain number of units priced below market rent resulted in an average 7.6% rent increase to cover the costs of those lower rents, according to the report. Consequently, 48% of developers said they avoid building in jurisdictions with inclusionary zoning requirements, and 87.5% avoid building within jurisdictions calling for rent control. “This translates into housing not being built in many areas where it is so desperately needed,” analysts concluded.
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The report comes in the midst of a recessionary environment that has seen interest rates rise, making housing affordability that much more allusive to some. Unable to afford homeownership as property values soar, many would-be first-time homebuyers – chiefly among the millennial generation coming of age for such milestones – have had to delay buying homes. As a result, many are flocking to apartments as they wait for affordability to re-emerge.
That pent-up demand for apartment dwelling in the face of housing unaffordability has benefited RentSpree – self-described as the industry’s premier end-to-end rental management software provider – that recently engaged in a partnership with Realty ONE Group. The partnership’s impetus was to offer more than 18,000 Realty ONE Group real estate professionals’ access to RentSpree’s “unique” rental technology, company officials described to Mortgage Professional America in an email.
In barely one year’s time – from January 2021 to January 2022 – RentSpree saw a spike of 95.75% increase in signups for the platform, company officials told MPA.