So it was announced today that Adam Neumann -- the cofounder and former CEO of WeWork -- has been quietly buying apartment buildings across the United States. According to the Wall Street Journal, he is involved in entities that have acquired more than 4,000 apartment suites valued at least $1 billion.
The buildings, which seem to be fairly typical and have at least a few hundred doors, are located in cities like Miami, Ft. Lauderdale, Atlanta, Nashville, as well as in many other US cities. It's not clear what the exact plan is for this real estate but people who claim to know things are saying that it will involve "redefining the future of living", or something along these lines.
Presumably this means catering to young professionals with cool design, fun amenities, and beer taps. Whatever ends up happening, it is interesting to see some of the cities that he/they are targeting. They are the cities that we've all been talking about for many years. You know, the ones that are growing quickly and have greater housing supply elasticities.
A new 280 acre park is currently under construction in an old quarry on the westside of Atlanta. It's called Westside Park. When it opens this spring (that's at least the target), it will be by far the largest park in the city. But already there are concerns that this investment in new public space could be triggering "rapid gentrification" in the surrounding area.
So earlier this month, the mayor's office issued an executive order that put in place a 6-month moratorium on all new construction permits in the communities surrounding the park. The order read like this: “...refuse to accept new applications for rezonings, building permits for new construction, land disturbance permits, special use permits, special administrative permits, subdivisions, replattings, and lot consolidations for non-public projects."
The objective is to avoid displacement. And since new development means change, this is a way to stop change. (Don't you just hate when things go and change?) The problem, of course, is that a moratorium on new housing doesn't stop change and it does nothing to address the desire to live next to this new amenity. It only stymies the supply of new housing to meet this demand. (It's also incongruent with the park investment being marketed as a "catalyst for new development.")
In fact, Joe Cortright (of City Observatory) and Jenny Schuetz (of the Brookings Institution) have both argued -- either directly or indirectly -- that the above move could actually increase displacement in the surrounding area; because the moratorium on new housing could simply redirect demand toward the existing housing stock. The order does seem to suggest that you can still renovate an existing property.
I wonder if any studies have been done on the externalities associated with temporary housing supply moratoriums. If so, I would be interested in reading them.
As part of the Amazon HQ2 bid process, a number of cities produced videos. I only discovered them today and so maybe some of you also missed them when they were released last fall. There are videos from Detroit, Boston, Pittsburgh, Philadelphia, Dallas-Fort Worth, Las Vegas, Louisville, Atlanta, and maybe others that I am still missing.
Some of the videos are bad. (I’ll let you make your own judgement calls.) I like the idea behind Atlanta’s video, which is the journey of someone named Georgia physically delivering their bid to Seattle. And Philadelphia’s video made me feel really nostalgic about my time there. Those were some great years.
But my favorite video is Detroit’s video. It feels authentic. The footage is outstanding. And it feels powerful. Though it is probably too long. It was a good reminder that I’m overdue for a visit. So here is Detroit’s video. If you can’t see it below, click over to YouTube.
[youtube https://www.youtube.com/watch?v=DO4J_PC1b5M&w=560&h=315]