Our Cities Can’t Afford So Many Rooftop Spas
First, let me be clear: Tomorrow is April Fools, not today. This is real.
There are luxury apartment buildings in Washington, DC, trying to lure renters with communal puppies.
That sounds like the makings of a tiny tombstone engraved with “Tragedy of the Commons,” if you ask me. Who’s going to take responsibility for a dog that lives in the hallway?
In any case, the shared dog is just one of many tricks and teases DC developers are using to entice renters, according to Jonathan O’Connell of the Washington Post.
“When the boom started a few years ago, a nicely finished kitchen or a landscaped courtyard made a project stand out,” O’Connell writes. “Now those are considered baseline essentials if a building is going to compete.”
The new must-have amenities include rooftop pools, pet salons, soundproof music “practice jam-rooms,” 24-hour resident concierge services, dry-cleaning valet, a calendar full of activities for residents, customized cupcakes and a signature cocktail at a nearby bar. Oh yes, and “a six-month-old miniature English bulldog named Emmy will take up residence in the sleek new lobby of 2M, one of dozens of apartment buildings being completed in the region this year.”
This is in a city where the average rent for a two-bedroom is over $2,000.
It’s conventional wisdom among urbanists that increasing density will improve housing affordability. It’s considered a natural, market-based solution for rising rents, as opposed to city regulations that artificially insert below-market-rate housing into high-priced neighborhoods. But developers in DC are showing their utter unwillingness to allow the market to edge prices down.
Even faced with a spate of post-recession overbuilding — there are 39,122 apartments being planned or built in the Washington area right now, the most ever recorded, according to McConnell — developers are loathe to lower rents even 3 or 4 percent, as some are being forced to do. More than 18,000 apartments will come online this year, according to the research firm Delta Associates, “a 69 percent increase over the 10,671 units that were completed in 2013.”
Builders are banking on the rising popularity of urban living among millennials and the culture at large, and preferences toward renting in particular, to justify their investments. All arrows point to them being right about those trends. But their drive to up-sell luxury units with absurd gimmicks like shared dogs points to their disconnect with the people who want to rent those apartments — not all of whom are so wealthy they’ll drop hard-earned cash at the mere mention of a spa or dry-cleaning dropoff.
Developers need to “overbuild” so that all kinds of people can afford to live in the city. Decreasing rents aren’t a sign that they haven’t customized enough cupcakes. It’s a sign that the market is doing what it’s supposed to do.
The developer mentality described in the Post article is what social justice activists decry when they criticize gentrification. Urbanists prefer to trust that developers increasing housing stock are doing the city a favor by boosting the supply of a scarce public good. But if builders are going to make sure that that public good is exclusively available to rich, young professionals, they’re proving the social justice activists right and the urbanists wrong.
The Post’s headline refers to “the breakneck race to lease Washington apartments.” That race is easily won. Anyone reading this article will intuitively understand that: Lower the rents and people will be fighting over these apartments.
Hum. This really does sound like an April Fool’s post for Streetsblog. I’m sure this is going to attract a lot of counter-arguments, so I’ll just limit myself to a few points:
Regarding this quote: “developers in DC are showing their utter unwillingness to allow the market to edge prices down,” developers don’t control the market, they respond to it. It’s the continued demand for housing that’s preventing prices from edging down. A market is both supply AND demand, and you’ll only start to see prices stabilize/decrease when supply meets or exceeds demand. I’d be curious to hear how rents are faring for existing units, as well — average rents don’t tell you much since they are constantly driven up by new buildings that are inevitably more expensive than older units, so it’d be more useful to know if the existing housing stock is continuing to increase in price. Regardless, DC is an uncommonly hot market, so meeting demand is a challenge there, especially with arbitrary height limits in the metro core.
And this quote: “developers are loathe to lower rents even 3 or 4 percent, as some are being forced to do.” What does that mean? Are they literally being FORCED by the district, or are you directly contradicting your message here to say that some developers actually are lowering prices in respond to cooling demand?
LOL at the ” developers unwilling” line. Hope this is April Fools because that was unusually bad.
Rooftop swimming pool? That looks like a civil engineer’s nightmare. And can you imagine one of those in California? First big earthquake, “Surf’s up!” Maybe someone closer to the world of architecture and construction can make a more knowledgeable comment, but I get the impression that for people in that field of endeavor, it’s a lot more “fun” to design for the upscale market than to squeeze every nickel and keep the costs to a minimum. Rather like asking automotive designers whether they would rather work on a new BMW 735 model or update a Nissan Versa. I would guess that there are architects who accept the challenge of economical building, and may even win prizes for designing something that “real people” can afford that doesn’t look like an army barracks, but I suspect they are in the minority.
Structural engineer not civil. Fairly straight-forward calculations using concrete that can accommodate the compressive forces. And, fairly straight-forward economics as well: demand and supply. I hope I have the means to live in a place like this some day and park my car in the garage of the building.
These projects take a long time from design approval to sales.
Upgrading amenities is an easier late-stage fix than downsizing floor
areas in response to a glut of new units. Also, the developers have
mandates like caps on the number of dwelling units and minimum parking
requirements. Covering those costs requires high rents. Furthermore,
the new units aren’t being built for people seeking cheap digs. Current
metro residents will move up into these units, freeing older units. The
filtering process plays an important role in bringing down rents
following a supply expansion.
Fine example of Modern Day TOD. I followed the link under the photo.
Here’s what I find patently ridiculous. Your statement above that its conventional wisdom by urbanists that density will increase affordable housing. Can you provide something to substantiate this statement? More likely than not, new construction instead drives up the cost of nearby less dense rental property. Further banks won’t lend unless there is substantial market support for the cost of construction. Land acquisition cost is just one factor. Unless you are going to build up in less than desirable areas the locations near transit like the northside of Chicago are already high cost areas. If you go into less desirable neighborhoods, fear of crime and lack of simple amenities like grocery stores may make it a hard sell to potential renters. While this could make it “affodable” in the short term once the area has gentrified, rents will andd do go up. So by now the conventional wisdom urbanists should be able to show us where this theory has been proved out without heavy government subsidies.
Rooftop swimming pools are fairly common even in Los Angeles, where the building codes are notoriously restrictive.
Thanks for the correction–I knew there was another category of engineer, but couldn’t come up with it. And I wasn’t aware of the number of roof-top swimming pools in LA, since, on the rare occasions that I do travel by air, the flight paths into LAX don’t cover the affluent areas.