The Real Signal #140 - Multi-Bedroom Build-To-Rent Is Growing
Plus: National Homes Prices Continue To Decelerate And AI Use Collapses Neural Connections
Multi-Bedroom Build-To-Rent Is Growing
Scott Choppin Note:
This trend of increasing bedroom count and square footage in the build-to-rent (BTR) marketplace is being driven by two main trends:
First, the increase in the US population that traditionally and historically lives in multigenerational households. So families from Mexico, Central and South America, and from Asian countries, that traditionally live in a multigenerational household environment, increases the demand for multi-bedroom (and multi-generational) housing.
Second, economic pressure on all households driven by constrained housing supply (increased rents/house prices) and general inflation (see second graphic). A natural defense mechanism is to combine incomes and expenses across a larger group, i.e. families and roommates. We call this “economic sharing” where the burden to all households costs are spread amongst a multi-generational family. There are other versions of economic sharing in housing: roommates, co-living, congregate care senior housing, all demonstrate this sharing methodology.
Bottom line: The graphic you see below demonstrates the development industries response to these lesser known yet powerful trends (Green markup is mine). The dual economic pressures of housing supply constraint and inflation are not going away anytime soon. Add to this, the potential declines in employment opportunities driven by AI.
Multi-bedroom BTR is the future of rental housing.
”After steadily rising for decades, the median square footage of new single-family homes peaked around 2015 and has gradually declined since.
Ironically, while for-sale single-family homes have been getting smaller, single-family homes built for rent have been getting larger.”
“Earnings Vs Rent prices is crazy the last 15 years”
National Homes Prices Continue To Decelerate
“The deceleration continues for nationally aggregated home prices
Zillow Home Value Index decelerated this week from...
+0.7% YoY to +0.4% YoY“
AI Use Collapses Neural Connections
“…MIT just completed the first brain scan study of ChatGPT users & the results are terrifying.
Turns out, AI isn't making us more productive. It's making us cognitively bankrupt….
Brain scans revealed the damage: neural connections collapsed from 79 to just 42.
That's a 47% reduction in brain connectivity.”
Do You Know a Land Owner, Business Owner, or Developer That is Stuck on Their Development Project?
We Can Help Them Succeed
We have expanded our team for our project management and development services offer, to help us serve more clients in the future.
Our project services clients include:
non-developers
new developers
folks who have gotten stuck in their development and planning process.
Some of our recent work includes helping the San Pedro Fish Market with their Phase 2 project at the LA Harbor in San Pedro, including design management and entitlements. We are also the real estate advisor on their redevelopment of a brand new location on the historic Fisherman's Wharf in Monterey, and we completed a project for them at the former Joe's Crab Shack in Long Beach at Alamitos Bay (see flyer below)
We are working on numerous housing deals as an advisor as well.
Send me an email if we can be of help on your project: choppin@urbanpacific.com
