Tag Archives: apartment

Everyone Loses In The Controlled Economy Advocated By Affordable Housing Movement

By Wood Caldwell, Managing Principal at Southeast Venture

In order to keep up with the 80+ new people moving to Middle Tennessee every day (that’s over 30,000 a year, with a large portion of this influx coming to Davidson County), construction of apartment, condominium and mixed-use developments has hit record-breaking levels, and this boom must continue to in order catch up with demand. Indeed, the relatively high rental rates for apartments in some parts of Nashville are a function of this imbalance between supply and demand. When supply meets demand, rates will moderate. This kind of adjustment to reality is the beauty of a free market economy.

Unfortunately, there is a movement to control rents by exchanging development incentives for “affordable housing.” Let me say, everybody loses in a controlled economy. As stated before in other articles, it would be a “self-inflicted recession.” This is Nashville’s future if such a plan prevails.

Should everyone who puts in a good day’s work be able to afford to live in our city? Certainly, and there is plenty of moderately priced housing in Nashville already. Is it in the hip neighborhoods like downtown, East Nashville, Sylvan Heights, Germantown or 12 South? No, yet this is what this movement demands.

But why? Is this really a noble cause? Isn’t it rather like demanding that all Nashvillians who drive a late model Chevrolet be upgraded to a Cadillac at public expense? Is this something we should raise property taxes to pay for? It is worth harming our city’s economy?

The latest salvo in the affordable housing “crisis” is a proposed ordinance from the Metro Planning staff, mandated by Metro Council, which seeks to enforce affordable housing quotas by taking away certain key incentives from developers unless a certain number of units in their residential projects are rented or sold at below-market rates. Currently, developers are allowed to build taller buildings by adding floors when their projects include characteristics like public parking, eco-friendly design or mixed-use ground floor elements such as retail and restaurants.

Therefore, height bonus equals needed downtown public parking, “green” designed buildings and mixed use projects: key elements essential for creating a vibrant downtown. It’s a win-win. The irony of this proposal is that it was the Metro Planning Commission and Metro Council that voted to incorporate these bonuses years ago to stimulate development and bring people back downtown.

This ordinance now goes to Metro Council for consideration. Hopefully, they will vote it down, just as the Planning Commission voted unanimously not to recommend it to the Council. This ordinance’s heavy-handed approach to forcing the development of below-market housing will have the unintended consequence of severely slowing development of residential real estate throughout Nashville. Everyone loses.

It’s also worth noting that nowhere in the ordinance is there anything about paying for this plan – even though the planning staff’s report estimated it would cost $10 million a year to compensate property owners for the money lost due to “affordable housing” quotas. Where is this $10 million coming from? This obviously means a tax increase. Either that, or cutting funding to other city services like education and public safety.

Again I ask, is this a sacrifice we want to make so that people can move from affordable housing in Antioch or Madison into a place they can’t afford in downtown or East Nashville? Is it really that important for our city to subsidize a hip lifestyle for everyone? Surely we have more pressing issues.

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Nashville CRE Week in Review: Week of August 5

Nashville CRE Links

  1. Jimmy John’s opening downtown spot — Nashville Business Journal (link)
  2. Melrose to get 266-unit apartment building — Nashville Post (link)
  3. Nashville-area apartment portfolio sells for $130.5M — Nashville Business Journal (link)
  4. Tennessee construction contracts up 57% in June — Nashville Business Journal (link)
  5. Tractor Supply Co. announces headquarters move — Brentwood Homepage (link)

Nashville CRE Week in Review: Week of April 22

Nashville CRE Links

  1. Asurion to expand into downtown’s Ragland Building — Nashville Business Journal (link)
  2. House of Blues eyes Nashville med mart site — Nashville Business Journal (link)
  3. Nashville apartment occupancy climbs — Nashville Business Journal (link)
  4. Northwest Nashville warehouse sells for $5.2 million — Nashville Business Journal (link)
  5. Terrazzo’s office and retail space hits the market — Nashville Business Journal (link)

Nashville CRE Week in Review: Week of Jan. 1

Nashville CRE Links

  1. Nashville apartment building boom hits pivotal year — Nashville Business Journal (link)
  2. November construction spending up 1.2 percent — Tennessean (link)
  3. Region’s real estate markets carrying momentum in ’12 — Nashville Post (link)
  4. Report: Nashville’s industrial market rebounds — Nashville Business Journal (link)
  5. Report: Office market continues to improve — Nashville Business Journal (link)

Nashville CRE Week in Review: Week of Dec. 25

Nashville CRE Links

  1. 2011’s Top Reads: Retail — Nashville Post (link)
  2. Apartment sites lure investors — Tennessean (link)
  3. Brentwood apartment community fetches $25 million — Nashville Business Journal (link)
  4. Metro eyes purchase of 144-acre Nashboro Golf Club for parkland — The City Paper (link)
  5. Sale of Mall at Green Hills closes — Nashville Post (link)

Nashville CRE Week in Review: Week of Nov. 20

Nashville CRE Links

  1. Amazon land deal to wait till after holiday — Tennessean (link)
  2. Hotel developer pays $2.35 million for Gulch sites — Nashville Business Journal (link)
  3. LifePoint to leave Williamson for Davidson — Tennessean (link)
  4. Stonehenge announces Music Row apartment building — Nashville Business Journal (link)
  5. Top of the List: Downtown Nashville office buildings — Nashville Business Journal (link)

Nashville CRE Week in Review: Week of Oct. 23

Nashville CRE Links

  1. Cigna to buy HealthSpring for $3.8 billion — Nashville Business Journal (link)
  2. HCA buys land for $10.2 million — Tennessean (link)
  3. Nashville apartment market regains momentum in 3Q 2011 — Property Management Insider (link)
  4. Williamson Co. growing faster than office space is added — WSMV Ch. 4 (link)
  5. Viacom, parent of MTV, to open accounting office in Franklin — Nashville Business Journal (link)