Tag Archives: apartments

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 19

Nashville CRE Links

  1. Brentwood commercial real estate bounces back in big way — Tennessean (link)
  2. Developer near deal for prominent Charlotte site — Nashville Post (link)
  3. Green Hills building plan expands to 7 stories — Tennessean (link)
  4. Local group purchases East Nashville apartment building — Tennessean (link)
  5. Nashville apartment sold for $27.6M — Nashville Business Journal (link)

Nashville CRE Week in Review: Week of July 22

Nashville CRE Links

  1. Glen Oak Commons Trades for $7.5M — The CoStar Group (link)
  2. Is Nashville over-building apartments — Tennessean (link)
  3. Midtown mixed-use project ready for start after delay — Nashville Post (link)
  4. ‘Sleepy’ Nolensville sees eye-opening growth — Tennessean (link)
  5. Tractor Supply Co. picks site for new HQ — Nashville Business Journal (link)

Nashville CRE Week in Review: Week of July 1

Nashville CRE Links

  1. Antioch retail strip sells for $3.5 million — Nashville Business Journal (link)
  2. Green Hills office building sells for $2.8 million — Nashville Business Journal (link)
  3. Nashville’s retail real estate market lags other sectors — Nashville Business Journal (link)
  4. Rolling Mill Hill slated for next residential building — Nashville Post (link)
  5. Velocity sale more proof of Nashville’s white-hot rental scene — Nashville Business Journal (link)

Nashville CRE Week in Review: Week of March 4

Nashville CRE Links

  1. Congresswoman Black’s company buys MetroCenter building for $8.75 million (link)
  2. Demand, prices climbing for suburban apartments — Nashville Business Journal (link)
  3. Real estate notes: Black buys big — Nashville Post (link)
  4. Rep. Diane Black’s husband buys office building for $8.7M — Tennessean (link)
  5. Simon Property takes full Opry Mills ownership — Nashville Post (link)

Nashville CRE Week in Review: Week of Dec. 4

Nashville CRE Links

  1. Boyle exploring redevelopment in Nashville’s North Gulch — Nashville Business Journal (link)
  2. Centennial Park apartments on tap — Tennessean (link)
  3. Expect slow grind to real estate recovery — Tennessean (link)
  4. Lenox Village getting more retailers — Nashville Post (link)
  5. New contender mulls Cool Springs office race — Nashville Business Journal (link)

Nashville CRE Week in Review: Week of Nov. 27

Nashville CRE Links

  1. 2 East Nashville buildings to house 86 apartments — Tennessean (link)
  2. Ballpark feasibility study gives options, not answers — Nashville Business Journal (link)
  3. Developer wants Gulch hotel to offer distinctive design — Nashville Post (link)
  4. Experts: Opry Mills’ return shouldn’t harm others — Nashville Business Journal (link)
  5. TVA Moves Forward with Plan to Avoid $30 Billion Debt Ceiling — Nashville Public Radio (link)