sutisuc t1_j9gmeha wrote
Jersey city does indeed seem to be a counterpoint that nonstop new building does not lower rental prices in a meaningful way.
Nuplex t1_j9gszyg wrote
How many times does it need to be said that building housing reduces the rate at which prices increase. It does not guarantee lower prices. Without new housing rent would just shoot up even faster.
A great analogy I heard: Saying building more housing doesn't help is like free-falling from an airplane and complaining the parachute hasn't completely stopped you mid-air.
Miringanes t1_j9gybt3 wrote
Try telling this to r/rebubble…
According to them, there is so much housing in this country that a crash is going to happen any day now…
Nuplex t1_j9h1s1y wrote
I guess they are technically correct, there is plenty of housing in the country.... if you just add it all together irrelevant of location and quality. Housing crisis is specifically because there isn't enough housing where the jobs are and where people generally want to live thats a reasonable commuting distance.
Also the day people realize that housing cannot sustainably appreciate forever (for numerous reasons) as an asset there probably will be an enormous crash and cultural shift of housing as an investment to housing as a need (see: Japan). We are nowhere close to that yet sadly. Probably take another 20 or so years.
GoHuskies1984 t1_j9hi5b2 wrote
Not trying to fight but anyone buying expensive property in hot neighborhoods already knows not to count on huge appreciation.
People buy in popular neighborhoods because they want to live there + build equity while doing so.
A collapse is not happening unless there are major external factors.
Miringanes t1_j9hmm35 wrote
Unless you’re levered to the tits… but yes, my wife and I bought in a pretty hot area and there will be some appreciation, but not like it has been. We bought where we did because of the charming housing stock and gas street lamps, commute time to Manhattan, and like minded people living in the town.
Jctexan t1_j9heexq wrote
This is my understanding based, too, especially regarding high-rise buildings. It can drive the overall values of an area up, while simultaneously helping to keep surrounding rents low by adding more supply. So there’s some give and take.
This is an interesting watch:
bodhipooh t1_j9gocuo wrote
What an odd take... the *correct* take is that we are NOT building enough. For all that "nonstop new building" people love to bemoan and criticize, we are getting MORE people than actual housing units, which is why prices DON'T come down or remain stable. Just to illustrate the issue, consider this: in 2000, it was estimated that JC's population was 240K. By 2010, it was estimated to be 247K (an increase of ~3% over 10 years) and then by 2020 it was estimated to be 292K (a increase of over 18% over 10 years, or 6x the growth of the previous decade). In the same period, the number of housing units did not grow nearly enough, so our vacancy rate of available housing units actually went down, demonstrating that we are not keeping up and instead are facing a market that is further constrained.
shootthemoon88 t1_j9h1497 wrote
I think you got some of your numbers mixed up there.
chazthetic OP t1_j9gmwit wrote
It feels like they want nothing but luxury renters from NYC
JeromePowellAdmirer t1_j9i30or wrote
If Jersey City stopped building, rich people would simply bid up the old houses, as happened in San Francisco and most of Manhattan.
russokumo t1_j9jldk2 wrote
If you could charge more for a product you sell, wouldn't you?
I moved to the NJ side of the Hudson specifically because my income became high enough that the ~4% city tax for NYC became a non trivial amount of money. I suspect many others did the same especially during covid when no one has to commute into the office. This gentrification effect is now at the snowballing phase for Jersey City where soon our rents east of Grove Street will rival the West Village in NYC.
Over a 30 year period "luxury" apartments should start trickling down to more affordable prices as new luxury buildings overtake them. But the NYC area is so insane that you can have old buildings like Grove Pointe continue to charge rents comparable to new builds in the area.
My biggest regret financially for rent was not buying property in Q3 2020 when prices were down (became a digital nomad instead since I thought NYC would become a crime and germ filled cesspool there was a really nice 1BR in Brooklyn that has now gone up 20%) or signing a longer term lease in Q1 2021 when rental market was still soft.
chazthetic OP t1_j9jtr82 wrote
I regret not buying as well. I agree with you about the trajectory of JC, but the unfortunate truth is the price increases right now feel like price gouging, the same kinds of price gouging we saw with groceries, gas, etc over the last few years.
I doubt the rising costs of an apartment were solely due to the costs of managing a building, and rather the desire to simply squeeze more and more out of the customers.
russokumo t1_j9jxcp8 wrote
Alas this is how capitalism works. You squeeze and get higher margins anywhere you can.
Interest rates were the other huge driver. Many other portfolio buildings for these owners are commercial properties on floating rate debt that they are deeply underwater on. So they're probably trying to make up for it where they can.
JeromePowellAdmirer t1_j9i2xhr wrote
Have you considered that what Jersey City is building is not enough to serve a metro of 20 million people? And yes, that is the market for Jersey City housing, not the 290k already here.
No one on the New York side is building anywhere close to enough. All that demand gets added on to Jersey City. Nothing Jersey City can do to fix it. New York has to fix it. If Jersey City stopped building, people would simply bid up the old houses, as happened in San Francisco and most of Manhattan.
HappyArtichoke7729 t1_j9gw9of wrote
What you see is that we aren't building enough. The prices would be even higher if we were building less housing.
pixel_of_moral_decay t1_j9h6kk6 wrote
Induced demand was first observed in housing.
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