Reprinted from GlobeSt
DALLAS—The Dallas/Fort Worth area has experienced impressive economic growth since the Great Recession. Affordability and job growth have attracted people to the area
in that time frame.
According to the US Bureau of Labor Statistics
, the DFW MSA ranks second in both rate of job growth and number of jobs added nationally. In Dallas alone, the population has grown more than 10% since 2010.
In fact, Texas will experience an acceleration of population growth during the next 40 years, according to Sam Tenenbaum
Analytics. The National Multifamily Housing Council
projects a national need for 4.6 million apartment units between now and 2030, with many of those units needed in the Dallas/Fort Worth area.
This has provided opportunity in multiple industries, including the real estate market. Owners and developers have enjoyed year-over-year rent increases and equity appreciation that is well above average.
While this is good for the economy, this has not had a positive effect on all stakeholders. According to Bloomberg
, renters nationally are spending more disposable income on rent than they have for the past 60 years. In the DFW area, the rapid increase in rental rates has pushed some of the workforce out of the more desirable areas and farther out to find affordable accommodations.
“The robust job growth and population increase has led to upward pressure on rents,” Tom Burns
of Presario Ventures
tells GlobeSt.com. “It has become difficult for renters to find affordable housing within a reasonable distance from their work. New supply is coming on line, but at a slower pace than over the past five years. Barring an economic calamity, this will continue to keep pressure on rents.”
One solution is to provide affordable units through government-sponsored loans, Burns offers. These loans provide some incentive to the developer or buyer to designate a certain number of units at a defined income level. The loan incentives can often offset the decreased rent received from the affordable units.
“We often try to work with the local municipality to produce a public-private partnership to further enhance the affordability component of the project,” says Burns. “Depending on the structure of the partnership, we can usually produce more units at an even more affordable price. We believe this is a win-win for all stakeholders involved. The municipality gets quality affordable housing, the renter has access to top quality construction at a reasonable price and the developer can execute the business plan within this framework.”
Recent data from Axiometrics
does show a slowdown in rent growth, but with a current pressing need for housing and a rapidly growing population, DFW will need some degree of affordability to keep its workforce close to home, GlobeSt.com learns.
For the GlobeSt article click here
November 22, 2017