I believe your information is wrong and therefore your presumption is incorrect. I ask you to cite a source about the for-sale vs. rental housing downtown. If you can't, then please stop making a baseless argument.

 

What information of mine are you challenging?  What presumption?  On what grounds do you characterize my argument as baseless?  I humbly request that you give me something to work with other than "I think you're wrong, shut up."  Frankly that's rude. 

 

Why are you demanding citations from me for data that is readily observable?  The existence of entire buildings?  You want a journal article or something?  We can all count.  My point applies citywide, not just downtown, but of the new-build housing projects downtown it lines up like this:

 

Rentals:  Crittenden

For sale:  Pinnacle, Avenue Dist loft bldg, Avenue Dist townhomes

 

That's either 2-1 or 3-1.  Am I missing something?  Because otherwise, it is fair to say that most of the residental structures built downtown recently are of a for-sale nature.   

 

Citywide there have been acres and acres of for-sale housing built during the past 2-3 mayoral administrations.  Why you are attempting to make a controversy of its existence is beyond me.  It's there for all to see. The city's effort toward attracting families and homeowners is no secret either.  It's not an allegation on my part, it's an openly stated public policy.  It's the overt motivation behind the tax abatement scheme and has been discussed at length here and elsewhere.

 

With the most recent completion (to my knowledge at least) being 668 Euclid, I would have to say you are missing something.

 

668 isn't new construction.  As with condos, some people want rehabs and some don't. 

Why does their need to be a distinction when both involve investment capital

there is no distinction except in 327s head.

Why does their need to be a distinction when both involve investment capital

 

It's not the same market, because the demand for rehabs and modern units doesn't entirely overlap.  Some people strongly prefer one over the other.  MTS, for example, hates modern stuff.  But many people have the opposite preference, and some have noted in the relocation threads here that our apartment offerings are really skewed toward rehabs.

 

327 you are wrong on almost every level of that argument, and its been laid out for you several times.

 

there is no distinction except in 327s head.

 

Seems to me that every time I even mention the issue, you or KJP says something like this, but your position is never really laid out.  You say the economy is bad and lenders aren't lending, but we all know that, and that's not really responsive to what I'm attempting to discuss.  I'm trying to be respectful and courteous toward you, and to follow the rules of the forum.  If you think there's no place on UO to have this discussion, even its own thread, that's your prerogative.  But you are getting out of control with the personal insults.

 

That answers for 2 years, but not for the previous several decades.  Tons of new housing was built during the 2000s and almost none of it was apartments.  It's been a policy choice on the part of city leaders (some more than others) to eliminate rental units, replace them with owner occupied sf homes (detatched and otherwise), and generally move toward a suburban growth model.  The politics behind this, if not the entire discusson, is probably best suited for another thread.  But I think its a talk Cleveland needs to have.

 

327, I think your conflating city policy with developer choice.  What city policies have favored for-sale over rental housing?  Tax abatement, for instance, also applies to mf rental: http://www.city.cleveland.oh.us/CityofCleveland/Home/Government/CityAgencies/CommunityDevelopment/TaxAbatement

 

As far as I know the city has been happy to work with serious proposals from market rate and affordable developers, whether proposing rental or for-sale.

the "rehab" apartments downtown aren't exactly someone walking into an 1800's brownstone they have to rehab. they are buildings that have been entirely gutted and completely repurposed with completely new and modern units put inside of them. if you walked into stonebridge (new con), or 668 or Bridgeview or Bingham, or pretty much any unit on east 4th (what you are referring to as rehab) you would be hard pressed to tell the difference. because there essentially isn't one.

 

and you are just dead wrong when you continuously say that in the last 10-15 years all we've done is build for sale housing downtown. dead wrong. its been covered over and over you just don't seem to want to accept it.

 

 

 

By the way... I still can't figure out why anyone would complain about for sale housing downtown.  Almost ALL of downtown is rental units.  I mean there are 47 residential buildings listed in downtown proper.  Only 14 are for sale, 3 of which are partial rentals partial for sale. To further break that down, most for sale buildings are significantly smaller than those of rentals.  So out of the aproximately 5,005 "units" available downtown.  4,331 of those are rentals as opposed to 674 for sale.  That is EIGHTY SIX PERCENT rental units downtown.  So let us please stop with the cry that all we do is build condos.  Some people would like to buy homes.  Some people have money and can afford more expensive places. Some people can rent more expensive places, and some people need entry level rental prices.  There is a mix of all such places here, and price... like every other city on the planet is determined by the quality of the unit and its location in downtown. 

 

yes 1br's are hot now.  But they were not so hot when the downtown residential market was just breaking in 10+ years ago. most of what was built was catering to what the market was at that point in time.  First it was artist lofts, then it was primarily 2 and 3 br places where in yps shortly after college would come in with roommates for 2-3 years before moving on.  Then we saw some older apartments turn to the first for sale units which were and still are less expensive (grand arcade, etc). Then more upscale rentals. A handful of less expensive rentals (crittenden) Then trying to capture the empty nesters with baby boomers (pinnacle / AD), and really just in the last few years have we started to see a pent up demand for more late 20's early 30s professionals wanting to stay DT longer... and without roommates.  And thus... we've started to see more upscale rentals focussing on 1 brs (euclid block, 668).

 

These people aren't throwing darts at a board.  They are just responding to the market.  Why aren't there more rentals flying up right now catering to the 1 br market?  Ummmmm  have you noticed the GLOBAL LENDING CRISIS?  It isn't exactly easy to make these projects happen at the moment. 

 

Regarding condo loans:

 

This is a post I made in the little italy thread some time back... not much has changed.

 

well, let's see... about a year ago fannie / freddie changed their requirements for issuing mortgages at condos making it significantly harder for a potential buyer to get a loan.  I just dug up an old WSJ article that can give you more information here:

 

Fannie Tightens Its Conditions for Backing Condo Mortgages

http://online.wsj.com/article/SB123733304341863319.html

 

With these guidelines it can be nearly (but not totally) impossible to get loans as a consumer.  Then factor in how many banks got burned by the spec condo craze (think all the 90% empty towers in places like miami), and getting a construction loan is nearly (but not totally) impossible.  And then factor in for most consumers to get loans you need a 71% sold building.  Which means you will normally need 71% presales now to get your construction loan.  I actually read somewhere at some point that K&D was supplying 2nd loans to buyers to help them meet these new thresholds just so they can get units sold.  Are there exceptions?  Sure.  I've heard Key has been bending over backwards to help sales go through at the Park Building.  So case by case it can be done.  But if you're building you better be able to bring a LOT of equity to the table.  And if you're buying one, you better be prepared to bring a LOT of equity to the table.

 

Crummy situation all the way around for condos right now.  My wife works for a local bank.  Condo loans are nuclear to them.  They won't even look at giving people loans for condos.  Sadly, it's just the way it is right now.  These tighter regulations seem to be hurting a lot more than they are helping.

 

and finally regarding some sort of city policy wherein somewhere some public official is hiding behind a curtain that favors condos over apartments or that said individual is trying to steer some sort of suburban policy... well that just isn't true, and isn't how it happens. the "city" is generally acceptable of most anything that comes through. I believe actually the councilman for the ward of the flats project was even quoted in the crains article stating he could care less if its for sale or rentals. Developers will do whatever they feel is in their best financial interest and act acordingly. the math is the math.

Yeah.... 327, I believe you are confusing rehab with conversion.  Conversions such as the Gospel Press building in Tremont are as modern as anything.

 

I also agree with the above comment about developer choice.  WAAAAAAAAAAY too often on UO, you read some post talking about a private development which starts with "we should be" doing this or doing that.  People really seem confused over how much control "we" have over what a private interest wants to do with private capital and private land.  Zoning laws can only be so restrictive and they must allow for..... wait for it..... economically viable use.  Let me repeat that again, ECONOMICALLY VIABLE USE.

^ The Gospel Press Building is Tremont Place Lofts correct?

When you say city wide, it makes sense that there would be more for-sale housing because thats what makes sense in a lot of neighborhoods. Apartments are the big thing downtown, not for-sale units though. City neighborhoods such as Tremont, Ohio City and Detroit Shoreway on the west side do have a lot of infill houses and town homes. And you have places like battery park as well. But those types of housing makes sense in their surrounding neighborhoods. So ill agree that citywide their are probably more new for-sale housing, but downtown that is just not the case.

^^That's right.

 

I guess I want to know what 327 means by "modern". If you mean "built with new materials", then for all intents and purposes, buildings as extensively rehabbed as 668 and Bingham ought to qualify.

 

If you mean that the building needs a "modern style", then yes, there aren't rental properties that fit the bill, but then again, there are sooo many buildings needing rehab that it doesn't make as much sense to build completely new.

 

If you are concerned that there are (in the case of downtown) two more "modern" owner-occupied buildings than rental buildings (nevermind that the Crittenden by itself has many more units than the other "built from scratch" buildings combined), then I suggest there there are bigger things in life that should give you distemper.

The Gospel Press building is now Tremont Lofts.

Whether a "conversion" is equivalent to new construction is a matter of opinion.  In some people's minds, functional simlarity changes nothing.  It's not an issue to me but it is to others.  Maybe it's a matter of style, maybe it's a personal preference for things that are new, maybe a combination of those and other factors.  Taste is subjective.  But no matter how strongly we feel that people should view the two as interchangable, not all of them will, so it seems prudent to at least recognize a distinction. 

 

It's tough to discuss the subject of new apartments if the meaning of "new" can't be agreed upon.

There's a big reason why I expect this will be my lone contribution to this thread:  because the purpose of it appears to be to find/create some nefarious reason why new apartment buildings aren't being built as much as you want them to. And that reason just doesn't exist. OUT.

I dont think its an issue for enough people though, I mean look how successful 668 was. I think a lot of people actually prefer to live in rehabs, but thats just my personal opinion based on what I have seen and heard.

It's tough to discuss the subject of new apartments if the meaning of "new" can't be agreed upon.

 

Doesn't matter.  As Avogadro pointed out, even if we just look at total new build, it's not like multi family condo buildings have been popping out of the ground either.  Plenty of fee simple townhouses and single family homes, but that's because land in Cleveland is dirt cheap and the rental/purchase prices aren't there to support multifamily construction.  Oh, and for the record, the only multifamily buildings under construction now are all rental (Uptown and the two subsidized buildings in midtown).

Is there a point to this thread?

It prevents this general discussion from creeping into every single NEO development thread...

There's a big reason why I expect this will be my lone contribution to this thread:  because the purpose of it appears to be to find/create some nefarious reason why new apartment buildings aren't being built as much as you want them to. And that reason just doesn't exist. OUT.

 

The only one assigning sinister motives here is you.  The purpose of the thread is to discuss issues related to the apartment market that get too broad or too technical for other threads.  Like the meaning of new, and the notion that it might entail different value judgments for different people.  That filled half a page, and there's no reason to clog news threads with it.  We here tend to prefer older buildings, and would prefer seeing more renovations, if only for preservation alone.  I'm squarely in that camp myself.  But the idea that renovations and new builds are fungible within the apartment market is another matter.  I don't think that's true in any market for anything, and real estate is no exception.

 

I was also hoping to get into some of the issues raised by StrapHanger and Hts121 above.  The Crains article from yesterday raised some others.  Haven't gotten to read the entire market report that someone posted yesterday in FEB - http://www.tcg-mm.com/marketresearch/MM2011NationalAptReport.pdf - but what I have read is interesting, and that's also the sort of thing this thread would be for.

Let's say that a developer decides to build a 20 story tower in downtown for rental units.  At Cleveland's market rate, how long would it take to turn a profit from rents alone?  There is a reason why these types of developments are usually limited to subsidized housing.  Developers need incentive which the state/feds will provide for the latter.

Let's say that a developer decides to build a 20 story tower in downtown for rental units. At Cleveland's market rate, how long would it take to turn a profit from rents alone? There is a reason why these types of developments are usually limited to subsidized housing. Developers need incentive which the state/feds will provide for the latter.

 

It's just like building a parking garage as opposed to a surface lot.  There's a lot more up-front cost.  However, I do agree with 327 in that renos and new builds are not the same thing.  They have a completely different feel to them in terms of unit layout and windows, at least in my mind.  New builds are typically done such that you can have ample natural light in every room.  That is prohibited sometimes in the renos of older buildings.

^I think we'll all agree that the rehabs have different aesthetic appeals from new build.  I think the point others were trying to make is that the rehabs aren't just hanging new curtains; they are substantial projects with big costs and the units they brought on line are just as new to the market as a full new build project.  So in terms of aggregate supply and occupancy type, they are identical to new build.

^I think we'll all agree that the rehabs have different aesthetic appeals from new build. I think the point others were trying to make is that the rehabs aren't just hanging new curtains; they are substantial projects with big costs and the units they brought on line are just as new to the market as a full new build project. So in terms of aggregate supply and occupancy type, they are identical to new build.

 

In that respect, I agree, if and only if it's a complete gut job.

^I hear you about the difference in windows and layout though.  When I first saw the rehab layouts with bedrooms that had no exterior windows, I thought it was the strangest thing.  Now every time a drunken bro or car alarm wakes me up in the middle of the night I imagine it might be a glorious thing.

There are new builds, there are renovations, and there are conversions.  Lately, we've seen more 'conversions' than anything else.  This does not involve taking an old apartment building and sprucing it up.  This would be taking a warehouse or department store, e.g., and completely re-purposing the building for residential.  In Cleveland, this makes perfect sense for the City and developers alike.  It also seems popular with the market.  I say keep it up.

^Good point regarding the vocab.  I should have said conversion rather than rehab.