Tag Archives: condos

Compared to homeowners, renters stay in a residence for a shorter time

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I recently read how long homeowners and renters stay in a residence:

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Redfin reported that in 2021, the typical U.S. home changed hands every 13.2 years. According to ResidentRated, a renter satisfaction survey company, a typical renter will stay in a multi-family building for 27.5 months, or just over two years.

How might this be interpreted? Here is what came right before the data:

Although the rules have been relaxed and tightened over the years, the secondary mortgage market in the U.S. requires condo buildings to maintain a certain level of owner-occupied units in order to fund mortgages for buyers purchasing in those properties. If buyers can’t get mortgages easily for a condo unit, they will look elsewhere. That can depress prices for the entire property. (Over the years, the percentage of allowable units that may be rented has fluctuated from 50 to 80%. Fannie Mae’s current rate of allowed rentals in a condo building is 50%. )

Also, renters may be wonderful people but they don’t always make great neighbors. They may not take care of the overall property as carefully as a unit owner would, and the length of their tenancy tends to be shorter than the amount of time a unit owner lives in a home they own.

Are renters less desirable because too many rental units can affect property values and renters may not care for the residence and they do not stay as long? Having seen such arguments in my research on suburban settings, there are both perceptions about renters and systems regarding properties that contribute to the overall preference for homeownership. Renting may be necessary for some and/or for a time and/or in particular markets, but Americans overall privilege owners who in contrast to the sentiments above presumably stay longer, care more for their properties, and promote higher property values.

If renting is going to be more common in the United States – homeownership is down or stable in recent years, it is difficult to purchase homes or units in many markets – then it will be interesting to see if these ideas about renters change or if it only reinforces decades-long ideas.

Chicago as “the nation’s capital of deconversions” from condos to apartments

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Henry Grabar suggests Chicago is ground zero for efforts to convert condos to apartments:

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Stories like this make Chicago the perfect place to understand how condos usually meet their end—not in a pile of rubble, but in a buyout that leaves some owners feeling lucky and others feeling betrayed. Lauren Kerchill, the owner of a Gold Coast unit overlooking Lake Michigan, was a holdout when investors came to buy out her building. After fighting to toss her condo board, she told Crain’s Chicago Business she was called “petty,” “greedy,” and “uneducated.” She just didn’t think she could find another home like hers nearby. In the end, she didn’t have a choice. Her neighbors voted to sell her building, at 1400 Lake Shore Drive, for $107 million in 2019—another record, this time the most expensive deconversion in the country…

But there’s another side to the story, in which deconversion is the only way out for condo owners stuck in deteriorating properties. In June, the collapse of Champlain Towers South in Surfside, Florida, drew attention to the challenges that confront condo boards as they assess structural damage and raise money for repairs. Maintenance bills for the Great American Condo Boom of the ’70s and ’80s are starting to come due in areas like South Florida…

While states like Florida, California, and Hawaii saw tons of new condo construction in the decades after the concept was established in the 1960s, Chicago saw a different kind of boom: older buildings becoming condos. Fearing rent control, facing declining profits, or saddled with obsolete prewar commercial space, landlords in Chicago raced to sell off their units in the 1970s. Yuppies and middle-class workers gobbled up these starter apartments, which provided an easy and cheap entry point to homeownership.

Fifty years later, those buildings are among the oldest condominiums in the country. Owners who have not kept on top of maintenance, and even some who have, sometimes find themselves facing massive repair bills.

It would be interesting to read more about the specific aspects of Chicago’s history, real estate market, and local regulations that play into the the number of condo deconversions in Chicago.

More broadly, this gets at two larger housing issues:

  1. How do deconversions fit with a larger American promotion of homeownership? Condos offer opportunities to offer homeownership opportunities in settings where the single-family home is less possible. But, given market conditions right now, is there now increased interest in having more rental units?
  2. While aging and the associated expenses is an issue for condo buildings, it is also an issue for many more housing units in the United States. What happens to older homes and residences when there is limited interest in repairing them or redeveloping the property? In wealthier communities and desirable locations, there are often developers and individuals interested in rehabbing or rebuilding structures. Hence, teardowns or new residences in suburban downtowns. Elsewhere, replacing or changing housing is a more arduous task.

How a fictional psychiatrist turned radio host lives in a swanky Seattle condo

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Television residents do not always match reality. One writer set out to find how Frasier Crane lived in such a large and well-appointed residence in Seattle:

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While characters living in unrealistically spacious apartments is a sitcom mainstay, the extravagance of Frasier’s apartment is central to the show, rather than an incidental. Frasier, ever class-conscious, takes great pride in furnishing his condo in the Elliott Bay Towers because it’s how he expresses his refined sensibilities. What better way to show off his yuppie bona fides than an Eames chair and a Wassily, a Le Corbusier lamp, a Chihuly vase, many questionable global artifacts, and, as he brags in the pilot, a couch that is “an exact replica of the one Coco Chanel had in her Paris atelier”? As a 1994 Chicago Tribune article points out, the decor choices were extremely deliberate—and extremely pricey…

From the available numbers, I learned that in 1989, the average salary for a psychiatrist was $117,700. Though Frasier likely would have made less starting out and more by the end of his tenure, for the sake of simplifying things, let’s say he worked that job at that salary from 1983 through 1993. If he saved the recommended 20% of his income during this period, he would have $235,400 stashed away at the end of that 10-year period—of course, this is before taxes…

“We talked about, ‘If anybody wonders how he can afford this it’s because Frasier has an investment income,’” Keenan told me. “He made a fair amount of money in Boston as a private therapist and he lectured and he wrote articles and he just invested very well. And at one point somebody said, ‘He’s from Seattle, maybe he got in on the ground floor of Microsoft.’ Little dividends arrived to augment what he was making in the station.”…

Keenan also pointed out that Frasier wouldn’t have seemed as wealthy compared to Niles, who lived in a “preposterously baronial house” thanks to Maris’s money. Plus, to an unfamiliar audience, “radio host” would have probably seemed like a pretty impressive and well-paying job.

In other words, the viewer should not ask so many questions. Just enjoy the show.

Seriously though, I could imagine a few additional points of explanation:

  1. Perhaps there was some unusual circumstance around the acquisition of the condo. Given the strange circumstances Frasier could get himself into, this is not hard to imagine. A short sale. Some gift or reduced price from a thankful client. He used his dad’s pension money from working as a cop. There could be lots of ways to explain this given the hijinks of the show.
  2. Frasier might have saved some money from good investments or had some extra earnings. At the same time, his character is not exactly one who makes wise long-term decisions. Was he smart enough to employ a good investment fund manager? Did he fall into some money (such as Microsoft stock as hinted above)?
  3. Frasier needs this condo as part of who he is. The expensive items, the preening tastes, the haughtiness are all tied to a pattern of conspicuous consumption. He likes to show off and does so with what he owns, including his residence. And the running gag with his father’s old chair does not work without everything attesting to Frasier’s acquisition habits.
  4. What other residence would suit Frasier? A single-family home in the suburbs? A tacky show of impressiveness like the home of his brother? A smaller city bachelor pad?

Luxury building boom continues in New York City

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The housing market may still be somewhat sluggish throughout the country but the luxury market continues to grow in NYC:

New York City developers will spend 60 percent more on new homes this year, while adding only 22 percent more units, a sign of the market’s tilt toward luxury condominiums, the New York Building Congress said.

Spending on new housing will reach $10.9 billion, the most in records dating to 1995 and $4.1 billion more than last year’s total, the trade group said in a report released today. The number of homes that money will build is 22,500, up from 18,400 in 2013.

A record wave of ultra-luxury condo projects planned or under construction in Manhattan accounts for the “wide disparity” between costs and unit production, said Frank Sciame, chairman of the New York Building Foundation, the trade group’s philanthropic arm…

Even as construction spending increases, the number of homes produced still falls far short of the 30,000-plus built annually from 2005 to 2008, the building congress said. In 2008, the city gained 33,200 units at a cost of $5.9 billion.

This echoes the larger housing market in the United States: while the market for cheaper or more affordable homes is slow, the luxury market still has plenty of builders and buyers. And we are talking about New York City, one of the places to be for the wealthy and influential.

The article also hints that New York Mayor Bill de Blasio promised lots of affordable housing in the next ten years. Having more luxury condos doesn’t necessarily preclude also building cheaper units but the statistics above suggest overall building is down. What big-city mayor could truly turn down or fight luxury projects? Cities desperately need such money even as they need to find ways to help promote housing for more average residents.

Want a home with extra amenities? Just buy a condo with hotel services

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Developers are building more condos with hotel amenities:

Developers across the U.S. are reviving a concept that collapsed with the real estate crash in 2008: combining condominiums and hotels. In cities including Miami, New York and Los Angeles, a rebounding hospitality market is joining with rising demand for luxury homes, spurring developers to construct new full-service hotels and ask premium prices for residential units associated with a high-end brand…

“I love the amenities the building will have — a restaurant that can provide room service, a concierge, maintenance, a person that can clean your place, valet parking,” said Viete, 25, who works for his family’s real estate company in Caracas. The $250 million project, scheduled to break ground in August, is already 85 percent sold…

Condo developments with a hotel can be structured in several ways. In some cases, residences may be connected to the lodging segment only so that owners can take advantage of the hotel’s amenities and benefit from the brand’s prestige. That tends to put a premium on unit prices.

In other developments, known as condo-hotels, a portion of the condos are made available to the hotel when owners aren’t using them, producing revenue for residents.

Sounds nice if you have some extra money lying around. On one hand, the story doesn’t say how much extra such units would cost over and above condos available elsewhere but on the other hand, if you have to ask, this isn’t the market for you…

Thinking about these units, they are an interesting contrast to a common American narrative about homeownership that goes something like this: you work hard to put together enough to purchase a home, you work hard to maintain it, you are more likely to participate in local community life, and it is a long-term investment and place for sentimental moments. Yet, the housing options available to those with more money goes against these principles. Instead of putting sweat equity into maintaining the home, you can pay someone else. Instead of getting deeply involved with neighbors and local issues, the wealthy can travel from house to house in exciting locations. Instead of holding onto a home because of family life and memories, housing becomes just another commodity to be bought and sold. In other words, condos with hotel features are far beyond normal American conceptions of homeownership.

Countering the suburban McMansion with the city “colossal condo”

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Suburban McMansions are known for their size but there is also a recent uptick in the size of condos in New York City:

At the peak of the Manhattan real-estate boom in 2007, the average new condo—from studios to penthouses—was 1,265 square feet. Now, new condos average 1,564 square feet, a 24% increase, said Kelly Kennedy Mack, president of Corcoran Sunshine Marketing Group.

The big condos, increasingly expensive and brimming with high-end details and amenities, are being built in converted garages and walk-ups, as well as part of new, ground-up construction across much of Manhattan…

“In New York, space is the ultimate status symbol,” she said.

Developers say that they are responding to the market—strong demand by the buyers in the upper end of the 1%. The new buyers, say brokers, include international clients looking for investment-grades properties, and local families, who after years of falling crime improving quality of life, want to stay in New York to raise families, or return there when their children head off to college.

Sounds like there is plenty of real estate money in New York City, whether it is for the latest offerings from Toll Brothers, big single-family homes, or large condos. Does this mean there is a bubble coming? Or, as the article goes on to note, what about housing options for the majority of New York residents?

It would be interesting to see how critics of McMansions would respond to these larger condos. Urban dwellings are often assumed to be greener and the average size of the new condo is still a couple of thousand square feet smaller than McMansions. Yet, they are quite expensive, aren’t exactly resource-free to construct, and tend to be within the reach of only a small segment of the population. In the end, are large urban condos and penthouses preferable to suburban McMansions?

Converting American churches into housing units

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More American churches are being converted into housing units:

The building is one of a number of church-to-home luxury conversions popping up around the country. As dozens of churches close or move to different quarters each year, they’re finding second lives as condo developments and townhouses.

The conversion process is growing more common as shrinking congregations and shifting demographics have made it difficult for some congregations to stay afloat financially. According to a March report from CoStar Group, a real-estate research firm, 138 church-owned properties across the country were sold by banks last year, compared with 24 three years earlier…

Architects have found creative ways to convert these historic buildings—which often have 40- or 50-foot-high ceilings, few or no interior walls and stained-glass windows—into homes and apartments that will sell for millions of dollars.

But it isn’t an easy process: Not only do the structures need intensive interior reconstruction and upgrades to meet modern building codes, but they often have been granted landmark status, further complicating renovations.

This is a good example of retrofitting. As the article notes, hundreds of churches have closed in recent years and converting the churches generally leaves the outside while making the interior reusable. One irony in this story is that I have read in recent years about growing conservative churches making use of vacant shopping structures, often big box stores, rather than building new churches or megachurches. So, in the suburbs, some churches are sacralizing profane spaces while in cities, new residents are secularizing once-sacred spaces.

It would also be interesting to hear how these new residential units were received in the communities in which they were built. The article profiles individual owners and builders but doesn’t talk much about the zoning process or reactions from neighbors. It sounds like people generally want to save the historic church buildings but there might be concerns about adding new residents. On the other hand, converting the churches means the property can be added to the tax rolls and generate revenue for the community.

Also, the examples of this article include fairly expensive condos and housing units. Has anyone turned churches into truly affordable housing? If so, the mission of the church might continue even if a congregation no longer meets there.

American housing reacts to changes in family and household structures

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After looking at some data about how much American families and households have changed in recent decades, Kaid Benfield asks an interesting question about how American housing might change to meet these realities:

So, as many of us connect with families in one way or another on Thanksgiving, I can’t help but observe that there really is no “typical” American family living under the same roof these days, if there ever was.  Rather, we have a diverse and changing array of household types and circumstances that smart planners and businesses will seek to accommodate.  The census data show that the growing parts of the housing market are nonfamily households, smaller households including people living alone, unmarried couples, single-parent households with kids, and older households.  The declining parts of the market are larger families, married couples, two-parent households, and couples with only one breadwinner, though each of these categories clings to a significant share of the total.

Interesting stuff, and mostly good for those of us who would like to see less sprawl and more walkable neighborhoods.  But also a bit complex.

The typical answer I’ve seen online to this question is to point to indicators that suggest younger (see here and here) and older adults (see here) will be seeking out denser housing. This may be true. I think we could also argue that American housing has already shifted to these realities in recent decades through several new options.

1. The rise of townhouses, particularly in the suburbs. These have the advantages of allowing for single-family home ownership, the ability to pay an association to maintain the housing as well as help protect property values, and denser housing which frees up more open space.

2. The rise of condos in both suburbs in cities. In suburbs, this has similar benefits to townhouses. In cities, this has been a boon for redevelopment and the movement of people with money into urban cores.

3. New housing products for older Americans beyond group homes including developments like the Del Webb communities and retirement complexes that include owned units (whether more like condos or detached single-family units).

4. More interest in tiny houses and tiny apartments (see this latest example from San Francisco).

5. Some New Urbanist communities and neighborhoods that allow for denser housing.

Perhaps the argument here about housing is about a matter of degrees; there have been changes in American housing in recent decades but it hasn’t necessarily been mostly anti-sprawl.

Note: I’ve been following some of these trends about changing family and household composition. For example, check out these posts (here and here) about more Americans living in single-person households.

Designer parking garages in Miami

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Parking garages tend not to have good reputations as they are often functional blocks of concrete that are measured by how many cars they can fit. But, Miami apparently has a number of “designer” garages including a proposed parking elevator for a new high-rise:

The $560 million Jetsonesque tower will rise in Sunny Isles Beach as part of a collaboration between Germany-based Porsche Design Group and a local developer, Gil Dezer. It likely will be the world’s first condominium complex with elevators that will take residents directly to their units while they are sitting in their cars…

Here is how it will work: After the resident pulls over and switches off the engine, a robotic arm that works much like an automatic plank will scoop up the car and put it into the elevator. Once at the desired floor, the same robotic arm will park the car, leaving the resident nearly in front of his front door. Voila, home!

The glass elevators will give residents and their guests unparalleled views of the city or of the ocean during their high-speed ride, expected to last 45 to 90 seconds…

The car elevators are the latest twist on Miami Beach’s burgeoning passion for designer parking garages. The highly acclaimed 1111 Lincoln Road designed by Swiss architects Herzog & de Meuron opened in 2009; also planned are garages by London architect Zaha Hadid, Mexico’s Enrique Norten and Miami’s own Arquitechonica.

Being able to live in a luxury condo that is greatly enhanced by parking right outside of your door sounds like a uniquely American prize. This is another reminder how American culture is dominated by the automobile.

At the same time, this could also be seen as an architectural or design issue: how can one successfully design parking garages so they are aesthetically pleasing? While these garages in Miami might be for more luxurious residences, there are other options. One option that seems to be growing in popularity is underground garages. While this is great in dense urban spaces where valuable land can’t be wasted on a separate parking structure, it can also be found in denser suburban developments where the goal is to allow condo or townhome owners to park directly below their units and to keep the garage out of sight. After all, large houses with prominent garages may be called “snout houses” in reference to the overarching emphasis on where the garage is going to be parked.

This reminds me of one of the parking decks in Naperville. The Van Buren structure features a stained glass window memorializing the “Cars of the Century.” Also, Wheaton has done a nice job of hiding their downtown garage behind more traditional looking structures.

Toll Brothers, former McMansion builder, near completion of luxury condos in NYC

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During the housing boom of the 1990s and 2000s, Toll Brothers was well-known for its large homes that they often called “estate homes” and critics called “McMansions.” But now Toll Brothers is branching out into new kinds of construction, including luxury condos in New York City:

The kinder, gentler Toll Brothers are debuting new luxury condos at 205 Water Street in Dumbo next month, and to support that image, the 67-unit “modern loft” building just got a huge PR boost from a Wall Street Journal preview calling it “unerringly contextual, but also elegant, and even at some points, whimsical.” Unlike Toll Brothers’ previous, shinier attempts in Brooklyn, the seven-story scale of 205 Water fits right in with its landmarked historic district (zoning allows up to 12 stories) and the rusty steel and concrete facade by architects GreenbergFarrow takes cues from the nabe’s industrial past. Adhering to the LPC’s requirements meant constructing 205 Water out of reinforced architectural concrete, a “temperamental material rarely used anymore as the primary material in new buildings” that projects a “world-weary sort of workingman’s facade” to the street. Upper stories are clad in cor-ten steel, a lighter material also seen on the Ford Foundation headquarters in Manhattan.

I wonder if the people at Curbed are disappointed since it sounds like Toll Brothers is building fewer homes they would view as McMansions and instead built contextualized structures that fit in more urban neighborhoods that maybe could even be considered green. Could Toll Brothers turn their image around?