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Eight Must Reads for the CRE Industry Today (June 21, 2022)

The Los Angeles Times looks at how much it costs to build affordable housing in California. Amazon is running into a labor shortage problem at its U.S. warehouses, reports The Wall Street Journal. These are among today’s must reads from around the commercial real estate industry.

  1. Affordable Housing in California Now Routinely Top $1 Million per Apartment to Build “More than half a dozen affordable housing projects in California are costing more than $1 million per apartment to build, a record-breaking sum that makes it harder to house the growing numbers of low-income Californians who need help paying rent, a Times review of state data found. The seven subsidized housing developments, all in Northern California, received state funding within the last two years and are under construction or close to breaking ground. When completed, they will provide homes for more than 600 families.” (Los Angeles Times)
  2. Here's Why This Housing Downturn Is Nothing Like the Last One “The housing market has cooled off a bit after an incredibly hot stretch fueled by the pandemic. That doesn’t mean it’s about to be 2007 all over again. America’s housing market is in far better health today. That’s thanks, in part, to new lending regulations that resulted from that meltdown. There aren’t as many risky loans or mortgage delinquencies, although high home prices are forcing many people out of the market.” (CNBC)
  3. Real Estate Industry Turning its Focus More to ESG “Real estate managers are seeing more and more that ESG factors can impact their bottom line.” (Pensions & Investments)
  4. Amazon’s Warehouse Problems? It’s Running Out of Workers to Hire, and Has Too Much Space “Amazon’s no-frill, low-wage, high-turnover labor model is beginning to show signs of stress. The tech giant could run out of workers to hire for its warehouses by 2024, according to a leaked Amazon internal research memo from mid-2021 seen by the publication Recode, putting its service quality, growth plans, and quick labor churn model in a pinch. ‘If we continue business as usual, Amazon will deplete the available labor supply in the U.S. network by 2024,’ the leaked report indicated.” (Fortune)
  5. John Oliver Knows Your Rent Is Too Dann High and Wants to Do Something About It “More than a third of U.S. households are currently renters, which is a problem for a whole bunch of inequity-related reasons. But as many news stories in the past couple of years have pointed out, being a renter is hard and getting harder — in the past year alone rents have risen 15 percent nationally, 30 percent in mid-sized cities like Nashville and Seattle, and a whopping 50 percent in Austin, which is not a great way to maintain weirdness.” (Rolling Stone)
  6. As Investors Flood the Housing Market with Cash, Potential First Time Home Buyers Become Tenants “In May, 34% of all home sales in the Valley closed as cash transactions, up from 31% in May 2021, according to Las Vegas Realtors. It’s a likely indicator that more investors are purchasing homes in the Las Vegas area. In many cases, those homes are being rented out, taking what could have been someone’s starter home off an already squeezed market. In May, the Las Vegas area had about a one-month supply of homes on the market, well below the six-month inventory of a balanced market.” (Las Vegas Inc.)
  7. The Real Estate Tycoon Who Brought His Surfboards to Work “Protégé of the swashbuckling mogul Harry Macklowe, Kent Swig was a West Coast guy angling to succeed in the rough world of New York real estate. But Swig saw things others didn’t.” (The Daily Beast)
  8. Return-to-Office Style, Brought to You by ‘The Talented Mr. Ripley’ “At certain angles, Pitti Uomo, a men’s fashion trade show held biannually in Florence, Italy, looks like the land that time lost. A land where men still wear bouffant paisley ascots, pinstripe three-piece suits and fedoras that must’ve been stolen off the set of ‘Guys and Dolls.’ You’ll see men proudly twirl handlebar mustaches like cartoon villains, puff self-consciously on tobacco pipes and pose with old-timey cameras. (Whether or not there’s any film in these cameras is one of the week’s great mysteries.) Yet one lap past the actual wares of the fair, where most brands marketed inviting, informal clothes, and these dutiful dandies appear as archaic as a crumbling fresco.” (The Wall Street Journal)
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