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The number of 6 story high apartment complexes with massive footprints that have gone up in our university town is amazing. I need to find the raw numbers and compare that with the current population, but it is substantial.

Honestly, I have been wondering for several years now who is going to fill all these apartments. The scale of increase is really that big.

Maybe the answer is… no one?

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It's not an anomaly that many six (6) story apartment complexes are popping up everywhere. The building style is called a "5-over-1" (https://en.wikipedia.org/wiki/5-over-1) and its high-prevalence seems to be a result of building code standards and construction cost effectiveness.

Related youtube video discussing the topic: https://www.youtube.com/watch?v=mrxZqPVFTag

The United States has added 100 million people since 1995. The pace of building hasn't even come close to that. The best estimates I can find is that we've added about 30 million units in that same period. The answer to your question is: the people already there. The cost of housing has spiked because we've let supply get low after all.

The Fed tracks this.

Housing units per person really has not moved much since 2000 either way. We're basically near the median for the 20-year period.

https://fred.stlouisfed.org/graph/?g=j9kB

One big issue not stated in the graph however is that the amount of childless people and people living alone is up, so we require more housing to match changing preferences.

I can't help but notice that data doesn't go back very far.

It's a shame we can't compare to 1920, 1950 or 1970.

> shame we can't compare to 1920, 1950 or 1970

We only started collecting information on housing in 1940 [1]. That's why household data only go back that far [2].

[1] https://www.census.gov/history/www/through_the_decades/overv...

[2] https://www.census.gov/data/tables/time-series/demo/families...

The lack of housing is not distributed equally over the country.

I sure wish they'd distribute less of it to my city

What? Where do you live that you have come to think that there’s too much new construction?

GP could be using a double negative. "Less lack of housing."

Correct. Just a tough crowd tonight I guess.

My wife and I are looking for a house, and the lack of options is extremely dispiriting.

Yea my bad. Thanks for the correction.

It's a shame they are getting downvoted because I really like the wordplay.

> The United States has added 100 million people since 1995

Where did you calculate this? Or are you excluded deaths?

1995 population was 266.6M. Today is 331.9M. That is growth of 65.3M

If you build it, they will come.

I don't know how residential rent/lease works in comparison to commercial, but I have known office space to sit unused for years. They landlord would rather the space sit empty than lower the rate to find a tenant. I'm guessing there's a deduction for loss in taxes, so it might be in the landlord's interest to have a few empty properties. But that's just a wild ass guess

Don't know if it's true, but I've been told that loan renewals for commercial properties use the most recently rented unit as an anchoring point, so if you lower rents too much, you end up under-water in your loan.

Lenders are smarter than that. CMBS (commercial mortgage backed securities) lenders require borrowers to maintain a certain debt service coverage ratio.

https://en.wikipedia.org/wiki/Debt_service_coverage_ratio

You do not get to pretend a half empty building is worth the same as a full one.

The rent affects the comps.

If the landlord happens to own the comps (he owns the building after all) He will run into trouble in multiple ways if hes lowering rent, for example with resets (every 10yrs or so), rolling the debt, refi, , lowering the floor for units in negotiation or renewal etc

Still it doesnt mitigate the fact that there is a real estate loan that must be paid.

Yeah, I've seen way too much empty office/restaurant spaces in many of the places I've lived simply because landlords won't lower the rent. IMO, there should be penalties if a space sits empty for too long in high traffic areas. It's an eyesore, it harbors pests for neighboring spaces, and there's people out there who can definitely use the space but can't afford it. Intentional empty spaces are simply bad for communities and I wish something could be done about it.

You should be asking why property owners can afford to sit on an unproductive building in a high traffic area. Forget your penalties. The answer is complex but fundamentally lenders are ruining our society.

Land value tax would solve this.

But it could be designed to be more specific. Demonstrate the lost city revenue from hypothetical retail or office work; split the difference if it’s vacant.

I believe the other reason this happens is “extend and pretend” [0].

Basically the bank issues a loan to a developer, based in part on how much income the developed property is expected to bring in. If the expected revenue isn’t coming in (say because the rent is too high), the bank doesn’t always want to admit that it’s a bad loan and call it a loss, so they extend (the length of the loan) and pretend (that the rent the developer is trying to charge is realistic). This incentivizes the developer to keep the high rent as-is even though nobody is going to pay it.

A case of terrible incentives causing terrible outcomes.

0.https://www.wsj.com/articles/SB10001424052748704764404575286...

We haven't kept up with housing need since 2008. And the new construction is still far below our actual need.

Tons of home developers lost their shirts. Tradespeople also left the industry. Housing prices have risen quite a bit since 2012 which has attracted some home building, but it has still been too easy to just hold index funds instead.

I found our population growth…

2018 +11.8k +1.8%

2019 +6.8k +1.0%

2020 +6.8k +1.0%

2021 +2.8k +0.4%

2022 +2.8k +0.4%

I would estimate that just one of these massive facilities would house 1k people and we have built no less than 10 in the last 3 years.

Household size has also been declining though; later marriages, single parenthood and lower fertility have all played their part

If housing costs in your area were elevated, great, these 10+ will help bring supply & demand back to reasonable levels and allow locals to save money or spend on other things. This is good!

If housing costs were not elevated, it still makes sense to build as you can see that your town needs between 1 and ~7 of these (or equivalent) built annually just to absorb population growth at recent trends. Housing takes a long time to permit and build; it's great that builders are willing to build ahead and slow rent growth in future years. This is what we should have been doing everywhere.

This is based on census data, yea? Students are _notoriously_ bad at filling that stuff out.

I'm somewhat randomly guessing that the amount of housing in your town has increased under 10% since the start of the pandemic. With just remote work, it's feasible for the same population to expand into that much more housing, guessing that 15% of people want an extra room to use as a home office.

I saw this in my town during the pandemic - an unprecedented, insane shortage of housing that led to a near-doubling of rents. People are now moving back into the city after learning how inconvenient it can be to live in the boonies..

This sounds a lot like my nearby university town. Apartment complexes and retirement homes are being built. Single family homes are not.

The message is clear. You are allowed to live there, but only temporarily.

lol don't worry they'll fill up. The US ain't Japan.

Super dense Japan wouldn't fill up these apartments?

Except for like three or four cities, Japan has been rapidly depopulating, to the point where some towns and villages are giving away properties.

Even Tokyo has started declining in population.

Wow, population estimates for 2022 have Japan at roughly back to 1995 population levels. By comparison, the US population is ~25% larger than it was in 1995.

Population growth rate by country:

https://www.indexmundi.com/g/r.aspx?v=24

USA: +0.71, 135th out of 235

Japan: -0.29, 215th out of 235

Maybe a few hedge funds buy them wholesale and keep them empty until rents reach the desired price?

While lobbying to limit further construction and against rent control?

> I have been wondering for several years now who is going to fill all these apartments.

vacationers using Airbnb?

The answer is foreign students if it's anything like my university town.

The number of international students in US is less than 1M in the last year [1]. Maybe they will be true in college towns that they represent a higher percentage, but that is rounding error compared with the actual population demand. More than this, there are ~ 20M in the last year [2] university students in the US, so taking all universities there would be an average 19 to 1 ratio for US students vs international students. I really wonder what is your town and if this is really the case (or maybe a unique case).

[1]https://www.statista.com/statistics/237681/international-stu...

[2] https://www.statista.com/statistics/235406/undergraduate-enr...

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