construction – Dino's Storage

Apartment Crisis Looming

Scan the downtowns of America’s largest cities, and you are likely to see a staggering array of cranes. Most of them are helping to build luxury apartment buildings. In fact, multifamily construction is now at a 40-year high; the trouble is, developers are putting up the wrong kinds of buildings.

The luxury market is largely overbuilt, while there is a shortage of affordable rental housing, and developers are hamstrung by the now record-high cost of construction.

Apartment completions in the 150 largest U.S. cities jumped to 395,775 units in 2017, beating 2016 production by a staggering 46 percent and more than doubling the long-term average, according to RealPage, an apartment management software and data company. Luxury, upscale buildings accounted for between 75 and 80 percent of the new supply in the current cycle.

“It’s really tough to deliver product at those lower price points. The cost of land, the cost of building materials, the cost of labor. It’s really about the same regardless of what product you’re doing and it’s just tough to make a deal work financially if you’re going toward that middle market price,” said Greg Willett, chief economist at RealPage.

Demand for luxury apartments is strong – by choice, not necessity. Tenants in luxury buildings are often renting a second or third home or perhaps downsizing from a larger suburban home. They are not struggling to afford the monthly payments.

“In our portfolio, which represents 70,000 units mostly in the luxury space, we’re seeing that our renters are spending a relatively low amount of their income on rent despite rents being perceptively high,” said Toby Bozzuto, president and CEO of The Bozzuto Group, a multifamily management and development company operating in the northeast and mid-Atlantic. “That being said, it is a tale of two cities. In the middle income and the lower income markets, people are spending proportionally more on their rent – so much so I believe there’s an acute crisis headed our way.”

Despite rising incomes, nearly half (47 percent) of all renter households (21 million) pay more than 30 percent of their income for housing, including 11 million households paying more than 50 percent of their income for housing, according to a late 2017 report from Harvard’s Joint Center for Housing Studies.

“While the market has responded to rental housing needs for higher-income households, there are alarming trends that suggest a growing inability to supply housing that is affordable for middle- and working-class renters, let alone those with very low incomes,” said Christopher Herbert, the Joint Center’s managing director.

Rents on the high end flattened in the last year, and landlords are starting to offer concessions, like high-end amenity packages or a month’s free rent. That is not happening outside the luxury market, where rent increases are still strong due to low supply. Developers say they simply can’t afford to add anything but luxury.

“The two-by-four doesn’t care whether it’s in a luxury building or in an affordable building. It costs the same,” said Bozzuto. “The differential of course, is the rent and there’s a huge disparity in high end rent versus low end rent. So the issue is for us to develop an economically viable, feasible project, it has to be, by its very nature, high end. The rents have to be high to support the cost.”

Two-by-fours are now at a record high cost. Other products like steel and concrete are more expensive, but the real cost spikes are in land and labor. Skilled construction labor is not only expensive, it is extremely difficult to find.

Investors, Bozzuto said, are moving away from new construction and instead rehabbing older rental stock. These so-called “value-add” projects just raise the rents on current tenants even more.

There are some government programs that offer developers financial incentives to build lower-income housing, but they don’t meet the needs. “Those are finite and many, many of us are competing for those very finite resources,” Bozzuto said, adding that the luxury market is, “on the precipice of oversupply, but I think macroeconomic conditions are actually going to keep us this year from developing much further. Costs in particular, land costs, hard costs mostly driven by labor, will ultimately make it harder to build new buildings.”

Six Rising Home Design Trends

What home-design trends will likely catch on in new construction? Builder Online recently spoke to Mollie Carmichael, principal at John Burns Real Estate Consulting, and Nick Lehnert, executive director at architecture firm KTGY, about the design trends that are gaining popularity in the new-home market this year.
Private space
Baby boomers, empty nesters and Gen Yers are showing a preference for homes that have more private outdoor spaces, straying from the traditional “public” backyard, according to surveys. One way some builders are fulfilling this desire is by positioning the home’s architecture strategically around the outdoor space to enclose it more and allow it to be more open to the interior living spaces. They also are creating more covered outdoor spaces.
The Super Kitchen
Besides being a place for cooking, the kitchen is also the entertainment/conversation area in a home. Open-kitchen layouts have continued to grow in popularity, putting kitchens more front-and-center and visibly exposed to other areas of the house. Kitchen islands are offering extra seating and prep space while larger pantries are offering greater storage. “As the hub, it becomes a consumer’s dream to design these elements together with function, practicality and flair,” the designers say.
Bigger Media Hubs
More home owners are looking for a place for their large flat-screen television. Larger television sizes are prompting more builders to realize the need for greater wall space to hang the televisions and larger entertainment rooms to accommodate more seating.
Larger Garage Spaces
If home owners had their way, garages wouldn’t be just for parking the cars. More home owners want spaces for hobbies and storage. Builders are taking notice by creating larger garages for multi-use purposes.
Home Offices
An office and den space is becoming a bigger desire among home buyers, and the location of it in the home is becoming increasingly important. Placing the home office off the entry is no longer considered the most practical location for it, but builders are experimenting with moving it closer to the “living” area, such as off the kitchen or the family room.
Two Homes in One
As multi-generational living gains popularity, builders are responding by carving out more separate spaces for several generations to live together. For example, some builders are offering semi-independent suites with separate entries, bathrooms and kitchenettes.

25th Annual Marge Durham Walk for the Animals

A 5K run has been added to the Nebraska Humane Society’s Walk for the Animals. The annual event is set for Sunday, Sept. 28, at the Humane Society Campus, 8929 Fort St. In Omaha.

Registration and check-in open at 8 a.m., the Run begins and 9 a.m. and the Walk at 10 a.m.

The one mile walk will proceed east through the park and onto the Keystone Trail then take a loop around the soccer field and head back to the Humane Society. Your four-legged companion is welcome to walk or run with you on the first-ever 5k Run.

General admission is $10 for adults and children 10 and under are free. Those pre-registered online will be admitted for free. Register at www.NeHumaneSociety.org.

Event sponsors include Dino’s Storage and sponsors will have giveaways and information on pet products and services. A silent auction also is on tap and rescue groups will be on hand with volunteers showing what they are doing to help your favorite breeds.

You can meet adoptable dogs at the 9:30 a.m. Adoption Parade and dogs who have been adopted from the Humane Society will lead the pack as the walk kicks off at 10 a.m. There’s even a special short walk route, dubbed the Dachshund Dash, for little legs.

There will be plenty of parking available in the ConAgra lot north of Bakers on the northeast corner of 90th and Fort. From there you can hop a shuttle bus to the Humane Society. And please be good neighbors and try not to take Bakers parking spaces. For $20 you can pull in on the north side of Fort Street and valets will take care of your car for you.

Seven New Materials Could Change Buildings

There is a huge gap between material science and construction. It can take decades to move an engineering breakthrough from a lab to a building site. Yet as architects and engineers face bigger challenges – from earthquakes to dwindling resources to sheer cost – a new generation of smart materials is emerging.

Some of these materials are still far from reality outside the lab, but others are coming much more quickly. These concepts may move into actual construction in months, years or decades. The folks at gizmodo.com offer a look at some of what may lie ahead.

Conductive Paint. A team from North Carolina State University and the University of Eastern Finland are developing a practical version of conductive paint that can sense cracks in a structure. In a study published in June, the researchers explained how the system works: First, electrodes are placed around the skin of the building. Then, the conductive paint is layered over them. After that, a current is run through the electrodes in different combinations, and a complicated algorithm can determine whether the electrical potential has changed – if it has, the system can work out where the problems have occurred. Such of paint could be invaluable for older buildings, or those in earthquake zones. It also could be used to monitor any structural fissures at nuclear power plants.

Smart Bricks That Act Like Lego. Lego offers a brilliant solution to prefabricated architecture. Not only do they snap together quickly and leave zero extraneous waste, the holes could provide extra space for wiring, plumbing and even structural reinforcement. With that in mind, a company called Kite Bricks wants to use Lego as a basis for a real-world building material called Smart Bricks. Just like the toy, these concrete-molded bricks snap together with a layer of mortar-like adhesive. Holes in the bricks can be threaded with rebar for extra structural reinforcement. And one side of each brick can be removed to provide access wiring, plumbing and the like stored inside.

Carbon Fiber Rope. One major deterrent to the height of supertall buildings is elevator technology – at a certain height, the amount of steel rope needed to pull people upwards becomes too heavy, increasing the number of separate elevators needed to reach the top skyscrapers. Kone, a Finnish company, has developed an alternative: A rope made of carbon fiber that’s 90 percent lighter and could support elevators up to twice as high as the current limit. Called UltraRope, the material could enable elevators that are up to a kilometer in height. It’ll also change how elevators are serviced, since it will last twice as long as standard steel cable.

Plastic That Lights Up In the Wind. Mechanoluminescence is a phenomenon in which a particular material will light up when it’s put under some form of physical stress. In the case of this material, a team from South Korea’s Daegu Gyeongbuk Institute of Science and Technology infused plastic with colored phosphors made out of copper-doped zinc sulfide. The combination results in a white light when put under mechanical stress. To take advantage of wind energy, the researchers molded the plastic into tubes – when the wind blows, the tubes deflect and the light appears. As for potential uses, imagine facades that light up in the wind, or beacons that glow to broadcast information about weather conditions.

Invisible Solar Cells. If you’ve ever sat inside a room that has photovoltaic panels on the windows, you know it’s easy to recognize the tell-tale, shimmering rainbow color of the cells. Researchers at Michigan State have developed an entirely different type of “solar concentrator” that can be layered over any window. The product takes advantage of non-visible wavelengths of light – ultraviolet and the near infrared – pushing them to the solar cells embedded at the edges of the panels. The result is a material that can make energy from sunlight in any number of practical situations. Examples might include gadget screens, windows and doors.

Bamboo That Can Compete With Steel and Concrete. Bamboo is inexpensive, it grows fast and it’s surprisingly strong. A team at MIT is studying how to make better use of bamboo in construction. Led by professor Lorna Gibson, the project is testing how and why bamboo is so structurally advanced. They’ve found that the material at the edges of a bamboo rod is actually denser and stronger than the stuff in the middle – and they envision using it to create a secondary building material, like plywood, to make houses and buildings that are stronger, cheaper and less environmentally impactful.

Wallpaper That Charges Your Phone. Sound can transmit energy and a new company called uBeam wants to turn that technology into a building product. A transmitter takes electricity and turns it into ultrasonic sound. A receiver on your wireless device captures that audio and turns it back into energy. You’d be able to charge any device while walking around your home. Right now, uBeam is focusing on putting its technology in wallpaper or a piece of art, but it’s easy to imagine how these transmitters could be embedded in all sorts of materials and places – an ambient web of ultrasonic sound that networks entire buildings.

Construction Boom Ahead

There’s a huge construction boom coming and baby boomers will be behind it. The big generational bulge of the 20th century hasn’t finished exerting its outsized influence yet, and commercial real estate will continue feeling its weight in the next quarter century.

“We’re an aging population, so in 25 years there’s going to be a heavy focus on medical-related facilities,” said Kenneth Riggs, president and CEO of Real Estate Research Corp. Riggs also predicts a shift back toward affordable, multi-generational households that will translate to increased multifamily residential properties, particularly in close proximity to mass transit.

In seven years boomers will turn 75, a magical number in one way, said Linneman, because that’s when people usually begin moving into senior housing. When this huge and demanding demographic is ready for the next stage of their lifestyle, rest assured: “It will explode,” he said. “Right now senior housing is a food group in real estate, but it’s like vegan or something, not that established. In 25 years it will be a major food group.”