Universal Parks and Resort To Build 1,000 Affordable Units Amidst Florida Housing Crisis

With Florida in the midst of a housing crisis that has seen rent in some locations increase by 37%, Universal Parks and Resort is stepping up by announcing the pledging of 20 acres that’ll be used to create a community of 1,000 affordable/mixed-income units, providing stability and work opportunities for those in need.

House Keys

2020 Predictions for the Real Estate Market

The real estate market in America has seen its fair share of ups and downs throughout 2019 including the fall of interest rates and the increase in house prices – we recently saw the “Beverly Hillbillies house” in California sell to Lachlan Murdoch for around $150 million. We also saw many of our shopping malls close, even though the commercial real estate sector was on the increase. And although many Americans are struggling to find property they can actually afford, investors were seeing their efforts being rewarded. But what is predicted for 2020?
According to there are several key predictions their team believe will be hitting us in 2020. We took a look at some of them here:

Increase in retail closures

By the end of 2019 more than 9,000 retail outlets will have had to close across America, and with 5,524 closing in 2018 and 8,139 closing in 2017 this is a worrying trend that seems to be on the increase.

The rise in shopping online has seen the decline for traditional “brick and mortar stores,” meaning many retailers, including J.C. Penney and Sears, have had to close large numbers of their shops – with many more losing their businesses altogether.

In an attempt to buck this trend, many malls are changing some of their space from retail to entertainment and leisure with gyms, restaurants, hotels and bowling alleys just some of the ways they are trying to entice money back to their premises. This looks to continue into the new year, but in the short term many landlords will be finding it hard to find the new tenants, leaving the consumer with fewer outlets to choose from.

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More starter homes will be built

At the end of the Great Recession the number of starter homes being built were low thanks to the number of people being able to afford them also being at a record low. This in turn led to all new builds being aimed at those that had the money to spare.

2020 has been predicted as the year that investors will start to build more starter homes to cope with the demand of young people who want to buy their first home. 2019 saw orders for starter homes increase and with the economy in a strong position – and unemployment continuing to stay low – it seems that the trend will continue.

The affordable housing crisis will see new solutions

America is currently in the middle of a housing crisis with the requirement of low cost housing at a high, not just for the lower earners but also those on a median wage.

According to a recent report, more than 7 million citizens are seeking homes in America, a demand that is not as of yet being met. And while in the past not-for-profit organizations or government bodies have had to find the money to resolve this, the new local and federal tax incentives alongside upcoming rent control laws mean the private sector are finally able to help resolve the situation, without affecting their bottom line.

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Multifamily housing problems to increase

When developers roll into neighborhoods across America with the aim to knock down homes and replace them with high-rises they are often seen as the baddies, the villains in the real estate story. However, with the affordable housing crisis continuing into 2020 it seems that many are looking at this option as the only option, much to the disapproval of others.

Earlier in 2019 Gavin Newsom, the governor of California, overrode single-family zoning while homeowners in the wealthier communities of Los Angeles have gathered together against transit-oriented community (TOC) developments, higher density developments and any other developments that could potentially resolve the crisis.

But as in every situation, you get the good and the bad. In the case of the LA issues, the TOC incentives have seen several new developments being brought forward and there have been a variety of investors trying to create solutions. However, while they are looking at multifamily investments by implementing smaller projects to see if they work, some of the developers of luxury condos are dedicating as little as possible of their low-income units in the hope they too can be awarded some of the incentives.

Over in Newark, Mayor Ras Baraka’s 2017 ordinance “Inclusionary Zoning for Affordable Housing” has helped to protect some of its most vulnerable residents yet has invited multifamily developers to the area as well as tech communities and even a $2.7 billion renovation at their airport.

With all of this in mind, the problems created by these multifamily housing problems are predicted to increase with many “not in my backyard” (NIMBY) feelings being brought forward by the neighborhoods as well as the anger that has been seen up and down the country when any type of gentrification has been implemented.

Real Estate Meeting

Real Estate Industry In Need Of Affordable Housing Solutions

The real estate industry is like the stock market, one day you’re way up, and the next you’re crashing. The housing market always fluctuates with the economy and today is no different. Due to a slew of combined issues, the real estate industry is suffering to find and maintain affordable housing in the US for clients looking to live in metropolitan areas. Phoenix, Arizona is seeing some of the worst of it currently, according to Chamber Business News (CBN).  A combination of lack of labor, high demand for properties to be built fast, and rising development costs is taking a hit on the entire industry, (CBN).

“I refer to it as the perfect storm. It isn’t just building and labor costs, but building products have gone up, too, and, today, the most severe labor shortage is for lot development, the folks that put in the sewer, concrete curbs and gutters, dry utilities, everything underneath the house, and the infrastructure to get to and from the home site,”  said Jim Belfiore, President of the firm Belfiore Real Estate Consulting in Phoenix. 

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Homeowners themselves are trying to take some of the heat off the companies they work with by providing additional costs, but even the real estate agents working with them know that what they’re paying additionally is way above what’s considered “normal”. The lack of labor is one of the biggest hurdles the industry is trying to get past, especially in Phoenix. According to CBN, construction costs overall have increased almost 40% over the past four years, give or take based on the specific residential market of course. Since a majority of the market’s clients can’t keep up with the rising costs, more labor workers are left without jobs. 

The labor shortage is affecting the whole country, but Arizona is especially feeling the negative effects. With an increase in anti-immigration laws and stricter policies regarding immigrant workers, many individuals have fled the state to avoid any threat of deportation. 

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“The labor shortage has really affected the schedule that home builders can deliver on because of a lack of contractors. There are projects that are going out to bid and getting zero bidders responding with proposals. It’s not unusual once you find bidders who can’t meet their schedule,” said Ron Hilgart, managing principal of a Phoenix construction management firm, to CBN.

Arizona alone has seen one of the highest influxes in population throughout the country, but they’re definitely not alone in the struggle of maintaining the growing clientele. According to a survey done by Freddie Mac, two-thirds of renters in this country can’t currently afford to become a homeowner, this is a 59% increase compared to last years renter statistics. The biggest and simplest solution to this growing problem is acquiring more land to develop properties. The need for property space is one of the leading causes to the decline in everything else within the industry. Agents are attempting to fulfill their clients specific limitations while finding them a proper space to call their own. Clients are demanding large and extravagant additions to be made to their homes that just aren’t necessary, such as large porches, grand foyer entrances, and garage spaces. These additions increase property value, which is currently being viewed as a bad thing due to a lack of clients that can afford those spaces.

“At the end of the day, anywhere there is land to build on today that is appropriate for residential use, I think our municipal leaders and our builders need to come together and allocate some share of that remaining land towards affordable housing and we need to have different requirements” concludes Belfiore.