I know some housing activists believe that rents never go down, and are convinced more new market-rate construction raises rents, but this couldn’t be further from the truth. Don’t believe me? Listen to what the landlords themselves have to say about it.
Here’s a new post from me over at This Old City:
You might think a post titled “High Rent District” would be worried that we’re not building enough apartments given these conditions, but Liz turns out to be worried we’re building too many – that is, that rents will go too low:
“There is a little too much—though not a flood,” says realtor Allan Domb, president of the Greater Philadelphia Association of Realtors. “I think we’re going to have a short-term problem. There’s a bit of musical chairs going on [...]
What will happen is that the rental buildings will be converted to condominiums,” he predicts. “Within 12 to 24 months, the units will be absorbed.”
Pardon us if we’re not shedding a tear for the poor landlords. The “short-term problem” Allan Domb alludes to is that rents will dip and landlords will take a pay cut.
For those of us who care about keeping Philadelphia affordable for low and middle-income earners, this is not a problem at all, it’s exactly what we want.
That Philly Mag post should have been titled Low Rent District, because that is the problem they are worrying about. They admit market conditions are super tight and rents are rising because there are too few apartments, but then give Allan Domb space to try to call the top of the market and urge developers to stop building more apartments at a bloody 4% vacancy rate. We need a 7-8% vacancy rate to see rents start coming down. That is what affordable housing advocates should be aiming for.