High number of Pittsburgh Rental Units

[Jesus Garcia]

Hi,

I'm curious about the high number of rental unit openings in Pittsburgh vs the population. Are people generally seeing that they're able to rent their units in a reasonable amount of time? I don't have much data on specific parts of town though and the data is from Zillow and US Census Bureau.

For comparison here are two other cities:

SF:
Units: 3k          Population:860k

Milwaukee:
Units:1,700      Population: 595,351

Pittsburgh:
Units: 2,600     Population: 300k

[Jay Hinrichs]

@Jim K.  this is not unique to Pittsburgh .. we see this in Portlandia as well..  infill glass and elevator MF  that takes 2 to 3 years in planning another year to build.. costs sky rocketed to build them  300 to 400 a foot just building costs.

now you have a 1000 sq ft apartment your all in cost close or at 400k.. rent 2500 and our median home price is 350k 

that renter can own.. and have a real garage hop on Max or ride bike or whatever .. or live out in the burbs were nice new homes that i build are 2500 sq ft for 450 to 500k all in maybe 3k a month with FHA loan.. why rent ??

there are no 700 dollar rents for SFR in our market pretty much starts at 1500 for a home.. but that home price is going to be 250k for a dump in the worse area to 350k.. so therefore very few SFRs are bought for rental purposes.

its 90% of renters live in MF in this area. And replace 3rd or 4th generation steel worker with a logger or fisherman and you have the same mentality.. although Portlandia has gone Tech Intel is the largest employer with almost 20k employees and it appears they are going to double down on their fab plants.. the last 10 years they build DX 1 2 3 to the tune of 10B they are going to build even bigger facilities in the next 10 years.. so there is a need for about 30k homes to be built.  We used to build 12k doors  a year until the crash.. now we are short 20k doors.  But as you point out its a huge issue with building costs and building MF that comes in at a price point were you can rent for 1200 a door. Owners who have owned MF for the last 20 years though are killing it with rents basically double or tripling. this is one of the big things you see on BP about OH it has to cash flow day one.. Well this market did not but if you went ahead and trusted it back then now your making a killing far more than you would in markets were rents are 600 to 700 and have been that way for basically decades. and have really no hope to go up much if not at all.. with the old owners of the houses moving on and landlords moving in and competing for the tenant base. 

that's why when i see proforma's for these markets and they include yearly rent increases I don't really think that is reality on the ground.. landlord gets a solid paying tenant last thing your going to do when tenant has a lot of options is raise the rent on them.

Now Oregon is going to rent control for the entire state.. I ran into a buddy of mine that has a large PM company about 10k doors all 50 unit and up projects.. he said its sure to pass.  but it allows 7% a year increase plus inflation increases so for now when we have seen rents double in the last decade to me its a moot point. you cant raise them 7% a year anyway