Reply to MOCO - County Wide Upzoning, Everywhere

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]No one should worrry about slummy properties or multiplexes changing the economic profile of their neighborhoods. Even making optimistic assumptions about land, construction costs, financing costs, and operating costs, rent would need to be north of $3,500 a month per unit to achieve a 7 percent cap rate. That rent requires a $140k annual household income.

The problem for potential small apartment building investors is that there are already a lot of units in DTSS and Bethesda available for less than $3,500 a month. The problem for potential small apartment builders who need financing is that there are already a lot of investments that deliver a better cap rate than 7 percent with less risk.

[b]If you live in a marginal neighborhood then you could see a lot of change as a result of upzoning.[/b]

This is all a show. Planning even knows it. Planning and the council want it to look like they’re doing something on housing and economic growth but this iteration of smart growth isn’t going to move the needle any more in the right direction than the previous iterations. [/quote]

This is the problem.  The various policy changes combine to undercut the detached SFH communities in the closer-in suburbs that are among the most affordable.

Bye bye Four Corners.  Bethesda & Chevy Chase?  No real change.  Just widening the gap.[/quote]

Four Corners already has SFH subdivided into rental apartments, but any new multiplex rentals probably will end up commanding more in rent than most owners pay on their mortgage right now, so maybe you get some gentrification but the new residents aren’t going to bring the neighborhood down. [/quote]

I get that it isn’t Chevy Chase, but some parts of 4corners is actually pretty nice right now, but hasn’t had the chance to go full cycle with home rehabs throughout the neighborhoods.  There is now way that it won’t drag it down.[/quote]

Construction for multiplexes won’t be cheap. Those costs alone will push rent toward $2k and that’s before land and operating costs. If those rents are too high for the market, no one is going to build. [/quote]

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