Source: Atlantic City Lab
Today, for the first time in history over 50 per cent of the world’s population lives in urban areas, a proportion that is expected to increase to 66 per cent by 2050.
The world’s urban population is expected to surpass a staggering six million residents by 2045. By 2030, the world is projected to have 41 mega-cities with 10 million inhabitants or more. Projections show that urbanization combined with the overall growth of the world’s population could add another 2.5 billion people to urban populations by 2050 becoming the single largest energy consumer and C02 emitter on the planet unless we can solve the primary 3 factors that have been identified and responsible for the housing crisis.
1. Affordability:
Every Single City in America Is Facing an Affordable Housing Crisis. City centers from San Francisco to Seattle to New York to Boston have seen prices explode as a tide of new housing demand bumps into a limited housing supply.
Source: U.S. Department of Housing and Urban Development
A new report reveals that zero cities in the U.S .have enough affordable housing. Nationally, half of all renters are now spending more than 30 percent of their income on housing, according to a comprehensive Harvard study, up from 38 percent of renters in 2000.
In December 2014, Housing Secretary Shaun Donovan declared “the worst rental affordability crisis that this country has ever known.” The strain is not limited to the usual high-cost cities like New York and San Francisco. An analysis for The New York Times by Zillow, the real estate website, found 90 cities where the median rent — not including utilities — was more than 30 percent of the median gross income. Even dual-income professional couples are being priced out of the walkable urban-core neighborhoods where many of them want to live.
Rents have been soaring across the country, even outpacing home values, according to a recent Zillow report. Some areas are facing a particularly harsh reality: In San Francisco and Seattle renters have seen a nearly 15% yearly increase, and Denver tenants have faced an 11.6% rise. And it’s not just a big city problem. “Places that were more traditionally affordable are growing more quickly,” said Skylar Olsen, senior economist at Zillow. The reason? A shortage of available rentals. “Vacancy rates are at very low levels, which continues to push rents higher,” said Andrew Jakabovics, senior director, Policy Development & Research at Enterprise Community Partners.
There’s a lot of pressure on the rental market: Millennials are renting longer, housing inventory is tight, the housing crash has scared some would-be homeowners, and Baby Boomers are downsizing. There’s also been a shift in people wanting to live in more urban areas, where renting is more common. But there just aren’t enough “For Rent” signs to keep up with the demand.
2. Availability:
After completing a major demographic study projecting headship and homeownership rates through 2030, we concluded that demand for rental housing over the next 15 years will dramatically increase—and we as a nation are not prepared.
Source: Urban Institute
Earth will be home to more than 9 billion people in 2050,1 a jump of 2.3 billion over four decades. This global milestone will have a pronounced urban penchant. Two-thirds of the world’s population will reside in “megacities,” urban centers with 10 million inhabitants. Rapid population growth and urbanization will have a dramatic effect on the increased demand for urban dwelling units.
With homeownership levels at their lowest point in 50 years, the demand for multifamily rentals is booming. Recently, the Urban Institute released a study that suggests 59 percent of new household formation over the next 15 years will be renters, which will cause an even bigger surge in the demand for multifamily rental housing. While the pace of new construction has picked up in recent years, it’s not yet at a level to meet new demand.
With demand for multifamily rentals only projected to increase over the next 15 years, now is the time to begin thinking about the future of multifamily housing in the United States. Beyond unit availability, it’s crucial that leaders in this space also focus our attention on the issue of affordability, and sustainability.
Ultimately Availability is a factor of demand which is likely to increase because of the following trends and data sources:
● From RCLCO: millennials are twice as likely to choose to live in an urban neighborhood as people over 40.
● From the National Association of Realtors: 62 percent of millennials prefer to live in walkable mixed-use neighborhoods served by transit.
● From the Urban Land Institute: 64 percent of millennials prefer or insist on “walkability” as an attribute of their housing choices.
● From Bloomberg: In 1983, roughly 92 percent of Americans between the ages of 20 and 24 had driver’s licenses. As of 2010, that figure had dipped to 81 percent.
3. Sustainability:
Buildings Account for 39% of CO2 emissions in the United States.
Source: USGBC
Sustainable growth of cities is crucial to the reduction of greenhouse gas emissions. Consider that the 20 largest cities consume 80% of the world’s energy. Urban areas generate 80% of greenhouse gas emissions worldwide. According to The Global Footprint Network, we are currently growing at a rate that is using up the earth’s resources far faster than they can be sustainably replenished.
The commercial and residential building sector accounts for 39% of carbon dioxide (CO2) emissions in the United States per year, more than any other sector. U.S. buildings alone are responsible for more CO2 emissions annually than those of any other country except China. Most of these emissions come from the combustion of fossil fuels to provide heating, cooling and lighting, and to power appliances and electrical equipment.
By transforming the built environment to be more energy-efficient and climate-friendly, the building sector can play a major role in reducing the threat of climate change.
Buildings consume 70% of the electricity load in the U.S. The most significant factor contributing to CO2 emissions from buildings is their use of electricity. Buildings have a lifespan of 50-100 years during which they continually consume energy and produce CO2 emissions.
If half of new commercial buildings were built to use 50% less energy, it would save over 6 million metric tons of CO2 annually for the life of the buildings the equivalent of taking more than 1 million cars off the road every year. Absent significant improvements in environmental performance, the building sector will be a major contributor to increasing global CO2 emissions