Tuesday, October 23, 2018

Property > people

At least 16 self-storage projects are in some phase of development in the New Orleans area, according to real estate investors and industry analysts. The boom will add well over 1 million square feet of new storage space — enough square footage to cover all of Canal Street from the Mississippi River to Interstate 10.

The recent boom in New Orleans is part of a national trend, driven by shifts in the real estate market, low interest rates, and the search by investors for a high-yielding investment that will hold up even in recessions.

The $32 billion dollar self-storage industry has grown by roughly 4.5 percent annually in recent years, significantly faster than the broader economy. In the last year, investors have added $4 billion in new storage spaces.
I especially love the image the Advocate chose to illustrate the extent of the square footage since the river-to-I10 is also a rough description of where most of the above sea level land is located around here.

Anyway, the city of New Orleans... like much of the country... is in the throes of a desperate affordable housing crisis.  Meanwhile capital has decided the best, highest, use of scarce real estate is building big lifeless crates to store things rather than house people.
That has helped push up rental rates on existing spaces. Real estate consultant Kevin Hilbert said investors have begun waking up to the fact that rents on some local storage units “are on a par with” suburban luxury apartments.

“Some storage companies can get $300 a month for a 10-foot by 10-foot unit,” he said. “You can get a pretty nice apartment for $3 a square foot.”

And self-storage, which generally consists of a warehouse divided into “rooms” of varying size, requires only a fraction of the maintenance and other costs that apartment buildings incur.

Real estate investors typically borrow most of the money they use to invest in properties, so low interest rates are allowing them to borrow cheaply.
Not a thing wrong with that market-driven system, right? Not according to  City Planning Comissioners Robert Steeg and Walter Isaacson who had this to say when considering a modest inclusionary zoning plan this month.
Commissioner Robert Steeg asked the CPC staff whether the city would be better “using a carrot rather than a stick” to attract affordable development through tax incentives, and whether there are “any empirical studies or data driven analysis as to which of those two methods works best.”

Isaacson also asked whether the “large amounts of new housing units proposed and coming onto the market” may end up dropping prices into affordable ranges “just by market forces.”
Market forces are going to have us all living in orange metal sheds, I guess, but that's the best we can do.

Update:  This afternoon your friends at CPC just voted to pass a recommendation to allow the Motwani-Sonder STR Strip on Canal St.  on up to City Council. As we've noted previously, the councilmembers don't seem to give a shit about protecting your housing stock from predatory capitalism either.  A lot of people have spent several years and a lot of hard work trying to convince them to give at least a little bit of a shit.  That hasn't worked.  I honestly have no idea if anything will.

Upperdate:  Okay now we can see why this all passed CPC so easily today.  The mayor, the DDD, and a few council members already had the fix in on it
Cantrell took a more critical view of the state of Canal Street. She remains concerned about cleanliness and the presence of vagrants often seen sleeping in the street.

"We have great, great space -- we know that and it's historic. But we have to do better," Cantrell said. "Even with pressure washing the buildings, you drive Canal Street, it's nasty. ... It still feels grimy."

Weigle said that in addition to Sonder's deal involving the three Motwani buildings, the Downtown Development District is exploring creative ways to get other buildings back in commerce. On the 800 block of Canal Street, Weigle said there's a plan to combine the vacant upper floors of three separately owned buildings into a new entity that would preserve the property rights of the first-floor owners who want to continue earning revenue from their respective retail spaces.
Love tooo preserve the retailers' property rights. But not nearly as much as we love "quality of life enforcement." 
Basically, they're gonna scrub the buildings down, hollow them out, and turn them all into vacation rental properties which they will protect the investment value of by aggressively rooting all us drunks, panhandlers and bicyclists out of the neighborhood.  This is Dizneylandrieu on steroids and I'm all out of answers as to what is to be done. For a minute or two we were kind of hoping it would make a difference if we just asked our elected reps to remember the poor folks a little bit when they made their land use decisions. But it's clear they don't give a shit.  Not sure what happens next. 

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