Regarding the September 2003 column by Mark Obrinsky [vice president of research and chief economist of the National Multi Housing Council], “What is the Right Level of Apartment?” the article comes to the conclusion that current levels of apartment construction are well-suited to demand. The methodology that arrived at this conclusion, however, seems flawed. The author states that condos, co-ops and other non-rental housing represent a distinctly different market than market-rate apartments, though he acquiesces that they do compete to some extent.
I would argue that multifamily, condo and single-familyare inextricably linked. Multifamily owners are currently losing renters to condo and single-family homeownership because of record single-family home construction, low interest rates and low down-payment programs. These factors, in turn, are creating a huge drag on demand, especially for Class-A, market-rate housing.
A proper assessment of the
William T. Hyman
Managing Director and Co-Director
PW Funding Inc.