During five sessions throughout the day, industry experts delved into the vision for Texas’ future, what makes Texas so attractive to businesses, the future of mixed-use development, office tenants and multifamily development.
When the attention turned to multifamily development for the last session of the conference, the panelists agreed there is huge tenant demand for housing throughout Texas.
“The volume of activity has been on a steady incline since September of 2020 and [went] up a whole new notch at the beginning of the year,” Gables Residential CEO Sue Ansel said. “The first thing you hear out of every team's mouth is the increased level of traffic that's coming from out of the state. Primarily a lot of that is coming from California or New York, and those are just not places that we have heard in the past when we talk about the demographics of our prospects.”
Douglas Elliman Texas CEO Jacob Sudhoff said one trend from 2020 that has continued this year is tenants wanting to migrate from urban apartment developments to suburban homes. He said buyers looking for a house for under $800,000 in any of the state’s major markets are likely to end up in a bidding war.
“A lot of people just don't want to go through that,” Sudhoff said, noting a lot of buyers find going to an apartment much easier. “Trying to buy a home is still very difficult today in that price point. ... A lot of buyers are exhausted from it, especially if they put on offers on five different homes and lost all five. They just want to go rent.”
In reference to a June 16 report from the National Association of Realtors that the U.S. is 5.5 million housing units short of historical levels, Ansel said too much of the cost of building a multifamily unit is tied to government regulations.
“You've got to put money toward a new park or you've got to put in new sidewalks or pay for that new traffic light or whatever it could be,” Ansel said. “If you really want to create affordable housing or rent-attainable housing or whatever definition you want, we need to figure out a way to get some of those costs out of the system.”