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Cashing In On The Death Of The "American Dream": Rental Permits Soar Most Since 1990

Tyler Durden's picture




 

If it wasn't clear to everyone that the "old normal" American Dream of buying and owning a house is now dead and buried, then today's just announced housing starts and permits data put the last nail in that particular coffin, because as we noted earlier while single-family housing starts dropped once again, this time to a level last seen in October, the real story was in housing permits. But not single-family permits: multi-family ones, aka rental buildings, just had the biggest monthly surge since June 2008, jumping 26% in one month, and a whopping 54% from a year ago!

 

Putting this move in context, while single-family starts languish at recessionary levels...

 

... the US "rental recovery" is in full force as multi-family permits just jumped to the highest level since 1990.

 

While we are confident this data will be promptly revised lower as today's "fat finger" is normalized with 2, 3 or more seasonal adjustments, the good news if any is that while rental prices have been soaring in recent years...

... there may finally be some respite for America's new rental generation. Just give it 2-2 years before all these permits become starts, then completions, and finally the housing units are rented out.

 

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Tue, 06/16/2015 - 09:04 | 6201279 foodstampbarry
foodstampbarry's picture

Change you can believe in!

Tue, 06/16/2015 - 10:12 | 6201516 two hoots
two hoots's picture

Following is a suckers game. 

Tue, 06/16/2015 - 11:10 | 6201747 TwoHoot
TwoHoot's picture

two hoots a newbie shill. Don't be confused.

Tue, 06/16/2015 - 12:32 | 6202221 MonetaryApostate
MonetaryApostate's picture

At what point do these fails realize the economy will not support higher anything?

Tue, 06/16/2015 - 09:04 | 6201280 buzzsaw99
buzzsaw99's picture

yep they are building a "projects" near here. time to move again. thanks owebomba.

Tue, 06/16/2015 - 09:15 | 6201314 duo
duo's picture

Section 8 checkers, we like to call it.

Tue, 06/16/2015 - 09:36 | 6201367 buzzsaw99
buzzsaw99's picture

they build decent houses and sell them first. later they move in all the maggots so decent folk have to move. what a scam.

Tue, 06/16/2015 - 11:13 | 6201773 TBT or not TBT
TBT or not TBT's picture

Plan Bay Area in a nutshell.  Spread the rot out amongst those who had the means to escape it, with tyrannical coertion from state and federal governments and courts to make sure no community escapes.   Atop that, they banned open carry some few years ago atop essentially barring all but the few and special from concealed carrying.  All firearms purchases are registered now.  Woe unto the person who defends their self and property using deadly force out here, with the prosecutors and judges and juries we have.    This is not the USA.  

Tue, 06/16/2015 - 09:05 | 6201284 LoneStarHog
LoneStarHog's picture

Multi-Family Units = Agenda 21

It is necessary to crash the single-family home dream in order to acquire the lands for multi-family units.  The Agenda 21 plan is that by 2050 there will only be urban dwellers.  The suburbs and county life will have ended.

Tue, 06/16/2015 - 09:50 | 6201414 nuubee
nuubee's picture

Sheep are more easily controlled when they're kept in a fenced pasture.

Tue, 06/16/2015 - 11:06 | 6201733 TBT or not TBT
TBT or not TBT's picture

The hard left hates suburb dwellers, suburbs, anything that enables suburbs(cars and roads and local governments control over local development, local policing, local schools), and private property(duh, except their own).   They love central control and anything that limits the autonomy of the family, their number one enemy.   

Tue, 06/16/2015 - 09:06 | 6201289 nopat
nopat's picture

Millenials are moving out of their parents' houses.  This is a good thing.

Tue, 06/16/2015 - 09:21 | 6201328 LoneStarHog
LoneStarHog's picture

No!...It merely means that they are moving into multi-family units.  Eventually, there will be no one to purchase the parents home, except to make room for more multi-family units.  The "good thing" would be for the Millenials to care for the parents and keep the home.  If Millenials did this in masse, the Agenda 21 bastards will not be able to acquire the lands for multi-family units. (A pipe dream?  Yes!  Realistic?  No!)

Tue, 06/16/2015 - 10:11 | 6201513 nopat
nopat's picture

Dafuq?  I think you need to stop sniffing glue, amigo.  There is absolutely nothing about what you said that makes any logical sense.

Tue, 06/16/2015 - 10:54 | 6201686 TheGreatRecovery
TheGreatRecovery's picture

Dafuq?

Tue, 06/16/2015 - 10:55 | 6201652 TheGreatRecovery
TheGreatRecovery's picture

I do not see the benefit in millenials moving out.

Your parents need help.  Stay and help.

Also, I think smart families hand the house down generation after generation. 

All millenials accomplish by moving out of their parents' houses is to work to buy duplicate stuff that their familly house already had in the first place.

Maybe they need to do that to learn their lesson, but why just USE the lesson, by staying home and using your capital to start a small business? 

You want power?  Capital is power.  Keep your capital in your family and in your neighborhood.

Tue, 06/16/2015 - 10:56 | 6201693 TheGreatRecovery
TheGreatRecovery's picture

And vote.

Tue, 06/16/2015 - 09:07 | 6201290 847328_3527
847328_3527's picture

"Yes we can!"

Tue, 06/16/2015 - 09:16 | 6201316 silverer
silverer's picture

"Yes, we can't!"

Tue, 06/16/2015 - 09:08 | 6201292 Toolshed
Toolshed's picture

ZH is always on the cutting edge of financial news and thinking. We all now know the data from the "accepted authorities" is pure propaganda, at best. I see no value in veiwing or analyzing what we all know is garbage. Isn't it about time ZH continued as the leader in financial news reporting and start their own data set series? I think people will pay for the truth when all you can get for free is lies.

Tue, 06/16/2015 - 09:11 | 6201303 LoneStarHog
LoneStarHog's picture

People and in particular the so-called markets are not guided by "Truth"; rather by "Propaganda".  ZH publishes the propaganda reports and then injects the "Truth" into the missive.

Tue, 06/16/2015 - 09:09 | 6201294 JustObserving
JustObserving's picture

How will US BLS seasonally adjust rents so they only keep falling? Or will they hedonically adjust rents for great views?  Or for the sun rising everyday? After all official inflation has to a tenth or lower of real inflation:

Chapwood Index shows real inflation in US.

In 2014, it was 9.7% - 1212% of official US inflation (0.8%)

http://www.chapwoodindex.com/

Tue, 06/16/2015 - 09:10 | 6201299 Dr. Engali
Dr. Engali's picture

Judging from the chart that's the biggest jump since Lehman.

Tue, 06/16/2015 - 09:10 | 6201301 ebworthen
ebworthen's picture

Welcome to the debt serfdom plantation!

p.s. - rent goes up 10% next month.

Tue, 06/16/2015 - 09:15 | 6201312 silverer
silverer's picture

Those college debt holders aren't lining up to buy houses and new cars and start a family on their new mediocre pay job?  Who could have predicted something like this?  I'm shocked, I tell you.

Tue, 06/16/2015 - 09:17 | 6201318 appocean
appocean's picture

It's called affordable housing.  The developers have to reserve a small percentage of the units for certain median income levels and then they get government backed bond financing at ridiculously low rates.  Then the developer depreciates the buildings over 27.5 years.  If you subsidize it you will get a lot more of it... and the developers are funneling back tons of cash to the politicians... all to make the world a better place.

Tue, 06/16/2015 - 11:16 | 6201793 TBT or not TBT
TBT or not TBT's picture

Valerie Jarrett can explain how it works.  

Tue, 06/16/2015 - 09:17 | 6201319 Thunderbox
Thunderbox's picture

Seeing a lot of new extended care and senior assisted facilities popping up in my area. Would these qualify as rental units for permitting purposes?

Tue, 06/16/2015 - 10:20 | 6201550 quartshort
quartshort's picture

Depends on the location, but generally not. "Minimal care" is associated with Hospital/health care and finds its way into "Civic" use. At least that's the way it is here!

I keep telling everyone if they keep this up everyone will have a mistress in an apartment soon.

Tue, 06/16/2015 - 09:17 | 6201320 Dr. Engali
Dr. Engali's picture

Don't worry Hillary Bush will fix this problem.

Tue, 06/16/2015 - 09:21 | 6201329 yogibear
yogibear's picture

Flood the US with more illegals to bankrupt welfare and have 1500 people compete for each minimum wage job.

Tue, 06/16/2015 - 09:27 | 6201342 adr
adr's picture

You don't need to flood the country with more illegals when the average Latina is walking around with six kids. The low income birthrate will make sure there will be plenty of new mouths sucking on the government's tits.

Tue, 06/16/2015 - 09:27 | 6201343 adr
adr's picture

You don't need to flood the country with more illegals when the average Latina is walking around with six kids. The low income birthrate will make sure there will be plenty of new mouths sucking on the government's tits.

Tue, 06/16/2015 - 09:18 | 6201321 Seasmoke
Seasmoke's picture

Stealing your houses thru high property taxes and fraudulent foreclosures and then renting them back to you sure sounds like WAR to me. Yet 1 out of 100 I used to speak to (I no longer try except here at ZH) understand or even care. Amazing and sickening !!!!

Tue, 06/16/2015 - 09:18 | 6201323 yogibear
yogibear's picture

Obama helped create more debt slaves while bailing out and boosting up the criminal banksters.

Tue, 06/16/2015 - 10:57 | 6201698 TheGreatRecovery
TheGreatRecovery's picture

Yes. 

And so did George W. Bush.  And Bill Clinton.  And George H.W. Bush.  And Ronald Reagan.

Tue, 06/16/2015 - 09:21 | 6201330 Whoa Dammit
Whoa Dammit's picture

It's not multi-family housing, It's government subsidized housing. There is a big difference. We haven't had apartments that a young middle class person who is jsut starting out could stand to live in since the Clintons ravaged multifamily dwellings "for the children".

Tue, 06/16/2015 - 11:21 | 6201824 TBT or not TBT
TBT or not TBT's picture

They didn't call him the First Black President for nothing.    The Congressional Black Caucus loved this type shit, and Clinton's aggressive enforcement of CRA, alliance with commie groups like ACORN to prosecute banks into doing bad loans.     

Tue, 06/16/2015 - 09:21 | 6201331 loregnum
loregnum's picture

I would like to think a good percentage of the increase is for people who realize owning a house sucks and haven't been brainwashed by the whole "you need to buy a house" crap society kicks out. I own one and if I could go back in time I would just rent. It's cheaper.

Tue, 06/16/2015 - 11:08 | 6201740 TheGreatRecovery
TheGreatRecovery's picture

Some reasons to own a home:

You can share it with other family members, saving capital.

You can have a small business (including usually with a truck and tools and workshop), accumulating capital.

A house forces you into responsibility, because whatever breaks, no matter why, you have to fix it.

A house locates you in a neighborhood of other people also doing these things.  You NEED a support group, to get power, or protect yourself from power.  You CANNOT survive alone.

And... more homeowners than apartment-complex renters understand that, and therefore your support group will be smarter and more determined.

Tue, 06/16/2015 - 11:18 | 6201777 TheGreatRecovery
TheGreatRecovery's picture

IMHO, owning a home is OFTEN but not always financially good.

And buying an EXPENSIVE house, in the hopes of reselling it one day for a profit, is usually not. 

(Of course, you MAY know where the Clubmembers are going to buy in the future.  But that would be like knowing what stocks the Clubmembers are going to buy in the future.  MAYBE you are smart enough to figure that out, or MAYBE you are a Clubmember and other Clubmembers will drop hints for you.  But otherwise, you are gambling, and when you're gambling, The House always finds ways to stack the game against you.)

Tue, 06/16/2015 - 09:25 | 6201339 adr
adr's picture

Drive around your nearest ghetto and marvel at the new "Low Income" housing that is being built.

#BLACKHOMESMATTER

The builders get to build so they can support their insane stock prices. The ghettofiers get brand new accommodations that would be out of reach for any middle class person in almost any city worth living in.

Tue, 06/16/2015 - 12:24 | 6202178 farflungstar
farflungstar's picture

It's true. Where I live is a stone's throw from da "hood". Notice the nicely paved roads? The grocery stores built into the lobbies? The new playgrounds with sprinklers, rubber mats and freshly painted park benches?

The harder I work the harder I get fucked. So dudes of working age can stand around all day on the corner in da hood with their hands in their pockets, glaring balefully at everyone.

Tue, 06/16/2015 - 09:28 | 6201344 ISEEIT
ISEEIT's picture

I agree entirely that the 'economy' is a mess, and that the relentless propaganda suggesting recovery is farcical...However percentages of these permits that will result in rentals can't be accurately determined merely by the designated multi-family catagorization.

Agenda 21 related or not, it isn't unusual for multi-family housing to be built then sold, becoming owner occupied. At least some of this housing is very likely within 'master planned communities'.

Tue, 06/16/2015 - 10:24 | 6201563 quartshort
quartshort's picture

Keep your eye on the subdivsion notifications in the paper. Multifamily that isn't "condo'd" up front has to go through this process (or fee simple subdivision) for the abitity so sell seperately.

Tue, 06/16/2015 - 11:21 | 6201822 TheGreatRecovery
TheGreatRecovery's picture

Caveat emptor.  A structure built to serve as rental apartments might not be built to last hundreds of years.  As the structure ages, maintenance costs may increase.

Tue, 06/16/2015 - 09:29 | 6201351 cheech_wizard
cheech_wizard's picture

Let them make bricks without straw.

Tue, 06/16/2015 - 11:23 | 6201831 TheGreatRecovery
TheGreatRecovery's picture

I never understood that story.  Would the owner of a building want it built with inferior bricks?  What's the deal?

Tue, 06/16/2015 - 09:38 | 6201373 Everybodys All ...
Everybodys All American's picture

Section 8.

Tue, 06/16/2015 - 09:49 | 6201407 Wahine
Wahine's picture

4 to 7 people in every one bedroom apartment in my complex. people are always pissing in the parking lot because the bathroom is occupied.  I dont know if its possible for things to get worse but I have a feeling they will.

Tue, 06/16/2015 - 09:59 | 6201449 quasimodo
quasimodo's picture

You will know things are much worse when they begin to take a shit in the parking lot because they can't afford to flush.

Tue, 06/16/2015 - 10:12 | 6201515 p00k1e
p00k1e's picture

You can see the results of the po-po. Don't let your place fall apart.

Tue, 06/16/2015 - 17:21 | 6201908 TheGreatRecovery
TheGreatRecovery's picture

CHAMBER POTS.  Throughout most of history, people had CHAMBER POTS.  These days we have the modern technology of plastic, from which a variety of manufacturers have made available a veritable cornucopia of wonderful containers - with large diameter screw-on lids  - which keep liquids within from stinking up the bedroom as bad as chamber pots used to.  Simply use container until it gets "pretty full" and then carry it to the bathroom, empty it, and flush.  Saves water too.  (My doctor ALWAYS makes me fill a container.)

Maybe you aren't the only one in your apartment complex who is tired of the parking lot activity.

Tue, 06/16/2015 - 10:03 | 6201469 NoWayJose
NoWayJose's picture

This is being caused by low interest rates for savers. As boomers with money look for yield, one of the few places left is housing that can be rented out. As single family homes are now in a bubble, the safest (looking) place is multi-family units -- even if on a small scale. I am seeing a bunch of clustered town homes, along with 4 or 5 unit apartments going up.

Tue, 06/16/2015 - 10:06 | 6201491 p00k1e
p00k1e's picture

Buy rentals.  They'll be trapped for their duration.

Tue, 06/16/2015 - 10:27 | 6201571 Khannea
Tue, 06/16/2015 - 10:32 | 6201592 serotonindumptruck
serotonindumptruck's picture

The depreciation in rental property values due to the tenants having no vested interest in the property seem to be largely missing from the equation. Many tenants seem to have a "don't give a shit" attitude WRT their residence. Their unsanitary lifestyles lead to vermin infestations and damages from black mold, among others. There are other consequences as well, including intentional damage/destruction of the property in the event of owner-tenant disputes, often resulting from failure to pay rents on time or eviction efforts/actions.

Tue, 06/16/2015 - 11:13 | 6201780 1stepcloser
1stepcloser's picture

We are all renters...  Stop making Property Tax, Mortgage or Rent payment and see what happens..

Tue, 06/16/2015 - 11:35 | 6201906 Raging Debate
Raging Debate's picture

When your country starts turning into Mexico buy some property and become a slumlord. The chart agrees.

I mentioned a few times PM's and low income rental properties were the hard assets I preffered most. Now slim pickings though in my area for now but I wager that there will be a new but smaller wave of foreclosures in the next 24 months.

The property rental business should be great as we go through another lost decade. Then I'll sell them and buy a nice affordable house on a lake up north as the boomers have nearly finished migrating south and begin croaking. That is if we avoid a world war.

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