I’ve been thinking and writing a bit about the need for a new type of housing that is flexible and rented rather than owned. This seems to fit the bill, as reported in the New York Times.
AVE complexes differ from extended-stay residences in that they offer both luxury hotel-style service and rental units, furnished and unfurnished, with condo-style amenities. A tenant can sign a lease for any time period 30 days or longer, and move in within 48 hours. Furnished units at the midrise AVE complexes — the other two New Jersey sites are Clifton and Somerset — are leased on a monthly basis, for daily rates starting at $145. … But it is the unfurnished units — leased for a minimum of six months, and ordinarily a year — that are emerging as a “hybrid” housing alternative … Set off in separate wings, and offering weekly social events for residents, in addition to the AVE concierge services, free cafe breakfast and fitness center access, they are evolving into small “neighborhoods”… On the professional side, the AVE complexes offer business centers with banks of computers, and fully wired conference rooms … The price range for such units is $2,595 to $3,330 a month, when leased on a yearly basis. A two-bedroom unit with a study goes for $3,600 a month. One-bedrooms start at $1,995 per month and go up to $2,550. By contrast, a one-bedroom furnished suite costs $145 to $165 a day, if rented for a month. For a two-bedroom two-bath suite with a direct view of the New York City skyline, the rate is $295 to $395 per day.
December 16th, 2008 at 8:26 pm
It sounds like a hotel. It is also a lot to pay without getting any equity, who would want to do that, and why ? Why not at least use a tenancy-in-common arrangement for buying a share of a building ?
December 16th, 2008 at 10:06 pm
AVE could add flexibility for mobile professionals through time-share agreements between facilities in different cities.
December 16th, 2008 at 10:49 pm
I don’t know the market in New Jersey, but good mid-town Manhattan hotel rooms are going for $600+ a night. We were in NYC last month and stayed in a new high rise condo on West 55th and Park Ave for about half that through Vacation Rentals By Owner http://www.vrbo.com/. This site has individual rentals all over the country. At first we thought it would be strange staying in someone’s home, but it turns out these are houses and apartments that people buy to rent.
It seems something like AVE, except it puts you right in a neighborhood of your choice (if you know the city you want). You get a kitchen and more room than any hotel I’ve ever stayed in. This is a product of the Internet and thousands of individuals who have set up these sort of side businesses. It’s more organic and quirky than AVE, but with many of the same advantages.
December 17th, 2008 at 1:41 pm
You’re going to lose this one I think Richard. I share many of your sentiments regarding housing and fought off the urge to become a homeowner longer than most of my peers. But at the end of the day, people want their own places to design and decorate as they see fit; members of the creative class want to renovate dilapidated buildings and deferred maintenance homes; improve the neighborhoods and become parts of the communities. I think there will be a huge demand for 2nd homes or live-in offices inside the cities and would guess that’s probably what a lot of the AVE units are rented for but I don’t think people will ever stop wanting to have places of their own. Especially with child-bearing/raising occupying the most important and productive 20 – 30 years of life for most people.
December 17th, 2008 at 2:40 pm
This is an opportunity to explore more radical type of proposals.
I met with a builder/contractor & hybrid “green”building materials manufacturer, that is proposing to build a prototype 8 story tall, urban vertical farm
It produces it’s own energy via methane through a biodigestor, grows its own crops and includes housing, retail and manufacturing space. with new smart green building materials it should cost in the low double digits/ per sq ft to construct vs the triple digit costs per sq ft now with conventional buidling materials, such as steel or cement
December 17th, 2008 at 3:34 pm
Radical housing? What about large companies like Apple or Google creating hybrid rooming houses/extended stay type accomodations in target cities for their employees, partners, and those in their business ecosystem? If enough companies did this, in partnership with cioties, there would eventually be entire corporate sponsored, creative class neighbourhoods.
December 19th, 2008 at 1:06 pm
Hayden – I have no problem with the tenure type (rent v. own) actually. it just has to be flexible. The labor market can’t adjust if people can’t sell their homes. I think you could have some sort of hybrid tenure type where people can still renovate, design and decorate, or have a developer/ manager do it for them. It’s all about the price. It makes more sense to roll this all up and have professionals do this for us, then to try to do this on an individual, case-by-case highly fragmented basis. I rented my house in Pittsburgh from Carnegie Mellon. We negotiated the rent and the improvements. They wanted to fill in the pool that was there; I wanted to keep it: We split the maintenance. This can be done. I buy for all the reasons you say. I want to make it my own, and do it the way I like. But this can be achieved with rental housing, or some hybrid form where owners buy equity in an entity providing a wide range of housing at various locations and can relocate more flexibly when needed. Most of all, we need more fresh thinking on alternative options and strategies.