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Continued solid demand for apartments are driving absorption of new supply. That is according to Equity Residential’s Mark Parrell, president and CEO, on the firm’s Q3 earnings call. “Our excellent people and properties that produced record high resident retention and this all resulted in same-store revenue growth.”
On the capital markets front, the company took advantage of a very favorable environment and issued $600 million in unsecured debt, with the yield of 2.56%. “There was tremendous demand for the issuance and we couldn’t be more pleased with the execution and I congratulate the team for it.”
He also talked about California recently passing AB 1482, and New York which has introduced new regulations on rents. He explained that it will create compliance challenges for all landlords, while also acting as a powerful disincentive to building the new affordable apartments needed in these two states.
“We agree that there is a shortage of workforce in affordable housing in many places in our country, but believe the actions taken in New York and California will not help solve these problems.”
According to Parrell, the new housing laws would discourage the production of new housing and do not materially address the root causes of housing production shortages, like zoning regulations that prohibit construction of multi-unit housing and other excessive governmental regulation.
“We also think that over time, it will lead to the deterioration of the existing affordable housing stock. Through our trade associations, we will continue to encourage policymakers to embrace actions like zoning reform and the removal of regulatory barriers to new housing construction as well as programs that create incentives for private market developers to build the affordable housing units our city so badly need.”