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121 sats \ 5 replies \ @Undisciplined OP 12 Dec 2023 \ parent \ on: The Fed-Enabled Apartment Bubble Is Unraveling econ
That's been a really long developing issue. Especially with city zoning restrictions, it's going to take a long time to absorb all the extra commercial spaces.
I was thinking more along the lines that these properties are leveraged at x valuation but and are now worth y valuation that is vastly lower and what kind of systemic risk that could pose to the lenders and CRE bond holders.
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Part of that valuation mismatch, though, is that cities have designated too much real estate as explicitly commercial. It would be worth more if the owners had the option to convert it to residential.
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It's not just the zoning that's a problem there; in many urban city-center places there are also parking minimums for residential that would be stricter than for commercial.
And, given that not being able to park a vehicle at your residence usually means not owning a vehicle, and that for purposes of traveling more than a couple miles away, not owning a vehicle puts you at the whims of the policies of Uber et al (and/or, in the future, the whims of whoever might hack into the autonomously-delivered vehicle that you rent) ... I find it difficult to argue against these parking minimums at any level beyond the general principle of "it's their property, they should be allowed to do whatever tf they want with it short of harming other people".
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That's a great point to bring up. I usually only think about the urban parking space issue in the context of ride-share services, but you're right about it being regulated differently for different types of real estate.
I forget who did the cost analysis of city parking, but just requiring street-side parking spaces is unfathomably costly. The point isn't that "it's their property...". The point is that urban space is very limited and people should be able to choose whether or not they want to pay for parking spaces, which are very expensive.
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Agree to Agree
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