10/20/22 Hampton Roads Mastermind Group Meeting

Hampton Roads October 2022 – Key Take-Aways

• We’re having the worst housing crisis since 2008 while simultaneously having the best housing market since 2008.  (Erica Sims – HousingForward Virginia)
• HousingForward Virginia has the ability to pull data from a variety of sources and uses that info to help inform policy decisions, advise non-profits, consult with real estate professionals, and relay important information to the public. (Erica Sims – HousingForward Virginia)
• HousingForward Virginia supports local and regional housing networks, provides leaders with actionable information, shines a light on racial disparities and works to build a positive image for affordable housing. (Erica Sims – HousingForward Virginia)
• While Q2 of 2022 saw the average homeowner gain over $60K in home equity, rents increased an average of 20%. (Erica Sims – HousingForward Virginia)
• Middle class wages are harder to come by in Virginia, with the largest growing job sector earning less than $30K. Meanwhile there has been a significant decline in low-cost apartments. (Erica Sims – HousingForward Virginia)
• The major issues facing the rental market include low supply of apartments – particularly at affordable rents, decreasing federal support relative to need, localities are behind on encouraging / permitting apartments, and wages among renters have not gone up. (Erica Sims – HousingForward Virginia)
• The LIHTC program is a success story of the last 30-40 years and has continued to grow. (Erica Sims – HousingForward Virginia)
• Home ownership was increasing prior to the pandemic but racial disparities remain persistent. (Erica Sims – HousingForward Virginia)
• Starter homes are disappearing from the market. (Erica Sims – HousingForward Virginia)
• The major issues facing home ownership include low supply, low interest rates (which has recently changed), localities haven’t zoned for denser, less expensive homes, higher wage workers weathered the pandemic, and the supply chain issues due to the pandemic. (Erica Sims – HousingForward Virginia)
• The affordable housing industry must adapt to be able to meet the needs of growing demand. (Erica Sims – HousingForward Virginia)
• Some housing solutions for local areas: encourage private markets, embrace innovative solutions, inclusionary zoning and generating new resources. (Erica Sims – HousingForward Virginia)
• There has been some slowing down of transactions. Still doing deals in every sector, but there have been fewer overall. (Richard Crouch – Woods Rogers Vandeventer Black PLC)
• While rate hikes were expected, they came more quickly than anticipated. Some people are hitting pause until we reach some kind of equilibrium. (Chris Ambrosio – Woods Rogers Vandeventer Black PLC)
• There has been a steady amount of leasing, especially industrial, some retail and even some restaurants. (Chris Ambrosio – Woods Rogers Vandeventer Black PLC)
• The impact of higher rates is becoming a factor. Looking at transitioning from being sales oriented to being purchase oriented. (David Rudiger – Boyd Homes)
• Recessions can offer opportunities when looking at long term goals. Working on projects now that were purchased 10-15 years ago. (David Rudiger – Boyd Homes)
• The pandemic has repositioned the workforce to work at home, so office leasing has seen a pause. The exceptions have been government contracts and healthcare. (Timothy McEvoy – Exclusive TenantRep)
• Struggles with supplies shift regularly from one material to another, so it’s taking a lot more effort to keep schedules on track. (Dan Shelton – Whiting-Turner)
• Continue to be busy and progressing as planned with a lot of black log. Keeping an eye on architects to see if volume starts slowing. (Dan Shelton – Whiting-Turner)
• There has been a shift in labor and the real estate industry has not kept up with innovation to automate some of the processes. (Lisa Burton – Burton Business Strategies)
• It was easier to do developments in Japan than in the US. (Avita Fleming – Interiornista)
• In terms of affordable housing and racial disparities, the biggest obstacle is getting loans. Keeping prices low is key when developing multi-family projects. (Avita Fleming – Interiornista)