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On Friday, the University of New Mexico released its long-awaited request for proposals for the Innovate ABQ site.

The RFP is looking for a developer to work within the framework that the UNM regents approved last month. The school is looking to forge a long-term public-private partnership with a developer that offers a variety of services, from real estate development to marketing and financing. The developer is expected to construct the laboratory, incubation, living and retail spaces envisioned at the site.
In the RFP, the school asks that the developer would spend 90 days to determine the first steps of the development, which include finding an anchor tenant. The deadline for submissions is June 1, and UNM’s target date to notify the selected firm would be June 30.
The school will be holding a presubmittal conference on May 5 for companies that are interested.
The school released a preliminary request for information in January. In March, the regents approved the framework for the site, which was designed by Perkins + Will. That approval meant UNM has an official plan for the seven-acre site Downtown after nearly two years of working on the project. Still, it will be 10 to 20 years before it’s finished, the school said.
The RFP doesn’t say when construction is expected to start.
By: Dan Mayfield (Albuquerque Business First)
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In this March 18, 2015, photo, visitors tour an apartment at the Gibson Santa Monica, a new luxury apartment building in downtown Santa Monica, Calif. The average U.S. rent has climbed 14 percent to $1,124 since 2010, according to commercial property tracker Reis Inc. Thats four percentage points faster than inflation and more than double the rise in U.S. home prices over the same period. (AP Photo/Richard Vogel)

LOS ANGELES — Living in an apartment? Expect your rent to go up again.

Renting has gotten increasingly expensive over the last five years. The average U.S. rent has climbed 14 percent to $1,124 since 2010, according to commercial property tracker Reis Inc. That’s four percentage points faster than inflation, and more than double the rise in U.S. home prices over the same period.

Now, even with a surge in apartment construction, rents are projected to rise yet another 3.3 percent this year, to an average $1,161, according to Reis. While that’s slower than last year’s 3.6 percent increase, the broader upward trend isn’t going away.

“The only relief in sight is rents in the hottest markets are going to go up at a slower pace, but they’re still going to go up,” says Hessam Nadji, chief strategy officer at Marcus & Millichap, a commercial real estate services firm.

The main reason: More people than ever are apartment hunting.

Young people who have been living with their parents are increasingly finding jobs and moving out. Rising home prices are leading many long-time renters to stay put.

In addition, most of the new apartments coming on the market are aimed at affluent tenants and carry higher-than-average rents. That’s especially true in cities where new buildings are going up in urban core areas, which means builders need to recoup higher land and development costs.

Consider Denver, where rents have increased more than 5 percent a year since 2010 — 9.2 percent in 2014 — according to Marcus & Millichap. Of the 9,400 new apartment units added last year, 23 percent were in urban core areas.

Competition for apartments means renters are less likely to be able to negotiate with landlords, or win concessions such as a free month’s rent.

Here’s a closer look at why apartment dwellers will probably see rents go up for a sixth straight year.

–MORE JOBS, MORE COMPETITION

During the last recession many workers who lost their jobs moved in with relatives or took on roommates. About 32 percent of U.S. adults were living with roommates or adult family members in 2012, up from 27.4 percent in 2006, according to Zillow, an online real estate firm.

Stepped-up hiring has begun to reverse that trend. About 2.8 million more Americans have jobs than 12 months ago.

“The share of young adults with jobs has climbed in the past year, and that will help many of them move out of their parents’ homes,” says Jed Kolko, chief economist at online real estate firm Trulia. “Most of them will be renters first.”

More people vying for apartments helps drive rents higher. And metropolitan areas with faster job growth are generally seeing higher-than-average rent hikes as well.

The three metro areas with the biggest annual increase in rent in January, according to Trulia: Denver (14.2 percent), Oakland, California (12.1 percent), and San Francisco (11.6 percent).

Job growth in each of those cities also eclipsed the national growth rate of 2.3 percent over the 12 months ended in January. Employment grew 3.7 percent in Denver, 2.7 percent in Oakland and 4.5 percent in San Francisco.

–HOMEBUYING DELAYED

Traditionally, renting has been a stepping stone toward homeownership. When rents rise, tenants are motivated to buy sooner, especially when interest rates are near historic lows, as they are now.

But these days, renters are taking longer to buy. The U.S. homeownership rate ended last year at a 19-year low of 64.4 percent.

Between higher rents taking a bigger bite out of the bank account and sharply higher home prices, potential buyers are having more trouble saving for a down payment and qualifying for a mortgage.

And many millennials, or 18- to 34-year-olds, simply prefer renting.

That’s true for Alyssa Hankins, a marketing and social media strategist in Los Angeles. She moved in February to a newly opened complex where rents range from $2,325 for a studio to $5,920 for a two-bedroom unit. She wants to be able to move quickly if a job opportunity comes up.

“It’s less about affordability and more about flexibility,” says Hankins, 29.

When renters stay put, fewer apartments are available for new tenants, which in turn drives up rents.

–NEW APARTMENTS ARE PRICEY

Developers added 238,000 apartments nationwide last year, a 14-year high, with another 210,000 expected this year, according to Marcus & Millichap.

In theory, more apartment construction should help bring down rents because landlords would compete for tenants. But 80 percent of new complexes, Nadji estimates, are high-end projects aimed at renters willing to pay a premium for amenities like gourmet kitchens and concierge service.

How much of a premium? The average rent for apartments completed last year was $1,721. That’s 46 percent higher than the average apartment rent for older units, according to Marcus & Millichap and data provider MPF Research.

“There’s very little new supply being added anywhere else,” says Nadji, “so that’s why there’s so much pressure on rents and very little choice for the average renter.”

By: Alex Veiga (Albuquerque Journal)

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A high-profile push to approve a New Mexico right to work law stalled during the recent 60-day legislative session, but the issue appears likely to be back next year — both in the Roundhouse and on the 2016 campaign trail.
Business leaders and other backers of the proposed state labor law change say they intend to keep up the pressure, despite strong opposition from state labor unions.
“Nobody locally thinks this issue is dead,” said Drew Dolan, the president of a political committee formed last fall largely to advocate for passage of a right to work law. “It’s something our state can do that doesn’t cost a dime and can create more (economic) opportunities the minute it’s approved.”
The group, called Jobs for All New Mexico, drew the ire of majority Senate Democrats during the legislative session by sending out mailers in at least one senator’s district.
But Dolan, who is also the president of Titan Enterprises, an Albuquerque real estate company, said the group will continue to advocate for a right to work law. “The goal is to make it a campaign issue,” he said Friday.
All 112 New Mexico legislative seats are up for election in 2016, and many races could be expensive.
On the other side of the issue, labor union leaders say they’re bracing for another attempt at passing right to work legislation and also plan to be politically active.
“We absolutely will weigh very heavily where legislators were on basic workplace fairness issues, worker pay and benefits in deciding where we play (in next year’s elections),” said Carter Bundy, political director of the American Federation of State, County and Municipal Employees union in New Mexico.
He also said the push to make New Mexico the nation’s 26th state with a right to work law —Wisconsin became the 25th earlier this year — has galvanized the state’s unions, saying, “We’re united as we have not been in decades.”
This year’s most visible right to work measure cleared New Mexico’s Republican-controlled House, but was derailed in a Senate committee on March 10.
It would have meant nonunion employees — in both the private and public sectors — would not have had to pay union fees as a condition of employment. Though union membership cannot be required under federal law, such fees can be mandated under contracts in unionized workplaces.
Rep. Dennis Roch, R-Logan, who sponsored the House-approved bill, said similar legislation likely will be introduced during next year’s shorter legislative session. The governor has the authority to set the agenda for 30-day sessions.
“It’s something I believe in, and it’s something I’d be interested in doing again,” Roch told the Journal. “I think you’re definitely going to see that show up in the 30-day session.
A spokesman for Gov. Susana Martinez said Friday the Republican governor “absolutely” continues to support the concept behind the bill, but is currently focused on reviewing bills passed during this year’s session.
Meanwhile, Senate Majority Whip Michael Padilla, D-Albuquerque, said any future right to work bills would have to be scrutinized, but said he believes such laws in other states have stifled worker pay levels.
“If  this is a priority of the governor, I would expect it to be back,” he said.
By: Dan Boyd (Albuquerque Journal)
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Last year, GDP growth was a mediocre 2.4%. While it was the best growth since 2010 when GDP growth was a “sparkling” 2.5%, it means yet another year, the ninth in a row, of sub 3% GDP growth. There has never been a run of such weak GDP growth since record keeping began in 1930. Yes, there were terrible periods but they were all blessedly brief, never lasting more than two or three years and they always occurred during recessions. In our case, the recession ended in June 2009. What is going on? The fact is that our weak GDP growth is not surprising at all, let me explain.
GDP growth is composed of two things, growth in the labor force and growth in labor productivity. GDP rises when more people work, and better yet, when they work more productively. Productivity growth is particularly important because it boosts living standards.
GDP growth was very good following WWII because annual labor force growth grew dramatically from 0.5% in 1950 to almost 2.5% in 1975. As a result, the prime-aged working population, those between the ages of 25 and 54, grew from 60 million to almost 80 million in 25 short years. While population growth then began to decline, it remained above 1% through 2003. As a result, the prime-aged population continued growing, hitting 122 million in 2003. As a matter of fact, the labor force grew much faster than the population during the 1970s and 1980s due to the huge influx of women into the labor force. As a result, the prime-aged working population grew by over 3% per year during the 1980s.
Since 2003, population growth has slowed further and is now barely 0.7%. Moreover, the Boomers have begun retiring in large numbers and the number of working men and women has, for a number of reasons, continued to slowly decline. As a result, the size of the prime-aged working population has essentially flat-lined since 2003. As a matter of fact, it peaked in 2007.  If the size of the prime-aged working population is flat, it’s hard to experience rapid GDP growth even if labor productivity growth is good.
Regrettably, labor productivity growth has not been particularly good of late. But first some history: from 1948 through 1973 labor productivity grew at an amazing average annual rate of 2.8%. Add to that rapid labor force growth, and it’s no wonder GDP growth averaged 4.1% per year. Between 1974 and 1990, labor productivity grew by an anemic 1.4% percent but given good population growth, GDP growth was a solid 3.0% per year. From 1991 through 2007, productivity perked up to a very respectable 2.4%, and despite weak population growth, GDP still averaged 3% per year.
Since the start of the Great Recession, however, we have experienced anemic labor productivity growth of, again, 1.4% per year and a trivial increase in the working population. As a result, GDP growth has averaged a dismal 1.2% per year. Luckily the prime-aged working population is again starting to rise, which is good. The million dollar question is “How will labor productivity growth perform?” Will it be a replay of the boom years of 1974 through 1990, the crummy years since 2007, or more likely something in between?   While nobody knows for sure, GDP growth should drift upwards as demographics become more favorable and labor productivity hopefully rises.
By: Elliot Eisenberg (GraphsandLaughs)
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