Is Gentrification Getting Out Of Hand?

[PotatoeEatsFish]

I know we love new developments and tall buildings, but is it getting out of hand in Omaha? It seems like everywhere these 5 over 1 buildings are popping up. The laziest big box buildings are always have rents starting for at least 1k just for a small studio. In the face of this almost no affordable housing is going up. All this is doing is raising rents for all nearby buildings and houses along with commercial buildings. People are moving in from out of state with cushy remote jobs where they do almost nothing and make 6 figures since they’re from the coasts and Texas where they already screwed up housing prices. Is it worth it for Omaha to grow and be “developed” if we just lose all the values that made Omaha have its original small town feel? We’re known for being one of the most affordable cities, so people from out of state decide to move here with their larger salaries and screw with our economy. Homelessness is growing and instead of helping with it, we just keep pricing people out of their housing. I don’t know why we want to be Austin so bad. They completely ruined that city by doing the same things Omaha is starting to see. Until large affordable housing developments start being built these 5 over 1 cheap “luxury” apartments are just |expletive| our city over for the future.

[almighty_tuna]

I wouldn't call gentrification necessarily. I would entertain the idea of calling it lazy a55 speculative housing, but in the end the result is the same. It's cheap |expletive| that does nothing to improve or add value (figuratively speaking) to the neighborhoods in which they're built.

[Louie]

The lack of true affordable housing for many is becoming more and more prominent. And its is not being built because the developers don't make enough money back on it to be rich, plain and simple. Either it needs to be subsidized or developers need to stop being greedy.

[ChadJK]

Where do you draw the line between gentrification and redevelopment? Outsiders see it as an older part of town with out-of-code buildings and a lack of retail and entertainment options getting a much needed overhaul. Insiders see it as big money coming in and jacking up rents and ruining the neighborhood's character. In the end, they're both have good points.

[NEDodger]

The lack of true affordable housing for many is becoming more and more prominent. And its is not being built because the developers don't make enough money back on it to be rich, plain and simple. Either it needs to be subsidized or developers need to stop being greedy.

Need to have some competition come in and undercut those developments somehow.

[Garrett]

Where do you draw the line between gentrification and redevelopment? Outsiders see it as an older part of town with out-of-code buildings and a lack of retail and entertainment options getting a much needed overhaul. Insiders see it as big money coming in and jacking up rents and ruining the neighborhood's character. In the end, they're both have good points.

Gentrification is a term that’s just supposed to be about displacement. If people aren’t displaced by your redevelopment, it’s not gentrification

[Brad]

The lack of true affordable housing for many is becoming more and more prominent. And its is not being built because the developers don't make enough money back on it to be rich, plain and simple. Either it needs to be subsidized or developers need to stop being greedy.

Need to have some competition come in and undercut those developments somehow.

I'm calling BS.... You can't just blame "greedy local developers".

Suburban Development:
1. Farmland prices are sky high. Even higher for land that has access too sewer

Both Suburban and Urban Development:
2. Government regulations add to the cost of development.
3. Building Materials are more expensive than in the past making construction more expensive.
4. Labor shortages and higher wages make construction more expensive.
5. Nebraska's High Property Taxes
6. Most developers don't have pockets full of money so they either bring on investors or taking out loans. Either way they are paying for that money (Interest or some sort of return on investment). Not sure you have ever calculated out the monthly payment on a $20 million loan...
7. All delays in construction (For any reason) add to the cost because that's more interest payments they need to make.

We have had and do have outside developers doing work in Omaha. We have also had developers leave the market because they can't make enough money here to keep their shareholders happy.

Its not a simple solution you can pin on one thing (Like someone being greedy). The solution will take lots of smaller pieces across the board to make a dent in housing costs.

[riceweb]

+1 to Brad's comments, capturing many of the reasons for higher prices.

The median plot of land for a single-family home is probably approaching $100k. And I don't think you could build a home for less than $300k in materials and labor. Historically for Omaha, that's a very high floor for new housing costs, and part of what's kept housing inexpensive in Omaha has been the ease of building new units + low traffic, by providing great substitutes to existing housing closer to the city core.

On the flip side, I think there's some indications that we've overbuilt housing. And some indications that the market is already correcting.

[Dusty]

I agree with Garrett and Brad on this.

For 70 years we torn down buildings and filled in space with surface lots to accommodate the car. Now we are filling in those holes and new infill development to add back density. We are not displacing but adding to the neighborhoods.

There are a ton of hoops developers have to jump through to make money. Unexpected costs can add up quickly. You may not like the look of these boxy apartments styles, but they can always add an interesting facade to it later when it makes financial sense.

[ChadJK]

Its not a simple solution you can pin on one thing (Like someone being greedy).

<grumble grumble> ...late stage capitalism... <grumble grumble> ...the 1%... <grumble grumble>

[Omaha Cowboy]

I agree with Garrett and Brad on this.

For 70 years we torn down buildings and filled in space with surface lots to accommodate the car. Now we are filling in those holes and new infill development to add back density. We are not displacing but adding to the neighborhoods.

There are a ton of hoops developers have to jump through to make money. Unexpected costs can add up quickly. You may not like the look of these boxy apartments styles, but they can always add an interesting facade to it later when it makes financial sense.

This ^..

100%…

Ciao..LiO…Peace

[Garrett]

A couple slightly outdated charts but I can assure you it’s not gotten much better

[nebport5]

I agree with Garrett and Brad on this.

For 70 years we torn down buildings and filled in space with surface lots to accommodate the car. Now we are filling in those holes and new infill development to add back density. We are not displacing but adding to the neighborhoods.

There are a ton of hoops developers have to jump through to make money. Unexpected costs can add up quickly. You may not like the look of these boxy apartments styles, but they can always add an interesting facade to it later when it makes financial sense.

Care to wager the odds of that happening?



Brad's points are well taken.


A few thoughts...

1. Apparently enough developers are making enough money or there wouldn't be the apartment boom Omaha has seen the last several years.

2. All these other factors aside there's a simple correlation between supply and demand. Developers wouldn't keep building if enough people weren't paying the surging rent prices.

3. I bet you could find some people in the last 10+ years who used to live in Midtown that feel displaced.

4. As for Midtown(and DTO) the urban renewal that so many on this site(myself included) have advocated for so many years will continue to result in higher prices.

5. Prices of course drop with excess vacancies but will they ever drop significantly? I bet after the streetcar is up and running we'll see a big surge in pricing and gobs of bumper stickers that say "Native Nebraskan". What seems expensive now will become the new "affordable housing". This trend is obviously not unique to Omaha. It's happening all over this country or at least in places with ever-changing relativity of "desirable" amenities.

[Busguy2010]

I agree with Garrett and Brad on this.

For 70 years we torn down buildings and filled in space with surface lots to accommodate the car. Now we are filling in those holes and new infill development to add back density. We are not displacing but adding to the neighborhoods.

There are a ton of hoops developers have to jump through to make money. Unexpected costs can add up quickly. You may not like the look of these boxy apartments styles, but they can always add an interesting facade to it later when it makes financial sense.

Care to wager the odds of that happening?



Brad's points are well taken.


A few thoughts...

1. Apparently enough developers are making enough money or there wouldn't be the apartment boom Omaha has seen the last several years.

2. All these other factors aside there's a simple correlation between supply and demand. Developers wouldn't keep building if enough people weren't paying the surging rent prices.

3. I bet you could find some people in the last 10+ years who used to live in Midtown that feel displaced.

4. As for Midtown(and DTO) the urban renewal that so many on this site(myself included) have advocated for so many years will continue to result in higher prices.

5. Prices of course drop with excess vacancies but will they ever drop significantly? I bet after the streetcar is up and running we'll see a big surge in pricing and gobs of bumper stickers that say "Native Nebraskan". What seems expensive now will become the new "affordable housing". This trend is obviously not unique to Omaha. It's happening all over this country or at least in places with ever-changing relativity of "desirable" amenities.

I don't recall if I stated it here, but I called it somewhere along the way. That's why I was on the fence about the streetcar and infill in general. It changed so much in the last year, 2 years, 3, 5, 10. The changes seem to be good, it's fun, it's exciting, its new, and its accelerating, but the bottom line is it's displacing existing people. Midtown was quite a different situation even just 10 or so years ago. It's crazy how quickly it's changed.

[nativeomahan]

The lack of true affordable housing for many is becoming more and more prominent. And its is not being built because the developers don't make enough money back on it to be rich, plain and simple. Either it needs to be subsidized or developers need to stop being greedy.

Please don’t wait up all night for the time when developers stop being greedy.

[nativeomahan]

The fact that rents are the highest they’ve ever been is not exactly news. When exactly hasn’t that been the case? Same with single family home prices, with very few exceptions.
As to Omaha turning into the next Austin, well, anyone on here who has spent time in Austin in the past decade knows Omaha has almost nothing in common with that city. Austin is a magnet for people for a whole variety of reasons. It’s growing by leaps and bounds. And there is no end in sight to that trend. It feeds upon itself.
Digital nomads have the option of living wherever they want. Cost of living certainly plays a factor. So do all the other things that contribute to one’s quality of life. Everyone is different but if given the choice most people would choose a city with great weather, ethnic diversity, moderate to liberal political views, and a vibrant cultural scene with lots of concert venues, exciting restaurants and nightclubs, parks and other low or no cost recreational opportunities. Many love having ready access to big league sports. Every large city has high quality medical care so that’s pretty much a wash. If you are near an ocean or other large body of water that can be a very attractive lure for nomads as well.
One of the biggest factors behind the huge housing boom in my adoptive city is the enormous number of digital nomads who have settled in Mexico since the dawn of the pandemic. They are loved by real estate developers and restaurant and bar owners but cursed by just about everyone else because they have so much more disposable income than the longtime residents do. They have led to rents rising 20-25% or more per year for the past 3 years, pricing many locals out of center city neighborhoods to the far flung suburbs and exurbs, where the quality of life is lower. I don’t follow the Omaha rental market but I’m guessing rents here are not rising by 20-25% per year.
In sum, I’m guessing that the Omaha market is pretty much like the real estate market in almost every other U.S. city. More and more younger people want to live in central cities, and housing prices respond to those pressures.

[Busguy2010]

I don't have the answer, but I do know I mentioned quite a while ago (10+ years or so) that I thought the suburbs would one day become the lower income parts of the city. Still hard to say that difinitively now, but you kinda see subtle signs. Poor apartment management, older vehicles, aging, underccupied strip malls, aging housing stock, more crime. Pretty much talking about NW omaha. Hard to pinpoint it, but you get a general feel if you drop a pin at 72nd & Blondo and go north and west from there. Even next door to Eagle run, you see signs. Roads still 2 lanes. Can't tell you how many times recently 108th street gets mentioned in the news for something bad. Irvington also in the bad press. It'll be, or already is a double whammy for those who get displaced to Northwest Omaha, because although the housing stock is relatively new, it was all built in an era where production is valued over quality. So I think some of these homes are going to be needing repair sooner than expected, relatively. Add having to drive everywhere, next to no public transit, food access is sparse, etc. I think it's actively playing out.

[Louie]

I don't have the answer, but I do know I mentioned quite a while ago (10+ years or so) that I thought the suburbs would one day become the lower income parts of the city. Still hard to say that difinitively now, but you kinda see subtle signs. Poor apartment management, older vehicles, aging, underccupied strip malls, aging housing stock, more crime. Pretty much talking about NW omaha. Hard to pinpoint it, but you get a general feel if you drop a pin at 72nd & Blondo and go north and west from there. Even next door to Eagle run, you see signs. Roads still 2 lanes. Can't tell you how many times recently 108th street gets mentioned in the news for something bad. Irvington also in the bad press. It'll be, or already is a double whammy for those who get displaced to Northwest Omaha, because although the housing stock is relatively new, it was all built in an era where production is valued over quality. So I think some of these homes are going to be needing repair sooner than expected, relatively. Add having to drive everywhere, next to no public transit, food access is sparse, etc. I think it's actively playing out.

I have been saying this for years and I’m pretty sure its from your post years ago.

[guy4omaha]

I don't have the answer, but I do know I mentioned quite a while ago (10+ years or so) that I thought the suburbs would one day become the lower income parts of the city. Still hard to say that difinitively now, but you kinda see subtle signs. Poor apartment management, older vehicles, aging, underccupied strip malls, aging housing stock, more crime. Pretty much talking about NW omaha. Hard to pinpoint it, but you get a general feel if you drop a pin at 72nd & Blondo and go north and west from there. Even next door to Eagle run, you see signs. Roads still 2 lanes. Can't tell you how many times recently 108th street gets mentioned in the news for something bad. Irvington also in the bad press. It'll be, or already is a double whammy for those who get displaced to Northwest Omaha, because although the housing stock is relatively new, it was all built in an era where production is valued over quality. So I think some of these homes are going to be needing repair sooner than expected, relatively. Add having to drive everywhere, next to no public transit, food access is sparse, etc. I think it's actively playing out.

I have been saying this for years and I’m pretty sure its from your post years ago.

NW Omaha is sort of unique. May or may not apply to suburbs in general. I remember when I worked for the city almost 40 years ago. While he was still a city councilman representing much of what was then NW Omaha (overlapping with quite a bit of what is NW Omaha today), he would describe his district as the only part of town with only one big employer or more specifically large contributor to the tax base. That was the old Sperry Vickers plant. And it too is now gone.

I don't know if this can explain everything. But it is notable I think.

[GenX]

I don't have the answer, but I do know I mentioned quite a while ago (10+ years or so) that I thought the suburbs would one day become the lower income parts of the city. Still hard to say that difinitively now, but you kinda see subtle signs. Poor apartment management, older vehicles, aging, underccupied strip malls, aging housing stock, more crime. Pretty much talking about NW omaha. Hard to pinpoint it, but you get a general feel if you drop a pin at 72nd & Blondo and go north and west from there. Even next door to Eagle run, you see signs. Roads still 2 lanes. Can't tell you how many times recently 108th street gets mentioned in the news for something bad. Irvington also in the bad press. It'll be, or already is a double whammy for those who get displaced to Northwest Omaha, because although the housing stock is relatively new, it was all built in an era where production is valued over quality. So I think some of these homes are going to be needing repair sooner than expected, relatively. Add having to drive everywhere, next to no public transit, food access is sparse, etc. I think it's actively playing out.

I have been saying this for years and I’m pretty sure its from your post years ago.

NW Omaha is sort of unique. May or may not apply to suburbs in general. I remember when I worked for the city almost 40 years ago. While he was still a city councilman representing much of what was then NW Omaha (overlapping with quite a bit of what is NW Omaha today), he would describe his district as the only part of town with only one big employer or more specifically large contributor to the tax base. That was the old Sperry Vickers plant. And it too is now gone.

I don't know if this can explain everything. But it is notable I think.

NW Omaha (east of 132nd-ish) is a strange beast. It’s neither North Omaha or West Omaha. It’s neither fancy, bad or overall dangerous, it’s just dull, meh. There’s little reason the be in this area of Omaha unless you live or work there. I work in Irvington and stay in an AirBnb around 96th & Blondo.