NY Times: Rental shortage in New Orleans continues

The NY  Times covers the rental shortage in New Orleans.  While the take-away is that it is unfortunate that rental rates have increased by 46% over pre-Katrina levels, it should be remembered, as the article states, that this situation exists because "demand is outpacing supply."

So, people want to live in New Orleans, but are constrained by high rental rates.  This is far preferable to a city that no one wants to live in with an oversupply of cheap housing (see Buffalo).  We can solve a shortage (theoretically), we wouldn't be able to solve an oversupply.  This is a positive, and we'll all just need to be patient while development and rehabilitation of affordable housing occurs.

Comments

[E.J.]

I don't know whether it's accurate to conclude rent is still so high because of demand. While searching for an apartment this past summer, I noticed that many properties were advertised for several weeks, which seems to indicate not enough demand if it's taking so long to rent them. Also, a Sunday article in the Times-Pic a couple of months ago detailed the trouble landlords have been having renting their units. The landlord of the apartment I ended up renting, like those quoted in the T-P, told me that the increased rent he charges barely covers his expenses due to skyrocketing insurance premiums. I suspect the higher rents are more a function of higher insurance costs than fierce demand.

[Max]

EJ,

Good point, and it begs the question of when increased insurance premiums will start to negatively impact real estate prices in New Orleans, to the extent they haven't already.

After all, at some point you would expect Landlords to lower their asking rents just to get their units leased.