As Rents Increase, Middle-Income Earners Struggle to Find Affordable Housing

It seems that the gap between affordable rental units and expensive luxury units is widening. However in contrast to conventional thought, luxury units are not seeing spikes in pricing. Instead, rents for units designed for middle income households are spiking, leaving many with few options for affordable housing. Developers have contributed a great deal to the issue, as they focus on building more luxury units rather than affordable ones. The Wall Street Journal has recently documented the phenomenon occurring in the country’s largest metropolitan centers, noting high construction costs, and growing populations.

According the CoStar Group Inc., more than 80% of new units available in metro areas are luxury rentals. Although the demand for middle-income rentals is seemingly at an all-time high, few of such rental units are actually being built. Nationwide, the scarcity of such units is driving prices up, leaving many with few options in terms of housing. Working-class households are either forced to pay higher rents, or driven into lower-income units and neighborhoods.

Despite the high demand, developers are refusing to build more units that cater to middle-income individuals. For developers, construction costs do not justify building lower-tier housing. Class B and C apartments, which are designed for middle-income and working class owners have become more expensive to build. Because of high construction costs, Class B apartments especially have outpaced rent increases compared to luxury Class A apartments. Axiometrics Inc., a Dallas-based apartment research firm, reports that rents for Class B apartments have jumped 5.8 percent in the second quarter of 2015. These rental units are often low-rise suburban apartments with outdoor pools, business centers, and ample green space.

According to New York University’s Furman Center and Capital One Financial Corp, fewer affordable units are available to middle-income earners. In Miami for example, renters looking for affordable rents can only afford 33 percent of available units in 2015, which is down seven percentage points from 2006. Philadelphia’s case has seen an even greater drop of 10 percentage points from 45 percent to 35 percent since 2006. Amazingly though, luxury units are still drastically more expensive than Class B or C rentals. Rental units for Class A luxury apartments average $1700 per month, while Class B rents average $1200, and Class C units average $850 per month.

In the article, The Wall Street Journal uses the Verona Complex in suburban Denver to showcase this phenomenon. Philadelphia-based Resource Real Estate which owns the complex has poured $3–4 million in upgrades into the mid-tier housing units. Since renovations began, tours and open houses have risen 25 percent. In order to keep up with high demand, the firm has teams working double shifts to finish all units for new renters. Rising prices are burdening many renters though, as more and more households are classified as “rent burdened”. Rent-burdened households mean that more than 30 percent of their incomes are spent on housing.

To learn more, visit Jerold Novack’s asset management blog here!


Charity Means More than Money

When one thinks of the traditional concept of philanthropy, one naturally thinks of the act of giving money to a charitable organization. By donating to social causes that are meant to better the lives of others, we are contributing to the general welfare of society.

While some look to solve water scarcity and world hunger, others hope their funds find cures for deadly diseases. However, philanthropy and charity mean so much more than just contributing funds. Today, Millennials are adding a new connotative meaning to charity and philanthropy.

Through new and innovative ways Millennials are contributing something just as important as money. Time for example, is scarce to a lot of people. Lending time and efforts to an organization are invaluable ways of contributing to a movement’s success. EliteDaily’s recent article sums up some of the new and innovative ways millennials are contributing to the philanthropic world. Here are a few:

Think of how many sayings and cliches exist on the importance of time. In the context of value, time is very valuable. Time is truly of the essence, and contributing one’s time to a certain charity is an important way of committing yourself to that cause. Whether it’s volunteering for an event, or volunteering to hand out pamphlets and leaflets, contributing your time to an organization consequently contributes to it’s growth and survival.

Knowledge in a way can go hand in hand with time. You must dedicate time to the pursuit of knowledge, and then more time to the distribution of it. Sitting down and creating a pamphlet of facts requires extensive knowledge of the cause. Being able to properly articulate and explain what your organization is fighting for is imperative. Sometimes even, debating with others who may disagree with your movement’s beliefs will be necessary. Of course, taking the time to contribute your knowledge to others has the potential to win followers, and grow your organization.

Without passion for the cause you’re advocating for, it’s difficult to contribute the time necessary to spread knowledge and awareness. Millennials in general are known to be a very passionate bunch, especially in terms of social awareness. Now more than ever, younger generations have been involved in the political, social, and economic aspects of society, openly advocating for one movement or another. Passion drives people, and has the ability to move mountains. This is especially true if a particular cause has enough followers.

Of course, giving money is the physical act of showing support for a charity or movement. All of the above aspects of giving inevitably stir individuals to contribute to the well being of a cause. With money, we see a return on our investment, and are able to see whether our efforts are actually making a difference or not. It is the greatest measuring tool of a movement’s success.

If you have a cause you are interested in, go contribute to it in whatever way you can. The personal satisfaction you will get from it will reward you immediately.

To learn more, visit Jerold Novack’s philanthropy blog here!

Life Lessons to Unlearn

The internet loves lists. Lists filled with top tips to a better body!, and 5 unusual qualities that make you a better leader!; it’s a constant stream of information to take in, understand, and practice in your day-to-day life. Whether you’re reading these lists for a laugh, for guidance, or to truly learn something new, it’s almost hard to imagine life without them.

This list, on the other hand, is a little different. Because there are some things hammered into your head that are actually inhibiting joy and preventing us from living our best lives possible. So here’s a list of 10 life lessons you should toss to the wind:

No problems? No problem! Problems seemingly, are the worst. They’re roadblocks, a wrench thrown into the wheel of a well-oiled machine. But in reality, the problems presented to you in the real world (not the tedious ones doled out to you by boring teachers in high school algebra) give you the chance to find the solution, which is what really gives life gusto. They often mark change and, when dealt with in the best way, can often become rewarding. Is your job just not doing it for you? Maybe it’s time to ask for a promotion! People without real problems are bored, go crazy, and do things like plan a wedding that isn’t theirs just for fun.

Happiness is everything! It seems ridiculous, but happiness isn’t everything, simple because we can’t always be happy. We just can’t. Life is constantly happening, and we need to deal with it as it comes. Forcing yourself to be happy in a miserable situation creates insurmountable stress. Instead, let your feelings be as they are. If you’re sad, allow yourself to acknowledge it, ride it out, and overcome it.

Own your baggage. The past can be painful and leave seemingly permanent scars. Instead of owning that baggage, letting it define you and create worries and stress, start thinking of it differently. Here’s an example: you were a really lazy student all throughout your education, and now in the workforce, you’re plagued with feelings of falling back into old habits. The worry engulfs you, and probably affects your performance negatively. Instead of focusing on the negative, combat it by coming up with reasons why you might be wrong, and your brain will begin to let go of the worry, which some have found to a euphoric feeling.

Hard work equals success. As a child, as you were learning about the world around you, how to speak, to use your body and fingers and all the like, were you working hard, or learning through play? Play, not work, is key to success. Childhood playing skills are key to learning and understanding complex ideas, because they are doing it with all-out absorption.

Success is the opposite of failure. Studies have shown that people who focus their attention on worrying about mistakes tend to shut down, while those who take a more relaxed approach about performing badly will soon learn to do well in the most efficient way for them. This applies across the board, from quitting smoking to learning how to ski, success is built on failure.

What will people think of me?! Who cares. Whether they’re right, slightly wrong, or completely off the mark, emphasizing others opinion of you can lead to despair, and even homicide and suicide. And really, what you’re doing is creating anguish within yourself from your hypothesis that other people’s hypothetical hypotheses about you actually mattered. Imagine what you’d be like if it didn’t matter. Got it? Good, keep doing that and never look back.

Think rationally! This has more to do with recognizing your inner-self; taking emotional and physical cues from yourself when making decisions. Your rational capacities are far newer and more error-prone than your deeper, “animal instincts.” While rational thinking can help you see things with a more level head, it’s important to understand where your natural instincts point you, and takes less time than making a pros and cons list.

The beautiful people have it all! Yes, they’ll get preferential treatment in a lot of life’s scenarios: unquestionable entrance into clubs, free goods, and better customer service, to name a few. By while everybody’s noticing them, nobody is really seeing the person behind the perfect figure and symmetrical face.

Life would be perfect if I had everything I ever wanted! Good fortune tends to have bad side effects. Don’t believe it? Check out jails, rehabs, and divorce courts. They don’t discriminate based on income. Anything that makes us feel good can also make us feel bad, but once you let go of the desire for tangible rewards, you appreciate exactly what you need, not want, more. The point is experiencing joy, not experiencing the joy from buying new Jimmy Choos.

Fear loss. If you’ve never experienced loss, you’ll never be able to experience joy on a humbling level. Because losses aren’t cataclysmic if they teach the heart and soul the natural, inevitable cycle of breaking a healing. Avoiding it is a life not lived, so live your truth.

To learn more, visit Jerold Novack’s mentoring blog here!

Strategic Philanthropy

When making philanthropic endeavors, some may not understand that in order to optimize effectiveness, they should incorporate strategy and thoughtfulness. Nurturing a generous spirit and making a difference for a person, community, or the environment is a more complex and sophisticated field than just tossing your change into a jar. While charitable donations are often personal and individualized, there are four general that lessons anyone hoping to dive into philanthropy on any scale should learn.

Internal & External Lenses

When you’re determining what your philanthropic goals will be, It’s important to see things from a “big picture” perspective.

When looking through an internal lens, a question you need to explore within yourself include: what it is you’re hoping to achieve for an organization, your personal wealth, your family’s security or your business when donating time and money to charity? If your giving for personal reasons, it’s most likely inspired by theology, gratitude, ego, fear, recognition, creation, power, compassion, or tax and estate planning. Businesses typically hope to enhance their employee recruitment, retention, engagement and productivity as well as their customer loyalty, regulatory approval, and investor value.

When looking through an external lens, you’re asking yourself a different question: what are you hoping to preserve or change in your community, country, or the world?

Maintaining both and internal and external lens when it comes to perspective will help aid both individuals and organizations in developing a confident and clear philanthropic strategy.

Engage & Listen

When examining those internal and external questions in terms of how to design and implement your philanthropic strategy, include those closest to you in thoughtful and ongoing conversations about what it is that truly matters.

If your embarking to reach your charitable goals with your family, include all generations, even the toddlers. By giving them a voice and a vote in all matters, you’re able to reach a more well-rounded decision.

In business, it’s important to include and engage with certain stakeholders, such as employees, customers, and investors, when you are examining the answers to the internal and external questions. In fact, engaging with certain stakeholders of your business has been shown to have a significant positive impact on the return of philanthropic investments.

Depth, not Width

While I love peanut butter, taking the “peanut butter” approach when making charitable donations–which is the practice of spreading your charity thinly across the surface of a wide variety of organizations–won’t make the impact you’re hoping for. Find a smaller, manageable number of important issues or causes that you’re passionate about, and focus deeply on making an impact.

What are you waiting for?

Just thinking about being philanthropic is the first step, but you need to take action in order to make an impact! Don’t wait to divvy your wealth post-mortem, that isn’t at all satisfying!

We don’t realize that we can afford to be more charitable with our current daily allowances, and we can do it without sacrificing quality of life. Let’s be honest, when have you ever heard of someone going into debt from being too philanthropic?

By consulting with a financial advisor, you can best determine an affordable amount of money that you can allocate to causes you deem worth.

Philanthropic strategist Bruce DeBoskey, J.D., once wrote “Philanthropy is like love. The more you make philanthropy a cornerstone of your life, the more you find the joy, meaning and satisfaction in living.”

To learn more, visit Jerold Novack’s philanthropy blog here!

The Benefits of Volunteering: Physical and Mental

Volunteering time to organizations, as well as providing monetary donations towards charities and non-profits, have their obvious benefits. Selflessness, doing right by others, beefing up the resume, and tax breaks, but what about the others? The ones that aren’t so obvious.

Numerous studies have found that acts of charity actually has positive mental and physical impacts on those who do so, no matter their age or circumstance. Physically known to lower the risk of dementia, reduce cardiovascular risk, and lower blood pressure, generosity has also been found to lead to less depression and anxiety as well as increase overall happiness.

There is a part of the brain called the mesolimbic pathway, or the reward pathway. When people commit, or even think about small acts of kindness and generosity, they activate this part of the brain, which is also responsible for managing feelings of gratification. Behaving selflessly actually causes our bodies to release our “happiness chemicals” like dopamine, endorphins and oxytocin.

While the thought of providing for ourselves sounds a bit more appealing than providing for and giving to others, it won’t lead to long-term happiness the way selflessness does. “If you are a recipient of a good deed, you may have momentary happiness, but your long-term happiness is higher if you are the giver,” said Dan Ariely, professor of behavioral economics and psychology at Duke University.

Ariely theorizes that the increase in happiness derives from the satisfaction that following rules and taking credit for doing something good brings us. He also notes that how we give is an important factor.

A 2012 study from the Health Psychology journal found that altruistic volunteers will live longer than those who don’t. A national survey of 4,500 American adults–the 2010 United Healthcare/Volunteer Match Do Good Live Well Study–found that those with a generous spirit have been known to experience a reduction in troublesome sleep, helplessness and hopelessness, and anxiety, as well as a stronger sense of control over chronic conditions. They also are known to have better relationships with others and healthy social networks.

Experts have even gone so far to say that if the positive effects of volunteering could put into a bottle and sold in stores, the inventor would be a billionaire. In terms of using volunteering as a means to manage chronic pain, Stephen Post, founding director of the Center for Medical Humanities, Compassionate Care, and Bioethics at Stony Brook University School of Medicine,believes “if you could say that on a scale of 1 to 10, insulin as a treatment for diabetes is a 9.5, drugs for Alzheimer’s disease are 0.05, volunteering is somewhere up around a 7.”

One of the central theories behind volunteerism as a marker of optimal physical health is that it leads to boosts in self-esteem and prevents individuals from becoming socially isolated, which have both been long connected to better health. Additionally, certain volunteering activities can expose participants to environment and circumstances that may humble their own, reducing stress and unhappiness, which have been known to reduce cardiovascular risk in adults.

“We are on the cusp of reaching the point where we are going to see more areas in clinical care, including preventative medicine, psychiatry, adolescent pediatrics, geriatrics, pain clinics and cardiology, where health care professionals recommend volunteering as a therapeutic behavior,” said Stephen Post.

To learn more, visit Jerold Novack’s philanthropy blog here!

Technology: New York City Real Estate

This is the age of fast, readily available information. Technologies influence over industry is seemingly endless. A city like New York, which attracts the best and brightest individuals of their industries, deserves just that: the most innovative and efficient real estate technology.

In the realm of real estate, the potential to make management and building data readily accessible is overwhelming with the use of technological advancements. For real estate professionals, both on the commercial and residential scale, online platforms can assist in efficiently and intelligently completing work. Analyzing trends become simpler, market changes are easier to detect, resulting in more concrete advice derived from solid information from data which is accessed more efficiently.

The marriage of real estate and technology is expanding to all facets of the industry, with New York real estate investors surging approximately $62 million into platforms aimed to enhance the system for both residential and commercial real estate.

That $62 million is almost 20 percent of the $322.5 million that has been invested in tech companies globally in 2015, the majority of that money–$221.8 million–has gone towards tech companies focusing exclusively on commercial real estate. The remaining $100.7 million went towards companies dealing with residential real estate.

Of the five-hundred commercial and residential real estate professionals polled for the RE:Tech report, about 85 percent of those working in commercial real estate said they were taking the time to understand how these new platforms have potential impact on their business. Overall, 45 percent of those polled believe their brokerage is interested in folding new real estate technology into their business strategy.

And it’s a smart decision to make: NYC-based real estate tech companies raked in $28 million in the first quarter of 2015, and $34 million in the second. One of those companies, VTS, a platform for asset management and leasing, recently announced its fundraising of $21 million. Honest Buildings, a management platform for building owners, raised $5 million in fundraising this past summer.

Real estate investment is seeing a surge in the induction of crowdfunding platforms into the industry since the federal JOBS Act passed in 2012.Sharestates, a crowdfunding marketplace, has raised over $30 million since January of this year, and Cadre, an online investment platform, raised $18.5 million. This is a distinctive indication that the business is evolving and adapting to be as responsive as possible to client needs.

Visit Blue Rock Real Estate online to learn more about the leading private equity real estate asset management company.

To learn more, visit Jerold Novack’s asset management blog here!

A Crash Course in Impact Investing

Institutional and individual investors are doing it, fund managers are doing, UK Prime Minister David Cameron even gave a keynote address at the 2013G8 Social Impact Investing Conference in London on it; but what is impact investing?

By name, it seems to be part-investment, part-philanthropy, but is it more one than the other? Amy Bell, the Executive Director and Head of Principal Investments for J.P Morgan’s Social Finance business unit defines impact investing as “the deployment of capital with an expectation of financial return, where the success of the investment is also contingent upon achieving a state social or environmental goal.”

These investments can be made in both emerging as well as developed markets, and focuses on a variety of returns from below to market rate. The impact investment market is able to bestow capital upon some of the biggest issues impacting the world today, including housing, healthcare, and education as well as sustainable agriculture, clean technology and more.

There are four core characteristics when it comes to impact investing:

  • Intentionality- essential to getting involved in impact investing, investors should want to make a positive social or environmental impact just as much, if not more, than they want to make a profit.
  • Expectations- while philanthropic, these investments are still expected to generate a financial return on capital for the investors. At the very least, investors should expect a return of capital.
  • Range of return expectations and asset classes- targeting financial returns that range anywhere from below market to risk-adjusted market rate. These returns can be made across asset classes including cash equivalents and private equity.
  • Impact measurement-when entering the impact investment market, investors make a commitment to measure and report the social and/or environmental performance and progress of any underlying investments. They should uphold transparency and accountability at all times.

While impacting investing is a relatively new market, it is a rather substantial market with significant potential for expansion. Watch David Cameron’s keynote speech below discussing the importance of impact investing and how it needs to be adopted worldwide.

To learn more, visit Jerold Novack’s philanthropy blog here!