Sunday, August 2, 2015
I hope this is a quiet week
Saturday, August 1, 2015
Can Las Vegas Keep Building Apartments?
The answer is: a lot. The basic industry is, of course, accomodation. Las Vegas has around 140,000 hotel rooms (http://cber.unlv.edu/stats.html) with an cccupany rate in excess of 90 percent. Hotels are profitable at occupancy rates of around 65 percent, meaning that Las Vegas could support something like 50,000 more hotel rooms with no increase in demand.
Let's cut that to 25,000 rooms to be conservative. There are roughly two jobs in the hotel business for every room in Las Vegas, meaning that 25,000 rooms will directly create about 50,000 jobs.
Economic base analysis (http://faculty.washington.edu/krumme/350/econbase.html) for Las Vegas predicts that every basic job produces an additional 2.5 non-basic jobs. So the Las Vegas market has room for another 175,000 jobs over the near-to-medium term (say 5 years).
The ratio of jobs to population in Las Vegas is .47; let's round and say population growth produced by hotel room growth will be 350,000. The average Household Size is a little more than 2.5 (census) and about 35 percent of households live in multifamily buildings (again, census). Put this all together, and there will be demand for about 50,000 multi-family units over the medium term--again assuming no growth in demand for hotel rooms. Vacancy rates for apartments in Las Vegas is a little less than 7 percent--this is close to a natural vacancy rate, meaning that the market is currently in equilibrium. The fact that inflation adjusted rents have risen by a bit more than inflation in the past year also indicates that the apartment market is not oversupplied. Assuming hotel developers respond to demand, there should be strong demand for apartments for some years to come.
There are issues, of course, not the least of which is water (although if people would stop watering their lawns, there would be plenty of water for awhile). But it is remarkable how much Las Vegas' strong population growth (and therefore demand for housing construction) is grounded in fundamentals.
New England Australia - introducing the Liverpool Plains
Photo: Liverpool Plains near Carroll.
As I write, controversy rages over plans to explore for coal in another area of the Liverpool Plains.
Very few Australians know the Liverpool Plains as such, although many have driven through them along the New England Highway. Yet this is not a small area, totalling around 1.2 million hectares.
The Plains lie on the western slopes of New England's Great Dividing Range, so the New England Tablelands form the eastern boundary.
The Liverpool Range forms the southern boundary.
This range starts from the Barrington Tops volcanic plateau and runs for about 100 km westwards, in so doing forming the northern boundary of the Hunter Valley, before merging into the Warrumbungle Range, the Plains' western boundary.
The Liverpool Range itself can be quite high (1300 metres) and rugged and formed a significant barrier to the expansion of settlement in the early period of British settlement in New South Wales. This was frontier country, marking the edge of the thirty nine counties proclaimed by the Governor in Sydney as the limits of settlement.
The first route across the range was Pandoras Pass discovered by Allan Cunningham (botanist). This is located near the western end of the range, north from the town of Coolah and within Coolah Tops National Park.
Most Australians will know Nowland Pass or Murrurundi Gap better. Here the New England Highway climbs sharply up the Range, leaving the Hunter Valley behind. The Great Northern Railway crosses under this pass via Ardglen Tunnel. Further to the east lies the country and journey that I described in Secrets of New England - along the Fossickers Way Day Two.
If the Plains are bounded by the Tablelands on the east, the Liverpool Range on the south and the Warrumbungle Range on the west, what is the northern boundary? I have never been sure. In my mind, driving north from Tamworth along Fossickers Way, the Plains end with the first of the western spurs from the Tablelands.
This was originally Kamilaroi country. With European intrusion, it became part of the Australian Agricultural Company's vast holdings. Tamworth, the Plains' main centre, began as a small village surrounded by AA holdings.
With the break-up of the big stations, the Plains became prime agricultural land, a wealthy wheat farming district. This remains true today, and lies at the heart of the conflict between mining - large coal deposits lie under parts of the Plains - and farming.