Page 48 - Trump University Commercial Real Estate 101

TRUMP UNIVERSITY COMMERCIAL REAL ESTATE 101

It ’ s common to drive down a main road and see houses on each
side. Then, at a larger intersection, you will find gas stations, dough-

nut shops, and strip malls. Residential and commercial spaces inter-
twine with each other as the need for both arises, and as local residents
state their preferences for commerce through their buying decisions.

Moratoria

Sometimes a city will realize that too much of one type of property
is adversely affecting the balance of properties. A moratorium may
not be too far behind, which limits or bans further growth in that
property type.
In the mid 2000s, an enormous number of apartment complexes
were converted to condominiums in San Diego. The market for resi-
dential housing was going through the roof. The average price for a
single - family home became way out - of - reach for the average wage
earner. For these people, the American Dream of home ownership
became unaffordable.
The best alternative was condominiums, which were generally
priced 20 to 30 percent below the average price of a single - family home.
Demand increased — quickly.
Developers were buying apartment complexes, making a few
changes, and then selling the individual units off as condos. They made
so much money that — of course — more developers got into the game
and more apartments came off the market to become condos.
Not only did the supply of apartments become converted to con-
dos, but builders did not replenish the apartment supply. They were
too busy building new condos. Rents shot up for the remaining apart-
ment units, making them unaffordable for many lower - paid workers.
When this happened, San Diego put a moratorium on condo
conversions. This eventually rebalanced the housing stock, but in the
meantime, prices for condos went that much higher.
Cities have been known to put moratoria on land use, septic hook -
ups, and a variety of real estate building types, depending on the

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