EP#95 Frank Cassidy | Less Red Tape, More Supply

**Jay Parsons** (0:02)
Welcome, welcome. It's episode number 95 of The Rent Roll, your podcast on all things, rental housing, apartments, single-family rentals, and build to rent. So here's what's on the docket for today. First and foremost, I'm going to give you the latest data on apartment lease-ups and how that's impacting rents and future development, the development pipeline, I should say, and also how those trends vary by market because it varies a lot. Even in these high-supplied Sunbelt markets, and that's going to have some real implications on the rent recovery and on supply in the next cycle. Then we're going to talk headlines impacting rental housing. We got an interesting story from The Wall Street Journal examining just how much of the New York City's rent-stabilized apartment market is occupied by high-income renters. And I'm going to tell you what that might mean for other cities that are considering rent control policies. And then in today's interview, we've got with us the recently departed head of the Federal Housing Administration and Assistant Secretary for Housing at the US Department of Housing and Urban Development, Mr. Frank Cassidy. We'll talk with Frank about red tape cutting at HUD and FHA to improve liquidity and supply in the housing market, especially for affordable housing. And we'll talk about the challenges of working as a political appointee at the behest of the White House. And also just what's next for Frank as he returns to the private sector, going back to Walker and Dunlop, where he worked prior to joining the administration. So lots to do. So let's get into it. First and foremost, a big shout out to my friends at JPI, a leading apartment developer, the state of purpose to transform building, enhance communities and improve lives. Check them out at jpi.com.
I've said this a lot, I'll say it again, JPI, they are really at the cutting edge of some really exciting innovations in apartment development and construction. So if you've not seen what they've been doing lately, definitely give it a look. Also a big shout out to Madera Residential at maderaresidential.com. Also to Funnel, the AI and CRM platform you can find at funnelleasing.com. Okay. So as always, let's kick it off with the section we call, Here's a Chart.
And we're going to talk about supply in this segment. And before we do that, I want to give a shout out to this segment sponsor, The Kirkland Company, celebrating 20 years of helping investors source and sell multifamily assets tailored to their investment strategy. This week's feature apartment listing is Nova 1400 in Daytona Beach, Florida, a 275 unit single story asset on 44 park-like acres surrounded by retail in the immediate vicinity of the Daytona Beach International Airport and Daytona International Speedway. Current ownership, according to Kirkland, has invested approximately $5 million into the asset, which includes 200 large 877 square foot one bedroom floor plans. To learn more about Nova 1400 and other investment opportunities, visit wesellapartments.com.
The Kirkland Company, we sell apartments. And again, all that data comes courtesy of Kirkland. Okay, so for here's a chart this week, we got three charts. All of them relate to the same topic. It's around lease ups and the rent impact. Because we know supply has been the biggest headwind to rent these past few years. Any rebound in rents is going to be heavily tied to the slowdown in supply. So we know supplies coming down. We've talked about it a lot in recent months and episodes. But when we talk about supply, we're typically talking about completions. But we have to remind ourselves that just because a property completes, that does not mean the battle is over. That is not the end of the impact on the market. It's really just the start of the impact. And so don't look at completions and think, okay, completions are down, everything gets better. Those new builds have to lease up. And so we're going to look at the estimated number of apartment units and lease up in this first chart.
These are units that have been built but have not yet reached stabilized occupancy. And so while they're in that lease up process, they're more likely to be in hypercompetition mode, offering big concessions or try to fill up, and in turn, putting downward pressure on rents in the surrounding market as well. So even if you're not in the lease up business, it's really important to track this because in high supply markets, we're seeing downward pressure on rents all the way down to the Class Bs, the Class Cs, and in many cases, even down to the subsidized affordable housing and LITECH level in many cases. So as of the end of June, here's the data. RealPage shows just under 600,000 units in some stage of lease up across the country. That's a big number. However, it has come down substantially. It was at more than 800,000 units in the early part of 2025 So it's down, but we are still a good bit above normal. Now, if we go back to early 2021, March of 2021 prior to the big surge in demand and in supply, if we think about that as a baseline, back then, we were just north of 500,000 units in lease up. So there's always going to be obviously some chunk of supply in lease up and that's normal. So if we think of somewhere around 500,000 as more normalish or at least a baseline, we're now somewhere call it 50 to 80K above that baseline today, give or take. So until that number normalizes, I think it's going to be really hard to see a material bump in market occupancies and in rents. Now, as I've talked about a lot in prior episodes, certainly here in 2026, we are seeing some upward momentum in many markets. Rents are still falling, but to a lesser degree than previously occupancy is starting to improve a little bit. But I'm talking about for a real rebound in occupancy and rents, getting occupancy stabilized, getting a normal rent growth again. I think that lease up number needs to come down a good bit more.