As tempting as it is to author a little tune and a set of lyrics that would be a satire on that holiday standard song, there really is what I like to call the 12 days of rent growth. Most of the time, during the year there is a general acceptance of what drives rent and much to the disappointment of renters it isn’t always a supply and demand issue.

While for now, the imbalance in availability is slightly tilted in favor of owners, some recent government releases have started to alter the trend just a little bit. So what makes rent growth acceptable to residents at the time of renewal? It continues to be the comparison to inflation. Picture this—a resident receives a notice that their new adjusted rent will be raised by 4 percent on a 12-month lease if renewed before the end of the current term. Typically the resident then stops by the leasing center and offers that inflation is only 3.1 percent and asks why they’re being asked to pay 4 percent. In most instances, the leasing center tells the resident that if they’d be willing to accept an increase at 3.1 percent, then they’d be offered a new lease. Many residents accept that offer. Now there are certainly some instances where rents do rise above the published rate of inflation, regardless of what the in-place residents want to offer but generally rent histories over long periods of time usually conform to the changes in the rate of inflation. Even underwriting standards at most firms typically only show changes above in place rents around the long run average change in inflation for their hold periods.

So once a month, when the Consumer Price Index is released, it’s good to take notice of the overall change in the CPI because it will not only affect the likely change in rents in most places in a normal market, which we are heading towards now, but also gives some indication of the direction of operating costs. We also always refer to the CPI-U (Consumer Price Index for All Urban Consumers), but there are other measures available, and at varying degrees they better reflect local market conditions. While we follow experimental chain weighted indices, they’re not widely used and so we don’t report on them very much. What we’d like to see is a CPI-C, which would measure commuter costs, a CPI-SP, which would measure real cost changes for single parents and a CPI-R, which could be specifically renter focused.

In the most recent release, the CPI remained pretty well under control, and for November some interesting things happened. (I suppose I’m the only person you know that thinks CPI releases are interesting, which might explain the lack of invitations to holiday parties and fear in the hearts of people who see me approach them to initiative a conversation!)

To start with, the CPI was mostly unchanged from October to November, which could mean the economy is either decelerating or we’ve reached an equilibrium point where manufacturing and service fundamentals are in balance. The CPI itself has grown at a 0.8 percent annualized rate over the last 90 days, and energy prices fell to a rate similar to March, with food prices finally slowing to a 2.2 percent annualized rate. Other than producer prices (PPI not CPI, and I have the t-shirt), which rose slightly, most pricing at various stages of production and processing remained very weak.

While this is a shorter-term view of what we’d ordinarily look at, it isn’t likely going into the winter season we’re going to see much of a change in CPI, so the concerns about hyper-inflation or even deflation seem to be unfounded right now. Ultimately the end result is lower rent growth in 2012 for many metropolitan areas and a little less pricing power for ownership.

Jack Kern is the research editor for Commercial Property Executive and Multi-Housing News and a frequent reader of government news releases, some of which contain hilarious misquotes and observations about American life. Usually the word logical and government don’t typically appear in news releases, leaving one to wonder, what do they do all day in Washington? You can reach Jack at jkern@multi-housingnews.com or by calling 301-601-1900.

I’m a second-generation American. My parents both came here from immigrant families that probably would have been denied entry if not for the fact that they arrived here around 1908. I come from a long line of renters (and a couple of very colorful characters who resided for a time at Sing-Sing and some other places for trying to make a living in some non-traditional ways). Renting was, in most respects, the norm in those days, and the vast majority of immigrant families either lived with relatives that had previously entered the country and found housing, or rented tenement flats or small, what were called front rooms.

Over the years I heard a lot of stories about where my relatives lived and even visited some locales, although most of the buildings are long gone, now occupied by much higher density uses like office and apartment buildings, and in one instance a giant hospital complex. Like most in my generation, as baby boomers we are really the first to live in conventional single-family, owner-occupied homes on a mass scale. Part of what makes this interesting to me as a demographer is the fact that the immigrant creed was to try to find success in some way, and get “out.” To say that someone got out and succeeded was actually a commentary on the idea of leaving the sometimes crowded and squalid living conditions in tenements and very dense apartment houses and move to what was considered a higher quality of life area. Oddly enough, it didn’t come to mean buying a home of your own until much later, perhaps in the 1940s and 1950s, the advent of the often called “new American family.”

Fast forward to 2009, about 100 years past when my intrepid family first discovered the hot dogs and corned beef in the delis of the lower east side of Manhattan, along with the character of their neighborhood shtetl. (Shtetl is a Yiddish word that doesn’t really translate directly in English, but it means a sense of being a part of a Jewish town or village, formerly found in Eastern Europe, which is where my family originated). I had occasion to spend what turned out to be my last Thanksgiving in a retirement center with my mom and about 300 mostly elderly senior citizen warriors. You might find that term funny, but if you could have seen how these people dispensed with their canes and walkers and voraciously threw themselves into the holiday meal, you’d know the term was a fit. And after a couple of turns through the line and the pies were all gone, the stories would start and I then learned from some of the residents that in their earlier years they had been immigrants, some had bought land and built what are now some landmark properties, and with little fanfare they recounted what had been the culture of renting, of families staying together in a building for over 25 years in some instances, when rents were both a matter of pride and a badge of honor. Rent increases, while not unheard of, were vastly slower in those days, born out of the necessity of the re-industrialization of this country and the fantastic increase in productivity that generally kept prices stable. Salary increases, when a family was making $25 a week were just enough to put food on the table and keep the landlord happy.

Now, as I look to this year’s Thanksgiving gathering of about 25 people in the same room in a house in the suburbs, I find myself thinking about my ancestors and relatives who celebrated holidays the same way, in their rented flat, with most of them still actually living in the three-room apartment. It gives pause in thinking about the dynamics of our industry, to push rents and build new buildings and try to deliver lifestyle along with shtetl, in places that are becoming the new urban enclaves. In some ways, I think my great grandfather, who I was named for, would have been amused by all of it. He never had much use for owning a house, “Something to break, something to fix, and who wants to buy a used house?” he would always say. As a house painter, he saw the world through a rainbow of colors he applied to other people’s homes. For him, an apartment was a home.

Happy Thanksgiving to you and your family, and may you honor the memory of our renter nation past by thinking about them, even for a few minutes. I think they would have liked that.

Jack Kern is our Accidental Economist and the research editor of Commercial Property Executive and Multi-Housing News. Usually he writes pretty informative and funny stuff. We’re going to have a talk with him about this one. In the meantime, please feel free to read this column to your family and friends. We think renters are pretty special too!

In an article that appeared this week in the Wall Street Journal, not necessarily the most accurate of sources, to be sure (hello, Rupert, lay off anybody today?), there is a bellwether article garnering little notice, but certainly worthy of more attention than Rick Perry got about forgetting the names of the federal agencies he was going to eliminate.

When it comes to the annals of fund raising history, few can match the talent, wits and connections of the Carlyle Group, so named for the Carlyle Grand Cafe in Washington, D.C., according to my conversation years ago with a senior partner there. The roster of pundits and staff members there reads almost like a White House Alumni phone directory, so the headline article in the WSJ seemed oddly out of place. Essentially, “Carlyle Cut Fees to Sell New Fund,” goes on the explain that in order to raise a significant $2.3 billion dollar fund, Carlyle had to offer unique initiatives and terms that are very much out of the mainstream for how these deals get done.

This isn’t even the largest deal to close, according to the WSJ, but fifth behind Lone Star, Morgan Stanley, Blackstone and Beacon, two of which raised over twice as much as Carlyle, although the terms weren’t disclosed. What passes for a successful fund raise then, begins to point out what may be obvious to you, why?

Softening in real estate demand isn’t unusual and we’re in the midst of a cycle, where capital allocation and preferred rates have to match the availability of product at a price that works. Given the necessity to mark to market, at least when you’re buying, if not holding, and looking for in place cash flows to grow, you’d expect very attractive returns in the intermediate term. What we have here in an indication of the declining faith of institutional capital in the ability of the sector to perform and tougher standards for compensation, fees and carried interest. By some accounts, the Carlyle fund has cut some fees in half and reduced the basis for its carried interest much more severely than any fund previously, once again suggesting that size doesn’t insulate you from risk.  The global expectation for returns from commercial property investment continues to become much more conservative. With the continuing unrest in Europe over monetary policy and the seeming inability of the U.S. Federal Reserve to arrive at a sustainable policy response, the indications for commercial real estate, most notably apartments, large regional mixed use projects and special purpose redevelopment are clear. There is little new capital to find its way into development, and existing pricing power will remain intact for the foreseeable future. As long as there is uncertainty in the capital stack, cap rates will remain compressed and new developments, most notably in constrained and infill locations will emerge slowly. Carlyle proved finally what has been said privately for the past year, that plentiful capital is running scared and new investment will cost even more than before.

Jack Kern, our Accidental Economist, is the research editor for Commercial Property Executive and Multihousing News and has actually been to the Carlyle Grand Cafe a couple of times. While not a piano player himself, he succeeded in saying, “play it again, Sam,” to a guy named Elliot, who promptly called him an idiot. If not for the fact the martini was perfect, he might have been offended. You can reach or insult Jack at jkern@multi-housingnews.com or by calling 301.601.1900.

Apartment rents have been a bright spot in an otherwise dreary economic outlook. The last time I had a conversation with anyone from Greece, he was a taxi driver taking me to LaGuardia. We had a very spirited conversation about Greek politics along with his insistence the speed limit signs in Manhattan were only advisory and didn’t apply to taxi drivers. An interesting fact that came out of the trip to the airport, white knuckled, seat-belt tightening aside, was that people in Greece apparently feel a sense of comfort that their system, however disorganized and prominently dysfunctional, takes care of the populace.

It kind of reminds me of New Jersey, but that’s another column. I think I understand more now about the Greek protests and the lack of willingness on the part of the citizens to give up hard fought benefits.

Greece, while not a major trading partner, is a bell-weather state of the European Union. Italy, on the other extreme, can be a problem. So much of what happens in the U.S. is now affected by world events, and economically we want the European Union to be healthy. It does appear, however that the E.U. is headed into a recession of their own and Italy, and potentially economic powerhouse Germany, have seen meaningful slowdowns. While the current picture in U.S. export activity is better than it’s ever been, it won’t last if the E.U. can’t find a way out of this debt crisis. The fundamentals of world trade are beginning to cause slowdowns in employment growth in the U.S., not only in trade, transportation and utilities but in the many multiplier industries that create jobs beneficial to renters. My own forecasts continue to show a slowing demand, not based on seasonality but on lack of growth in mid-market employment so important to this industry. For the moment, one of two likely solutions loom ahead, either the finance ministers of the affected countries accept significant reforms and control their spending, or the U.S. somehow regains economic strength and pushes rent growth to higher levels. With a little bit of foresight and lots of luck, we might just get both.

Jack Kern is the research editor of Mult-housing News and Commercial Property Executive magazines and the lead singer in a country western band call “Pond Scum Acres.” The band is working on an album of songs about the E.U. He can reached at jkern@multi-housingnews.com or 301.601.1900.