Who’s Moving Into All Those Apartments

I was struck by the comment about the wealthy retiree having a shoreline home for the summer and a city apartment for the winter. Some people can't afford any home, and the well heeled can have multiple homes, and by doing so, is forcing other renters out of the city. (As my 12 year old nephew said "who NEEDS more than one home?") Some older stock landlords may reduce rent temporarily, but then a real estate investor or mega landlord will come along, offer a sale price they can't refuse, do a makeover, and then rent those apartments to the wealthy who fled NYC and other higher priced cities, or the wealthy who have multiple homes. And you say they want to move to the city for the restaurants and the entertainment venues, but retail shopping in brick and mortar establishments is a dying industry. Also if all the service industries workers can't afford to live in the city, or even in the nearby suburbs, it's going to be a lot harder to find workers because they're going to either have much longer and more expensive commutes to get to work, or they're going to leave the state.

completely agree with Carol - adding to apartments available (increasing supply) will bring down overall pricing. Simple Econ 101. We don't need government getting in the way - adding restrictions and adding cost to the process.

People still making "Econ 101" arguments about supply & demand even though it's been empirically disproven again & again & again. Show us where an influx of private capital has led to lower real estate prices. Nowhere.

This is a displacement project, in line with all the other White Infill "development" of the last couple decades. We have tens of thousands of people behind on rent and an incoming eviction wave, meanwhile real estate prices and rent are through the roof. You need an example of the class warfare the wealthy are waging? Look no further than these NeoHaven developments for managers and Shoreline people's chic second homes.

"Monthly rents for 425-square-foot studios there start at $1,595; for 510-675 square-foot one-bedroom apartments at $1,750; for 900-1,040 square-foot two bedrooms at $2,895; and 1,610-square-foot four-bedroom suits at $5,500."

Who can afford this???

I drive by the new "Elm " apartments on Howe Street almost daily. I have watched it rise over the course of the past year and I have been appalled, disgusted, insulted and horrified by how incredibly cheap this "building" is. Not so different in intent from the myriad other cheap constructions all over town, this particular building sinks to a new low.
A type of construction originally developed in Los Angeles to house low income families, this "stick built" design is fast, cheap, and barely beyond the quality of what FEMA throws up in emergencies.
Much like the many new housing projects in town, they are five or six stories at the most because any more weight would collapse the structure.
But the crowning insult is the final surface of the Elm, composed of plastic decal sheeting intended to mimic a gray brick facade but looks like cheap wall paper. How more dishonest can the builder be?
At least the other new stick buildings make some attempt to look presentable with their terra cotta brick tile veneers, but the "Elm" looks more like a correctional facility than an apartment house.
The builders' only motivation here is fast, short sighted money.
And to add insult to injury, the rents these developers are asking are at least 50% higher than existing apartments in the immediate neighborhood.
In 20 years this building will sag, crack and fall apart, but then the developers will have long since moved on and taken their profits with them.

Aside from that ONE anecdote and the disproven truism of Econ 101 "supply and demand", can she or anyone show ANY evidence that more luxury condos lowers rents? All we have ever experienced is the exact opposite.

NeoHavener, are you actually trying to argue with literal Econ 101???

Can you please share your empiric evidence disproving this basic law of economics?

Thanks,
Inquiring mind

Esteban, I totally agree with you comments. Ironically, in the 1940's-1950's, "projects" were built for lower income people and returning veterans. Many of these were substantial masonry buildings, and many were renovated many times because they had "good bones". But they were built by "the government" and therefore had a stigma attached. These new investors will reap their profits and leave the taxpayers holding the bag when the buildings need to be demolished, since their bad "bones" will not allow renovation at a reasonable cost. This type of "podium" building was and is promoted by the lumber wood industry to increase their profits, at a huge cost to the environment.

Why does anyone still push the BS argument that more market-rate apartments will push down the rent elsewhere in town? People have been saying this for years, yet rent continues to go up. New Haven is far more expensive than it's worth already. At what point do we see this magical lowering of rents?

I'm no economist or real estate expert, granted. But it's been years of being told this nonsense, so I'm a bit skeptical, to say the least.

Also, I'm not sure we can trust the person who runs Farnham Realty to give it to us straight. Just sayin'.

This is an ad or an article?

I think anyone who ignores the law of supply and demand does so at their own peril. That said, its never that simple and there are undoubtedly other dynamics going on here. From my layman perspective, factors such as the following are playing into this:

• general economic inflation,
  
• relatively flat incomes for many segments of the population over the last few decades,
  
• increased demand for housing in your more tradition urban places (mixed-use, generally walkable places),
  
• increased demand for housing in CT due to folks leaving very dense places such at NYC on account of the pandemic,
  
• ... the there are certainly others factors I'm not thinking of.
  
  But it would seem to me that the slow pace of of adding housing units is certainly a factor. Clearly if these places are renting out then there is a demand for luxury units that is being met. Without those units coming into the market, wouldn't wealthy folks be taking up more of the existing housing stock. I suppose the question should also be - without these new buildings being built, how much higher would rents and housing prices increase otherwise?

There are about 50,000 housing units (homes and apartments). If you assume that 1% of the housing stock is lost each year due to obsolescence, disaster, or conversion to non-residential use, the city needs about 500 units per year just to keep even.

Heather, I have a number of empty nester friends who moved here from the suburbs. But they, and I suspect most people in this category, sold their old homes.

Kevin McCarthy- I have no objection to empty nesters selling their big house and downsizing to the city apartment or condo, just people owning multiple homes while some people can't afford a roof over their head and the explosion of expensive new units in the city causing a rise in rents almost everywhere in the city and the eventual mega landlord monopoly as the mega landlords and developers and real estate developers gentrify all over the place and build cheaply and rent high. These buildings are going to crumble and fall apart in a few decades and nobody will want to live in them then, and in the meantime they will irrevocably change the city. My sibling who is in the building trades called them fire traps and said you couldn't pay him enough money to live in them due to the fire hazard and the toxicity of the cheap construction materials used in building them. He says they may be built within building codes, but codes change in response to tragedies, and these are one "shirtwaist fire" disaster away from changing our building codes.

Bill Morico: Lumber is a renewable resource. Wood buildings can easily last 300 years so long as they are kept weather-tight. Concrete, however, is far more environmentally destructive. Cement plants are tremendous polluters, and iron ore, chromium, etc. mines are great scars on the land. Aggregate quarries are so pleasant, either, although at least the aggregate is close at hand in North Branford. (The closest cement plant is by Knox's house on the Maine coast.)

Why does the NHI allow people to comment with misleading and false claims? There's no reason why people shouldn't have different opinions, but allowing Trump believers who think that economic science is magically not true in their town or have some anecdote and conclude…"more supply must mean higher rents" is disingenuous at best, and malicious at worst. Sorry guys, New Haven isn't a special case.

This is like listening to people say that vaccines don't work. I've tested out writing a comment on another article about how vaccines don't work, let's see if the NHI allows that equally fallacious statement to be posted.

People want to live in New Haven. It's got jobs, it's got food and culture and nightlife, it's relatively walkable and bikable compared to surrounding suburbs. If people can't live in newer developments, then the demand will transfer to existing units.

If you don't want young white yuppies displacing existing residents, then give them someplace to live that doesn't involve displacing someone else. Otherwise, landlords in Edgewood and Fair Haven and wherever else will realize that they can rent to newbies for a lot more money than they're making now.

There's a great, great case to be made for de-commodification of housing. But as long as housing IS a commodity, more supply is better than less, especially when demand is high.

These projects will always benefit investors at the expense of the public.

Neohavener, there is a huge empirical literature showing that increases in housing supply decrease rents. For one example review see

https://www.theurbanist.org/2021/06/02/new-round-of-studies-underscore-benefits-of-building-more-housing/

It is important not to get fooled by reverse causality. When the demand to live in a city increases, rents rise and new buildings start being built. The new buildings aren't causing the rent increase any more than daffodils cause spring.

I have talked to a number of local landlords who are very upset by our mini building boom, because the new buildings keep their rents lower. More importantly, the new buildings "trap" the new people moving into the city, who otherwise would create pressure for renovations to more existing buildings (which lead directly to displacement). In the current setting, the new residents have mostly displaced surface parking lots.

Esbey,

Maybe the landlords you talk to are upset about the fact that their taxes are always going, while most of these developers get multi-year tax breaks.....

Bill Saunders: Yes, these projects benefit investors, but how do they cost the public? Unlike the affordable housing projects, they will go on the Grand List and pay the same mill rate you do. Like you, their residents will pay more in taxes than they consume (few kids that need to be educated, few social problems, etc.).

The new developments are having a very modest impact on rents because (1) the additions are a tiny share of the housing market and (2) housing supply and demand are more or less in balance - the rental vacancy rate here is close to the national average. Rents are increasing faster than incomes, and affordability is a real problem. But that is true almost everywhere, including places seeing little if any development.

1644, the issue of whether a household pays more in taxes than they cost in services is more complicated than whether they have kids or not. I suspect that, to the extent that families in the new developments have kids, they are pre-schoolers who will leave before starting school. And the state pays the majority of the cost of New Haven public schools As you have noted, this is not the case for Branford.

I moved to New Haven around the "turn of the century" (I like writing that) when I finished w/ school. Having lived in Middletown for college and then Hartford for grad school, I liked city life, compared to the suburbs where I grew up. But New Haven seemed like it had more to offer than Hartford did, while Stamford was simply too corporate. I haven't really regretted my decision and I never left.

While this is only anecdotal, I have lived in the Taft for the entirety of that time, and yesterday under my door was my lease renew offer. I thought there was a typo in it, b/c this was the first year the rent didn't increase. I guess that's good news.

What's sad news is all the empty storefronts on Chapel Street - I count maybe ten now - and Yale would rather leave them empty than lower commercial rents. New Haven could definitely use some more old fashioned retail, especially along the stretch of Chapel from Temple to York, which (In my mind) exists much like a Hollywood facade does for the benefit of Yale parents when they visit. But now post pandemic they are empty. There are also so many new young talented artists, some undocumented, so why not use the empty space to display some art and have galleries and salons for up and coming or even older artists? That's one way Yale could "respect New haven." Whitney is pretty empty too now that Clark's Diner, Fashionista, The Hive, Flex School and other business are gone. It's eerie. Wall Street Pizza is empty too. I'd rather have some "eyes on the street" than no eyes.

ShadowBoxer: There are empty storefronts all over, in non-Yale areas like the Ninth Square, and in suburbs like Branford. Yale didn't even charge its tenants rent for most of the pandemic, so its not the rent that's shut them down. Also, Yale doesn't own all the storefronts from Temple to York. It doesn't own the Enson's through Starbucks, and it only owns two buildings between College and Temple.

Shadowboxer: This map shows what Yale owns
https://your.yale.edu/sites/default/files/files/YPD-Campus-Map-2019.pdf