New Haven Has Nation’s Lowest Vacancy Rate
| Jan 5, 2012 7:10 pm
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Posted to: Business/ Economic Development, Housing
A national ranking released this week affirms what local developer Chris Nicotra has been seeing around town: “The biggest problem we have with apartments in the city is that we don’t have enough.”
Nicotra (pictured), president of Olympia Properties on Temple Street, made those remarks Thursday, the same day that a report from the real estate research firm Reis Inc. found that the New Haven area has the lowest apartment vacancy rate in the nation.
Only 2.1 percent of New Haven area apartments are vacant, according to the firm. New York had the second-lowest rate, with 2.4 percent.
The rate is for the New Haven “market area,” which includes a rather large swath of Connecticut including Waterbury and Meriden.
New Haven vacancies “stem from constant demand for a small inventory of market rate rentals, fueled by the education sector,” observed Reis Head of Research Victor Calanog.
The news comes as the nationwide vacancy rate fell to 5.2 percent, the lowest rate in 10 years, according to the firm.
“This is good news,” responded Mayor John DeStefano in an emailed statement Thursday. “Low apartment vacancies translate to a strong property tax base to pay for important city services, and population growth that helps support business growth and job creation. It also challenges us to develop more housing, especially worker housing to keep rents from rising disproportionately.”
Nicotra said his firm has long believed “the demand has far exceeded the availability of apartments in the city.”
That’s why “we have secured several prime locations within the city for future development of apartments,” he said.
Olympia has bought up three downtown properties for future plans, which include a 26-story apartment tower on State Street.
Before moving ahead with those plans, Nicotra said his firm was “sitting back and watching the success of 360 State Street” as a gauge of the market. The 32-story complex, which opened a year and a half ago, is now 88 percent filled, according to developer Bruce Becker.
Nicotra called it “unbelievable” how quickly renters snatched up Becker’s apartments.
“We see nothing but positive growth over the next few years,” he said.
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posted by: Noteworthy on January 5, 2012 3:43pm
The reason why apartments are up, is because home-ownership is down. People have lost their homes to the bank and to the City of New Haven. DeStefano filed more than 400 foreclosure lawsuits last year.
posted by: Curious on January 5, 2012 3:50pm
[The news comes as the nationwide vacancy rate fell to 5.2 percent, the lowest rate in 10 years, according to the firm.
“This is good news,” responded Mayor John DeStefano in an emailed statement Thursday.]
Couldn’t this be from more people having to sell their homes and move into apartments? Without data showing that this is from new residents, this is not necessarily “a good thing”, as the mayor puts it.
posted by: Curious on January 5, 2012 3:52pm
*** Does anyone else get error messages from this website that supposedly show misspellings, only the words are spelled just fine? It’s pretty annoying.
posted by: Guilford Girl on January 5, 2012 4:02pm
If someone were to build high end condos in new haven, alot of people would move from the suburbs, This would greatly enhance the tax base with all the mercedes and BMW’s addded to the tax rolls. New Haven needs more quality upscale housing
posted by: yz on January 5, 2012 4:59pm
Can we please not construct giant apartment towers and instead build with a smaller scale in mind? The height of the buildings in the 9th Square is preferable to the towering 360 State Street.
Compare apartment buildings west of Park Street with the behemoth towers south of Crown Street. I wish that contemporary real estate developments are built to a human scale, instead of high-flying towers. Such towers are only necessary in places that have the density of a major city.
New Haven has tons of open lots used for parking that could be instead replaced by 3-5 story buildings with or without retail space on the first floor. Aesthetically, this would be a lot better.
What’s the occupancy rate on apartments in the 9th Square these days?
posted by: nhv on January 5, 2012 7:55pm
This is great news, I’m so glad that Olympia is ready to take on this project!
And honestly, 25 stories isn’t really that much for a city. It’s a big number, but New Haven has a lot coming for it in terms of urban growth downtown. I think that State Street can really turn into something else, there’s a lot of potential thee. There are places in the city for skyscrapers and places in the city for smaller scale apartments. I love 3-4 story buildings, but I think that certain parts of downtown should be more than that.
posted by: SteveOnAvon on January 5, 2012 8:17pm
Given the impact of the most recent revals, I wouldn’t be surprised to see a whole lot of new apartments created in East Rock as homeowners try to stay on their properties by renting out less used rooms.
It’s astonishing that the city is allowing Vision Appraisal’s completely opaque revals to punish those who want to take care of their properties and help be part of a community, while the absentee slumlords of the city seem to fly completely under the radar. Meanwhile, if Yale had any commitment to the city of New Haven, it would begin to engage with the city of New Haven as a whole, and not just its shuttle-serviced enclaves in the city.
posted by: Mike on January 6, 2012 8:48am
I wonder how section 8 housing plays into this number. I bet it plays in big time, even bigger than foreclosure.
posted by: Stephen Harris on January 6, 2012 10:18am
The tower this article talks about was originally approved several years ago but the timing was bad as Wall Street was busy crashing the economy at the same time. It couldn’t get financing.
The zoning regulations permit a one time, one year maximum extension of an approval; see Sec. 63(h). That project was granted an extension that has now expired. Any new project would have to go back to square one.
I’ve never been a fan of large towers. I find them de-humanizing. A city can achieve a great deal of density and a livelier street scape at five stories.
I would urge the developer to consider taking those 26 stories and break them up into five, five story buildings and place them along the site’s perimeter. That would create both a human-scaled development and enliven the street.
posted by: the1king on January 6, 2012 10:35am
maybe we have the lowest rate because all the illegals coming to live in New Haven
posted by: robn on January 6, 2012 4:17pm
IMHO 360 State is a very homely building. The Nicotra design is an atrocity and should not be allowed under any circumstance. Why don’t we have citzens design review in New Haven?
posted by: really on January 6, 2012 10:51pm
Great observation, stay up all night [...] for this one. Or do you fail to realize that some legal citizen has to provide the housing first.
Second, Has anyone taken a drive around this town to look at the swaths of vacant homes. Plus isn’t the community in need of more stable HOMEOWNERS. Just wondering when we lost touch with reality here.
posted by: Stephen Harris on January 7, 2012 1:47pm
I had the wrong lots (so many to choose from…). I thought the article was referring to the lots across from the new high school, not those behind Horowitz. But towers are still a bad idea.
posted by: webblog1 on January 9, 2012 1:37pm
“A national ranking released this week affirms what local developer Chris Nicotra has been seeing around town: “The biggest problem we have with apartments in the city is that we don’t have enough.”
Nicotra’s statement regarding…
... “New Haven area has the lowest apartment vacancy rate in the nation”, is patently false.
According to the US. Census Bureau’s 1 year estimate for (5) congressionaL districts in CT; the (3rd) congressional district has the highest apartment vacancy rate in CT, don’t even go there as far as the nation is concerned.
According to the Census Bureau estimates:
Vacancy for rent statics..
Congressional district 1. 7,240
Congressional district 2. 3,775
Congressional district 3. 9,057
Congressional district 4. 7,352
Congressional district 5. 6348.
For New Haven Town New Haven County only:
For rent 7,930.
Nicotra and the real estate research firm Reis Inc. had better perform more accurate research technics, Nicotra and Destefano had better verify the data before signing on to a snake oil pitch, designed to justify constructing more down town apartments which have no such demand exist, other than Nicotra’s.