NJ Investors Buy Winchester Lofts

These investors aren’t dumb. They know that demand is through the roof and apartment rents will continue to climb quickly.

Of course, this is an affordability crisis for families. Nowhere else in CT is building much housing, and even New Haven isn’t building nearly fast enough. The only way to fix the crisis is to convince developers to build much more quickly, through things like infrastructure improvements in outlying areas (for example, better quality transit into Hamden, which has many sites that would be great for high-rise development if it were more accessible), brownfield redevelopment cash, tax credits, and most importantly the elimination of most zoning and parking requirements.

When will the city change its currently unfair policy of taxing small property owners more for an assessed value but large property owners less for the much smaller income model?

Robn, I think you misunderstand the problem. For the past year or so, I’ve been comparing the sales prices of properties in Tom’s articles with their appraised values. For two to four unit properties, the numbers have generally been quite close, with some properties selling for more than their appraised value and some less. The recent sales may not be representative of this class of property. But the data to date do not suggest a systematic problem with the appraisals of these properties. This is not the case for large multifamily sales. In most cases, they have been selling for well over their appraised values

The law gives assessors broad discretion in how they value properties. But they cannot cherry-pick, using one method to value one property and another for a different property in the same class. Nor can the city retroactively change an assessment (except if owner successfully challenges it in court).

If these people have so much money - they ought to spend it on maintaining what they bought. A tenant of theirs, who is disabled posted on Nextdoor that the elevator in Westville Village Apartments is constantly broken. One night, her husband allegedly had to spend the night in his car because he uses a wheel chair to get around and go to work. Somebody from the city should be looking into this.

Anonymous, we need to build more housing, market rate as well as subsidized. But housing supply is only part of the affordability equation. A person working full time at an $15/hour job can afford a rent of $750/month. No plausible increase in supply will bring rents to this level. (While finding a roommate is a realistic option for a younger single person, it does not work for single parents or many low-income middle-age or elderly people.)

Robn, we agree that the city has undervalued larger properties, notably large multifamily buildings. You also believe the city has overvalued single and small multifamily buildings. So far, the sales price do not support this belief. The undervaluation of the large properties means that you and I (and many other people) are paying more in taxes than we should. But it does not mean our assessments are systematically off.

Robn, I should have been more precise. You have implied, rather than stated, that single family homes have been over-valued. And you really have not said anything about the valuations of small multifamily buildings - my error.

What do out of state, international companies know about NewHaven that locals don't? Why are they investing here? What is the end game? First question.
2nd Ques-- Why must all housing include poor people? What is the plan in NH? To fill it with poor people who need tons of services? When they are all in NH, who will pay for it? 3rd-- What is the vision for NH? They claim it is a document. What does this document say? A city of high rises and poor people below? Sounds like the favelas of Brazil to me. Is that the plan?

CY2, the vast majority of the housing that has been built here in the past few years is market rate, and decidedly not affordable for poor people. Few of tenants of these developments have school age kids or otherwise create major costs for the city. And while the inclusionary zoning ordinance seeks to provide housing that is affordable to low- as well as moderate-income people, it is highly unlikely that will happen. Developers can, and I fully expect will, set rents for the reserved units that are affordable for the latter, but not the former (e.g., for an entry-level teacher, but not someone working at McDonalds).

With regard to your first question, Anonymous is right. Both nationally and in New Haven, the supply of housing has not kept up with demand. There are a whole bunch of reasons for this, including market failures and counter-productive public policies. Housing affordability is a global problem, across a range of political and economic systems. Adding housing supply, by itself, is not going to solve this problem. But not increasing supply will make it worse.

the irony of this is they are a corporation that is allowed to dictate what ever number they want for their rent but the small working class person CANT raise their rents to be competitive because the city and all of its power will dictate that rents have to be under a certain amount because the regular person cant afford such an increase. This is disgraceful. They charge three to four times as much as an apartment one city block away and it is blessed . The owner of a multi family trying to do the same will have to endure fair rent commission , attorneys for the displaced tenants that cant afford such housing prices and zero support from the elected officials they voted for that these investors dont.... yet we keep electing people into positions that cosign this as their personal wealth steadily increases as well! Doesn't smell clean!

ThreeFifths, that is what I said. It is necessary to build more housing, market rate and subsidized. But by itself, that will not be sufficient to address the affordability problem, particularly for poor folk And like Ms. Klasky-Gamer, I have said that adding market rate housing will initially benefit middle-income renters in neighborhoods like East Rock.

Neither the market nor current policies will make housing affordable for low-income people. The steps required to do would be costly for middle-income people, also known as voters. These steps include (1) dramatically increasing housing subsidies, which would raise their taxes, ((2) dramatically increasing housing supply, which would necessarily decrease the value of their property, and/or (3) substantially increasing the incomes of poor people through structural changes in tax or employment policy. Old fashioned rent control is virtually extinct in NYC and not remotely plausible here. Rent stabilization is slightly more likely. But NYC has a huge affordability problem, notwithstanding having an extensive rent stabilization program.

Corporate investors, foreign and domestic, are exacerbating the affordability problem. They are buying properties whose current owners undervalue them, and rent increases will ensue. But this is part of a broader and deeper problem. There are steps the city can and should take. But they will only help on the margin.

“There are steps the city can and should take. But they will only help on the margin.”

This isn’t true. As you point out earlier in your post, a massive increase in new construction would alleviate rent burdens. Many cities that have built housing much more quickly than the places like NYC, Boston, New Haven, DC, and San Francisco have, are much more affordable places to live.

Of course, residents with very low income (including many college students) still face affordability issues regardless of where they live. They often double up on apartments. That’s been the case for tens of thousands of years — and most people would agree with Kevin that it’s unlikely that voters and the GOP-controlled House would approve vast new amounts of government-provided, free housing for students and all other people who need it. More likely, nonprofits and advocacy groups will step in to fill the gap and try to convince state governments to focus on helping the people in greatest need. Providing free housing for elderly residents who have zero income and families with young children who are homeless shouldn’t be a controversial issue. Raising the minimum wage to $20 also shouldn’t be controversial.

But that issue is separate, and it doesn’t mean we shouldn’t take the necessary steps to alleviate the crushing housing burdens that fall on the remaining 85% of the population, including most families. Those steps would include allowing high-rise development as of right throughout the entire city, and subsidizing developers (by cleaning brownfields, improving transit connections to outflying areas, paying the difference between 6-story wood podium construction and 35-story high-rise steel, etc) who agree to add many thousands more badly-needed new homes to the current supply.

Other than electing a socialist-majority Congress and Elizabeth Warren as President, this is the only realistic way to keep rents from continuing to spiral out of control.

ThreeFifths, there are about 3.5 million housing units in NYC. Of these, about 16,000 (less than one half percent) are rent controlled. It is correct to say that rent control, as distinct from rent stabilization, is virtually extinct in NYC. And we have discussed Mr. Vaughan before. He has done great work, but his portfolio of affordable apartments is even smaller than the number of rent controlled units. Finally, the goals Newark has set are great. But how many affordable apartments have been built in Newark under its IZ ordinance? I would be pleasantly surprised if it was in the hundreds. Newark has nearly 90,000 apartments.

Anonymous, the city can’t raise the minimum wage to $20 or increase funding for Section 8 or similar programs. It can and should amend the zoning ordinance to facilitate housing construction. (I have had continuing discussions with alders and City Plan on this front.) A massive increase in housing supply would undoubtedly reduce rents. But developers are in the business to make money. They will not build more housing than they think will be profitable. The city has approved every large housing development proposal submitted in recent years, routinely granting zoning variances and tax benefits. The reason why no 10+ story private residential building has gone up since 360 State is that developers don’t think they can make money erecting them.

It's funny how hard some commenters are working to vilify large properties owners who are bringing money into New Haven from NYS/NJS, which could go anywhere else, and are proposing to overtax them to death to ensure that they go elsewhere instead of coming to our town and spend their money here. Not only that, but a few exceptionally large buildings, which sold over their past appraisals are blamed here consistently for the higher taxes of others. The taxes in our city our high because our politicians cannot stop spending our money. A grand list increase of 34% resulted in a mill rate decrease of only 10% . Not only these are distorted point of views, but most ironically, the same people who are asking for high taxes on commercial owners, are also asking for more affordable units. It's always the people who have never been landlords or developers who are the most generous with other people's money. It's hard to make a dime owning a building to begin with today, especially with the old New Haven stock that is deteriorated to the core, and the huge expenses needed to modernize buildings, now we are asking developers to gamble with their money and put up personal guarantees to provide affordable housing. The real answer is lower taxes and less regulations, and encourage development wherever you can. Currently the taxes in our city are actually a huge deterrent for developments as even vacant sites are taxed so high that to just carry them is a huge risk, let alone build. So don't hold your breath for more affordable units, they are not coming. It's a pipe dream. What's coming is more rent increases, and more luxury units in small houses that used to be working classes. And these high taxes phasing in next year? well that will surely be passed on to the renters in one of two ways: rent increases, or deferred maintenance. Make a pick. And good luck with the lofty goals. Words are cheap. Bricks are not.

Nelson, undervaluation does not make the benefitting owners villains. No one has suggested that they have acted unethically or illegally. While the law requires that these properties be appraised at fair market value, the owners of undervalued properties have no legal obligation to report that their appraisals are low. Similarly, there is nothing wrong if a buyer determines that a property is worth more than the current owner thinks. Markets could not function if this did not happen routinely.

But at any given level of municipal spending, taxation is a zero sum game. If some properties are appraised at less than their fair market value, other owners will pay higher taxes than they otherwise would have. The bulk of New Haven’s apartments are in smaller buildings. The owners of these buildings are paying more in taxes as a result of the undervaluation of large commercial properties. I am willing to believe that most of these small landlords are decent people. But as you note, landlords pass their taxes on to tenants in the rent. One thing you, ThreeFifths, and I agree on is that rents will continue to rise.

We should be protesting the ridiculous mill rate we are paying, and not bother with a few large buildings, I look at around 200 properties a year, and I've seen as many under valued small properties as big ones, and I've also seen a lot of overtaxed large properties, there are some white elephants out there (like useless bank buildings) that are hard to use and have like 50K in annual tax because they have a beautiful front. Bottom line is the mill rate needs to come down 10 points and that's where the focus should be,