Next Wave Of Apartments For Downtown Hartford: Smaller, Less Expensive
By KENNETH R. GOSSELIN
December 02, 2012
A decade ago, apartment construction in downtown Hartford was all about upscale and luxury, with rents to match.
The next wave of rentals in the city's center is one being pursued by a growing number of cities: smaller, less expensive studios and one-bedroom apartments.
"If I had a building downtown with studios, I would fill that up in a week," said Cynthia Rodriguez, owner of The Property Shop in Hartford, which finds apartments for renters. "We are so in dire need of that. If you look at downtown, there is nothing out there."
Over the next three or four years, downtown could see the addition of another 1,000 apartments — as many as 85 percent of them studios and one-bedrooms — in at least five major projects and an array of smaller conversions.
More modest-size apartments with lower rents, experts say, could attract many different renters: young professionals paying off student loans; those without college degrees who work downtown; and the newly divorced or separated. Students who attend classes downtown when the University of Connecticut moves its West Hartford campus to the city might want to move nearby, as they did in Stamford when UConn moved to that city's downtown.
Michael W. Freimuth, executive director of the Capital Region Development Authority, is convinced there is demand for the apartments now on the drawing boards. Right now, many renters are skipping downtown because the overall apartment vacancy typically is less than 5 percent, and even less for studio apartments, he said.
The first projects will be critical to setting the tone for their own success and for the future of apartment construction downtown.
"If done well, they will reinforce the market," Freimuth said. "Therefore, the first deals out of the gate need to be thoughtfully calibrated to both meet and drive demand."
In the last decade, the strategy for downtown apartments was targeted mainly at apartment dwellers looking for the upscale: empty-nesters who had sold their homes in the suburbs and workers who were more established in their careers. What the strategy ignored, for the most part, were younger workers — some professional, some not — who couldn't afford what is often well over a thousand dollars a month in rent, plus, in some cases, additional costs to park a vehicle.
Housing is considered key to the continued revitalization of Hartford. More downtown residents can only add to the vibrancy created by restaurant and shops and new cultural attractions, including the Connecticut Convention Center, the Connecticut Science Center and the recently opened Spotlight Theatres movie complex.
Most of the major proposed apartment projects — the largest being the conversion of the former Bank of America office tower at 777 Main St. into 286 units — are vying for a piece of the $60 million the state has set aside to the development authority for new downtown housing. Most of the developers also want state money earmarked for affordable and workforce housing, meaning a percentage of the apartments would have below-market rents aimed at enticing low- and moderate-income households.
Other cities, including New York, San Francisco and Boston, are considering even smaller apartments, known as "micro-studios." For example, New York Mayor Michael Bloomberg is seeking competitive designs for units that are no larger than 300 square feet that still include a kitchen, a bathroom with a tub and windows with a view of the city.
San Francisco is considering shrinking the minimum size of its rental units from 290 square feet to 220 square feet. And in Boston, some apartment buildings under construction are including a version of the micro-studio at less than 450 square feet, at the prompting of the city's mayor.
Downtown Hartford's studios aren't likely to get that tiny, but they could shrink, said Martin J. Kenny, the developer of the Trumbull on the Park apartments in downtown Hartford, which started leasing in 2005. Kenny is now part of a partnership that hopes to convert two downtown buildings at the corner of Pearl and Trumbull streets into apartments.
Studios in downtown Hartford now range between about 480 square feet and 950 square feet, with rents running from $1,000 to $1,500 a month, Kenny said.
"If they are tighter, better-designed, a 450-square-foot studio could go for under $1,000, making it more affordable," Kenny said.
John Glascock, director of the Center for Real Estate at the University of Connecticut in Storrs, said the trend toward smaller apartments is being driven elsewhere by young, single people, most under 30, who are working on their careers and don't want to waste time commuting.
"They don't mind a unit that is smaller and cheaper is better," Glascock said. "You need just enough room to decompress, shower, change your clothes. You don't need a living room or a second closet."
Past The Six Pillars
The last big push to add rental units in downtown Hartford came in the late 1990s as part of former Gov. John G. Rowland's "Six Pillars" plan to revitalize the city. The plan included multi-million dollar state subsidies for such apartment projects as Hartford 21, The Lofts at Main & Temple and Trumbull on the Park. Other privately financed apartment projects followed, including the conversion of two vacant office buildings: the former SNET building on Trumbull and the American Airlines building on Main.
Construction added about 1,000 rentals to the 500 that already existed in the downtown area. The next wave would push that total to 2,500, and the development authority has a goal of reaching 3,500 by 2018.
Thomas E. Deller, Hartford's director of development, said this second phase of apartment construction downtown is just as significant as the one that started in the late 1990s.
"We're at a critical stage for housing downtown with these five proposals," Deller said. "We want housing in Hartford to appeal across all income lines."
Introducing lower cost housing in downtown Hartford is a fine line to navigate because it isn't only about the potential tenants but the overall impact on the downtown.
The authority's housing strategy is focused on creating market-rate units. But Freimuth said the authority can support apartment plans in which roughly 20 percent are set aside for low- and moderate-income households. The concession was made because the projects require multiple funding sources, some with units that are set aside for income-based rents.
The tenants in those units can be charged no more than 30 percent of their gross income for rent and utilities. Qualifying income will vary from project to project, probably ranging from a median income that is 60 to 80 percent of the average for the Hartford area. At 60 percent, the upper qualification limit would be $36,840; at 80 percent, it would be $45,500.
Those income parameters would likely fit the starting salaries of police officers, elementary school teachers, firefighters and some clerical workers in Hartford, Freimuth said.
"We're not talking about Section 8 housing here," Freimuth said.
Section 8 Housing accommodates families and individuals with much lower incomes and includes rent subsidies.
Initially, some developers had sought a much higher percentage of rent-regulated units. Becker and Becker Associates Inc., the developer of the Bank of America tower, first proposed a nearly 50/50 split between rent-regulated and market-rate units. Now, Becker is settling nearer the split sought by the authority.
Freimuth said he believes 20 percent of affordable housing will help diversify the affordability of units downtown, with the projects still meeting other goals.
"We want these properties to appreciate in value," Freimuth said. "That's difficult when you regulate rents. If you regulate rents at a low level, you frustrate value appreciation."
Part of the value of a commercial building is determined by how much income it earns and that, in turn, affects how much tax the city can collect in the future, Freimuth said. Successful projects also will attract more investors for future projects, Freimuth said.
"We also want the discretionary income that comes with higher income groups that is critical to generating restaurant and retail activity," Freimuth said.
Not all the proposals will necessarily be completed. But at least one, the conversion of the old Sonesta Hotel into 193 units, including 54 studios of roughly 450 square feet, could begin construction early next year, delivering units in 2014.
In the meantime, real estate brokers who handle downtown rentals say prospective tenants should be ready to make a decisions quickly if they find a studio or one-bedroom apartment.
"If you like an apartment, chances are other people do, too," Grant Corbit, owner of A List Apartments in West Hartford, said. "So you have to jump on it."
Chris Aparicio and his girlfriend, Bonnie Wetzel, have yet to find the right, one-bedroom apartment. The couple now rents a house in West Hartford, but they are looking to move to something smaller downtown.
"We just want to be able to walk to different places," said Aparicio, 33, who owns a restaurant food delivery service.
The couple has been looking seriously since October, but thinking about it longer. They've looked at apartments on the outskirts of downtown, and while they have found deals — free heat and hot water at one building — the fit just hasn't been right.
"Ideally, we'd like to be right in the center of things," Aparicio said.
Reprinted with permission of the Hartford Courant.
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