For many, homeownership −an integral part the American dream for decades− has lost its allure.
Potential buyers recognize that the commitment to homeownership makes it difficult to move for employment opportunities, says Mark Wood, president of Wood Companies. And at a time when unemployment rates high, that’s an important consideration.
Meanwhile, the demand for apartments has increased in recent years. In addition to economic uncertainty, Kevin Lykens, president of Lykens Companies, contends that a weak single-family housing market and tighter lending standards have helped create a larger pool of renters.
Consequently, apartments have become a growth area for developers− and not just the large ones. In fact, being a small or medium-sized developer can be an asset.
“The majority of the projects in the urban areas contain fewer units than a number of the larger developers are accustomed to developing,” Lykens says. “This, coupled with the increased bureaucracy, makes the area less attractive to the larger developers.”
Wood expressed a similar sentiment, saying smaller developers are able to build in tighter urban settings that might not provide the opportunity of scale desired by larger competitors.
The 24 apartments Wood Companies is developing above Northstar Café in the Short North is an example of that.
Another factor behind the apartment boom is a new group of renters who are leasing by choice, says Brett Kaufman, CEO of Kaufman Development
Generation Y appears to value a flexible lifestyle and seems very content renting, Wood says.
“The demand to rent by choice will always be there for quality product that delivers a desirable living environment in the right locations,” Kaufman says, though he does expect demand to wind down considerably over the next two to three years.
Lykens predicts that the increased demand will last for the next five to 10 years.
At the moment, one of Lykens Companies’ biggest projects is the redevelopment of the former Wonder Bread bakery on North Fourth Street. The project includes 56 apartments dubbed the Wonder Bread Lofts.
Further, a restaurant will be located on the southeast corner of the building, which will also feature two large interior courtyards and three rooftop decks.
Kaufman Development has two apartment projects under construction: 600 Goodale, 174-unit complex, and The Gramercy New Albany, a 322-unit complex.
Both projects have “a heavy set of amenities focused on health and wellness, as well as a lot of indoor-outdoor common living space,” Kaufman says.
In addition to the aforementioned apartments above Northstar Café, Wood Companies is renovating the Leafy Dale apartments on Dennison Avenue near Goodale Park.
“Both projects will have garage parking and condo-quality finishes,” Wood says.
Photos from top to bottom: Wood Co Apartments, Wonder Bread Lofts, Rendering of 600 Goodale.