New Haven Register (Sunday) (New Haven, CT)
BOOM A BOON TO RENTERS
Rent inflation moderate in many CT municipalities, but little comfort to struggling tenants
As the calendar flips to June — peak season for apartment moves across the country — rental rates across the U.S. are starting to rise, as states continue to lift pandemic-related restrictions on travel, indoor and outdoor gatherings and mask-wearing.
Rents in Connecticut, however, while historically high, could be benefiting from a huge expansion of new buildings constructed since 2011, which are now competing for tenants flooding in from New York City and elsewhere.
A Hearst Connecticut Media analysis of data from
the U.S. Census Bureau, Zillow and Apartments.com shows that rent inflation in dozens of municipalities across the state has been moderate compared with other population centers.
That’s little comfort, however, to thousands of renters who struggle to afford what they’re currently paying each month, while Connecticut landlords face mounting costs associated with the long-running moratorium on evictions.
Many prospective tenants struggle to get a signature on an initial lease, said Charmain Yun, a landlord engagement specialist with the Coordinated Action Network in New Haven. Some advocates now advise clients to seek rooms for rent as an alternative to full apartments.
“I have one client who has a criminal history ... [but] has wonderful jobs — a full-time job with a great reference and another part time job,” Yun said. “I think he would make a great tenant, but his application keeps getting denied . ... That’s not a [unique] scenario.”
What people pay and where
The National Low Income Housing Coalition calculates a “housing wage” of $55,000 in annual income for any individual or family to afford a two-bedroom apartment in Connecticut, under a formula that devotes 30 percent of income to housing costs.
But depending on the locale, that baseline income can swing widely, from $83,000 in Stamford to $46,000 in Waterbury. Bridgeport has the highest estimated totals of renters classified as “cost burdened” by NLIHC, at nearly six of every 10.
In Stamford and Greenwich, at least 40 percent of renters pay $2,000 or more in monthly rent, according to U.S. Census Bureau estimates of rent brackets in Connecticut cities and towns with at least 5,000 renters.
Just over 30 percent of renters in Norwalk pay that amount, along with 15 percent of tenants in both Danbury and West Hartford. In two sections of Milford that add up to more than 5,000 renters, 19 percent pay $2,000 or more a month.
At the opposite end of the rent scale, only Waterbury, Torrington and New London had more than half their populations of renters paying less than $1,000 a month. At least 50 percent of renters in Manchester and West Haven paid between $1,000 and $1,499 to lead the state in that bracket.
Danbury and Norwalk were highest for the rental range between $1,500 and $1,999, hovering around 30 percent of all renters in the two cities.
The Connecticut Department of Housing is in the process of awarding $250 million in rental assistance to tenants and landlords through federal funding. But with limitations on evictions for participating landlords, not all are choosing to participate, according to John Souza, president of the CT Coalition of Property Owners.
In April, researchers with Harvard University and the Housing Crisis Research Collaborative issued a study that estimated a quarter of renters nationally depleted their savings significantly during the pandemic, with a smaller percentage resorting to loans to make rent.
A boom in new construction
Unlike the home sale market, in which real estate associations keep meticulous data on transactions, snapshots of the apartment market rely on imprecise surveys.
Stitched together, however, a picture takes shape in Connecticut — a boom in apartment construction, financed both by private developers and the state’s affordable housing programs, has added more than 37,000 units across 330 new apartments buildings analyzed by Hearst Connecticut Media.
In Stamford, Building & Land Technology and other developers have added nearly as many apartments — more than 10,000 in all — as the next four cities combined in New Haven, Norwalk, Hartford and Bridgeport.
BLT’s signature project in Stamford is the Harbor Point district, which was backed by the Philadelphia real estate investor Lupert-Adler.
The developer is now focused on Norwalk for its next mammoth project in Merritt Station Norwalk, a boulevard of highrise apartments running the length of Glover Avenue north of the Merritt Parkway, where it is on pace to complete the third and final phase of its Curb complex that is currently the largest under way in Connecticut with more than 760 units.
BLT has sought to capitalize on movement during the pandemic by offering lease terms of as short as two months for people needing more time before making a commitment. And this week, it announced any real estate clients of its William Pitt Sotheby’s International Realty affiliate can move into one of its apartments after completing the sale of their home, with the option of breaking the rental lease with no penalty once they close on the purchase of a new home.
If BLT’s projects have dwarfed others in Connecticut, developers like RMS, Spinnaker Real Estate Partners and Trinity Financial have transformed blocks of Connecticut cities and towns as well.
RMS is leading the development of North Crossing in Hartford, an apartment village clustered around the city’s new Dunkin’ Donuts Park baseball stadium. Trinity Financial is nearing completion of Soundview Landing in South Norwalk, replacing the outdated Washington Village affordable housing project. And Spinnaker apartment developments are in the works for Hartford, Norwalk, Fairfield and New Haven, where its Coliseum proposal downtown renewed scrutiny on affordability in the city’s apartment sector.
NYC rents plunge, CT edging up
In 2018, Connecticut had more than 1.5 million units of housing, with about 30 percent occupied by renters — more than 460,000 total units — according to the U.S. Census Bureau.
As of May 2021, however, Apartments.com listed less than 7,800 available apartments, condominiums and houses for rent in Connecticut. On Craigslist, nearly 3,500 more are listed for rent, with significant crossover in listings between the two websites.
That compares with more than 11,000 homes up for sale as of mid-May, including about 2,700 in the form of condominiums or town houses.
Nationwide, April 2021 saw the largest monthly increase in yearover-year rental prices since the start of the COVID-19 pandemic, according to a Yardi Metrix analysis of roughly 19 million rental properties in the largest cities.
On Zillow’s separate index of mid-range apartment options in larger metropolitan areas nationally, Stamford, New Haven and Hartford had higher inflation in rental rates than New York City over six years through the start of 2020.
But as New York City rents plummeted 8 percent over the course of the pandemic, Stamford and New Haven rents accelerated by the same margin, with Hartford-area rates up 6.5 percent. The Zillow study zones in on just two dozen ZIP codes in Connecticut from Greenwich as far east as Manchester and Old Saybrook.
The biggest gainers spanned a mix of Connecticut neighborhoods, including two sections of Norwalk, Bridgeport’s North End, a swath of Greenwich and a district covering portions of Meriden and Middletown.
Still, Stamford only barely cracked the top third of metro areas nationally for inflation in middle-market rentals through the first 12 months of the pandemic, Zillow data shows. Landlords registered the biggest gain in Boise City, Idaho — at 17.5 percent — while Providence topped Northeastern cities with an 11 percent increase to rank seventh nationally.
New York City continues to lag on the Yardi Metrix index; rents are down 12.8 percent amid ongoing flexibility by office employers in allowing employees to work remotely, though there were signs in April of a rebound among renters identified as choosing to live in the city for lifestyle considerations.