The Apartment Share of Housing Construction Is at a 40 Year High There are only 4 apartments left at Norwalk’s Summerview Square which is a microcosm of renting the American Dream

One in three new residential units built last year was a rental. That’s the highest share since census data began being recorded in the mid-1970s.

According to the CT Dept. of Economic & Community Development, in the month of January, there were 533 housing permits in Connecticut (representing 128 reporting towns).  However, 340 of those permits were for 5+unit buildings. That’s a 258 percent increase over last year!

In 2013, multi-family units accounted for 38 percent of housing permits in Connecticut.

New home building is shifting to apartments because Americans are viewing home ownership as a riskier investment; househofd formation is changing; and an improving jobs picture has motivated young adults to move out on their own. According to  Harvard’s Joint Center for Housing Rental Housing Study, all age groups have been attracted to the benefits of renting, but the younger segment, known as Gen Y or millennials, are most attracted to the greater ease of moving, more affordable housing and no home maintenance that renting offers.

"Builders are betting on more millennials leaving the nest this year. But young people don't get a job one day and buy a home the next. The improving jobs picture for young adults will mean more renters this year, not a surge in first-time home buyers."

Jed Kolko, chief economist, Trulia

Millennials spur lease up of Summerview Square

Jeff Kolko’s prediction has certainly proven true at Summerview Square in Norwalk, a 64 unit infill apartment community built by Summerview Development Group. Millennials account for many of the 28 townhouse style apartments that have leased up since the last phase of 32 units was released in January.

“Actually, I love my apartment,” says Tracy, a 20-Something, who has moved several times over the past few years. Tracy lived with her parents and then with roommates before moving from Minneapolis to her own two bedroom apartment at Summerview Square.

“I love my attached garage and there’s lots of storage. It’s as if I’ve got my own little home.”

Like many in her generation, Tracy is single and focused on her career. She anticipates renting for the next several years. “If something goes wrong, maintenance will take care of it. And I feel safe here," she says.

According to the National Association of Home Builders, the average age of first-time home buyers is now 34—at least six years older than it was in 1980.

Summerview Square is a microcosm of renting the American Dream

 “We have a few international folks here on jobs; a number of 25-35 year old young professionals; middle aged professionals with no kids, and at least one retiree,” says Norwalk rental specialist and leasing agent, Michael Church of William Pitt Sothebys International Realty.

Three reputable studies — by NAR, Robert Charles Lesser & Co. (RCLCo), and Arthur Nelson — all found a nearly identical imbalance in US housing supply and demand. Attached housing and small-lot housing are undersupplied — here’s why:

·          Less than a quarter of U.S. households today fit the married with 2.5 children model

·          The fastest growing segment has been single-person households.

·          However, according to Harvard’s Joint Center for Housing Studies, married couples without children will grow at a faster rate than single-person households.

Rental construction dominates the Norwalk market

In Norwalk, The Residences at Waypointe has begun leasing one, two and three bedroom apartments, Avalon East Norwalk, a community of 240 studios, one, two and three-bedroom apartments is leasing at 8 Norden Place. The Spinnaker Companies will be building 107 apartments in their mixed use development at 20 North Water Street across from the Maritime Center.  Building & Land Technology is in zoning for Merritt on the River South, 132 one and two bedroom rentals on the Norwalk River.

The townhouses at Summerview Square remain unique because they are designed with attached garages and front porches that blend in with the neighborhood’s historic Victorian two family homes.

“We've actually had a few renters who left an Avalon development because they preferred the homey feel of Summerview,” says Michael Church.