Big national gains in apartment construction not seen locally
Groundbreakings on homes and apartments jumped 9.3% nationally from October to November, the best monthly growth since April 2010, according to government figures. The bulk of that growth was attributed to soaring starts in apartments, with about 175,000 projects this year compared to 97,000 just two years ago; the current pace, however, is still half of what experts call "healthy."
But the multifamily sector has not seen similar growth in the Capital Region, says Wesley Moore of Cook, Moore & Associates, who tracks local apartment projects. "There are very few apartment projects going on right now, and that's really been the case all year," Moore says.
The stagnancy in multifamily construction in the region is due to a sunset on the glut of complexes that were built with GO Zone tax incentives and other subsidies in the aftermath of Hurricane Katrina, he says.
"When everyone else was in the toilet bowl, it was like a race here to build as many units as possible before those tax incentives ran out," Moore says. "So what we're seeing here is some other parts of the country starting to come out of the [toilet], while we're seeing some slow down."
Of the four apartment projects that were in the planning stages during the spring, just two are under way. And Moore says he doesn't expect many new apartments to be announced in the coming year.
"It appears unlikely that anything will commence on the River House or Rouzan sites anytime soon," he says, noting that the other formally announced deal is a 158-unit complex on West McKinley Street by Columbus, Ohio-based Hallmark Campus Communities. The project, University Edge, will target LSU students.
Hallmark Campus Communities "definitely has the capital and expertise to get that one rolling," Moore says. "Otherwise, I know there's a group trying to get a project put together in Zachary, and another in Iberville Parish, but both are far from being anything more than concepts."
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