Blah-blah-bland architecture and luxe prices.

Reasonably-priced new construction is fast becoming one of those stories parents tell wide-eyed offspring about the good old days. We all know that new apartment construction within a reasonable commute to a job center has been almost all-luxury. In fact, since construction restarted post-Recession, RealPage estimates that 75 to 80 percent of all apartment construction has been luxury. Adding to the problem, existing apartment buildings have been snapped up, resuscitated, and flipped to higher-rent brackets.

It’s often simple to blame greedy developers because … well … duh … but that’s as simplistic as it is simple. What isn’t simplistic is the effect this lack of market-rate affordable housing has on home buying.

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ULIFall2016

The Urban Land Institute held its 2016 Fall Meeting in Dallas last week with a tizzy of tours, sessions, networking events, and dinners. In my experience, the biggest benefit of a conference is in the networking. But the content at this one also covered a large array of subjects, from community engagement to redeveloping skyscrapers, to global trends, to niche discussions like “To Sell or To Hold,” and “The Fundamentals of Attracting and Keeping Companies North Texas Style.”

Tuesday I led a tour of the seven new development projects going up in the Bishop Arts District for the Colorado ULI chapter through the North Central Texas Congress for New Urbanism (more on that to come!) Wednesday and Thursday I got to catch a few sessions.

Highlights from the sessions included:

  • new metrics to qualify which dense urban cities are the best investment opportunities
  • innovative ideas for community engagement (from Detroit, of course)
  • the argument for building wood frame apartments above concrete podium parking.

And one topic repeatedly came up in each session — whether in the presentation,  in conversations with attendees, or by Q&A with audiences — affordable housing.

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Photo courtesy Wood Partners

Another residential development is underway near West Dallas’ super hot Trinity Groves neighborhood with the construction of Alta Yorktown by Wood Partners LLC.

The development will include 226 luxury apartments in three, four-story buildings on six acres. The property, located at 660 Yorktown St., is just one mile west of downtown Dallas, and sits near the Trinity Groves restaurant, retail, and entertainment area.

Rents at Alta Yorktown will average just over $1,300 a month for apartment homes that average 827 square feet (available as studio, one, two, and three bedrooms). Leasing will begin toward the end of 2015, and construction is slated for completion toward the middle of 2016.

Interior finishes in the apartments will include granite countertops, stainless steel appliances, tile backsplashes, Shaker wood cabinets, upgraded fixtures, and wireless technology packages. Community amenities will include an outdoor swimming pool and courtyard, grilling stations, and fire pits. The property will also have a small amount of retail space.

Alta Yorktown is just one of multiple new developments in and around Trinity Groves, where Wood Partners has a big stake in the neighborhood. It sits next to the Sylvan Thirty mixed-use project, in where Wood Partners built the 200 apartments, and the Alta West Commerce apartments, which will have 252 units. Jump to read more!

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The Trinity Village development in West Dallas will begin in 2015. Photo courtesy of Dallas Morning News.

Work will begin on the Trinity Village development in West Dallas in 2015. Rendering courtesy of StreetLights Residential.

More good news for development in West Dallas with word Thursday that Dallas-based Stonelake Capital Partners has closed on a 25-acre tract of industrial property on Singleton Boulevard, west of Sylvan Avenue.

Along with developer StreetLights Residential, Stonelake is planning a $200 million mixed-use development at 1000 Singleton Boulevard, on the southwest corner of Singleton and Sylvan.

This is 2014’s largest single redevelopment property in West Dallas, and it will bring about 1,500 new residential units to the area west of Downtown Dallas. (more…)

4501 Cole Map

We just can’t build apartments fast enough in Dallas, it seems. Apparently Sarofim Realty Partners and Lincoln Property Company agree, as new plans reported by Steve Brown of the DMN include 165 luxury rental units for the mixed-use development at 4501 Cole.

Greater density in the area has left residents craving a real grocery store, and rumors swirled about Trader Joe’s moving in months ago before being confirmed in Brown’s story. The site, at Cole and Armstrong, has had plenty buzz as developers seek to turn Knox Street into the city’s premiere walkable shopping district.

And with these apartments added in the mix, and with rental demand projected to remain strong, we think this Womack + Hampton Architects development would be a tremendous asset to the area, which has several multi-family developments nearby, but none with a mix of ground-floor retail such as this.

Here’s a bit from Brown’s story:

“The Lincoln Knox apartments are a natural extension of this upscale, walk-able neighborhood and will offer outstanding amenities,” [contractor] Hill & Wilkinson’s Jay Graham said in a statement.

It does make me wonder what could be next for Knox. Of course, the area has been a magnet for high-end retail and exceptional boutiques such as Forty Five Ten, Design Within Reach, and Urban Flower/Grange Hall. It’s a short walk to the Katy Trail. Tons of trendy restaurants can be found nearby, too. But what about the landmarks? Could longtime businesses such as Wild About Harry’s and Highland Park Soda Fountain (nee Pharmacy) be pushed out as more dense developments go vertical?

What do you think?

4501 Cole Map

We just can’t build apartments fast enough in Dallas, it seems. Apparently Sarofim Realty Partners and Lincoln Property Company agree, as new plans reported by Steve Brown of the DMN include 165 luxury rental units for the mixed-use development at 4501 Cole.

Greater density in the area has left residents craving a real grocery store, and rumors swirled about Trader Joe’s moving in months ago before being confirmed in Brown’s story. The site, at Cole and Armstrong, has had plenty buzz as developers seek to turn Knox Street into the city’s premiere walkable shopping district.

And with these apartments added in the mix, and with rental demand projected to remain strong, we think this Womack + Hampton Architects development would be a tremendous asset to the area, which has several multi-family developments nearby, but none with a mix of ground-floor retail such as this.

Here’s a bit from Brown’s story:

“The Lincoln Knox apartments are a natural extension of this upscale, walk-able neighborhood and will offer outstanding amenities,” [contractor] Hill & Wilkinson’s Jay Graham said in a statement.

It does make me wonder what could be next for Knox. Of course, the area has been a magnet for high-end retail and exceptional boutiques such as Forty Five Ten, Design Within Reach, and Urban Flower/Grange Hall. It’s a short walk to the Katy Trail. Tons of trendy restaurants can be found nearby, too. But what about the landmarks? Could longtime businesses such as Wild About Harry’s and Highland Park Soda Fountain (nee Pharmacy) be pushed out as more dense developments go vertical?

What do you think?

We know from the cranes: apartments are going up in Dallas like crazy.

More than 7,200 apartments are being built in North Texas right now to satisfy the need for more rental housing. Most construction projects, like homes, are almost non-existent, the Home Builders Association has lost almost a third of its members, but construction workers are hammering away on multi-family projects.

Steve Brown reports that “Dallas-Fort Worth apartment starts are up more than 80 percent this year, while single-family home construction continues to fall. And the area leads the country in apartment building.”

We need the nation in home sales, now Texas leads in apartment construction. Texas really is like it’s own country! Experts tell Steve we will stay put as the number one building center for a while: tenants are knocking the leasing office doors down and apartment occupancies are at all-time highs. Will we overbuild? Probably, but apartment building in Dallas-Fort Worth is still less than half of what it was before the recession and credit crunch.

Net leasing has outpaced apartment completions in North Texas for more than two years. Mike Puls of Foley & Puls says demand is better than we have seen since the 1980s, since there are fewer young people today who can afford a home and more people moving to Texas. He called it a structural change in the mindset of the consumer: older households don’t want to own anymore because they don’t see the value in the investment. Younger people can’t get jobs and move in with  mom and dad.

I know of a very smart couple who shed their home not too long ago.

“I am paying $3000 a month for rent and they have to cover all the repairs,” he told me. “I love it. In my home I was paying twice that per month and where was it going?”

But these tenants are a sophisticated crowd: developers know they have to provide a higher-quality product to attract and maintain renters. The market is too competitive to be be cutting corners, says Brian Tusa, managing director with builder Alliance Residential, who is building in Dallas like there’s no tomorrow.

One of the most expensive Alliance projects to date is a 303-unit apartment building under construction on Market Center Boulevard in Dallas’ Design District — my husband asked me about it when we were going downtown the other day.

Alliance has other projects across the area: Lewisville, North Fort Worth, and the Medical District near Parkland Hospital, which is exploding, as I reported about a year ago.  JLB Partner’s is building on Maple Avenue, and just opened a 281-unit apartment project on University Drive east of Southern Methodist University: already 50 percent leased.

JLB is also hammering away at a 372-unit apartment complex east of downtown on Ross Avenue, and has started 300 units on North Central Expressway in Cityplace.

Everyone, said Sherwood,  wants to come to Texas to do something. But with tougher lending standards, he doubts that all the proposed projects will actually get built.  Of 15,000 to 16,000 units on the planning sheet, Sherwood says maybe 8,000 to 10,000 could actually be completed.

One thing for sure: rents are and will continue to go up. Average D-FW rents have risen about 9 percent since the end of 2009, and are forecast to increase 4.4 percent. The average Dallas apartment rent is $800 a month, but these snazzier units go for much more — $1500 to $3000 a month. Most experts agree that as rents go up from higher and higher demand, buying a home will look better and better.

But we have problems with that.

One, financing is much harder to get and shows no sign of easing.

Two, 20% down is the new down payment norm. That means a young couple buying a $300,000 home need to have $60,000 saved up for a downpayment.

Three, the unemployment rate exceeds 17 percent for the younger Gen Y’ers, compared to 7 or 7.5% wth Baby Boomers.

Four, Gen Y is more mobile and may prefer leasing over buying after seeing parents and older sibs with underwater mortgages. We are becoming a renter nation, and the smart commercial multi-family builders are all over it.