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Credit: City of Rochester

Credit: City of Rochester

Every time a new downtown luxury apartment complex is announced, many people wonder, “Where are the people coming from to fill them up?”

There’s a big shift happening in Rochester and around the country. This is a demographic shift. This is a lifestyle shift. This is a shift of expectations when it comes to housing.
Here is why we need more apartments, who is likely filling the units and why downtown is an attractive option.

There are more households without children. In 2000 there were 102,033 homes without kids in Monroe County. In 2014, there were 121,016. That’s a 19 percent increase of childless households. If you don’t have children, you can get by with less space. You don’t have to live in a suburb to access good schools. You may have more disposable income.

The population is aging. Between 2000 and 2014, the median age in Monroe County went from 36.1 to 39 years old. Between 2000 and 2014, the share of the population claimed by people over 65 went from 13 percent to 15.5 percent. Seniors often like to downsize. They often sell their homes for an easier lifestyle. During this time period, the number of seniors in childless homes grew by 8,000. But the number of childless households went up by nearly 20,000. Who is making up the gap?

The Millennials are a force. The percentage of the population between 20 and 34 years old went from 19.8 percent in 2000 to 21.3 percent in 2014. That’s an additional 15,000 young people in Monroe County. Data shows they’re trending toward city living. Although they can afford houses in many cases, they prefer to rent.

There are more people not married and living alone. In 2000, 82,042 people, or 11.5 percent of the population, lived alone. In 2014, 99,959 people, or 13.3 percent lived by themselves. On the marriage front, in 2013, 44.2 percent of the population in Monroe County was married. That’s down from 51.3 percent in 2000. If you live alone, you’re less likely to want or need a house.

Home ownership rate is falling. All of the above demographic factors have led to a lower home ownership rate in Monroe County. In 2000, 70 percent of households were owner-occupied. In 2014, 64 percent of households were owner-occupied.

Good apartments in demand: The 2014 Census shows there is a 7.7 rental vacancy rate. But where are these vacant units? I suspect landlords of lower-quality apartments and apartments in less desirable and convenient areas are suffering. Rents are on the rise in Rochester. Downtown’s rental market shows a vacancy rate of 3 percent, which is considered a very healthy market.

But downtown rents are so expensive! Newer downtown units are starting at $1,000 and up. But that’s comparable to some newer suburban apartment complexes. Downtown living is easier for those who will be closer to work and entertainment. That saves time otherwise spent in a car and money on gas. The units coming online downtown are unique and special. You can’t find the views or the ambiance anywhere else.

But a house is an investment! Maybe. Studies show people think their houses appreciate far more than they really do. Some economists think you’re better off putting the money into stocks. Houses also have big upfront costs. The New York Times calculator shows if you buy a $125,000 house with a 20 percent down payment, and spend only $2,000 the first year on fixing the place up, you’re better off renting an apartment that’s $900. This doesn’t include the cost of furniture and ongoing maintenance and home projects. You’re certainly not going to buy a house for that price downtown, in the East End or Park Ave., the most walkable neighborhoods in Rochester. Houses in good shape for that price in Swillburg or South Wedge go very quickly. The bottom line is renting can be a financially attractive option for those wanting a certain lifestyle.

There you have it. All of these things taken together are why we’re seeing more apartment complexes going up in the Rochester area, particularly downtown.

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12 Responses to Explaining Downtown Apartment Boom

  1. This article does not address all of the issues related to housing. The most recent housing developed for downtown has rents that favor those with greater wealth including the initial rent of $1000. In addition investments incentives with huge tax breaks further favor those who have greater wealth to rent downtown and those who have the funds to invest. While the size and numbers fo families are declining there will continue to be a need for housing which most families with children prefer. In addition older home owners indicate they favor staying in their own homes if at all possible. However, the monies available to assist with home repairs and remodeling homes which tend to be reaching 100 years old are very inadequate. Given some of the changing in housing needs providing greater opportunities for alternatives such as cooperatives and models which can provide more possibilities like co-housing We cannot play the downtown against the needs of neighborhoods. Also the rentals downtown leaves the pattern for those who have and those who have not very much in play. That of course feeds into affecting many other social justice issues. More funding should be made available for residents who join together and develop plans to enhance their areas and to do so on a more grass roots decision making level

    • February 15, 2016 at 12:21 pm Rachel Barnhart responds:

      I’ve written about the rental crisis. It is a serious issue. The purpose of this piece was to explain the demand downtown. Yes, there are those who won’t be able to afford the new units.

    • Yup, there are “those” that will not be able to afford the down town housing. Lets say about 90% and that’s conservative. Strange how it is that you (Rachel Barnhart) seem to be s excited about this down town development and the need that appears to drive it. But that is just for the upper crust. This “boom” will also result in the push and pull of the homes and apartments which are inhabited by those in poverty, that continues to grow.

      And that poverty will continue its growth until we address the educational crisis that exists. But wait, the search for a new school superintendent has begun. Success is just around the corner. Right.

      • February 16, 2016 at 11:07 am Rachel Barnhart responds:

        Don’t misinterpret me. I have a written about the rental crisis. I am merely explaining the demand for THIS segment, as people don’t believe it exists.

        • Now that I have your attention,…how about an investigative piece on the urban education crisis. An honest, in depth analysis that exposes the shameful, pitiful and unnecessary educational failure. An urban educational failure that keeps poverty a number one issue,…. no, actually perpetuates that misery.

        • February 22, 2016 at 6:50 pm Some Guy responds:

          Let’s be honest, how much demand for any development around here exists absent massive tax giveaways by COMIDA, Empire Zones, “Tax-Free New York” zones on-near-or far-from college campuses? Other than incremental demand as more and more people escape “The Crescent”?

          Monroe County’s population would be down more than 10% since 2000 from the massive net-outmigration were it not offset by a roughly equal amount of poorer, less-educated, and more resource-intensive class of people. And there are fewer jobs now than there were in 2000, and more of the jobs that remain do not contribute to the tax base, but undermine it.

          Tax subsidies for apartments of the well-heeled is perhaps the most egregious failure of local governments that charge Mercedes taxes for Yugo quality.

  2. February 15, 2016 at 12:18 pm Bil Kinnear responds:

    Section 8 is where people will get the money to rent these Apartments. its averages about 1000.00 a month
    Soon it will be illegal to not accept Section 8 vouchers as rent . Thats the the way it is in Vermont.
    So when you are looking at that new house in downtown Rochester NY . Take a drive down SCIO street or Joseph and Cuba street
    and say HELLO to your Soon to be Neighbors.

  3. Section 8 usual payment is not $1000. and my point is that the rents downtown are and will going up. I am also speaking of the primary area seen by most as downtown not the constant moving the lines to accommodate the need to appear otherwise. Section 8 has not been available for years and in fact they stopped the waiting list for over 10 years. Section 8 would need to move their upper level of allowable subsidy much higher to allow any considerable number of low income renters to live in the majority of newer rental housing downtown . Stop excusing the fact that the usual way of development has been to deal with investors for years for tax breaks which benefit the wealthy including their likely renters. The historic pattern has been to foster segregation . Bonnie

  4. February 15, 2016 at 2:23 pm Some Guy responds:

    It is good to see that the myth that everyone deserves to own their own home falling apart, but I do have concerns about the potential for an equally artificial outcome when redevelopment is little more than a euphemism for propping up shortsighted and backwards-thinking building owners who failed to grasp the consequences of the move out of downtown offices years ago. Creative destruction then would have kept rents attractive and workers downtown, as well as created the impetus to improve the parking situation.

    And even that collapse in demand was the inevitable consequence of economically irrational sprawl getting subsidized as a matter of public policy for more than a generation. Otherwise economically irrational urban development is now subsidized as a matter of public policy, so that’s what we’re getting. Neither will end without dire unintended consequences.

    Some people want a particular lifestyle, others will favor something different, that’s a fundamental benefit of living in a free society. But a huge problem arises whenever government is the vehicle to make an otherwise irrational/unsustainable lifestyle possible.

    The existing entitlement structure was a Ponzi scheme, destined for collapse, before all kinds of housing subsidies were conjured up. Figure those costs in, add land use restrictions that have no basis in protecting the property of others, and the end result will always be higher prices and less availability.

    • February 15, 2016 at 9:20 pm Some other guy responds:

      You just used a whole lot of words to say absolutely nothing.

      • February 25, 2016 at 11:53 am Some Guy responds:

        Why don’t you actually address any of the substantive issues raised? Oh, that’s right, you likely believe in forcible wealth redistribution, and central economic planning, over free choice, but don’t have the decency to be honest about your cause.

  5. February 24, 2016 at 2:50 pm Some Guy responds:

    http://www.democratandchronicle.com/story/news/2016/02/23/fire-causes-extensive-water-damage-tower280/80834802/

    “A small kitchen fire caused heavy water damage to a building at the center of downtown Rochester redevelopment on Tuesday evening.

    Rochester firefighters were called to Tower280 at Midtown, 280 E. Broad St., at 8:12 p.m. for the report of a kitchen fire on the 14th floor. According to James McGowan, Rochester Fire Department acting battalion chief, a sprinkler was set off as a resident was cooking.

    ‘But the water flowed and flowed and flowed,’ McGowan said. ‘There’s quite a lot of damage to the building, and the elevators that just got completed will have to be re-built. They are in the process of having to dry out.’ ”

    Now onto how this came about in the first place:

    http://tower280.com/

    “To date, Empire State Development has invested $55 million, along with $20 million from the City of Rochester. Once completed, the site will accommodate about one million square feet of office, residential, hotel and retail space.”

    The apportioned cost for the residential portion, of approximately 921,000 square feet, is roughly $69M. There will be 150 units, ranging from $1,462 for a studio to $3,922 for Penthouse 7. That is an average taxpayer “investment” of $460,500, PER UNIT.

    This sort of government is criminally insane. Actual public infrastructure is well past its useful life and replacement would be far smarter than ongoing maintenance costs, particularly in poorer neighborhoods.

    This is why Common Core is dangerous, it renders a populace largely incapable of the ability to perform any sort of critical analysis. It’s also why in a republic, voting is supposed to be limited to people who actually pay taxes, electing other people to govern the government, not to use the government to line the pockets of people looking for easy money, and lord over the tax slaves.

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