ST. GEORGE – Finding an apartment in St. George these days isn’t easy. A general lack of available multifamily housing, high rents and other factors play into the issue, according to a recent report.
Demand for apartments is high, yet supply is low. According to a report from real estate firm NAI Excel, vacancy for apartments and other forms of multifamily housing in St. George is less than 0.1 percent. Units are filled as soon as they become available.
The area hasn’t seen any new major multifamily developments built since 2006, according to the study.
“We haven’t had the supply and demand has been quite strong,” said Neil Walter, NAI Excel’s managing director.
There are a number of reasons multifamily housing development has not kept up with the demand, and some of those factors are found in the NAI report. These factors include the rise in construction cost and land values, along with impact fees that are high in comparison to those found along the Wasatch Front, Walter said.
Monthly rental rates have also gone up. In 2010, the average rent for a two bedroom, two bath apartment was $690. Today the average is $848.
And like any other type of investor, developers aren’t going to invest in a potential multifamily development if they don’t feel money can be made, Walker said.
The Great Recession also played a part in stalling housing projects across the board, St. George Mayor Jon Pike said. While other sectors, such as industrial and commercial development, have been on the rise in St. George in the wake of the recession, multifamily housing is just now beginning to show some recovery in the market.
“I think we’re seeing a market catching up from the recession,” Pike said.
Signs that the market is catching up include the 244-unit Grayhawk Apartments project near the Dinosaur Discovery Site off River Side Drive, Pike said, as well as two mixed-use projects proposed for downtown St. George in the area of Tabernacle Street and 200 West and St. George Boulevard and Main Street.
“If it comes to fruition – and I think most of it will – that should really help us a lot with our (housing) market,” Pike said.
Along with a general need for affordable rentals, there is also a need for affordable, subsidized housing. In its Aug. 5 meeting the St. George City Council approved a general plan amendment making way for a smaller complex to be built by the Grayhawk Apartments.
Called the RiverWalk Village, the complex will offer a total of 55 units.
Additional housing, at least on some level, may also become available as Dixie State University continues to add new student housing, Pike said.
The Campus View Suites, a 352-bed student housing complex on the Dixie State Campus along 100 South, is nearing completion and is already filling up with residents for the 2016-17 academic year.
Students currently renting regular apartments may be able to take advantage of the new housing, Pike said, thus opening up some apartments to the public.
Not in my backyard
In addition to the potential cost surrounding the development of a multifamily complex, another factor developers pay attention to is how their projects are received by the public, Walter said.
Time and again, when a developer presents a project in a planning commission or city council meeting it tends to draw out those opposed to it.
Often, opponents say they are not opposed to the project itself – just the fact that it’s next door.
“The ‘Not In My Backyard” dynamic is a very powerful dynamic in the community and it’s discouraged some development projects that may have otherwise been built,” Walter said.
A lot of homeowners seem to associate apartments with crime and bringing individuals into the neighborhood who will only cause trouble.
“That’s an unfair characterization, I think,” Walter said.
The community needs to take hold of the issue or else it may remain hard for people to find entry-level housing – something apartments provide.
“Most of us lived in apartments at one point,” Walter said. “Most of the time people who are struggling to find affordable apartments are most often people like us.”
While projects like Grayhawk and those proposed for downtown St. George may ease the apartment crunch somewhat, it is an issue the city will likely have to deal with for many years to come, Walter said.
“Increased student housing construction may relieve some of the pressure on nearby traditional multifamily housing properties,” according to the NAI Excel report. “Even so, multifamily remains significantly short in supply.”
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