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Demand driving multifamily development

Sprawling luxury apartment communities have become an increasing presence in Katy in recent years. According to Apartment Data Services, which analyzes apartment trends across the region, the number of apartment units in Katy has grown by 30 percent since 2010. With at least 10 additional complexes proposed or under construction, this growth is expected to continue.

In December of 2010, there were 13,000 apartment units in Katy. Since then, the total number of apartment units has increased to 17,000, said Bruce McClenny of Apartment Data Services.

“You’ve got so many businesses moving to the area right now, there’s not enough housing for everyone in Katy,” said Cindy Price, manager of the District at Westborough apartments, a new luxury community opening this month on Westborough Drive.

Growing demand

A strengthening economy is responsible for some for some of the growth, McClenny said. Building projects stalled when the economic downturn set in and few properties were built for several years.

“Projects that may have been put on hold then may be underway again,” said Lila Valencia at the state demographer’s office.

Factors that have driven Katy’s growth in recent years are also fueling the construction of apartment homes. The oil and gas industry is growing at 5 percent per year and providing a lot of high-income jobs, said David Jarvis, regional director of Metrostudy.

Energy Corridor employees coming to the area often want to move easily between their home and work, and some of those workers are here for temporary assignments. For these employees, renting an apartment may be the best option, said Michael Cline, associate director at the Hobby Center for the Study of Texas.

“There are people who move for a corporate job and don’t know how permanent their placement might be, especially with international companies,” Cline said. “So they choose to rent.”

Even some long-term employees prefer to rent rather than buy.

“They want to be close to a new job, avoid selling a home if they make a career move, or maybe they like the easy lifestyle of living in an apartment,” said Aimee Arrington, director of Community Engagement and Media at the Houston Apartment Association.

Jarvis said some residents need or want the option of apartment living. As a rule, he said, there should be one apartment unit built for every two single-family homes.

New building trends

The majority of new construction is branded as “luxury” apartments. While there is no specific threshold an apartment community must meet to be labeled a luxury property, those that classify themselves as such have many features in common.

“With a lot of properties, you’re seeing the same kind of finishes, the granite countertops, the high-end appliances, the amenities that you would see in single-family communities,” Arrington said. “This is a new standard.”

Price said that what residents want from apartment living is changing.

“It’s not just about putting in four walls; it’s about giving them a lifestyle,” said Price. “The young professionals don’t want to get houses right away. They want to be pampered.”

Developers shifted to luxury-style apartments to command higher rents in response to increasing land prices and insurance costs.

“They think, ‘Let’s really build a nice product that rivals the nicest single-family house that’s being put out there too,’” McClenny said. “People want that. Many people coming out here can afford that.”

Although luxury apartments tend to have higher rents than older apartments with fewer amenities and services, there is not a lack of tenants. Verona at the Reserve, on Cobia Drive off of Kingsland Boulevard, which opened in 2011, has leased 97 percent of its units. Broadstone Grand Parkway, on Falcon Park Drive off of Katy Gap Road, opened in 2010 and has leased 99 percent.

Growth and obstacles

Although Katy’s new apartments may not have any problems finding tenants, they do face resistance from nearby homeowners. There is an active petition to prevent the construction of a 171-unit apartment complex on Highland Knolls Drive. It has obtained 2,216 signatures so far.

The petition contends that the apartment complex would negatively impact drainage in the area, increase crime and traffic, and lower their home values.

Population and Survey Analysts, the group that conducts demographic studies for Katy ISD, projects that Katy area will see an additional 11,000 apartment units built over the next 20 years.

Reprint from Impactnews.com – Houston – Katy          by Kelli Ainesworth

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