I have been thinking about Harbor Point, the new 100 acre development in Stamford, and the absence of condominium development. A few years ago, I was told that the developer of the rental buildings, BLT, no longer plans to build condos. Further, the city of Stamford put no mechanisms in place that required BLT to do so. So, the lack of condo development continues to exist in Stamford, as well as throughout the country, even though there is demand for new condo inventory.
In my business as a Realtor and a small business consultant, I see having newer places to live as a growing demand for home buyers: Downsizers want low maintenance and proximity to NYC; Investors look to build a diverse portfolio of condos to keep long-term; and renters are tired of ever-increasing cost but are used to new construction and modern amenities.
The shifting lifestyle needs of Stamford residents are consistent with homebuyer trends in major metros throughout the U.S. They seek higher levels of convenience, less reliance on cars, and walkable neighborhoods. There is also a desire for smaller, renovated, functional spaces with minimal maintenance and energy efficiencies. Access to parks, meeting places, and proximity to the diversity of talent and culture are the signature of great cities. While buying a single family house can satisfy all of these needs, there is not enough single family housing in Stamford to meet this particular demand, nor is there enough variety in the current housing selection.
The most frequently asked question I hear in regard to Harbor Point in Stamford is, “When are they building condos?”. I doubt that I am the only realtor who has heard this, so why are they not being built?
If the answer came from a large single developer’s perspective, it would be about cost. The cost of building a condo building and selling it is about 30% more expensive than building a rental buildling and selling it. This is primarily because legal fees must be paid to create and close on each condo. I have also read recently in an article in Next City that financing for condos is considered more risky by lenders, so financing is more expensive and assess to funds is more of a challenge.
It seems to me that it is time for the city to provide aggressive incentives to build condos and help smaller developers and land owners overcome barriers to condo development. There would be numerous benefits for Stamford, especially if we encourage cutting edge, sustainable design. These actions would be immeasurable in terms of making Stamford a truly great place to live.
In my experience, homeowners stay committed to living in a place longer than renters and they become invested in their communities. According to a 2011 report by NAR, “American Attitudes about Homeownership,” homeowners are more satisfied with their quality of life, feel more connected to their community, report better health, are more likely to know neighbors, and engage in community life. Furthermore, since homeowners are more likely to accumulate more wealth over time than renters, home owners add to the collective wealth of our cities.
And let’s not forget aesthetics and coolness! Condo developments can be very different in design, function, and quality compared to rental buildings. A good condo development should take into account the owners who live there longer and perhaps want a higher quality of construction, design, and floor plan. For example, many condo owners will demand storage space, private outdoor space, deeded parking, and customization in design. Since homeowners typically start buying in their early thirties, their needs are often different than many renters who are in their twenties.
Good condos can improve property values in a way different from rental development, specifically in regard to social, sustainable, and economic impact. Rental buildings are often built to be sold within 5 years; and when new owners of these buildings buy them, the owners plan capital investments based on projected rental income and disposition strategies. Since the aim of owning a rental building is to maximize profit long-term for large investors, they are not necessarily built with focus on what many long-term residents need and want.
It would be great if the city of Stamford became proactive in reaching out to the owners of land in Harbor Point and executed a plan that could benefit everyone. Specifically in regard to Harbor; the right mix of renters and homeowners will attract a broader range of businesses and cultural outlets to the neighborhood and therefore boost the convenience of living there, which in turn will boost property values further for all of Stamford, even the older condo inventory that does exist.
The potential for Harbor Point to be a great urban development hinges on the creativity and proactive strategy development by the city of Stamford and its urban redevelopment commission, not private developers that may or may not be invested in Stamford’s future. While BLT has done a great job in starting the process of a better Harbor Point, it is up to our leaders (along with our help, of course) to build upon this progress with a plan for more housing diversity. I know the city of Stamford is up to the task and I am eager to see results.