AS COSTS RISE, DEMAND INCREASES:
WHO’S RENTING, WHY, WHERE—AND FOR WHAT PRICE?
You may have noticed scores of new construction popping up near downtown Saratoga Springs over the last few years, as well as the rehab and conversion of several existing properties. Taken together, there can be no doubt about it: Saratoga is in the middle of a housing boom, but it’s not the traditional kind. This is rental housing, and demand has never been higher.
“My biggest challenge right now is lack of inventory,” says Thompson Herrick, broker/owner of Maxwell Property Management in Saratoga Springs. Herrick specializes in rental properties, working to find qualified tenants for nearly 100 clients looking to lease out their apartments, condos and homes. “Simply put, demand is high and supply is low.”
So what, exactly, is driving people into Saratoga?
First, Saratoga has always been a desirable place to either put down roots or retire. The beauty of the area, combined with a central location—just over three hours to New York City, Boston or Montreal—and a thriving downtown community have long been major drawing points.
But there’s also industry. GlobalFoundries, which broke ground south of Saratoga in Malta about a decade ago, has continued to expand, broadening its footprint in the area. The Naval Support Activity, which relocated from Scotia in 1999, welcomes crops of men and women, along with their families, to the area for six- to 12-month stints, sometimes longer. This is in addition to the scores of businesses, institutions and industry leaders that call the Capital-Saratoga Region home.
Let’s also not forget that Saratoga topped the list of New York’s healthiest counties, due largely to what the study considered “quality of life” factors—such as good air, green space, fair commutes and long lives.
Oh, and that lovely, walkable downtown area.
“I get calls from people all the time wanting to be close to downtown,” says Jason Thomas, a realtor and property manager for Saratoga-based Roohan Realty. “Even if they decide they don’t want to be right in town, they only want to be a few blocks away so they can walk or bike there whenever they want.”
BUT WHY RENTALS?
A quick accounting of the groups living here lends a clue.
Students. Skidmore upperclassmen have long flocked to nearby neighborhoods in search of temporary housing, from September until May— and landlords love them for that very reason. Student tenants have made way for the onslaught of couples and families who flock to the track season after season, enabling landlords to score premium rental rates during each summer.
Then there’s the Navy, which consistently stations recruits and officers for temporary assignments of under a year. Buying isn’t really an option when you’re not clear as to where you’ll be posted next.
“Navy students used to come in for a pretty standard six-month tour, but now they’re tending to stay anywhere from six to 12 months,” Herrick says. “But even now, Navy students remain a very viable part of our local market.”
“I’ve noticed with the Navy, even though they’re often very thrifty and may not want to blow their housing allowance, they’re renting newer accommodations these days,” says Tom Federlin, broker/ owner of Racing City Realty. “Which means they’re spending more.”
Retirees are another prime rental group, Federlin explains. Today, many aren’t just downsizing, leaving behind the three- and four- bedroom homes they raised their kids in. Now they’re opting for a “maintenance-free” lifestyle in their golden years, whether it be in a condo or a cozy one bedroom, and have no intention of mowing lawns and shoveling snow.
That’s the case for the 55-plus set at one of West Side Management’s newest properties—The Grove at Neumann, which opened in October 2015. Thanks to an overhaul by Bonacio Construction, the former retirement home for Redemptorist priests is now a luxury living facility for singles and couples, aged 55 years and older.
“Our senior community is not assisted living at all,” says Laura Hogan, property manager for Saratoga-based West Side Management. With an indoor pool, hot tub, billiards room, card room, movie theater, putting green, bocce court and on-site restaurant and bar, it’s meant for what Hogan calls the mature, active adult. “Maybe their kids are living on their own already, or off at college, and so they’re ready to live a lower key but still independent lifestyle.”
“All-in-all, this places packs a real punch. Really, you never have to leave,” Hogan says. But if you want to go out, the Grove offers transportation around downtown and back.
“With retirement, comes a complete lifestyle change,” says Jared Horton, the assistant property manager of the Hamlet on Marion Avenue, who says his tenants—especially the older ones—love being a 10-minute walk from downtown and steps from a grocery store, as well as burger and pizza joints.
Retirees and young professionals currently make up the heart of Horton’s business at the Hamlet.
“Young professionals just have a tremendous amount of student loan debt, and so it’s not easy for them to get financing,” Horton says. “Or maybe they don’t have a down payment ready yet for a condo or home, and so they’re driven to communities like ours.”
Several of his younger tenants work for GlobalFoundries and local hospitals and, like the retirees, they enjoy not having to worry about home maintenance.
But you also have families. Some may have sold their current residence, and need to rent until their new home is ready, Federlin says. Others have relocated to the area for a job, and don’t feel the need to buy.
At West Side Management’s properties, the demographics are mixed, Hogan says. “We’ve got everything from the typical ‘first apartment, first job’ types, to families that are building, to [people who] relocated for their job, to empty nesters.”
But still, there’s more to the boom, Herrick says.
Renters are staying renters for longer periods of time, and some are planning to rent indefinitely. Young professionals aren’t pressing forward into home ownership in quite the same way as they used to, he says, and retirees are actively moving out of the homeowner market. Combined, this means there are more renters than there were only a decade ago.
It hasn’t just created an availability problem. There’s an affordability one, too. Greater amenitie —think pools, game rooms and gyms, not to mention in-unit washer/dryers and rent that covers most utilities, as well as cable and high speed Internet—come with higher price tags.
“New, luxury buildings have honestly changed the market,” Thomas says. “There are fewer affordable apartments available today than there used to be.”
WHERE ARE PEOPLE RENTING?
As always, private residences— apartments and homes—both old and new, downtown and across Saratoga, need renters. That’s mainly what keeps realtors and property managers like Herrick, Federlin and Thomas busy, working to place qualified tenants in desirable housing.
There’s also the aforementioned crop of new buildings and complexes, and recent overhauls of historic buildings, for a total delivery of 669 new units since 2012, with at least another 90 slated for some time before 2018.
Here are just a few of the new apartment complexes:
The Hamlet, under Prime Management, has 55 units now complete, and plans to add another 90 units across three additional buildings in the next two years. Its first residents moved in this past January. There’s a Fresh Market on the property, as well as a Smashburger and pizza place.
The Springs, which began delivering apartment homes in 2013, now has three midrise buildings plus several townhomes, for a total of 308 units, off Weibel Avenue. Aside from a handful of vacancies, it’s nearly entirely occupied, and is managed by Burns Management. In addition to an on-site restaurant, there is also a dry cleaner, nail salon and barber shop.
The Algonquin on Broadway, a fullyrenovated building from 1893, re-opened in February 2016. It has 29 luxury units with anywhere from one to three bedrooms, and is about two-thirds let to date.
In the past four years, West Side Management opened four new properties, adding a total of 277 units:
Market Center on Railroad Place is located in the heart of downtown, steps away from Price Chopper and Bow Tie Cinema. It opened in June 2012 with 124 units and is roughly 97 percent occupied.
The Washington on Saratoga’s historic Broadway is a 14-unit, high-end luxury building that opened in August 2013 and sits above famed Saratoga retailers Northshire Bookstore and Kilwin’s chocolates.
Located on West Ave., 2 West has 63 apartments, as well as a rooftop terrace, wet bar and 24-hour fitness center. It opened in August 2015 and is currently leasing.
The Grove at Neumann on Lake Avenue is an independent living community for the 55-plus crowd, with luxury amenities ranging from an indoor pool to a movie theater. The Grove started leasing in October 2015 and has 76 units, from one-bedrooms to two-bedrooms/two baths with a den.
What has high demand, plus all those new units, done to pricing? Here’s what a few local realtors and property managers have to say:
Racing City Realty
On apartments: “It used to be about $1,200 for a one-bedroom apartment, three or four years ago, and anywhere from $1,500 to $1,800 for a two bedroom. That was old and new construction. Now, they’re spending so much more.”
On private residences: “Not even five years ago, if you listed a house in a development for $2,000, you were stretching it. Now, that’s not at all the case. You see private residences being rented for $3,000 or $4,000 a month— and that’s a year-round price.”
Maxwell Property Management
Apartments: “In the not-too-distant past, a person could get a three bedroom, two bath for $1,500 to $2,000. Now you’re seeing that same market inching forward into the $2,000 to $2,500 range… It’s almost impossible to find a quality apartment for less than $1,000 close to downtown.”
Private residences: “A short time ago, a $2,500 rental was big bucks. But now, things are just becoming very pricey. Rental houses for $2,500 and up are not uncommon anymore.”
Apartments: “The luxury apartments have definitely changed the rental market. In a way, they took some of the pressure off, but they’ve also shifted prices. The prices have gone up at least $200 per apartment in the last five years.”
Private residences: “We have listings for smaller townhomes past the hospital for about $1,400 a month, and some ranches starting at $1,700 or $1,800 a month… Our newer construction, like the three bedrooms/two baths, are about $2,200 and up. But a lot of these houses aren’t walkable [to the downtown area].”
Apartments at the Hamlet: “Our one bedrooms start at about $1,650 per month, and our two bedrooms/two baths (about 1,200 square feet) average about $2,350 a month. Our largest penthouse rented for $3,850 a month…. Every unit comes with a parking space.”
West Side Management
Apartments at 2West: “Our one bedrooms start at about $1,350… but we have a three-level three bedroom, two-and- a-half bath with attached garage that rents for $3,250.”
Apartments at Market Center:
“Location sells this place. It starts at about $1,425 for a one bedroom, and a 1,000 square foot two bedroom/two bath is about $2,200 a month.” Apartments at the Grove: “Our one bedrooms rent for $1,995 and up, with a two bedroom/two bath renting for $2,400 and up.”
Apartments at the Washington: “One bedrooms start at about $2,300, two bedrooms at about $2,700 and three bedrooms at about $4,400.”