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New apartment communities help meet renters’ demand
By Dennis Quick
Senior Staff Writer
The Arboretum is a 12-building, 246-unit apartment community scheduled for construction this month in West Ashley. Developed by Raleigh, N.C.-based EYC Companies, developer of the Eagle Wood Retreat residential subdivision on James Island, the 12-acre community features four-story buildings (the first story being parking) in a park-like setting designed by West Ashley-based landscape architect firm HLA Inc.
The apartment community will offer one-, two- and three-bedroom units, with rents ranging from about $900 to $1,350 a month. Buildings will include elevators. Construction completion is scheduled for February 2007.
The Arboretum is one of several forthcoming apartment communities that should help bolster the Lowcountry’s apartment inventory of more than 25,700 units. The region’s growing population, including an influx of renters, and the apartment-to-condominium-conversion craze have whittled the area’s apartment vacancy rate from 10.2% in 2002 to 5.9% in 2005, according to Carolinas Real Data, a Charlotte, N.C.-based market research firm.
Victoria Cowart, vice president of Darby Development and a board member of the Charleston Apartment Association, considers the Lowcountry’s apartment market to be healthy.
Ray Case, president and broker in charge of North Charleston-based commercial real estate firm Coldwell Banker Commercial Atlantic International Inc., said he receives calls from apartment developers based in cities as far away as Boston and Houston.
However, available land for apartment communities is scarce closer to Charleston.
Consequently, “infill” developments—projects built on vacant land in an already developed area—are an alternative.
The Arboretum is an example of an infill development. Located near Bon Secours-St. Francis Hospital and a Wal-Mart discount store, the community will include a cement-edged pond similar to downtown Charleston’s Colonial Lake, two large lagoons with fountains, a 4,000-square-foot clubhouse, walking trails and a buffer of trees surrounding the site.
Yet even infill space is becoming harder to find, which is why apartment developers are looking outward from Charleston at the Summerville area, Johns Island and Hollywood, Case noted.
The Lowcountry has a need not only for apartments, but affordable apartments, Case said. With land costing about $150,000 an acre for apartment development, it will be difficult for developers to keep rents below $700 a month without tax credits, bond financing or government assistance, he said.
The Lowcountry’s average monthly apartment rent is $713, according to Carolinas Real Data. That places the Charleston area among Carolinas Real Data’s Top 10 Southeastern metropolitan areas with the highest average rental rates. The Charleston area ranks eighth, directly behind Savannah, which has an average monthly apartment rent of $714, while Orlando ranks first, with an average rent of $805.
Columbia ranks 14th, with an average rent of $634, and the Greenville-Spartanburg area, with a $598 average monthly rent, ranks 17th out of the 17 cities in the Carolinas Real Data list.
The S.C. State Housing Finance and Development Authority’s Low Income Housing Tax Credit Program provides incentives for apartment developers to offer more affordable rental units. Apartment community owners and investors can use the credit as a dollar-for-dollar reduction of federal income tax.
To qualify for the program, an apartment community must have at least 20% of its units reserved for tenants earning at or below $19,229, which is 50% of the median income for Charleston County, or 40% of its units occupied by households earning at or below $23,074, or 60% of Charleston County’s area median income, which is $38,458. (Dorchester County’s median household income is $42,886, and Berkeley County’s is $40,161, according to the 2002 U.S. Census Bureau.)
Developers who qualify must participate in the authority’s Compliance Monitoring Program for 15 years and agree to maintain low-income units for an additional 15 years.
Dennis Quick is senior staff writer for the Business Journal. E-mail him at dquick@charlestonbusiness.com.
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