High-End Rental Boom Moves to the Suburbs
Apartments in downtown Phoenixville for $1,300 to $3,000 a month? Who knew?
Just as they have in the city, the Millennials are touching off a construction boom that’s now busily reshaping suburban communities around the region.
The Philadephia Inquirer reported Sunday (Jan. 8) on a surge in construction of upscale apartments in suburban communities such as Phoenixville, West Chester, King of Prussia, Ardmore and Bala Cynwyd.
According to the article, nearly 7,000 new apartments are either under construction or in the pipeline in Lower and Upper Merion Townships, Phoenixville and West Chester alone. The construction boom is reviving old downtowns like Phoenixville and transforming auto-oriented environments like King of Prussia.
The forces driving this boom are similar to those that have reshaped Philadelphia’s apartment market, but there are some differences. One is lower rents. Rents for high-end apartments in the suburbs range from $1,000 a month for studios to $3,000 for multi-bedroom units. Lower taxes, more space per dollar and better schools are also lures.
Much of the new construction is taking place in established communities such as Ardmore and King of Prussia that are already fairly well off. Indeed, Ardmore is banking on one such development, Carl Dranoff’s One Ardmore Place, to give its struggling Main Street district a booster shot of activity. Nonetheless, as in the city, the surge in upper-end construction has led to concerns that affordable apartments may be disappearing.
The report quotes Dale Gravett, executive director of the Housing Authority of Chester County, as observing that the boom is a mixed blessing of sorts: “Not that the creation of additional units isn’t a wonderful thing,” he said, “but there are some issues with scarcity of affordable housing.”
This is more of a worry in places like Phoenixville, small cities that survived for years on local industry but fell on hard times when the industries closed. The influx of new housing at rents not seen before in such places has led to rises at the bottom of the market that are forcing lower-income renters out.
Barbara Denham, an economist at REIS quoted in the story, says her data shows that rent increases are already beginning to slow down thanks to the new units flooding the market. But housing agency officials report that they get calls every day from renters worried that they will be priced out of their apartments when their leases expire.
The challenge, then, will be to ensure that the benefits that flow to older suburban downtowns like Phoenixville’s from the boom in new apartment construction also benefit the people who stuck around when things were less rosy.
Upscale apartments are booming in Philly’s suburbs (The Philadelphia Inquirer)