Apartment influx welcome news for mid-, upper-income renters

July 22
July 22, 2008
Medric J. "Spud" Auenson
July 24, 2008
July 22
July 22, 2008
Medric J. "Spud" Auenson
July 24, 2008

Although Houma has seen tremendous growth in upscale apartment developments since Hurricane Katrina, lower income housing has lagged throughout the Tri-parish area, according to owners, realtors and developers.

Over 900 new units and four apartment complexes have been built in Houma post-Katrina, including the 246-unit Ansley Place Apartments, located on newly-built Emerson Road off Corporate Drive. The development’s first apartments will be available in October.

Another 256-unit development is scheduled to break ground later this summer on West Park Avenue off U.S. Highway 90 by local developer Northpark.

“The rental property/apartment market has increased significantly since hurricanes Katrina and Rita because of people being displaced and the growth of the economy,” said Monica Broussard and Joy Guilbeau of Claudet Properties. The two are president and administrative executive of the Houma-Thibodaux Apartment Association respectively.

“There is strong employment growth down there,” said Russell Oldham, vice president of development for Georgia-based Hathaway Development, general contractor of Ansley Place Apartments. “I’m sure the energy sector has something to do with that.”

Tax credits have given developers an incentive to build mid- to upper-income level apartments.

“The people who have been constructing with the GO Zone tax credits have used them to their advantage, allowing them to build market rate apartments,” said Terrebonne Parish President Michel Claudet, who also owns several apartment buildings under Claudet Properties.

Meanwhile, the economy has been good, but not good enough to entice developers to pursue new apartment construction elsewhere.

Rent in existing apartment complexes in the Tri-parish area has increased 20 to 25 percent post-Katrina, according to owners and managers.

“We don’t have any vacancies. There’s still a lot of demand,” said Don Domino, owner of Villa Apartments in Morgan City. “The big problem with building new rental property is that you have to charge substantially more rent.”

With construction costs substantially greater now than before Katrina, the higher rent is needed to justify building a new apartment complex, Domino contends. He is now sure the paychecks of most Morgan City residents are strong enough to support that.

“I have had to bump my rent somewhat,” Domino said. “My one-bedrooms are $425. My two-bedrooms are $500. I find above that, there’s a little price resistance.”

“It’s impossible to offer rents that are substantially lower without financing or government subsidy with construction and interest rates the way they are,” Claudet said.

According to a January 2008 Houma-Thibodaux Market Survey for Occupancy & Rates, the average rent is $565 for an one-bedroom unit, $722 for a two-bedroom unit and $860 for a three-bedroom unit.

The average rent at the new apartment complexes built in Houma since Hurricane Katrina (Houma Highland, Southdown Pavillion and The Landing) is even more – $840 for one-bedroom, $1,102 for two-bedroom, and $1,388 for three-bedroom. Old Town Square was not included because all units are two bedroom and cost $1,150.

The Ansley Place Apartments will fit in with this recent trend.

The apartment complex will offer one, two and three-bedroom units, ranging from approximately 750 feet to approximately 1,200 square feet.

Rents will start from about $750 for the one-bedroom units, while the three bedroom units begin at $1,100.

“Around the clubhouse, there’s a resort-style pool with wireless Internet, a cabana, water feature, grills and a fireplace,” Oldham said. “There is an upscale fitness center overlooking the pool, a media center, a java lounge. It’s like an Internet cafe with televisions and a cappuccino machine.”

Utilities are not included in the rent, but residents can purchase standard Comcast cable packages.

As for security, each resident will be issued an electronic keycard so they can have 24-hour amenity access, and they can have their unit wired with a security system if they wish.

Oldham has not decided whether Hathaway will apply for GO Zone credits. Developers can receive GO Zone credits as long as open before Dec. 31.

“We’ll leave that up to our tax guy, but I think we’ll be eligible for a tax credit once we’re finished,” he said.

With occupancy rates at 100 percent in the Tri-parish area, the question of whether the upscale apartment market can handle growth is up for debate.

“The Houma-Thibodaux region is probably at capacity,” according to Broussard and Guilbeau. “However, there is a larger need for lower-income housing.”

“I think there’s additional room for capacity in this market. There seems to be strong demand,” Oldham said.

The real indicator may depend on Houma’s continued economic growth and whether other communities can do the same.

“Anytime you build something new, you have to be concerned with how long the existing economy is going to last because nothing’s going to pay for itself in less than 15 years,” Domino said. “Maybe 10 if you’re lucky.”

Construction at Ansley Place Apartments is progressing. The 246-unit complex is scheduled to open in October. According to Monica Broussard and Joy Guilbeau of Claudet Properties, the bustling local economy and large number of people who settled in the area after hurricanes Katrina and Rita are the main reason. * Photo by KEYON JEFF