SCHENECTADY — There has been a housing boom in the city’s downtown section within the last five years.
Over 1,110 housing units have been constructed within the past seven years and more are in the planning stages, including a 49-unit mixed-use building on the site of the now-demolished Citizens Bank at 501 State Street.
A new report, released last week, provides concrete numbers to illustrate the exact demand.
Over the next five years, downtown Schenectady could potentially absorb 675 to 850 new rental units, 50 to 75 new condominiums and 85 to 130 new townhouses.
That’s a total of 810 to 1,055 new market-rate housing units, according to a housing study released as part of the Schenectady Downtown Revitalization Initiative (DRI).
As many as 950 households have the potential to move to the study area annually.
When it comes to market demand, 71 percent, or 676 households, would prefer multi-unit apartments, whether new or pre-existing units.
The projected demand for multi-family sale units — including lofts, apartments and condos — is 10.5 percent, while single-family attached for-sale facilities like townhouses constitute 18.3 percent of demand.
Downtown’s capture of market potential for entirely new construction is between 162 to 211 units per year, according to the report.
The study by New Jersey-based consultants Zimmerman/Volk Associates Inc. was designed to measure the market potential for rental and for-sale housing units that could be developed in downtown Schenectady over the next half-decade.
Its release comes as stakeholders are reaching a decision on how to allocate $10 million in state economic development funds awarded to the city last fall as part of Schenectady DRI.
An annual average of 3,960 households have the potential to move within or to the city each year over the next five years.
Younger singles and couples represent 57 percent of the market for new dwelling units in the study area, which includes downtown and the Erie Boulevard corridor up to Mohawk Harbor.
The average market rate for a loft rental is $800 to $1,250 per month with apartment rental ranging from, $1,125 to $2,250 per month; while the purchase price for condos is $175,000 to $300,000 and townhouses, $275,000 to $395,000, according to the study.
Zimmerman/Volk Associates used a complex formula to calculate the demand, factoring data gleaned from the Internal Revenue Service and Americans Community Survey Data, among other metrics into its equation.
Economic development officials say the report supports the soaring number of downtown residential units.
“There continues to be a strong demand for housing across our new downtown from the Proctors Block to lower State Street to Mohawk Harbor,” said Schenectady Metroplex Development Authority Chairman Ray Gillen. “We are getting inquiries from developers every week and many developers who have done projects want to do more.”
In addition to the 49-unit building at 501 State St., a mixed-use development between the Mill Artisan District and Electric City Apartments has been proposed.
Redburn Development Partners and Highbridge Development, respectively, are each seeking state grant funds to subsidize those efforts.
The report also includes occupancy rates for housing complexes in the coverage area.
For example, the Lofts at Union Square are listed at 100 percent occupancy, the River House reported 99 percent occupancy and 245 Broadway has an occupancy rate of 94 percent.
However, the rate for several newer projects, including Electric City Apartments and Redburn-developed projects, are not included because they’re still in the “lease-up” phase, which can take up to a year depending on the specific marketing area, said Laurie Volk, principal at Zimmerman/Volk Associates Inc.
And while Zimmerman/Volk did not conduct a turnover analysis, “we thought downtown was doing very well in terms of occupancy,” Volk said.
The study was completed in February just as the COVID pandemic began to deepen in the U.S. and before stay-at-home orders resulted in the shutdown of large sectors of the downtown economy, including restaurants and offices, as well as Proctors, Bow Tie Cinemas and Rivers Casino & Resort.
While Volk acknowledged that the study was a snapshot in time, she said that the housing market appears to be holding up “extremely well” despite the economic recession caused by the pandemic.
“We were uncertain what impact [the pandemic] was going to have on housing,” Volk said on Tuesday. “But unlike retail, which was destroyed by COVID, housing seems to be doing quite well.”
Local developers said they’re feeling bullish about the future of the downtown housing market.
Dave Buicko, president and CEO of the Galesi Group, said demand at Mohawk Harbor’s River House Apartments has been consistently strong, and popular with both millennials and empty-nesters drawn to the waterfront and surrounding amenities.
“We’re fairly full here,” Buicko said. “We’re very pleased with how we’ve leased up and keep them leased up.”
Mohawk Harbor’s 15 townhouses are also filling up.
“We’re over 50 percent committed to,” Buicko said, “which is right on plan.”
Inquiries are also continuing to come in for the Live-In Schenectady townhouses on Barrett Street, Buicko said, among other recently completed downtown complexes
“It’s a very strong market on the multi-family side,” Buicko said, citing pent-up demand as developers are continue to upgrade housing stock that has been largely unchanged since the 1970s.
Like Volk, Buicko agrees COVID may not leave a lasting impact on the city’s housing market, and Schenectady may ultimately benefit from New York City-area residents seeking to live in smaller cities they perceive as safer.
“I think it’s going to be a benefit to cities like Schenectady,” Buicko said.
Schenectady DRI’s next online public meeting is Thursday, Aug. 13 at 6 p.m. For more information, visit schenectadydri.com.