315 Apartments along Montgomery Street, Decatur GA
We have long argued (respectfully, of course) about the demand of the Decatur rental market around here. That’s because up until this year, it was hard to get a real gauge of it due to such a low supply. But now 315 West Ponce, Trinity Triangle and Paces Clairemont are all going up at the same time and we’ll soon get to see what a Decatur rental market looks like in 2015.
315 West Ponce is the furthest along and thus will provide us with a first look at demand. The first phase, (aka The Place on Ponce) which sits along West Ponce has been complete for a month or so, while Phase II is well underway on the backside of the property. [Photo above]
Conor McNally with CarterUSA tells us that 20 of the 28 units in Phase I have been rented. The Place on Ponce’s Facebook page states that all 2 bedroom units in Phase I have leased and only one bedroom units remain. They are also beginning to pre-lease Phase II, which includes 1, 2 and 3 bedroom units. Published rental rates last year for the 1-2 bedrooms in Phase I were between $1,400 – $2,500.
As for the Phase I retail space along Ponce, Conor tells us that one lease has already has been signed and one to two more are “almost ready to execute”. Stay tuned for that.
How this demand ebbs and flows as these larger projects are completed and become available for rent is yet to be seen, but it should provide some greater context to our long-standing, ongoing conversation on the subject.
I’ve been thinking on how some people look at $1,400/month for a one bedroom as being ridiculous vs. the fact that they seem to be leasing out just fine.
Perhaps the downtown apartment projects will become the rental equivalent of a Location Efficient Mortgage. That is, some portion of the market (*not* those who find the prices ridiculous) is seeking the ability to live a car free or car lite life and there’s only so many places in the Atlanta metro where that’s possible. But, for those willing to be serious about it, downtown Decatur is one of the places where you could forego a car. So for someone who’s saving the up-to-$1,000/month it takes to own and maintain an automobile, it seems totally reasonable that they’d be more than happy to devote part or all of that savings towards more expensive housing in close proximity to the things that make their desired lifestyle possible.
How many of these people exist, I don’t know. But we’re about to find out. Anyone have any thoughts on this?
Good point. Another evolving topic will be whether the new crop of apartments are considered “affordable housing” in Decatur. The city has long argued that these rental units will help promote and keep some semblance of economic diversity in the city (a goal that I personally support). I’m not sure $2,400 for 3 bedrooms is considered affordable by any standard, but considering a median sales prices of over 500k for a single family home in the city, perhaps it is. My guess is these rental prices will appeal to exactly the type of customer you’re referring to, one who views location in an urban environment as paramount.
I think the people foregoing cars will be in the great minority for some time to come. $1,400/month for a one-bedroom is simply market rate for the area now. Like brianc said below, Midtown is even more expensive. And look at Virginia Highland. Try to find a one bedroom for under $1,400/month and you’ll be searching for a long time before biting the bullet or settling for way less amenities in a crappy building or house. There are 2 and 3 bedroom houses in City of Decatur going for almost $3,000/month! Market rental rates shot up during the mortgage crisis and they simply have not gone back down. With our proximity to Emory, Agnes Scott and the CDC, there is no shortage of folks with the means to pay such rental rates and who will choose to rent rather than buy – i.e. college/grad students and transient professionals. I’m just glad we bought our house when we did and don’t have to deal with these prices!
“I think the people foregoing cars will be in the great minority for some time to come.”
You’re right. In fact, 2014 was a banner year for US auto sales. Nation wide, there is very little (if any) evidence to suggest any sort of large-scale movement away from cars. And note that the crash in oil prices did not occur until late 2014. If gas prices stay low, that’s another factor that will spur car sales.
There may be pockets here and there where you see people moving to car-lite lifestyles, but that is the exception, not the norm.
Though much of the increase in car sales (besides pent-up demand) is being driven by sub-prime lending, which probably goes along with the increase in suburban poverty.
According to this article total miles driven in the U.S. peaked in 2007 and miles driven per person peaked in 2005. The recession accelerated the decline and there has not been a reversal in this trend with the improving economy. (However there is some evidence that lower prices at the pump has increased demand somewhat.) The number of registered vehicles seems to have peaked in 2008. Folks may not be exactly abandoning their cars, but they are using them significantly less frequently.
http://www.businessinsider.com/vehicle-miles-driven-2013-2
One other interesting data set that’s interesting is the breakdown of car ownership by age group. I believe it’s remained pretty constant for the older cohort, but it’s trended down for those in the younger – i.e. 20s to early 30s – cohort, while use of mass transit has increased.
I read an article recently that said the fraction of drivers eligible kids 18 years old or under who actually have a license is at an all time low since the 1960s.
Tying a couple of threads together:
Presuming many renters will be Emory/CDC people simply because that is the big jobs magnet nearby, they can simply hop on and off the free CCTMA Cliff shuttle, from Decatur Marta to Emory/CDC.
It is hard to overstate what a great lifestyle it is to live in Decatur while commuting to work in this way.
I’m sort of surprised that everyone seems to find $1400 for a nice 1 bedroom so outrageous.
One data point that I can quickly reference: the Post apartments on 10th along Peidmont Park, diagonally across from Blakes. I remember when they were built, (what, 10-15 years ago?) studios started at $1K.
That did seem high then but it’s all about location, amenities and convenience, right? Glad we have it all.
“Iām sort of surprised that everyone seems to find $1400 for a nice 1 bedroom so outrageous.”
It may be that some haven’t adjusted to the idea of downtown Decatur as being a “hot spot”. For years, Decatur’s resurgence was mostly about single family homes in quaint neighborhoods. All of the bars and restaurants that have proliferated downtown have changed that to a degree, but that’s still a fairly recent development. When we moved here about 8 years ago, there was no Leon’s, no Cakes and Ale, no Paper Plane, no Iberian Pig, etc.
We ditched the 4BR house for a 2BR+den condo. We share one car. Live in less space. I take transit or bike to work daily. It’s quite liberating. Don’t wait until post-kids or retirement!
The only downside is both children seem to attract a gaggle of kids hanging out at our place every Friday night due to downtown proximity to the square/schools, but the kids are all right š
Downtown is a micro-urban core, and will appeal to people who want urban amenities with the community that is still Decatur.
Interesting data. Can you ask if any of those units have children in them?
We’re one of those households (though buyers, not renters). I guess we’d fall under the “car-lite” category. We share one car between two people, a trade-off we gladly make to live in a relatively expensive area (fyi, there are a number of Midtown apartments under construction that will have rates roughly 50% higher than these in Decatur).
I do think we are somewhat unusual, though. I think for most people who are choosing to live in these high-rent areas, it isn’t as much a matter of saving money on a car, but the desire not to have to use it very often, which is understandable given the miserable traffic in Atlanta.
Amen to that. Just drove back from Buckhead and I may choose never to do that again.
I imagine the “car lite” category will grow, and will manifest in various ways beyond choosing to rely on one car instead of two. Using the secondary (and even the primary) vehicle less often means you can keep an older car longer.
The unknown factor in all this is what effect driver-less cars will have. They will be in urban areas first, of course, but how soon? I’ve seen projections of 5-7 years on the nearer end of the time frame, and 15-20 on the other end (they can’t get here soon enough, imo). Whatever the time frame, they will certainly have a major impact on urban real estate development.
Driverless cars will eventually play a role, no doubt about it. But they represent such a paradigm shift that it’s difficult to predict what the process of embracing them will look like. Especially when we still don’t know when they’ll arrive or how much they’ll cost. In the meantime, I think more and more households will shift into car lite mode in ways that don’t necessarily involve adopting new technology or spending the money to go hybrid or electric. That is, people will simply keep old cars longer because they can, if they aren’t putting so many miles on them. Or forego replacing the second car when it dies, because they can figure out how to get along fine with just one. (My last car before this one lasted several years longer than it otherwise would, because I moved to Decatur and started working at home. Even with several major repairs, the tax and insurance were so much less, not to mention lower expenditures on fuel and tires, that it made sense to keep driving it. Would not have served for any kind of regular commute–the last year, I tried to remember never to buy more groceries than I was willing to carry home on foot!)
“Especially when we still donāt know when theyāll arrive or how much theyāll cost.”
Or who will own them. Everything I’ve been reading points towards driverless Uber (or Google, or some other company) as the future. To paraphrase one of the execs I heard talking about this, Uber is expensive because of the other person in the car, the driver. Take away the other person and it becomes less expensive than car ownership.
We downsized to one car last year. Uber, ZipCar, and the occasional weekend car rental (twice over the past 12 months) are a lot cheaper than owning a second car. Now I just need to convince both kids they don’t need their driver’s licenses š The Zipcars on Clairemont (by Marriott) and Commerce (Taco Mac) are pretty heavily booked.
We bought our house in Decatur 25 years ago mainly because we could be a one-car household. And because it was super affordable. I worked in downtown Atlanta so all the MARTA access was perfect. Would never go totally car-free, metro area sprawl means that a lot of my destinations are not within reach.
It might be their desired lifestyle, but I don’t think it is going to decrease car use. Unless you work in downtown Decatur or downtown Atlanta, the public transportation options in metro Atlanta are just not viable.
Consider that most of us in Decatur live within one to two miles of at least one of (and sometimes all of) the surrounding MARTA stations (Decatur, East Lake, and Avondale). And most of us don’t use it.
Also consider that AM and PM rush hour traffic includes cars outside of our city. So now we’re going to have the existing “outside” traffic, existing Decatur traffic, and new (apartment) traffic all at the same time.
I’d want to distinguish between (i) decrease car use and (ii) allow one to do without a car altogether. Living in downtown Decatur can help a whole lot with (i), but fairly few people are go to go all of the way to (ii). I live in Oakhurst in a “car-lite” family (2 adults, 3 kids, 1 car), and we couldn’t do that if we weren’t able to bike or MARTA to work and use bikes to get around to lots of local places. (So car-lite works for us here, but it wouldn’t in lots of other metro ATL areas.) Every once in a while it’d be nice to have car #2, but that’s fairly rare.
“Living in downtown Decatur can help a whole lot with (i), but fairly few people are go to go all of the way to (ii).”
Question: how cheap, on a per mile basis, would Uber or a similar service have to be to make “ii” (car free) viable?
That’s a good question, but I haven’t priced it out, because going the full carless would awfully inconvenient. We use our car for most shopping, excepting occasional small bike trips to Edgewood Kroger on the way home from work or to the OM to pick up a couple of items. On mornings when the weather is nasty or we’re running late we’ll pile the kids in the car for a quick ride to Oakhurst Elementary, even though most days we’ll try to have one of us walk with the walker and the other bike with the biker. (Child #3 walks himself to FAVE.) And on weekends we’ll use the car a lot to take trips out to metro area parks, PATH bike paths, etc.
Rather than Uber, Zipcar would probably be the way for us to go if we were to go carless, since we’re a little more than half a mile away from the Eastlake MARTA station. But with the kids, including a booster seat plus child seat, humping my way up there in order to drive back and then pile everybody in would be a PITA right now. It would be financially viable but not worth it, especially as we have a fairly old car where the taxes and insurance costs are relatively low. Maybe after the kids move out I’ll go that route.
I don’t know how big the 3 bedroom apartments are but $2,400.00, although high, is cheap compared to purchasing in Decatur. I see more kids in our school system’s future that they were not planning for properly.
More traffic. More kids. More trailers.
This is the current leading plan for our family. Rent out current house, rent 3 BR in Decatur as primary residence, use Decatur schools for the 3 kids until college, then move back to current house. This seems to have a better ROI then using private school and staying put.
Except for the part where you have to move decades worth of accumulated belongings and paint, this is very tempting.
Exactly what I was afraid would happen. A very smart and cost-effective alternative to private school. But your apartment would need to be listed as your primary residence for this to work, I would think.
You can’t claim a homestead exemption on the house while it’s rented, though, right?
No, you can’t.
We lose the homestead exemption and have to pay tax on the rental income. We also get to take deductions on improvements and depreciation.
The $2400 is the high-end for two bedrooms. I don’t have hard data for the 3 bedrooms.
None of these projects would be built unless the developers were confident that the properties would carry themselves income wise. It’s supply and demand. After all of the units are constructed, i imagine the rental rates will decrease some because of the supply, but I guess we will see. The added traffic is going to be brutal and the additional students in the schools may change the dynamics of the way things are now.
“The added traffic is going to be brutal and the additional students in the schools may change the dynamics of the way things are now.”
As downtown residents, I guess we’re fortunate to be child-free and tolerant of the masses on MARTA. š
My family and I moved here in August. I believe we had a little over a month to find a place to live. Everything we found to rent that was available and in our price range was exorbitantly priced for what it was and, frankly, was gross. I mean… “dank” would be a good word to describe some of them. It made more financial sense for us to purchase a condo. It’s not what we would’ve preferred but it’s what we can afford here. We hoped it would be worth it because of the schools but now I feel disappointed. The schools are great academically but our child doesn’t seem to be fitting in socially and I feel out of place too. Decatur needs more socioeconomic diversity. I would hope that having more rental properties would help but if they are all renting at at least $1,400 a month that is no help at all in the diversity department.