A day after dedicating new apartments for low-income tenants in a Dixwell parking lot, officials gathered at a lot on Audubon Street on Wednesday afternoon to open 66 luxury apartments – while cutting the ribbon on 135 new ones at fast filling.
In the officials’ account, these two events are linked: they are part of an ongoing building boom that is growing a livable city while helping more people afford to live here.
Wednesday’s groundbreaking took place at The Audubon New Haven, a 470-apartment and retail mini-city that is rising in phases on a 3.3-acre former superblock parking lot bounded by Orange Streets, Audubon, State and Grove.
Tuesday’s event marked the completion of phase 2 of the project: the inauguration of the second wave of completed apartments. Monthly apartment rents start at $1,850 for studios and $3,800 for three bedrooms. All 135 units were rented in 100 days, according to developer Spinnaker Real Estate Partners, reporting that
a recession the economic tightening may not have slowed New Haven’s market-rate apartment boom.
“New Haven is jumping!” Mayor Justin Elicker said before joining Spinnaker CEO Clay Fowler and other officials to cut the ribbon.
Then the group decamped to Audubon Street to inaugurate phase 3 of the project, 66 additional apartments on the block between State and Orange.
The city’s economic development administrator, Michael Piscitelli, noted that the same group met on Tuesday afternoon to open the 69-unit apartment complex by nonprofit builder Beulah Land Development Corporation on the land. from the old Joe Grate to the Dixwell-Orchard-Munson intersection. Almost all of them will be affordable, not luxury apartments (for families earning 60% of the region’s median income or less, or less than $61,740 for a family of four).
“It’s about building on old car parks, not demolishing, [but] create new value,” said Piscitelli.
Elicker argued that both projects help make housing more affordable for New Haveners: Beulah Heights, with lower rents; and Audubon, by meeting unmet demand for market-priced housing and, in doing so, reducing pressure on rents from other existing buildings by increasing supply.
Downtown/SoHu/Wooster Square Alder Eli Sabin echoed that argument. He noted that the latest statistics show that rents have risen 20% in New Haven over the past year, in a market short of about 3,200 desired rental units at market price and about 8,000 affordable housing desired.
“This project helps meet that demand with supply,” said Sabin, a supporter of the “build-build-build” to the shortage of affordable housing.
The assumptions underlying this argument reflect a national debate, one that was presented at Audubon’s press conference on Wednesday.
On Sabin’s side, the best way to make housing more affordable is to let mark-to-market developers build as many homes as they want in order to ease the pressure on rents elsewhere. According to this argument, imposing affordable housing requirements on builders at market rates ends up preventing them from being able to afford to build, which actually makes it more difficult to lower rents.
Other proponents argue that this theory of supply and demand does not always work in practice, in part because new high-rent apartments may create a market for more high-rent apartments; and that the government should subsidize the construction of low-income housing because the market will not create such housing.
In Audubon’s case, Spinnaker purchased the land from a private owner and only sought market-priced housing, with no subsidies or strings attached. This is why the project was set up fairly quickly.
If Spinnaker were to buy the land now, it would have to include 15% “Affordable” as part of a new inclusive city zoning law passed in an effort to make housing more affordable in New Haven.
Spinnaker CEO Fowler (pictured above) was asked on Wednesday if he could have built this project under those conditions – if he could have made the budget work and got funding.
He says the issue is complicated.
“As long as it’s 10% affordable housing and no more, he said. “We only make 10-15% profit on these projects, and there is not much cost transfer available to cover the losses of subsidized units.
Even then, it depends on how much rent is reduced on those units, he said.
Alder Sabin said the city was careful to build its inclusive zoning ordinance with tax abatements and increased density permission to help developers afford to pursue new projects.
Mayor Elicker added that another objective is also important in the development of the city: integration. It is important for people from different backgrounds to live together, he said, in order to overcome challenges such as racism and unequal opportunities. He pointed this article from the New York Times reporting how children from low-income families do better in life if they grow up in economically integrated settings.
Underscoring the tension between these two arguments is the fate of two other planned Spinnaker projects nearby which have progressed more slowly than the Audubon.
One is the proposed mixed-use development on the site of the former New Haven Coliseum site bounded by Orange, George and State streets and MLK Boulevard. This includes public subsidies and affordable housing as well as requested public improvements.
Fowler announced Wednesday that construction is now ready to begin on the $75 million, three-part first phase of that project. He predicted that ground would be broken on the first 200 apartments within 60 days, with two more sub-phases shortly thereafter.
The fate of a planned boutique hotel in the former Webster Bank project at 80 Elm St. is more complicated. The hotel market has changed since the start of the pandemic. The company was therefore unable to obtain the necessary financing. Fowler said Spinnaker now plans to build apartments there instead. It does not need zoning relief to do this. He expects to submit a site plan for this work to the city “in the near future,” Fowler said.