Demand for housing in New Haven has risen, but with it, prices have drastically increased, forcing developers to seek new ways to meet the needs of the city’s economically diverse urban population.

Pledging to build at least 100 residential units each year until demand is met, the city faces the challenge of striking a balance between market and affordable housing in each of its new developments.

Despite the buildup of housing in New Haven in the past few years, market demand remains stronger than ever. In 2004, occupancy rates for downtown’s 2300 apartment units ran at 99 percent, according to a study by the New Haven Office of Economic Development.

Beginning about five years ago, the city of New Haven began to focus on both market and affordable downtown housing as an economic development strategy, Deputy Director of Economic Development Tony Bialecki said.

“Housing became one of our biggest priorities because it attracts a 24-hour, built-in clientele for stores, restaurants,and the rest of the downtown community,” Bialecki said. “In the past couple of years, we have seen waiting lists on housing units for the first time because so many people want to live downtown.”

But College Street real estate broker Francis Demaio, who oversees the Strouse Adler New Haven Luxury Apartments in Wooster Square, said she thinks there is a limit to how much more New Haven housing can expand. Although the constant inflow of young professionals and “empty-nesters” has maintained Strause Adler’s occupancy at 99 percent, Demaio said her company was fortunate with its timing.

“I cannot see how if they continue to build apartments, there will still be enough people to move into them at this point,” Demaio said. “We definitely got in at the right time.”

With increased demand, housing prices have risen steeply. The average rental price currently runs at a monthly rate of $815 for a studio, $1,025 for a one-bedroom, and $1,383 for a two-bedroom apartment. The more luxurious apartments, such as the Eli and the Liberty, charge up to $1,250 for a one-bedroom and $1,900 for a two-bedroom. According to a census in 2000, the median apartment price for all of New Haven was only $651.

This sharp rise in prices has caused concern among certain members of city government. In 2004, the Board of Aldermen created an ad hoc affordable housing committee in recognition of the rapid buildup of downtown New Haven. Committee member Ben Healey ’04 said the group feels that the city has a responsibility to ensure that working-class families can live comfortably in New Haven.

“The expansion of high-end housing is great for the city as a tax base,” Healey said. “But as luxury housing continues to grow, we must ensure that we maintain a balance with affordable housing.”

Affordable housing units are required to charge monthly rent no greater than one third of the income of a household earning 60 percent of the New Haven Metropolitan Statistical Area income. Certain housing developments around New Haven, such as the Residences at Ninth Square, have set aside a percentage of their units for affordable housing.

Property Manager Shiela Shien said development incentives are often used to encourage builders to include affordable housing in their projects. In the case of the Residences, the city paid the developers to exercise rent-control over 42 percent of its units.

Condominiums present another more affordable alternative than apartment rentals with the additional benefit of ownership. Recently converted from apartment rentals, the Center Court Condominiums will open this summer at a price range from $90,000 to $250,000. Before the makeover of Center Court, only about 15 percent of New Haven’s more than 3,000 downtown housing units were condominiums. The announcement of the new condominiums’ opening met with enthusiasm, and 75 percent of the Court Street residences have already been reserved, project manager Jon Bevacqua said.

“There is nothing like [Center Court] in downtown New Haven right now, and we are really one of the first to offer downtown ownership,” Bevacqua said. “Our prices are more reasonable than all the rentals around us, and our location is ideal for students and professionals.”

In reaction to the rise in rental units and the success of the few existing condominium complexes, three new proposals for condo units have recently been submitted to the city. But condominium prices have also risen in the past few years, jumping nearly 20 percent in 2002 and remaining high, with an average sales price of about $167,000 per 1,000 square feet.

Bialecki said that the city has been anticipating the increased demand for condos, and the Office of Economic Development is looking to include some affordable condominiums in the Downtown Gateway Project to make ownership available to a greater percentage of the population. The city is requiring that a minimum of 20 percent of the residential units in the project be reserved for affordable housing.

The Livable City Initiative, a sector of City Hall that focuses on low-income housing and increasing the quality of life in New Haven, has worked with both non-profit and private developers to find an ideal mix of affordable and luxury housing in many of the new housing units.

“Especially as New Haven has turned the corner in the past five years, the demand is there for both affordable and luxury housing,” Deputy Director of the Livable City Initiative Craig Russell said. “And these two can go together as long as there is space, which there certainly is right now.”

Economic Development Administrator Wendy Clarke said all city-funded developments aim to come as close to a fifty-fifty balance between affordable and market housing as possible.

“In talking to local realtors, I know there is still a great need out there, so the city will continue to build,” Clarke said.

[ydn-legacy-photo-inline id=”15935″ ]