The 1901 West development has never quite gone according to plan. Technically referred to as "that monstrosity out there on the Johnson Lumber site", 1901 West had to scrap its initial plans to sell condominium units, _
In January, a spokesman for the development
predicted that all retail space would be filled in 6 months. Now nearly a year later, plans have just been announced for merely the 3rd retail tenant:
predicted that all retail space would be filled in 6 months. Now nearly a year later, plans have just been announced for merely the 3rd retail tenant:
Modern Carpet One Floor and Home, a regional carpet and flooring company
with locations in Prince George's and Calvert counties, plans to open its third
store in February at 1901 West, a mixed-use complex in Annapolis.
The carpet company will be the third business to open in the vacant 1901
West space at the corner of West Street and Chinquapin Round Road in Annapolis. Manpower, a national staffing firm, recently moved its Annapolis office into a
1,653-square-foot space at 1901. Starbucks opened last year.
Residential occupancy, level at 40% at this time last year, has doubled to 80%.
The fate of the residential apartments makes an interesting study. To be honest, I am surprised that the occupancy rate has doubled in the past year. The housing market today heavily favors buyers, with prices being slashed as much as 25%, perhaps even more. Applying the same interest rate that I just got on my mortgage, the cost of monthly rent at 1901 ($1300 or so) would buy you a $225,000 house, which could somewhat easily put a person in a decent townhouse.
_
If apartment demand in Annapolis is driven by tenants who do not have permanence in the city, then it would be less affected by the mortgage market. However, if renters are saving money or building credit for a home purchase in the near future, the apartment market may be set to take a hit. And since 1901 represents some of the most expensive apartments in the city, it would be one of the first to go.
_
Given a bad rental market, don't be surprised if 1901 switches to Section 8 housing. Any owner can elect to participate in the Section 8 program, which would make the unit(s) affordable to lower income families who would otherwise not qualify. The owner would receive a reduced rent from the tenants, along with a matching payment of some proportion from the government. I would guess that market-rate rent would be higher than rental income from Section 8 properties, but if you can't lease at market-rate, some money is better than nothing.
_
This phenomenon can already be seen in the MPDU (Moderately Priced Development Unit) program at 1901. A couple of years ago, the city passed the MPDU ordinance, requiring builders of rental units to avail 6% of all space to moderate pricing parameters. All such units at 1901 are leased, with market-rate units struggling to keep pace.
_
The back-of-your-mind question should be: is Annapolis prepared to envelop even more subsidized housing than it already has?
9 comments:
Exactly where in Annapolis can one find a $225,000 house?
I currently live in a townhouse in the landings, which is a neighborhood in between annapolis middle school and the truxtun park baseball fields. The house just appraised for $240,000, and it is an end unit in good shape with significant landscaping improvements. I would bet you could find a house in my neighborhood in this market for $225,000, but I haven't looked up any real estate prices.
Is that community off Forest Dr.? I have resided in Annapolis since 1990. That area is known as one of the worst in Annapolis. The community is old and run down, too. My townhome just appraised for $421,000. I think the numbers speak for themselves.
I take a little offense that you would call where I live one of the worst in Annapolis, especially when you don't know where it is. Yes: off of Forest Dr. Also off of Hilltop. The neighborhood is good and well-kept. And like I said, this house just appraised for $240,000, so your claim that "the numbers speak for themselves" doesn't make much sense to me.
Offend? I have invested in this town! The impression you gave in your article is that Annapolis is a poor city. As a resident, I take offense to that. I am simply stating that we live in a city. And, like any other city, there are good and bad areas. For example, if I was asked to recommend an area in D.C., I would certainly would not recommend Southeast D.C.
If the impression in the post was that Annapolis was a poor city, then I came across the wrong way. The city has good and bad areas, as well as more and less expensive areas. Here is the list (12 properties) of the places you could own today in Annapolis for less than $225,000:
http://matrix.mris.com/Matrix/Public/Email.aspx?ID=22710757121
Some of these are in bad areas but some are not. The point I want to make is this: it is not a stretch to think that someone who can afford to rent at 1901 West can also to afford to buy in the city in the near future. That being the case, I speculated how many 1901 residents were thinking about buying. If that number is high, then we could see interesting developments at 1901.
I have since learned that 1901 is for sale, for a mighty price. If it goes through, the new operators would be unlikely to accept the reduced income that would come from section 8 housing, and would likely operate it in the manner is is now.
Brian,
The Anonymous poster from December (me) does not live in Annapolis and is not the subsequent Anonymous poster from January. Just thought I'd make that clear.
I know this is a few months late but I think something should be said about 1901 West from someone who lived there. I had a lease there for 13 months and just recently moved out. The design of the apartments are fabulous, thats really what has people renting there however... there is MUCH to be said about the construction of the apartments. I have never had more problems with an apartment in my life. Just to name a few... my sink fell off, the kitchen hose broke twice, the dishwasher leaked several times, and the "balcony" door was hung crooked so in the middle of october i had to shove washcloths in thetop of the door to get my apartment above 35 degrees. some of my neighbors said thier appliances werent even installed, instead they were just pushed into place. And the fire alarm..... what a nightmare it went off everyday for a few weeks. At one point it went off at midnight and continued until 5 am! I still see East Coast Fire Protection there on a regular basis working on it. Just 2 days ago I was at the Starbucks and it went off 4 times. And lets not forget the hospital is like 2 miles away, and the firehouse is right around the cornor on forest drive so you can imagine the amount of sirens you get to listen to. Dont get me started on thier "security system" what with the garage flooding every time it rained, the garage gates breaking, the security doors almost never worked. So for almost $1400 a month... no thanks. I dont know many people who renewed their lease there.
oh i know how you feel about the place 1901 west. just a few months ago we had a break in. all of the tvs were stolen fitness room,"cyber cafe" and the huge one where the pool table is. but your right about the security the gates never work,doors always broken also maybe 3 weeks ago 4-5 maybey more thats all i heard about were broken in to.i dont think they evere vaught anyone or have any idea because theres no secuity.and about sirens oh yea constantly almost like your living in a trauma center express way.i cant wait until november to get the hell out i know i can find somthing better i would drive 20min commute.although i like the eastport community alot i will be checking this out. if i could give any advice do not rent here the staff also snobby.i will not be supprised if the place goes to section 8 houseing in two more yrs.
Post a Comment