Meet The New Cost of Living
For middle-class newcomers looking to live in the Park Cities, the bubble is getting even harder to burst.
Bulldozers and wrecking balls are a common sight in local neighborhoods, with older apartment complexes as some of their most frequent targets.
That means that while draws of Park Cities living are still there — the safety, the public services, and the school district — the options for those at an affordable price point are dwindling.
Local realtor Charles Gregory said when clients asked him about finding entry-level apartments in the Park Cities a decade ago, he probably could have found something. These days? He said some complexes have a wait list of 18-24 months, and that’s just for an $800-per-month efficiency unit.
“Those are few and far between,” said Gregory, an agent with Dave Perry-Miller and Associates. “It’s completely financially-driven. The land is just too darn valuable.”
Gregory said the significant rise in property values during the past several years, combined with favorable selling conditions, have created a scenario for turnover. In other words, investors and property owners simply can’t do business the same way they used to.
For example, the 4100 block of Lovers Lane includes several aging apartment buildings that are also some of the most affordable in the Park Cities. At the Park Lane Apartments, which cover 23,625 square feet, land value rose from $591,000 in 2005 to $1.2 million last year. Such an increase is common.
“When I see one still standing, I wonder why,” Gregory said. “Regardless of what the land is used for, it’s gone up so much in value that it doesn’t make sense at a lower price point. I don’t see any way that this trend is not going to continue.”
Other factors have contributed to the decline in multifamily development, as well, especially around the SMU campus in University Park. The university purchased and razed the 350-unit University Garden Condominiums, and others were demolished to clear land for the Highland Park Middle School campus and the George W. Bush Presidential Library and Museum.
Another reason could be the development boom in Uptown and other nearby neighborhoods, where zoning is friendlier and land is cheaper.
“All the building is being done in Uptown and downtown and Knox-Henderson,” said Steven Spodek of Dallas Luxury Realty. “There’s really not a lot out there to pick from.”
Then there’s the recession in 2008, which caused plenty of strife within the development community. While single-family construction bounced back fairly quickly, multifamily has been slower to rebound locally.
“It hasn’t been until recently that we’ve seen some multifamily being scraped and redeveloped,” said UP city manager Robbie Corder. “I think there’s an increased interest and an increased demand for multifamily, but so far it’s been kind of slow.”
Since 1977, UP has eliminated multifamily zoning in six different locations of varying size throughout the city, but has added only one block since then, along Lomo Alto Drive. That accounts for a 33 percent reduction, from 115 acres to 78.
Almost all of the apartments in the city are clustered either near the high school or SMU, and some apartments near the college campus could open up with the recent increase in campus housing.
The city also has introduced guidelines in recent years to requirements in density, parking, and design. But that isn’t intended as an indirect effort to keep people out, Corder said. It’s simply more practical.
“Since we’re completely built out, the city is not adding multifamily districts,” he said.
The city allows duplexes to become octoplexes. Why add multifamily districts when you can simply build more density in the existing areas? Smoke and mirrors!
My wife and I rented in the Park Cities for several years. Our first Park Cities rental was a historic fourplex on Normandy. The entire block was built as officer quarters for airmen stationed at Love Field during WWII. After the war, they turned the officer quarters into duplexes and fourplexes. In my opinion, these units were better built than homes being built today, featuring concrete walls and hardwood floors throughout. We loved our unit, but the property manager let us know after our first lease expired that a developer had purchased the entire block and was beginning the process of tearing the units down, one-by-one, to build newer, more expensive fourplexes for “empty nesters.”
The property manager reduced our rent even more to entice us to stay for an additional six months. At the end of that six months, they offered us another discount to stay month-to-month, with the understanding they only had to give us 60 days notice to vacate. By the time we moved in 2011, we were paying approximately $800 a month for a 1,200 sq. ft. for a fourplex within walking distance of Highland Park Village.
Luckily, we were able to find another duplex at the far northern end of UP. This time at Northwest Parkway and Baltimore. The duplex was roughly the same size as the fourplex we had rented, but more modern (built in the late 50’s, early 60’s). We paid roughly $1,200 a month for the entire time we lived in this unit. This time we even had our own private backyard. It was the perfect home to welcome our first born child.
Unfortunately, the owner decided to tear that duplex down as well and build a newer, bigger, and presumably better unit. It allowed him to collect about four times as much rent a month from the property.
We were unable to find anything in our price point after that, so we ended up moving to a condo in Turtle Creek. Before deciding on Turtle Creek, we looked all over the Park Cities, but found nothing even comparable to what we had been paying. Two bedroom, two bath, 1,200 + sq ft units in the Park Cities were now starting at about $1,700/month, if you were lucky. That was about a year ago, so I would imagine the price point is even higher now.
We would love to move back to the Park Cities, but find it virtually impossible with the current rental market.
What I think baffles me more than anything is the decision to tear down the fourplexes on Normandy. Like I said, these were well-built units, with a little bit of history. It would have been nice had someone come in, bought the property, invested some money in updating the units, without tearing them down, and slightly raised the rent.
“When I see one still standing, I wonder why,” Gregory said. “Regardless of what the land is used for, it’s gone up so much in value that it doesn’t make sense at a lower price point. I don’t see any way that this trend is not going to continue.”
It is highly presumptuous to assume that property values can not fall in the Park Cities. They certainly can.