As housing costs continue to rise in the Greater Houston area and land availability becomes scarce, experts say more residents and developments are turning to apartments—and they will increasingly do so for the foreseeable future.
Population and Survey Analysts Demographer Justin Silhavy said the Lake Houston area follows the same trend: the population is projected to grow over the next 10 years before tapering off due to the lack of land.
“Usually, in the suburbs, the leftover land tends to be along major corridors and in smaller pockets [and] smaller pieces of property, so that land kind of gets reserved for retail and apartments,” he said.
PASA completed demographic reports for both New Caney and Humble ISDs in March that showed multifamily occupancy growth is projected to bring a combined 10,647 occupied units, or lived-in units, to the region by October 2028.
That projection represents increases of 61.5% and 142.3% for HISD and NCISD, respectively, in the next decade. Comparatively, HISD saw a 23.3% increase between 2009-19, and NCISD saw a 31.1% increase between 2010-19.
n the next year alone, at least three apartment complexes will open in the Kingwood, New Caney and Atascocita areas. The projects include 255 Assay in Generation Park, The Royalton at Kingwood on Northpark Drive and The Sarah at Lake Houston in Atascocita.
Several multifamily developers in the Lake Houston area said luxury apartments are becoming more attractive to renters who are willing to pay more to have easy access to their jobs as well as to lifestyle and entertainment options.
Signorelli Co. President Danny Signorelli, who built the Valley Ranch mixed-use development, said this is true for The Pointe—the community’s newest luxury apartment complex, which opened Phase 1 in June.
“Connectivity and walkability to shopping, dining and entertainment are massive drivers,” he said. “Equally as desirable is a location that offers convenient access to major freeways.”
The apartments will open the remainder of its 336 units by January, and the complex will break ground on the 120-unit Phase 2 by the end of 2019, he said. He also said he intends to add 300-500 multifamily units to Valley Ranch annually.
Luxury apartments are not an option for everyone due to their price, which can range from $1,265-$3,474 per month at 255 Assay, McCord Development’s first complex in the mixed-use community of Generation Park, according to leasing information.
Despite the price point, McCord Development Director of Development Levi Hermes said apartments with amenities not available in other complexes, such as on-site fitness centers and covered parking, are in high demand. The 251-unit complex opens in December, and it has preleased 10 units to a variety of renters as of early November.
“Our other demographic is folks that … may have lived in more [affordable] apartments and now want to move to a more luxurious offering to tap into those amenities,” he said.
Hermes said the developer also hopes to break ground on another 300-unit development in Generation Park in 2020, which could open in the next three years. Designs for more affordable apartments are also in the works, he said.
Additionally, as the Atascocita area builds out over the next several years, PASA data shows there are seven multifamily developments planned for the West Lake Houston Parkway corridor. The exact location of these developments is not yet available.
Average rental rates are higher in the Lake Houston/Kingwood submarket as more apartments are developed, Apartment Data Services President Bruce McClenny said. However, the average rent in the area is increasing at a slower rate than the Greater Houston area.
In the last five years, the average apartment rent in the Lake Houston area increased from $1,023 per month to $1,119, or 9.38%. Meanwhile, rent in the Houston region as a whole during the same time increased from $921 to $1,051 per month, or 14.12%, ADS reports.
Despite the higher average rents, Class A rental space—or a majority of the apartments built in the last 10 years—is lower than the region by about $230 per month, per ADS. McClenny said the area’s slightly higher rent could be due to suburbs building out slower than the Houston region as a whole.
“There’s probably a little bit better quality, more recent construction of Class B and C [in the suburbs],” he said.
With at least five apartments debuting in the last 12 months—including one 55-plus community—and multiple incoming developments opening in 2020, McClenny said there is quite a bit of inventory available. This means apartments will be more likely to offer incentives, such as discounted rent for the first few months, to attract renters.
“When there’s plenty of supply, that could lead to better deals in the short term for people renting,” he said.
Schools, first responders affected
PASA data indicates that more families with school-age children are living in apartments than in 2008 and 2009.
HISD students made up more than 38% of those living in multifamily units in 2019, while NCISD students made up more than 21%. Additionally, both districts saw the number of students who live in multifamily housing more than double in the last decade.
Some reasons more families are living in apartments include the 2009 recession making housing less affordable, job growth in the northern portion of the region and accessibility with Beltway 8, Silhavy said.
“Inside the city … rents have really soared, so since that [recession] time frame, we’ve seen almost every suburban area increase in the number of students per apartment,” he said.
Humble and New Caney ISDs officials said overall population growth affects district operations more than the type of housing in which the students reside. HISD Public Communications Director Jamie Mount said the district takes all housing projections into its enrollment planning strategies to plan for staffing and school buses.
Two apartment complexes that opened in 2019, Stonegrove Fall Creek and Chapman Crossing Apartments, as well as future proposed multifamily development in the area, are near HISD schools set to open in the next couple years.
Elementary School No. 30 is set to open on Aspen Fall Lane in the Fall Creek neighborhood in August 2021, and Middle School No. 10 will be built near Ridge Creek Elementary School on Woodland Hills Drive and open in August 2022. However, Mount said it is too early to speculate on the attendance zones because the district has not formed its boundary committees yet.
Atascocita Fire Department Chief Mike Mulligan said population growth is also a challenge for his department.
“The increase in population that comes from any growth creates more request for service,” he said. “If there’s more people living in the area, there’s going to be more people that need help.”
With much of the future apartment growth planned for the Atascocita area, Mulligan said his department considers budgeting needs, staffing and equipment purchases when looking at 10-year population forecasts.
Publication: Houston Community Impact