Forget that house in the suburbs with a big lawn to cut and driveway to shovel. The newest trend in Buffalo and its suburbs is to plunk down as much as $3,000 a month on a swanky apartment – maybe even a loft – and let someone else do the yardwork. ¶ Over the past five years, 5,500 new apartments have been – or are in the process of being – built in Buffalo and its biggest suburb, Amherst. Construction continues this spring on hundreds more apartments in other local communities, including Lancaster, Hamburg and Grand Island. It’s a reflection of several forces at work. ¶ For Buffalo, it’s part of a back-to-the-city movement helping to revive the downtown core. Not only is it creating housing, but boosting the downtown commercial market, as well.
For the region as a whole, the apartment boom dates to around 2008, when the nation’s housing market tanked, tightening mortgage money and leaving many young professionals nervous about whether buying a house was a worthwhile investment.
Locally, the apartment boom also reflects college students wanting more amenities than a dorm offers.
It reflects seniors looking to downsize with some flair and millennials who are ready to move out of their parents’ home, but not yet ready for a house, a spouse and a baby.
Who can argue with granite countertops, stainless steel appliances, maybe an indoor pool or gym, and – to top it off – someone else shoveling the walk?
Still, in a region that appears on the brink of a long-awaited turnaround, with housing prices on the upswing after years of flat-lining or worse, this apartment boom is raising lots of questions.
How many more apartments does an area with little population growth need?
What are these new apartments doing to the values of existing homes?
What are they doing to the suburban lifestyle?
And, of course, what about those prices?
High-end apartments are going for as much as $2,000 to $3,000 a month in some suburbs as well as in Buffalo – a city where one-third of the population lives in poverty, but 17 percent of households earn over $75,000 annually.
“I don’t know exactly where they’re coming from,” developer Anthony Cutaia said of all the high-end renters, “but they’re coming.”
In the suburbs
There is a three-year waiting list to get into Dockside Village, the luxury rental units off Transit Road in Amherst.
Residents at Dockside Village have access to a clubhouse, an exercise room and a heated outdoor swimming pool. The units have vaulted ceilings, gas fireplaces and large walk-in closets. Some have gourmet kitchens with granite countertops. There’s door-to-door trash pickup.
“The young professional today, they want to work and play. They don’t want to have to maintain a house,” said Cutaia, the Dockside developer. “We even change their light bulbs for them.”
Demand for apartments has been building in recent years, in part, because few new units were available, he said.
But over the past five years, nearly 1,300 apartments have gone up or are under construction in Amherst, town figures show.
They include the luxury units at Dockside and the Villas at Rensch, student apartments near the University at Buffalo. Down the road are nearly 200 units at the Deer Lakes Apartments, while an August opening is scheduled for the FayeBrooke apartments, a retirement community at Maple and Ayer roads.
“What we’re finding is a lot of people love the flexibility,” said FayeBrooke developer Paul Bliss. “The lawn is cut. Their driveway is plowed. Even the seniors. They can go to Florida for six months and not have to worry.”
And there’s plenty more where that came from.
In Amherst, planning records show at least another 769 units in the pipeline – more student apartments on Sweet Home Road, more senior apartments on Meyer Road, more luxury apartments at Cutaia’s Dockside.
In Hamburg, roughly 500 apartments are currently proposed, ready to begin or under construction.
In Lancaster, two planned projects less than a mile from each other on Harris Hill Road would add more than 200 apartments geared toward baby boomers.
Meanwhile, Bliss has his sights set on roughly 300 more apartments in Amherst, Cheektowaga and Clarence.
Of course, not everyone is happy about this.
Complaints can be heard from Amherst to Lancaster to Hamburg as nearby homeowners voice concern about increasing traffic, decreasing property values and a general disruption of suburban quality of life.
In fact, the complaints got so loud over a project proposed for Whitehaven and East River roads in Grand Island that town officials recently declared a four-month moratorium.
“We’re trying to work this out so there is a some kind of better move forward,” said Grand Island Supervisor Mary Cooke. “If something is going to be built next to people already there, we want the existing residents to be at least somewhat happy with it – or at least tolerating it.”
In Buffalo, a 40-square-mile city with little land left to build on, 82 projects with some 3,500 new apartments have been proposed since 2012 and are now in various stages – from completed and rented to still awaiting approvals, according to Buffalo News research and documents provided by the city’s Office of Strategic Planning.
That number includes a mix of senior apartments on the city’s East Side and on Gates Circle as well as hundreds of student apartments near UB’s South Campus and low-income rentals in the East Side and Riverside neighborhoods.
There also are long-time churches, with beautiful windows and steeple roofs – in all parts of the city – being converted into apartment buildings, as well as shuttered parochial school buildings being reborn as apartment units in North and South Buffalo.
New rental housing is also spreading along Main Street, often near Metro Rail stops, like Fenton Village, which developer Nick Sinatra built to attract young professionals from the Buffalo Niagara Medical Campus just over a mile away.
“The white picket fence and house in the suburbs are no longer the American dream for millennials. They’d much rather be in the city,” said Sinatra, whose Fenton Village, at the corner of Main and West Ferry streets, features a juice bar, workout room, and $1,300 to $1,600 rents. Part of the building was first built as the Fenton Hotel in 1900 to accommodate guests attending the Pan-Am Exposition. Some of the historic details remain.
But much of the new apartment life in Buffalo is centered around a downtown core that is part of a newly defined downtown district extending from the waterfront to North Street and from Niagara Street to Michigan Avenue, taking in the entire Medical Campus and jutting out to include Larkinville to the southeast.
In the past 15 months alone, some 1,000 apartment units have been proposed for that area, most converting vacant or underused office buildings into apartments. Construction has begun on almost half the projects, according to Brandye Merriweather, project manager with the Buffalo Urban Development Corp.
The projects include, for example, renovating the former Birzon Building, next to Shea’s Performing Arts Center, into 12 lofts and first-floor retail space; converting the vacant Stanton Building farther south on Main Street into 36 apartments and a real estate office for the new owner; and building 30 new apartments on Ohio Street that feature boat docks and views of the lake.
That is in addition to the growing list of completed projects, such as conversion of the former Spaghetti Warehouse on Elm Street into 22 loft apartments, the Hotel Lafayette renovation on Washington Street with 92 apartments, and a former warehouse at 149 Swan St. transformed into the HUB, an upscale apartment building with 50 lofts, a roof-top deck and rents that hit $2,000 a month.
“It’s not just young people; it’s empty nesters, too,” said HUB developer C. Jake Schneider.
The apartment boom is starting to transform the basic downtown fabric.
Once a place to work and shop – in stores like the former AM&A’s and Berger’s – downtown is instead becoming a place in which to work and live. Mayor Byron W. Brown initially set a goal of 1,300 new residential units downtown by 2018, but given the progress, he recently pushed the goal to 2,000.
“Downtown is the fastest-growing neighborhood in the city,” Brown said.
This effort isn’t just about bringing more apartments downtown. It’s also about addressing what had become a glut of often-obsolete office space depressing the downtown market and business climate. With outdated floor plans, inadequate parking and outdated electrical systems, there was little demand for these office buildings, which became vacant or underused. But with the help of state historic tax credits, developers are finding it profitable to convert these buildings into restored rental housing.
“Part of the strategy is to reduce vacancy to stabilize the downtown market and rents,” Brown said.
While for years there was little commercial interest in these buildings, there’s lots of demand for them as apartment buildings. People enjoy living in restored old buildings with modern-day updates, Sinatra said. “The younger generation in Buffalo likes the tribute to old Buffalo,” he said. “Having some history to the building is cool.”
But how many apartments does the region need?
“That’s always the question you ask yourself when you develop property. ‘Have we reached a saturation point?’ ” Schneider said.
Back in the 1990s, Amherst experienced a building boom of single-family homes that outstripped population growth. The result was big, new homes that had the financial staying power of a car, losing value as soon as they were bought.
Meanwhile, the City of Buffalo was building new, subsidized housing during the no-growth decades, resulting in city residents leaving older, more established neighborhoods for newly created ones off Clinton Street and in Willert Park. All the building and movement ultimately hurt housing values at the lower end of the market and, critics said, led to more abandoned housing.
Today’s building boom, some 20 years later, is occurring at a time when Erie County, including Amherst, has shown slight, but continued, population growth since the 2010 census.
Buffalo’s population, meanwhile, continued a slight decline at the beginning of the decade, but it seems poised for an upswing, given expansion of the Medical Campus and introduction of other new major employers, including IBM and Solar City; as well as an influx of immigrants.
“We think the demand for housing in the city is rising at a more rapid pace than we’ve seen,” Brown said. “Our projection is that the city will see its first population growth since 1950 in the 2020 census.”
A 2011 study on the potential residential market estimated demand for about 4,500 additional housing units in downtown Buffalo. Another study states that 41 percent of the demand will come from within the city, 30 percent will come from the rest of Erie County, and another 31 percent will come from outside Erie County.
“We knew the demand was there. There’s much more demand,” said Brendan Mehaffy, the city’s director of Strategic Planning.
“If this were a nine-inning baseball game, we’re probably in the fifth inning,” added Sinatra, one of the city’s major real estate developers.
In the suburbs, Bliss, developer of the FayeBrooke senior development, agreed that saturation is always a concern, but said it’s a complicated equation that takes location, amenities and price into account.
“Our long-range plans are two years out, and then we will re-evaluate,” added Cutaia, also a suburban developer.
Whether the prices will hold is another thing. Some developers may run into a problem, not because the demand isn’t there, but because the price isn’t right, said William A. Paladino, CEO of Ellicott Development.
“I think come this fall, you’ll see more units on line, and you’ll generally get a better indication of where the market is,” Paladino said.
Only time will tell if the surge in apartments will affect the value of existing one-family homes. But housing values in the strongest and most in-demand neighborhoods have enjoyed a spike in recent years, city and suburban officials say.
Housing values in some of the city’s poorer neighborhoods, however, have often been flat or even declined, officials said.
There’s no indication at this point that the new housing is leading to more vacancies or abandoned houses in Buffalo as occurred in the 1990s, Mehaffy said.
“We can’t point to anything, even anecdotally, that this is leading to that,” he said, noting that there’s been increased demand at city auctions for property that the city has foreclosed on.
Still, there are people in Buffalo now living in substandard housing, Mehaffy and Brown said.
If it turns out these substandard houses become vacant and abandoned as new apartments become available in Buffalo, the abandoned properties eventually could be taken over by the city and provide opportunity for further development, Brown said.
“We know there are individuals who are living in substandard, energy-inefficient housing right now whose assessments are very low. Our ultimate goal is to get more residents at the lower end of the spectrum in clean, safe, energy-efficient, affordable housing,” he said.
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