Condo, apartment construction booming in areas of New Orleans
NEW ORLEANS (WVUE) - Construction cranes and crews of laborers can be spotted most days of the week as condo and apartment construction is plentiful downtown, in the Warehouse District, and to some extent in the Mid-City area.
"The fastest-growing neighborhoods are the CBD,” said Allison Plyer, chief demographer with The Data Center.
The rampant construction prompts questions about who will occupy the new dwellings.
"The population of New Orleans does continue to grow. It’s about 393,000. That’s still less than pre-Katrina, when it was about 480,000 in the 2000 Census,” stated Plyer.
Local realtors welcome the robust activity.
"That’s a plus for the realtors, and we’re able to assist more clients in helping builders make this happen,” said New Orleans Metropolitan Association of Realtors President Latanya LaBranch.
According to information from The Data Center, the median gross monthly rent in New Orleans was $962 in 2017, after being adjusted for inflation. In 2004, it was $742.
"Rent prices have gone up 30 percent since pre-Katrina, and median incomes have actually gone down about 8 percent, both adjusted for inflation, so now we see a much higher rate of renters who are paying more than half their income on rent,” said Plyer.
LaBranch said she encourages clients to become homeowners.
"I know everyone is not able to purchase homes, but most times it's cheaper than it is to actually rent,” she said.
There is a growing demand for downtown living, and LaBranch said it became evident post-Hurricane Katrina.
"We saw like an influx of the younger generation wanting to have that work-life balance lifestyle and seeing them kind of congregate more downtown…so that really built up the need for housing downtown, and turning those units that were abandoned into condos, apartments things like that,” stated LaBranch.
Short-term rentals are part of the equation, as well.
"There's some evidence that a lot of the home prices are being driven up by people buying second and third homes,” said Plyer.
And a local broker for both commercial and residential properties said for short-term rental companies, there is little risk in buying up condos and apartment units because they know they can fill them at a profit.
LaBranch said there is no doubt that demand builds up confidence among investors and builders.
"The confidence comes from the supply and demand, you know, when there's a demand for it, they put the supply out there,” she said.
Still, home ownership remains stagnant in the city.
"The home ownership rate in New Orleans is 47 percent, it’s virtually identical to what it was pre-Katrina, plus that’s quite a bit lower than the national level which was 64 percent, so we don’t have as many homeowners,” said Plyer.
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