The dirt continues to fly fast and furious on new apartment communities in greater San Antonio. And much of the new construction is geared toward the affordable-housing market, according to a new report by O'Connor & Associates. As of Sept. 30, 2007, O'Connor & Associates reports that more than 1,400 units have entered the multifamily market. Of these, 688 were affordable-housing projects -- also referred to as tax-credit developments in the analysis.
At present, there are another 3,800 multifamily units under construction -- of which 1,600 are for affordable-housing developments, O'Connor & Associates states.
Houston-based O'Connor & Associates is a real estate firm that provides appraisals, market research, cost-segregation studies and federal and ad-valorem tax reduction services.
What is driving the new slate of tax-credit multifamily housing?
The key factors, according to O'Connor & Associates, are the city's growing economy and the rise in middle-class employment. According to recent figures from the Texas Workforce Commission, for the 12 months ended Sept. 30, San Antonio added 14,400 jobs -- in such areas as mining and construction; leisure and hospitality, and trade, transportation and utilities, according to the O'Connor & Associates report.
The average rental rate for these affordable-housing developments now stands at 75 cents per square foot. By comparison, the market-rate projects in greater San Antonio are now averaging 84 cents per square foot.
The overall occupancy rate for the local multifamily market now stands at 91.4 percent for the third quarter of 2007 -- up from a rate of 91.2 percent as of third quarter of 2006, O'Connor & Associates notes.
Source: San Antonio Business Journal