white-hot growth, with two months free rent
tampatrib.com
Hillsborough Building Boom May Be In Lull
By BRAD SMITH bsmith@tampatrib.com
Published: Sep 9, 2001
TAMPA - Apartment hunting? It's war in New Tampa.
Discounts and free rent are common bait to attract tenants to upscale apartment complexes that line busy Bruce B. Downs Boulevard. Many are so new that the paint is barely dry.
``We try to lease apartments, not specials, but we have to be competitive,'' said Jenny Wallen, a manager at The Grand Reserve in Tampa Palms, where $795-a-month one-bedrooms on harder-to-rent third floors come with two months free. ``We're trying to cut back because it's getting to be like a mad war.''
In apartment-glutted suburbia, it's a renter's market where would-be tenants pit one complex against another to squeeze out better deals, leasing agents say.
Besides New Tampa, battlegrounds include Brandon, minutes east of downtown, where thousands of the 27,121 units built countywide since 1995 went up.
But leasing incentives are one sure sign, experts say, of a building boom's stuttering end stage.
And new data showing a sharp drop in multifamily building permits in Hillsborough County last year hint that five years of rocket-fueled growth may be tapping the brakes.
Specials such as free rent ``show overbuilding,'' said Jim Hosler, a Hillsborough demographer. ``I've noticed a lot of that in New Tampa. They don't do that because they're trying to be nice. Two months' free rent? My God, that's one-sixth of a year's lease free.''
After 1999's white-hot growth, new single-family housing permits in Hillsborough County also tailed off for the first time in five years last year in a trend that could foreshadow leaner times.
The slip was modest, but, significantly, it was the first rollback since 1995. Each month in 2000 averaged 596 permits for new houses, according to county data.
Tampa Stands Out Bucking the trend, Tampa permitted more new houses last year than 1999, jumping from 1,283 to 1,526. But, overall, single-family permits countywide were off 66 last year.
Apartment permits were off considerably more, plunging 40.2 percent, from 7,243 to 4,330.
Marvin Rose, a Tarpon Springs analyst who issues Rose Residential Reports, disputed the numbers and said trends show no cooling off. Year to date through June, he said, single-family housing permits were up 14 percent, and closings were up 18.6 percent through July.
``If there was a leveling off in 2000, it's picked up again by now,'' Rose said. Apartments were off but ``primarily because 1999 was a very unusually high year.''
Hosler said apartment construction is more cyclical than home building. And apartments are not built to meet demand, like houses, because builders can get favorable financing.
``Builders think they can lure people from older apartments. But we'll have to wait and see what the occupancy rates are of these new units to see if we're adding new people, or to what degree we're just replacing older apartments with newer units,'' Hosler said.
Between 1995 and 2000, Hillsborough permitted 4,520 multifamily units a year. Last year, the biggest concentrations were in Brandon, New Tampa, the University of South Florida area, Keystone and West Carrollwood.
That a lengthy growth boom may be about to slow should surprise no one, Hosler said.
Phenomenal growth has been ``going on pretty long,'' to the point that many may forget that Florida building booms are cyclical.
``A lot of people are feeding off it. It's been a real boon for house painters to appliance salesmen to lawn men,'' Hosler said. ``It's not going to go on forever.''
Joseph Narkiewicz of the Builders Association of Greater Tampa said the numbers may be off, but they are better than most locales in the nation.
``This year has been one of the best years for certain builders,'' Narkiewicz said. ``Some information we've seen might indicate some slight trail-off. But with the balance of the economy picking up again in the second quarter, we don't really expect to feel much of a pinch at all.''
Questions About Future Growth Building permit trends raise larger questions of how well Florida will meet the lifestyle demands of aging baby boomers who want different amenities than their parents.
``It's going to be critical in the next two years for us to see if we are able to do what we hypothesize, which is attract more growth,'' Hosler said.
For 2000, Hillsborough permitted 12,034 housing units, a decrease of 19.5 percent, or 2,917 units, from 1999.
Most building permits were in the county's vast unincorporated areas, where almost 73.5 percent of new housing is planned. Hot spots were Brandon in the southeast, Westchase in the northwest and Sun City Center and Balm/Wimauma in the far south.
In the nonresidential building sector, activity slowed in 2000 from a strong 1999. The dollar value last year was $316.7 million, down 41.2 percent from the previous year.
In this arena, the public sector was cold, and the private sector was hottest. The value of public sector nonresidential construction was $73.8 million last year, compared with $242.8 million in private hands.
Reporter Brad Smith can be reached at (813) 259-7365.
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