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Multifamily real estate encompasses various residential types, from luxury skyscrapers with rooftop pools to duplexes. One sector of real estate is the garden-style apartment complex. This term refers to low-rise suburban apartments often centered around a central garden or pool area.
Garden-style apartments are often older buildings, but they became popular again during the pandemic when people were interested in minimizing their time in lobbies and sharing amenities with others. That led to renewed interest from real estate investors. In 2021, they received an influx of $60 billion in capital investment, 28% more than the two years before, as investors saw the renewed value in the asset class.
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Garden-style apartments can be charming but are not the most efficient type of multifamily real estate. That may be one reason the town of Prosper, TX, a rural suburb of the Dallas-Fort Worth metropolitan area, recently banned new garden-style developments. The city’s new zoning laws lay out areas for multifamily development and raise the maximum height allowance from three to eight stories. Developments will also have to accommodate retail tenants on the bottom floor. The city’s director of development services, David Hoover, said the change was necessary because the town’s existing standards didn’t reflect the city’s growth. “We have less and less land to dedicate 20 acres to an apartment complex,” Hoover said.
Prosper has a population of 42,598 and is about 35 miles from Dallas. The move comes as many towns are considering how they address urban density. In Dallas, the city council planning commission voted against preserving single-family zoning. Some residents believe this will lead to a proliferation of apartment units and destroy the character of neighborhoods. In contrast, others say that changes like this are necessary for people to be able to continue living in the area. “In the next 10-20 years, if we do not open the door to density, our children and grandchildren will be living outside the city of Dallas,” said Dallas City Plan Commissioner Tabitha Wheeler-Reagan.
Ogden Contemplates Going In The Opposite Direction
While many cities are trying to figure out how to add more multifamily properties, Ogden, UT is facing a different type of housing problem. The city now has a large supply of mid-rise apartment buildings and is considering limiting multifamily construction in several of its main commercial zones. The Salt Lake Tribune found that the city has 2,550 mid-rise apartment units either approved or under construction but only around 797 low-rise apartments and townhomes, and 83 single-family homes.
Despite concerns over a shortage of affordable housing, city planner Mike McBride said the city would still be able to meet demand for apartments through 2050. The city is updating its general plan and the proposed ordinance is a stopgap measure to give the city time to make larger changes. The city says it needs to preserve the space it has left for future projects. “We don’t have enough land to accommodate the needs for single-family housing, and that’s not a healthy way to develop a community,” said Ogden Planning Manager Barton Brierley.
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In the past few years, most zoning changes in the U.S. have added density by degrees, allowing accessory dwelling units, duplexes, and quadplexes rather than opening up to large apartment developments in residential neighborhoods. While Prosper’s move toward greater density is intriguing, it seems unlikely that many cities will start focusing on limiting apartment types. In most areas, there is far more potential in widening single-family neighborhoods to greater usage first.
Garden-style apartment developments have tended to find favor in many areas because they are often Class B and Class C units that provide workforce housing. They have also proved to be good investments as demand remains high. Speaking with Multifamily Housing News, Allan Swaringen, president & CEO of JLL Income Property Trust, said suburban and garden-style apartment communities, especially those in highly rated school districts, attract investors.
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This article One Town Just Banned Garden-Style Apartments: Will Others Follow? originally appeared on Benzinga.com
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