David Stockert helps oversee a healthy business in one sector of the battered housing market: apartments.
Stockert, 49, is president and CEO of Atlanta’s Post Properties, which has 21,431 apartments in 57 communities from Washington, D.C., to Dallas, including 1,568 apartments under development. The company started building here 40 years ago on the edges of Atlanta, which at that time were places like Roswell. Post rode the population booms of urban areas like metro Atlanta, held its own as it saw a sector of clients move to owning, and is poised to grow again as many of those clients are returning to renting.
Post has land downtown and in Buckhead that Stockert said the company is ready to build on, and he hopes that will happen within 18 months or so.
Posts’ experiences reflect what is going on nationally. The number of permits to build apartments hit a three-year high in October and are up by more than half in 12 months. And despite the fact that a large number of houses that were formerly owned are now rental properties, apartment occupancy rates are climbing along with rents.
Stockert took time to talk to The Atlanta Journal-Constitution about changes in the housing market that reflect everything from employment rates to where young people are migrating.
Q: What are some of the trends shaping the market right now?
A: The big trend that has buffeted us the most is that starting in the mid-1990s, interest rates started coming down and we saw this huge migration toward owning a home. That capped out in 2006 and has reversed, and the impact was just enormous. We had [nationally] about a 5 to 6 million person shift to owning and about 3 million have shifted back to renting. When you get that kind of movement in that short a time, that is disruptive.
[An earlier estimate by Stockert said metro Atlanta’s share of former homeowners who are now renters is around 55,000.]
Q: And the economic instability is keeping even those with jobs from buying?
A: I do think that is clearly happening. People are renting moreso than they have in the past because when unemployment is 10 percent, you worry as an employed person that, for me to keep a job consistently, I may need to be fast on my feet. I may have to take a job with a different company or move to a different city. I am not going to buy anything right now.
Q: What is changing in terms of the renters of today compared to the past?
A: Back in ’71 when we began, we were, generally speaking, in a period of suburban flight away from the center of cities. So most of apartments were more suburban style, with lots of surface parking and garden style apartments. Post was building in places like Sandy Springs; there was nothing as far out as Alpharetta. That was forest land back then. We were in Cobb County, that is what suburbs were back then.
Today, you have this resurgence of people moving back into the central city and that has been going on 20 years. So we have more urban products, high-rise rental products which we didn’t have that much of at all back in 1970s.
Q: Some other companies have recently announced several high-rise apartments downtown near 12th Street. Are we starting to overbuild again already?
A: I think those things won’t deliver new units until, at the earliest, 2012. So they won’t bring a lot of product on for a while, and they are counting on continuing growth in the population and in household formation. I think they will do OK. I think they will be successful because nothing is being built now in Midtown.
Our market is growing by virtue of the fact that, for one thing when you step back and look at the population of Atlanta and the U.S., the U.S. population grows by one percent a year and Atlanta grows faster than that. We do add new households in this market every year, so we are adding households and not growing our housing stock. That means we are seeing market occupancy for apartments ticking up gradually.
Q: Looking toward the future, what is going to change Atlanta?
A: [Stockert is on the Atlanta Chamber’s transportation committee helping to promote the upcoming vote on a regional penny sales tax to fund roads and public transit.] That is one thing that concerns me deeply. We have not made the same sort of investment in transportation infrastructure that some of our competitors have. I see it in spades when I travel to Dallas, which has done a great job building new infrastructure. It’s no secret why Dallas is attracting a lot of job growth. You go Dallas and it is exciting. There is a lot of transportation infrastructure construction in there and we have to get back on that track. This referendum is incredibly important. If we show we are committed to solving our problems, that will make a big difference.
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