Are Atlantans ready to rent luxury high-rise apartments?

Urbanistindustry insights, real estate29 Comments

for rent ~ what now, atlanta?

They should, argues Urbanist, guest columnist, because it’s the only way Atlanta will become a great city.

It’s been proven Atlantans will purchase high-rise condos but will they rent high-rise apartments?

There’s only one way to find out.

Midtown is expected to see two separate high-rise luxury apartment buildings — a 22-story and a 23-story project — break ground towards the end of the year.

Now, after my article acclaiming the benefit of apartments and criticizing single-family homes in urban areas, I thought it might be best to explain why I believe that to be the case.

Apartments can provide the city of Atlanta with something it drastically needs: dense populations of diverse people.

Apartments bring density to cities by allowing more people to live in closer quarters with each other without requiring down-payments or mortgages and they provide liquidity to lifestyle. Apartments attract people who may start out as temporary residents, but often become permanent ones.

But what kind of benefits does density provide?

Safety: Density means more people in an area which means more eyes and feet on the street which creates a passive sense of security that is often more effective than active policing.

Sustainability (no relation to socialism, like some of the less intellectually savvy would like to believe): Living in closer quarters and in smaller spaces means less energy use. Rarely do people rent three bedroom apartments when they will only use one of them. Often do people buy large homes with multiple unused rooms. More efficient usage of space means lower energy bills. Denser areas also lessen the requirement of a car, as more necessities are within walking distance.

Demand Economics: The more people in an area, the higher the demand for places to eat, drink, socialize, work, and relax. In a relatively free-market economy, the theory goes that entrepreneurs will recognize this demand and create the commercial options to sate it. More businesses equal more jobs. More jobs equal more prosperity, and so on.

Apartments typically introduce diversity into neighborhoods as well.

Apartments can be constructed/renovated as A, B, C, or D Class buildings to appeal to a variety of different economic demographics. Apartments can also be built to mix economic demographics within the same building (which has been done successfully in major cities all over the world for decades, despite the uninformed opinions of some).

Diversity, like density, provides it’s own host of benefits:

Social Expansion: Interacting with people from different places and economic levels, with different ideals and different backgrounds, provides us a more expansionary view of the world. If you live in a trailer park, or a suburb, restricted to a narrow range of incomes, the majority of your social interaction is limited to a narrow set of people and beliefs. It’s not a positive thing….unless you like FoxNews.

Demand Variety: The same demand that will drive the creation of more business will also drive the creation of more diverse businesses. With more apartments, you will see an influx of a various groups of people, all with their own demands, and businesses will meet these. It’s no coincidence that the densest places in the world have the highest variety of commercial options.

Urban apartments can increase the social connectivity of a badly fragmented city and help create a center of energy and activity rather than a bunch of small, disconnected, semi self-sufficient pockets.

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UrbanistAre Atlantans ready to rent luxury high-rise apartments?

29 Comments on “Are Atlantans ready to rent luxury high-rise apartments?”

  1. Kevin Morrow

    Of Course high-rise apartments will rent! Look at the large number of high-rise rentals we lost to condo conversions.

  2. Tim C

    Agree with the broader concept but diasagree that multiple economic classes in the same building sharing the same amenities works.

    Rich people do not want to live next to poor people. Period.

    Part of it is (perceived) safety, whether founded or not.

    Part of living in an exclusive building is that it is aspirational. Look what happened to the Jaguar brand when they started making $30K Jags….

  3. Bryan

    I’m confused, your guest columnist is supposed to be an expert and he’s worked (past tense) in a variety of investment banking and private equity roles raising capital for commercial real estate yet he has a passion for urban planning, city planning, and sustainable development? Seems odd to me. Those are very different areas of expertise. Stanford Cardinal must be right, he must be an underachiever.

  4. Mark in mid-town

    You make some interesting points, though you took a gratuitous shot at Fox News viewers that shows you’re not exactly as open-minded to diversity as you would have us believe.

    Anyway, one of your points is that more density means more safety. That may be true in some scenarios, but completely untrue in others. There have been plenty of places where higher density has meant higher crime rates. It all comes down to the quality of people living in an area, whether in a dense population setting or a setting that lacks density.

  5. JT

    Ok What Now Atlanta, you have lost me. Let Urbanist write one post, fine, be completely oblivious to the biggest news story in the past 6 months in the city you cover, one that was all over every website, newspaper, and newscast both local and national ( the loss of a major professional sports team)…fine again, let Urbanist again twist a relatively good idea into something exclusionary, insulting, and degrading, you have now joined the content ranks of your Internet counterpart, Perez Hilton. Apartments are an excellent and needed component of a vibrant urban landscape but to say there is no place for single family or condo makes it seem as though Urbanist is saying there is no place in his urban utopia for people that choose to be adults, marry and have children. Perhaps urbanists idea that families be shunned to the suburbs for deciding to procreate is the reason there are suburbs to begin with. I will always live intown, including when I have a family and just because i choose that doesn’t mean I should be incapable of giving my children the space they need. Atlanta is not New York and that’s its appeal to many, you have great urban amenities with a much more liveable city. Atlanta’s appeal is that you can have a house with a yard two blocks from the skyscrapers Midtown. If you want it to be NYC, then perhaps you need to go back to NYC. Atlanta is Atlanta and many of us love it for that very reason. By your logic our great intown neighborhoods like the Highlands, Inman Park, Candler Park etc. Wouldn’t exist. I can not for the life of me figure out why you are here when you hate all the very things that give Atlanta it’s identity.

  6. UghNotHim

    Can this blog please move on beyond this Urbanist loser? I mean really this douche needs to start his own blog. Most of your readers don’t like this character or anything he says.

  7. Skeptical

    I too am skeptical about this guy. Why would someone with investment banking or private equity experience miss the whole enchilada? He fails to mention the biggest issue, the economics. It’s easy for one to spout their urban planning ideas, concepts, etc. I mean seriously, no sh*$ a city needs more rental apartments for continued growth. Is that really news to anyone? If he was worth a d@mn, he might try explaining the economic viability of executing it. Show me how it makes money. Quite simply, he can’t.

  8. VatechinATL

    Absolutely!! The proposed high-rises will offer another option for those interested in in-town living! This is a win for both, Midtown and Atlanta. True Atlanta is not NYC; however, the additional density, coupled with the fact that a majority of the potential renters will be analysts, accountants, or attorneys, bodes well for Midtown’s retail aspirations from North Ave. to 14th. I applaud Selig and Novare for believing in our great City. This is a game changer. Hopefully, this will have a spillover effect and lead to future development along Spring Street and West Peachtree.

    Additionally, the two towers planned for “Buckhead Atlanta” will be good for Buckhead. This to will add density and re-activate the area once known as the Village. Although I question the one-story buildings included in Oliver McMillian’s plan, its good to see this moving forward.

    Cousins has dropped a ton of money in Buckhead with it’s Terminus project. I believe its site at North and Peachtree (the old Wachovia building) is pivotal since it represents the gateway into Midtown. Really looking foward to seeing something rising on this site!!

    Luving Atlanta!!!

  9. Rent Hiker

    The apostrophe should not be in “Atlantans” in the title or body of the article. That’s a 2nd grade grammar error!

  10. BDM

    Gotta love the jab at FoxNews … wow … I’m loving the sermon on promoting diversity! I agree that apartment buildings add to the vitality of life for Atlanta, but people want to live a certain lifestyle with similar-minded people and within a related income bracket … especially if they are investing their own money for their own happiness (renting or buying). Plain and simple …

  11. frankly

    @ Kevin THANK YOU!

    I don’t understand why this urbanist character keeps spouting the same dribble over and over as if he discovered the holy grail of urbanism. The fact of the matter is that due to the historically low interest rates and gov’t induced junk loan programs EVERYBODY was getting a mortgage instead of renting. Tons of rental units in the city were converted to condo and projects that were initially apartments (such as Metropolis) changed to condo.

    And as I pointed out before, THOUSANDS of apartment units have been built intown in the last decade NOT ONLY CONDOS as he continually implies.

  12. Harry

    I agree that this blog needs to be more informative than snarky. Urbanist has some good points, but looses me with his snarkiness. Keep him to commentary rather than features, Caleb.

  13. Urbanist

    @ Stanford – more baseless accusation from someone with zero value-add

    @ Tim – Buildings with a portion of the units set aside for tenants that are considered “lower income” have a long history of success in a lot of different cities. This typically means a portion of the units (most often 20%) are set aside for tenants that earn below a threshold of the AMI. The “affordable” units are often not as nice as the units leased at market rate. Keep in mind that in certain areas, the AMI is at a level where someone making below 50% of the AMI isn’t necessarily “poor”.

    @ Bryan – you are aware that investment banks raise money for real estate related entities, right? How do you think REIT’s sell shares? How do you think groups like Blackstone financed a large part of their acquisition of Hilton Hotels? They hired an investment bank. I’ll give you a quick lesson in the fundamentals of private equity too. Private equity firms invest and buy undervalued assets. That can be a company, or a piece of real estate. Investment Banking – i.e. providing capital to real estate operating companies; Private Equity – buying commercial real estate, adding value, and reaping the returns – an extensive career in both these fields enables me an experienced voice on the subject.

    @ Mark – I think you’re confusing density with over-crowding. Over-crowding often leads to problems, density rarely does.

    @ Skeptical – I’ve said it in a lot of other places – TO keep it simple (since I clearly have to) urban apartments bring more people into an area, more people spend more money, more money spent means more businesses attracted to an area, more businesses attracted to an area means more development, more development means more tax revenues at the property level as well as the revenue level. Get it?

    @ Frankly – I’m aware of this, and as I’ve pointed out multiple times before, Atlanta still has a significantly lower number of urban apartment options than most every other major metropolitan area. Atlanta doesn’t have nearly as large of an “urban” area as a lot of other major cities, but I think a reason for that, is due to the fact that there aren’t enough viable urban residential options in this city. That’s no holy grail, it’s just an observation of one of the many catalysts behind Atlanta’s problems.

  14. Urbanist

    @ Bryan – you made the comment that investment banking and PE were “very different areas of expertise” from urban planning, sustainable development, etc. In doing such, you made it clear that you needed someone to hold your hand through the obvious connection between a career in i-banking / PE and sustainable development, urban planning, etc. Oh, and one of the most prolific and influential voices in urban planning over the past 60 years was that of an individual with no formal education on the subject, but simply a passion for smart design and development.

  15. David K.

    The answer to this question is “yes.” I’m not even sure why this is even being debated. Demand for high priced rentals has been strong and developers have mostly built mid-rise buildings to meet the demand. Gables Midtown and The Heights Armour come to mind first, but there are others in Midtown with rates starting in the low thousands.

    Also, we’re in a time where lots of upper income households (single, married, and families alike) want to lease instead of buy for a variety of reasons. Their reasons are unimportant, but they want to rent something as nice as where they were living when they owned it. These high rises should meet these expectations.

  16. Clicker

    Another insulting elementary school lesson from the clearly politically biased urban policy ‘expert?’

    Followed by similarly snarky follow-up responses by said expert?

    No thanks.

  17. Jibali

    Atlantans have been renting “luxury high rise apartments” for years. Does Urbanist not know about the Mayfair? Or any of the number of other ‘luxury high rise apartments’ which were converted to condos when the market was up?

    Doesn’t nearly everyone know that they are building apartment buildings because condos wont sell? And as soon as the market recovers enough to where the developers can sell and cash in, they will be converted to condo’s and sold?

  18. wss

    The idea that we need density to have a vital city is absolutely right. It’s not even controversial. Additionally, very few experts would dispute that middle class population density makes for safer cities. Most of the sad news on this blog about store and restaurant closings would go away if more people lived here. More apartments would really help. Even if they were ugly or not ideal in some other way. I’m just happy to see them being planned.

  19. Suburbanist

    Density=safety? Criminals are opportunists, thus they are attracted to areas that are dense with people, thus allowing multiple opportunities/choices to select from. They are not intimidated by “more eyes and feet on the street”. Or is the author stating that people feel safer walking down dark, populated alleys versus dark vacant alleys? If so, duh, but that’s an odd “benefit” to list as a reason for more apartments/density. While generally an advocate for more density, without a better mass transit system, be careful for what you wish for. Not all of these residents will be working across the street from their luxury high-rise apartment and will need to commute to work via our already congested streets. Density works in NYC, Chicago, London, etc… because of the vast network of subway lines. We all know the problems with MARTA.

  20. Urbanist

    @ Suburbanist – how often are crimes committed in front of groups of people? When you have densely populated neighborhoods, and more “eyes on the street” it acts as a countermeasure to criminal activity. Criminals may be opportunists, but they aren’t people that are interested in being caught. This is the reason most crimes happen in poorly lit, poorly populated places (like alleyways). There are a lot of those in Atlanta.

    Diversity in the type of development also plays a part, but I think density is more important.

    Yes, you’re right, re: MARTA has problems. However, the wise thing to do would be to develop a Marta system that acts as a precursor, or at least a simultaneous, transportation link between new areas and areas that are already connected…

  21. Suburbanist

    @ Urbanist– A criminal is more apt to lie in wait for his next victim in an area ripe with potential victims (urban) vs an area with few victims from which to choose (extreme example- desert). Do not fall on the sword defending this point as it will leave no one to defend your other, more valid arguments for density:). Perhaps we can agree to meet in the middle and say that with proper development controls and good planning principles density MIGHT be able to stem criminal activity.

    As for MARTA, hasn’t that ship sailed for Atlanta? The original planners for that system failed miserably and I don’t see how it will ever be successful in serving as a true transportation alternative in Atlanta. Yes, the lines could be extended further north, south, east, or west, but single, uni-directional lines would provide what real benefit for Atlanta?

  22. Atlantan

    Caleb, as a new follower, the content from your guest is losing my interest. It’s elementary and very amateurish. Hope you can improve your standards. Good luck!

  23. Volkan

    Suburbanist, you are wrong and Urbanist is correct on the crime issue. Density is a deterrent. If you want to read up on the topic and why that is the case, Google the following term: Routine Activities Theory (RTA). it explains that in order for a crime to occur you need three things; a motivated offender, a viable target (victim), and a lack of capable guardians (i.e., no people around, no police, no cameras). Urbanist is correct in stating that density increases safety. In areas where there IS density and high crime (say in a poor urban development) it is again because of a lack of capable guardians (i.e., there may be people around but they are unwilling to call the cops, or the cops do not patrol that area). The key term is CAPABLE guardians. Another term to Google is Crime Prevention Through Environmental Design (CPTED), which talks about planning and physical space. Manhattan is a very safe place, because the city and developers take advantage of the principals of RTA and CPTED, and these prinicpals have been proven to work in cities all over the world.

  24. Jayde

    If you map actual crime in the overall metro Atlanta area (many sites where you can do this now), you don’t find density = safety. It’s the opposite in most areas. Total crimes are lower in areas with less density. Perhaps Atlanta is just perverse that way and defies all the urban planning theories, but there you have it.

    At least in Atlanta, it’s not really about density, or about apartments vs. condos vs. single family. It’s all about economics. Cheap housing of any kind = more crime. Mid-range to expensive housing of any kind = less crime. You can see that pattern in statistics all over the Atlanta metro area, including various suburbs, even down to the street/block level in many cases.

  25. Urbanist

    @ Volkan – that about says it, thanks. When you look around the world at some of the most dangerous places, it isn’t density that defines them, but rather things like desolation or, as you said, the lack of capable guardians.

    @ Atlantan – perhaps you can offer something more than substantial than a blanket condemnation that doesn’t criticize anything in particular? Otherwise it’s just an empty potshot..

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