Connecticut Realty Trust CEO Bard H. Kligerman and Krown Point Capital principal Reggie Kronstadt said they are looking to build 19 single-family homes in Granby, where some, or potentially all, of the dwellings will be available for rent rather than sale, an unusual sight in the Northeast.
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Since last summer, buyers have been scooping up single-family homes in Connecticut at a pace not seen in years, and they’ve been willing to pay a premium amid booming demand.
It seems clear that the COVID-19 pandemic has led to more people, whether they already lived in Connecticut or were relocating here, wanting additional space and comfort.
But who says they have to buy?
That’s the question a Fairfield development duo is asking as they target a major housing project in the northern Hartford County community of Granby.
Connecticut Realty Trust CEO Bard H. Kligerman and Krown Point Capital principal Reggie Kronstadt said they are looking to build 19 single-family homes just off Route 202 at 2 Murthas Way. But the twist is some, or potentially all, of the dwellings will be available for rent rather than sale.
Building single-family rental homes has become common in southern states like Texas, Oklahoma, Arkansas and Louisiana, according to the National Association of Home Builders, but it’s unusual in the Northeast.
“What we’ve seen across the country is a tremendous amount of demand for single-family rentals,” explained Kronstadt. “We want to be in this market because we think it has room to run.”
Jim Perras, CEO of the Home Builders & Remodelers Association of Connecticut, said other area builders are also exploring so-called single-family built-for-rent construction.
“Anecdotally, I’ve heard recently from a number of my multifamily and single-family developer members that are exploring this submarket, many for the first time,” Perras said.
That’s driven in part by changing demographics, Perras said. The age of first-time homebuyers continues to climb and some young people don’t want to be tied down to a property, but still prefer the space and privacy of a single-family home.
“Similarly, empty nesters who are in the midst of downsizing may want the flexibility of renting without the responsibility of maintenance and upkeep, but still want the perks that come along with living in a single-family home,” Perras said.
However, the economics don’t always work, he added. Single-family lots often cost too much, and zoning restrictions on density can also be a challenge.
Kligerman and Kronstadt declined to say what rents may be on the proposed rental homes.
An array of housing options
Helping drive the decision by Connecticut Realty and Krown Point to build the rental homes (they are also proposing to erect 28 rental duplexes) is the fact their adjacent multifamily property has leased up quicker than expected.
The two firms paid $33.3 million last May for the Grand Luxury Apartments at 3 Murthas Way, which was developed and built several years ago by Danbury-based Upstream Properties.
The apartment development was 45% leased at the time of the deal, but occupancy has since reached about 90%.
“We came in and bought it not knowing when we were going to do [additional nearby development],” Kligerman said. “We wanted to test the market and understand the demand profile and it’s been extremely strong. I don’t think any of us could have expected the activity at this level.”
“We’ve seen incredible demand for existing multifamily, but we’ve also heard from a lot of people expressing desire for more private space, and to hit a price point that fits the desires of every person from all the different economic backgrounds,” Kligerman added.
Before selling in February the site of the proposed rental homes (at 2 Murthas Way) for $3.1 million, according to town records, Upstream Properties had local zoning approval to build 50 single-family dwellings there.
Connecticut Realty Trust and Krown Point Capital are now asking the town to approve a permit modification to instead build 19 single-family detached homes and 28 duplexes.
“This is kind of our proposal to offer every aspect of rental living that you could possibly have,” Kronstadt said.
Abigail Kenyon, Granby’s community development director, said the permit modification is headed to a hearing with the wetlands commission this month and she expects an application to reach the planning board soon.
The developer’s intent to rent some of the proposed homes is new, she said.
Kenyon said she couldn’t speak to the demand for such rentals, but single-family homes have been selling in town.
“When it comes to single-family housing, we are seeing not only entry-level buyers but folks looking to downsize into a little less space to maintain,” Kenyon said.
