From rural towns to suburbs and cities, CT is getting a wave of new apartments

With more than 700 new apartments in and around central Connecticut, another 1,400 under construction and better than 3,000 more being planned, 2024 shapes up as a pivotal year in the region’s housing market.

Dozens of new apartment complexes are being built or about to start construction in towns from Mansfield and Windsor to Bristol and Farmington, in some cases potentially changing the skyline of urban downtowns or altering the makeup of small-town populations.

But challenges in the real estate and development markets could become a challenge in 2024 for some communities eager to get new multifamily housing, new residents and a bigger tax base. It may be a make-or-break year as many builders calculate whether they can still afford to go ahead with plans they drew up during easier times.

Construction inflation mixed with high interest rates in 2023 served to curb the wild frenzy of development proposals that hit towns from 2020 through 2022, so even the most popular communities are no longer getting new pitches every few weeks.

With the cost of borrowing money more than twice what it was, builders are also reconsidering whether plans that won municipal permits in 2022 or 2023 are still feasible to build.

“The supply chain issues are pretty much behind us, but the costs of construction haven’t gone down at all. And the cost of money has gone up, it’s in the 6 to 7% range,” said Tony Valenti, a principal in the Southington-based Newport Realty Group. “We’re pretty efficient builders and we buy our land right, so we’re fine. But it could make some people’s projects go sideways.”

Even so, apartment construction has become the heart of housing growth in Connecticut, where the bottom largely fell out of the traditional subdivision market. Single-family houses are still vastly predominant, but at least for now contractors are putting up three- and four-story multifamily projects rather than new capes or ranches.

Communities across the state have seen an almost unprecedented interest in new market-rate apartment complexes, almost all with contemporary architecture, energy-efficient design and appliances, and a heavy focus on amenities like dog parks, fire pits, courtyards and fitness centers.

“East Hartford is trending lower in age, we’re getting more young professionals who work at Pratt or Coca Cola or in downtown Hartford, and they want that one-stop, live-work-play experience,” Mayor Connor Martin said.

“A lot of my generation doesn’t really want to take on the maintenance that comes with home ownership, we want to come home from work, grab a bite to eat, maybe exercise or get some recreation without the burden of maintenance,” said Martin, 32.

His community is on the verge of getting the biggest new residential development in modern memory, and it’s all apartments. Developers Avner Krohn and Brian Zelman are scheduled to break ground in the spring for Concourse Park’s more than 400 apartments, East Hartford’s largest new multifamily complex in a half century.

“Concourse Park represents a level of housing we just haven’t had in East Hartford. We have either affordable or low-income apartments, or single-family houses,” Martin said.

Like community leaders in Bristol, Windsor and elsewhere, Martin sees the ripple effects of large-scale apartment development revitalizing commercial centers. They see hundreds of new tenants who can afford market-rate rents as a major benefit to existing stores, restaurants and service businesses — and an attraction for new ones.

Zelman and Krohn make that a centerpiece of their proposals in the state, which typically include long-term local tax incentives to supplement their bank financing. Krohn found an especially receptive audience in New Britain, where the downtown had been shabby and stagnant for decades.

His pitch to build contemporary, attractive mid-rise apartment towers with high-end features like quartz countertops, stainless-steel appliances, glass and tile bathrooms, Juliet balconies, custom kitchen cabinetry and a curved-glass facade would have seemed unthinkable in the downtown New Britain of just a decade ago, but Mayor Erin Stewart lobbied the council to back his plan for The Brit in 2021.

With construction of the six-story building nearly done, those 107 apartments will be leased this winter. Krohn now has two similar projects The Strand and The Highrailer under construction nearby, and other developers have more than 300 new apartments in the works in New Britain.

When Krohn’s Jasko Development broke ground on The Strand in September, Stewart said the wave of gleaming new apartments was driving the city’s revival.

“During urban renewal, when all these businesses closed down and all the apartments left, no one wanted to live downtown. That’s when downtown New Britain became desolate. Now project after project, we’re moving forward with getting people back,” she said.

In Bloomfield, Krohn and Zelman opened The Residences at Wash Brook in mid-2023 and reported strong demand for its 111 units that lease for $1,850 to $4,100 a month. Some residents questioned whether there would be a market, but Zelman said in December that it’s strong.

“When people ask ‘Who is going to rent all these new apartments,’ remember that relatively speaking we don’t have a lot of new product in Connecticut. As a percentage of the overall housing market, new rental units are still very small,” Zelman said.

“Many of our tenants are moving from out of state for health care jobs or insurance jobs, or to relocate closer to families. Every product is different and we do market studies before we start a project,” Zelman said.

Valenti sees a still-powerful market for studios and one-bedroom apartments, but cited recent challenges in the two-bedroom market. His Newport Realty has reconfigured its Steele Center project in the heart of Berlin to add smaller units and scale back the two-bedroom ones; the company will start building 50 there in 2024.

“We’re not seeing the velocity of renters like we saw a year ago. I could lease out one-bedrooms and studios all day long, but there are headwinds now with two-bedrooms,” he said.

At least for now, West Hartford is among the strongest markets in the region. Krohn is bullish on The Byline, a 48-unit luxury apartment building he’s constructing along Farmington Avenue in the town center, and developers plan a 172-unit complex on the grounds of the former Science Center a block or two away.

Overall, the town stands to gain more apartments over the next two years than any of its neighbors: Officials in the fall said more than 1,500 units are being built or in the planning.

Work is underway in Bristol, Newington, Middletown, Rocky Hill, Farmington, South Windsor and Windsor for projects that will ultimately bring more than 1,000 units, and Avon anticipates the start of work on complexes at 20 Security Drive and the expansion of Avon Mills — that will add nearly 440 more.

Smaller communities are adding multifamily units, too. Contractors in Portland have razed the remnants of the Elmcrest Hospital, where the first phase of the sprawling Brainerd Place is expected to open in 2024 with 99 apartments — to be followed by another 141 the next year.

Fueled by demand at the University of Connecticut, Mansfield is on track to get more than 1,600 apartments and private dorm rooms over the next two years.

And relatively rural Granby is getting Station 280, where the Burkentine Real Estate Group expect to begin leasing the first 78 of 235 apartments in the first quarter of the new year. The project will be a mix of one-, two- and three-bedroom units.

“We see a lot of young professionals and families that lease these types of homes,” said Michael Burkentine, co-owner of the Pennsylvania-based Burkentine Real Estate Group. “It’s great for commuters and work-from-home lifestyles.”