Watertown landlords restore old apartment buildings to compete with newer options

WATERTOWN — City landlords have made major renovations to multifamily houses during the past five years to compete with new housing stock built in the area.

And it’s a trend that City Code Enforcement Supervisor Shawn R. McWayne said is expected to continue if landlords want to remain in business without dropping rental rates.

City residents now have an abundance of new, affordable rental options to choose from in the area as a result of the housing boom during the past five years. Because of the market shift, some tenants have elected to migrate from older to newer apartments.

Landlords “will have to do major renovations if they want to stay in the rental business — you have to keep up with the times,” Mr. McWayne said Tuesday. “If an individual is paying $600 a month for an old, beat-up apartment, they’ll choose to move into a brand new apartment for $650 or $700.”

Mr. McWayne said major renovations to apartment houses in the city have been done by “at least a handful or more” of landlords during the past five years.

Charles E. Bates, for example, has renovated six apartment buildings and a single-family house along a block-long section of Union Street.

“He redid the whole street and brought the housing stock back up,” Mr. McWayne said.

Mr. Bates, who was not available Tuesday for comment, is now renovating a commercial building at 320 State St. by converting the two upper floors into seven apartments. Adam Brown, owner of A. Brown Properties in Watertown, has renovated a handful of apartment buildings over the last five years. Mr. Brown, who did not return a call Tuesday seeking comment, has bought several apartment buildings that were destroyed by fires and renovated them, Mr. McWayne said.

“He’s bought quite a few burnouts,” he said, citing, as an example, the renovation in 2014 of an apartment building at 165 Winthrop St. that was badly damaged by a 2011 fire.

Other landlords, in contrast, have been unwilling to invest in major renovations, Mr. McWayne said. But if they don’t choose eventually to do so, “they are either going to sell them or walk away from some of them because they don’t want to be tied down to the hassle,” he said.

On Tuesday, Watertown home-improvement contractor Raymond A. John Jr. was completing work with two other crew members on a duplex apartment building at 339 William St. He said the building, owned by Brien M Spooner, is getting a complete makeover. As part of the project, his crew is responsible for replacing the siding panels, trim and windows.

“I am seeing more houses being redone in the city,” Mr. John said, adding the project is the fifth apartment house his crew has helped renovate this season. “We’ve been doing them one right after another.”

The housing market in the Watertown area, which had relatively low vacancy rates in the 2000s, has been transformed by a housing boom over the past five years to meet the demand for housing by Fort Drum personnel.

Highlights include three large-scale complexes: the 296-unit Beaver Meadow Apartments by COR Development Co., Fayetteville, behind the Target store off outer Arsenal Street; 394 market-rate townhouses by Morgan Management, Pittsford, at the Preserve at Autumn Ridge off County Route 202; and 200 units by Norstar Development USA, Buffalo, at Creek Wood Apartments on the city’s north side.

MIGRATION TO NEW UNITS

Occupancy rates have dropped for some of the city’s landlords because tenants have moved into new apartments.

Several rental properties recently acquired by Washington Street Properties, for example, offer newly renovated apartments at rental rates that primarily range from $500 to $700 a month, said Brian H. Murray, owner of the real estate firm. He said the majority of the firm’s rental properties are now fully occupied.

Some tenants have migrated to the firm’s rental properties from older apartment buildings, Mr. Murray said. It took only two months, he said, for tenants to fill the 48-unit Arsenal Street Apartments complex, which opened in May. Almost all of the apartments at the former Rodeway Inn hotel are studio units, which range from $495 to $645 a month with utilities included.

“The renters there have been primarily young working people in town,” Mr. Murray said, adding that some of them probably migrated from older apartments. He said while occupancy rates have dropped for some landlords in the city, they’ve remained strong at the firm’s rental properties.

“When you have more options, people are going to migrate to get a better value and a better price,” Mr. Murray said. “We want to keep rents low and provide nice, clean apartments at affordable rates.”

Mr. Murray said the firm’s rental prices are strategically lower than those offered by large-scale rental complexes — such as the Preserve at Autumn Ridge — that mainly cater to military personnel. He said only about 20 to 25 percent of tenants who occupy the firm’s rental properties are military personnel.

Mr. Murray said his firm has avoided competing head-to-head with large complexes by offering apartments at a lower rate. He said those new complexes have been compelled to set rents at higher prices because of the high cost of construction. Military personnel are flocking to those complexes because they get a basic allowance for housing to cover the cost.

“Most of the properties around the periphery of the city are targeting military renters, but we’re not,” he said. “We’re choosing properties desirable to natives and aren’t setting our prices based on the military’s BAH.”

 

By Ted Booker, Times Staff Writer