Rental Health | Apartments are booming in Sanford, keeping up with housing and growth

More jobs and more people have meant for construction of single-family homes in Lee County, with two major subdivisions on the way. Also on the rise are apartment complexes and town homes, a sign that Sanford is attracting a more diverse population.

By Gordon Anderson | gordon@rantnc.com

If you feel like you’re seeing a whole lot of new apartment buildings going up around Sanford and Lee County in the last several months, it’s not just your imagination.

A group of townhomes at Carthage Colonies is under construction off Carthage Street. The new Hawkins Walk complex is being built where Hawkins Avenue crosses over the U.S. 421 bypass. Sandhill Court Apartments is going up on Pendergrass Road. An expansion into a second phase is happening at South Park Village on N.C. Highway 87.

Speaking in general terms, these projects — referred to as multi family units in industry talk — are popping up in just about every part of Lee County.

And there are plenty more on the way. In addition to the projects listed above, which are all in construction, another three — Kendall Creek Apartments, also on Pendergrass Road, Southeastern Development Apartments on Dalrymple Street in Jonesboro, and Pine Reserve Apartments on Center Church Road in Tramway — have been approved by the local planning department, and two more (Kendale Lofts on Lee Avenue near Kendale Plaza, and another complex on Canterbury Road) are in review.

If all of these projects come to completion, 1,268 multi-family housing units will be added to the 6,106 that already exist in Lee County (think Falls Creek on Wilkins Drive, The Oaks off Amos Bridges Road, Ryder Downs on Pendergrass Road, High Ridge off Wicker Street, and any number of other similar complexes).

“I really do believe that with our projected population growth, these new units will be absorbed,” said Susan Keller, who with her husband Carter owns Rampart Property Management, the company that owns South Park Village and is currently building that community’s second phase. “There’s a great benefit to renting — it allows you to be a little more free, and the generations that rent are typically younger and more focused on experiences.”

Keller added that, like everything else, the way people live has been impacted by the COVID-19 pandemic. In a lot of cases, that means apartment living is desirable now more than ever for a good number of people.

“For so long, the focus was on places like Raleigh and Durham, and the closer you could be to the downtown areas the better,” she said. “And for that you had to trade some amount of space. But now, a lot of people are less likely to want to live that close together, and for people that have the ability to work remotely, it doesn’t matter where you are. So all the sudden, an apartment complex in a place like Sanford looks more attractive, especially if we can offer other amenities, like space to work from home, as part of your experience.”

KEEPING PACE

While the number of local apartments stands to increase by about 20 percent in the coming months, it doesn’t appear that the overall percentage of multi family units compared to single family will increase at all in the coming months and years — with at least 2,700 single family units either under construction, approved or in review, that balance (currently at about 77 percent for single family versus 23 percent for multi family) will remain essentially the same assuming all of the proposed constructions go forward. Instead, signs point to the apartment boom as really just a function of one sector of the housing industry keeping pace with overall growth.

John Ramsperger, who owns Sanford Real Estate, echoed Keller’s point about the profile of the “typical” apartment renter, if there is such a thing.

“Going back to the 2008 recession, that made a lot of the population much more transient. And the generation growing up now is probably less sold on things like buying a home, and so apartments are very attractive to them,” he said. “There’s also a housing boom going on, and prices are going up. That put (houses) out of reach for some people, and so apartments are there to serve that part of the market as well.”

As of the last decennial Census, Lee County’s population stood at just under 58,000. But that was 10 years ago, and because the numbers from the 2020 effort aren’t in yet, gauging any growth in population is a little difficult.

But there doesn’t seem to be much doubt that Lee County will see some significant population increase — North Carolina is likely to be the country’s ninth largest state when it’s all said and done, and while much of that growth has occurred in more urban counties, smaller ones like Lee are sure to have played their part.

Any influx of new residents is likely to have an impact on the the provision of government services, but Lee County Manager John Crumpton does anticipate the growth in the multi family sector to present any problems or challenges as far as the county’s primary responsibility — public education — is concerned, particularly since apartment dwellers tend to be younger and have less children (or older, with grown children).

“When we looked at what happened with the most recent increase in apartments, we didn’t find a lot of children that came with that. So we’re probably more concerned about the single family units,” he said. “Looking at that many units, it’s hard to project how many kids are going to come with that home. Our county from a population standpoint has been growing one to two percent per year in the last five years. But even with that, you (average daily membership) in the public schools has gone down every year since 2014.”

Crumpton was quick to note that the decrease in average daily membership is largely attributable to a declining birth rate and the upswing in private, charter and home school options rather than any decrease in population.

Instead, Crumpton said he anticipates the private sector will have to react as much or more to population growth than the public sector — whether that new population lives in single family homes or multi family apartment or townhome units.

“If we end up with 10,000 new people, that may mean we need a new school in another ten years, although we currently have capacity in our schools,” he said.

“But there’s also going to have to be a lot of other support in place — that means grocery stores, drug stores, restaurants, and those other types of things people want in a community.”

 

Crumpton said the “break even point” — the cost of a single home at which the county receives more in tax revenue than it spends on services is probably somewhere around $270,000. But applying that formula to apartments is difficult because it’s something of an apples to oranges comparison.

“Obviously everyone can’t have a $270,000 home,” he said. “And many of the people in apartments are single, or older couples who don’t have kids in the schools.”

Keller concurred that the private sector will respond to population growth and said that the growth in apartments logically follows much of what’s put Sanford in the news recently — namely the massive growth in new business and jobs locally.

As has been reported in this space plenty of times before, the past couple of years have seen an influx of new jobs and industry, and there’s plenty of reason to believe more is on the way. If even a fraction of those filling the new jobs come from elsewhere and choose to live in Lee County, they’ll need rooftops.

“All of that news has been very positive,” she said. “But if you want people to live here, there need to be amenities.”

FILLING FAST

Keller said the South Park Village complex has essentially been at 100 percent capacity since opening, and she anticipates that staying the same even with the influx of new units.

“We do have a lot of people from Sanford, but because of our location we also have a lot of people who commute to Raleigh or Fayetteville. We have a significant military population,” she said. “But the need for housing is so great that I really believe there’s room for both (new single and multi family housing).”

Ramsperger, the owner of Sanford Real Estate, said that he doesn’t have any reason to anticipate a slowdown in the boom of new apartment complexes and townhouses going up. In fact, he said he fully expects more.

“Right now, there’s just not nearly enough housing inventory for home buyers in Lee County,” he said. “You literally have 10 or 12 houses on the market while there are 50 or 60 buyers. That’s why things sell in two days and for more than the list price.You’ll see more new single family homes come on the market starting in the summer, and that may pull some renters out of apartments, but I still only see more apartments being built. People who know how to calculate the demand for new apartments obviously see the demand in Sanford.”

For Ramsperger, who came to Sanford from the Raleigh area in the 1990s, what’s unfolding is something he saw in his previous home. And while Sanford will never be as big a city as Raleigh or Durham, it’s experiencing the early stages of a similar dynamic.

“Sanford is not the sleepy little bedroom community it was 15 years ago,” he said. “Many of the ones renting now may not be someone who would want to live in a quiet little cul de sac for 19 years. They’re more likely a commuter. In any case, you have a lot of these apartment communities that have waiting lists where you have 10 or 15 or 20 families who are saying they want an apartment when one comes available.”

Keller said the boom in apartments isn’t exactly unique to Sanford — Rampart owns a similar complex in Pittsboro, which is also at capacity. She added that builders are interested in such projects right now because it’s a good business model.

“From an investment standpoint it’s a good thing to do,” she said. “They hold their value and they produce cash flow.”

But she also said the idea that everyone even wants to own a home isn’t quite correct, and apartments make more sense for plenty of people. She noted that South Park and other similar complexes aren’t considered low-income housing and that potential residents have to provide proof of a certain level income.

“Having these kinds of living options isn’t bringing down the median income,” she said. “There are all kinds of reasons people would rather rent. Maybe they don’t want the big yard, or any yard at all. Maybe they want to move somewhere that’s close to their children and that’s their main concern. But our residents are part of the community. They’re the people you see downtown and on weekends at soccer and baseball games. And we’re glad we can provide these opportunities for them.”