January 4, 2021
A department store that closed in West Palm Beach is being replaced by a luxury rental apartment complex, not another retailer.
The site of a former office building on the Intracoastal Waterway in Boca Raton is being transformed into a luxury condominium, where units cost millions of dollars each. And the owner of a Boynton Beach shopping center, where a large tenant shut down during the coronavirus pandemic, is working on a plan to turn part of the development into multi-family housing.
The nearly year-long coronavirus pandemic decimated the county’s tourism and hospitality industries, but it hasn’t hurt the county’s dominant real estate industry.
In fact, the pandemic has fueled strong demand for the new homes and apartments slated for completion during the next two years, and beyond, as investors and builders snap up any piece of land they can find to build more housing.
The market for new homes and apartments in Palm Beach County already was robust prior to the pandemic. That’s because the county is a popular destination for people moving here to escape cold weather and high taxes in the Northeast and Midwest.
But the pandemic created even more interest in the Palm Beach County homes, especially from wealthy residents fleeing crowded, urban cities outside the county and state.
“It’s a lot easier to socially distance when you can pull into your driveway and walk into your home, rather than get into a dense elevator,” said West Palm Beach housing analyst Brad Hunter.
In addition, the acceptance of work-from-home arrangements means people can live where they want, a trend Hunter said is “here to stay.”
For builders of new homes and apartments, the pandemic has turned housing projection on its head, forcing experts to rethink demand.
Job growth used to be a major tool by which developers decided where to build, said Steve Patterson, president of Related Development, an arm of Miami-based Related Group, builder of numerous apartment and condominiums in South Florida.
But with the pandemic, “domestic migration from the northern states has played a huge factor,” especially since many people moving still can work from their homes, Patterson said.
That’s not to say Palm Beach County’s housing developments are being built now simply because of the pandemic. “The decision (to build) was made years ago,” Patterson said. “It’s a very time-consuming process.”
But this prior planning means homebuilders not only have skill on their side, they also have luck, thanks to the unexpected pandemic-fueled demand for residences.
The crop of new homes comes at a difficult time for many existing Palm Beach County residents.
Some people living in houses or apartments face the prospect of homelessness because they cannot pay mortgages or rents, community leaders say. The pandemic has slammed hotels, restaurants and retailers, leading to job losses, or slashed wages or hours.
Rental eviction moratoriums in place will expire either at year-end or early in 2021, depending on federal efforts to craft another coronavirus relief package. When rental moratoriums end, renters will be responsible for months of back rent, which many people will not be able to pay.
Some home builders, including GL Homes, already have given money to homeless services’ agencies such as The Lord’s Place to help keep people from winding up on the streets.
“We are gearing up for 2021, which is going to be a year of helping people stay in their homes,” said Diana Stanley, chief executive of The Lord’s Place. “We’ve got to do everything in our power to keep them housed.”
Stanley said she understands the demand for new housing. But she also worries the county does not have enough affordable housing, although there is some small progress on this front.
Housing Trust Group, one of the nation’s largest developers of affordable homes, just broke ground on Flagler Station, a new $33 million affordable apartment complex in West Palm Beach.
Apartments at Flagler Station will be set aside for residents who earn at or below 30%, 60%, 70% and 80% of area media income, with rents ranging from $393 to $1,689. The 94-unit property is scheduled for completion in February 2022.
Still, for many out-of-towners moving to Palm Beach County for the first time, housing is cheap compared to the high prices paid for houses or apartments in states such as New York, Massachusetts or Illinois, Patterson said.
That’s a boost for Related Group, which is building four rental apartment complexes in Palm Beach County. These projects alone will add 1,405 new apartments to the county during the next two years.
Related is building the second apartment phase of Water Tower Commons, a mixed-use project in Lantana.
Manor at Lantana started construction in September and will feature 348 units, ranging in rent from $2,100 to $3,200 a month, when the project is finished in November 2021. Related previously built Town Lantana, a 360-unit apartment complex at Water Tower Commons that was finished in December 2019.