Developers face tough market on Long Island

July 29, 2010 04:00PM

Alexander Goldfarb and Long Island

Long
Island may possibly be the toughest market in the country for apartment
development, though there is a lot of opportunity for building there,
residential real estate experts told the Wall Street Journal. The
housing stock is largely single-family homes, with apartment buildings
representing just 17 percent of the inventory, compared with 35 percent
in Bergen County, and 38 percent in Westchester County. AvalonBay, the
only public developer building apartments in Long Island, charges
thousands of dollars a month to renters of all ages, from college
students to seniors looking to downsize from larger homes. “There is a
very strong anti-renter sentiment that seems to exist on ‘The Island’
that we do not see in other REIT markets,” Alexander Goldfarb, a real
estate investment trust analyst with Sandler O’Neill + Partners, told
the Journal. Others agree. Home Properties, which owns older apartments
in the area, isn’t pursuing new construction there because it isn’t
“new apartment development-friendly,” said Charis Warshof, vice
president of investor relations at Home Properties. “There is a
scarcity of land; it takes a long time for approvals,” he added. [WSJ]