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Landlords feel squeeze from Hillside Commons [The Daily Star, Oneonta, N.Y. :: ](Daily Star, The (Oneonta, NY) Via Acquire Media NewsEdge) Aug. 04--A Franklin Street house regularly occupied by college students is rented usually by April, the Oneonta property owner said, but until Thursday, it had no tenants. Owner Allison Lundin said the only difference between now and last year has been the construction of Hillside Commons, a student apartment complex that opens this month. Lundin isn't alone in facing increased competition in the rental marketplace created by Hillside Commons. But the impact has been mixed, with several rental business officials reporting little or no negative effect, thanks to marketing or lowering some rents and promoting incentives. However, some landlords with one or two properties and fewer units seem to be having a tougher time, they said. The State University College at Oneonta's fall term starts Aug. 25, and landlords said they are cleaning, painting and making other preparations for the arrival of students, especially toward the end of this month. The rental marketplace has about 330 more beds with the introduction of Hillside Commons, a four-story complex at 150 Blodgett Drive developed by Newman Development Group of Vestal. The property is adjacent to the campus of SUNY Oneonta, but the privately developed residence isn't affiliated with the college. SUNY Oneonta projects that 6,065 students will attend this fall, officials said, and under a five-year enrollment plan, growth calls for 6,229 students by fall 2018. "Although we anticipate that more incoming juniors and seniors will live off-campus this year than last, we believe that our residence halls -- with a combined capacity of 3,555 -- will be nearly full," Hal Legg, college spokesman, said. The cost for room and board for 2014-15 is $11,100 per student. The city of Oneonta has about 950 rental units, which aren't categorized by type or location, officials said. Mayor Dick Miller said no major landlords have indicated an adverse effect from Hillside Commons at this point, but they have indicated it will take a year to measure the impact. "The larger property owners saw this coming, got ahead of it and were able to mitigate its impact," Miller said last week. Overall, Hillside Commons' presence has made a minimal negative impact on the rental market, he said, though he has heard that for landlords with smaller holdings, the impact has ranged from none to an inability to fill units. Lizabeth Rose, general manager for Peter Clark Student Rentals and a real estate broker, said at least two independent landlords called to discuss selling their student-rental properties because they don't have tenants and cannot afford mortgage payments. The situation could result in lower property values, she said. Lundin said she doesn't think her situation is unique. Another landlord in the neighborhood who typically has no vacancies still is searching for tenants, Lundin said last week, and she has noticed multiple "For Rent" signs posted in downtown dwellings. Lundin said she and her husband, Tim, have spruced up their three-bedroom rental property at 28 Franklin St., lowered the rent significantly and were open to renting to families, athletic teams or traveling medical professionals. Rent was $1,575 per month as a student rental and they refinanced the mortgage on the property, she said, but they still don't expect to meet expenses and the value of the property they bought in 2007 doesn't meet their investment. The property at one time was listed for sale, she said. On Sunday, the "For Rent" sign at 28 Franklin St. was gone. Lundin said three young professionals -- not college students -- had called Thursday and agreed to rent the house. "We are very happy," Lundin said Sunday. But the changes in the rental marketplace remain a concern, she said. Three major landlords said that, to face off possible negative impacts of Hillside Commons, they took steps to compete, such as slightly lowering rents, offering free cable or other incentives and promoting downtown services. With all, or nearly all, units rented, the efforts have been successful for this year, they said. The city of Oneonta Planning Commission approved Newman Development's $23 million project to build Hillside Commons in May 2013. The next month, the Otsego County Industrial Development Agency approved a payments-in-lieu-of taxes agreement. The 15-year tax abatement schedule calls for Newman Development to pay $92,316 in taxes in the first year, with payments increasing to $418,909 in the 15th year, and in the 16th year, taxes would be $575,301. Last year, some landlords voiced opposition to Hillside Commons based on concerns about possible negative impacts on rental businesses and property values. At least two landlords last week reiterated concerns that local property owners and the community will lose millions of dollars in rental revenues that go to the developer. Newman Development Group has developed similar housing units in other college communities, including Binghamton. In 2012, SUNY Oneonta postponed a townhouse project based on building costs, funding challenges and the proposal that became Hillside Commons, Legg said, and the college hasn't revisited on-campus housing plans since. Last week, two landlords owning multiple properties said that to compete with Hillside Commons, they adjusted rental prices slightly. Another landlord who reported no negative impact from Hillside Commons said the picture may be different next year when the developer joins the cycle to gain student commitments starting in October. Hillside Commons, which has had a leasing office in Clinton Plaza on Main Street downtown since last autumn, is scheduled to open for students Aug. 15. Jeffrey Smetana, a vice president with Newman Development Group, didn't return messages left at his office Thursday and Friday. Hillside Commons has one-, two- and three-bedroom apartments with amenities including dishwashers and clothes washers and dryers in the apartments, plus exercise facilities on the premises, a courtyard and more. Rents range from $725 to $925 monthly per bed. The complex was built with prefabricated modular units. Students renting from Hillside Commons moved from campus and not from apartments downtown, landlords said. They also marketed the difference in character of their apartments and the location of their buildings downtown. Rick Weinberg, president of Rental Company One Inc., said to compete, his firm has done more advertising, lowered some rental prices 5 percent to 10 percent and made apartment renovations, among steps toward offering the best rental options to students. Rental Company One, which started in 1975, traditionally has filled units, said Weinberg, who projected up to a 5 percent vacancy rate this year. The company has about 20 employees and rents to about 350 students, he said. The addition of beds by Hillside Commons has created a tougher rental business environment, he said. "There are more apartments than students to fill them," Weinberg said. Rental Company One is looking to fill a few vacancies with transfer or other students whose living needs changed at the last minute, he said, but overall he feels "pretty good" about "maintaining a decent position" in the marketplace. Peter Clark Student Rentals has been turning students away because its apartments are rented, a result reached without lowering rents to compete with Hillside Commons, owner Peter Clark said last week. "We didn't find that they were much of an impact for us," Clark said. "What we offer is completely different from what they offer." Clark said his company offers apartments in neighborhoods with access to a gym, within walking distance of bars, pizza parlors and coffee shops in the downtown environment that outclasses Hillside Commons. Peter Clark Student Rentals also provides support to help students when needed if something breaks without constantly monitoring their activities, he said. "Our business is basically the next step in growing up," Clark said. Clark, who has been in business locally for about 40 years, said his company has about 250 beds in buildings on Market and Main streets downtown and is planning to open more apartments. The firm also has about 20 employees, he said. Quality Rentals offers apartments and buildings with a "homey feeling'' without a controlled environment with cameras, owner Nathan Batalion said, and students have opportunities to become more independent. "They're more prepared for life, living in a home-like setting," Batalion said. Hillside Commons and downtown rental options differ in character and atmosphere, he said. "It's hard to compare apples with tangerines," Batalion said. However, to compete with Hillside Commons, Batalion said he opened an office at 297 Main St. instead of working from his home. The visibility and access, plus some flexibility on rents and offering incentives has spelled success this year, he said. "We do expect to be fully rented," he said. "We expected much worse consequences." Quality Rentals, which started business in 2000, took on properties management in response to the economic downturn several years ago, Batalion said, and last year bought another income property to be more competitive. "We have to rise to the challenge, whatever the challenge is," Batalion said. "We've survived well." ___ (c)2014 The Daily Star (Oneonta, N.Y.) Visit The Daily Star (Oneonta, N.Y.) at www.thedailystar.com Distributed by MCT Information Services |