Why Would Anyone Want Fewer Apartments in Downtown Easton?

Excited to hear the buildings at 118-120 Northampton Street in Easton are going to be renovated, but this was a weird statement:

Milosev said he intends to convert the two structures to house 12 apartments on the upper floors, with commercial retail space at the ground level.

“If the grant goes through, we’ll consider scaling down the number of units to six to nine,” he said.

Right now there’s high demand for quality apartments in downtown Easton. The Pomeroy apartments filled up quickly, and Becky Bradley’s told me the nature of the Easton rental market is that crummy apartments stay vacant a long time, but whenever apartments of decent quality come on the market they get snapped up right away.

Insofar as that’s the case, there’s a money-making opportunity there to renovate some nice apartments and rent them out to people. Why on earth would it be better to halve the number of units from 12 to 6? The service economy in the downtown area gets more customers, Milosev makes more money, and most people are better off. Some of the immediate neighbors might whine about the impact on parking, but tight parking is never a reason to build less housing and Christina Georgiou’s reporting that the sale agreement includes off-street parking at the lot across the street.

Comments

  1. Hi, Jon,
    The 6 to 9 apartments would be larger than the 12 smaller ones, and therefore attract a high-paying crowd, though I suspect 12 would ultimately generate more cash on a monthly basis for the developer/landlord. Apoligies if it wasn’t clear in the article, but being that the buildings are the buildings and there’s only so much space, I guess I thought that would be apparent.

    Personally, having seen some of the other renovated spaces in town, I think the larger apartment option is not only perfectly fine but desirable. The smaller ones are nice enough, but bigger, done right, is more in keeping with the original spaces, I think, and attracts more of the sort of people I’d like to have as my immediate neighbors–less transient, long-term residents that are invested in the community.

    Either way it happens, this particular project looks like a real winner so far in my personal opinion. Local developer/management firm, invested entirely in the LV, with the guidance of a very good Easton-based architect with a great reputation for historic preservation work.

    Not to be snarky, but I’ve got to ask, why would you complain over such a small difference anyway? Especially from a distance? In a city of nearly 27,000, with lots more revitalized spaces coming in Easton, a 3 to 6 residence difference on one property (which will essentially generate the same muni and school taxes either way) doesn’t seem like worth making any sort of fuss over. ..

  2. John says:

    You can’t determine what’s happening here based on the article, but I’m going to go a different direction than Christina.

    Let’s assume that the apartment size isn’t changing, but that Milosev is doing fewer apartments and thus adding more commercial space to the project. That makes sense if he gets the grant, and here’s why:

    Jon is right, apartments in Easton are a hot commodity and will rent easily. But over the long term, investment returns on residential rentals are generally lower than on commercial space – makes sense, lower risk results in lower return. If all that’s going into the project is his own cash, more residential rentals makes sense as it lowers the investor’s overall risk profile on the project, balancing it between residential and commercial rentals.

    However, injecting $500k of someone else’s cash (and a grant no less, not a loan) means Milosev can increase his risk and potential for return because he’s now playing with other people’s money.

    Jon I think your conclusion is wrong – Milosev is changing the mix to increase his return, not decrease it.

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