Developers discover charms of Baltimore

Construction permits top 735 units this year

August 07, 2005|By Jamie Smith Hopkins | Jamie Smith Hopkins,SUN STAFF

The townhouses rising quickly under the baking sun are like so many popping up in popular suburbs. Brick facades. Two-car garages. A project of a national builder that's priced at more than $600,000.

But these aren't in the 'burbs - they're in Baltimore.

Pulte Homes' McHenry Pointe, near the harbor, is just one wave in a regional sea change.

In the five decades since people began heading in droves for new frontiers cut out of farmland, homebuilders barely gave cities a passing glance. Now, as suburban communities pile on restrictions to rein in growth, development-friendly cities are getting a second look - helped along by new demand for urban living from young professionals and aging baby boomers.

Baltimore issued permits for 735 units of new residential construction in the first six months of this year, a sevenfold increase over the first half of 2000, according to Census Bureau estimates. That's as many units as were approved in all of last year - and nearly as many as in much larger Baltimore County.

That number will balloon, assuming developers deliver projects they have announced. More than 7,000 new homes in major projects are in a planning pipeline that seems to swell every day as developers scramble to assemble parcels of land.

And those numbers don't even include the aging commercial buildings in and around downtown being converted into hundreds of condos and rentals.

As the city's development has accelerated, the suburbs' has declined. Last year, the five counties surrounding Baltimore issued permits for a total of 9,200 homes, almost 2,000 fewer than in 2000, the census reported.

"We see more and more builders who used to only be in the county, and who quite frankly always downplayed the city ... being very eager to enter the city now," said Sandy Marenberg of Marenberg Enterprises Inc., a local developer-builder that also advises others in the industry.

"Slowly but surely, we're retaking the neighborhoods that were abandoned."

Pulte, based in Michigan, Atlanta-based Beazer Homes and Greenbelt-based Bozzuto Group are among the large builders working on their first new-home projects in the city. Ryland Homes is in the middle of its first Baltimore project in a decade, 34 townhouses in the mixed-use Clipper Mill development in Woodberry.

All want to do more, and this is why: Demand for the new homes is so strong that builders are raising their prices midstream - sometimes doubling.

Many of the buyers are not current city residents. So far, seven out of every 10 people who bought a Camden Crossing townhouse in Washington Village, for instance, came from the suburbs or farther afield.

Critical point in desire

"We've reached a critical point where ... you feel if you're not there, you're missing something," said Tom Bozzuto, chief executive of the Bozzuto Group, which is building the mixed-use Spinnaker Bay in Harbor East. "The more bodies there are on the street, the more people want to be on the street."

E. Neil Tabor, a partner with the local Ashley Custom Homes, rarely used to work in the city. Now six out of every 10 units he builds or renovates are in Baltimore. He has moved his office there - even moved his family from the suburbs to Fells Point.

"Land is near drying up in the county, and there's a lot of infill work closer in," he said. "It's hard to find an area in Baltimore City that isn't on the rise."

Builders who venture in from the suburbs are setting foot in a city of old homes. Three-quarters were built before John F. Kennedy took office, according to the Census Bureau. Nearly 40 percent predate World War II.

When firms did construct new residences in the more recent past, they asked for - and got - government grants, tax breaks or other public assistance half the time, said city Housing Commissioner Paul T. Graziano. Now fewer are asking, he said, and those who receive are being subsidized "at a much lower rate per unit."

"When I got here 4 1/2 years ago, it was virtually impossible to talk to anybody about any development activity without them immediately starting with, `We need free land, we need a ton of subsidies and we need tax relief,'" he said. He thinks the city's role in the future will be to assemble land with blighted housing, clear it and let developers do the rest.

Singles, empty-nesters

The boom in new homes hasn't spurred population gains in Baltimore yet; census counts last summer still show a downward trend. Demographers say average household sizes are declining, which could explain it - the typical Baltimore newcomer is single or part of an empty-nester couple.

But it means money for the city all the same. Transfer taxes. Recordation taxes. Property taxes. Income taxes. Graziano credits the residential boom, new homes and otherwise, for the unexpected $59 million budget surplus.

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