The eighth annual Greater Norwalk Real Estate Outlook was held in the M&T Bank Magnificent Room at the SoNo Collection mall in South Norwalk on May 22, 2024.
Since the location was first used for the annual real estate updates in 2021 some things have changed. In 2021, the space was the People’s Bank Magnificent Room and the Covid pandemic was still a key force in driving people to relocate to suburbs throughout Fairfield County. Other things have stayed the same, most notably a chronic housing shortage which has not abated despite the creation of many new apartment complexes in Norwalk and the surrounding area.
Eric Bernheim, managing partner at FLB Law served as the moderator for the event. He thanked outgoing Greater Norwalk Chamber President Brian Giffin for having supported the Real Estate Outlook since its inception, and helping the annual event become a platform for insight into the market.
“Over the past eight years our panels have discussed a lot of high-profile developments that have really transformed Fairfield County for the better in my opinion,” Bernheim said. “And fortunately, our FLB team has had the privilege of working on many of them. We were special counsel to the City of Norwalk for the mall project so we’re grateful to be sitting here and seeing a successful project that’s really become an asset of the community.”
Bernheim also thanked Westport-Weston Chamber of Commerce Executive Director Matthew Mandell for supporting development efforts in Westport, including the Hamlet at Saugatuck, which will involve upzoning an area around the Westport train station. He also recalled the year’s long process of building the new Westport YMCA, a project that started even before the annual Outlook event series.
“Who would think building a new YMCA for a community would be controversial?” Bernheim asked the audience. “This project probably took over a decade, really divided Westport, and had 27 public hearings just for the Planning and Zoning Commission to approve that application. I believe there were about 10 appeals, all of which we were successful on.”
The uphill fight for development was a reoccurring theme throughout the panel, which was wide reaching.
“What we’ll be discussing are all facets of the real estate Industry,” Bernheim explained.
“If you visualize the real estate market as a rope, each strand of that rope really needs to be strong enough so that the entire market is strong. In order to have a strong residential market you need to have retail and commercial to support that,” without any one component the other two are under that much more strain, according to Bernheim.
He noted that the Fairfield County Community Foundation has said that the region needs 25,000 new affordable housing units to meet the needs of low-income residents, while the state as a whole is short 169,000 low income units and 100,000 middle income units. The lack of housing hurts staffing across sectors, and makes retail locations less able to withstand economic shocks that can be cushioned by neighborhood regulars.
Bernheim asked Executive Director of the Norwalk Housing Authority (NHA) Adam Bovilsky to highlight some of his organization’s current projects. He explained that the NHA had shifted priorities from roughly 30 years ago, when it was slashing its capital and operating budgets for new housing units to focus on providing educational services and learning centers.
“The outcome of that was that our buildings got tired. Our buildings got a little run down, so we have two prongs to the work we do in development,” Bovilsky said. “The first is we need to improve the housing we have.”
Bovilsky made the case that the NHA has corrected course by pointing to Washington Village, the oldest continually serving federal public housing development in Connecticut which was recently converted to a single building featuring 273 brand new fixed income units. Colonial Village and Meadow Gardens are currently receiving major upgrades, including new units and gut renovations of existing structures, supplemented by other new projects.
Kylie Gosselin, president and CEO of the Housing Development Fund discussed how her organization has provided information and financial products to help those of limited means acquire housing, as well as developing projects such as Stamford’s Washington Crossing which hosts 23 families earning below 60 percent of the area median income, with plans for future projects.
“What we’re trying to do is actually increase supply,” Gosselin said. “There’s a really crucial need not only across the state but also especially acutely in Fairfield County.”
Gosselin also outlined the Fund’s services including home ownership counseling, financial literacy programs, and guidance in applying for federal downpayment assistance programs, which can provide access to a home for as little as one percent down. She also noted that her background as an attorney had let her see first hand situations where the “rope” Bernheim described had frayed due to stark separations between housing and retail, separating people from their jobs and businesses from their customers, a problem often rooted in zoning regulations.
David Waters, General Counsel for Building and Land Technology (BLT) discussed how his company’s tagline fits into the design of modern living space.
“Live Work Play is a concept that has really come into its own but it’s not overly new,” Waters said. “It’s actually something that historically people had. Their offices were below their residential buildings and there were other things in town to begin with.”
Waters said that corporate campuses, once the ideal example of separating work from home and entertainment, have been supplanted by home offices and short commutes. Young people prefer hybrid work without long commutes while enjoying access to amenities and the ability to socialize in public spaces near home, preferring a “London” style of living.
“People have very small flats there, but the neighborhood pub is an extension of their house. There it’s not just a bar, it’s a place where in back there’s a playground for kids, board games on shelves on the walls, things like that. It becomes part of the whole sphere of options for people,” Waters said.
David A. Waldman, the founder of David Adam Realty, Inc related how he had seen downtown Westport, particularly along Main Street go from the site of empty storefronts and high turnover to an area with a rent score north of $120 per square foot. He credited Covid with reversing the trend of past years, where New York City’s amenities drew younger people, to the present where many of them sought more space during lockdowns.
“Westport was one of the biggest recipients of Covid,” Waldman said. “We have roughly 750 families moving down into the Westport market. As a result our vacancy rate went from 25 percent to sub 5 percent. Our rents have popped back up into north of $100 a foot and we’ve had a lot of developments.”
There was broad agreement among all of the panelists about what makes for a desirable housing development. The presence of third spaces, walkability, and access to retail and transportation were all key and a focus of the many developments they were each involved in.
Starkly different positions emerged on the topic of how to best furnish the housing the panelists all agreed was in desperate need. Balancing the costs to developers to include below market rate units and otherwise affordable structures was described as exceedingly difficult. The costs associated with developing any multifamily housing are challengingly high, particularly in communities where there is stronger opposition to the developments.
The more affordable units a building has, the more developers want a bigger structure to fit more market rate units to offset that lost income. Bigger structures tend to attract even further opposition from locals who would rather see only single-family housing in their neighborhood. The result is thinning margins and worsening public relations that make housing aimed at middle segments of the market let alone the lower end difficult to profit from.
During open questions an audience member asked why Walmart was able to profit while focusing largely on the poorest segments of the population without relying on taxpayer subsidies, but it seemed housing developers could not.
Bovilsky noted that public housing options, either built by governments or funded through programs like Section 8, offered a more rapid solution to the problem than commercial development. Even when laws like 8-30g exist to incentivize affordable units, the uphill battles fought on many large scale developments make it difficult to count on.
When the audience member shook his head at the mention of taxpayer subsidies Bovilsky asked rhetorically, “Where do the Walmart employees live?”
“They live in my units. I can’t tell you how many public housing residents I work with that work at Walmart. Walmart refuses to give them a full-time job so they don’t get benefits, they’re getting paid pretty close to minimum wage. So, the Walmart model only works because of that taxpayer subsidy that allows them to live in public housing,” Bovilsky replied.
“The Walmart model only works because of the taxpayer subsidy. It’s the business we’re really subsidizing.”
