Altitude at Stoneport will soon be built on Port Republic Road, with room for 425 students.

The Retreat is nearing completion on Reservoir Street, with room for 700 students.

JMU enrollment is growing, but only by about 350 students per year.

And now, a 22 unit apartment building is proposed for the edge of the Purcell Park neighborhood -- which is and is not applicable to the matter at hand....

So, here's the deal....

1.  A local resident (developer) is intending to replace two older single-family homes with a mixed-use complex with restaurants, retail space and (22) one-bedroom apartments.  STAFF recommends approving it.  PLANNING COMMISSION does not.  CITY COUNCIL might, or might not approve it.  Read more here: Planners Discuss Decision.

2.  Many neighbors of the proposed development are opposed to this potential development - because it would increase traffic, change the nature of the neighborhood, increase the population density in that area, and because some believe it will just be filled up with college students.

3.  A JMU official (coordinator of off-campus life) wrote a letter on JMU letterhead to City Council and residents of the neighborhood indicating that JMU has no need for more off-campus housing.  Read the entire DNR article here (JMU: Official's Letter On Zoning Issue Not Official) or an excerpt of the LETTER here....

"Additional apartment-based housing is not needed at this point in the community, and might actually be detrimental to current properties who are having difficulty reaching capacity with tenants and profiting,"

4.  The developer's engineer indicates that the apartments are not designed for college students.

OK -- so -- let's sidestep the issues of the aforementioned letter not really being JMU's official position on the matter AND whether or not the apartments are or are not intended for or suited for college students.

Instead, let's think about (talk about?) whether Harrisonburg needs more off campus student housing.

So -- do we need more?

Most student housing developers coming to the area would say that we do -- but they might always say that?  After all, the newest and nicest student housing (almost) always leases quickly. 

In contrast, I would argue that all income college students (for 2018-19) could easily fit into existing on and off campus housing, even without the addition of The Retreat or Altitude.

So, why do these new complexes keep showing up?  Because the newest and nicest complexes always lease quickly.  And because a student housing developer can make money by building such a development in this area.  And because the City and/or County continues to approve these developments -- perhaps not feeling it is their place to decide whether there is a need for more housing.

Side note -- should City/Council decision making bodies approve or disapprove student housing based on whether there is a need for more?  I do not recall any instances when this is a question that these governing bodies discuss -- they seem to assume that the developer wouldn't be proposing it unless it were needed (which is not necessarily true -- see above) and then just move on to whether it is reasonable to develop the proposed land in the proposed manner.

So, if student housing developers will always want to build more, and local decision makers might keep approving the developments independent of whether there is a need or not, I might just be wasting my time to continue to think about all of this -- but I'll continue nonetheless.

I think we (citizens, tax payers, elected officials) need to realize what happens when more student housing is approved when there is not necessarily an actual need for more such housing.  And the place to look to best understand this is the oldest student housing.

What typically happens when new student housing is built is that the oldest (and/or least conveniently located and/or least upgraded) student housing eventually starts having higher occupancy rates, and then eventually starts being leased to folks who are not college students.  All of that is well and fine and good -- except that it means that the rental income often declines, the properties aren't maintained as well, vacancy rates climb higher, rental income drops lower, property maintenance declines further, etc.

So -- we end up having (or will end up having) older apartment complexes that used to be college student housing -- that are now rented to non-students -- often to low income individuals and families -- and that are often not maintained as well as when the rental income allowed for them to be better maintained.

Is this (college housing potentially becoming low income housing) a bad thing?  Not necessarily -- but I think that we need to realize that this is often the eventual, market driven, impact of continuing to approve new student housing developments.  Are we comfortable with this long term end to our short term decisions?  Is this the way that we want to grow our housing stock? 

Hopefully I have provided MANY more questions than answers.  :)  Feel free to drop me a line to discuss, or offer your opinions and perspectives.
 

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With great regularity, potential buyers (either investors or parents of JMU students) will ask if a single family home can be purchased and rented to a group of JMU students -- often an intended group of four or more students.

I let them know that it will be no problem at all -- the adjoining property owners in the quaint neighborhood probably won't mind as long as the students aren't too bothersome -- and the City doesn't mind at all if their zoning ordinances are violated, so long as it's just "nice college kids"....

WAIT!  NOT REALLY!  READ ON!!!!

It seems that some buyers are really getting that feedback of "sure, it will be fine" -- though I'm not sure if they're getting it from their Realtor, or from someone else advising them in the transaction, or if they just aren't thinking about whether their planned use of a property is allowable.

The REAL answer, and the feedback that I ACTUALLY provide to my clients is....

1.  We need to check to see how this property is zoned, and whether that zoning classification allows for that number of unrelated people to live in the property.

2.  We need to check to see if there are recorded restrictive covenants for this neighborhood that restrict the number of unrelated people who live in the property.

A few notes....

1.  Most single family homes in the City of Harrisonburg are zoned R-1 or R-2 and do NOT allow for three or more unrelated people (students or otherwise) to live in the property.

2.  If a property has been used in a non-conforming manner (for example, four students living in it) since before the zoning ordinance was put in place, without a 24 month gap in the non-confirming us, it MIGHT be possible to continue to use the property in that non-conforming manner.

And, if #2 above is starting to get confusing, then we arrive at my main reason for writing today....

CALL COMMUNITY DEVELOPMENT TO UNDERSTAND ALLOWED USE OF A PROPERTY!

Yes, in fact, there are very helpful City staff in the Community Development department -- who can very quickly help you understand whether a property can be legally used as you intend to use it. 

And it is imperative that you make this call BEFORE you buy the property, and even BEFORE you make an offer on the property!
 

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Seems like this will be an attractive structure -- and not just a big box with vinyl siding.  Read more about the plans for this student housing complex here.

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   view a larger image

The property shown above was sold for $1.76 million to a new developer from Richmond, VA who will start site work in August for this 250,000 square foot student housing complex planned to be open for Fall 2019.

Some highlights from yesterday's Daily News Record article...

• Altitude will be modeled somewhat after the 865 East building on Port Republic Road.
   
• Walker said he thinks the security features, popular at 865 East and with James Madison University student and parent focus groups, and the nearly 2,500-square-foot deck space with garage-type doors that can be opened or closed based on the weather "will really resonate" with potential renters.
   
• "We wanted to take a cue from the 865 East product type," he said, "and rather than do another garden-apartment project, with walk-up steps, we wanted to do something with interior corridors, key-fob entrance and elevators. With some of my partners, we concluded that was a void within the market."
   
• Eighty-seven of the units will have four bedrooms and four bathrooms, and Walker said those spaces should rent for about $650 per bedroom. Altitude also will have two- and one-bedroom units, with the one bedrooms leasing for about $1,100 a month.

 
Here is the original rendering of the planned student housing complex....

   view a larger image

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If you are looking to purchase a rental property for your JMU student to live in while they are a student at JMU, there are two basic paths you could go down....

Option 1 --  A property in a traditional student housing neighborhood. These will allow the most students to live in the property and will maximize the rental income per dollar spent on the purchase.  However, it will also expose you to a more turbulent segment of the market, as rental rates and sales prices of these properties can vary quite a bit over time as the supply of competing student housing ebbs and flows based on large complexes being built by student housing developers.  You can find purchase options in this category here.

Option 2 -- A townhouse in a community that has many owner occupants, some non-student renters and some student renters.  Many of these will not allow as many un-related students to live in the property (per zoning regulation or restrictive covenant) and will not provide quite as much rental income per dollar spent on the purchase price.  However, they will be in segment of the real estate market that is much more predictable and less volatile from a rental rate and/or sales price perspective.  You can find purchase options in this category here and here.

I work with parents of JMU students each year who go down each path outlined above, each for different reasons.  Most of the time, though, it boils down to their tolerance for risk or their desire for reward.  It can also be related to their intended time horizon for owning the property.

If you are interested in buying a rental property for your son or daughter to live in while they are at student at JMU, let me know.
 

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The R-2 zoning classification was amended on December 15, 1998 to only allow up to two unrelated people in an R-2 zoned property.  Prior to that time, up to four unrelated people could have lived in the property.  All that said, if an R-2 zoned property was being inhabited by four unrelated people prior to that zoning change (12/15/1998) and has been ever since that time, without a 24 month gap, then it can continue to be used in that way.

Otherwise, if you own an R-2 zoned property, even if it has four bedrooms, even if it is close to the JMU campus, even if everybody else on the street rents their house out to four unrelated students, you cannot per the zoning ordinances.

Below is an excerpt of an article from the Daily News Record that discusses one property owner's request to the City to allow him to use an R-2 zoned property as a rental property for more than two unrelated people.  I think his request was reasonable, in some ways, based on the use of neighboring properties, but read on to discover what the City thought and what they decided.

Council Kills Special-Use Permit Request
By Tony Brown, Daily News-Record
March 16, 2017

HARRISONBURG - Ted Byrd played sheriff at Tuesday night's regular City Council meeting.

He deputized the other four council members and led a unanimous posse to gun down a petition for a special-use permit for an old house on Old South High Street downtown.

He said the property owner was trying to get out of breaking the law.

"This was an illegal use from the getgo," the lone Republican on council said. "Sometimes, you gotta draw the line. This is begging for forgiveness instead of asking for permission. We're either a body of laws, or not."

Byrd was so persuasive that he converted Democrat Richard Baugh, who did a complete 180 on the issue.

As the elected council's representative on the appointed Planning Commission, Baugh was part of a unanimous decision by the commission to recommend council approve the petition.

The city planning and zoning staff also is on record recommending the change.

Click here to read the entire article.

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If you have driven on Port Republic Road or Reservoir Street near the hospital anytime in the past six months, you have likely seen the drastic changes to the landscape surrounding Reservoir Street.  A significant part of that change has been the development of a new college student housing complex, called The Retreat, which is shown above.

Construction has been moving very quickly at The Retreat, with the new structures springing up seemingly overnight in some cases, while the site work is still in progress.

Reservoir Street will have certainly seen some significant changes when we look back a few years from now -- with the road expanding (in the City, and hopefully soon in the County) and the development of Robinson Park (an affordable housing complex) and The Retreat (student housing).
  

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As I commented to a potential investor this past week -- investing in student rentals can offer a higher return than other non-student properties, but there are also higher risks associated with such an investment.  These include....

1. Unexpected Vacancies -- If you miss the leasing cycle, or if a student leaves after a semester you can come up short on rental income based on an unexpected vacancy of part of all of the rental property, which is usually not easily filled until the following school year.
    
2. Property Damage -- Not all college students party, but some do.  You are likely to have at least somewhat more property damage on a student rental property as compared to a non-student property.  This is a generalization, of course, as some college students take excellent care of the property they are renting.
    
3. Value Swings -- The graphic at the top of this post shows the wide swings in property values seen at Hunters Ridge over the past 14 years.  This is mostly a result of swings in the supply of student housing.  As large (regional or national) student housing developers come into Harrisonburg to build new large student communities, the supply of such housing increases, causing vacancy to increase in older communities and rental rates to decline -- which affect property values.

Again -- investing in student housing can provide a great return on your investment, but it comes with risks that you should full understand before you make an investment.

Learn more about investing at Hunters Ridge here.

 

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   click here for a larger version of this aerial image

If you have driven along Reservoir Street lately, you would have noticed the massive area on the hospital side or Reservoir Street where trees have been cleared for a new housing development.  This site will soon be home to 700 college students in a new development called "The Retreat at Harrisonburg", being developed by Landmark Properties out of Athens, GA.

The developer has acquired 36.81 acres for $5.71 million in August after the land was rezoned in May to allow for this community to be developed.  This same developer is (per their website) also currently developing The Retreat at Blacksburg, a student housing community for 829 students.

Read more about this purchase and development in this Daily News Record article....

Student Housing Developer Buys County Land
August 30, 2016

Here is the intended site plan....



Per documents submitted to the County, we know the following about this potential student housing community....

• the community would be a mix of detached homes, duplexes and quads
• amenities would likely include a clubhouse with fitness center and study facilities, outdoor swimming pool, outdoor gaming courts and extensive walking and biking trails
• this community would have no more than 178 residential units and no more than 715 beds (bedrooms)

Here is a rendering of one of the proposed homes....



 

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Based on enrollment projections approved by the State Council of High Education for Virginia and published by JMU, on campus enrollment is set to continue to increase in coming years....

• Though still an estimate, enrollment likely surpassed 20K this past year.
   
  
• Enrollment will likely grow past 21K in 2018-19.
   
  
• Enrollment should hit 22K by 2021-22.
  

Of the variety of different figures that exist within the enrollment projections, the "Total On-Campus Headcount" is typically seen as the most pertinent relative to our local housing market.  This figure is the best reflection of the number of students who will need housing, either on JMU campus, or off campus.  These figures, and their changes over time, are the best numbers to be using when analyzing the need for off campus student housing in Harrisonburg.
 

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   view a larger image


   view a larger image

The Rockingham County Planning Commission will consider a re-zoning of a 6.1 acre parcel on Port Republic Road this evening.  The property, located across the street from Bojangles (but on the same side of Port Republic Road) is currently zoned R-3C and the applicant (KKB, LLC) is requesting that the land be rezoned to be PMF (Planned Multifamily).

Per the Planning Commission's packet of information about this rezoning request, this land would be used for a student housing community to include a total of 140 apartments, and 425 bedrooms....

• 29 one bedroom apartments
• 24 two bedroom apartments
• 87 four bedroom apartments
  

Per the developer's description....

• There will be a 2-3 story clubhouse with roof top deck, surrounded by two apartment buildings.
  
• The apartment building along Port Republic Road will be 5 stories in height.
• The apartment building along Apple Valley Road will vary between 4 to 5 stories in height.
• The community will include a clubhouse with fitness center and study facilities, a roof top deck, outdoor courtyard, storage units, bicycle storage room and study rooms with smart technology features.
• The exterior of the buildings will include faux stone, EIFS (exterior insulation finishing system), metal panels and cement panels. (no vinyl siding)

Read more about this proposed development via the recent Daily News Record article or the Planning Commission's information packet.

 

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A new student housing community may be built in Rockingham County depending on (among other things) the outcome of the public hearing of the rezoning of the land that will take place tomorrow, April 5th.

Below is an illustration of where the community would be located -- just off Reservoir Street, just past the City/County line when headed towards the hospital.



This location is in the vicinity of several other student housing communities, so it is not a surprising location to be proposed for this community.

Per documents submitted to the County, we know the following about this potential student housing community....

• the community would be a mix of detached homes, duplexes and quads
• amenities would likely include a clubhouse with fitness center and study facilities, outdoor swimming pool, outdoor gaming courts and extensive walking and biking trails
• this community would have no more than 178 residential units and no more than 715 beds (bedrooms)

You can view lots of details about this proposal by downloading the full packet of information from the rezoning request which includes the master plan and illustrations of the front elevations of some of the potential dwellings to be built.  Download it here.

 

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Pheasant Run Townhomes is a college rental community comprised of 143 townhouses. Of those 143 townhouses, 103 are corporately owned and 40 are privately owned.  The privately owned townhouses have recently been selling in the $140K's....



The latest news is that the 103 townhouses that are corporately owned sold for $10,425,000 on December 18, 2015 to TRP Pheasant Run Manager LLC, a company affiliated with Thalhimer Realty Partners, which is a subsidiary of Cushman & Wakefield/Thalhimer.

As per today's article in the Daily News Record....

Matt Raggi, a vice president with Thalhimer Realty Partners, said the company will operate the property. It owns and operates almost 4,000 apartment units in Virginia and the Carolinas, including student markets such as Richmond, Norfolk and Chapel Hill, N.C.

Pheasant Run is the company's first acquisition in Harrisonburg.

"We like JMU. We like the Harrisonburg market," Raggi said. "We think JMU is going to continue to grow. We're long-term investors, so we see long-term value in Harrisonburg and JMU."

Local company Pheasant Run Townhomes LLC owned and operated the property, which was developed in phases between 1999 and 2003.

Absent any major changes in strategy by the new corporate owner (which seems unlikely) I anticipate that the 40 privately owned townhouses will continue to sell for similar prices as they have in the recent past, and that the community will remain a good option for investors looking to purchase a student housing rental property.

Find out more about Pheasant Run at HarrisonburgInvestmentProperties.com.

 

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Click here for a larger version of the map above.

Three college housing communities in Harrisonburg, VA sold in May 2015 for over $81,000,000 to a Chicago-based company.  These complexes included:

• The Commons on Port Republic Road
  (now "The Hills Northview")
   
  
• Southview on Peach Grove Avenue
  (now "The Hills Southview")
   
  
• Stonegate on Neff Avenue
  (now "The Hills Stonegate")
  

Read more about it in last week's Daily News Record article.

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Based on enrollment projections approved by the State Council of High Education for Virginia and published by JMU, on campus enrollment is set to continue to increase in coming years, surpassing 20K students for the first time in the 2017-18 academic year.

Of the variety of different figures that exist within the enrollment projections, the "Total On-Campus Headcount" is typically seen as the most pertinent relative to our local housing market.  This figure is the best reflection of the number of students who will need housing, either on JMU campus, or off campus.  These figures, and their changes over time, are the best numbers to be using when analyzing the need for off campus student housing in Harrisonburg.

Read more about student housing in Harrisonburg, past, present and future here.
 

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    click here for a larger version of the map  or here for a PDF

Enjoy this updated map showing where JMU college students live, in a few categories of housing....

• JMU Residence Halls (purple squares)
• corporately owned apartment complexes (green squares)
• individually owned single family or multi-family homes (orange squares)
  
• townhouses/condos you could purchase, primarily for undergrads (red text)
• townhouses you could purchase, primarily for grad students (blue text)

If you are interested in purchasing an investment property in Harrisonburg -- for college students, or not -- feel free to drop me an email (scott@HarrisonburgHousingToday.com) and we can discuss the best opportunities for you.

 

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It would seem that JMU will be buying this 60 acre parcel on South Main Street that was originally intended to be privately developed as student housing.

Per the Daily News Record (June 7, 2014)....

James Madison spokesman Bill Wyatt said that while the university has no immediate plans for the property, the board is buying it to add flexibility to shuffle the school's auxiliary, nonacademic services away from the center of campus, and create space for future facilities.

Read the full DNR article here.

Read about the 466 apartments that were originally going to be built on this land here.
 

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Click the images below to read two recent national news articles about student housing that provide commentary on Harrisonburg related to the recent sale of University Fields.


  (archive)


  (archive) 

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Photo Source:  Moseley Architects

I'm not sure if we call this on campus or off campus housing, but JMU is building a new residence hall on West Grace Street that will feature approximately 507 beds, various student life spaces, classrooms, seminar spaces, administrative offices, and other support spaces.

Read more via The Breeze here.
 

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An auction was scheduled for University Fields back in September -- and now we know who purchased the property.

Vesper Holdings, a real estate investment firm in New York City, purchased University Fields for $19 million on October 28th.

Five million dollars of capital expenditures are planned including renovating the interiors of the apartments, clubhouse and amenities as well as enhancements to the exteriors of each building and technology upgrades.

Pertinent details about University Fields....

• 1,152 bedrooms
• (22) three-story buildings
• Built on a 23.55 acre site.
• Entirely four bedroom units, between 1,100 and 1,200 SF

Read the entire press release here. 

Read today's Daily News Record article here.

  

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