Homeownership Shapes Multifamily Demand and Developers Get Creative With New Supply
New Project in York’s Supply Wave Shows How Local Developers Adapt to Limited Demand Market
Written by: Ben Atwood, CoStar News
York, Pennsylvania, multifamily is experiencing its largest supply wave since the housing collapse, thanks to the mid-summer arrival of two modest-sized communities, the Wynfield and Dover Run Apartments.
Respectively located in York and Dover, the complexes are the first new developments to contain more than 100 units in 11 years.
Even in slow growth central Pennsylvania, York’s conservative construction stands out. Over the last decade, its inventory has expanded at about half the rate of nearby Harrisburg, Lehigh Valley and Lancaster. But these markets are all strikingly similar. Outsourcing and automation formed common demand barriers across the region, and these rural, blue-collar markets are still heavily reliant on manufacturing and shipping. York, like its neighbors, lags the national index in nearly every measure of growth.
But these conditions are the norm across Pennsylvania. Most of the state’s counties are losing residents, and in spite of its limitations, the capital region is experiencing some of its strongest levels of population growth. Harrisburg has recovered from its 2011 bankruptcy declaration, and is nearing an exit from Act 47 status, which will give the city a greater degree of control over its finances.
So why has York’s multifamily market expanded by just 4% over the last decade?
Partly because of Maryland. York County has become something of a commuter hub, and an American Housing Survey shows about 60,000 residents make the commute into neighboring markets, such as Baltimore.
“We see a lot of Maryland license plates in our lots,” said Mike Burkentine, President of Burkentine Development, the family-owned Hanover-based company behind the Wynfield. The 236-unit community is the company’s first foray into the apartment world, and they chose to build it less than a mile from Interstate 83.
The I-83 corridor allows for an easy commute into the Baltimore area, and Burkentine believes central Pennsylvania’s lower cost of living is pulling residents out of Maryland.
But Burkentine said the out-of-state demand boost comes with a cost, because many transplants don’t want to rent.
York’s affordable homes are a big reason Marylanders make the move, and its residential market is hot. County homes are selling in record time according to a 2019 survey by the Realtors Association of York and Berks counties, and home prices are rising across the region.
Burkentine believes facilitating renter’s transition into ownership helps his company succeed. “We are a one-stop shop,” he said. “We set you up in a rental while we build your house.”
Renters moving into Burkentine-built homes pay no penalty for breaking their lease, and the Wynfield property features on-site storage units.
The company also tries to keep costs low, and catering to those looking for modern supply but also saving for a down payment can be tricky . Burkentine describes the Wynfield as ‘functional luxury,’ a term which best describes most of York’s recent additions.