Mill Creek Residential Trust continues construction on a market-rate apartment building on Old Country Road in Mineola on Thursday, Dec. 4, 2014. Photo Credit: Steve Pfost

By Maura McDermott – January 2nd, 2015

In a striking change for the birthplace of the single-family-home suburb, Long Island is attracting growing numbers of national developers who are building rental complexes in local downtowns.

For decades, fierce opposition from neighbors, high costs, long delays and a history of scuttled projects have discouraged most major out-of-state builders, especially those specializing in rentals.

But now the same eye-popping rents and scarcity of apartments that bedevil young professionals and empty-nesters are luring out-of-state builders. They range from AvalonBay Communities of Arlington, Virginia, which is expanding its presence here, to relative newcomers to the Island such as Mill Creek Residential Trust and TDI Real Estate Holdings, both headquartered in Texas. As those builders forge ahead with construction, other major players are actively looking for new projects on Long Island.

“Not a lot of developers want to be pioneers,” said Eric Alexander, executive director of Vision Long Island, which advocates development near downtown train stations. “When they see success from others, they say, ‘All right, some people have paved the way.’ ”

The national developers’ apartment building boom is already starting to reshape the downtowns of Long Island communities such as Rockville Centre, Huntington Station, Mineola and Hempstead. Typically located near train stations, the new buildings look nothing like the low-slung, red-brick rental complexes built in the 1960s and ’70s. They can include amenities such as pools, gyms and barbecue stations. Apartments often feature granite countertops and stainless steel appliances more commonly seen in condominiums.

New builders watch results

However, there is concern that Long Islanders’ resistance to new construction might deter some of the new out-of-town builders.

“They have to be really big developers with really broad shoulders, like AvalonBay, that are willing to spend the time and money it takes to get things developed on Long Island,” said Artie Cipoletti, owner of Wantagh-based DaVinci Construction and president of the Long Island Builders Institute, a trade group.

Long Island’s torturous approvals process — some developers use words like “painful” to describe it — has “scared off national players in the past,” acknowledged Chris Capece, senior development director in the Melville office of AvalonBay, a real estate investment trust valued at $22 billion that has built or acquired 10 apartment complexes on Long Island since 1995. Of the nearly 3,200 units, roughly half have been built since 2007.

AvalonBay’s newest complex, in Huntington Station, opened in September and was expected to be full by the end of 2014, Capece said in December.

In some cases, a national developer and a local builder join forces. In Farmingdale, local developer Anthony Bartone spent six years getting approvals for a 154-unit residence complex next to the village’s train station. Two years ago, he brought Texas-based TDI in on the project.

The first 39 apartments opened in December, and the rest will be completed in the spring. Rents range from the low $2,000s for one-bedrooms, up to $3,000 or more for two-story units that will open next year, Bartone said. TDI offered not only financing, but expertise.

“They were looking for an opportunity on Long Island, and we were looking for a partner with the depth of resources that a national developer would have,” Bartone said. “For a project like this you need someone with the financial wherewithal of a national developer like TDI to really get it done.”

The new supply of apartments may, in the long term, help drive rental rates lower. By law, in exchange for certain incentives, developers must set aside at least 10 percent of units as “workforce” housing for those with low or moderate incomes, or pay for affordable housing to be built elsewhere.

Moreover, the new apartments will attract the most affluent Long Island renters, freeing up lower-priced units, said Alexander Roberts, executive director of Community Housing Innovations, an affordable housing group with offices in Patchogue and Hempstead, as well as Westchester.

However, he said, “the need is so great that I don’t think that it’s immediately going to have any great moderating impact on rents.”

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