With the Central Business District and Warehouse District bulging with new condominiums, the condo action was probably bound to push into New Orleans' downriver neighborhoods sooner or later. Now, it's happening.
Spurred by rising prices elsewhere and a regulatory squeeze on short-term rentals in the French Quarter, condo developments are popping up in Faubourg Marigny and Bywater between St. Claude Avenue and the river.
At least three multiple-unit condo projects have either broken ground or are edging toward a start near the river in those neighborhoods, joining several others that recently wrapped up or are nearing completion.
Developer Jerard Ward on Oct. 31 broke ground on The Saxony, a 75-unit, five-floor condo building at Burgundy and Bartholomew streets in Bywater. With units ranging in size from studios to three bedrooms and amenities that include a pool, courtyard and private balconies, marketers tout the site's "historic" surrounding neighborhood and its proximity to the Mississippi River.
Also, the units will be "Airbnb compliant," Latter & Blum Marketing Director Stephen Waring noted. With pricing on the units ranging up to $645,000, or $450 a square foot, the ability to put a unit to work as a short-term rental could be crucial for some owners.
Construction of The Saxony follows on the heels of smaller developments that include the recently finished Bakers Row homes in the 2400 block of Dauphine Street. Built by developers Michael Bosio and Kyle Resmondo on the former site of the Hubig's Pies factory, the eight townhouse-style condos offer high-end design features and finishes, with units priced up to $395 a square foot.
Closer to the river is the recently completed Crescent View Lofts, an upscale three-story, seven-unit complex located across the street from Elizabeth's restaurant at Gallier and Chartres streets. Like some of the other new structures in the area, marketers tout its proximity to the riverfront Crescent Park and the river views available from the building's top floor. Prices are in the area of $475 a square foot.
Another project slated to get underway soon aims to put its residents in still closer touch with the river. Developers David Fuselier and Patrick Schoen will build the first Bywater condos on the river side of Chartres Street, at Piety Street, right next to the pedestrian overpass leading to Crescent Park.
The section of Old Metairie's main thoroughfare that is sometimes known as upper Metairie Road has long seemed a "poor cousin" to the rest of …
"Piety on the Park" will be a three-story, 12-unit building with space for a restaurant or other commercial use on the ground level. It will feature river views from each unit's 12-foot, floor-to-ceiling windows and prices as high as $500 a square foot.
Fuselier said the project targets "local professionals who enjoy living in the city but want the more quiet neighborhood feel" of Bywater. He said buyers have signed contracts for five of the planned units; construction could begin by January.
Real estate analyst Wade Ragas said the movement of condo development into downriver neighborhoods was to be expected as pricing in the downtown areas heated up.
For a while, condo prices in the CBD and Warehouse District seemed to plateau around $500 a square foot, but new luxury projects such as the Domain Companies' The Standard, along with a few smaller Warehouse District developments, helped push the bar as high as $750 a square foot.
The potential for putting units to work as income producers has contributed to the price moves, and after the city began to step up enforcement of the prohibition on short-term rentals in most of the French Quarter, the Bywater and Marigny neighborhoods became new targets for developers.
Ragas said the areas have a lot to offer buyers. "Bywater gives them the ambience of an interesting urban neighborhood, but not the (higher) price level of a French Quarter unit," he said.
"Having a place to go out and see the river and have a park-like experience is pretty unique in New Orleans," he added.
Ragas is not surprised that some condo developers also are touting their properties' potential for short-term rental income. Condo development is expensive, he said, and "Airbnb owners will pay a lot more per unit than other buyers."
Analysts say a number of factors have converged to pave the way for the growth in condos downriver from the CBD and the Quarter. As in many other cities, young buyers in New Orleans show a preference for neighborhoods where they can walk from home to work, or to restaurants and entertainment venues.
Then there's the "cool" factor of the Marigny and Bywater areas, an intangible that seems to derive from cultural and income diversity, giving older, perhaps even dilapidated, neighborhoods a cachet that sets them apart from other areas.
Demand in these neighborhoods also benefits from the lure of the river. Appreciation in property that lies close to the Mississippi River is driven in part by Crescent Park, the new linear riverfront park that's accessible via a pedestrian overpass and eventually will extend into the French Quarter.
Latter & Blum President Rick Haase said the number of condo units that came on the market in Marigny and Bywater south of St. Claude Avenue during third-quarter 2017 was 25 percent above the same period a year earlier, and the action is not confined to condos. "Both multi-family and single-family homes in that area are pretty hot right now," he said.
Despite rising prices, Haase said, the area has not turned into a no man's land for buyers at lower levels. "The median home price in the area, in October, was $261,000," he said. "When you can live that close to a major urban center for $260,000, that's great."
Constantine Valhouli, a New York urban housing consultant who keeps a close watch on residential trends in a dozen U.S. cities including New Orleans, said the growth rates in Bywater and Marigny are typical of what is occurring in places such as Austin, Texas; Philadelphia; San Francisco; and Washington, D.C.
"Near prime areas of the cities, tremendous gains have been seen in emerging neighborhoods that have gone from 'marginal' to desirable," he said. But he added that the impact on a neighborhood of having its housing stock turn suddenly hot can be negative for long-term residents.
"When you have a place that's inexpensive but lively, and it starts to get more expensive — maybe because absentee owners or second-home folks are displacing full-time residents — the neighborhood may not survive in the form that it has known," he said.
For residents of Mid-City, the cleanup that began recently at the long-vacant Lindy Boggs Medical Center can't happen fast enough.
Areas characterized by economic and housing diversity "tend to become more homogeneous as housing becomes more uniformly expensive," Valhouli said. "And businesses that thrive in an active neighborhood of residents are not always the kinds of businesses that thrive in an area driven by tourism."
The team that developed the Bakers Row condos said their aim with their next Bywater project is to draw people who truly want to live in the neighborhood. Bosio and Resmondo own the land immediately adjacent to the site of Piety on the Park, and they plan to build a condo complex of perhaps 18 units there.
Resmondo said they do not yet have a start date for the 3200 Chartres St. project but have begun talking with potential buyers.
He said some of the prospects already live in downtown buildings that are rife with short-term rentals, and they are tired of the constant turnover among their neighbors. "They want to get away from that atmosphere," he said.
Resmondo said that he and Bosio want to build a complex that features both appealing design and a high level of storm resistance. He acknowledged that the features won't come cheap but declined to discuss pricing on the new units.