Long Island, for years a bastion of antidevelopment sentiment, is warming up to rental-apartment projects as demand for them grows from people either unwilling or unable to buy single-family homes.
In the latest example of a project moving forward, AvalonBay Communities Inc. is poised to receive a rezoning Monday that essentially clears the way for it to build more than 300 apartments in Huntington Station. It would be Huntington Station's first new apartment complex in a decade, said Frank Petrone, Huntington's town supervisor who plans to vote for approval.
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"The big need on Long Island is different types of housing, including rental," he said. "It's very easy to say, 'No, no, no, people don't want it.' [But] if you don't change with the times, the area will change it will deteriorate, no question."
Other AvalonBay developments recently opened or are underway in Long Island—one with 349 apartments in Rockville Centre and the other with about 200 in Mitchel Field. Also an empty hotel in West Hempstead was recently razed by Mill Creek Residential Trust to make way for 150 apartments.
In Suffolk County, where AvalonBay's latest proposal is located, more than 8,000 apartments are proposed—the largest number in more than 20 years. David Calone, the chairman of the Suffolk County Planning Commission predicts more than half will be approved.
"You're seeing movement toward the recognition by political leaders that the era of the new single-family home is over," Mr. Calone says. "What we need is a more varied housing stock."
Populated in the last century by people fleeing the problems of the city, Long Island communities have been famous for their not-in-my-backyard bias against development. Over the years, local governments and residents have blocked hundreds of apartment units, office buildings and retail complexes. Residents have fought a new mall in Syosset for more than 15 years, costing retail giant Taubman Centers Inc. millions of dollars.
But demand for rental housing sharply increased on Long Island as well as the rest of the country in the wake of the housing crisis. People who have lost their homes through foreclosures have been forced into the rental market.
At the same time, buying a home has become more difficult because of financing hurdles, and home ownership has clearly lost its luster. With home values anemic, many have become convinced that renting is a better deal than owning.
The demand for rentals is particularly acute on Long Island, where single family homes makes up most of the housing stock. Rental units make up less than 18% of the Island's supply compared with 35% and 38%, respectively, in Bergen County, N.J., and Westchester County, N.Y., according to Alexander Goldfarb, a real-estate investment trust analyst with Sandler O'Neill + Partners. Some homeowners have turned their basements and attics into illegal apartments.
"We're behind the curve and we've been behind the curve for a long time, at least 30 years, if not longer," said Eric Alexander, executive director of Vision Long Island, a local nonprofit promoting smart growth.
The region's lack of housing diversity has forced many younger residents to leave the region. In 2009, there were 15% fewer 25-to-34-year-olds than there were in 2000, compared with a 5% gain nationwide, according to the Long Island Index.
"It's the No. 1 complaint that we hear from our tenants, that there's not enough quality housing for their employees," says Gregg Rechler, a managing partner of Rechler Equity Partners, which owns more than 6.5 million square feet of industrial space Islandwide and is looking to build 500 apartments in North Amityville. "Their biggest issue in retaining employees is just that, affordable housing."
Developers throughout the county have been moving forward with new rental apartment projects, making the sector one of the most active in the real-estate industry. More than 225,000 new apartments are expected by 2013, according to the CoStar Group.
AvalonBay's proposal recently earned unanimous approval from the Suffolk County Planning Commission. Part of the appeal was that the 26-acre site is located near a Long Island Rail Road station, which planners hope will encourage further mixed-used development in the area and allow residents to reduce car use.
But the project, named Avalon at Huntington Station, still ran into community opposition. The original plan for 490 units was rejected in September by three of the five Town Board members, so it was halted. Scaled back to 379 units, it is expected to get the three votes needed for approval Monday.
AvalonBay, one of the nation's largest publicly held apartment operators, plans to charge rents of $1,800 to $1,900 per month for one-bedroom units and more than $2,000 per month for two-bedroom apartments, said Matt Whalen, who oversees Long Island development for AvalonBay. Amenities will include a pool, clubhouse and fitness center.
Some residents remain opposed. Steven Spucces, president of the recently formed Greater Huntington Civic Group, said it is too dense and will generate too much traffic. "It's the wrong project, the wrong time and the wrong place," he says.
Write to Dawn Wotapka at dawn.wotapka@dowjones.com
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