With so much focus on how well the Washington, D.C. market has done despite the recession over the past few years, developers often think to its neighboring city, Baltimore, as a shoo-in for expanding that success.
But the two can’t be comparable, experts say. And it’s not fair to try. “Baltimore always gets a bit of bad rep,” says Asheel Shah, senior vice president of Kettler Management. “But when you think of it compared to other Tier-II cities, it always ranks in the top three or four.”
Speaking Tuesday at Bisnow’s Multifamily Summit in Baltimore, Shah and other experts agree that opportunities in the city do exist, but there are still challenges to overcome because of Baltimore’s economic state. Here were some of the key takeaways:
• It’s all about refinancing. Refinancings, particularly of seniors and affordable housing communities, constitute the bulk of capital activity in the city, says Richard Martinez, managing regional director at Freddie Mac.
• Rents aren’t high enough. High property taxes and lower rents make building difficult, says Peggy White, owner of Axiom Engineering Design, LLC. And with tough Maryland regulations in place, she thinks the city could move further toward anti-growth sentiments in terms of new development.
• Public transportation could be better. It would be great if Baltimore had the same amount of wealth as D.C. in terms of transit for expansion, says Jeff Kayce, Bozzuto’s vice president. Baltimore residents now think of accessibility to the light rail and water taxis as a luxury amenity, he added.
• The city needs jobs. Gen Y renters are attracted to Baltimore’s new properties like the Bozzuto Group’s Fitzgerald community in Mount Vernon. But without jobs to bring in more of this demographic, the city is losing out, Kayce says.
• Columbia, Md. is hot. Offering easy access to both D.C. and Baltimore, industry experts see untapped potential in Columbia’s market over the next few years.