Las Palmas Condominums, in the foreground, are among the residential properties nearest to the Mall at University Town Center.
STAFF PHOTO / MIKE LANG
BY THE NUMBERS
• 4,827 home sales during third quarter
• $195,650 median home price
• $1,355 average three-bedroom rent
• 108-year wait for subsidized one-bedroom housing
• 1,700 condo-style housing units planned for the mall by Benderson Development
But because developers have generally failed to meet rental demand for the 2,000 mall workers, avoiding earlier agreements to build affordable housing as part of UTC approvals, apartment rents that are climbing at the fastest clip in a decade are projected to rise further out of reach.
That could widen the gap between homeowners and renters in this region, boosting competition for housing near the mall and further tightening supply.
Analysts say that scenario will benefit homeowners already in a comfortable living situation, while making it harder for workers living paycheck-to-paycheck to find decent digs nearby.
“It's great the mall will create these additional jobs, but the vast majority are hourly with no benefits, and the cost of living has gone up so much, most of these folks will have to live somewhere else and drive to the mall,” said Jack McCabe, a Florida real estate consultant.
“There's just nothing affordable within walking distance, and the rapid rise in rental rates is far outpacing what most workers can afford,” McCabe said.
Median home prices during the third quarter reached $195,650 in the North Port-Sarasota-Bradenton area, a figure that continues to flirt with its post-recession peak, Realtor data show.
Meanwhile, the average fair market rent for a three-bedroom home in Sarasota and Manatee was $1,355 in August, according to industry researcher RealtyTrac Inc.
Only Broward, Miami-Dade and Monroe counties have higher average rents in Florida.
The new mall is expected to boost demand for housing along the University corridor, from the 2,000 employees expected to work at the retail hub and retirement homebuyers who want to live nearby.
Already, Realtors are using the mall as a sales pitch in their listings, much like they do for the area's beaches.
Some homebuyers are avoiding the region over traffic concerns. Others want to live near the action, said Gloria Weed, managing broker for the Michael Saunders & Co. brokerage in Lakewood Ranch.
“Some people see it a great draw, and they're going to want to live here because of the mall,” Weed said. “And others are concerned.
“We just don't know what we have here yet.”
Even amid a development uptick, residential supply has not kept pace with ballooning demand, especially in the lower price points.
In October, Iberia Bank sold nine acres out of foreclosure near the corner of Fruitville and Cattlemen roads to a subsidiary of Sarasota Apartment Development Group. If the buyer ultimately builds apartments on the land, it would help feed housing demand near the mall.
MI Homes also is building 62 townhomes near the University Town Center mall, the latest in what is expected to be a rush of multifamily development near the new shopping hub.
The project joins a 237-unit apartment complex dubbed The Venue at Main Street Lakewood Ranch. The first phase of The Venue is open for leasing, with apartments that are expected to attract more upscale tenants.
Two other apartment projects are in the works for Lakewood Ranch.
The vast majority of those homes and rentals will be priced beyond what mall workers and many other families in the area can afford.
“We have a big gap, and that's a real concern because these workers will have to live somewhere,” said Joe Murphy, a real estate agent with Coldwell Banker who specializes in that area of town. “Every new home project we've seen is priced beyond their reach. Even the apartments are going to be expensive.”
“We have really priced out our workforce.”
Mall co-developer Benderson Development Co. has said it plans to build up to 1,700 condo-style housing units near the mall, through a mix of both rentals and for-sale units, although the company has been mum on the details.
In 2007, Benderson agreed to affordable housing stipulations to gain government approvals for UTC, with promises to build as many as 437 homes that would be affordable to middle-income buyers.
But when the Great Recession crimped construction plans, Sarasota County commissioners agreed to allow Benderson to push forward with the retail segment first — and eventually to shed the affordable housing element altogether.
At the time, both sides were armed with studies that showed a sharp drop in local real estate prices had erased the need for more affordable homes.
But since then, a robust recovery has once again thinned the supply of rentals and homes for sale that are within the reach of most typical workers, especially lower-income families.
Todd Mathes, Benderson's director of development said although the company is not obligated, many of the homes to be built at UTC will still meet the previous stipulations tied to the property.
“The mall has had a tremendously positive impact on real estate,” Mathes said. “Everyone recognizes increases in the neighborhoods.”
There are now more than 500 applicants for a one-bedroom unit in Sarasota with rent that is subsidized below market standards by the government, but historically only five of those apartments open up each year, county records show.
That leaves a wait of 108 years.
“Benderson came in with a plan for a mixed-use, walkable community, with some substantial affordable housing,” said Dan Lobeck, an area attorney who advocates for slower growth. “After huge campaign contributions to county commissioners, they got that aspect repealed. This is the pattern we're seeing with development.”
Much of the residential growth near the mall also will be subject to recent changes to Sarasota County's 2050 plan, including a proposal to increase density east of Interstate 75 and south of University Parkway.
Critics fear that will only heighten the affordable housing gap. Earlier in October commissioners overhauled the rural growth regulations, amid community concerns over environmental harm, housing sprawl and the cost of development to taxpayers through infrastructure like roads and emergency services.
“Because we have very few projects going on, there has been and there will continue to be some pent-up demand,” said Kirk Boylston, president of LWR Commercial Realty. “We have kind of been playing catch up a little bit.”
Real estate analysts say those already living in established homes near the mall are poised to see the biggest benefit.
There is not a lot of empirical data to quantify a shopping mall's impact on surrounding real estate.
In areas of South Florida, where similar luxury centers have sprouted, values have generally increased. Most appraisers expect similar results in northern Sarasota and Southeast Manatee.
But they say it will depend on the price points at which existing homes will start changing hands — and how that compares with pricing before the mall's opening.
Traffic congestion also could curb some of the expected real estate appreciation.
“We'll look at other sales near the mall after it opens, and decide if it was a result of the mall or just the economy being robust,” Sarasota County Property Appraiser Bill Furst said.
“We're not in a position to predict what's going to happen.”