All the New Apartments Coming to Katy; Saint Genevieve Closes in West Ave

Mural Behind 2800 San Jacinto St., Midtown, Houston

Photo of mural behind 2800 San Jacinto St.: elnina via Swamplot Flickr Pool


21 Comment

  • It’s disappointing to see the overbuilding of apartments in Katy. Midtown and Montrose benefit from being sandwiched between Downtown and Uptown. It makes sense to build more multifamily housing in those general areas because there are so many jobs nearby. This also means those apartments will age gracefully. But Katy has none of that. They’re a suburb, with limited access to other parts of the City. When the apartments lose their newness, they’ll go into decline. Throw in a major economic downturn or two, and you have another Alief.

  • ZAW, you do know there are more jobs near the “Katy” apartments than near midtown?

    Katy in this sense is a vague term, but there are four job centers that spread around these new apartments:
    Energy Corridor
    Memorial City
    Sugar Land

  • It would be inaccurate to say that Katy doesn’t have a lot of jobs…it doesn’t (yet) have a lot of white-collar professional jobs housed in big office buildings, though they’re not really far away and are definitely creeping westward. However, Katy has been adding multitudes of retail, medical, institutional (schools), and industrial/warehouse jobs, which do increase apartment demand. Is that enough to justify the amount of development? Hard to say without doing a market study.

    Is it some sort of community responsibility (specifically, the public sector) to make sure that any suburban school zone has a maximum number of “apartment kids” or “starter home kids”? I would posit “no.” Plus, higher-end apartments tend to have a much lower ratio of children per unit anyway compared to older cheaper properties.

  • Montrose/Museum district: 3000 units
    Katy: 1000 units.
    Sure, it’s second, but it’s a pretty distant second.

  • There were jobs close to Alief when they overbuilt apartment, too. The offices along the Southwest Freeway were built around the same time as those apartments, and they were about the same distance from Alief as Katy is from the Energy Corridor. Uptown was getting started, and that was about as far from Alief as CityCentre is from Katy. It wasn’t enough to prevent a long decline in the multifamily market in Alief due to the overbuilding.
    I guess the Grand Parkway will make it possible to commute from Katy to The Woodlands and Exxon’s new campus, but even that won’t be the same as Midtown and Montrose’s access to just about everything.
    Don’t get me wrong. I WANT to be proven wrong here. I hope history doesn’t repeat itself. I really do. But I’ve seen what can happen if it does, and we should all be scared.

  • kjb434,

    “you do know there are more jobs near the “Katy” apartments than near midtown?”


    That’s a nice hand Katy has there, but Midtown wins on the reveal with a four of a kind including

    Downtown, Medcen, Greenway, Galleria

    *Not meaning to knock Katy, but that was just a completely ridiculous statement.

  • Houston has chronically underbuilt inside the loop. That has caused a huge spike in rental rates as demand quickly outstripped spply. Only so many people can afford to pay $1500 a month for a one bedroom apartment and most people would prefer to not live in a run down old garden style apartment on Gulfton in order to find affordable rent. Thus, multi-family housing is booming in the burbs.
    I would actually agree that multi-family in Katy could be susceptible to decline in a boom-bust cycle, but not because they are located too far from major job centers. Developers in Katy are just dropping apartment complexes in wherever there is cheap land. There is no real effort to integrate multi-family into mixed use developments. Once the complexes start to age, they will just keep going to a lower price point as there won’t be any value in the location. By contrast, Sugar Land and The Woodlands have done a better job of integrating new multifamily development into a live/work/play environment instead of the live, drive a long way to work, drive to play environment that is being built in Katy.

  • Don’t also forget that what sent Alief apartments – and those in many other areas around the city, plus lots of middle-class single family homes – into the lower-rent stratum was the utter collapse of the regional economy – there was an oversupply of EVERYTHING except U-Hauls leaving town. While that doesn’t mean the vast oceans of mediocre garden apartments were justified on the southwest side, that property sector took just a massive, massive hit – you didn’t have to have a large supply in any one place to end up with a crappy tenant base.

  • What a racket Texas City has going on. We were down there two Saturdays ago and the sparse Port-O-Lets were so disgusting we decided to hold it. I mean they were BAD. Looks like they hadn’t been emptied in a week.

  • kjb434, just so you know, Memorial City and Sugar Land are not that far from the Museum District either (mileage wise). You can get to both in about 20 minutes (assuming a reverse commute), which I’ve done on a number of occasions. I have neighbors and friends that commute to these locations, so it’s not like you have to be in Katy to work in these locales. Driving from deep inside Katy to Memorial City would probably take a similar amount of time.

  • @Planner: I said that in my initial post.
    @ Old School: Great point, and good assessment of the situation.
    I would also note that Sugar Land and The Woodlands are running a very tight ship on granting permits. They don’t ban apartments per-se (that would run afoul of Fair Housing Law) but they are incredibly strict on design standards, landscape buffers, tree requirements, etc. for everyone, and especially multifamily.

  • That mural needs to be holding a general business degree in one hand and keys to a BWM in the other if it really wants to be a mural of Midtown’s $30k a year millionaires.

  • I always pictured God with at least some bicep action…

  • @ZAW: Upon review, yes, you mentioned that.

    @Old School: Though any major economic downturn puts apartments at risk, I fully agree that having standards for quality and urban design – and if the community uses zoning, siting to encourage optimal “place making” – will help apartments retain their appeal and value even during weaker economic times. I’ve seen some suggestions that apartments should be shunted off to industrial zones or the edge of town away from anything and anyone. That’s a sure way to create a slum over the long haul.

  • LP: “I fully agree that having standards for quality and urban design – and if the community uses zoning, siting to encourage optimal “place making” – will help apartments retain their appeal and value even during weaker economic times. ”

    But if we disrupt the hidden hand of the free market by placing restrictions on the siting and design of apartments, wouldn’t that mean such apartments would be of lessor value than those sitting out there on the unincorporated Katy Prairie?

  • Re: apartments in Katy – this cartoon sums it up nicely:

  • I’m only saying if a community applies land-use and density zoning (which I personally don’t support), then at least put multifamily where it can leverage and reinforce value – don’t banish it to the extremities.

    Design guidelines and performance standards, however, are generally acceptable, even though they can increase costs.

  • @Superdave, that cartoon describes the Inverse Doughnut principle which has been known for at least two decades and is finally in full effect in Houston. The part that it does not mention is that the process effectively precludes the minorities from ever coming back to inner core because the prices have risen beyond their foreseeable abilities. (median salaries have stayed flat after all)

    Extrapolating on this fact and statistic and common sense, fleeing minorities(in real estate sense) is still en vogue with the WASPs today and for the foreseeable future.

  • @ ZAW: It’s sometimes easy to forget that at its peak, as a city of about half its size, Houston in 1982 had 42,355 new multifamily units per year getting permitted; and bracketed around 1982 were several other very active years. Five years later, that rate had declined to a mere 244 units. In 1998 and then again in 2007 we had booms that topped out just above 20,000 units. Those are our post-bust peaks. The past couple of years have been strong, but not even 20,000 strong. As of the year-ended 2013, 16,649 multifamily units had been permitted; so the 1,000 in Katy represent about one sixteenth of new supply in the region. That’s not so alarming. (Sources: Texas Real Estate Center & Census Bureau)

    What happened to Houston’s southwest side was a process of urban entropy so historically aberrant, so abrupt, that — if it were going to happen again anywhere else in Houston — would require an energy bust that was an order of magnitude worse than any on record. It would make Detroit seem like greener pastures by comparison and would be occasion for doomsday preppers to break out their zombie guns and go sit on their porches menacingly.

    Another thing to consider about these rankings is that the Katy submarket is many times larger in land area than Montrose/Midtown. One could even argue that although the Katy submarket is fairly well self-contained, that it would be grossly ignorant to analyze the Montrose/Midtown market in isolation, and that it should be lumped in with most of the remainder of the western part of the Inner Loop, plus Uptown and Downtown, as part of the urban core. Start redrawing submarkets, though, and all of these rankings start to unwind and to appear as the superficial headline-grabbers that they really are.

  • @Niche: that does make me feel a little better.
    Still, though, I don’t think the word has gotten out to others in the neighborhoods around Houston. The media puffs up the current boom of apartment construction and it makes a lot of people (myself included) very nervous about overbuilding and repeating the crash of the early 1980s. Nobody ever gives us numbers, as you did, to put it into perspective.
    (The story of what happened in Houston in the early 1980s also needs to get out to everyone involved in housing in this town, because it’s been 30 years and large portions of the City are only now starting to recover from the 1980s bust. I’ve been saying this all along, but I digress).

  • Well, you know the first sort of real estate asset to recover from the ‘Great Recession’ was multifamily. And by the time that developers got their pipeline of new deals set up and financed again (of which, they could only get money for “sites with a story”, so “irreplacable urban core sites” worked, and in Houston, “Energy Corridor” worked), then built them, and then began leasing them, there was all this pent up demand from consumers with good incomes that couldn’t get home loans; and they wanted new apartments; and the rents on those new apartments began to increase pretty fast. For a while (only a brief while, in Houston), apartments were the only story worth talking about.

    I do tend to think that there’s been an inflection point in the current cycle and that some submarkets will become overbuilt. Katy might be one of them. However, a supply glut by itself doesn’t worry me too much. Developers in Houston haven’t spent years obtaining entitlements on their sites and they’ll let the deal go sideways or pull the plug if its real bad; and for the properties already built, they’ll concess to fill units; however, they’ll still be nice properties, and when everything shakes out the concessions will burn off and everything will be okay again. There’s a pretty good reason to build in Katy, which is to provide affordable new housing to an ever-increasing number of employees in the Energy Corridor; and east of Park 10, the words “new” and “affordable” don’t go together; and they’re all close to the freeway, not out on the margins, and yet not all crowded together.

    So…it’s just not that bad. Not at all, right now. It could get that way over time, but…if there had to be a new apartment ghetto somewhere, there are a whole lot worse places that it could be other than that strip along Interstate 10.