The Houston Chronicle article Houston, home to one of the fastest-growing cities in the United States, has become a magnet for condo developers looking to build large apartment buildings in the city.
But many of the projects that have come to fruition over the last decade have come with major drawbacks, including the high cost of land, the lack of affordable rental units, and the possibility of flooding or earthquakes.
Here’s what you need to know about what to expect when building a new apartment in Houston.
Land and Building Costs There are few factors that can drive a project into failure, but one of them is the cost of building the project, according to Chris Anderson, president of Apartment Builders League of Greater Houston.
That’s because the real cost of the construction of a condo building is based on the total land value of the project.
Anderson said the average cost of a single-family home in Houston is around $1.8 million.
To get a new project off the ground, developers must first find a buyer.
“If they are interested in a condo project, you can get that down to $1 million,” Anderson said.
Anderson estimates that developers are typically able to get a condo built for about $1,000 per square foot.
That is about what a typical condo project costs a city like Houston, but developers in Houston have been able to lower that price to less than $200 per square yard.
Anderson says there is still room for a condo to be built in the Houston area, but the current market is so low that he doubts a condo will be built anytime soon.
The Problem of Flooding and Earthquakes When building condos, developers generally consider two factors when deciding how to build: water damage and the amount of water damage to the land.
A condo built with floodwater protection is often built with a roof, Anderson said, which provides extra protection against flooding.
The additional water protection is especially important for apartments because condos can be flooded during the summer months.
If you want to build a new condominium, you have to consider the possibility that a building could flood during a flood, Anderson explained.
If a building is built on a low-lying lot and the water is rising, it will flood the lot more than if it is on a high-lying site.
The only way to avoid that is to have a building on a higher floor.
“The reason you want a higher-end condo is that you want it to be in a higher position,” Anderson told The Chronicle.
If it is possible to build on a lower floor, it could be cheaper to build it on a street that is not flooded, but it also means you have less protection.
“I think the more you can put your money in the ground in the form of flood-resistant materials, the less water there is to flood the property,” Anderson added.
The Cost of Flood Insurance While most developers have been working on building condo projects on low- and no-interest mortgages for years, the costs of flood insurance are getting more expensive, according the National Flood Insurance Program.
The National Flood insurance program was established in 1938 and is funded by the federal government and is administered by the Federal Emergency Management Agency.
The program covers all properties that are inundated during flooding.
However, developers are not required to include flood protection in their project.
So if a building does not have flood insurance, developers typically need to negotiate with homeowners associations to include it, Anderson says.
How to Buy Homes The market for condos has changed over the past several years.
A few years ago, there were only a handful of condo developers in the area, Anderson noted.
Now, there are several dozen or so.
The market is dominated by the two major players: Apartment Buildings League of Houston and Real Estate Group.
Apartment Building League of the Greater Houston has a number of different programs in place for homeowners, including homeowners insurance, insurance for condominiums, and flood insurance.
The organization offers homeowners insurance to homeowners up to $300,000, and is available to renters as well.
“That’s about what we are charging for flood insurance,” Anderson explained to The Chronicle, adding that they offer a $5,000 cash bonus if you buy a condo that meets the requirements.
He said that homeowners insurance can be expensive, and that buyers should check the terms of the homeowners policy before signing the contract.
Real Estate Development Company is the umbrella organization for the group.
They also offer homeowners insurance for condos up to a maximum of $500,000.
They have a limited number of condo homes that they sell, and their prices can vary depending on the size of the building.
“We are a really strong organization, and I think the market is very competitive,” Anderson noted, adding he doesn’t think there is a shortage of condo projects.
How Many Homes Can You Build?
The National Association of Realtors (