Generation Y Trends, Economy Drive Decatur's 315 West Ponce Project

The planned $40 million development project at 315 West Ponce de Leon Ave. lays the groundwork for constructing the first set of new rental apartments in Decatur since 1999.

The project, which has raised nearby residents' concerns over traffic and its scope, follows another developer's plans for the site that fell through when the economy soured.

A rebounding economy is partly fueling the high-density, mixed-used development that calls for the construction of 235 apartments and 10,000 square feet of retail. It also calls for the construction of a seven-story parking deck to be shared by the tenants and retail customers.

But like other planned rental projects underway in Atlanta's Inman Park and Old Fourth Ward neighborhoods, Atlanta-based Carter, the developer behind 315 Ponce, is responding to what it sees is a shift in housing tastes.

Generation Y —  80 million people, or about a quarter of the U.S. population — is willing to pay a premium for housing and the amenities that come with intown living. And being more environmentally conscious, they're attracted to smaller living spaces, shorter work commutes and population density, as opposed to the white picket fences of suburban sprawl.

The shift in how Generation Y — roughly defined as those born between 1980 and 2000 — views long-term commitments, will drive housing trends for years to come, according to a 2012 Urban Land Institute report that looked at demographic changes.

None of that is lost on Decatur resident Conor McNally, Carter's chief development officer and the executive leading the project at 315 West Ponce, a 2.5-acre site bounded by Montgomery Street, Fairview Avenue, West Ponce de Leon Avenue and Ponce de Leon Place.

Theirs is a generation that is "very focused on living in intown, higher density locations like this," McNally told Decatur Patch in an exclusive interview.

Carter is betting the site's location in downtown Decatur, its proximity to MARTA, jobs in Buckhead and Midtown, as well as Emory University and the U.S. Centers for Disease Control and Prevention, will be a draw for renters.

Further fueling the company's belief that the project makes sense now is that Gen Y, characterized as having commitment issues, still has the housing market crash of 2007 fresh on their minds.

"The last cycle taught a lot of people that an investing in purchasing a home is something that — unless you're ready to commit to five or seven years plus — is maybe not a good investment," McNally said.

It explains why Atlanta's condo market has stayed fairly ho-hum, while announcements of new apartments for rentals or the renovations of existing buildings have been better received.

Cincinnati-based North American Properties' development in Atlanta's Old Fourth Ward, for example, is being built with  Generation Y's housing demands in mind.

And while they're opting for more flexibility because they expect to move several times for their careers, they're willing to spend more on rent, McNally said.

But even though they don't want to take mortgages early on, Gen Yers don't necessarily want to scrimp on their living arrangements.

It explains why Carter is pricing the monthly leases of its one-bedroom units at $1,100 to $1,200; the two-bedrooms at $1,800 to $1,900, and the three-bedrooms at $2,000.

"They're choosing to have the flexibility of renting vs. buying," McNally said, "even at higher rent levels where you could afford to purchase."