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Fully furnished: Zero apartment building permits were issued in 2005
As soon as Nick Hogan saw the classifieds and the listings on the Internet, he knew he would have no difficulty finding an apartment in Cape Girardeau.
There were plenty.
"I didn't have any trouble," Hogan said. "There were a lot to choose from. I didn't know what to expect, but when I saw how many ads there were, I knew I didn't have to worry."
And it was only a few days before the 26-year-old State Farm Insurance agent from New Madrid, Mo., landed a two-bedroom apartment on Themis Street.
With the number of vacant apartments on the market, Hogan's story probably isn't uncommon. There were nearly 60 one-, two- and three-bedroom apartments listed in the classifieds last Saturday and Sunday, ranging from one to three bedrooms and generally in the $450- to $600-a-month range.
Some are fully furnished, some are partly furnished and others are more bare-bones. And more than a few, apparently, are sitting vacant.
That may have something to do with why new apartment buildings aren't going up in Cape Girardeau like they have in years past. In fact, no new construction permits were issued by the city of Cape Girardeau in 2005, the first time that has happened at least since 1991, according to city records.
Since 1991, 789 new apartment units have been built in Cape Girardeau, for a total construction cost of nearly $40 million.
As recently as 2000, there were permits issued for 166 new apartment units with a construction cost of $8.1 million. But the numbers have dwindled in years since and finally reached zero last year.
City planner Kent Bratton said the numbers of permits of any kind -- new residential homes, duplexes, commercial -- are cyclical. He pointed out there have been years in the past when there were very few permits issued. For example, in 1991, there were only two new units built and in 2001 there were only six units.
"The builders watch the market pretty closely, and they adjust from year to year," Bratton said. "If they have apartments that aren't getting filled, they don't build new ones for a while. They lay off for a while; the demand builds up."
Harry Rediger, a planning and zoning commissioner, thought of a few other reasons why new apartments may not be going up at a fast clip right now.
Interest rates for new single-family homes have been low over the past two years, he said, making it more appealing for people to buy homes rather than live in apartments, he said.
But Rediger agrees that there has perhaps been some excess on the part of apartment builders, who may be learning now that they have put up too many apartment buildings and complexes -- maybe more than there are renters. He also wondered if the Cape Place apartments on North Sprigg -- geared primarily to Southeast Missouri State University students -- have taken many of the college students off the market.
"The market will adjust itself," he said. "We're playing catch-up right now and we're seeing higher vacancies for it."
Mike Smith, who owns apartment buildings on Lynwood Hills Drive near Lynwood Baptist Church, said there are always vacant apartments in the city.
"And we never fill them all the way up," Smith said. "If someone wants an apartment, they should be able to find one right away."
But Smith -- who owns Smith Properties -- said there are other explanations about why no apartment permits were issued in 2005. Construction costs are also up, he said.
"When you build an apartment building, you can't rent at the prices you need to compete anymore," he said.
David Bean owns more than 250 apartment units in Cape Girardeau. He was surprised that there were no new apartment permits issued last year. At any given time, he has 10 or so apartment vacancies. But he hasn't built any new units since 1997.
"But it's all supply and demand," he said. "If there's a big demand, the supply will increase. As long as there are vacancies, there's no reason to build more."
335-6611, extension 137
By the numbers
|Year||Apartment permits||Construction costs|