Electric Boat hiring strains housing market
A shortage of homes on the market in southeastern Connecticut could lead to a larger housing challenge down the road, given, in part, Electric Boat's plans to continue to hire thousands of new employees.
U.S. Sen. Chris Murphy, D-Conn., raised the issue during a recent congressional hearing, noting that EB, which is building two Virginia-class attack submarines a year, is close to starting construction on a new fleet of ballistic-missile-carrying submarines, known as the Columbia class, and there's talk of building three attack submarines in some years.
"The Navy's going to start production on Columbia in 2021 and is considering adding a third Virginia class. And so you're going to have two boats under construction, and each boat is going to have a pre-commissioning crew of about 250. Thus, conservatively, we're talking about an additional 500 families, not to have mentioned all the junior sailors that are coming in at the same time that EB is ramping up production. So you're requiring more and more workforce housing," Murphy told Navy and Pentagon officials at an April 27 hearing of the Senate Appropriations Military Construction, Veterans Affairs, and Related Agencies Subcommittee.
Navy Vice Admiral Dixon R. Smith and Lucian Niemeyer, assistant secretary of defense for energy, installations and environment, both committed to working with Murphy to ensure there's an adequate supply of affordable housing in the region.
Officials at the Naval Submarine Base in Groton are working on a not-yet released report that examines housing needs surrounding the base. The Navy relies heavily on private-sector housing for its personnel, Murphy said, and there's "nothing in the short-term budget to build more Navy housing in and around the sub base.
"I want to make sure the Navy is thinking through how it can work with the community to solve this welcome problem," he added.
During the first quarter of this year, 553 single-family homes were available in New London County, compared to the 589 single-family units available this time last year, a 6 percent decrease in inventory, said Susy Hurlbert, CEO of the Eastern Connecticut Association of Realtors. That has driven up the median price for a single-family home in the region from $200,000 to $220,000.
"That's going to affect people who need lower priced housing," Hurlbert said.
A recent housing study of the region found that about 51 percent of renters and 30 percent of owners in southeastern Connecticut are considered "housing cost-burdened," meaning they put more than 30 percent of their income toward housing. The study was done by the Southeastern Connecticut Council of Government and the Southeastern Connecticut Housing Alliance.
The number of households in the region is estimated to increase by 7,200, or 6.3 percent, from 2015 to 2030, according to the study.
EB hired 3,000 people last year between its facilities in Groton and Quonset Point in Rhode Island. Of that, about 15 percent, or about 450 people, required relocation. The company provides relocation assistance to new employees but the level of assistance depends on individual circumstances, and arrangements with hiring managers, according to EB spokeswoman Liz Power. EB also works with local banks and Fidelity, which administers benefits to EB employees, to enable employees to hear from financial professionals about their offerings and learn from them about a range of topics, including how to save for or how to apply for a mortgage, Power said.
Inventory shrinks, prices rise
Realtors in the region said they're seeing an uptick in demand for housing, including from EB employees. Depending on the neighborhood, and condition of the house, it's common to see listings receiving multiple bids — a trend not observed in several years, if not longer.
Carol Christiansen of RE/MAX Realty Group in Ledyard said in addition to multiple bid offers, she's also seen more full-price offers. Given more people are looking to buy, and there's less inventory, houses are going for more than the asking price, in some cases.
"That's going to make it more of a seller's market," whereas previously it had been a buyer's market, she said.
Single-family homes between $200,000 and $250,000 are "very desirable" right now, she said. At an open house she hosted recently, a line of people waited to tour the home.
"This area has lagged behind on recovering from the rest of the country and even rest of the state, so now with new hires from Electric Boat, that has started to stimulate the market," Christiansen said.
Rent first, buy later
Keith Turner of Homestead Funding Corp., formerly McCue Mortgage in New London, said there's been an influx of buyers interested in buying homes in New London.
"I'm noticing more and more people are keeping New London as part of their search criteria," Turner said, noting the all-magnet school district is a draw for people, as is the arts and culture scene.
However, he's found that in many cases EB employees decide to rent first to get a sense of the area before putting down roots. The southeastern Connecticut housing study estimated that more than half of the new households expected in the region will be renters.
That's spurring interest in New London from apartment developers. Pennsylvania-based A.R. Building Co. recently completed a $15 million, 104-unit complex at 60 Mansfield Road. The complex is a mix of studio, one- and two-bedroom units with a starting price of above $1,000 a month, with larger units exceeding $2,000.
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