Housing in short supply amid Electric Boat building boom
Jun. 22—David Shaman Ortiz, a rigger at Electric Boat, is looking for a one-bedroom apartment for him and his family within a 15-to-20 minute commute of his job in Groton.
But the search to find a space for him and his partner, Suhery Tavarez, both in their early 30's, and their 11-month-old son, Elrah Ortiz, has been very difficult.
Ortiz, who has a salary of about $50,000, said the apartments either are too expensive and he doesn't qualify because of his income, or he gets priced out because there are so many applicants. Amid the high rents and cost of living, Ortiz, who is currently the only income provider for his household, knows he's not the only person struggling to provide for the family.
"This is something that's affecting everybody," he said.
With the hiring boom at Electric Boat, developers are proposing and building new housing in the region. The submarine manufacturer is hiring to expand its workforce to meet the Navy's need for Columbia-class and Virginia-class submarines and account for natural fluctuations in its workforce due to retirements and attrition.
But some Electric Boat workers say they are struggling to find housing at a reasonable price.
The increased hiring comes at a time when there is already a nationwide housing shortage.
Ortiz said the median price range is $1,250 to $1,400 ― and goes higher ― for the one-bedroom apartments he sees, which is an increase over the rents he saw when he moved from New York City to the region last year. Ortiz, who is temporarily renting a space in East Lyme, is surprised that the apartments he sees, for their square footage, are priced similar to New York City apartments. With home prices and mortgage interest rates, he said the market for buying a home is even more difficult.
Growth at Electric Boat
Electric Boat employs about 23,000 people across its major facilities in Connecticut and Rhode Island, and the company estimates reaching a peak number of 25,000 employees over the next decade, according to Electric Boat's spokesperson.
"Overall, housing has not prevented Electric Boat from meeting our hiring needs, though there have been instances where some new hires are having trouble finding affordable housing," the company said in a statement. "We're discussing these specific examples in conversations we're having on housing with the state, our local elected officials, our Congressional delegation and the Navy."
Kevin Graney, president of General Dynamics Electric Boat, announced at a legislative briefing in February that the submarine manufacturer was projected to hire 5,000 employees this year in Connecticut and Rhode Island. That includes 1,900 positions at Quonset Point, R.I., 1,100 in Groton, and about 2,000 in engineering and designing positions in southeastern Connecticut.
U.S. Rep. Joe Courtney, D-2nd District, said there's no question that housing is going to be a key part of the solution for Electric Boat to recruit employees from outside the area and the state.
Courtney said Electric Boat has a strong retention rate of 88% of employees hired last year. But, he said, at some point, if the housing supply doesn't increase, the trend of rising rents and housing prices is going to continue and that's a concern to him.
Housing developments in the region
Across the region, new housing developments are being built, many driven by demand from Electric Boat employees and other professionals.
In Groton, among the developments are the former William Seely School off Route 12 and the former Colonel Ledyard School, which are both near the Groton shipyard and being turned into apartments.
New London, home to Electric Boat's engineering office, has seen a pipeline of 2,115 housing units in various phases of development, from proposed to built, since 2018, said New London Director of Economic Development & Planning Felix Reyes. He called the amount of development in the city of five-and-a-half square miles "unprecedented."
"We have seen interest," said Waterford Planning Director Jonathan E. Mullen. "There have been several multi-family developments approved and constructed in the past two to three years."
Housing search difficult
Sean Ladyga, 45, who has worked at Electric Boat for 21 years and has been a part-time coach for 26 years, said when he got divorced, it was difficult to find a new space for himself and his five-year-old son, who stays with him three nights a week, and his 16-year-old son who stays with him some weekends.
With his price range of $1,000 to $1,200 for monthly rent, Ladyga, a program rep at Electric Boat, said he couldn't afford the new apartments built in the area.
He said he felt fortunate to find a one-bedroom apartment in Groton at La Triumphe Apartments for about $1,195 in rent ― which increased by $100 after a year ― and where he could also keep his electricity costs down through Groton Utilities.
But Ladyga, who pays child support, said housing costs are stretching his budget and he's worried about future rent increases.
Ladyga, who has a six-figure salary, said he does not qualify for low-income housing, and he can't afford a two-bedroom apartment. He's working on his credit score, and his long-term goal is to buy a home.
"The apartment building that I live in, it's good for what I need," Ladyga said. "Would I like something a little bit more for me and my two boys? Absolutely, but right now you got to go with what you can afford."
He worries about the affordability of housing when his son graduates from college and for the new hires at Electric Boat now.
Edward Ahlcrona, 31, of Niantic, who has been working at Electric Boat for the past five years in Structural Design, said he and his wife have been looking since the spring of 2022 for a home with three bedrooms, ideally large enough to start their family in. They submitted numerous offers above the asking price for properties throughout the area, including Ledyard, Waterford, Groton, East Lyme, Montville and Norwich.
"It has been an incredibly frustrating experience," he said. "As someone who's been patient for the past two years, I really encourage everyone to anticipate that it could take awhile."
Nationwide need for housing
Courtney said the need for more housing is nationwide. He said a recent briefing from Mark Zandi, chief economist of Moody's Analytics, relayed good data on the U.S. economy, but Zandi said the biggest Achilles heel in the economy is housing, and it is a supply problem. Zandi said the housing market never fully recovered from the 2008 financial collapse, and then the COVID-19 pandemic hit.
Courtney said that Realtors explain that when houses go on the market, "It's like the hunger games where people are bidding up the price above the listed price." He said there has been progress in building multifamily housing but rising rents suggest a shortage. There are other issues in the rental market, such as large financial groups buying apartment buildings and raising rents.
Locally, Jon Reiner, the director of planning and development services for the Town of Groton, said that while Electric Boat's growth is affecting the housing market, it is part of a larger picture. Reiner said the hiring has exacerbated the existing housing need in Groton and the region.
Overall, demographics are continuing to shift across the United States to smaller and more one-person households, creating a need for more housing, he said. People also are living longer, said Paige Bronk, economic and community development manager for the Town of Groton.
A 2023 housing market study update for the town found an under-production in housing in Groton, with 405 housing units permitted from 2013 to 2022.
The initial housing market study in 2021 incorporated only the beginning of what happened during the pandemic, as more people worked remotely and relocated to the area, Reiner said.
In Groton alone, there is a projected demand for up to 6,450 new housing units over the next decade, with new Electric Boat workers driving demand for 2,680 of those units, according to the 2023 update. The rest of the demand is from people living in obsolete units, new workers to the region, and commuters, and rental upgrades.
Bronk said there are people who currently work in town who are waiting for an opportunity to live in Groton ― 82% of the 27,000 total jobs in the town are held by commuters.
Bronk said the increased hiring is also an opportunity, as a growing population and jobs could help bring more commercial opportunities, such as dining, retail and entertainment, to the town.
Some housing proposals have been met with concerns from residents.
To encourage more housing, the town has taken steps, such as allowing higher density in mixed-use centers in the downtown and Poquonnock Bridge areas, and the Planning and Zoning Commission has started the conversation about some of the recommendations of the town's affordable housing plan, Reiner said.
The town meets with developers every week that are looking for opportunities in Groton.
Bronk and Reiner said all types of housing, both ownership and rental, and at all prices are needed to meet the housing demand. They said without an adequate housing supply, housing prices will continue to rise.
Reyes said that the pandemic has had a negative impact across the country. House prices increased amid a lack of inventory. People, who would otherwise have bought a house, remained in apartments, creating a supply and demand issue and causing rents to skyrocket.
He said it's important to increase the supply of both market-rate and affordable apartments. He said when there aren't enough market-rate apartments, people who could afford to pay more for housing absorb the less expensive apartments on the market and those apartments are then not available for people who could only afford those apartments.
Reyes said the housing developments in New London have been built on existing lots in the small city. He pointed to The Beam, an apartment complex at 221 Howard Street on a former brownfield site, as an example of the benefits of development in cleaning up sites with the help of grants.
Courtney said the U.S. House of Representatives recently passed the Tax Relief For American Families and Workers Act that would expand the Low-Income Housing Tax Credit program, a federal program to help increase housing. The program is aimed at setting aside some units in housing developments for low-income housing, and largely mixed-income developments get built under the program.
Reyes said New London has worked on improving its parks and infrastructure. He recalls a meeting years ago when Electric Boat explained that recruiting and retaining employees is not only about where they live, but also about amenities, quality of life, and schools.
He said the city hopes that the new jobs and infrastructure upgrades improve the lives of the city's residents, and that the young employees who moved to the city to live in the new apartments will stay for the long term, buy a house and raise children in the school system.
Reyes said New London is building its fair share of housing, and some other towns are also doing a good job. But the entire region needs to build more housing "if we want long-term sustainable population growth in southeastern Connecticut," which will help other industries and drive investment in the region.
Developers anticipate demand
North Haven-based DonMar Development is developing the 304-unit Triton Square apartment complex at the William Seely School site in Groton, with studios, one-bedroom apartments, two-bedroom apartments and amenities. Anthony Di Gioia, vice president of DonMar, said rents are anticipated to be $1,850 to $2,800, but will be adjusted when leasing starts depending on the market.
Chris Crampton, director of operations for Konover Residential Corp., the management company covering marketing, leasing and operations for Triton Square, said the plan is to begin leasing in September or October. About 250 people have asked for more information, with a quarter of the interest from Electric Boat employees, and the rest from other professionals and some retirees. He pointed to a need for multi-family housing with amenities in the region.
Bill Bellock, principal member of Bellsite Development, who plans to redevelop the former Colonel Ledyard School property in the City of Groton into 65 apartments, is exploring the state's Build For CT program, which the state says targets "middle-income households" and would help set aside a percentage of apartments at rents appropriate for the workforce.
Bellock recalled hearing at a recruitment event last year in Hartford that Electric Boat's biggest hurdle is recruiting, and the first question they get from people is, "Where am I going to live?"
"Nobody wants to commute an hour each day," Bellock said. "A big part of the solution is going to be housing for them."
The top ten communities in Connecticut where Electric Boat employees currently live
Groton: 2,070 employees
New London: 1,266 employees
Norwich: 1,040 employees
Waterford: 813 employees
Ledyard: 586 employees
Mystic: 546 employees
Gales Ferry: 492 employees
Uncasville: 450 employees
Pawcatuck: 429 employees
Oakdale: 389 employees
Source: Electric Boat
