AvalonBay Communities has partially completed one apartment complex in Milford on Woodmont Road (above) and is seeking to construct another near Wheelers Farms Road.

A Virginia company that builds often-controversial luxury apartment complexes has completed the purchase of 42 acres near the Connecticut Shoreline. AvalonBay Communities, a developer that regularly builds apartments under the state’s affordable housing appeals act, or Section 8-30g of the Connecticut General Statutes, had the land under contract for several years while securing the permits necessary to build a 283-unit complex near Wheelers Farms Road in western Milford.

The permits haven’t yet been finalized because the developer remains in court with the city over disagreements on sewage and planning and zoning issues.

Meanwhile, AvalonBay has completed two out of seven buildings in a second Milford complex on Woodmont Road. The complex of mainly one- and two-bedroom apartments will be built under Section 8-30g, the act that applies to developments including at least 30 percent affordable units. The statute allows those developers to forego some local zoning ordinances, such as those dealing with density, and to appeal to the state for approval if they are not happy with the restrictions a city or town places on the project or if the municipality does not approve the project.

About 30 percent to 40 percent of AvalonBay’s developments in Connecticut are done under the affordable housing appeals act, said AvalonBay Vice President Mark Forlenza.

Although many cities and towns across Connecticut have railed against Section 8-30g projects, and against AvalonBay projects in particular, the act is intended to spur the production of affordable housing, which is lacking in many parts of the state. The law applies to cities and towns where less than 10 percent of the housing stock is affordable.

AvalonBay specializes in building apartment complexes – which usually have amenities like swimming pools, health clubs and waterfront views – in communities around the country that have many barriers to development. Although many local communities try to stop Section 8-30g projects, AvalonBay fights what Forlenza calls unfair zoning laws in such municipalities. Such zoning restrictions are often part of the reason many of those cities and towns have little affordable housing. The affordable housing appeals law is there to give developers the tools to challenge communities that are resistant to new housing in general, and specifically affordable housing, Forlenza said.

“It sort of combats the lack of zoning [fairness],” he said.

About 6 percent of Milford’s housing is considered affordable.

In addition to the need for more affordable housing in the city, Milford Mayor James Richetelli acknowledges the city needs more market-rate apartments.

“There is a need,” he said. “Milford is a very desirable place to live.”

But AvalonBay’s current and proposed developments in Milford are not the best locations for apartment complexes, Richetelli said.

“The city has not received AvalonBay with open arms,” Richetelli said.

But Richetelli said he is not opposed to AvalonBay building in the city. The luxury apartment complexes provide quality living space for young professionals and others in the area, and he said he believes AvalonBay builds high-quality complexes. Indeed, the company has won numerous awards for its buildings.

“We just don’t believe they are in the right locations,” Richetelli said.

But the 42 acre-site’s proximity to Interstate 95 makes the location ideal for the apartment complex, Forlenza said.

“Any site along the I-95 corridor is underserved from [an apartment] market perspective,” he said.

Market Effects

AvalonBay has run into disputes in many of the towns and cities in which has developed. A project in Orange spent years in court before AvalonBay started construction on the complex earlier this year.

Although city officials and citizens in Orange weren’t always in favor of the project, it could be good for the real estate market, said Frank D’Ostilio, president of William Orange Realty in Orange. AvalonBay has other complexes near the Shoreline, in places like Darien, Stamford and New Canaan.

The common fear when an AvalonBay complex comes to a community is that families with children will move in and overload schools that are often already cash-strapped, D’Ostilio said. But that isn’t usually the case, he said.

“I haven’t seen that happen,” he said.

Before AvalonBay builds an apartment complex, the company’s representatives often say – as they have in Milford – that the apartments will draw young professionals to the area and D’Ostilio said he has found that is usually the case.

“They attract exactly what they say they’re going to attract,” D’Ostilio said.

Many young professional with no children move into AvalonBay’s apartment complexes, he said. These people are often qualified to buy a house, but move into apartments to check out a city before committing to it, D’Ostilio said. AvalonBay apartments offer a good place to do that, he said.

However, the presence of an AvalonBay complex in a city or town can sometimes have a detrimental effect on the rental market there.

“It’s harder to compete with Avalon,” said Judy Tibbetts of Tibbetts Real Estate in Darien, where AvalonBay recently finished a project. Since the complex was completed, it has been difficult for landlords to find tenants for some of the lower-end apartments in Darien, Tibbetts said.

But the construction of big apartment complexes can sometimes have the opposite effect, Forlenza said. Because of the high quality and often high rent of AvalonBay complexes – Milford apartments will go for between $1,300 and $1,800 per month – other apartment owners in the area can raise their rents a bit, Forlenza said.

“Generally, our rates are above everyone else’s rent,” he said.

That can change, however, if an AvalonBay complex is built in a market that is close to saturation, he said.

The presence of an AvalonBay complex doesn’t usually make much of a difference on the rental market, D’Ostilio said. It depends more on interest rates and whether people decide to buy or rent.

“The rental market ebbs and flows,” he said.

The partially completed AvalonBay complex in Milford is 50 percent leased, Forlenza said.