While a few apartment projects currently are in various stages of planning and development in the Spokane-Coeur d'Alene area, and the apartment rental market here is being called relatively stable, 2009 has been a slow year for new apartment developments here, some industry insiders say.

Sizable projects planned or under way here include the $20.7 million, 216-unit second phase of the Granite Pointe apartment complex, in Spokane Valley—although developers are in no hurry to start that project—and a $17 million, 192-unit phase of Eagle Pointe Apartments, in Cheney.

Mitch Swenson, an agent with the Spokane-based commercial real estate company NAI Black, says the number of apartments currently under development is the lowest he's seen in years.

Apartment construction in the city of Spokane and in unincorporated Spokane County is far behind last year's pace. Through the first nine months of the year, building permit values for new apartment construction in Spokane totaled $2.2 million, down 82 percent from $12 million in the year-earlier period. The county had issued no permits for apartments as of Aug. 31 this year, compared with projects totaling $9.3 million in the year-earlier period.

Looking ahead, the only new apartment project in the city of Spokane's pipeline is a $1 million, 11-unit project proposed at 532 S. Garfield by Highland Park United Methodist Church. P&G Quality Construction Inc., of Spokane, is listed as the contractor on that project, and Russell C. Page Architects PS, of Spokane designed it.

The Granite Pointe Phase II project puts the total value of apartment projects permitted in the city of Spokane Valley at $26.1 million for the first nine months of the year, nearly double the $13.8 million total for the year-earlier period. Work on that project, however, hasn't begun yet, and no other apartments are in that city's planning pipeline, says Mike Turbak, Spokane Valley's permit specialist.

Permit values for apartment projects so far this year in Spokane, Spokane Valley, and Spokane County total $28.2 million, down from $35.1 million in the year-earlier period.

While this year's total isn't expected to increase significantly before the year is out, the total for all of 2008 was $55.4 million, and the 2007 total was $40.9 million.

HAL Valley Apartments LLC, of Spokane, will be developing the Granite Pointe Phase II project at 12925 E. Mansfield, says Chris Ashenbrener, a principal in HAL Valley, along with longtime Spokane developer Bill Lawson and Tom Hamilton.

That project will be located immediately east of the 144-unit first phase of the Granite Pointe apartment complex. The developers started construction on the $11.4 million first phase last year, and began leasing apartments there in July.

A&A Construction & Development Inc., of Spokane, which is headed by Lawson, is the contractor on the project, and Wyatt Architects & Associates PS, of Spokane Valley, designed it.

Developers aren't in any hurry to begin work on Granite Pointe Phase II because they're waiting to see how well leasing goes in the first phase of the apartment complex, Ashenbrener says.

"We're contemplating holding off on construction until we have a better idea of how the economy is lining up," he adds.

Ashenbrener says financing requirements for apartment projects are stringent, but not as difficult as they are for other commercial projects, such as hotels and assisted-living complexes.

"As long as there are people who need housing, you can get apartment financing," he says.

Historically, demand for apartments strengthen when economic conditions make it difficult for people to buy homes.

This year's higher unemployment rates could dampen demand for rental housing, he says, because some tenants are doubling up with other tenants or moving in with relatives to save on rent. He adds, however, "We think demand will be strong as the economy regains strength."

Granite Pointe Phase II will include 10 three-story buildings, nine of which will have 24 units with the other having 20 units, the permit application filed with the city of Spokane Valley shows.

In the Cheney project, Spokane developer Lanzce Douglass is constructing the first-phase of a two-phase apartment complex at 1090 Betz Road.

Douglass declines to discuss local market information, which he says is proprietary, but adds his projects are doing well. Developers here "know the market and wouldn't be building if there wasn't demand for them," he says.

The first phase of Eagle Pointe is to include 192 units in eight three-story apartment buildings, as well as a recreation building. Russell C. Page Architects PS, of Spokane, designed the project. The second phase, which has no planned start date yet, is to include 384 units in 16 buildings.

Billboards in Cheney say Eagle Pointe apartment units will be available for rent starting this winter.

While apartment vacancy rates have edged upward recently, occupancy here still is relatively strong, Swenson says.

Swenson, who specializes in sales of apartment buildings, says the resale market is at a near standstill. This year, the apartment sales volume is just over $5 million, down dramatically from more than $70 million in 2008, Swenson says.

"There was a lot of money coming out of Southern California," he says. "When that market goes away, the whole West Coast feels the ripple."

Many apartment investors are hanging onto their properties—and for good reason, Swenson says.

"People who own apartment properties are pretty well set," he says. "I haven't heard of any foreclosures on apartments here."

The overall vacancy rate for apartments in Spokane County was 5.5 percent as of March 31, up from 4 percent a year earlier, according to an annual spring market survey conducted by the Washington Center for Real Estate Research at Washington State University. A vacancy rate of around 5 percent is considered stable, Swenson adds.

The vacancy rate here is considerably lower than the average Washington state rate, at 6.3 percent, and the U.S. rate, at 7.3 percent, he says.

WSU's spring survey shows the average monthly rent for an apartment unit built since 1995 in Spokane County was $734, compared with $684 two years earlier.

Swenson says the increase in rents is another sign that occupancy is stable. "Spokane isn't a sexy market, but over the long term it's hanging in there," he says.

The overall vacancy rate for apartments in Kootenai County was even tighter at 4.6 percent as of March 31, up slightly from a year earlier, the WSU survey says.

George Mitchell, of Coeur d'Alene, is one of few developers who have started apartment projects there this year. He recently obtained a permit for a nearly $1 million, 15-unit apartment building.

"The market is about right," he says. Since the decline of the condominium market there, "construction costs are down, and everyone (in the construction industry) is looking for a job."

Mitchell says he plans to rent the units he's developing for $700 to $850 a month.

WSU's spring survey shows the average monthly rent for a newer apartment unit in Kootenai County was $752, up from $625 two years earlier.

Mitchell, who owns about 35 apartment units in four structures in Coeur d'Alene, says all of the units are occupied.