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BATON ROUGE, LA-When it comes to commercial and multifamily development, much of the news from the Gulf States has focused on redevelopment efforts primarily in New Orleans and Biloxi, MS. But another headline grabber has been the dwindling supply of multifamily units in an inland city situated about an hour’s drive to the northwest.

Housing experts tell GlobeSt.com that developers that are coming in to remedy the problem, but some questions arise as to whether Baton Rouge is ready for the growth. According to David Trusty, the market is short by nearly 11,000 multifamily units, with the downtown area’s class A space more than 90% occupied. “We’ve gotten population shifts and a real demand placed on inventory because of the storms,” says Trusty, a local commercial broker with Gully, Phelps & McKey Inc. “People are building as fast as they can.”

“There’s an immediate housing need right now,” adds Tom Murphy, a senior fellow with the Urban Land Institute’s Washington, DC office. “As that becomes permanent, we need to assume that the economy of Baton Rouge will expand significantly. There’s a definite belief that this will become a permanent population, with jobs increasingly migrating to the area because of a ready work force.”

Baton Rouge’s multifamily unit growth runs the gamut from townhouses and standard apartments to newer forms of high-density residential like lofts and brownstones. “There’s been a whole new influx of people into the Baton Rouge market who are looking for urban spaces, such as loft product, that the area just doesn’t have yet,” says Dimitri Menutis, co-developer with Menutis Investments in New Orleans.

But, there is likely more of it to come, thanks to tax breaks. GoZone Tax incentives are encouraging builders to come into Louisiana and Mississippi. “If you’re looking to invest in multifamily rentals, this is the spot,” says Arthur Sterbcow, president of Latter and Blum and CJ Brown Realtors, headquartered in New Orleans.

The main questions that crop up are whether Baton Rouge, which once was in the shadow of the more flamboyant New Orleans, is ready to support the anticipated growth. The infrastructure–including roads and highways–was strained even before Katrina. Murphy says these days “the highway between Baton Rouge and New Orleans looks like New York City at rush hour, with people driving back and forth each day.”

Sterbcow, who admits to making the New Orleans-Baton Rouge commute each day, says the inland city’s roadways were poorly laid out from the start and are a barrier to any type of organized growth. All is not lost, however. “There are billions of dollars coming down the pipeline from the federal government through tax breaks and private investment,” Sterbcow says. “That’ll be used to help fix up infrastructure.”

The experts believe growth is a given in the area although some people are likely to return to New Orleans. “I think you’ll continue to see a little give and take,” Sterbcow says. “There will certainly be more population moving to Baton Rouge over the next 24 months with some move-back to New Orleans. But, we’ll likely have businesses relocating to Baton Rouge for good because of insurance reasons or until category 5 protection is in place in New Orleans.”

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