Post on 01-Nov-2014
description
Downtown KC Housing Summit June 2010
Downtown Council of Kansas City 1
Downtown KC Housing Summit June 2010
Downtown Council of Kansas City 2
Model Downtown Residential Development Strategies
Private/Public Sector Research and Strategy
• Development of a residential strategy based on GDAP & EDIP guidelines
– Agreed upon residential development market gap analysis
– Tax base impact of Downtown resident
– Advocacy process for State and Federal economic development tools
Private Sector Initiatives
• Define Downtown in terms of sub‐districts – drill down analysis
• Create a Downtown Residential Development Group:
– Equity fund for multi‐layered financing (GKCCF, Downtown Corporations, Philanthropies)
– Marketing to
• Residents (underway)
• Buyers by segment
• Developers (“matchmaking” developers with projects)
– Developer resource guide
– Broker education program
– Relocation Services
E l i ti– Employee incentive program
Public Sector Initiatives
• Establishment of a Urban Redevelopment Authority (Possibly under EDC umbrella or within housing department – focus on land assemblage, bonding capacity)
• Comprehensive GIS database inventory: detailed building data and surrounding infrastructure ‐ Opportunities for supporting existing investments and creating density, developer accessible
• “Green Tape” policy for Downtown housing (“front of the line”)
– Double green tape for historic rehab (e.g. Lucas Place, Pickwick, Mark Twain, Argyle)
Downtown KC Housing Summit June 2010
Downtown Council of Kansas City 3
•Downtown housing is a top priority
Double the Downtown residential population
for sustainable development of our
community.
•EDI states that one of the priority
uses for public investment is for
“Downtown Housing Development –Downtown Housing Development
Loft, Condos” (page 11)
Greater Downtown Kansas City
2009 Residential Population
•17,353
Goal (2% of KC metro area population)
•40,000
Market Overview*:
11,438 housing units1.6 people per unit91% average occupancy rate
*Source: Compiled by the DTC from property owner/manager interviews and 2000 Census
g p y
Downtown KC Housing Summit June 2010
Downtown Council of Kansas City 4
Average sales price of existing homes in Greater Downtown Kansas City 2003‐2007
Why Does it Matter?Resident Impact: Purchasing Power
$236,803
$190,041 $170,741
$200,000
$250,000
Purchasing Power per Acre
$46,457 $33,390
$102,706
$ ,$154,383
$‐
$50,000
$100,000
$150,000
DrillDown 2007
Census 2000
Source: Kansas City Urban Market Assets (KCUMA), 2007‐08 Kansas City DrillDown Results
Key Points:•Residents shop and work at local establishments• Residents pay taxes
Downtown KC Housing Summit June 2010
Downtown Council of Kansas City 5
Central Business District – Residential Density & Development Opportunities
Area= 1 square mile
Central Business District2009 Year End Market Overview: CBD*For‐Sale Units# of units 1,733SF Range 665 1,575 Price Range $130,887 $402,774 Average price per sf $ 221Average Occupancy 91%
•3,763 total housing units•4,557 est. population
•46% of all units are for‐sale units•63% of rental units are affordable units
g p yMarket Rate Rental Units# of units 758 SF Range 640 1,693 Rent Range $ 699 $ 1,744 Average rent per sf $ 1.06 Average Occupancy 92% Affordable Rental Units# of units 1,272SF Range 486 1,198 Rent Range $ 470 $ 702
•Average rent per square foot:
•Market Rate:$1.06
•Affordable: $0.78
Average rent per sf $ 0.78 Average Occupancy 93%
*Source: Compiled by the DTC from property owner/manager interviews
Downtown KC Housing Summit June 2010
Downtown Council of Kansas City 6
River Market – Residential Density & Development Opportunities
Area= .3 square mile
River Market
2009 Year End Market Overview: River Market*For‐Sale# of units 337 SF Range 1,066 1,809 Price Range $ 203,917 $ 362,370
•1,414 total housing units• 1,745 est. population
•24% of all units are for‐sale unitsg $ , $ ,Average price per sf $ 199 Average Occupancy 86%Market Rate Rental# of units 634 SF Range 774 1,597 Rent Range $ 763 $ 1,438 Average rent per sf $ 0.94 Average Occupancy 98%Affordable Rental# of units 443
24% of all units are for sale units• 41% of rental units are affordable units
•Average rent per square foot:
•Market Rate: $0.94•Affordable: $0.79
SF Range 533 1,442 Rent Range $ 518 $ 879 Average rent per sf $ 0.79 Average Occupancy 98%
*Source: Compiled by the DTC from property owner/manager interviews
Downtown KC Housing Summit June 2010
Downtown Council of Kansas City 7
Crossroads – Residential Density & Development Opportunities
Area= .85 square mile
Crossroads Arts District
2009 Year End Market Overview: Crossroads*For‐Sale# of units 341 SF Range 1,546 2,161 Price Range $ 215,173 $ 447,073 Average price per sf $ 197
•914 total units•1,142 est. population
•37% of all units are for‐sale unitsg p pAverage Occupancy 91%Market Rate Rental# of units 503 SF Range 746 1,801 Rent Range $ 784 $ 1,753 Average rent per sf $ 1.01 Average Occupancy 93%Affordable Rental# of units 70 SF Range 500 1,490 R R $ 445 $ 820
•12% of rental units are affordable units
•Average rent per square foot:
•Market Rate: $1.01•Affordable: $0.72
Rent Range $ 445 $ 820 Average rent per sf $ 0.72 Average Occupancy 98%
*Source: Compiled by the DTC from property owner/manager interviews
Downtown KC Housing Summit June 2010
Downtown Council of Kansas City 8
2009 Year End Market Overview: Core Downtown Neighborhoods* (2.1 square miles)
# of Units SF Low SF HighRent/Price
Low Rent/Price
High Average
Price Per SF Average
OccupancyEstimated Population
Market Rate Rental 1,895 720 1,697 $ 749 $ 1,645 $ 1.01 94% 2,268Affordable Rental 1,817 506 1,377 $ 478 $ 800 $ 0.76 96% 2,182
Market Rate For‐Sale 2,411 1,092 1,848 $ 183,325 $ 404,072 $ 206 89% 3,068
Core Downtown Neighborhoods
•6,123 housing units•94% average occupancy rate•7,519 estimated population
•39% of all units are for‐sale units•49% of rental units are affordable units
•Average rent per square foot:
*Source: Compiled by the DTC from property owner/manager interviews.
Average rent per square foot:
•Market Rate: $1.01•Affordable: $0.76
Core Downtown Neighborhoods: Conversions(Rehabs) vs. New Construction
263
223
27
100
2008
2009
Conversions(Rehabs) vs. New ConstructionCore Downtown Neighborhoods , 2000 to 2009
Conversions (Rehabs)
New Construction
418
389
664
556
597
654
32
59
0 250 500 750
2000‐02
2003
2004
2005
2006
2007
*Source: Compiled by the DTC from property owner/manager interviews.
•94% of housing units added to the Core Downtown Neighborhoods since 2000 were conversions or rehabs.
0 250 500 750
Downtown KC Housing Summit June 2010
Downtown Council of Kansas City 9
Adjacent Urban NeighborhoodsWest BottomsWest Side
Columbus ParkPaseo West18th & Vine
Crown CenterUnion Hill
Type of Units# of Units
% of Total
Market Rate Rental (Multi‐Family) 423 6%
Affordable Rental (Multi‐Family) 809 13%
M k t R t F S l (M lti F il ) 726 11%Market Rate For‐Sale (Multi‐Family) 726 11%
Housing Authority of KC Developments 1,034 16%
Single Family Homes 3,389 54%
Totals 6,381 100%
Sources: Downtown Council interviews with property managers/owners (Multi‐Family Units); Housing Authority of Kansas website; 2000 Census (Single Family Homes)
Market Demand Indicators
2009 Absorption Rates (Market Rate Units Completed in 2009)
Months to Lease Up Total Units
Average Monthly Absorption
Market Station 6 100 16.67
Piper Lofts 14 118 8.43
Windows Lofts 14 105 7.50
Notes: (1) Leasing information provided by Boveri Realty Group, May 2010(2) Assuming 1.3 persons per household (market rate rental)
Units Absorbed Quickly•323 new market rate rental units were absorbed in 2009
Demand Exceeds Inventory•Boveri Realty Group reports 1,825 people interested in moving Downtown contacted their office in the first quarter of 2010. Most requesting a price point between $500 ‐ $800 a month.
Downtown KC Housing Summit June 2010
Downtown Council of Kansas City 10
Who lives Downtown?: Resident Profile
Downtown Resident Survey Results*
Characteristics 1998 2002 2004 2010Surveys Distributed 1,996 1,950 3,297 3,400Responses 380 351 429 892% Employed 91% 89% Na 89%
% Rent 89% 100% 83% 58%HH Income of $50,000 or more 46% Na 47% 70%Current monthly rent/house pymt of $1,000 or less
92% Na 77% 46%
Marital Status ‐ % Single 78% 83% Na 67%
% of respondents under 40 66% 79% 65% 69%Only One Adult in Household (HH) 69% 74% 63% 45%Have children living in HH 4.50% 2% 5% 10%Work Downtown 53% Na 50% 51%
*Source: 1999, 2002, 2004, 2010 Downtown Kansas City Resident Surveys – Downtown Council
Commute to work by automobile Na Na 68% 69%
Who lives Downtown?: Resident Profile
2010 Downtown Resident Profile•Employed•Owns or rents•Income over $50,000•Monthly rent or mortgage payment over $1,000•Single or Married•Likely under 40•Likely more than one adult in household•Likely no children•May work Downtown•Most commute by car
*Source: 1999, 2002, 2004, 2010 Downtown Kansas City Resident Surveys – Downtown Council
Downtown KC Housing Summit June 2010
Downtown Council of Kansas City 11
Why do People Live Downtown?
Downtown ranked above average for:
•Entertainment/nightlife•Character (history and architecture)•Art and culture
•94% of respondents are completely satisfied or satisfied with their decision to move D !•Dining options
•Diversity (social, economic and cultural)•Connectivity/ease of access with the rest of the region•Cleanliness•Cost of living
Categories ranking below average included:
P bli i i
Downtown!
•Public transportation options•Green space (parks & trails)•Shopping options
Source: 2010 Downtown Kansas City Resident Survey
Downtown Services and Amenities
Providers 4 + visits per month
Dinner, casual dining 72%Groceries 67%
Monthly Visits to Downtown Service/Retail/Amenity Providers*
Groceries 67%Lunch, casual dining 64%Entertainment/Nightlife 62%Breakfast (including coffee only) 43%Dinner, fine dining 23%Pharmacy/Health and Personal Care Products 22%Libraries 20%Movies/Movie Theater 19%Weekend brunch 15%Public Transportation 12%Gift shopping 11%Clothes shopping 8%Home Furniture & Accessories shopping 5%
*Source: 2010 Downtown Kansas City Resident Survey
Downtown KC Housing Summit June 2010
Downtown Council of Kansas City 12
Why do we need a private/public strategic plan? General Market Gap Analysis
Development Pro Forma
Land Cost @ $35 per foot @30,500 s.f. $1,067,500
Building Construction @$100 per ft 5,000,000
Parking Lot Costs 50@$2,000 100,000
Assumptions:•New Construction•50,000 sq. ft. stick•$100 per sq. ft. cost
Soft Costs 55,075
Developer Fee 5%‐10% 0
Total projected annual 648,000
Less Vacancy @ 5% 32,400
Gross Income 615,600
Less Projected Operating Expenses 150,000
•900 sq. ft. units•$1,080 avg. rent•50 total units•10% equity Inv.•30 year mortgage•8% interest•$3,000 per unit avg.Operating exp.
Operating Income 465,000
Less Debt 484,025
Projected NI Before RE Taxes ($19,025)
Estimated Annual Real Estate Taxes $100,000
Projected Net Income ($119,025)
Investment Yield (1.8%) 23
What tools have we used to fill the gaps?Economic Development Tools Used for Residential Development in Core Downtown Neighborhoods 2000‐2009*
Total Units
Low Income Housing Tax
Credits (LIHTC)
State/Federal Historic Tax Credits (HTC)
PIEA Tax Abatement
Chapter 353 Tax Abatement
Ch. 99 Tax Abatement
Neighborhood Pres. Tax
Credits (NPA)CBD 3,763 431 11% 938 25% 886 24% 1,114 30% 559 15% 0 0River Market 1,414 443 31% 664 47% 733 52% 413 29% 0 0% 76 5%Crossroads 914 70 8% 245 27% 484 53% 190 21% 10 1% 0 0Crossroads 914 70 8% 245 27% 484 53% 190 21% 10 1% 0 0
Total 6,091 944 15% 1,847 30% 2,103 35% 1,717 28% 569 9% 76 1%
Tools Creating the Most Residential Units:Hi t i T C dit (30%)
Layering of Economic Development Tools (2000‐2009) ‐ Number of Projects*#of Projects No Tools 1 Tool 2 Tools 3 Tools
CBD 38 8 21% 16 42% 10 26% 4 11%River Market 23 1 4% 10 43% 10 43% 2 9%Crossroads 24 6 25% 12 50% 6 25% 0 0%
Total 85 15 18% 38 45% 26 31% 6 7%
• Historic Tax Credits (30%)•Planned Industrial Expansion Authority (PIEA) Tax Abatement (35%)
*Source: Missouri Housing Development Commission, City of Kansas City, Missouri, Economic Development Corporation of Kansas Cityand developer interviews, May 2010.
Layering of Economic Development Tools:
• 82% of residential projects have used economic development tools
• 38% have layered 2 or more tools
Downtown KC Housing Summit June 2010
Downtown Council of Kansas City 13
Downtown KC Housing Summit June 2010
Downtown Council of Kansas City 14
Model Downtown Residential Development Strategies
Private/Public Sector Research and Strategy
• Development of a residential strategy based on GDAP & EDIP guidelines
– Agreed upon residential development market gap analysis
– Tax base impact of Downtown resident
– Advocacy process for State and Federal economic development tools
Private Sector InitiativesPrivate Sector Initiatives
• Define Downtown in terms of sub‐districts – micro‐scale analysis
• Create a Downtown Residential Development Group:
– Equity fund – multi‐layered financing (GKCCF, Downtown Corporations, Philanthropies)
– Marketing to
• Residents (underway)
• Buyers by segment
• Developers (“matchmaking” developers with projects)
– Developer resource guide
– Broker education program
– Relocation ServicesRelocation Services
– Employee incentive program
Public Sector Initiatives
• Establishment of a Urban Redevelopment Authority (Possibly under EDC umbrella or within housing department – focus on land assemblage, bonding capacity)
• Comprehensive GIS database inventory: detailed building data and surrounding infrastructure ‐ Opportunities for supporting existing investments and creating density, developer accessible
• “Green Tape” policy for Downtown housing (“front of the line”)
– Double green tape for historic rehab (e.g. Lucas Place, Pickwick, Mark Twain, Argyle)