Downtown Housing Status Power Point

Downtown KC Housing Summit June 2010

Downtown Council of Kansas City 1



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 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



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



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



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


•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%




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



Rent Range $ 445 $ 820 Average rent per sf $ 0.72 Average Occupancy 98%




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


*Source: Compiled by the DTC from property owner/manager interviews.

Average rent per square foot:


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



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.



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



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



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



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)

Downtown Housing Status Power Point

Technology

Transcript of Downtown Housing Status Power Point