Quote:
Originally Posted by CAGeoNerd
Yup, this is a huge problem. Developers and land lords keep thinking downtown/midtown warrants huge rent and high-end lofts, etc. But they're really doing a disservice to the big picture. The problem is there's not enough mid-income housing in the urban core. Why pay $1600 a month for a small one-bedroom apartment in midtown when the same could rent you a 2 or 3 bedroom house in East Sac or Land Park? Especially for couples/families? Developers and the city tend to think the only people who want to live downtown are single, young professionals with lots of money. That's a draw, but that's not all we should build for.
|
Actually, at least so far, the developers building higher-end housing have had no problem filling them. Legado de Ravel, with units starting at $1600 and going above $2000 per month, filled within a couple months of opening. 16 Powerhouse, with rents ranging from about $2000 to $3200, already has a waiting list and it isn't even finished yet. So there is an existing, not yet exhausted market for high-end rental housing. Typically these higher-end units are very well appointed, and the more expensive ones are as big as 1000-1500 square feet--which is as big as many homes in Midtown or East Sacramento! They're also about the same size as the limited number of for-sale infill homes that are cropping up, which sell for $300-500K. It's all about location, proximity, and a neighborhood of choice.
They pay that price for an apartment in Midtown because East Sacramento or Land Park don't offer what Midtown does, in terms of access and proximity to the lifestyle they want. They don't want a house in a bucolic neighborhood that is a 10 minute drive from an urban environment with late-night activities and downtown jobs--they want to walk downstairs and be in it RIGHT NOW. And the population we're talking about chooses their city based on access to those amenities. If they can't find a place with the lifestyle they want, they do not just shrug their shoulders and get a place in the suburbs,
they pick another city that offers them. That's also part of why ownership housing is so important--as mentioned elsewhere, a lot of renting Midtowners who want to own end up buying in East Sacramento or Curtis Park because there simply isn't enough housing for sale in the grid, due to lack of supply.
The question is, how big is that market? And the problem is, when existing landlords see their new neighbors renting for $1600+ and decide their property is now worth more, even if it's a 400 sf 1950s crackerbox with semi-functional wall heat and A/C, and jack up their rent by several hundred dollars a month--perhaps adding a coat of paint or a new wall A/C unit. Will people in the middle income bracket be forced out, take on additional roommates, or vacate the scene? That's a longer term problem. Possible solutions include affordable-housing legislation, which produces screams from the development community over its cost and mandates, and screams from everyone else about "Section 8 slum housing" even when the affordable housing is intended primarily for incomes commensurate with working-class incomes, service workers, or entry-level professionals. We're already hearing those cries in conjunction with the low/moderate/mixed income projects under construction and in the planning stages, like the WAL (whose rents vary from $350 for low-income studios to $2000 for 3-bedroom lofts), 700 K (which is a mix of low, moderate and market rate housing.) I think in the long run we'll need a lot more like that, but it's politically unpalatable, and with the end of redevelopment agencies and tax increment financing, very very hard to build unless you got in under the wire.
Another, longer-term solution comes with subsequent build-out. Eventually the new development will sufficiently meet the demand for high-end housing, and we'll find out when we have met that demand when the latest high-end housing doesn't rent out, or its opening results in people moving from slightly older high-rent housing to the new units. At that point, the owners of the now-surplus housing will have to choose between lowering rents to a point where the market can fill it, or leaving the units vacant. Over time, the oldest of the "high-end" housing will become less appealing, due to wear, newer products, or just the dictates of fashion, and former "high-end" becomes "middle-end" housing. Will there be enough? Maybe, but that's a big challenge. As we start to recover the urbanity that our urban core had prior to 1950, the larger number of residents may buoy the economy to the point where the market can afford building inexpensive housing above ground-floor retail again, and we can keep moving back towards #58000 and potentially above. If not, we'll have to find other ways to ensure that the people who work downtown can afford to live nearby.
Prev
Linear Mode
