Construction | Conversion/Adaptive Reuse
MARKET RATE HOUSING
Maintaining an economically diverse residential base is critical to the health of a municipality. The addition of new housing units in a growing area is a necessity and an automatic outcome of population shifts. In declining areas, developing new housing is often a challenge, but it is viewed as an important economic development strategy. By retaining residents or attracting new ones to the city, local leaders hope to capture additional tax revenue. New housing not only adds to the residential property tax base, but can also contribute to the commercial property tax base by attracting new businesses.
The availability of downtown residential units is particularly important. Labor markets and housing markets are directly related - housing attracts labor. More importantly, people tend to start businesses close to where they live if the market makes it possible. The availability of downtown housing may reinvigorate downtown business activity. Finally, housing is part of the amenity package that attracts business and amenities justify higher rent levels for downtown commercial space.
The availability of newly constructed housing is key to drawing residents to an area. New housing is generally abundant in growing communities, but attracting investment for new homes in struggling communities can be a difficult yet important part of revitalization efforts.
Examples:
- City of Cleveland, Cleveland, Ohio
Cleveland has been recognized as a national model for its success in developing housing in the central city. While the city has not escaped the effects of urban sprawl, it has combated the problem with an active residential construction agenda. For decades, new home construction within city boundaries was virtually nonexistent. In the 1990s, the city issued more than 1,600 building permits for new-home construction. In many years, this surpassed the number issued by any suburban community in the county.
Perhaps the most surprising fact is that new homes are selling at market rate prices. While the city has offered incentives to buy, including property tax abatements and special financing packages, sale prices have been comparable to suburban housing. Furthermore, new construction has occurred throughout the city, not just in select neighborhoods. Upscale infill housing has been built in one of Cleveland's more economically distressed neighborhoods; high-end townhouse developments across the city are selling out in a matter of months. The building boom has shown few signs of slowing. By following a focused agenda and ignoring the naysayers, Cleveland has successfully used new residential construction as a tool for revitalization. Miller, J. (2000, April 3). New homes, new hope. Crain's Cleveland Business [online]. For more information: http://www.crainscleveland.com/article.cms?articleId=28066
Older residential areas face a number of disadvantages when attempting to develop housing. Newer communities generally offer larger lots, better infrastructure and higher quality services. However, central cities and inner ring suburbs are finding ways to capitalize on their assets; a key strategy has been to renovate existing structures to housing demands. Adaptive reuse can capitalize on unique architecture and the desire to recapture the feeling of community that exists in close-knit neighborhoods.
Examples:
- Blue Devil Ventures, Durham, N.C.
Blue Devil Ventures (BDV) is a community development company formed in 1995. It specializes in the adaptive reuse of historic urban properties. Its focus is on developing downtown Durham residential opportunities that will act as a catalyst for urban revitalization and the creation of a "24-hour" city.
BDVs most ambitious undertaking has been the West Village project, which is the adaptive reuse of five former tobacco warehouses built between 1895 and 1926. The ornate brick buildings cover eight acres of land totaling more than 300,000 square feet. West Village opened in 2000, with the warehouses transformed into 243 market rate, loft-style apartments and 31,500 square feet of commercial space.
Within a year, nearly all units were leased. It appears to be meeting initial hopes that it would lead to further development of the area, as more projects are in the planning stage. BDV intends to build 300 to 350 new condominiums and 50 townhouses over the next few years. Other developers have projects lined up as well. The new housing also has led to increased retail activity in the area. Blue Devil Ventures [online]. For more information: www.bluedevilventures.com.
see corresponding section in What Works