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  • 1. Downtown KC Housing Summit June 2010 Downtown Council of Kansas City 1
  • 2. Downtown KC Housing Summit June 2010 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 – Employee incentive program E l i ti 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 Council of Kansas City 2
  • 3. Downtown KC Housing Summit June 2010 Double the Downtown residential population •Downtown housing is a top priority  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 units 1.6 people per unit 91% average occupancy rate g p y *Source:  Compiled by the DTC from  property owner/manager interviews and  2000 Census Downtown Council of Kansas City 3
  • 4. Downtown KC Housing Summit June 2010 Average sales price of existing homes in  Greater Downtown Kansas City 2003‐2007 Why Does it Matter? Resident Impact: Purchasing Power Purchasing Power per Acre $250,000  $236,803  $200,000  $190,041  $ $170,741  , $154,383  $150,000  $102,706  $100,000  DrillDown 2007 $46,457  $50,000  $33,390  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 Council of Kansas City 4
  • 5. Downtown KC Housing Summit June 2010 Central Business District – Residential Density & Development Opportunities Area= 1 square mile Central Business District 2009 Year End Market Overview: CBD* •3,763 total housing units For‐Sale Units # of  units 1,733 •4,557 est. population SF Range 665  1,575  Price Range $130,887  $402,774  •46% of all units are for‐sale units Average price per sf $         221 •63% of rental units are affordable units  g p y Average Occupancy 91% Market Rate Rental Units # of  units 758  •Average rent per square foot: SF Range 640  1,693  Rent Range $         699  $        1,744  •Market Rate: Average rent per sf $        1.06  $1.06 Average Occupancy 92%  Affordable Rental Units •Affordable:  # of  units 1,272 $0.78 SF Range 486  1,198  Rent Range $         470  $           702  Average rent per sf $        0.78  Average Occupancy 93%  *Source:  Compiled by the DTC from property owner/manager interviews Downtown Council of Kansas City 5
  • 6. Downtown KC Housing Summit June 2010 River Market – Residential Density & Development Opportunities Area= .3 square mile River Market 2009 Year End Market Overview: River Market* •1,414 total housing units For‐Sale # of  units 337  • 1,745 est. population SF Range 1,066  1,809  g Price Range $ $        203,917  $        362,370  , $ , •24% of all units are for‐sale units 24% of all units are for sale units Average price per sf $                199  • 41% of rental units are affordable units  Average Occupancy 86% Market Rate Rental # of  units 634  •Average rent per square foot: SF Range 774  1,597  Rent Range $                763  $            1,438  •Market Rate: $0.94 Average rent per sf $               0.94  Average Occupancy 98% •Affordable: $0.79 Affordable Rental # of  units 443  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 Council of Kansas City 6
  • 7. Downtown KC Housing Summit June 2010 Crossroads – Residential Density & Development Opportunities Area= .85 square mile Crossroads Arts District 2009 Year End Market Overview: Crossroads* For‐Sale •914 total units # of  units 341  •1,142 est. population SF Range 1,546  2,161  Price Range $        215,173  $        447,073  Average price per sf $                197  g p p •37% of all units are for‐sale units Average Occupancy 91% •12% of rental units are affordable units  Market Rate Rental # of  units 503  SF Range 746  1,801  •Average rent per square foot: Rent Range $                784  $            1,753  Average rent per sf $               1.01  •Market Rate: $1.01 Average Occupancy 93% •Affordable: $0.72 Affordable Rental # of  units 70  SF Range 500  1,490  Rent Range R R $                445  $ $ 445 $                820  820 Average rent per sf $               0.72  Average Occupancy 98% *Source:  Compiled by the DTC from property owner/manager interviews Downtown Council of Kansas City 7
  • 8. Downtown KC Housing Summit June 2010 Core Downtown Neighborhoods 2009 Year End Market Overview: Core Downtown Neighborhoods* (2.1 square miles) Rent/Price  Rent/Price  Average  Average  Estimated  # of Units SF Low SF High Low  High  Price Per SF  Occupancy Population Market Rate Rental 1,895 720  1,697  $          749  $       1,645  $       1.01  94% 2,268 Affordable 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 •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: Average rent per square foot: •Market Rate: $1.01 •Affordable: $0.76 *Source:  Compiled by the DTC from property owner/manager interviews. Core Downtown Neighborhoods:  Conversions(Rehabs) vs. New Construction Conversions(Rehabs) vs. New Construction Core Downtown Neighborhoods , 2000 to 2009 2009 223 100 Conversions (Rehabs) 2008 263 27 New Construction 2007 654 2006 597 2005 556 59 2004 664 2003 389 2000‐ 418 32 02 0 250 500 750 •94% of housing units added to the Core Downtown Neighborhoods since 2000  were conversions or rehabs. *Source:  Compiled by the DTC from property owner/manager interviews. Downtown Council of Kansas City 8
  • 9. Downtown KC Housing Summit June 2010 Adjacent Urban Neighborhoods West Bottoms Columbus Park Crown Center West Side Paseo West Union Hill 18th & Vine # of  % of  Type of Units Units Total Market Rate Rental (Multi‐Family) 423 6% Affordable Rental (Multi‐Family) 809 13% Market Rate For‐Sale (Multi‐Family) M k t R t F S l (M lti F il ) 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  Average Monthly  Lease Up Total Units 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 Council of Kansas City 9
  • 10. Downtown KC Housing Summit June 2010 Who lives Downtown?: Resident Profile Downtown Resident Survey Results* Characteristics 1998 2002 2004 2010 Surveys Distributed 1,996 1,950 3,297 3,400 Responses 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  92% Na 77% 46% or less 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% Commute to work by automobile Na Na 68% 69% *Source:  1999, 2002, 2004, 2010 Downtown Kansas City Resident Surveys – Downtown Council 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 Council of Kansas City 10
  • 11. Downtown KC Housing Summit June 2010 Why do People Live Downtown? Downtown ranked above average for: •94% of respondents  •Entertainment/nightlife are completely satisfied  •Character (history and architecture) or satisfied with their  •Art and culture decision to move  •Dining options Downtown! D ! •Diversity (social, economic and cultural) •Connectivity/ease of access with the rest of the region •Cleanliness •Cost of living Categories ranking below average included: •Public transportation options P bli i i •Green space (parks & trails) •Shopping options Source:  2010 Downtown Kansas City Resident Survey Downtown Services and Amenities Monthly Visits to Downtown Service/Retail/Amenity Providers* Providers  4 + visits per  month Dinner, casual dining 72% 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 Council of Kansas City 11
  • 12. Downtown KC Housing Summit June 2010 Why do we need a private/public strategic plan?  General Market Gap Analysis Development Pro Forma Assumptions: Land Cost @ $35 per foot @30,500 s.f. $1,067,500 •New Construction Building Construction @$100 per ft 5,000,000 •50,000 sq. ft. stick •$100 per sq. ft. cost Parking Lot Costs   50@$2,000 100,000 •900 sq. ft. units Soft Costs 55,075 •$1,080 avg. rent •50 total units Developer Fee  5%‐10% 0 •10% equity Inv. Total projected annual 648,000 •30 year mortgage Less Vacancy @ 5%  32,400 •8% interest Gross Income 615,600 •$3,000 per unit avg. Operating exp. Less Projected Operating Expenses 150,000 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* Low Income  State/Federal  Neighborhood  Total  Housing Tax  Historic Tax  PIEA Tax  Chapter 353  Ch. 99 Tax  Pres. Tax  Units Credits (LIHTC) Credits (HTC) Abatement Tax Abatement Abatement Credits (NPA) CBD 3,763  431  11% 938  25% 886  24% 1,114  30% 559  15% 0  0 River Market 1,414  443  31% 664  47% 733  52% 413  29% 0  0% 76  5% Crossroads 914  914 70  70 8% 245  27% 245 484  53% 484 190  21% 190 10  10 1% 0  0 0 Total 6,091  944  15% 1,847  30% 2,103  35% 1,717  28% 569  9% 76  1% 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% Tools Creating the Most Residential Units: • Hi t i T C dit (30%) Historic Tax Credits (30%) •Planned Industrial Expansion Authority (PIEA) Tax Abatement (35%) Layering of Economic Development Tools: • 82% of residential projects have used economic development tools • 38% have layered 2 or more tools *Source: Missouri Housing Development Commission, City of Kansas City, Missouri, Economic Development Corporation of Kansas City and developer interviews, May 2010. Downtown Council of Kansas City 12
  • 13. Downtown KC Housing Summit June 2010 Downtown Council of Kansas City 13
  • 14. Downtown KC Housing Summit June 2010 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 Private 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 Services Relocation 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 Council of Kansas City 14