Downtown Housing article

[fsujax]

From the TU this morning. So much demand, but no one willing to do anything other than Ron. Still waiting on 220 Riverside to break ground.

http://jacksonville.com/business/real-estate/2012-09-17/story/more-renters-moving-downtown-jacksonville-hasnt-sparked-new

[simms3]

Yea it's a shame.  Novare is replicating its newest apartment tower twice in Atlanta (one almost complete), in Raleigh, in Orlando (broken ground), in Austin (broken ground), and potentially more cities in the SE.  It would be nice if they could look at Jax.  Their rents are considered cheap for new high rise development and they have received incentives allowing them to drop rates to around $1.90-$2.25psf.  Could Jax fill 200 1 BRs of between $1500-$2300 and 100 2 BRs of between $2200-$3000?

Wish the preservation story would kick off more and am excited for Chamblin's pioneering efforts.  Usually an occupancy rate of 95% and rent growth of at least 3% is attractive to developers and lenders, but maybe history is what is holding Jax back?  It took a while to get there and rents are still too low?  Lenders underwrite deals with what is called "debt yield" nowadays, not loan to value or percent of cost.  The debt yield allows them to value a project's conservative cash flows like investors might value the same project.  This could be preventing many Jacksonville projects from starting.

[If_I_Loved_you]

From the TU this morning. So much demand, but no one willing to do anything other than Ron. Still waiting on 220 Riverside to break ground.

http://jacksonville.com/business/real-estate/2012-09-17/story/more-renters-moving-downtown-jacksonville-hasnt-sparked-new

So six more apartments are really going to help the future apartment renters fall in love with Downtown Jacksonville?

[CityLife]

Yea it's a shame.  Novare is replicating its newest apartment tower twice in Atlanta (one almost complete), in Raleigh, in Orlando (broken ground), in Austin (broken ground), and potentially more cities in the SE.  It would be nice if they could look at Jax.  Their rents are considered cheap for new high rise development and they have received incentives allowing them to drop rates to around $1.90-$2.25psf.  Could Jax fill 200 1 BRs of between $1500-$2300 and 100 2 BRs of between $2200-$3000?

That isn't the type of rental housing DT needs. For $2,300 a month, people can buy a beautiful 2,500 square foot home in Springfield (practically downtown), lease out the extra bedrooms to friends, pay someone for lawn care, and pay the principal down $2,000+ a month on the money saved/rent charged (or pocket it). As long as there is relatively cheap (by $2,300 a month for a 1 bedroom standards) quality housing in San Marco, Riverside, Springfield, there isn't much of a need for luxury rental housing DT. And I SERIOUSLY doubt there are even enough people with that kind of money here. $2300 for a one bedroom apartment? In Jacksonville? With the cheap cost of land and numerous infill opportunities, if there were that type of money, we'd have developers from all over the country dying to build here.

One of the best things going on for Downtown, is the growing nightlife scene and interest the younger generations have taken in Downtown. We need adequate housing for those who work in the DT service/entertainment industry (waiters, bartenders, musicians, artists, etc) . These people are playing a large role in DT's comeback, certainly as much as Joe Everbank who works DT and leaves the minute the clock hits 5.

Our short sighted leaders have always craved sexy luxury housing on the river...but what we really need is housing that is affordable for college students, waiters, blue collar workers, struggling recent college grads, and the like. Basically the people who make a place vibrant. There are COUNTLESS opportunities to build affordable infill DT; from LaVilla, to the no mans land between DT and Springfield, and so on. And its not unrealistic to think that developers will still be able to make nice bank on the deals too. If I had the money, I'd have built it yesterday.

[fsujax]

Joe Everbank! haha. I have noticed that many of the new Everbank employees are quite young. I am sure many of them wouldn't mind living downtown. Not sure any of them could afford or would even pay $2,300 a month for a little one bedroom apartment.

[fsquid]

Joe Everbank! haha. I have noticed that many of the new Everbank employees are quite young. I am sure many of them wouldn't mind living downtown. Not sure any of them could afford or would even pay $2,300 a month for a little one bedroom apartment.

who in God's name would pay that much for an apartment anywhere in the South?

[John P]

City place has affordable small units. I wonder how their occupancy is. I agree that if you build it they will come. The demand is there.

[jcjohnpaint]

I agree.  First of all- jobs would have to pay more in this area for those rents.  Sorry, but it is true.  And I don't see it as any different in places like Nashville either.  Why would anyone pay $1,500-2,000 a month for a one room when you could pay less for a 2-3 rm near SJTC, Riverside, Springfield etc?

[CityLife]

I am glad to see that the TU has written this piece though. I think lack of housing options DT for both Jose Dos Gatos and Joe Everbank are a big part of the lack of vibrancy DT.

I know a lot of people who live in lame places like Mandarin and the SS ( no offense to anyone, I grew up there) who really want to live DT, but just can't make it work or find something that suits them.

DT has a lot of issues and there aren't many easy solutions...but if there is one, Its housing, stupid.

[jcjohnpaint]

You know I have been looking to move DT for a while, but I cannot find a place that matches the rooms for the price.  I need a second room for a studio.  It might be pretty cheap for 1 brm, but when you get to 2, the price jumps up significantly.  Until I find this I am not ready to leave the SS for DT. 

[duvaldude08]

Options are an issue. Before buying my house, I searched high and low for somewhere to stay downtown... and it is NOT affordable. The only affordable options I found where in Springfield. Yes some may agrue that 1,800 a month is afforable or "just get a roommate", but the bottom line is you have to have affordable housing if you want people downtown. Thats really the bottom line. 220 Riverside will be a start.

[If_I_Loved_you]

Options are an issue. Before buying my house, I searched high and low for somewhere to stay downtown... and it is NOT affordable. The only affordable options I found where in Springfield. Yes some may agrue that 1,800 a month is afforable or "just get a roommate", but the bottom line is you have to have affordable housing if you want people downtown. Thats really the bottom line. 220 Riverside will be a start.

When 220 is built won't several people who live downtown move to this new project. My problem with downtown is there really isn't much to do? Chamblins is open till 9:00pm on Wednesday's only and even if they stayed open every night of the week that would get boring fast. The landing needs a major redo and that's not going to happen anytime soon. And across the river on the southbank the condos have a better view and it feels more relaxed. I feel 220 is going to hurt the downtown apartments being built unless it becomes a lot more active.

[simms3]

I agree.  First of all- jobs would have to pay more in this area for those rents.  Sorry, but it is true.  And I don't see it as any different in places like Nashville either.  Why would anyone pay $1,500-2,000 a month for a one room when you could pay less for a 2-3 rm near SJTC, Riverside, Springfield etc?

This is my whole point.  You need those rents bare minimum to make new high rise infill work.  You can chop off 20-30% to make decent hybrid/mid-rise work.  An expensive rehab is going to require decently high rents, too, maybe not as high.  Look at rentals downtown...aside from the rare repositioning such as City Place Apts, most infill and rehabbed buildings downtown command the highest rents in the city...out of necessity.  Though none are as high as really required, hence the notable struggles of almost every development downtown and the huge incentives required for each one.

Land in Jax is CHEAP.  Already highlighted this before.  Novare paid $11-12MM for its tiny one acre or so parcel for its Skyhouse project in Atlanta, which is literally "off the beaten path".  Land in Charlotte and Raleigh in CBD/infill areas has also gotten pretty expensive, but in the grand scheme of things land is but a fraction of construction costs.

Unless you can deal with literally crappy stick projects with surface parking and minimal design elements, of course no retail, you're going to have to meet demand for pricier projects.

Joe Everbank! haha. I have noticed that many of the new Everbank employees are quite young. I am sure many of them wouldn't mind living downtown. Not sure any of them could afford or would even pay $2,300 a month for a little one bedroom apartment.

who in God's name would pay that much for an apartment anywhere in the South?

Atlanta, Charlotte, Raleigh (all infill developments going up - 2,000 units or so - are underwritten at $1.60-$1.90++psf and built at $150K+++/door), Nashville, Austin (most expensive in TX, more expensive than Atlanta), Miami (most expensive in the south obviously), I have to guess Tampa and Orlando.  And might I remind you that in larger cities like Boston and SF $2,300 will put you in a 250-300 SF studio in the worst part of the city with no AC, no elevator, no parking, leaky faucets and questionable neighbors. 

[thelakelander]

This is my whole point.  You need those rents bare minimum to make new high rise infill work.  You can chop off 20-30% to make decent hybrid/mid-rise work.  An expensive rehab is going to require decently high rents, too, maybe not as high.  Look at rentals downtown...aside from the rare repositioning such as City Place Apts, most infill and rehabbed buildings downtown command the highest rents in the city...out of necessity.  Though none are as high as really required, hence the notable struggles of almost every development downtown and the huge incentives required for each one.

I agree that those are the type of numbers to make high rise infill housing work.  However, I think Jax has so many parking lots that it would be better off with low rise mix of 2-4 story infill in areas like Brooklyn, LaVilla and the Cathedral District.  You can still pack in some decent market rate density with low rise development.  DC, New Orleans, Charleston and Savannah are great examples of this.

I'm another person who wanted to stay in Jax's urban core when I moved to town.  However, I couldn't find the building product I wanted (a townhouse/rowhouse) at the price point I was willing to pay for the environment being asked of me to reside in.  The Parks were the only thing around and they were pretty much filled at the time.  In addition, I didn't like the idea of paying more for a smaller space and still being subjected to using the car for reverse commutes to access services that should be within walking distance.

[simms3]

The other problem is that rehabs in Jax are probably more expensive than they need to be because we let the buildings fall into such disrepair that it doesn't matter how much they cost up front, you essentially have to rebuild it completely just to make it safe enough for certificate of occupancy.  If the buildings were at least partially kept up over the years then we'd have so many opportunities for relatively cheap urban housing.

And townhouses would be great, though I'd rather see that level of density in Brooklyn, Springfield, and Riverside-Avondale than DT/Lavilla.  Well I guess anything would be better than a dirt lot   Dirt in Lavilla/DT is more expensive than around the SJTC, so to put a hybrid rental community up DT/Lavilla with a concealed deck garage (and of course our favored ground level retail) will probably require rents at least to the level the new projects around SJTC that aren't "uber-luxurious" are commanding, which is to say a good $1,200-$1,800 for 1BRs and $1,700-$2,100 for 2 BRs (I think if I remember correctly).  Still on the highest end for Jacksonville, but these rents are standard in just about every other growing southern city (in the suburbs I might add) so Jax should be able to satisfy a market there.

Villas at St. Johns is probably the best comp.  About as expensive as the Strand, faux stucco stick construction of lowest quality, concealed deck garage, no street level retail.  Just look up those rents and ask yourself if you think there is a market for that to be replicated in the city.