Great news. There is a huge demand for high end condos downtown. Lucas Piatt is ecstatic:
The Golden Triangle's newest condominium building, 151 First Side, has commitments on 43 of 80 units, with prices ranging from $250,000 to $500,000. Piatt Place at the former Lazarus-Macy's building has lined up buyers on 10 of 65 condos, with prices running from $335,400 to $634,500, in the four months the sales office has been open.
"It exceeds our expectations. We're excited about it," said Jack Piatt, chairman of Millcraft Industries Inc., the developer.
And the news keeps getting better:
It's a whole lot of housing to add to the 1,290 rental and condo units available in the Golden Triangle. But several studies over the past five years have indicated the demand is there to match it.
They suggest the Downtown market can absorb 100 to 250 units a year, at rental levels below $1.60 a square foot (the current level is $1.34) and at sales prices of $200 a square foot, translating into a monthly rent of $1,742 for a 1,300-square-foot apartment or $260,000 for a condo of the same size.
And a recent Carnegie Mellon University study found that demand for Downtown housing among young professionals far exceeds the supply. For that category of buyer or renter, it estimated there is a need for at least 162 more units, up to as many as 2,061.
So tell me again: Why are we subsidizing these projects? And ultimately, what's happening with that money? Are the developers keeping it to increase their profits? Or are they passing the savings along to people who can afford $600,000 condos? In either case, is that a good use of scarce resources? In a city that is basically in receivership?
If, as Piatt says, the market "exceeds our expectations," why don't the developers give the subsidies back? Why don't they have to? Remember, they got the subsidies because they said the market could not sustain the projects. Well, they were wrong about that, apparently. So, you know. Give the money back.
Seriously. Let's say my family applies for a house from the city, or from Habitat for Humanity. And on the way to rent a U-Haul on moving day I buy a lottery ticket and win $30 million. Would it be right for me to move into the house anyway? Or to accept it, sell it and keep the profits?
I don't think so.
So the news about the housing market is great across the board. Great news for people who want to live downtown and now can. Great news for people like the Piatts who think downtown residential is important to their larger plans for the city.
And great news for the city and the state. Because it turns out that the millions they pumped into these projects wasn't necessary.
Now go get it back.
Or, you know... give them more money. Any chance of that happening? Oh yes...
Perhaps the biggest unfulfilled need Downtown is for more moderately priced housing. Ms. Burk said studies have found a very high demand for such housing Downtown. The CMU study found that young professionals are willing to pay $900 to $1,100 a month to live Downtown.
As a result, a group of business, civic, political and foundation officials have begun meeting to try to find ways to entice developers to build more moderately priced "workforce" housing. ...
"The difficulty in most cities is that it is too expensive to develop market rate housing to make it affordable for young people or teachers or government workers without some kind of city subsidies or assistance," said John McIlwain, senior fellow for housing at the Washington D.C.-based Urban Land Institute.
Without incentives, developers tend to gravitate toward building more expensive units Downtown because it is the only way they can make money.
Well, um... Who's operating without incentives?