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Priced out in the Downtown Tampa condo boom

4677 Views 44 Replies 16 Participants Last post by  matttampa

Condo boom with high price

And it's a high one. New residences climb against the skyline and soar beyond the reach of most who work downtown.

By BILL VARIAN, Times Staff Writer
Published March 21, 2005

TAMPA - David Hey and his wife lived in a cramped apartment in downtown Boston before they moved South six years ago. He still misses the urban lifestyle there: walking to restaurants and the supermarket, giving up their cars and meeting a wide assortment of people.

With condos at last sprouting around downtown Tampa and more promised, you might think the Heys would be looking at moving from their Gandy Boulevard digs.

"Of course, we kind of look at them," said Hey, 34, who works as a city planner downtown. "But when you see prices starting at $280,000 and know that's probably for a one-bedroom ... that's just over the threshold. We don't even bother going to the sales office."

The Heys are hardly alone in their sticker shock.

Each month seems to bring another announcement of a new condominium proposal in or near downtown. Tampa appears finally to be on its way to getting the residential construction city leaders have long coveted as the missing piece needed to make downtown the place to be.

But just as Tampa looks to shed its downtown dormancy, a new shadow is emerging. Much of what is being built is priced beyond the means of many downtown office workers and young professionals.

From the northern edge of downtown to the Channel District to Harbour Island, more than two dozen new residential projects are proposed. The entry price: at least $200,000 in most cases, with top prices soaring into the millions.

And would-be downtown denizens often show up at sales centers to find those least expensive units already gone. Cheaper places are getting gobbled up by preconstruction investors who lease them out once they're built or flip them to other buyers, sometimes at steep markups.

Getting people to live downtown is supposed to be the elixir that spurs investment, sidewalk dining and culture, all the things that make a city cool.

The challenge for Mayor Pam Iorio then, as she seeks to capitalize on the newfound interest in downtown, is ensuring Tampa's newest neighborhood doesn't become exclusive and unattainable, like one more gated community out in the suburbs.

* * *

From new towers popping up on Beach Drive in St. Petersburg to pricey mid- and high-rises replacing motels of yesteryear on Clearwater Beach, the Tampa Bay area is enjoying a bit of a condo boom. And Tampa is getting in on the act.

The Tampa Downtown Partnership, a private, not-for-profit group that promotes downtown revitalization efforts, is tracking 27 proposed projects in or near the city center. Of those, 13 have prices starting at more than $200,000. Nine have some units for less, two are proposed as rentals and the others have yet to determine prices.

Mike Griffin, executive co-chairman of Emerge Tampa, a volunteer group that tries to attract young professionals to the city, says many come here from places where they're accustomed to urban living. They just can't afford it here.

"We're creating residential dwellings (downtown)," said Griffin, who works for an startup commercial real estate company. "But are we creating neighborhoods?"

Blame land prices, says Paul Ayres, director of marketing and business development for the partnership. "We do know the (housing) prices are high," he said. "Right now, what's influencing many of the prices is that developers are buying land at higher prices."

The channel district, a burgeoning entertainment hub with a cruise ship terminal, aquarium, the St. Pete Times Forum and the Channelside mall of restaurants, shops and movie theaters, is seeing much of the early action. The future condos carry names like Ventana, 02 at Pinnacle Place and the Arlington.

The Place at Channelside promises two eight-story towers with 244 dwellings. One-bedroom, 600-square-foot units start just under $190,000, while a perch in the penthouse tops out at more than $1-million.

Plans include a fitness center, pool with cabanas, spa, clubhouse and landscaped greenspace on the fifth level when it opens next summer.

Dale Hunter, 24, a Realtor with Century 21 Beggins Enterprises, signed a contract on a two-bedroom unit with about 1,500 square feet at the Place last August. He liked the floor plans and amenities, including granite counter tops, wood floors, a breakfast bar island and stainless steel appliances.

Going in with a friend, he was able to swing the nearly $400,000 price.

"I wanted to be part of Tampa's downtown transformation from a 9-to-5 workplace to a vibrant urban residential area," Hunter said through an e-mail.

But many of his clients can't afford the entry fee. So he has been showing them places such as SkyPoint, a proposed 31-story condo that would include 400 units on Ashley Drive, in the heart of what the city wants one day to be a cultural arts district.

SkyPoint is billed as an affordable alternative to Trump Tower Tampa, the planned 52-story condo up the street backed by business tycoon and Apprentice reality show star Donald Trump. Trump Tower represents the height of opulence among downtown's proposed residences, with prices expected to start at about $700,000 and climb to $6.5-million.

By contrast, city officials are touting SkyPoint's potential for what they see as "attainable" housing, a euphemism for something between affordable and pricey.

At SkyPoint, attainable means $170,000 for a small 725-square-foot, one-bedroom home.

The condo's developer isn't saying how many they're offering at that price, but says most of the units will cost less than $200,000. Top prices run to $330,000.

At $170,000, with 20 percent down, a buyer is looking at monthly payments on a 30-year mortgage at 6 percent interest of about $815. Add about $200 monthly in property taxes, plus insurance, plus maintenance fees.

SkyPoint is where Katie Vickers is pinning her hopes. The 24-year-old Carrollwood financial adviser wants to be part of downtown's rebirth and figures she can spend somewhere south of $200,000. She initially hoped to pay less than $150,000.

"I have looked at a few places," she said. "Some have offered things in my price range, but they might not be available by the time I get there."

As Vickers has experienced, many of the lowest-priced units are getting scooped up by investors who plan to lease them or resell them at a markup.

At SkyPoint, one person offered to buy 75 units while another has sought to buy an entire floor. The competition among buyers is surprisingly intense for a town that for decades had few downtown living options, seemingly for lack of interest.

At Art Center Lofts, tucked next to Interstate 275 on the northwest corner of downtown, Suzanne Soliman is one of the lucky ones. With the help of parents looking for an investment, she scored a one-bedroom loft overlooking the Hillsborough River, built last year. Price: $179,900 for 928 square feet.

"I've noticed in the time I've been (in Tampa), there's always been the talk of things happening," Soliman said. "Now it's actually happening."

But owners of 29 of the 42 units at Art Center Lofts don't receive their property tax bills at that address, meaning it's likely they are investors. Four have already sold their stake, netting profits from $24,300 to $112,000.

Even some who are involved in Tampa's downtown condo construction seem a little surprised at the prices.

"I'm concerned that a lot of the product that we're seeing is too heavily loaded on the luxury side of the equation," said Mickey Jacob, an architect and principal with Urban Studio Architects, which is helping design Grand Central at Kennedy. At $142,000, Grand Central is offering the lowest entry-level units in the downtown condo market.

* * *

As cities from San Diego to Baltimore have enjoyed a return to downtown living over the past decade, Tampa largely sat on the sidelines.

The number of residences in downtown Tampa through the 1990s typically ranged in the low hundreds, excluding the Central Park Village subsidized housing complex. The number would swell to 6,000 if all that is proposed is built.

For years, the few downtown dwellers took up residence at the mid-rise One Laurel Place. A few artist s converted channel district warehouses into places to work and live. But overall, downtown was a ghost town come quitting time.

So city leaders are eager for a long-awaited coming-out.

"What we're hoping to have is an affordable housing problem (downtown)," said Mark Huey, the city's economic development administrator. "Right now, we have a housing problem."

The price of living downtown presents a challenge to Mayor Iorio, already grappling with plans for a riverwalk and rising costs for a new art museum across from SkyPoint.

Huey said the city isn't taking the availability of affordable housing lightly. As in other cities, Tampa's government is looking to provide incentives for developers to offer lower-cost homes.

"It's very much a part of our mission," Huey said.

This is particularly true just north of downtown, where one proposal, the Heights, would add some 2,000 new residential dwellings. In exchange for creating a special taxing district for the area to pay for infrastructure, the city may ask developers to set aside 10 percent of what they build as "permanently attainable." That would keep investors from buying and quickly selling the properties.

The city is also exploring ways to waive height restrictions and density limits for builders who create affordable homes, particularly in the channel district. The city has crafted agreements that let revenue from a special taxing district there get spent on affordable housing initiatives.

And the mayor has created a task force to work with the Tampa Housing Authority as it redevelops Central Park Village, the dilapidated, air-conditionless public housing complex that connects downtown, the channel district and Ybor City. The goal is to entice a developer to redevelop the property so that people of varying means can live there together.

The city planner who passed on trying to get a home of his own downtown said such efforts are important. As part of his profession, he supports having residential development downtown instead of adding to sprawl.

But not if it's exclusive.

"Downtown should be everyone's neighborhood," he said.
1 - 20 of 45 Posts
I'm weeping. I'll move to downtown St. Pete instead. . .

The Times runs one of these articles about every month now. . . IF they say it long enough, maybe it will be true, except it is getting less true as projects are added, not the other way. Though I doubt you'll be able to get a $50k duplex anytime soon.
well, try to buy a new house for less than 150k with decent construction and your screwed all the way from pasco to charlotte. so what if dt is expensive? prices come down as the buildings age, and there will be people leasing them out to renters.
^well it is interesting that they mention Boston in the article, because as a city with a serious housing crunch, Boston requires that developers set aside a certain percentage of affordable units in each development. I really wish all of Florida's cities would require this. It would level out the market a little bit and keep it going once the "boom" settles.
No, it would kill the market. Boston is a mature city with good urban development and infrastructure - not even Miami has that, really. Teh developers would just go elsewhere.
Yes, please don't become like Boston in that respect.
smiley said:
I'm weeping. I'll move to downtown St. Pete instead. . .

The Times runs one of these articles about every month now. . . IF they say it long enough, maybe it will be true, except it is getting less true as projects are added, not the other way. Though I doubt you'll be able to get a $50k duplex anytime soon.
It's funny how you disagree but in conversations past on this forum we've all chimed in about pricing being too high for average people...

So the media finally picked it up and - wham. Lets go back to the Anti-Tampa spin of the St. Pete Times instead of facing up to the problem that is truly there.
I personally don't understand why the epicenter of a city should be expected to contain cheap property? This is completely irrational to me.

Even though I obviously think affordable housing in the city center would be super, I don't think it's fair to anyone except the people who would be living in an area they should never otherwise be able to afford, were it not for artificial subsidy.

And I too am tiring of the St Pete Times' seeming obsession with trying to scare folks from leaving Pinellas for Tampa. Get over it already.
smiley said:
No, it would kill the market. Boston is a mature city with good urban development and infrastructure - not even Miami has that, really. Teh developers would just go elsewhere.
that doesn't make any sense. If the profit is there, they will stay. Obviously with all these developments they are not going to just pack up if a city enacts a few requirements.
Basically high land costs, in the downtown core, drive the market rates for urban living, which is understandable, because nobody is going to build affordable housing if they can't make a profit off of it. With that being said, maybe the city could spur more afffordable housing projects by....gasp.... extending the streetcar line into Tampa Heights or west along Kennedy (near the neighborhood boxed in by Kennedy, Howard, the river & I-275. It seems like, given their central location, these areas would be great for quality, yet cheaper housing, due to the lower land values. Having access to the streetcar line would give residents direct access to the core, Channelside and Ybor.
1) I never bought into the complaining about affordable housing (that I can remember) - it would be nice, but it is not crucial.
2) REQUIREMENTS will hurt profit, which is why people develop in the first place - this is not a mature market. Maybe the next wave, not this.
3) Civitas had affordable housing in it . . .
4) I like Lakelander's idea.
5) I maintain the Times is full of whining about Tampa - if you had that map for St. Pete they would be screaming about their successful boom. . . They hate the fact that Tampa is now getting residential and retail and all that crap . . .it's just the way it is, and has always been - the newspapers are one of the greatest repositories for the annoying rivalry in this area.
6) Oh, yea, how about renting a place - they are building rentals and what do you think all those hated investors are going to do with their condo units? eat them. I know a bunch of people who rent units on Bayshore that they could never buy at this point. . .
Group Aims To Attract Affordable Housing
By ELLEN GEDALIUS [email protected]
Published: Mar 22, 2005

TAMPA - Commissioner Tom Scott often has heard from developers that they have few plans to build affordable housing in Hillsborough County.
As Scott listens to developers during land-use meetings, he asks them how many units will be labeled affordable. The answer, Scott said, is usually zero.

Knowing the need is there - and having worked with the city in the failed Civitas plan to build affordable housing in Central Park Village - Scott has assembled a task force to work with developers to bring affordable housing to Hillsborough County.

Members include officials from the county, Tampa, Plant City and Temple Terrace, as well as affordable housing experts. The first meeting is Wednesday.

The shortage of affordable housing extends beyond Tampa's boundaries and into Hillsborough County as a whole, Scott said.

Housing is considered affordable if people earning a living wage - about $10 an hour in Hillsborough - pay no more than 30 percent of their income for gross housing costs, including utilities.

``It affects more than just poor people but teachers, police, firemen, just everyday average people who want to experience the American dream,'' Scott said.

More than 1,000 people are on a Section 8 waiting list in Hillsborough, and 2,500 are on the list in Tampa. Under the Section 8 Rental Voucher program, housing authorities issue vouchers to very low-income people. For a family of four, ``very low income'' is below $26,100 yearly.

Dagmar Arja, Hillsborough's affordable housing manager, said she has seen homes priced at $65,000 three or four years ago now sell for more than $100,000. She has seen the effects of rising home prices firsthand when trying to help people through the county's first-time home buyer program. With land prices going up, she has a difficult time matching buyers with homes they can afford.

``No one is really developing affordable housing in the $100,000 to $125,000 range,'' Arja said.

Scott hopes the task force comes up with incentives to encourage developers to build low-cost homes.

The county could offer more density bonuses, meaning that if developers agree to build a certain percentage of affordable homes in their projects, they can build more units on the land, said former Commissioner Ben Wacksman, a task force member and president of Capital Realty Investors.

He also suggested waiving impact fees or fast-tracking the development review process for companies willing to build affordable homes.

Incentives are needed, Wacksman said, because rising land values increase market demand, and developers are more attracted to building for the higher end of the market.

Tampa Housing Authority Executive Director Jerome Ryans, who will be on Scott's task force, said the shortage of affordable housing is exacerbated by the increasing cost of land.

``You can't address affordable housing in a vacuum,'' Ryans said. ``People still need a place to shop, schools, transportation.''

Wacksman said that as land prices increase, developers have a harder time providing affordable housing.

``There's a tendency to not be able to see that in unincorporated Hillsborough County, but it's there,'' he said. ``If you can address this problem now, it can be a really positive for Hillsborough County and not the challenge it's going to become.''

Reporter Ellen Gedalius can be reached at (813) 259-7679.
developing that strip from channelside north to the crosstown is the best thing they could've done, right along the streetcare route. It will be continuous development from the aquarium to Ibor.
Ok, I just want to point out something on this map - if you look closely you will see that the vast majority of projects are within a couple of blocks of the streetcar route (which is on the map) Next time you email either the county or the city about downtown or transit, send them the url for the map (you probably can't send the map itself) and point that out. And point out all the tax revenue they will get from those developments.
Prices will keep going up and there is nothing us middle-class can do about it
I-275westcoastfl said:
Prices will keep going up and there is nothing us middle-class can do about it
Well I certainly hope housing prices don't keep going up the way they currently are, with upwards of 20% yearly increases in the price existing homes. If that's the case, I probably won't ever be able to afford my own home. Hopefully prices will level off sometime in the next couple of years, which would be better than an all out real estate crash, á la Dallas in the 80's.
5) I maintain the Times is full of whining about Tampa - if you had that map for St. Pete they would be screaming about their successful boom. . . They hate the fact that Tampa is now getting residential and retail and all that crap . . .it's just the way it is, and has always been - the newspapers are one of the greatest repositories for the annoying rivalry in this area.
:bash: St. Pete

They need to accept their subordinate role.
Their purchase of the Ice Palace renaming it into the St. Pete Times Forum is nothing more than a part of a strategic 4 pronged plan to culturally dominate Tampa.

You think I'm joking. I avise to burn and destroy everything St. Pete related in Tampa but no one wants to listen to me.
Amusing enough but if you can find an issue in the Times saying something in Tampa is just plain good without a qualifier over the course of maybe three months or even find an article in the Trib about downtown St. Pete. . .

Business leaders always complain about the rivalry but the papers are the worst . . .
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