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Study: Springfield loft inventory grew sixfold in five years

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The number of loft apartments in downtown Springfield is expected to nearly double by 2012 – and there likely will be people to fill them, according to an urban housing study released Oct. 3.

Southwest Valuation LLC released the results of the study at Springfield Area Chamber of Commerce, accompanied by Urban Districts Alliance and other public and private entities that partnered to fund the study. The study was completed in April, five years after the local firm conducted its first study of downtown Springfield housing.

About 11 percent, or 28,848, of the Greene County population resides downtown, according to the study. That’s down from about 15 percent in 1990.

Since 2002, loft units in center city grew more than sixfold, from 45 to 299. Average occupancy inched up 2 percent to 93 percent, and average monthly rent prices per unit increased to $844 – or 80 cents per square foot – from $715. The rates indicate downtown lofts have a 15 percent premium on a square-foot basis, compared to garden apartment prices in Greene County.

UDA Executive Director Rusty Worley ties the growth in downtown living to the number of employees who work in center city – about 25,000 – and the fact that six of the area’s top 10 employers have presences downtown. He also points to the increasing attractions in the area, such as Hammons Field and Jordan Valley Ice Park, and to growing student enrollments at nearby colleges.

The study articulates a major divergence on the horizon: a higher demand for owned downtown units.

Presently, rental units make up about 70 percent, or 266, of downtown residences. The study attributes the high percentage to the historical tax credits that many developers use in redeveloping lofts that prohibit selling units for five years. Additionally, students make up 50 percent of downtown dwellers, and students typically rent, according to the study.

By 2012, the study predicts owned housing units will increase to about 165, compared to 114 now, as the tax credit time constraints fall away, and as older residents looking to buy instead of rent take more notice of downtown.

More attention from older buyers, namely “empty nesters,” is the reason why local lenders aren’t too worried that increasing foreclosure rates both locally and across the country will hurt downtown loft-buying activity, Great Southern Bank Vice President of Community Development Brian Fogle said. Older buyers generally are not purchasing their first homes and are better prepared for the financial commitments, he said.

Fogle added that the 2007 study paints a positive picture of Springfield urban living, giving lenders and developers confidence in future projects.

“When we were looking at the housing market five years ago, we had a lot of anecdotal demand for housing,” Fogle said.

As testaments to that confidence, developers Matt Miller and Craig Wagoner were at the press conference to discuss their downtown loft projects. Miller planned to break ground Oct. 5 on his Six23 Condos, which will open next summer with 38 condominiums at 623 W. Walnut St. Meanwhile, Wagoner is renovating a former furniture warehouse at East Chestnut Express and North National Avenue into the Lofts at Jordan Creek, which should have 20 condos by early next year.

This story originally appeared in SBJ’s Oct. 4 free e-news Daily Update. Click here to register.[[In-content Ad]]

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