The Springfield region is one of the strongest areas for economic growth in the state, and our population continues to grow by roughly 4,000 people annually. This is great news for our future. However, we are currently underbuilt for housing and very little is as important to somebody looking to move to or stay in an area than their choice of housing.
Several signs indicate that demand currently is outpacing supply of housing. Residential homes are selling very quickly at or above asking prices. Mortgage rates are at historic lows for the foreseeable future, so there is little sign this trend will change. In the multifamily sector, vacancy rates are at historic lows hovering around 5%, and rental rates continue to increase drastically on an annual basis. We are not meeting current demand and are not doing enough within the city to close the supply gap.
The metropolitan statistical area as a whole will be able to keep up because there are enough people who can and want to develop residential and multifamily housing. There’s also available developable land and eager municipalities.
Springfield has its own difficulties. If we do nothing, we are limiting our economic development potential within the city proper and allowing the additional tax dollars that support our infrastructure to flee to the surrounding communities. Lack of available land, bureaucracy and complexity of the neighborhood political environment makes residential and multifamily development costlier in time and financial commitment for developers within Springfield.
Doing nothing to change our situation is not an option.
Given the lack of open land inside the city limits, it is time for Springfield to grow upward. This will require strategically identifying neighborhoods and structures that are prime for redevelopment. Unfortunately, there are pockets of our community with single-family homes that are in such disrepair they cannot be saved. Razing those dilapidated structures and replacing them with higher-density, mixed-use developments will meet the need for more housing, generate more tax revenue for the city and enhance property values for surrounding homeowners by removing blighted properties.
In order for these types of projects to be successful, developers must work with the neighborhoods – which in Springfield are very powerful and they should be. Homeowners are heavily vested and we as developers need to work with them to ensure we improve their property values and quality of life.
The final piece of the puzzle is the city of Springfield staff, administration and City Council. Their support is critical to help foster development. Right now, it is simply faster, easier and therefore more cost effective to develop in the surrounding communities. However, I believe there is a way for developers and the city to work together for the greater good while achieving everybody’s goals.
The concern we often hear is the belief that Springfield is overbuilt with apartments. The data simply does not indicate that to be true. Nationally, trends are gravitating toward renting for convenience, to maximize disposable income and gain access to amenities. At this stage of maturity for our city, apartments are necessary and even essential. We have a large working class that cannot afford to own a home, and if they all move to the outskirts of the city will not be able to afford the daily commute to work. Springfield’s working class is the backbone of our economy, and it is in all of our interests to help them remain financially stable with secure housing in order to continue our strong economic development trajectory as a region.
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