Though downtown Tacoma’s residential construction boom shows promise, it fails to target young and first-time homeowners, according to a study released last month.
The 120-page study, compiled by Mill Creek, Wash.-based New Home Trends, notes that home buyers between 25- and 34-years-old represent a huge market segment, yet find it difficult to purchase homes that meet their taste and affordability standards.
“These are the people that housing is not being built for down here,” said Deanna Sihon, principal and director of research and consulting at New Home Trends, who spoke yesterday during a presentation of the study for Tacoma City Council. Sihon added that most new residential construction was focused on “move-down” buyers — older people moving out of single-family homes and into condominiums and townhomes in urban settings. Downtown’s housing inventory needs smaller, studio-sized units with price tags attainable for young people.
The study, commissioned by the City of Tacoma, is aimed to provide an update on the downtown housing market and help developers make decisions on future development projects, according to Martha Anderson, the city’s deputy director of community and economic development.
It focuses on six downtown neighborhoods — Stadium District, St. Helens, Midtown, Foss Waterway, South Downtown, and Dome District — and highlights strength and weaknesses in each area.
The Dome District received the biggest rave. Sihon pointed to its status as a transit hub for Sound Transit’s Link Light Rail, Sounder, and express bus services, as well as Pierce and Community Transit. Multi-family development coupled with easy access to mass transit could create a walkable, village environment appealing to home buyers. “This area has the most potential out of any area downtown,” she said. “It lends itself well to being a transit-oriented community.”
A high level of concern was reserved for the St. Helens neighborhood, where seven new developments with 596 apartments and condominiums are slated for 2007 and beyond. “Product differentiation is going to be critical for this neighborhood,” said Sihon, who added that most of the homes target empty nesters and baby boomers. She said homes would need to be “carefully released so as not to create an oversupply.”
The study also seeks to explain the demand for downtown housing development, and points to a lack of affordable, market-rate housing in King County. “There was a shift 10 years ago due to affordability,” explained Sihon. “People can no longer afford to live in King County.”
She pointed to statistics compiled in February that show the average list price for a detached home in King County equals $728,972; in Pierce County, the average list price is $415,047. Similarly, the average list price a condominium and townhome in King County is $513,438; in Pierce County, that figure is $372,900.
Sihon recommended the city partner with developers to create a center to showcase to potential home buyers its vision for downtown Tacoma, projects in development, and homes for sale. In Seattle, a similar model exists at the South Lake Union Discovery Center, where visitors can learn more about development in the area north of downtown Seattle.