A recent housing and economic report reveals Spokane is experiencing a shift in demographics to both younger and older age groups, whose interest in the urban lifestyle is fueling the growth of downtown development projects in the areas of housing, retail, and entertainment.
The report was commissioned by the Downtown Spokane Partnership and the University District Development Association. Its purpose was to conduct an economic and residential market analysis, accessing potential support for future development efforts in certain areas of downtown.
Mark Richard, executive director of Downtown Spokane Partnership, says of the findings, “We have these two bookend generations that are both being drawn to the urban environment.”
DSP is a nonprofit membership organization, formed to enhance the quality and vitality of downtown Spokane. The organization oversees what is known as the Business Improvement District, which includes hundreds of business and property owners in an 80-block area, as well as the neighboring University District, and provides other services in the city’s core.
Richard says both younger people in the age range of 18 to 25 and those in the 65-plus range enjoy living, working, and shopping in one area. They’re also drawn to the energy created by entertainment venues and outdoor events taking place downtown, he says.
“I would say it’s the idea of convenience, tied in with that sense of participation in an experience,” Richard says.
He says the report also shows downtown employment rates are projected to rise, with downtown areas accommodating additional employment and job opportunities for graduating students, including training and mentorships.
However, the report projects slightly higher employment growth in the University District—a 62 percent increase by 2040, compared with a projected 56 percent rise for the Business Improvement District for the same time period.
According to the report, Spokane is expected to add about 45,800 residents by 2040. Although employment growth isn’t projected to grow at the same pace as population over the next 30 years, the city expects to add 24,900 new jobs, increasing the 2010 estimate of 111,000 jobs by 2040 to 136,000 new jobs by that year. Of those 136,000 new jobs, as many as 4,400 are expected to be added in downtown’s Business Improvement District, while the University District is expected to add 1,600 new jobs.
The full report, which was prepared by Applied Development Economics Inc., a Walnut Creek, Calif.-based consulting company, evaluated three city locations as being ready for development. These included the West Downtown Historic District, an area of West Main Avenue between Browne and Division streets referred to as College Town, and the University District.
Developments and capital improvement projects completed or planned in or neighboring downtown include Kendall Yards, the Davenport Grand Hotel by Marriott and Spokane Convention Center expansion, the University District Pedestrian Bridge, Riverfront Park revitalization, Huntington Park revitalization, Division street redevelopment, and the Central City High Capacity Transit Line.
“These are the areas of the city where we see the most grassroots developments taking place,” says Richard.
Both the city and private businesses have been making efforts to invest in both the Business Improvement and the University Districts to provide housing, employment, and entertainment opportunities for residents and workers. Last year, the city adopted a new Economic Strategic Plan with specific incentives for targeted areas in the city, including downtown and the University District. The city also formed the University District Revitalization Area with a commitment to invest some $43.6 million by 2035 to improve infrastructure and community amenities.
According to the newly released report, data obtained through the Spokane Regional Transportation Council 2040 forecasts the city is expected to add 22,300 total housing units by 2040, with downtown projected to add 2,500 units and the University District an additional 2,100. While most housing growth is for single-family units, the report says there is a definite trend toward more multifamily residential housing in the coming years.
Richard says so far the best example of the area’s housing market responding to this changing population’s needs is Kendall Yards, which has experienced a variety of age groups moving in, including older adults and young professionals. He says the 78-acre, mixed-use development located northwest of downtown, and adjacent to the Spokane River, Gorge Park and Centennial Trail expansion has been successful in its early phases. It is expected to include 1,088 residential units and 700,000 square feet of retail and office space when fully developed, and as of last October, 182 apartments had been built and occupied and 161 homes had been sold, with another 31 homes pending sale or under construction.
Joe Frank is president of Liberty Lake-based Greenstone Corp., the parent company for Greenstone Homes, which has been involved with the construction of several Kendall Yards projects. He says Spokane has been craving an urban neighborhood like Kendall Yards for quite some time.
“We haven’t had a new mixed-use development like this in downtown for a long time,” says Frank. “You now have everyone from millennials to baby boomers attracted by the idea of lower-maintenance housing, and that access to urban amenities, whether it’s shows, restaurants, or outdoor trails along the river.”
Frank says there isn’t a lot of housing inventory downtown right now, but the success of Kendall Yards has given other landowners a certain comfort with the idea of creating more housing options soon.
“You’re just starting to hear more about ideas for downtown housing, and I think you’ll continue to hear more as time goes by,” he says.
Melissa Murphy, owner and managing broker of Prime Real Estate Group of Spokane, says, area Realtors have begun noticing the downtown area’s changing demographics.
“I am seeing units successfully selling at that entry-level price point to young professionals, and units in the higher price point selling to that empty nester group looking to downsize,” she says.
Murphy says she believes population growth and job opportunities are two major factors contributing to the housing demand here.
“Washington is listed as one of the top five states for migration, with more people moving in than out,” she says. “We’re seeing a lot moving here from the West Side, people who are escaping those higher costs of living, seeking quality of life at a more reasonable cost.”
The report indicated downtown Spokane’s apartment-rental mar-ket has seen low vacancy rates in recent years, reaching 2.1 percent in the spring of 2015 after years of steady decline. That, coupled with projected increases in asking rents, presents an opportunity for market-rate apartment complexes located downtown. Home prices and rental rates continue to increase steadily within the city, providing a need for affordable housing for students and nonstudents alike.
Murphy says her company’s property management group is continually getting calls on rental vacancies, with open units not lasting more than a few days on the market.
“I would say there is very much a need for good rentals in the area,” she says. “As inventory remains at a low, that has driven up the demand at that median price point, higher than we’ve seen it before.”
The report shows support for “adaptive reuse” building conversions, and mixed-use development is also expected to thrive, particularly in downtown’s Business Improvement District, with new projects having been announced frequently there this past year. Many of those projects include ground floor retail spaces with residential units on the upper floors, and some also have created new office space or included renovation of old hotels.
“That western end of downtown has all these entertainment venues whose energy kind of bleeds into surrounding areas, attracting more people,” says Richard.
He says a project like the redevelopment of The Montvale Hotel mixes hospitality with the arts, and nearby entertainment venues like the Bing Theater do the same with education and entertainment.
“It’s a really cool area for creative, youthful types, or even just those looking to get out more,” he says.
Another area being eyed as ready for development is an area west of the University District, encompassing Main Street between Browne and Division Streets. This area, which the report refers to as College Town, mixes young professionals and student populations, tying the city’s downtown to the University District. The report indicates this area already has seen an influx of new businesses and entertainment venues, and officials expect that planned improvements to Division Street, as well as a continually growing university student population will support further growth there.
“This area has a lot of retail spaces right below housing, just up from downtown,” says Richard. “These spaces aren’t strictly beholden to a cycle of new students each year, but can also focus on young professionals looking to live close to but not quite in downtown.”
The report indicates continued expansion of the universities’ academic curriculum and strength of the medical and health science network also are expected to drive future industry in the University District. Planned expansion includes the development of a new four-year medical school at the Washington State University Riverpoint campus, which is expected to inject spending into the local economy, and generate interest in the area as a residential and employment environment.
One project that also is expected to ramp up development activity in the area is the pedestrian bridge project. The addition of a pedestrian bridge crossing Martin Luther King Jr. Way and the rail lines will connect university facilities on the north side to the south University District area, which will encourage residential and commercial projects along the Sprague avenue corridor to support student populations.
“That area is set to become a hub of medical research and employment, as well as housing,” says Richard. “Property owners are already curious about how the medical school will impact the area, and are beginning to consider how to reuse older buildings for businesses and housing.”
The area would also have links to the envisioned Central City Line, which supporters claim would improve transit and infrastructure connections, streamline operations at the STA Plaza downtown, and elevate land and improvement value in areas along its route by $175 million over a 20-year period.
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