Agenda - Planning Commission - 02/02/1999

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The Importance of Downtown Residential Development It Has Become Axiomatic in Grand Rapids and in Other American Cities: "A Healthy andDiverse Residential Sec/'or Is Required for a .City Center to be Considered ¼'brant and Healthy." The city of Grand Rapids, Michigan, and the Downtown Management Board have together established a goal to increase the production of housing of all types in the downtown area. A residential sector is considered necessary and supportive of the other sectors of the downtown economy: retail, employment, entertainment, and the arts. Creation of a vibrant downtown residential neighborhood will help to establish Grand Rapids as a vital and unique urban area in western Michigan. For several decades, the office sector has been the most viable sector of the downtown economy. The close proximity of offices to other uses can be a distinct advantage for downtown employers and employees. Without a strong downtown residential sector, a downtown is at risk of becoming less diverse and therefore could lose this advantage. Thus, increases in the diversity of downtown uses increase the viability of all uses. Downtown's uniqueness comes from the intensity and diversity of its uses and the presence of many older, often historic buildings. The potential for residential development offers the downtown community an important strategy for the reuse of many of these older buildings, some of which have fallen into disrepair or disuse. Land Use and Zoning The land-use pattern in downtow.: is best described as'"mixed use." Existing residential, commercial, office, medical, religious, entertainment, and cultural facilities all have a strong presence in the area. Although some distinct districts exist, the development trend is towards increased mixing of uses, both within buildings and within districts. The zoning ordinance now divides the downtown area into five separate use districts. Residential uses are permitted outright in two districts: CBD-2 and CBD-4. Residential uses are permitted with the special approval of the planning commission in two other districts: CBD-3 and CBD-5. Residential uses are not permitted in the CBD-1 zone, being the ci,/ic center adjacent to Calder Plaza. From Downtown Housing: The Report of the Downtown Housing:Task Force, Grand Rapids, Michigan, December 1995. Baltimore and Toledo, but the new downtown residential markets still faced numerous obstacles. Cities like Memphis, Norfolk, Dallas, Minneapolis, and Columbus, Mississippi, began to look realistically at areas that could be renovated into mixed-use districts that would include residential development. Two early major obstacles involved the conversion of historic structures, many of which i~ad been vacant for years, and, more importantly, financing these huge projects at a time when downtowns were losing businesses to the suburbs and real estate values were depressed. In many ci{ies, the downtown housing market was untested, and it was unclear whether such residential units could be built without pricing themselves out of the market. For cities such as Columbus and Dallas, the downtown housing experience was a new one and provided a huge boost to their central business districts. Downtown Columbus consisted primarily of government buildings until investors decided the potential existed for reviving the area with a residential market providing the catalyst. A development company chose to convert the second floors of its old empty retail establishments into residential apartments. Because many of the downtown structures were historic, developers had to maintain a consistent style of architecture that added more appeal to the area. The public responded enthusiastically, and commercial businesses soon followed. Downtown housing was a new experience for Dallas as well. Prior to the new wave of downtown development, Dallas's City Center had one residential building, the Manor House, constructed in 1965. The city now has an estimated 10,000 units of downtown housing, and that number is still growing. A recendy conducted survey in Dallas showed that 74.3 percent of the tenants in the downtown area had relocated from outside the city limits. In contrast, between 1970 and 1990, the in-town population declined by 38 percent. According to a recent Urban Land Institute Christopher Burke is a former APA research associate who is now working for the state of Georgia. publication, Dallas attributes this change to two factors. First, the flight of downtown businesses to the suburbs had diminished downtown real estate values. Second, public and private sector leadership cooperated, and the city offered public incentives. This combination of circumstances is a common ingredient in the redevelopment of downtown residential markets. Bc~$ics ~f Do~.town Housing For many cities, downtown housing has been the solution for reviving struggling central business districts. Their success, however, hinges on the answers to a few central questions: · Why will people want to relocate downtown? · What will entice investors to support what they may see as an' unproven idea? · How will all the pieces come together to make this idea a reality? Why would people move into areas of town previously seen as unsafe, congested with traffic, home to vagrants, and full of old buildings? Convenience, nostalgia, and eccentricity are all plausible explanations, but most city leaders believed people wanted to be close to their jobs and places of entertainment, live comfortably in a safe environment, and experience living in a historic structure with modern amenities. At the same time, cities are beginning to witness a popular backlash against suburban sprawl.~The same suburbs that once touted acres of open space and large lots often have become an oversold American dream. People ~began to notice that the suburbs devoured the very green space that attracted many residents in the first place. Baby boomers who had left the city for the suburbs years earlier were now in their 50s and 60s and no longer had young children to raise. These "empty nesters" wanted to be closer to work, the museum, art galleries, and fine dining while their children, Generation Xers, were young professionals looking for a hip place to live. The two generations had a new reason to become neighbors in newly revitalized central city neighborhoods.