A local developer plans to demolish a pair of vacant office buildings along Meridian Street in the near northside to make way for a $21 million apartment and retail project.
Posted: May 03, 2019 9:55 AM EDT By Merritt McLaughlin, Inside Indiana Business
Rendering courtesy of Old Town Design Group
WEST LAFAYETTE –
Purdue University has announced plans for
Provenance, a new neighborhood development in the $1 billion Discovery
Park District. The residential area is the fifth development project
announced in two years for the district.
Carmel-based Old Town Design Group is the developer for the neighborhood.
The
university says the neighborhood will feature single-family detached
homes, townhomes, cottages, condominiums and apartments.
Plans
also include a community center, fitness center, restaurants and retail
outlets, a day care facility and community gardens. Expected to open
June 2020, the facility 17,000-square-foot day care is planned to
support 156 children.
“Our goal for Provenance and for all our
neighborhood developments is to create a ‘sense of place’ for the people
living in an Old Town community,” said Justin Moffett, a partner of Old
Town. “As soon as we heard about the Purdue residential village, we
felt strongly that it was something that we wanted to create. Each
Provenance home will be unique, authentic and lasting in design in a
traditional walkable neighborhood.”
The project joins several others currently under development in Discovery Park. The most recent is a 15,000-square-foot luxury apartment complex project, slated to open in 2021.
LAFAYETTE, Ind. (WLFI) – County and city leaders,
builders, developers and realtors in Tippecanoe County went to Monday’s
housing strategy meeting to listen.
“We want to hear what people want,” said Jay Andrew, a board member for the Builders Association of Greater Lafayette.
Greenstreet consulting took a year to find out what people want when it comes to housing.
“More and more people are feeling the pinch and having
trouble meeting the housing needs on their own income,” said Mark
O’Neall, Senior Associate at Greenstreet.
Understanding what homeowners and renters value, could
help stakeholders understand where to invest and where to cut cost. The
study found household sizes are changing.
“People living alone or just with a partner are growing a lot faster than families,” said O’Neall.
“Families used to be larger than what they are and now
they are much smaller,” said Lafayette Director of Economic Development
Dennis Carson. “You know, having less children and then people getting
married later, so, all of those things are effecting those housing
choices.”
In many cases, those smaller families are looking for
less space. Andrew can see this type of housing work in downtown
Lafayette.
“Some more of the high rise mix use stuff, so you can
kind of have a restaurant down below, have some of the amenities some
people are looking for,” said Andrew.
However, the city knows it can’t be limited to downtown. They’ll have to expand to surrounding neighborhoods to be successful.
“Have enough rooftops and people that would support a downtown grocery store,” said Carson.
Their overall goal isn’t just to house people, it’s to give them a place they want to live, a forever home.
“Just making sure that we are a fun city to live in you
can prosper here but you can also have fun on a week night, a weekend
and be happy with your daily life,” said Builders Association of Greater
Lafayette member Jennie Dekker.
Real estate agent Joe Lackner is well-versed in the Garfield Park neighborhood.
He
knows to talk up the elements that make the south Indianapolis area
special: the strong community, the summer farmers markets and the
popularity of First Friday at the Tube Factory.
But
another major upcoming amenity is poised to bring even more attention
to the area: the Red Line. Lackner said the bus rapid transit
system, which will run down Shelby Street from Fountain Square, cutting
through Garfield Park and Bean Creek, has “added to the frenzy” of the
developing neighborhood.
“We
have already seen the values in Garfield escalate considerably due to
the high prices in Fountain Square and now Bates-Hendricks driving first
time buyers our way,” he said.
(Photo: Michelle Pemberton/IndyStar)
Construction materials are laid out down College Ave. in Indianapolis as construction crews build infrastructure for the Red Line bus route on Thursday, March 28, 2019. The Red Line will run from Broad Ripple to downtown Indianapolis, to the University of Indianapolis and more.
Lackner
said the last two homes he sold in Garfield Park had multiple offers in
less than one day. Some homes that are priced right and in good
condition will go before he can even put up a sign. Three years ago,
these homes were priced at an average of $90,000. Now they are selling
for $130,000 or more, Lackner said.
The 13-mile bus rapid transit (BRT) corridor runs from Broad Ripple down to the University of Indianapolis, passing by plenty of single-family housing along the way, particularly on College Avenue and the south side. In general, experts expect the Red Line will have a positive effect on home values along the route.
Katie
Wertz is a senior associate for Greenstreet Ltd., an Indianapolis real
estate development, brokerage and consulting firm that helped IndyGo and
the Indianapolis Metropolitan Planning Organization (MPO) determine the
locations for Red Line stations. Wertz said she believes once
neighborhoods develop the right mix of amenities, which can include
transportation, housing prices will likely increase.
In
2018, the Metropolitan Indianapolis Board of Realtors (MIBOR) and
MPO conducted the Community Preference Survey, reaching 2,163 adults in
central Indiana aged 18 or older. Results showed that most respondents
had little interest in living in residential-only areas and preferred
living in mixed-use neighborhoods with amenities like shops and
businesses.
Twenty-seven percent of respondents were satisfied with the availability of public transportation where they live, while 34 percent were pleased with the shops and restaurants within walking distance of their homes.
“What
we’re seeing in the market both national and locally is a rising demand
for places that are walkable and mixed-use with mass transit places,”
she said. “We don’t have a lot of those places.”
An amenity for buyers
John
Creamer, a real estate agent with Century 21, said some of his clients
purchased homes specifically to be close to the Red Line. He points to a
couple from Chicago who frequently rides public transportation and
looks at the BRT as a plus.
He said the average
price of a home on College Avenue three years ago was $205,000, while
the average price in the last 12 months was $247,000. Creamer believes
some of that increase is directly affected by the opening of the Red
Line.
“The market has been good,” he said. “There
are so many desirable businesses on College (Avenue), mostly
community-oriented restaurants and pubs that people can walk to.”
Creamer
said the Red Line construction hasn’t deterred certain home buyers, who
are looking to the long term and making decisions based on what the
area will eventually look like.
“When people
purchase a home or even lease, looking at the next 5 years purchase,
that construction is obvious, some people know it’s coming for sure, for
those people want to get downtown IU medical center, know they can get
on it this coming September.”
Chris Pryor, vice
president of government and community relations at MIBOR, said he sees
similarities in the Red Line to the development of the Monon Trail,
which saw a 10-mile stretch in Indianapolis completed in 1999, and
Cultural Trail, which was finished in 2013.
“When
they were proposed, people objected to them and thought they would have a
negative impact on property values,” he said. “The opposite has been
true for those, and it’s seen as a premium for homes on those trails or
in close proximity.”
Few construction concerns from buyers
Peter
Stewart, an independent broker, is selling a property on College Avenue
and 55th Street with an asking price of $225,000. While there’s
construction out front, he hasn’t run into any issues.
“I
thought it was going to have more of an impact than it has,” he said.
“We’ve been listed for about five months and I haven’t had one negative
comment.”
He thinks most prospective buyers understand the location and go into showings well aware of the construction.
“I’ve
been in the business for over a decade, and see things like this as a
big plus,” he said. “It’s a big pain in the butt while they do the work,
but you’re seeing the benefits in the long term.”
(Photo: Michelle Pemberton/IndyStar)
Construction cones sit around a sewer grate along College Ave. in Indianapolis where construction crews are building infrastructure for the Red Line bus route on Thursday, March 28, 2019. The Red Line will run from Broad Ripple to downtown Indianapolis, to the University of Indianapolis and more.
Kelly
Lavengood, real estate agent for Plat Collective, said the increase of
average sales price from 2017 to 2018 was 10.5 percent for College
Avenue and the two blocks on either side of the street. The days a
property was on the market also decreased.
Lavengood
personally purchased a commercial property on Central Avenue and 38th
Street that will become her new office, and she said its location on
both the Red and Purple lines were factors in her decision.
“People
moving into neighborhood are really aware of Red Line project and
excited about it,” she said. “For the most part, people moving in are
planning to use it in some capacity.”
Stewart has a
different take. He said home buyers in the area purchasing homes of
“$200,000 or more” are “typically not going to be bus riders.”
Will homeowners use the Red Line?
Some
current homeowners are also skeptical. Perry Hammock, 65, has lived
on Central Avenue and 54th Street for 30 years, and he is only a few
blocks away from the Red Line.
“I don’t see the Red
Line in any way helping my property value,” he said. “You can take the
bus Downtown now and the (Red Line) might only save you five minutes. I
don’t know if it will help change much at all.”
As
for riding the Red Line himself, Hammock doesn’t see many reasons why
he would use it. He said he wouldn’t be able to get directly to some of
the places he usually goes Downtown, and it would only take him a few
more minutes to drive.
For others, the uses of the Red Line seem clear.
Tim
Treat, 31, purchased a home in March 2017 on 49th Street and Guilford
Avenue, which puts him several blocks away from two Red Line stops. He
and his wife supported the 2016 public transit ballot referendum that increased income taxes to help fund the Red Line.
“I’m
excited about the Red Line potential to build up the transit corridor
developing along College (Avenue), which adds significantly to our home
values,” he said. “Having more options to get around the city attracts
more diverse more people to the area. That will also bring more
development and more stuff to do, more restaurants and more things we
want and need in the neighborhood.”
He and his wife
work at IUPUI and drive separately because they have different
schedules. They don’t currently use the bus because “it’s unreliable for
a Downtown commute,” and he said it would take him “over an hour” to
get to work.
He also sees the Red Line as a positive for the overall community.
“People
who don’t have cars currently rely on underfunded and unreliable bus
system,” he said. “This has the ability to reach more jobs, which will
possibly increase their ability to earn. I don’t look at it as something
just for people who currently drive.”
How BRT has affected other cities
A
number of real estate agents and housing experts are optimistic about
the bus line attracting buyers and potentially raising housing prices,
particularly on or near the route. Sean Northup, deputy director of
MPO, believes there will be a positive impact.
“Transit
is a market enhancer, not necessarily a market maker,” he said. “Based
on observations from other cities, we absolutely expect more buyer
interest closer to the corridor, and we’ll probably see higher prices
after the transit line is built than before.”
(Photo: Michelle Pemberton/IndyStar)
Construction materials are laid out down College Ave. in Indianapolis as construction crews build infrastructure for the Red Line bus route on Thursday, March 28, 2019. The Red Line will run from Broad Ripple to downtown Indianapolis, to the University of Indianapolis and more.
In
2017, the National Institute for Transportation and Communities
(NITC) published a study from the University of Florida that focused on
single-family home sales near the Lane Transit District’s Emerald
Express BRT service in Eugene, Oregon. For every 100 meters closer to a
station, researchers found an increase of $823 to a home sale’s price in
2005, $1,056 in 2010, and $1,128 in 2016.
The Greater
Cleveland Regional Transit Authority has also been beneficial to home
values, according to a 2019 study from Cleveland State University. The
GCRTA features buses, including BRT, light rail and trolleys. The
study discovered neighborhoods that gained transit saw a 3.5 percent
increase in property values within a decade. It also found that
employment increased by 3.1 percent, and poverty decreased by 12.9
percent.
Wertz said that national research shows
that most of the increase of property values tends to happen from when a
transit line is announced to when it opens. But Indianapolis might be
different.
“Indianapolis is not known for its
transit system, so it may take longer for people to see the benefits of
living on or near the transit line, in order to raise property values,”
she said.
Kellie Hwang is a reporter at IndyStar. You can email her at kellie.hwang@indystar.com. Follow her on Twitter: @KellieHwang.
Housing costs gobble up the largest share of Americans’ household income. Adding transportation costs to the mix takes an even larger bite. In Indianapolis, combined housing and transportation costs average 45% of the family budget, which limits economic mobility.
A broad-based coalition of community development organizations, local
government officials, philanthropic groups, neighborhood leaders, and
fair housing and transit advocates are collaborating on ways to
stabilize costs. They want to leverage the massive investment in the
Marion County Transit Plan to spur widespread community prosperity.
As an organization committed to creating conditions for working
people to be self-sufficient and meet basic needs without public or
private assistance, the Indiana Institute for Working Families (IIWF)
sees access to affordable housing near transit as a way to increase
economic mobility. “If we can build out our transit system and build
housing in a more strategic way, we help maintain self-sufficiency,”
said Jessica Fraser, IIWF director.
Fraser is concerned that many families are being stretched too far.
“Forty-one percent of renters in Marion County are spending more than
35% of their income on rent,” she said. “Almost 10% of households in
Marion County have no vehicle available to them.” Adding transportation
costs on top of housing costs can create more economic hardships.
“Families need to find affordable housing, transportation to work and
school, and make sure they are near access to food,” she said. “It’s
important to get both affordable housing and reliable transportation.”
INCLUSION AND AFFORDABILITY
Metropolitan areas around the country have leveraged investments in
transit by making changes to land use and zoning regulations to
encourage—and in some cases even mandate—that multi-family residential
developments include a percentage of affordable units. Called inclusionary zoning, such regulations are seen by advocacy groups like the Center for Transit-Oriented Development
as a way to “enhance community stability and sustainability and ensure
that low-income households are not isolated in concentrations of
poverty.”
However, this tool is not available in Indiana. In 2017, the Indiana
General Assembly passed legislation that precludes local units of
government from establishing equitable housing requirements without
prior authorization from the legislature.
Amy Nelson, executive director of the Fair Housing Center of Central Indiana,
said that because the General Assembly made inclusionary zoning
difficult to achieve, “We’re missing affordable housing from being
created. We don’t get an opportunity to say ‘it is a priority for us as a
community to insure there is housing availability for people who are
working and can’t afford the cost of being near their jobs.’”
The Indianapolis Neighborhood Housing Partnership® (INHP)
has taken a creative approach to circumventing Indiana’s legislative
roadblock. On February 5, INHP announced it had joined with Cinnaire,
a Michigan-based community development financial institution (CDFI), to
establish the city’s first equitable transit-oriented development
(ETOD) fund to insure that affordable housing is available near transit
stops.
“Inclusionary zoning is something we cannot be distracted by,” said
Joe Hanson, executive vice president of strategic initiatives for INHP.
“We have the ability to create environments for private and public
sectors to work together toward a common goal and find a way to help the
City leverage private-sector resources.”
The INHP/Cinnaire $15 million ETOD fund does just that. To build the
$3 million equity portion of the fund, INHP pledged $1.5 million of a
2015 Lilly Endowment grant. The City of Indianapolis committed $1
million in federal Community Development Block Grant funds, and JPMorgan
Chase’s PRO Neighborhoods program contributed $500,000. Hanson added:
“It doesn’t happen without Cinnaire.”
Rick Laber, Cinnaire executive vice president of new ventures, is in
charge of assembling $12 million in lending capital from banks as well
as for managing the fund. So far, First Merchants Bank, National Bank of
Indianapolis, Lake City Bank, and First Financial Bank have committed a
total of $5 million as lines of credit. “Community banks are motivated
to give back to their communities,” Laber said. This is part of their
corporate culture, and it also helps banks meet federal Community
Reinvestment Act (CRA) requirements. “Essentially what the CRA is saying
is, if you’re taking deposits from folks that live in your community,
you need to also make investments and loan products available as well,”
he said. That makes the fund a powerful CRA tool for banks. “They might
lose a little money on it or break even, but they get CRA credit and
that helps them with the regulators,” Laber said.
Such enlightened self-interest will likely help the fund reach its
goal of acquiring properties within a 15-minute walk radius of a transit
station, either to preserve or to spur the development of 1,000
affordable housing units. INHP’s Hanson said, “We’re looking for sites
that can sustain mixed-income and mixed-use like first-floor retail that
provides resources to the community.” INHP won’t develop the sites, he
said. “We will sell to anyone that can deliver the affordable housing.”
Two properties have already been acquired along the Red Line—one near
Garfield Park and the other just south of Fall Creek on Illinois
Street. Hanson said INHP is optimistic ETOD will help reduce
transportation costs for households and improve their quality of life.
“Insuring that low- and moderate-income families have access to safe,
affordable housing and high-quality transit provides tools for true
economic mobility,” he said. “If they have access to affordable housing
and quality transit, it opens more doors to jobs, education, health
care, and food.”
Data source: FTA. CLICK TO ENLARGE
INHP’s focus will be on properties in proximity to bus rapid transit
lines that are already generating interest from the development
community. The Federal Transit Administration has identified a national
trend: Once a major transit infrastructure investment is announced, it
sends a signal to the development community that prompts private sector
investment (see infographic). Such interest drives up acquisition costs
that in turn make affordable housing projects less likely. INHP’s Hanson
said the timing of the ETOD fund announcement was deliberate. “We
wanted to get ahead of the trend so we could ultimately maximize the
opportunity to help low- and middle-income families.”
TRANSIT ORIENTED DEVELOPMENT
During his time working with IndyGo on the Marion Transit Plan, Oregon-based transit consultant Jarrett Walker
said that one of the goals of expanded transit service is to provide
citizens of all ages, abilities, and incomes with improved access for
everyday needs. “A complete transit network provides liberty and
opportunity to so many people,” he said in an interview. “Transit’s a
win-win.”
Walker’s work here focused on encouraging IndyGo to create a complete
transit network. “The Red Line is a great thing. You’re getting a lot
of federal money to build it. The fact that you’re getting it in Midtown
doesn’t mean somebody else loses,” he said. “Transit succeeds precisely
because there are other people who benefit from it. That’s what gives
it the ridership. Transit achieves high ridership by being useful to
lots of people, not to any particular kind of person. High ridership
arises from diversity.”
He added that one of the potential benefits of the Marion County
Transit plan is that it can spur the development of apartment buildings
with fewer parking spaces. “That may sound technical but it makes a huge
difference because if you build less parking you can build more density
and make those units more affordable.”
Zoning regulations mandate the number of spaces required even if those spaces are unused. According to a report [PDF]
by Gary Cudney, senior vice president at the engineering firm WGI, the
2018 median construction cost for a new parking garage was $20,450 per
space. That does not include the cost of land and other project soft
costs.
Walker observed that this expense is one that tenants end up paying
for. “One of the keys to affordability and one of the things the
community should be advocating for, if it wants affordable housing, is
housing with less parking,” he said. And for such developments to work,
Walker said they must be located in proximity to a transit stop.
Sean Northup, deputy director of the Indianapolis Metropolitan Planning Organization,
was instrumental in hiring Walker, so it’s no surprise he agrees about
parking. “Parking is totally the enemy of affordable housing,” he said.
“Around transit, you have an opportunity to make a big impact if you’re
not assuming that every unit needs one or two parking spaces and every
resident is driving.”
Northup said that early in the Marion County Transit Plan process, a
land use analysis informed station placement. “Now the stations are set
and it becomes a conversation about what’s allowed to happen,” he said.
But to unlock the development potential, it requires making the case to
property owners that their properties are more valuable because they’re
located in proximity to a transit line.
Making that argument one property at a time is a recipe for
frustration. Another route taken by other communities is to introduce an
overlay district for multiple parcels. The effect, Northup said, is to
change “use by right” zoning in all land within proximity to transit
stops to encourage walkable, mixed-income, mixed-use developments. “The
great irony of this is that the purple, blue, and red [BRT] lines are
all located in historic transit corridors, and what’s built there now is
currently illegal,” he said. He noted that if one travels the BRT
corridors today there are taller buildings built to the corner with very
little parking; lot coverage with no side setbacks; and wide sidewalks.
“All of the kinds of things that are really in demand and easy to use
if on foot are illegal,” he said. Obtaining the necessary variances
under current zoning can add an entire year to the development process
and cost thousands of dollars.
THE “D” WORD: DENSITY
EPA graphic. CLICK TO ENLARGE
While property owners might be encouraged by beneficial economic
impact, neighborhoods can be uncomfortable with infill developments that
encourage density—the mix of uses and population that transit serves so
well. The frequent refrain is, “Do we really need more apartments?”
To which Katie Wertz replies, “Really, Indianapolis is not building
enough housing overall at every price point.” Wertz is a senior
associate at Greenstreet, Ltd., a local real estate development,
brokerage, and consulting firm that recently completed a market analysis for the Metropolitan Indianapolis Board of Realtors® and the Builders Association of Greater Indianapolis.
“What we found is that people are now choosing to find housing, and
then look for a job. If we’re not building the right kind of housing,
they’re going to go elsewhere,” she said. That makes it harder for Indy
to attract and retain new residents. “One of the links to transit
oriented development is when we build housing in a more compact,
walkable place, it not only helps an underserved market, but also saves
money for the City and generates higher revenues so we can add
streetlights, upgrade parks, and pave roads,” she said.
Housing demand in Indianapolis is also noted in Harvard University’s Joint Center for Housing Studies annual State of the Nation’s Housing
report. It found that “a growing number of low-income renters are
competing for a shrinking number of low-rent units and rapid growth in
high-income renters over the last 10 years has outnumbered growth in
high-rent units.”
Daniel McCue, a senior research associate at the Joint Center for
Housing Studies, worked on the report, which tracked housing stock and
demand. “As we looked through the data we saw a story across the nation
of the loss of low-rent units,” he said. Another story McCue saw was the
growth in high-income renters, which happened after the housing
downturn, as well as long-term growth in the number of low-income
renters.
McCue said what the data shows for Indy in terms of demand is both
high growth in the number of low-income renters and strong growth in
high-income renters as well. “I think that is partially explaining why
it seems all of the new developments are high end,” he said. “There is
demand at the high end and it’s really spurring this rental
construction.”
Dave Bangert, Journal and Courier Columnist 10/1/2018 10:45:00 AM
LAFAYETTE – Say goodbye to Lafayette City Hall’s parking lot at Fifth and South streets, developers prepare to build a complex of apartments and retail space in downtown Lafayette.
The city closed the parking lot on Monday to clear the way for Star City Crossing, a five-story mixed-use project expected to feature 76 apartments and 7,900-square-feet of commercial and retail space on the first floor, plus a parking facility. A timeline for the project wasn’t immediately available.
Construction of the $10.5 million project comes at a time when a city-generated study, released this summer, suggested that downtown Lafayette will need to have 550 to 800 more housing units by 2022 to meet the demands of the growing population.