South End housing market ‘ripe, on verge of bursting open’
Date: 11/21/2013
By G. Michael Dobbs
news@thereminder.comSPRINGFIELD – According to one housing expert, the key of revitalizing the city is by making sure the downtown is healthy and that means additional market-rate housing.
Laurie Volk of Zimmerman/Volk Associates Inc. told an audience of city officials, property owners and housing developers on Nov. 14 the market potential of downtown Springfield and the South End is “just ripe, just on the verge of bursting open” at the release of two housing studies.
The firm completed a pair of studies, which was funded under a grant of the Economic Development Administration under a city partnership with the Pioneer Valley Planning Commission.
Downtown was defined by the study as “covering the area bounded by the Amtrak railroad tracks, including Union Station, in the north, Byers and Myrtle Streets in the east, Union Street in the south, and the Connecticut River in the west. The downtown Springfield study area encompasses most of the Metro Center neighborhood, including the Central Business District; the Business Improvement District; the Quadrangle-Mattoon Street and Lower Maple Historic Districts; the Club Quarter, the city’s entertainment district; and several public parks – including Court Square, Tower Square Park, Stearns Square, and Riverfront Park.”
The South End “includes the area encompassed by Howard and Union Streets in the north, Maple Street in the east, Pine and Mill Streets in the south, and the Connecticut River in the west; the recently-designated Outing Park historic district is located in the South End. The Naismith Basketball Hall of Fame is also located in the South End; however, it is separated from the heart of the neighborhood by Interstate 91.”
Volk had conducted a similar study in 2006, and she said there was much potential there for an upswing in housing. Then the recession of 2008 came and “the bottom fell out,” she noted.
Several factors have influenced the new market conditions she explained. They include the gradual decrease on the cost of energy; the beginning of tight credit conditions easing for both developers and homebuyers; the tornado, which opened up new urban lots that could be developed; and the potential of a casino in the South End.
She emphasized that improvements in the housing market in the downtown and South End “are not dependent, but are enhanced” if the MGM casino complex is built.
Two demographic groups are making changes in the real estate market and their influence would be felt in Springfield, Volk said. Baby boomers, those born between 1946 and 1964, and the millennials, who were born between 1972 and 1996, are the two groups who are attracted by urban life, she said.
Volk noted these groups are one to two person households who are not looking for traditional detached housing. Instead they are looking for rent or buy apartments, condominiums and lofts.
According to the research her firm conducted, the majority of the potential buyers or renters for newly created housing in downtowns would be from Springfield itself (37.5 percent) and the remainder of Hampden County (31.6 percent).
For the South End, its new residents would also principally come from Springfield and Hampden County.
For both neighborhoods, the study predicts the market for the South End would be primarily younger single people and couples and empty nesters and retirees.
“There is an abundance of reason people want to live downtown,” she said. In Springfield those are its historic buildings, employment, cultural offerings, walkability, parks and the riverfront, tourist attractions and its location and ease of access.
She said these positive attributes out-weigh the negative characteristics, such as the perception that downtown and the South End are not safe; there are too many neglected properties; and there are high development costs. Volk maintained there has been a “significant” improvement in public safety when compared to her 2006 assessment and that vacant properties and development costs are issues shared by many cities.
Her study indicates the market potential for additional market-rate housing will attract mostly millennials (63 to 69 percent) with baby boomers making up about 22 percent of the market.
One thousand new residents can make “a significant difference,” she said in the downtown and the South End.
Presently she noted the overwhelming majority of the people living in downtown rent their home rather than own it.
The report on the South End noted a silver lining if the MGM casino plans do not come to fruition.
“Other opportunities for redevelopment open up if the MGM project is not approved for Springfield. Buildings that would have been demolished, such as the Howard Street School (the Alfred G. Zanetti Montessori Magnet School), could then be considered for residential redevelopment. Old school buildings that are no longer useful for educational purposes can become attractive rental apartments. It is highly recommended that artists’ housing be considered for the Zanetti School; this type of development has been enormously successful across the country as a means of saving and restoring historic buildings and providing affordable housing for artists and artisans who live in the area.”
The report continued, “The combined use of both historic and low-income housing tax credits can provide significant dollars for redevelopment of the project. Other than income restrictions, the only requirement would be that one member of the household have a portfolio, or published work, or some proof of artistic activities. If public gallery space is also provided on the ground floor of the building, it can become a stimulus for other types of retail development in the vicinity of the project.”
Volk underscored the conclusion of the Urban Land Institute study of Springfield that was made in 2006: In order to grow retail and service businesses downtown and in the South End, there must be a greater number of people living there.
She added that downtown redevelopment must be a goal shared by the city. She cited how downtowns have been the traditional focus of cities and that no matter how good neighborhoods might be, the city will have problems with a failing downtown.
“It will be difficult to improve neighborhoods if the downtown is suffering,” she said.
Mayor Domenic Sarno noted there are more developments in the downtown area besides the potential casino, which he believes will cast a positive light on the area. The Springfield Data Center on Eliot Street, the renovation of Union Station, the new home of WFCR radio on Main Street and the conversion of the former School Department building on State Street are all under way.
Developer and property owner Evan Plotkin said, “If every one goes home at the end of the day we’re not going to see an investment back in downtown.”
