Saturday, December 16, 2006

Downtown Housing Slump

In what is a recurring reality the decades long effort to remake downtown continues, and the comparison with other cities ability to provide housing in their downtowns is striking; further strengthening the oft reported analysis that this is a town very unfriendly to business, who is the prime mover in building communities where people live, downtown or in the suburbs.

Downtown struggling with slump
By Mary Lynne Vellinga - Bee Staff Writer
Published 12:00 am PST Saturday, December 16, 2006

Baltimore, Denver, San Diego, Chicago -- downtowns around the nation have blossomed with new housing in the past 15 years, attracting thousands of new residents to liven up their once neglected urban cores.

But Sacramento's central city housing effort -- despite a mountain of recent hype -- took so long to germinate that downtown largely sat out one of the hottest housing markets in memory.

With the real estate industry in a slump, it's unclear whether some of the ambitious projects conceived at the tail end of the housing boom will materialize.

"In Sacramento, we didn't capitalize on a great market cycle," said Sotiris Kolokotronis, who built more central city housing than anyone in the last decade -- 309 houses and apartments in three separate projects. Kolokotronis has 92 for-sale lofts under construction across from his recently completed apartment complex at 18th and L streets.

"We didn't get it in this cycle," Kolokotronis said. "I hope we get it in the next one."

In total, Sacramento's central city, the area between the rivers and the freeways, saw 1,780 housing units created between 1990 and 2006, most of them rental apartments, according to the city. That compares to 15,332 units built in downtown Denver during the same period.

Just since 2000, Baltimore has added 2,400 housing units downtown; San Diego, about 7,000.

Developers say the demand from buyers and renters wanting to live downtown is substantial, but the process of building in the central city remains excruciatingly hard, time-consuming and expensive. Sales prices and rents only recently reached levels that would come close to covering their costs. Most substantial projects have required millions of dollars in city subsidies.