And the Livin' Ain't Easy

Would-be urban dwellers should take heart: The city is finally getting serious about rental housing that would bring working professionals into the core of the city, night and day. A brand-new study commissioned by the City of Phoenix and the Phoenix Community Alliance--an advocacy group for downtown--finds there's a market for about 700 new upscale units, and it recommends they should be built by 1991, to coincide with the opening of the new deck park. The bad news is that there's no easy way for these apartments to be developed at a profit. In fact, city subsidies are mandatory. "No developer can go in there and do it on his own," says Margaret McKeough, city center administrator.

The catch is that, just as downtown is becoming vital enough to make it slightly attractive to urban pioneers, the city's subsidies are getting harder to come by. Reflecting back on the days (only four or five years ago) when the city was land-rich or endowed with abundant federal monies to seed downtown, McKeough says, "We are no longer in that mode."

It comes down to the fact, she says, that the city has already given most of its land away practically as gifts. And the fact, too, that federal grants to states and cities are drying up.

For instance, the Renaissance Park condominiums on Seventh Street--one of downtown's two new housing projects--were built at a land cost of only 27 cents per square foot, an incredible price made possible by the fact that the city had bought the ground in 1979 with monies allocated to it by the feds. And St. Croix Villas, part of the five-square-block French Quarter being developed by Oregon's Heritage Development, had its land-acquisition costs subsidized by the city to the tune of $3.3 million. That, too, was money the city had got from Washington.

Today, the city's annual federal allocation for downtown will be only $1.2 million, down from $1.8 million in 1985-86, McKeough says. And future housing projects should plan on land costs up from 27 cents to $10 to $15 per square foot.

She adds, cheerfully but vaguely, that this new reality will have to stimulate "some really creative thinking" when it comes to building apartments downtown. She suggests that a nonprofit corporation could be established to raise funds and have bonding authority for downtown projects, but adds that such an organization is just an idea. Whatever mechanism is found, "We are hoping that the whole crux doesn't fall on the city," she says.

This grudging attitude shouldn't be interpreted as a lack of enthusiasm about downtown housing, however. McKeough calls it "critical," and adds that downtown is "not going to be vital without 24-hour-a-day activity." "I am speculating that when the city needs to prioritize, that the sympathy is not going to go to the office developments," she says. "The sympathy will be, `We need grocery stores and residences.'|"

The crafters of the new study would agree. Performed by Mountain West, a group of urban development consultants, the study leans heavily on the concept that Phoenix's current economic slump is at its lowest point. Judging from the pattern of past peaks and valleys, we should be enjoying a full recovery by 1992 and will then need increased high-density housing, the report says.

And if that chirpy prediction is realized, not just any high-density housing will do downtown. Yuppies and DINKs--the targeted market for the urban environment the city keeps assuring us will one day be hip--will be satisfied only with a prestigious project that provides a sense of security, is located close to the zippy new amenities and is reasonably priced.

This paragon of a residence could be best located in the Roosevelt Historic District, north and south of the Papago Freeway and right up against the new deck park, the study says. It recommends a large-scale mid-rise development of 500 rental units, as well as a smaller site for 74 units opposite the Embassy Condominiums.

It recommends them with an almost awe-inspiring confidence, considering the success so far of downtown housing. After three years, Renaissance Park has sold 156 of its 170 units. But after a promising start in 1986 and '87, there was a year in the middle when the units wouldn't seem to move. This moderate success looks like the frantic activity of a Macy's sale, however, when you compare it to St. Croix Villas on Fillmore. Open for business since last September, only three of the sixty units have sold. This is despite the fact that 36 of them have their own garages-- when will we see this again in a downtown, anywhere?--and prices that have recently been lowered, down to $85,900 from $98,000 on the largest units.

Even so, one of downtown's most optimistic voices says not to worry. According to Stephen Dragos, president of the Phoenix Community Alliance, the hard times at Renaissance and St. Croix, which are for sale, do not relate to the new rental housing proposals made by the study his group co-commissioned. The decision to live downtown requires a commitment, it's true, but rental housing is a commitment that goes down easy. Says Dragos, "It is much easier to get someone to commit to a six-month lease than to part with $100,000.

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Deborah Laake

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