Tuesday, April 15, 2014

Why Cincinnati needs more neighborhood options to attract Corporate expansion and relocations

The proposed GE offices in the Cincinnati metro area is certainly a positive thing for the region. Its ultimate location could be teachable moment for city leaders if GE selects a suburban location over the banks and even if we are selected, it is time to have serious discussion about diversity in our housing stock availability and our "over reliance" on a market aimed at one demographic to attract new business.

Unlike other Midwestern cities, who offer a broad diversity of downtown/near downtown neighborhoods, we have put all our eggs in the OTR basket. That follows a flawed idea that all companies are startups, all companies employ 25-30 year olds and they all want to ride, bike or walk to work. This is shortsighted and ignores the actual diversity in the workforce.

Millennials are being priced out of the OTR real estate market as prices approach , or exceed 300 per square foot
Everyone agrees that OTR is a success, however, with new sales at 300.00 a square foot and the ever tightening government lending regulations, the idea that someone 25-30 (probably with student loan debt) will be able to afford 270,000 for a 900 sq. ft. condo and come up with 20 percent down ( 54,000.00),  ignores reality.

OTR's own success means it is rapidly pricing out the original target demographic that would help us attract new business. City leaders have essentially, put all their eggs in one basket. Does a neighborhood like OTR help us attract new business, absolutely. However, we are being extremely shortsighted to think it gives us some "magical edge". Every major midwestern city, Columbus, Indianapolis, Louisville have Urban neighborhoods , in fact they have multiple neighborhoods with price points well below 300 a sq. ft.

"The Highlands" a new construction development of 17 new residences in Holy Cross ( a neighborhood overlooking the Indianapolis downtown) provides options for  homes in the 300-500K range within 5 minutes of the urban core and provides a diverse housing stock for a diverse work force including families.
More importantly, they have neighborhoods downtown and near downtown that appeal to different demographics like young families in their 30's  with kids or executives who want larger homes with major amenities. We have totally ignored those neighborhoods in Cincinnati, with our focus on OTR and we may find ourselves at a disadvantage when companies consider Cincinnati

Quality built historic housing stock like this is abundant in near downtown Cincinnati neighborhoods and can be restored/renovated and priced in the 100-150.00 a square foot range offering greater housing diversity and more neighborhood choices
The time has come for us to explore redevelopment/restoration in other neighborhoods close to downtown. We need to get rid of our pre conceived notions of what a neighborhood is (much like we have done with OTR) and explore what it can be.

The idea that lower Price Hill has to stay the way it is with mostly rentals and low income, and not be a small "Georgetown" is shortsighted.  For example we should be seeing construction of million dollar homes in the incline district and restoration of once single family homes back to upper/middle class residences. The same  applies with Fairmount, Knox Hill, and Camp Washington all areas within an easy 5-10 minute commute to the city core.

Lots like this, with a view  and proximity to downtown, sell for 50-150K in most cities. We have an abundance of developable lots suitable for new construction of single family homes at a fraction of that price, meaning we can build at a lower cost per square ft..
In short, we need to be able to offer a diversity of residential product that appeals to the entire workforce, not just one segment.

If we delude our selves into believing that everyone wants to live right downtown, ride a bike, doesn't own a car, or have kids, we place ourselves at a competitive disadvantage.


Quimbob said...

I think you might be focussing on the recent government efforts too much. OTR/CBD was just the area that needed the most attention from government.
Hopefully the momentum is there now & other areas can be addressed.
I don't know what kind of jobs GE will be bringing in nor what age the employees will be.
But here's my deal - the real estate sales people need to know the city neighborhoods.
Do any champion Knox Hill?
When Kenner moved to Pawtucket, my brother in law moved with the company. The company did a lot to help relocating employees & set them up with a realty firm. Both my sister & her husband were Revolutionary War enthusiasts so moving to that part of the country was really exciting. They wanted to find a cool old country farmhouse - the older the better.
Unfortunately the real estate agents only knew the newer bland suburban sprawl crap.
Even if GE moves to the banks, all the employees might wind up residing in Mason, anyway.
I don't know if the neighborhoods need to lobby GE or what.

Paul Wilham said...

We had a home tour in 2012, we will be holding some "realtor brunches" this summer and fall to showcase some projects.

Interestingly we are using a different approach in Knox Hill, marketing nationally to a preservation based audience. I will be showing one of our save not raze projects soon to a couple from NYC who are relocating to Cincinnati.

Ironically we have people buying in my neighborhood who are 'priced out' of OTR and downtown already.

Paul Wilham said...

I might add that one well known OTR realtor just recently bought a property in Knox Hill and is redoing it. That speaks volumes in my opinion.