If you build thousands of lofts downtown, will thousands of loft dwellers appear from the corn fields? Maybe not:
Even the strongest supporters of downtown growth say that, at least in the short term, demand isn’t likely to keep up with the supply of new units.
“I don’t want to be naïve about it,” said Jim Cloar, executive director of the Downtown St. Louis Partnership. “There’s quite a bit coming online in the spring, and there will be a natural drop-off (in occupancy numbers). But in the next few years, it will get better.”
Demographics, however, suggest it could get worse before it gets better.
In all, 834 rental and 471 for-sale units are under construction downtown. Another 2,669 rentals and 865 for-sale condos are proposed or planned over the next five years.
If all of the proposed units are built and occupied, the downtown population would increase by about 9,800 people in less than five years. That would be a 50 percent increase over the growth rate from 2000 to 2005, based on the downtown partnership’s estimates.
The culprit for this glut? The Keynesian flat tire:
But many developers keep going because projects are being driven by tax incentives, such as historic tax credits, rather than market demand, said Dan Woehle, first vice president for CB Richard Ellis, a commercial real estate services company.
“It would be better if the units come online as the demand builds, but developers are scared that the incentives are going to go away,” Woehle said.
Kinda impedes thoughts of the downtown revitalization, eh, Williams?
