We currently have a huge shortage of market-rate apartments downtown. Market-rate units are those that rent for whatever the market will support, as opposed to units limited to certain income levels. The Crescent Lofts, Mississippi Lofts, and now Riverwalk Lofts are turning away dozens of potential downtown citizens because they don't fit the tax credit requirements. What about market rate units downtown? They're nearly all full, especially in newer developments. Even the all market-rate CityView Apartments (former Courtland) have at times had a waiting list. I've seen this shortage firsthand, and I had it confirmed yet again when I toured the Riverwalk Lofts a couple weeks ago. People who make good money are calling to inquire about getting a place downtown, and being told there aren't enough market-rate units for them. How many of these people might be finding a place in downtown Rock Island instead? Downtown Davenport needs more residents, and we're turning them away.
The tax credits that come with Section 42 housing are important to developers, but there are also ways to make market-rate apartments work. As I'll give examples for later, its working other places in Davenport. Other than that, I believe this is a case of the local developers still clinging to their 1980's view of downtown Davenport as an empty wasteland. If you notice, all of the big residential projects happening downtown are out of state folks. Alexander Company (Crescent Lofts) is out of Madison, J&T Development (Mississippi Lofts) are out of Chicago, and MetroPlains (Riverwalk Lofts) are out of the Twin Cities area. The one bright spot currently on the horizon is the Blackhawk Hotel redevelopment, which will include 30 high end lofts. The company doing that, Restoration St. Louis, is of course out of St. Louis. This is a fantastic project, but I believe there is demand for far more than 30 high-end apartments downtown. Unfortunately it seems to take an outside perspective to see it.
Another problem may be the banks, especially when it comes to condos. I've heard from multiple sources that none of the local banks (again, old money with old views of downtown and housing choices) will loan money to developers for owner-occupied developments downtown. I think there's a market for it, but they apparently don't. Jeff Speck even mentioned it while he was here. Unlike apartments, there's no real proof of the demand for condos. With apartments, there is absolute, concrete proof that there are lots of people who WANT to live downtown but aren't being provided the option to.
This isn't how capitalism is supposed to work! If there is a demand for a product, someone is supposed to see that demand and cash in on it. Middle-to-upper income people are willing to pay literally $1000 a month to live downtown, and we're turning them away. Where is the new condo or apartment building construction? I don't believe that it is financially impossible. Look around town, and you will see multiple examples of condo buildings and apartments succeeding. The examples I always use are the condos behind HyVee on Eastern, and the apartments on Washington just north of Locust. Neither of these are out in the 53rd Street "hot" area, and neither of them are low income, or cheap, yet they seem to succeed. Or even look just up the hill to the CityView. Its barely downtown, but has great views of both downtown and the river. It happened when local landlord Matt McDonnell rehabbed the Courtland, charged $600, $700 and up per month, and has had TONS of interest. If someone built or rehabbed a building similar to any of these downtown, I truly believe it would be full within a month of completion, if not before. Between the 1st Army coming to the Arsenal, and a lot of former home-owners becoming renters again, now is the time to build apartments.
So why isn't it happening?