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The Tucson Association of REALTORS® engaged The Counselors of Real Estate® (CRE) Consulting Corps to analyze for-sale housing demand in downtown Tucson, Ariz., identify development barriers and recommend steps to increase the supply of owner-occupied properties in the downtown area.
As one of the CRE’s giving-back initiatives, the CRE Consulting Corps provides real estate analysis and action plans to not-for-profit organizations, government entities, educational institutions, and other nonprofit owners of real property. The Consulting Corps leverages counselor expertise at well-below-market rates to address economic development, disaster response, affordable housing, and other public service issues.
A study conducted in 2013 by the Urban Land Institute found relatively robust demand for market-rate, multifamily housing in downtown Tucson, but not for owner-occupied units. A year later, a streetcar transit system began operations, generating an estimated $2.4 billion in economic impact and serving as a catalyst for several commercial and high-density transit-oriented housing projects that are primarily rental.
Stakeholders told the Consulting Corps team about numerous examples of households seeking to buy homes downtown, but comprehensive data collection and analyses were needed to confirm and forecast potential buyer demand. Data on the supply side was also needed. The team found the market had recovered steadily since the 2007–09 recession, although with few condo or townhome sales in the central business district. However, the sample analysis identified attached home sales among older duplex product in nearby neighborhoods.
To understand the market dynamics driving new residential development, the team drafted a sample market feasibility study for a midrise building. Comparing development costs of a building offering condos for sale or apartments for rent, the analysis showed how financing and other expense factors had been driving decisions to build rental buildings rather than condominiums. The team anticipates continued housing development in central Tucson and suggested modest efforts that could help downtown capture more of the region’s for-sale residential inventory. Facilitating increased housing supply may also improve affordability.
The Tucson assignment is one of more than 50 projects completed by CRE Consulting Corps teams. If you’re aware of an organization or institution that would benefit from the services of the CRE Consulting Corps, contact Samantha DeKoven at sdekoven@cre.org.