Continuing downtown Buffalo’s momentum hinges on housing

The momentum in downtown Buffalo continues, as buildings, streets and neighborhoods are coming back to life.

New restaurants are opening throughout downtown and new housing units are leased nearly as fast as they become available.

Job growth on the medical campus, as well as a desire by many young professionals to live downtown, has helped stimulate residential demand.

Ellicott St 461However, we still have a tall mountain to climb to truly achieve revitalization.

In 2012, the Partnership along with the City of Buffalo and the Buffalo Urban Development Corporation lead the charge for a concerted effort to rejuvenate the downtown real estate market.

We’ve made a lot of progress, but with nearly 2 million square feet of vacant commercial space still on the market, efforts to stimulate the market must be stepped up.

Recognizing the critical importance of converting vacant buildings to new residential space, Mayor Byron Brown chose to revise his housing unit development challenge for downtown Buffalo.

In 2014, the Mayor stated that he’d like to see 1,300 residential units developed in downtown Buffalo. Based on the prospect of 1,000 units in the pipeline for downtown and Larkinville, the Mayor raised the number to 2,000 units by 2018.

Delaware Ave 107Given the rate of development and market demand in the downtown area, this is not surprising. Developers report a 98 percent residential occupancy rate in downtown Buffalo.

The reality is downtown Buffalo has a problem: we’ve got a demand for housing that exceeds the units available.

Certainly this can be seen as a “good” problem to have, however more residential units are needed to meet the demand.

While the seemingly obvious solution to the residential shortage is “convert more units,” it’s unfortunately not that simple.

Adaptive reuse projects in the urban face a long list of challenges that projects elsewhere do not.

This is particularly true for smaller developers and it often results in financial gaps. These gaps may be the result of many issues, but lower residential rent rates (compared to other urban centers) is often a culprit.

Furthermore, the costs of converting some older buildings in the downtown core due to small floor plates, building neglect, and contamination can often be very high.

However, a number of initiatives such historic tax preservation credits, the Brownfield Cleanup Program or Buffalo Building Reuse Project (BBRP,) provide financing help to close the gap.

trico-buffalo-nyThese programs have been vital to development in downtown Buffalo.

BBRP is particularly aimed at smaller developers who may have more funding issues than larger, established developers.

While many projects have been completed in recent years, there are still many under-utilized buildings and spaces throughout downtown.

With the right project and support, these buildings can be transformed to meet the high housing demand.

Furthermore, more residential units will help spur more retail activity.

We’ve made progress in recent years, but if we’re going to meet Mayor Brown’s goal, we must continue to stimulate growth and activity in downtown Buffalo.