Recession and lenders chill developers
Eric Karnes | Aug 4, 2010
This article originally appeared in The Blue Line
Construction of new for-sale housing declined during the first half of 2010, reflecting the difficulty in obtaining financing and the lingering effects of the recession. Boulder’s economy was much more resilient than that on the national level but lenders are still reticent to approve many mortgages for new construction of any type, anywhere.
During the first half of 2010 the City of Boulder issued building permits for 318 new residential units (net of demolitions). That’s close to double the total for all of 2009 but is inflated by the presence of the 238 units permitted at one project, the Residences at Twenty-Ninth Street, a new apartment project at 30th and Walnut Streets. The Residences is the first substantial apartment community built in Boulder in seven years, since land costs generally lead developers to do for-sale rather than for-rent housing, even though Boulder normally has one of the lowest apartment vacancy rates in metro Denver.
The following table shows the number of building permits issued by the City of Boulder since 2000, including the first half of 2010:
One can clearly see the increasing role of multi-family housing in Boulder, reflecting changes in demographics and land costs. The “scrapes” activity has subsided since 2008 as issues of recession and financing reduce the market for large single family houses. Stricter City regulations may also have deterred some demolitions and replacements.
Most of the new construction currently underway in Boulder is limited to University of Colorado buildings, the Residences at Twenty-Ninth Street and on-going residential projects in north Boulder at the Dakota Ridge, Holiday and Northfield neighborhoods. Even with a reduction in development activity there are seven substantial projects currently in some stage of the approval process:
- The Armory is a 5.2 acre redevelopment of the former US Army Reserve center at 4640 Table Mesa Drive. Peter Stainton is seeking approval to rezone the site to allow 37 to 41 townhouse and condo units.
- The controversial Boulder Creek Commons residential development on 55th Street south of the East Boulder Community Center is still on the list as an annexation petition, although nothing has showed up yet on Planning Board or City Council agendas.
- Boulder Housing Partners, in conjunction with Morgan Creek Ventures, has proposed to develop 59 affordable apartments at 4990 Moorhead Avenue, just north of Table Mesa Drive.
- Covidien is seeking to amend property boundaries with another owner so that the company can construct a 64,862 square foot office building and 140,000 square foot parking garage on their campus at 5290 Logbow Drive in Gunbarrel.
- An annexation petition has been filed for a 9.9 acre tract at 3015 Kalmia Avenue for Harper Hollow, a previously announced residential mixed-use community adjacent to Northfield.
- Junction Place Village is a proposed apartment project at 3100 Pearl Street, across the street from the proposed RTD express bus station. Pedersen Development Company wishes to construct 319 residential units with 15,964 square feet of commercial space.
- Thistle Community Housing, in partnership with Coburn Development, is seeking approval to redevelop a part of a mobile home park at 1000 Rosewood Avenue into 16 single family homes and a duplex.
- Red Oak Park (former site of Boulder Mobile Manor) on Valmont Road east of Folsom Street, being developed by Boulder Housing Partners and Coburn Development, will have 59 affordable units (single family, duplex and triplex).
The City of Boulder has improved its online tracking system for rezonings, site plans and building permits but I still find numerous errors, so users should take care in doing research. There are numerous duplications, out-dated information and inaccurate project locations on the provided applications map.
Once the economy improves, and lenders start to once again fund new construction, there will be other projects proposed.
Columnist and investigative reporter Eric Karnes is a Boulder-based commercial real estate research consultant who advises several national clients. He is a long-time participant in local debates about planning issues.