ATLANTA | Development Thread VI

[Atlanta3000]

16 Story Office and 10 Story Hotel @ Perimeter Center Mall

[ATL_J]

Just to add to the previous discussion, many of these projects wouldn't be economically feasible without some sort of incentive. For example, high-rise construction right now needs something like $2.50 / SF to justify new multifamily residential construction. In places like Downtown the market just isn't there and in Midtown and other neighborhoods you'd only be seeing super, high end deals go through, and then only a few.

Usually cities have a substantial stock of older buildings to serve as more affordable housing, however, due to Atlanta's history and recent demographic preference shifts you're having a huge influx of people heavily reliant on new construction to fill the housing void.

This isn't to imply I agree with the practice of subsidizing developers in this manner, just not sure what other approach to take?

[Street Advocate]

The Emerson sold its penthouse for $6 million. Holy crap.

[Atlanta3000]

Originally Posted by Street Advocate

The Emerson sold its penthouse for $6 million. Holy crap.

Did you see the couple that bought it? The wife looks like she is 16. I swear her face in the picture was screaming .....HELP ME!

[GeorgiaPeanuts]

Originally Posted by Atlanta3000

Did you see the couple that bought it? The wife looks like she is 16. I swear her face in the picture was screaming .....HELP ME!

Andy Heyman was an executive with Radiant Systems; musta made bank when NCR Corp. bought them out.

[GeorgiaPeanuts]

http://www.bizjournals.com/atlanta/news/2017/06/16/a-110-million-buckhead-condo-tower-gets.html

Those storefronts will take the place of longtime Buckhead retailers The Fish Hawk and Chuck’s Firearms, which have relocated. Demolition should begin in the next two weeks. The project will take about two years to complete, delivering its first units sometime in May 2019.

[jpk1292000]

Originally Posted by Street Advocate

The Emerson sold its penthouse for $6 million. Holy crap.

I assume this huge price is a good sign for Opus

[shivtim]

Originally Posted by Atlanta3000

Did you see the couple that bought it? The wife looks like she is 16. I swear her face in the picture was screaming .....HELP ME!

You mean Melissa Heyman? The 36 year old investment banker with a degree in chemical engineering from Georgia Tech and an MBA from the #1 ranked business school (Wharton @ UPenn)?

[Street Advocate]

Originally Posted by shivtim

You mean Melissa Heyman? The 36 year old investment banker with a degree in chemical engineering from Georgia Tech and an MBA from the #1 ranked business school (Wharton @ UPenn)?

Thank you. This was the appropriate response.

[arjay57]

Apparently TechRise was approved by the DRC.

It's nice to see these older structures getting updated.

http://www.bizjournals.com/atlanta/news/2017/06/14/buckheads-techrise-takes-another-step.html

https://media.bizj.us/view/img/10498945/tech-rise-2*750xx2866-1612-0-91.jpg

[arjay57]

Originally Posted by Street Advocate

Thank you. This was the appropriate response.

I also thought she looked like a successful businesswoman.

[Atlanta3000]

Originally Posted by shivtim

You mean Melissa Heyman? The 36 year old investment banker with a degree in chemical engineering from Georgia Tech and an MBA from the #1 ranked business school (Wharton @ UPenn)?

Hey LinkedIn.com, I think any 36 year old woman would be extremely flattered I thought she looked 16 regardless of what g-damn school she went to.

[Verge]

Originally Posted by Atlanta3000

Hey LinkedIn.com, I think any 36 year old woman would be extremely flattered I thought she looked 16 regardless of what g-damn school she went to.

I really don't think so-- at least none of the women that I know. The view of women as helpless little things wanting to be flattered is a bit dated don't you think? ;-)

[Verge]

Originally Posted by Atlanta3000

The Development Authority of Fulton County doesn't and they are the one who has funded/reduced taxes for most of these developments.

Right-- a source of tension between the groups-- I would expect that the County will follow suite at some point.

[jsvh]

Originally Posted by ATL_J

Just to add to the previous discussion, many of these projects wouldn't be economically feasible without some sort of incentive. For example, high-rise construction right now needs something like $2.50 / SF to justify new multifamily residential construction. In places like Downtown the market just isn't there and in Midtown and other neighborhoods you'd only be seeing super, high end deals go through, and then only a few.

Usually cities have a substantial stock of older buildings to serve as more affordable housing, however, due to Atlanta's history and recent demographic preference shifts you're having a huge influx of people heavily reliant on new construction to fill the housing void.

This isn't to imply I agree with the practice of subsidizing developers in this manner, just not sure what other approach to take?

Our problem is we have severely constrained the supply of property in the metro where building density more than SFH is legal. Which has forced any land that can legally and viably support denser development to be worth millions per acre and require a "luxury" mid-rise / high-rise with $2.50SF prices in order to make the economics work.

The solution is that we need to relax our zoning laws. It is not healthy that development is jumping from decades as an empty surface parking lot to giant high-rises basically overnight. It should be much more incremental: Empty lot -> SFH -> "Missing Middle Housing" -> Mid-rise -> High-rise. And spending decades at each step along the way.

The "missing middle housing" is historically the major source of affordable living options in a city, and we have all but banned it. The only places you can really build it is the same zones where it is legal to build a mid-rise. And since the supply of denser zoned land is limited, of course the more expensive luxury mid-rise will get built in order to make the economics of the land value work out.

[Ant131531]

Originally Posted by jsvh

Our problem is we have severely constrained the supply of property in the metro where building density more than SFH is legal. Which has forced any land that can legally and viably support denser development to be worth millions per acre and require a "luxury" mid-rise / high-rise with $2.50SF prices in order to make the economics work.

The solution is that we need to relax our zoning laws. It is not healthy that development is jumping from decades as an empty surface parking lot to giant high-rises basically overnight. It should be much more incremental: Empty lot -> SFH -> "Missing Middle Housing" -> Mid-rise -> High-rise. And spending decades at each step along the way.

The "missing middle housing" is historically the major source of affordable living options in a city, and we have all but banned it. The only places you can really build it is the same zones where it is legal to build a mid-rise. And since the supply of denser zoned land is limited, of course the more expensive luxury mid-rise will get built in order to make the economics of the land value work out.

I mean, highrises are only being built in a few square miles of the entire city...do you expect rowhouses/townhomes to be built in the small 1 square mile area of Midtown? Ofc, highrises are going to be built there...literally one of the only areas highrises are zoned to be built at.

The real problem is that everyone wants to live in the same neighborhoods of the city because large areas of the city are full of crime and blight. There are plenty of cheap areas to build at in the city...the problem is no want would want to live in English Avenue or Bankhead where there are areas primed for re-development. There's only but so many single family homes and townhomes in Inman Park or Virginia Highlands and even large lots for midrise apartment blocks are running out in say...Old Fourth Ward because so much of the neighborhood is low density single family homes.

Houston for example has been building a lot of "middle housing" in some of it's previously notorious crime filled areas like the Fourth Ward because the land is cheap and plentiful and they can build a lot of townhomes at once. Slowly the area is developing denser and denser.

So yeah, my point is that the only way to get cheap housing to be built near downtown is to start hoping developers buy the cheap land on the West/Southwest sides of downtown and begin building rowhouses/townhomes en masse....maybe affordable apartment blocks as well....it's just not simply going to happen on the Eastside of the city anymore....same with Buckhead....these areas are too desirable that land is expensive and the only way to get back money is to build luxury apartments or rowhouses/townhomes.

[Atlanta3000]

Not to discount what jsvh or Ant131531 said, but I think the answer to all this is more simplistic. Invest Atlanta and the Development Authority of Fulton County needs to limit subsidies to areas of the cities that are not thriving. There is no rational world I can imagine somebody effectively argueing subsidies are needed for a luxury apartment tower in Buckhead or Midtown or the numbers don't work.

Go sell crazy somewhere else, because we are all stocked up here.

[arctk2014]

Originally Posted by Atlanta3000

Not to discount what jsvh or Ant131531 said, but I think the answer to all this is more simplistic. Invest Atlanta and the Development Authority of Fulton County needs to limit subsidies to areas of the cities that are not thriving. There is no rational world I can imagine somebody effectively argueing subsidies are needed for a luxury apartment tower in Buckhead or Midtown or the numbers don't work.

Go sell crazy somewhere else, because we are all stocked up here.

The irony is that this whole debate started with a project being developed in an underserved market (Downtown).

[Atlanta3000]

Originally Posted by arctk2014

The irony is that this whole debate started with a project being developed in an underserved market (Downtown).

The circle of life arctk.

[jsvh]

I think targeting limited subsidies to just start an area can be a valid strategy, but it still does not address the underlying issues. Once those areas are going they will still be unaffordable.

Originally Posted by Ant131531

I mean, highrises are only being built in a few square miles of the entire city...do you expect rowhouses/townhomes to be built in the small 1 square mile area of Midtown? Ofc, highrises are going to be built there...literally one of the only areas highrises are zoned to be built at.

That is exactly what I am saying, the problem is we need to increase our supply of viable, densely zoned land to bring down prices.

I don't think the economics will allow skyscrapers suddenly popping up everywhere just because we scale back zoning laws. But what will become more common everywhere is more duplexes, multiplexes, live / work row-buildings, and mid-rises. That will increase the supply of denser, urban housing and land and bring down prices of both housing and land in the nearby high-rise areas.

So yeah, my point is that the only way to get cheap housing to be built near downtown is to start hoping developers buy the cheap land on the West/Southwest sides of downtown and begin building rowhouses/townhomes en masse....maybe affordable apartment blocks as well....it's just not simply going to happen on the Eastside of the city anymore....same with Buckhead....these areas are too desirable that land is expensive and the only way to get back money is to build luxury apartments or rowhouses/townhomes.

But that is the problem. Those areas have the same zoning limitations. So what we are already seeing is that the areas will skip right over being that "affordable middle-class" step and go to being a high-demand upscale area where homes cost half million (already going for $400K in places like West End) and new "luxury" mid-rises filling on empty lots that will be renting studios for $2k a month.