Group Assesses Demand for Owner-Occupied Housing
Chicago, IL, March 20, 2020—A team of five professionals from The Counselors of Real Estate worked with the Tucson Association of REALTORS® (TAR) to analyze for-sale housing demand in downtown Tucson, Arizona, identify development barriers, and recommend steps to increase the supply of owner-occupied properties.
TAR engaged the CRE Consulting Corps, one of The Counselors of Real Estate’s giving back entities, for its expertise in working with municipalities. The CRE Consulting Corps provides real estate analysis and action plans for not-for-profit organizations, government agencies, educational institutions, and other nonprofit owners of real property, leveraging Counselor knowledge at well below market rates to address economic development, disaster response, affordable housing, and other public service issues.
Though a 2013 study by the Urban Land Institute found relatively robust demand for market-rate multifamily housing in downtown Tucson, those units were primarily rental. While Tucson’s streetcar transit system, which began operations in 2014, has generated an estimated $2.4 billion in economic impact and serves as a catalyst for several commercial and high-density transit-oriented housing projects, those units are also predominantly rental.
Although stakeholders shared with the Consulting Corps team numerous anecdotes in which households were seeking to buy homes downtown, comprehensive data collection and analyses are needed to confirm and forecast potential buyer demand. Data is similarly needed on the supply side. The team found the market has recovered steadily since the 2007-2009 recession, though with few condo or townhome sales in the central business district. However, a sample analysis identified attached home sales among older duplex product in nearby neighborhoods.
“To understand the market dynamics driving new residential development in downtown Tucson, the team drafted a sample market feasibility study for a midrise building,” said Michael Dinn, CRE, the group’s team leader. “Comparing development costs of a building offering condos for sale or apartments for rent, the analysis showed how financing and other expense factors have been driving the decision to build a rental building rather than condominiums.”
The team anticipates continued housing development in central Tucson and suggested modest efforts that could lead to downtown capturing an increased share of the region’s for-sale residential inventory. Recent reports suggest that housing prices are rising quickly, so facilitating increased housing supply may also help address the issue of affordability.
In addition to Dinn, from Covington, KY, other members of the Consulting Corps team were Jackie Buhn, CRE, Philadelphia, PA; William Chandler, CRE, Memphis, TN; Wayne Grinnell, CRE, Las Cruces, NM; and Raymond J. Neary, CRE, Omaha, NE.
“After an intense week, the team brought a lot of perspective from their respective cities,” said Randy Rogers, chief executive officer of the Tucson Association of REALTORS®. “I think it’s fantastic work. One of the best things that came out of this is the Counselors framed the questions that we should be asking. That’s as advantageous to us as anything else.”
Members of The Counselors of Real Estate volunteer their time and expertise for Consulting Corps assignments, providing access to the highest levels of industry knowledge. The Tucson team was selected for its objectivity and experience directly applicable to the municipality’s needs. The Tucson assignment is one of more than 50 projects completed by CRE Consulting Corps teams.
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About The Counselors of Real Estate
The Counselors of Real Estate® is an international organization of commercial property professionals from leading real estate, financial, law, valuation, and business advisory firms, as well as real property experts in academia and government. Membership is selective and extended by invitation, although commercial real estate practitioners with 10 years of proven experience may apply.
Counselors have resolved the dispute between the developer of the World Trade Center and its insurers post September 11, led the privatization of U.S. Army Housing, developed a multi-billion-dollar, 10-year master plan for Philadelphia Public Schools, created and endowed the MIT Center for Real Estate, and valued both the Grand Canyon and Yale University. Counselors reside in 20 countries and U. S. territories, with only 1,000 professionals holding the CRE credential worldwide. For more information on The Counselors of Real Estate® and how to apply for membership, visit CRE.org.