Plans were recently announced to revitalize a highly visible location on Main Street in downtown Hartford. The public-private partnership will convert the former Bank of America building from commercial offices into 286 apartment units. The total investment will be approximately $78 million and will move the city closer to accomplishing a myriad of economic development goals, including promoting a strong, active and economically diverse population in the city's downtown.
Connecticut residents want a vibrant capital city they can be proud of — perhaps even live in. We're going to give that to them.
Who is the consumer in this housing market? A prospective resident is between 21 and 34 years old, a recent college graduate or post-graduate, unmarried, with an annual salary $45,000-65,000, does not need more than 700 net square feet living space, and does not want to spend more than 30 percent of income on rent.
How do we know? The market told us.
The last American Community Survey, conducted by the U.S. Census Bureau, estimates there are 1,159 residents located in the city's 06103 ZIP code. This data revealed that 61 percent of residents are under 35 years old — 72 percent are under 45. Non-family households comprise 82 percent of residences and 60 percent live alone. The city's downtown residents are highly educated, with 78 percent possessing a bachelor's degree or higher; and most are not from Connecticut, with 47 percent having been born in a different state and 15 percent being foreign born. Most strikingly, nearly one-quarter of downtown residents relocated into the downtown within one year of the previous survey and 40 percent earn a median salary of $67,500.
The market is vibrant. The market is primed. The city is responding.
Hartford must aggressively pursue development investment in the capital city. There may have been a time when government was not necessary to entice large-scale development in Hartford's downtown, but current market conditions are a deterrent to major rehabilitation and conversion projects. This policy is feasible, prudent, and responsive.
Long-gone are the days that government funding provided to a development project is considered a “subsidy.” Government, through effective public-private partnerships, is an investor. The City of Hartford is grateful to the state's residents for their investment in the capital city. Their investment, and consumer confidence, is critical in order to respond to demands for quality housing that is affordable for working class residents; for world-class entertainment; and for an enhanced quality of life. The state's generous $21 million investment, equates to a nominal contribution of two-cents per unit from each Connecticut resident. Connecticut residents are smart investors.
Although the city's housing market has demonstrated weakened performance since 2008, downtown residency is at capacity. Policy analysis has determined that Hartford's housing market remains weaker than expected because consumers are seeking something that the city does not currently have available. Consumers are interested in a variety of housing options, blending homeownership with affordable rental. Approximately two years ago, the federal Department of Housing and Urban Development (HUD) provided new insights and best practices regarding residential development. After analyzing empirical market data, HUD committed to place less emphasis on homeownership and is instead stressing the need for affordable and market rate housing to serve all income groups across all “life phase” categories and at various rental price points.
It is as incumbent upon the city to assist low- and moderate-income residents by developing responsible housing policy as it is to ensure that the city has policies that promote a sustainable young middle class population. One policy does not preclude the other; one program does not prevent another from being successful. The city is investing in our assets so they may be attractive to new residents, and new investors.
Converting 777 Main Street will produce nearly 400 construction jobs and significantly reduce the downtown commercial vacancy rate. The apartments at 777 Main will be a catalyst to achieve the critical mass necessary to invite new retail downtown and create the vibrant urban center that consumers demand.
In addition to downtown development, the city is aggressively pursuing neighborhood revitalization. The city's Housing Division offers several programs which provide down payment assistance, low-interest rehabilitation loans, and grants for developing new residential units. The city's residential programs assist low-, moderate- and middle-income homebuyers. These programs are designed to abate blight, encourage infill development, and assist new homebuyers to make Hartford home.
While homeownership is important to creating and maintaining vibrant and healthy cities, and remains one of our top housing goals, it is important to have a balanced housing policy and a range of housing options, particularly in our downtown neighborhood. Shifting trends in the city's downtown demographic indicate a younger and wealthier population. 777 Main Street is attractive to a certain type of consumer in the housing market; and we want that consumer to have options that coincide with their life stages. At some point our young urban professionals will be re-entering the housing market to look for a family home. Improving the market variety will give consumers a point of entry, with the expectation that we will be able to retain them as residents.
Thomas E. Deller is director of development services with the City of Hartford.