by Bradley Parsons
Staff Writer
Downtown residential development will catch up to the explosive growth that has been the trend nationally, but public incentives will be needed to keep a portion of that development affordable, according to a downtown market analysis that will be presented this morning at the Downtown Development Authority’s meeting in City Hall by a national real estate research group.
Lambert Advisory, LLC was hired by the City to examine the comparably slow-growing residential market north and west of the river. The market won’t be on the sidelines for long, Lambert predicts in its report. But it’s unclear whether the area’s residents, whose family incomes are about half of Duval County’s median, will be able to buy into that growth.
The study primarily focuses on development inside Jacksonville’s Empowerment Zone, an area, including downtown, stretching from the Northbank to Edgewood Road West in the north to Moncrief Road in the west, where federal tax breaks assist development.
Lambert sees opportunities for development in both the rental and for-sale segments of the market.
The firm described the area’s market for rental development as stable for the past several years, putting aside normal fluctuations. But the availability of relatively cheap housing in Duval County has curbed growth in the rental market, according to the report.
Lambert points to the poor performance of large rental units as evidence of that trend. Many of the families who would rent three bedroom apartments have instead been able to buy houses thanks to low interest rates, which have made home loans easy to get.
Lambert expects the flow of cheap money to subside somewhat, which should boost the more expensive end of the rental market.
As for the less expensive end, Lambert said demand for market-rate rentals is questionable and said incentives would need to be available to convince developers to build cheaper units.
Lambert sees a similar trend in the for-sale market, which has experienced “some of the strongest growth in history” locally and nationally. But downtown development has lagged behind those trends, largely because of the plentiful supply of cheap real estate spread throughout Duval County’s 840 square miles, according to the firm.
Because the City’s housing market has remained affordable, there’s been little incentive for developers to grab the cheaper land inside the Empowerment Zone. Lambert contrasted Jacksonville’s market to Miami’s, where much of the land outside the urban core has been developed, leading builders toward more in-fill development.