Realtor Kevin Burns, principal of UrbanSpace Realtors, lives, eats, and breathes downtown living, and when he talks about downtown Austin, he talks “fundamentals.” “I’ve studied Austin, Dallas, and Houston, and Austin has the best fundamentals,” Burns says from his office on West Fifth Street, ticking off the reasons. “In terms of size and proportion, there’s an ability to truly walk across downtown Austin. It’s safe. It doesn’t have a large supply of inventory that is dormant, or dead blocks, like Dallas or Houston. You have the Town Lake trail running through it. It’s ideal.” Burns says Austin was already a 24-hour downtown before residents began filling the lofts.
The downtown living trend began with a handful of smaller projects, then gathered steam with the Nokonah (Ninth and Lamar) and Austin City Lofts (West Fifth). The city estimates 1,385 apartment and condominium units – both in downtown proper and along Town Lake – are under construction or recently completed, and another 2,500 units are potentially in the pipeline.
The two most ambitious projects are planned for Congress Avenue, what Burns calls “the signature address” in downtown Austin. The Congress Avenue Condominiums, developed by Benchmark Land Development and designed by Ziegler Cooper, would rise more than 40 stories at the northwest corner of Congress Avenue and Second Street. The project would be primarily residential, with first-floor retail below 250 condominiums.
The proposed Fifth and Congress, at the northeast corner of its namesake streets, would sit adjacent to the Bank of America building and become the city’s tallest high-rise at 47 stories. It’s an ambitious combination of 1 million square feet of retail, office and residential space designed by Pelli Clarke Pelli Architects, one of the most prominent architects in the world. The Texas Capitol notwithstanding, developer Tom Stacy intends to create the signature building on Austin’s signature street.
At one time not so long ago, the 11 stories of the 95-unit Nokonah sounded beyond the reach of the Austin residential market. The 14-story Austin City Lofts was impossible to imagine. Both are now filled. Today the talk in Austin downtown development is of buildings that are 40 to 50 stories tall, a sign of the easier lending practices in the downtown living market and the success of existing projects.
Perry Lorenz, who developed the Nokonah and is now developing the Spring point tower, says Austin is perceived as a dynamic city both inside and outside development circles, and perception is a hard driver when it comes to development in the residential market. “Downtown development seems to be cooling off in other cities, we hear, but there seems to be no cooling off in Austin,” Lorenz says. “Austin is thriving right now, and if you asked, ‘When does it stop?’ I don’t know. There’s no indication right now it is.”
City Planner Michael Knox, who also serves as the city staff liaison to the Downtown Commission, has charted downtown development across a number of years and noted the pent-up demand for residential units downtown. Still, Knox calls the growing ambition of downtown projects a sign of evolution rather than revolution, and he maintains a healthy amount of skepticism for just what might occur, depending on the market: “It is a wait-and-see situation when it comes to downtown living.”
Charles Heimsath of Capitol Market Research has suggested that the absorption of downtown living units is a healthy, yet modest, 300 per year. That means that developers have put about six years’ worth of units on the ground in a space of about three years; another eight years of units to absorb is on the drawing boards. Somehow, units are going to have to get a lot more popular and simultaneously affordable, or some of those residential units are simply not going to get built.
This article appears in July 21 • 2006.