SALT LAKE CITY, Utah (ABC 4 Utah) – Downtown is coming of age. Two studies on Salt Lake City’s economy and the perception people have of the area show that downtown is seeing a boom!
“People really want to live in downtown, they want to live in downtown because it’s easy to shop, there’s a lot of work downtown. People want to live close to where they work,” said Jason Mathis, Executive Director of Downtown Alliance.
Today, the Downtown Alliance along with City Creek Center, CBRE, and Wasatch Residential Group hosted a “State of Downtown” media roundtable to cover status reports on commercial real estate, retail health and residential development to be released to the public on Friday.
Salt Lake City received a total of $3,105,000.00 dollars in income during the 2014-2015 year. The money came from things such as urban development, the GREENbike program, and farmer’s market among others. Expenses came out to the grand total of $3,016,000.00.
Continued development of new office, residential, hotel, arts and entertainment developments are vital to the expansion of a city’s growth. New construction reflects this trend. Salt Lake City saw a 16% increase in office development, 18% in hotel development, and 10% in government, arts, and culture. Over 580,000 new office space areas were completed or under construction from 2014 to present. There was an increase of 25.8% in total commercial valuation, and over 1,800 new residential units that were either complete, under construction or planed for construction.
Accordingly, over 14 new restaurants called Salt Lake City home and over 290,000 sq. ft were available for retail space.
In the last year, Salt Lake City has seen an increase in residential units by 52%. Compared to other metropolitan areas downtown is among those cities below the regional rent average of $1,698 sitting at $921, falling third behind Phoenix ($863) and Las Vegas ($827). The highest is San Francisco at $3,084. Currently demand is outpacing supply of market-rate rental apartment availability in Salt Lake.
“The residential market is currently very healthy, we’re seeing all of our projects lease very well, our occupancy’s are doing very well,” said Corey Johnson, Vice President of Wasatch Residential Group.
Although, there are some big concerns. Improved amenities and high-end finishes target wealthier buyers and highlight the gap for those moderate income or “workforce” families looking to live in Salt Lake City. There’s also the issue of rent. As the cost for construction goes up, so will rent prices. Experts believe – and hope – that inflation and wages will keep up with the increase to help alleviate those concerns.
Continued development of office and retail space also provides a bright outlook for the city. The availability of space, amenities, and access to transportation, has generated interest among companies. Increased interest by the technology sector in the downtown area gives experts a reason to believe the market will be receiving a big boost in the future.
It’s also no doubt downtown is the prime location for shopping and dining. This past year, retail sales of $800.9 million slightly surpassed the previous record of $800.3 million set back in 2013. Eating and drinking led the way in sales with $330.4 million followed by clothing sales (165.3 million) and general merchandise ($100.0 million).
The growth is also having a big impact with Millennials. As the group continues to grow in size and influence. It’s important to point of that this generations preferences seem to highlight trends in the economy. Even more, the data tends to support these claims.
“Over, and over again, we hear that young people want to be associated with downtown. They want to work downtown – live downtown. We’re trying to find ways to make it easier, more affordable, and funner – really cause that’s important, fun is important – funner for young people to live downtown,” added Mathis.
But Salt Lake City is not without it’s problems, people have expressed concerns for moving to Salt Lake for things like parking and traffic. There’s also the homeless issue like the one seen at Pioneer Park. Officials say the homeless population and its services are too concentrated in one neighborhood and they need to be able to take that concentration and disperse it.
“We really need to look at that as a trend and as an opportunity for us in the next two years to figure that out, that’s one thing. Downtown is firing on all cylinders, we got a few things to work on and one of those is figuring out how we’re gonna do a better job with homelessness in our community,” said Mathis.
In the following year, officials will be looking closely at improving homelessness, workforce housing, expanding upon the transit system – especially programs like the GREENBike Program – and harvesting the growing technology and sharing economy trend that the city has begun to see.