Should condos be an option for downtown living in Buffalo? Yes, but they get no help from the law, which provides a crucial incentive for construction of apartments, but none for condominiums. It’s a problem that prevents Buffalo from attracting a different and valuable category of residents.
The state historic tax credit is the fulcrum upon which many rehab projects turn. With it, apartment projects make financial sense; without it, they often don’t. But its restrictions make it all-but unusable for condominiums, which require more substantive changes to appeal to residents who plan to stay for the long term and want amenities that may not come with an apartment. What is more, a statutory five-year waiting period makes it difficult to create condos out of apartment buildings that have been rehabbed via the historic tax credit.
Thus, the problem: As a matter of law, condos don’t even count as an afterthought. The market is artificially tilted against them.
Other factors may also count against robust development of condos in downtown Buffalo – including demand for those projects and lenders’ insistence upon evidence of that demand – but by weighting the marketplace against those projects, it’s impossible to know. Equalize those benefits and the market can drive the decisions.
One thing is certain: Demand for downtown living is high and showing no signs of flagging. As reporter Jonathan Epstein reported this week, downtown’s Central Business District contains twice as many apartments as it held a decade ago and will grow by another 20% once projects under construction are completed. Even beyond the Central Business District, demand for downtown living continues to boom.
Yet the vast majority of that space is aimed at renters. They are an easier market to satisfy, the thinking goes, because they are not committing to anything beyond the length of a lease. But it’s not hard to imagine that some portion of professionals, empty nesters and others would be attracted to ownership of a condo where building and grounds maintenance are part of the package.
Some developers agree. With a critical mass of apartment-dwellers making their homes downtown, they believe the conditions are right to start expanding the number of condos, whose supply is limited to places such as City Centre, Waterfront Village and Jake Schneider’s Historic Warehouse Lofts. Buffalo should want to expand that market, but first it has to level the playing field. There may be more than one way to do that.
If it’s not possible to fit the historic tax credit to the needs of condo projects, then Albany should look for other ways to make those numbers work. It would be a wise use of public dollars to help drive buyers back into the state’s urban areas, and it wouldn’t be unfair.
As the executive director of Buffalo’s Office of Strategic Planning observed, county taxpayers – including those in the city – already shoulder infrastructure costs for suburban construction projects. Cities want infill and density and they already have much of that infrastructure in place, said Brendan Mehaffey. What they need is a different kind of financial help.
It can only benefit Buffalo’s long-term prospects to draw more condo residents downtown, especially to its Central Business District. Whether that will happen is an open question. What is beyond doubt is that to create the possibility, Albany has to find a way to help make the numbers work, just as it does for apartment projects.
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