Monday, July 8, 2024

Student Housing is At Risk Again

Rendering of ATRE Waterview Mixed-Use Development

In December, 2022, when we last checked in on the long-running saga of one Richardson man's quest to build student-purposed housing just north of UT-Dallas, things were looking up, but with a big catch ("Breakthrough in Student Housing").

The catch was that City Council insisted on starting construction on a hotel and traditional apartment along with some retail before agreeing to issue a certificate of occupancy for the first phase, student-purposed housing.

I explained just how big a catch that was in an earlier post ("Three-Legged Stool of Mixed-Use Development"):

The hotel developer won't build his hotel unless assured of nearby restaurant/retail to make their hotel attractive to travelers. The restaurant/retail developer won't build unless assured of nearby people to patronize their businesses. The student housing component doesn't have such prerequisites. It is the obvious choice to lead this phased development, as there is, and has been, pent up demand for more student housing at UT-Dallas. Build it and they will come. With students next door, the restaurant developers will come. With restaurants next door, the hotel developer will commit. Put conditions on the order things get built, and maybe nothing will.
Source: The Wheel.

Why did the property owner agree to those restrictive terms? He was given no choice. The alternative was to abandon his project altogether. He decided to take what the City Council offered and hope he could find a way to make it work later. Well, the miracle required for that didn't happen.

The property owner could not find a banker and developer willing to commit to phase one when its payback depended on a phase two to be built later, possibly by another developer and banker. The property owner couldn't find a single developer with the experience and interest in building two different types of apartments, to say nothing of the retail and hotel, that the City Council insisted on. So now the developer is back with a request for a different mix and phasing of the development. According to Community Impact:

ZoneDev is requesting to change its development plan to allow for the replacement of a mixed-use market rate apartment complex with a 173-unit mixed-use student apartment complex, according to city documents.

The phasing of the plan would also be updated in the planned development district to restrict the issuance of a certificate of occupancy for the mixed-use student housing complex until after construction finishes on infrastructure and sidewalks for all phases of the development, per city documents. The other student housing complex could not receive a certificate of occupancy until retail buildings or the proposed hotel is considered weather tight.

The City Plan Commission (CPC) approved this 6-1 on May 21, 2024. None of the CPC members objected to changing the phasing to build the central apartment building before the other. The sole no vote on the CPC was by Gary Beach. According to the minutes, "Commissioner Beach commented that he was in favor of the proposed phasing but was not in support of modifying the uses from what was previously approved." That modification is described by Community Impact as "the replacement of a mixed-use market rate apartment complex with a 173-unit mixed-use student apartment complex." Both plans include mixed-use apartments. Both are market rate. The student-purposed housing won't be subsidized housing. It's only the configuration of apartments in the student-purposed apartments that is different from traditional apartments. For example, in student-purposed apartments, there are some four-bedroom suites with equal sized bedrooms, each with their own bath, instead of the traditional layout of a large master bedroom and bathroom and smaller children's bedrooms with shared baths. If you are marketing to students, the first floorplan will be more popular than the second.

I am puzzled by Beach's opposition to this. First, the modification is justified by the great demand for student-purposed housing in that area. Many traditional apartments have recently been approved elsewhere in Richardson. Second, the modification will allow for the owner to partner with a single developer with expertise in this kind of apartment to build both apartment buildings.

Now it's up to the City Council, which will take up the application on July 15, 2024. With the project's previous approval by City Council, with the improvements in this iteration to make it a financially successful project, with the support of the CPC for this latest iteration of the plan, and with the City's reputation for working with developers who want to invest in Richardson, I expect the Council will see to it to support this development and bring relief to the serious problem of a lack of housing targeted to students near UT-Dallas. But who knows? Maybe the City Council will insist on holding the property owner to the bad plan that the Council never should have insisted on in the first place, one that the property owner, in good faith, tried and failed to make work. Now it's time to correct that earlier mistake and work with the property owner instead of against him to fill this unmet need in Richardson.

1 comment:

Mark Steger said...

On July 8, the City Council was all in on amending the planned development at CityLine East to add 1,275 more apartments in single-use buildings. They called it, not a change in the vision of CityLine, but a "tweak" based on evolving market conditions. I hope the City Council takes the same attitude towards this ATRE Waterview mixed-use development. The changes asked for here truly are tweaks. If I hear any Councilmember describe it as a bait-and-switch, I'll know they aren't arguing in good faith.