Downtown Orlando has enjoyed a development renaissance period over the past few years, with property values increasing at a rate of 12 percent per annum since 2012, and foreclosures dropping by half in 2015 from the year prior.
But ensuring diversity in that continued growth is integral to long-term stability for property values throughout the district, and public policy favoring affordable housing and mixed-use development is more important than ever, according to a panel of business leaders Thursday night at the Orange County Property AppraiserRick Singh's State of Downtown Real Estate presentation.
Singh's office designates the Downtown Orlando area as bordered by Par Street to the north, Crystal Lake Drive to the east, Michigan Street to the south and Orange Blossom Trail to the west.
The area covers 15 square miles with 57,000 residents and 28,000 households with average household incomes of $70,000 (compared to $66,000 county-wide), and includes nine formal neighborhoods and represents 6.5 percent of the county's tax base. Foreclosures downtown declined 50 percent from 2014 (333 cases) to 2015 (161).
In response to questions about if and when major retailers would return downtown, the growth of dense residential development in the district is slowly delivering the foot traffic metrics that retailers seek, said Daryl Tol, president/CEO of Florida Hospital, whose Health Village development is drawing more retail business north of Ivanhoe Village.
However, retail will never fully recover in downtown because of the rapid growth of e-commerce, and because the district is centrally located in a dead zone of sorts between retail hubs Mall at Millenia and Winter Park Village, said Craig Ustler, president of Ustler Development, which has led the Creative Village planning.
"The numbers are tough for retail (development) now, the industry has changed in fundamental ways, ... it doesn't make you want to go long on retail" as an investment, Ustler said. "We'll never see N. Orange Avenue lined with storefronts."
Downtown's residential mix favors single-family homes (14,500), with apartments and condos following with 5,000 each, and duplex/tri/quad properties at 1,800. The downtown area's real estate occupancy is weighted by 51 percent renters, compared to rental properties county-wide accounting for 32 percent.
Commercial space downtown favors office with 9.6 million square feet (60 percent of the district), followed by industrial with 3.8 million square feet (24 percent) and retail at 2.5 million square feet (16 percent).
When asked how the City of Orlando can best ensure affordable housing remains in downtown, most on Singh's panel agreed that mandating such affordability for portions of large-scale redevelopment plans is key.
So-called workforce housing should also be encouraged for developers, in which they evaluate the income brackets of major employers near a new development, and try to match their housing price point to those incomes. The Ivy Residences at Health Village is one that successfully set rents at an affordable level for a range of hospital employees.
"Affordable housing can also be prompted by glutting the market with more options," Ustler said. "We just need to keep building more."
Downtown Orlando compares favorably right now with downtown Austin, Texas, according to a five-point analysis Singh's office presented.
Both downtown districts enjoyed 3 percent population growth within the past year. Both rank the same (with scores near 155) on a housing affordability index, which measures the degree to which a typical family can afford the monthly mortgage payments on a typical home.
Orlando and Austin each claim between 29 percent and 31.6 percent of their populations to be millennials (ages 16-35). Orlando reported 4.1 percent employment growth over the past year (compared to 2.5 percent for Austin), and Orlando projects 13 percent growth in the number of households over the next three years, compared to a 9.2 percent projection by Austin.