Town Lake Condo Projects Fuel Opposition

A new group, "" has been formed and has initiated legal action against the city to fight variances for a variety of condo projects on the banks of Town Lake. Essentially, they want to make sure that the city does not grant variances to allow new projects to build closer to the lake than current ordinances allow. Here is the summary from the Statesman:

An Austin citizens group has asked a judge to temporarily stop the city from granting exceptions to an ordinance that limits development along Town Lake in the latest battle over dense development in and near downtown. The outcome could have ramifications for future development along the lake, where developers have proposed more than 1 million square feet of residential projects. Some of those projects are seeking exceptions to an ordinance that restricts how close developers can build to the shore and how tall the buildings can be. contends that a 1999 rewrite of the city's waterfront development rules omitted key provisions, including height limits and the right of citizens to appeal when variances are granted. . . .SaveTownLake's specific target is a proposed three-tower condominium project that CWS Capital Partners LLC plans on Riverside Drive east of Congress. The developers want a variance to build part of the project closer to the lake than the existing ordinance allows.

It's hard to argue against protecting the banks of the lake . . . .as downtown becomes more and more dense, the urban experience will be greatly enhanced by the park-like experience of Town Lake. The issue, however, is more complex. A number of projects -- especially those East of I-35 on the south shore, have proposed trading variances for extension of the hike and bike trail and permanent easements providing public access to the shore. For example, Star Riverside. This is clearly in the city's best interest.

Maintaining a Quirky Yet Vibrant Downtown

There has been lots of talk about gentrification of central neighborhoods such as south and east austin over the last few years. It seems that central living is in high demand -- prices are going up, developers are moving in, and whole swaths of central austin are being gentrified. But no area is being gentrified faster than downtown where warehouses, parking lots, and office buildings are being replaced by large condo projects.

With this wave of development, downtown Austin should gain a much more vibrant downtown. At the same time, the city is losing some landmarks. Las Manitas is being displaced by a hotel, Austin Music Hall is being razed and rebuilt. And now, the bright pink Railyard condos are being painted a much more neutral palette.

The Railyard of Today: Bright Pink

The Railyard of Tomorrow: Cream, Tan & Red

Here is the summary of the change from the Statesman:

For decades, Austin's Railyard Condominiums on East Fourth Street downtown have been a blast of Pepto-Bismol pink stucco amid the drabber hues of nearby commercial and public buildings. But faced with a more competitive downtown real estate market, with hundreds of new condominiums coming online this year and next, the Railyard is trying to update its look. The board of the Railyard Condominiums Owners' Association Inc. has voted to pitch the pink for more muted colors of brown, cream and dark red. "The (directors are) working hard toward the changing of the pink to multiple wonderful colors to continue to raise property values for the association as well as the downtown area," said David Wang, community association manager for the Railyard.

As downtown becomes a hotbed for residential development with rapidly increasing condo prices, it seems the Railyard community association has decided to ride the wave by trading the development's quirky allure for a much tamer palette.

For Austin, the challenge will be to balance preservation of the fun downtown landmarks with the benefits and vibrancy that come with the current downtown development boom. It is the balance of density and quirkiness that will give downtown Austin a lasting allure.

Nokonah Analysis: Part II

Two months ago, Austin Towers initiated a comprehensive unit-by-unit analysis of appreciation in the Nokonah. The Nokonah, A luxury high-rise project completed in 2002, was one of the first successful projects that helped to ignite the current condo boom in downtown Austin. The 11-story project is located at 9th and Lamar just north of Whole Foods and on the western border of downtown. When the Nokonah was built, the real estate market in Austin was stalling as the regional economy slowed. It was not clear how well the new project would do. Five years later we know the answer: the project sold out and the buyers have seen significant appreciation in the value of their units.

As we mentioned in Part I of our analysis, In order to better understand condo values in the downtown market, we've begun a comprensive analysis of public tax records (tax records are available online through the Travis Central Appraisal District) to better understand downtown condo market values and how they have changed over the last five years. This analysis, which tracks every unit in the Nokonah, shows appraisal value and $ / SF by floor, apartment size, # of bedrooms, and year. The data is fascinating and will be a useful tool for anyone looking to purchase a downtown condo (Register for the full report).

In part two, we've further examined the tax data and have come up with some interesting results: Read More...

Flipping in Austin?

Now that it is open and available for occupancy, the 240 unit Milago is completely sold out. Despite the fact that all units have been purchased, it is curious to see 30 units -- 1 / 8th of the building -- currently listed on MLS. While some could be from people whose plans have changed between when they signed the contract and now, the most likely option is condo flippers.

It will be interesting to see what happens. While the Austin market increased by 5% last year, this is hardly the sort of growth that gets flippers excited. Now, with 30 units competing for buyers, it will be interesting to see how fast they turn and whether prices increase as the market strengthens.

Changes to the Capital View Corridor

The Capital View Corridor is a unique Austin phenomenon. As part of the downtown master plan, the city has set aside a number of corridors where development is severely restricted. The corridor essentially requires all buildings to be short so that they don't block views of the capital from a number of predetermined angles. With 30 such corridors, the result severely limits downtown growth (read our previous posting on this)

In order to increase downtown density, a city council advisory board is recommending changes to the corridors. Here is the summary of today's news from the Statesman:

Of the 30 city views of the Capitol evaluated by an Austin City Council advisory board, a dozen are being recommended for change.The Downtown Commission characterizes the changes as mostly technical in nature, accommodating the reality of already restricted views because of development or other obstructions. . . In fact, enacting any recommendations in the report would require approval by the City Council or the Legislature, depending on which corridor it is. . . Boyt noted that the commission is proposing to keep 18 view corridors intact and that of the dozen with recommended changes, only three are substantive: deleting or modifying a view corridor that includes Wooldridge Park to allow for redevelopment of nearby lots; adjusting the northern boundary of a view corridor from the MoPac Boulevard (Loop 1) bridge, a change that might allow taller developments along West Fifth and Sixth streets; and realigning the view from Interstate 35 between East Seventh and 10th streets, to remove three blocks where the view is obstructed by buildings and where the view is perpendicular to traffic on I-35.

Given the broad scope of the corridors and their effect on downtown development (do we really need 30 corridors to provide views of the capital), the significant changes proposed to two corridors seems quite reasonable. The challenges to getting these through the council and, if needed, the legislature, may be significant.

Question: What are condo buyers interested in? Answer: 360.

The growth of the site has been amazing over the last three months - we're now averaging nearly 1,000 visitors per month -- it's great to see so much interest in downtown high rise condo development.

On our home page, there is about 40 links. Interestingly enough, the link that gets the most click is not the blog or the project navigator or the condo project rankings. It's the link for the profile of Novare's 360 development. With 430 units across 44-floors, it's the biggest downtown project so far. With units starting at $190K, it's also the most reasonable. According to the developer, 75% of the units were under contract by the end of March, just 3 weeks after they went on the market.

The Austin condo market is so new that it is very hard to predict what will happen over the next few years. It's good to see that tall, well-designed, affordable projects in good locations are drawing so much interest and demand --- it bodes well for vibrant and dense urban core.

Now Available: Real-time Condo Listings!

The purpose of Austin Towers has always been to help downtown austin condo buyers to find the right project and unit. Today, Austin Towers launches a new listing section which will help make this a reality!

The way most people choose a condo is by figuring out which building or buildings they want to live in and then looking to see which units are available. Unfortunately, there has been no great way to do this. With Austin Towers listings, buyers can now view both MLS and developer listings on a building-by-building basis.

With this update, Austin Towers has also added 8 completed projects and a completed project navigator to the site. This will help buyers evaluate and search for units in existing buildings in addition to te many new developments that we have always covered.

Here are the links to the new capabilities:

- Condo Unit Listings
- Completed Project Navigator

And the following new profiles:

- 5 Fifty Five
Austin City Lofts
Avenue Lofts
Brazos Lofts
Brown Building
Plaza Lofts

More on Downtown Living Costs

When you focus on price-per-square-foot in evaluating costs, downtown condos may seem expensive. But there is more to the cost:

- Energy costs in a condo are typically very low: it's not uncommon for average utilities in a 2,000 SF unit (Electric + Gas + Water) to be under $100 per month. A similar house with a lawn could have average monthly utilities in the $300 - $500 range.

- Maintenance costs are included so you won't have to spend $10K for a new HVAC unit, roof, or other potentially expensive repairs.

- Downtown living can enable a different life style. Some couples or families may be able to eliminate a car and the related gas, insurance, and financing payments that come with it.

- Many buildings include amenities such as swimming pools, shared "guest" bedrooms, etc. that allow tenants to live in smaller units that they might otherwise own. If the building has an extra bedroom that can be used when guests are in town, you may be able to live in a unit that is smaller than a comparable single family house.

- And there are many more economic benefits: you won't need a paid security system or service, your insurance premiums will likely be lower and you won't spend money on landscaping, exterior painting, or pool maintenance.

So while the price per square foot may seem high, think about the complete picture. There are some great economic benefits to life in a downtown condo.