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Downtown Apartment Market

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Posted (edited)

I am reminded of Arrested Development and George Sr’s former employee who is brought in at key times to teach a lesson ... “And that is why you always source your data ...”

 

I agree with TheSirDingle that I don’t think it’s solely the homeless population. That’d be pretty sad if it’s 20% of the population. And thanks to 102 for pointing out it’s probably not prisoners (except maybe there’s a distinction between long-term prisoners and short-term?). I would doubt it’s hotels but that number does seem reasonable based on number of rooms.

 

The confusing part is that the only number that is sourced is the household population, and I assume HDMD refers to “Houston Downtown Management District,” meaning they came up with it and they didn’t come up with the other numbers. Which makes me think it did come from the Census/ACS by zip code. (Surely HDMD would be able to survey hotel “population”? And if it’s meant to be a definition of who is “present” during the day, why not add employment?) Which makes me think the difference has to be homeless, long-term prisoners, or some combination thereof.

 

From a marketing perspective, though, it certainly seems strange ... would imply an FAQ from interested parties is “Could you back out the prisoners and the homeless, please?”

Edited by mattyt36
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OK well I checked out the ACS for 2017 and the population for zip code 77002 is 12,370.

 

Consisting of 10,435 males and 1,935 females (!).  That's worse than Alaska!  No way that's true with 1.71 people per household.  As a gay guy myself, I've never found downtown to be anything more than slightly above average gay population-wise (maybe we all need to move there so population will inevitably explode).  But I guess we can all send notes to our female friends to move to downtown Houston just because of probability!  Or maybe it is all prisoners and homeless.

 

There are only 23 people between the ages of 0 and 5.

 

0 between 5 and 9.

 

And 18 between 10 and 14.

 

No data on households.

 

So I don't think the ACS is the source.

 

https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=CF (not sure if the link will work . . . if you go to this link https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml and in the "Community Facts" box type 77002, then click "2017 ACS -> Demographics and Housing Estimates" and you will see the data).

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Some more statistics

 

7,068 white

 

4,135 African-American

 

3,276 (of either of the above) are Hispanic or Latino

 

Downtown has 25 Cubans (2 must be Astros!)

 

84 Asian Indians

 

51 Native Americans (no Elizabeth Warren jokes please . . . she went to UH, left, and came back)

 

18 Samoans (!) . . . what's the story behind that?!  I'd like to meet these people . . . in my romantic mind they all live in the Plaza Peacock Apartments . . . 

 

Oh how ridiculous the Census questions are in re racial sorting . . . at least there's not going to be one for citizenship in 2020, which is good for Houston (and Texas).

 

Having lived plenty of places elsewhere in the country and out of the country (but a 4th generation Houstonian), I can say it really is Houston's strength and you just don't get it elsewhere (except maybe Toronto).  I was amazed to read in the HBJ's "40 Under 40," and they were all asked what they loved about Houston.  36 (by my count) out of 40 said diversity.  You really don't get that anywhere else.  

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Demographics is a big part of my career (snoozefest), so I did a little typing tonight. First, based on the Downtown District’s list of residential properties it seems as if they are using Census Tract 1000 as the “core” geography. It’s basically the freeway donut hole all inner loopers consider downtown.  As several pointed out, prisons are in fact where the “non-household” population comes into play. Prisons are considered group quarters and are separated from the estimates of households. The 2017 ACS estimated just over 1,586 people living in group quarters in Tract 1000. The DT district estimates a 1,931 non-household population which technically falls within the margin of error. (I believe this a good estimate because the 2010 Census states there were somewhere around 2,400 in group quarters (which likely includes homeless shelters, etc. that may not all be surveyed annually). Hotel guests do not count into population estimates unless the property is something like an extended-stay/rental/RV Park.

 

The Downtown District either creates their own population estimates or hires someone to do it for them since only 2017 estimates exist at this low geographic level and thousands of new units have come online and been leased since.

 

I’m skeptical about the household size multiplier of 1.71. In 2010, this census tract had an average household size of 1.31. In the 2017 ACS, that number went up, but it was still only 1.40. Now, I can’t estimate it without determining how many new units were 1-bedroom and 2+, etc. (frankly, I’m just not going to spend the time to do that for this post!) In middle income suburbs with high numbers of children, a 1.9 to 2.1 avg. HH size is typical in multi-family so I remain skeptical that downtown has 1.71 even with all the new units, but it is possible. If the average household size is inflated and it’s actually 1.40, the total population would be 7,396 + 1,931 for a total of 9,327.

 

As for gender in Census Tract 1000, in 2010 there were 2,283 people living in households. Of these, 1,472 (64%) were male. The prison inflates this stat if it’s not removed from the equation.

 

Sources!!  Table DP1 (2010 Census); B26001 & S1101 (ACS 2017);

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Seemed like somewhere with the DLI that there was a running tally of apartments that were being constructed, all of which are within 77002, I think (One Park Place seems to be the only one within 77010, and it predates the initiative). 

 

In any case, depending on when in 2017 the measurement was taken, it would predate a ton of the DLI units coming online. 

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Defense Language Institute?

Daily Light Integral?

Dual Language Immersion?
Deep Learning Institute?
I give up.

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21 minutes ago, dbigtex56 said:

 

Defense Language Institute?

Daily Light Integral?

Dual Language Immersion?
Deep Learning Institute?
I give up.

Downtown Living Initiative ;)

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9 hours ago, skooljunkie said:

Demographics is a big part of my career (snoozefest), so I did a little typing tonight. First, based on the Downtown District’s list of residential properties it seems as if they are using Census Tract 1000 as the “core” geography. It’s basically the freeway donut hole all inner loopers consider downtown.  As several pointed out, prisons are in fact where the “non-household” population comes into play. Prisons are considered group quarters and are separated from the estimates of households. The 2017 ACS estimated just over 1,586 people living in group quarters in Tract 1000. The DT district estimates a 1,931 non-household population which technically falls within the margin of error. (I believe this a good estimate because the 2010 Census states there were somewhere around 2,400 in group quarters (which likely includes homeless shelters, etc. that may not all be surveyed annually). Hotel guests do not count into population estimates unless the property is something like an extended-stay/rental/RV Park.

 

The Downtown District either creates their own population estimates or hires someone to do it for them since only 2017 estimates exist at this low geographic level and thousands of new units have come online and been leased since.

 

I’m skeptical about the household size multiplier of 1.71. In 2010, this census tract had an average household size of 1.31. In the 2017 ACS, that number went up, but it was still only 1.40. Now, I can’t estimate it without determining how many new units were 1-bedroom and 2+, etc. (frankly, I’m just not going to spend the time to do that for this post!) In middle income suburbs with high numbers of children, a 1.9 to 2.1 avg. HH size is typical in multi-family so I remain skeptical that downtown has 1.71 even with all the new units, but it is possible. If the average household size is inflated and it’s actually 1.40, the total population would be 7,396 + 1,931 for a total of 9,327.

 

As for gender in Census Tract 1000, in 2010 there were 2,283 people living in households. Of these, 1,472 (64%) were male. The prison inflates this stat if it’s not removed from the equation.

 

Sources!!  Table DP1 (2010 Census); B26001 & S1101 (ACS 2017);

Do you know how the estimates on population for the Houston Metropolitan Statistical area are arrived at? I've noticed that the numbers are sometimes revised the year after released.

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8 minutes ago, Twinsanity02 said:

Do you know how the estimates on population for the Houston Metropolitan Statistical area are arrived at? I've noticed that the numbers are sometimes revised the year after released.

 

Correct. The annual Population and Housing Estimates are revised going back to the last decennial census with each "vintage" released. Data can easily change from year-to-year--the City of Conroe is a good example. They approved a lot of annexations before the State started micromanaging cities a few years ago. So if you look at the 2015 release and compare it to the 2018 release, the 2015 population estimate is about 10,000 higher in the latest release. I'm not sure what other reasons there are--likely variables such as new housing that the Bureau wasn't aware of so they go back in and alter the data just a bit.

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22 hours ago, dbigtex56 said:

 

Defense Language Institute?

Daily Light Integral?

Dual Language Immersion?
Deep Learning Institute?
I give up.

 

Sorry about that, didn't mean to get too jargony. 

 

The Downtown Living Initiative seems wildly successful. The residential building/conversion prior to it being enacted was very spotty. I would love to see the economics involved for any of the builders with/without the incentive. The stark difference in activity makes me think that it wasn't thought to be all that close to "worth it" before, but I don't have any kind of feel on what value the incentive is worth for an overall project. 

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3 hours ago, Nate99 said:

 

Sorry about that, didn't mean to get too jargony. 

 

The Downtown Living Initiative seems wildly successful. The residential building/conversion prior to it being enacted was very spotty. I would love to see the economics involved for any of the builders with/without the incentive. The stark difference in activity makes me think that it wasn't thought to be all that close to "worth it" before, but I don't have any kind of feel on what value the incentive is worth for an overall project. 

 

Someone smarter than I (a large crowd, no doubt) can probably delve into the files at https://www.houstontx.gov/ecodev/tirz/3.html and get a rough estimate of how much corporate welfare was doled out to the billionaire hogs at the trough.

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4 hours ago, gmac said:

 

Someone smarter than I (a large crowd, no doubt) can probably delve into the files at https://www.houstontx.gov/ecodev/tirz/3.html and get a rough estimate of how much corporate welfare was doled out to the billionaire hogs at the trough.

 

Pricing without a market is always dodgy business. 

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Saw this and thought of the thread, not completely downtown related, but does overlap: 

 

 

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Posted (edited)

2nd Quarter, 2019:

 

A net 209 units were absorbed in the CBD, while zero new units were delivered.  (Assuming 1.4 people per occupied apartment, downtown added about 100 people per month during the 2nd quarter)  Up to 90.3% occupancy.

 

The "Central Houston" market (downtown, Montrose/Museum/Midtown, Heights/Wash Ave., Highland Village/Upper Kirby/West U, and Med Center/Braes Bayou) delivered 465 new units during the quarter, with 911 units net absorption (for approximately 1,275 additional residents).

 

Since I started keeping track three years ago, more than the downtown apartment market has seen net absorption of more than 3,000 units. We are probably adding around 1,400 additional residents each year in rental apartments (plus a few in condos). Not bad.

Edited by Houston19514
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On ‎7‎/‎3‎/‎2019 at 1:05 AM, mattyt36 said:

OK well I checked out the ACS for 2017 and the population for zip code 77002 is 12,370.

 

Consisting of 10,435 males and 1,935 females (!).  That's worse than Alaska!  No way that's true with 1.71 people per household.  As a gay guy myself, I've never found downtown to be anything more than slightly above average gay population-wise (maybe we all need to move there so population will inevitably explode).  But I guess we can all send notes to our female friends to move to downtown Houston just because of probability!  Or maybe it is all prisoners and homeless.

 

There are only 23 people between the ages of 0 and 5.

 

0 between 5 and 9.

 

And 18 between 10 and 14.

 

No data on households.

 

So I don't think the ACS is the source.

 

https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=CF (not sure if the link will work . . . if you go to this link https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml and in the "Community Facts" box type 77002, then click "2017 ACS -> Demographics and Housing Estimates" and you will see the data).

 

This is interesting. It most likely means that female renters are waiting for downtown to feel safe enough before they decide to move there. Which signals that there is still a lot of unrealized potential for downtown as perceptions continue to change. Most likely we see those renters start to flow in over the next 5 years.

 

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Well maybe then we have to use a "Love After Lockup" approach to attract more female residents downtown.

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Posted (edited)
16 hours ago, Houston19514 said:

Yes, that is mostly because of the jail.

 

What is the jail population? If it is 8-9k as someone said a page back, then the non-prisoner residential population is really small at only around 4,000 people, especially considering that 77002 includes a large swath of Midtown including the Post Midtown Square complex as well as Mid-Main. If the downtown non-prisoner residential population is much more than 4,000 (I think it is considering that 3,000 new apartments have been filled and there were already a couple thousand non-prisoners before), then it is mostly male.

 

 

 

Edited by H-Town Man

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On ‎5‎/‎29‎/‎2019 at 12:40 AM, downtownian said:

Q1 2019 downtown market report just released. See link and highlights below.

  • Not yet 10k residents. Occupancy increased from 84.4% in Q4 2018 to 86.8% in Q1 2019. "The submarket has grown to close to 6,100 residential units, up from about 2,500 in 2013; Downtown now houses over 9,000 residents."
  • "[The Preston], Camden Downtown and Regalia at the Park—will add 873 units to Downtown’s growing inventory."
  • The office dynamics are interesting and worth reading all the way through. Flight to quality is causing significant renovation projects, co-working spaces are increasing share, overall vacancy increased from 19.7% to 20.4%. Bank of America Tower (formerly Capitol Tower) is 82% leased which seems fast compared to 609 Main which has been open a while and is "over 80% leased".
  • The Downtown District has a new security program with SEAL Security. Two dedicated SEAL officers will patrol Downtown and walk designated high traffic areas daily from 7 pm to 3 am.
  • I think having Houston's innovation and tech corridor downtown instead of the former Sears site makes a lot of sense. It seems to be organically developing: "Downtown’s emerging tech, innovation and entrepreneurial ecosystem continues to grow at a solid pace. In the first quarter alone, Downtown’s innovation ecosystem gained two new co-working spaces (Life Time Work, Spaces), two new accelerators and one incubator (MassChallenge, Founder Institute, WeWork Labs), and two notable tech tenants (Ruths.ai and UiPath), further placing Houston on the map as a competitive tech and innovation hub. Venture capital activity has also significantly increased, with Chevron Technology Ventures new $90 million Fund VII; and new accelerator/investment programs by BBL Ventures and Eunike Ventures... Downtown now has eight co-working companies, an unprecedented expansion a key amenity for cluster growth in Downtown’s dynamic innovation ecosystem."

 

http://www.downtowndistrict.org/static/media/uploads/attachments/downtown_market_update_2019_q1.pdf

 

6,100 residential units suggests around 9,000 non-prisoner, non-homeless residents as the Downtown District says. If only 1,900 of those are female, that is really lopsided.

 

Since the 77002 zip code includes portions of Midtown, I am starting to wonder if the 12,370 population figure includes any prisoners.

 

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22 hours ago, H-Town Man said:

 

This is interesting. It most likely means that female renters are waiting for downtown to feel safe enough before they decide to move there. Which signals that there is still a lot of unrealized potential for downtown as perceptions continue to change. Most likely we see those renters start to flow in over the next 5 years.

 

 

It is an interesting statistic, but one which we should withhold going to deeply in. Like what are the underlying stats for that number? The "safety" question is one that could be the reason, but there also could be so many others. I'm guessing this was just an overall headcount that didn't ask further questions. Beyond just "safety" it could just be that is a preference difference between men and women. Maybe it isn't. Maybe its based on the companies that men and women work for. Maybe it isn't. We should make sure to not jump the gun because of one number. There needs to be followup questions to that number. Its just to vague. Same with the male number too. Who knows why. Its just a number right now. On a general basis though, its usually easier for men to relocate than women. In general, since we are a heavy expat city, typically more men are expats to a place than women. In general, men also take more risks than women, and thats double for a new area that wasn't that great beforehand. Again these are in the general which also doesn't look into certain sectors or reasons, etc... I do agree with you that as downtown becomes an actual, livable environment then more women will want to live in downtown. Women just need way more things in a general area than men do, and have different priorities. Downtown is getting their though. There are so many women that work in downtown and just as the food industry is trying to keep people in town, and the same with entertainment, we should start seeing more particular industries that cater to men and women exclusively also show up. If there is a large portion of the market that works in downtown that are women...at some point someone with a brain is going to want to cater to that demographic.

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There are a LOT of UH sorority women living in the various downtown towers. I wonder if they aren't the ones on the lease (parents) then they aren't being counted? My daughter has 20+ friends from her sorority in 4-5 different buildings downtown. My daughter moved out of the Campus Vue and is in a complex on Allen Parkway now.

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9 hours ago, H-Town Man said:

 

What is the jail population? If it is 8-9k as someone said a page back, then the non-prisoner residential population is really small at only around 4,000 people, especially considering that 77002 includes a large swath of Midtown including the Post Midtown Square complex as well as Mid-Main. If the downtown non-prisoner residential population is much more than 4,000 (I think it is considering that 3,000 new apartments have been filled and there were already a couple thousand non-prisoners before), then it is mostly male.

 

 

 

 

 

It took me a while, but I finally was able to tease the numbers out of the Census figures.  The 2017 survey population in 77002 of 12,370 includes only about 4,448 living in households (the other 7922 would be in non-household housing, predominantly jail.

 

Keep in mind those were 2017 ACS numbers (which may be based on 3 or 5 years of surveys, so it might include numbers going back as far as 2013).  As we've seen, the downtown population has grown a lot since those years.

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From what I can tell, the district isn’t including the Census Tract north of the bayou which includes the county jail’s 6000+ inmates. Only the federal jail on Texas and the JDC seems to be included in their non household estimate. Thus, they are likely using only a single tract as their base—not a zip code. 

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Q2 downtown report is up. Highlights:

 

-residential occupancy of 90.3% up from 86.8% at beginning of quarter. Increase due to strong seasonal demand. Houston average is 90.2%

-average rent of $2.03/sf compared to Houston average of $1.18

-Bank of America Tower is 88% leased 

 

http://www.downtowndistrict.org/static/media/uploads/attachments/downtown_market_update_2019_q2.pdf

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Posted (edited)
1 hour ago, downtownian said:

Q2 downtown report is up. Highlights:

 

-residential occupancy of 90.3% up from 86.8% at beginning of quarter. Increase due to strong seasonal demand. Houston average is 90.2%

-average rent of $2.03/sf compared to Houston average of $1.18

-Bank of America Tower is 88% leased 

 

http://www.downtowndistrict.org/static/media/uploads/attachments/downtown_market_update_2019_q2.pdf

Woah, Downtown reached the average much faster than I thought. Definitely shows that there's a large demand for urban living (dense living, high rise living, what ever you wanna call it) in our core. 

Must be some decently wealthy people going off rent/sf, wonder how this will affect retail in the future. 

Overall loving the results. Also about to pass 11k residents, which is nice. 

Edited by TheSirDingle
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18 hours ago, BeerNut said:

Lots of lease concessions in the Houston market.  

 

Well if there are a lot of concessions throughout the market, it still shows strong relative demand for all of the new units downtown.  People could choose to live somewhere else, after all.

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9 minutes ago, mattyt36 said:

 

Well if there are a lot of concessions throughout the market, it still shows strong relative demand for all of the new units downtown.  People could choose to live somewhere else, after all.

 

Exactly.  My gf works in the apartment industry and Houston is considered one of the toughest markets for pricing projections because of all the concessions and new developments.

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3 hours ago, TheSirDingle said:

Any updates on the market? Can't find anything myself,  for some reason http://www.downtowndistrict.org/  hasn't updated their reports since June. Hopefully a 3Q report will be out soon.

 

The reports are quarterly. The next quarter ends Sept-30 and then it takes them a while to write up the report so mid/late October.

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21 hours ago, TheSirDingle said:

Downtown Houston Market update 2019 Q3: 

http://www.downtowndistrict.org/static/media/uploads/attachments/downtown_market_update_2019_q3.pdf

Residential:

Occupancy rate is now up to 91%, up from 90.3%.

There are currently 6086 residential units, with 837 U/C and 1179 planned. 

Rent/square foot is $2.35 which is an increase of $0.19, and well above the $1.29 regional average.

I suspect around 11.4k people living in Downtown now, going off 2.07 per unit occupancy. 

Hospitality:

8228 hotel rooms, with 150 U/C ad 400+ planned.

year-to-year occupancy rate up 6% to 68%. 

 

Many other details inside the attachment, such as Preston details and many retail updates. 

 

 

 

Good stuff.  But I think 2.07 per unit occupancy is probably too high.  I think 1.4 per occupied unit is a more likely average, which would put our current population at 7754 (but this seems to only include rental units; there are an additional several hundred living in condos).

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44 minutes ago, Houston19514 said:

 

Good stuff.  But I think 2.07 per unit occupancy is probably too high.  I think 1.4 per occupied unit is a more likely average, which would put our current population at 7754 (but this seems to only include rental units; there are an additional several hundred living in condos).

Personally think it's around 1.8. I think an update for June said it was somewhere around 1.71. So 2.07 is a little too much, I could see a little under 10k people living within the rental market. With an extra few hundred living in condos. Still think total Downtown pop is above 11k, since it was stated slightly below 11k in June. Wonder when they're going to release official population stats for the area? 

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3rd Quarter, 2019:

 

A net 157 units were absorbed in the CBD, while zero new units were delivered.  (Assuming 1.4 people per occupied apartment, downtown added about 75 people per month during the 3rd quarter)  88.9% occupancy.  (CBRE's reports can be frustrating at times.  Last quarter they reported 90.3% occupancy. With additional net leasing and no deliveries, it's a simple mathematical certainty that occupancy would go up, not down...)

 

The "Central Houston" market (downtown, Montrose/Museum/Midtown, Heights/Wash Ave., Highland Village/Upper Kirby/West U, and Med Center/Braes Bayou) delivered 918 new units during the quarter, with 869 units net absorption (for approximately 1,200 additional residents).

 

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