Can housing keep up with the Zappos Downtown move?
Wed, Jan 9, 2013 (3:51 p.m.)
Photo: Tom Donoghue
Just before Christmas, I took a walking tour of Downtown taverns—a refined way of saying “bar hopping”—with a resident of one of the Downtown high-rises. We went from the Lady Silvia in Soho Lofts to Artifice two blocks west. I only had a mile or so to drive before we started our trek, but even knowing I had that short trip home, I went easy on the sauce. I know way, way too many people thrown in jail for drunken driving.
My friend laughed at the very idea. “I never have to worry about it,” he said, lighting a joint. “I step out, walk to a great bar, walk to another, then walk home. I love living Downtown.”
Walking to a neighborhood bar isn’t something you typically hear in the Valley, even if you live close to one in the suburbs. Heading to a PT’s Pub from a gated development can be an incredibly long walk.
While a growing number of people live Downtown, many times more live in the suburbs and commute to work in the central Valley. That makes sense: 15 of the world’s 25 largest hotels are on the Strip; 13 hotel-casinos are on Fremont Street; and thousands more city, county and state employees work in Downtown office buildings.
Of 828,000 employed in the Valley as of early November, Applied Analysis estimates about 30 percent work on the Strip or Downtown. Later this year, the percentage will rise slightly when roughly 1,500 Zappos employees move into their new headquarters.
Trouble is, for all those people, affordable living Downtown in relatively crime-free areas is hard to find.
Downtown, Steve Franklin and “Uncle” Jack Levine, real estate agents who work exclusively in the Downtown housing market, say they have dozens of clients lined up to buy homes in the neighborhood that aren’t currently available. At the same time, both believe home prices Downtown are rising faster than in farther-flung areas of the Valley.
Take the area between Valley View Boulevard and Eastern Avenue; then Sahara Avenue on the south up to U.S. Highway 95 That stretch includes desirable residential areas John S. Park and McNeil Estates—close but not too close to Fremont and the Strip. Franklin looked at every home sold there in 2012. The average sale price rose from $47 per square foot in March to $66 per square foot in November and December; and with three closings on the books so far in January, the price has been $83 per square foot. If that number holds, it represents an increase of 76 percent in price per square foot.
According to Applied Analysis, Valley home prices increased 19 percent per square foot (from $67 to $80) between March and October 2012, based on the three-month rolling average. In ZIP codes typically associated with Downtown, 89101 and 89104, the price per square foot remained at about $50 between March and October. That’s deceptive, however, because while 89104 includes John S. Park, it also includes a chunk of land farther east toward the intersection of Fremont and Eastern. ZIP code 89101 extends many blocks north of U.S. Highway 95, where some of the streets are places most Las Vegans would not feel safe walking, day or night.
After Zappos announced its move to Downtown from Henderson two years ago, CEO Tony Hsieh formed the Downtown Project, which will infuse $350 million into various categories of redevelopment, including housing. Hsieh wants to create a critical mass of people and interactions so Downtown’s growth becomes self-sustaining.
Plans evolve and change. While designers from New York had worked on ideas for a Zappos employee housing complex, now Hsieh says the Downtown Project wants residential construction to happen, but someone else will have to do it. “We’re leaving that to other developers,” he told me.
A Downtown developer told me residential developers actually are waiting in the wings, but some are sitting tight until the dust settles from all of the Downtown Project’s property acquisition on Fremont. It looks to be at least a year, maybe more, before new living space is built in the neighborhood. In the meantime, those who have homes or condos Downtown near their work will continue to count their blessings. And those making the commute from the ’burbs? They’ll just have to grin and bear it.