By Philip Haldiman, Editor-in-Chief | Dealmaker
All large cities evolve over the course of time, but central Phoenix could look and feel substantially different in the coming years.
Infill development within the central corridor is in full swing, particularly multi-family, which experts say will lead to a more diverse and vibrant urban core.
From 2012 to 2014, the U.S. Census Bureau recorded 16,773 multi-family permits in Maricopa County, with about 46 percent of those in Phoenix, many in the central basin. Tempe and Scottsdale followed, with about 19 percent.
Phoenix Planning and Development Director Alan Stephenson told Dealmaker the last two to three years has seen substantial development and an influx of new residents to the central part of the city.
Stephenson said projects by Alliance Residential Company, Lennar Homes and Habitat Metro plan to bring nearly 1,000 units to central Phoenix, with more projects set for later this year.
Four multi-family projects have broken ground or are slated for the 16th Street corridor.
The growth of multi-family and higher density in central Phoenix will result in many commercial uses reflecting the city’s specific neighborhoods, Stephenson said.
“It will lead to more cultural attractions whether they be art studios, coffee shops, restaurants or bars,” he said. ”We’ll end up having enough people to support more than one type of activity throughout our neighborhoods.”
State Demographer Jim Chang told Dealmaker these areas stand to see an influx in thousands of people leading to some dynamic changes, with a good chance of growth in businesses.
Traffic will increase, but the central corridor stands to be livelier with activities, Chang said.
“When people move in they are definitely going to need services,” Chang said. “Establishments will see more customers, and if existing establishments are not enough, more businesses will come in.”
Additionally, Dan Klocke, vice president of development for Downtown Phoenix Partnership, told Dealmaker the multi-family activity will draw Millennials, who are still not quite ready to buy, but interested in urban living.
“I think all these new apartments will attract a lot of young people,” Klocke said. “This becomes really attractive for newer companies interested in that demographic for their workforce.”
Mixed-use projects with commercial at the ground level and multi-family above has become a common choice for developers. Stephenson said more projects like these are coming online, and will lead to a more walkable city, also an attractive quality to Millennials.
People want to live, work and play in one place, he said.
“People are interested in a city with an active street scape, with shaded walkways, where you can walk, where you can hop on a bike or the light rail and not have to drive as historically you used to,” Stephenson said. “That trend is continuing and will lead to more people downtown.”
Colliers International reported the greater Phoenix multi-family vacancy rate continued to improve in the first quarter of 2015 to 5.7 percent, after ending 2014 at a 17-year low.
Mike Huckins, vice president of public affairs for the Greater Phoenix Chamber of Commerce, told Dealmaker the deluge of infill activity has been a self-fulfilling prophesy that came out of the light rail.
“The light rail helped create the environment for the businesses along the central corridor and with that brings the need for housing,” Huckins said.
