How to build a downtown apartment in Tucson
Downtown Tucson, Arizona, has long been a magnet for home buyers.
But a new downtown apartment market has been gaining steam, with developers like Hausfeld Real Estate Group planning a slew of apartment projects.
Here are five things to know about the market.
There are dozens of apartment developments in downtown Tucson.
Hausfield Real Estate is planning several apartments downtown.
There’s a large, new condo tower at 801 N. Main St., for example.
The project has attracted attention for its proximity to the University of Arizona campus, but it’s also a popular place to live.
Two other apartment developments are under construction in the area, one near the Arizona State University campus and the other at the corner of Main and N. Washington Streets.
Downtown Tucson is a hot real estate market.
Hausefeld’s apartment tower, for example, sold for more than $300,000 last month, according to real estate brokerage CBRE.
That’s almost twice the price of the current condo tower on the same block, which is priced at $165,000.
It also sits right on the border of Tucson’s residential district.
Downtown is growing fast.
The market has exploded in the past few years.
In the first three months of 2018, the area saw an average of 20 new apartment projects per month, which rose to over 100 per month in 2019.
The latest development in the Tucson market was a three-story tower at 1.7 acres that opened last month at 703 N. California St. near the University Of Arizona.
The development, which sits at the intersection of California and North State, is expected to be completed in 2020.
There is a big housing shortage in Tucson.
The city has some of the most expensive housing in Arizona, according in-state tuition and fees.
The state of Arizona has been working to curb a housing shortage that has been exacerbated by a recent flood, which forced many families to move from the state’s more affordable neighborhoods.
But as of this year, only about 10 percent of housing in the metro area is affordable to middle-class families, according data from the Arizona Housing Association.
Hasefeld’s tower on Main Street is the latest project to come up for a development review, and it has been on the market for a few months.
That means that the developers will have to figure out how to get the property approved for a project that’s close to the university.
There isn’t a single project in Tucson that’s being marketed to the middle class.
The average monthly rent for an apartment in downtown is $1,200, according the Tucson Real Estate Association.
That is far lower than the $3,200 average for a median-priced apartment in the entire metro area.
The median rent for a typical family of four in downtown was $6,400, according CBRE, and that’s far below the $10,000 average.
The apartment market is still far from saturated.
However, as the market has grown, it has attracted a new group of middle-income residents.
In addition to Hausfields, other developers are building apartment buildings in downtown.
In 2019, a condo development on the site of the former West Tucson High School on N. W. California Street sold for $140,000, according a real estate broker.
And in the spring of 2020, the condo project at 804 N. Arizona St. sold for about $100,000 — nearly twice the asking price of that condo project on the corner.
Developers are looking to build affordable housing in downtown, too, though there is a lot of competition.
The housing shortage isn’t the only issue.
Downtown also is experiencing a severe housing shortage due to a lack of rental housing, according Hausfert’s CEO, Peter Hausflick.
That has forced many residents of the area to live on the streets.
And, according by real estate brokers, the new condo project next to the former school building is on the verge of going under.
The Arizona Housing Authority expects the market to continue to deteriorate, and a number of developers are looking for ways to make money from the property.
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