A new study of housing needs in downtown Billings seems to suggest that the demand is there but is relatively modest, and that some fundamental improvements could entice more people downtown.
The findings were presented Thursday at a meeting sponsored by the Billings Industrial Revitalization District and the Downtown Billings Alliance, the two groups that commissioned the market study of downtown housing.
The main speaker was Brian Duffany, a senior vice president with Economic and Planning Systems, of Denver, and Karl Barton, with the Denver office of Billings-based Sanderson Stewart, an engineering and development company.
Duffany said one of the study’s main conclusions is that the downtown should set the relatively modest goal of capturing 10 percent of the multifamily housing market in the next 10 years. Projections show that about 2,000 such units will be built in Billings over that period, Duyffany said, which means the downtown would add 200 multifamily units in the next 10 years.
Barton said cities that are “bullish” on encouraging downtown living — he mentioned Fort Collins, Colo., as one example — are hoping to capture 20 percent to 25 percent of the housing market.
Barton also said that the two kinds of multifamily developments most likely to make economic sense would be walk-up or “stacked flats” units, or three-story apartment complexes. The walk-up units would have tuck-under parking and an average size of 700 square feet. A developer could build an estimated 37 such units on an acre of land, he said.
The apartment complex would yield about 36 units per acre, with units averaging 600 square feet. A distant third, in terms of economic viability, would be three-story townhomes with backyards and two-car garages, with 12 units an acre.
The area of downtown considered most ripe for residential development sits astride the informal boundary between the central business district and the east end represented by the BIRD. The targeted area is roughly between Montana Avenue and Third Avenue North, from North 22nd to North 24th Street.
That means that for now, at least, not many people are interested in living within the BIRD.
“That’s necessarily a surprise, but we’re working on it,” Duffany said.
To gauge interest in downtown living, the study authors surveyed members of the DBA, the BIRD, Big Sky Economic Development and major downtown employers. Of the 750 respondents, 11 percent said they would be interested in moving downtown immediately, while another 24 percent saying they’d be interested in living downtown within the next five to 10 years.
Fully half the respondents said they had no interest. Of those, 56 percent said living downtown wouldn’t fit their lifestyle, 35 percent said they needed more space for families and children, and 28 percent thought the downtown doesn’t feel safe. (Obviously, some respondents had more than one of those concerns.)
The study also showed that about 13,700 people work in the downtown area and about 1,700 people, roughly 1 percent of the city’s population, lived there as of 2015. But because a lot of downtown residents live alone, downtown housing units make up about 2 percent of the city’s total.
About 90 percent of downtown residents are renters, the downtown population contains a relatively large number of people 18 to 34 years old, and average incomes there are lower than in the city as a whole.
Duffany said millennials and baby boomers make up the two biggest cohorts of the population, and also happen to be the people most interested in moving downtown. Millennials and boomers both want the convenience of downtown living, he said, and millennials also want an urban lifestyle, lower-cost housing and proximity to work, entertainment and recreation.
Baby boomers’ other needs are low-maintenance living, walkability and access to social activities and health care. Put those two populations together, Duffany said, and “it really creates a lot of demand for close-in urban living.”
One trend that will affect the housing market, though Duffany didn’t go into much detail about it, is that most new jobs are either low-wage or relatively high-wage, without much in between. In Yellowstone County, he said, 50 percent of new jobs pay $12 an hour or less, and 40 percent pay more than $20 an hour.
Billings already does a fairly good job of providing workforce housing, which Duffany defined as housing for people making 80 to 120 percent of the average median income in the area, which translates to those with household incomes between $43,400 and $65,000.
Among top priorities of people when they’re looking for a place to live, Duffany said, are rents or mortgages (and more generally the cost per square foot), proximity to shopping and services, a yard and — more than any other single thing — a driveway or garage.
“Parking,” he said, “is the tail that wags the dog,” and is something that downtown developers will have to be innovative about dealing with.
Factors that would make the downtown more attractive, according to the survey, include an improved or a new downtown grocery store, safety, traffic-calming techniques and general aesthetic improvements.
The lunch-hour meeting drew about 45 people — mostly developers, planning officials, engineers, architects and economic development representatives — to the First Interstate Bank Operations Center at 1800 Sixth Ave. N. After the presentation, some of the attendees had questions for the presenters.
Real estate agent Ernie Dutton asked if there should be an emphasis on people interested in high-end condominiums, to help spur revitalization, as has happened in places like Denver.
Duffany said that may be a market niche later on, but that at this stage of development, downtown “pioneers” are more likely to be people looking for relatively cheap housing.
Developer Brad McCall asked what could be done about wide, high-speed, one-way streets like Fourth and Sixth avenues north, which act as imposing barriers between segments of the downtown.
Barton said that is a question for policy-makers, not developers. The good news, he said, is that the streets are so wide that they could be greatly improved without sacrificing any property on their edges.
Nicole Cromwell, with the city-county Planning Department, pointed to the existence of four bakeries in downtown Billings and suggested that a number of small, specific shops catering to downtown residents who shop for groceries daily might make more sense than trying to attract one big grocery store.
Billings mayor-elect Bill Cole asked the presenters if they know how far away a grocery store had to be before it was considered too far. He said he asked because a grocery store on the north edge of the South Side might be able to serve both the downtown and the South Side, often described as a “food desert.”
Duffany didn’t have a ready answer for that, but said residents would probably consider a store within “walkable” distance if it was not more than a quarter or a third of a mile away.
Tim Goodridge, coordinator of the Billings Industrial Revitalization District, said the consultants’ study is still in draft form. When it is complete, he said, it will be posted on the internet for anyone to peruse and make use of.