Demand for rental housing units in downtown Peoria and the Warehouse District appears to be strong - and still growing.
A recently-updated Downtown Peoria Rental Market study commissioned by the city of Peoria and the Downtown Development Corporation shows some positive indicators for residential growth in the downtown area.
Mayor Rita Ali said the study shows current downtown unit occupancy rates of 98 percent, above the state average of 92 percent.
"Ultimately, this study suggests a strong demand for downtown rental housing," said Ali. "It's an encouraging sign for new development."
The study estimates demand for 278 to 404 additional market-rate rental units in the downtown and Warehouse District areas through 2026.
"This study really validates the fact that our market, and the demand for this type of market rate housing downtown is there," said Urich, noting "downtown" is defined in the market study as also including the Medical and Warehouse Districts.
Additional buildings last opened up for housing in the downtown area in 2018. The study noted may properties currently have waitlists exceeding building capacities.
The average age of people living in the downtown area is 33, slightly younger than the city's average age of 37. Urich said the targeted market for downtown living is a "dual track" of younger residents and older empty-nesters looking to downsize, more so than families with children.
Urich said the city's focus right now is primarily upon the Warehouse District, where most existing buildings can be redeveloped more affordably under State Historic Tax Credits within the River Edge Redevelopment Zone. He said some office buildings downtown may also eventually become good candidates for a conversion to mixed-use commercial and residential usage.
"I would just say that we eventually expect that to be happening. But it's an expensive process," said Downtown Development Corporation president and CEO Michael Freilinger. "We'll probably have to look at the incentive package and how it's structured to get the same type of incentive benefit in, let's say, the central business district, as we would in the Warehouse District."
Urich said while more than 9,000 parking spaces are currently available throughout the downtown study area, if capital funding becomes available, the city would love to see construction of a parking structure for the Warehouse District. He said the city has also signed onto a redevelopment agreement to place 300 new parking spaces along Commercial Street, south of Washington and next to the WTVP studios.
The average household incomes targeted for downtown residency are between $35,000 and $150,000, with $35,000 the baseline considered minimum to afford $1,000 in rent with utilities. The current median household income downtown is $16,650, which includes those residing in existing low-income and senior housing within the study area.
Urich said Low Income Housing Tax Credits could allow for a mix of market-rate and affordable housing downtown.
"I think that that becomes part of the conversation, a part of the equation, is that you look at that and you start to see where a development like that might make sense, or there may be a mix of of both affordable units and market-rate units in development. And we've had those discussions with with interested developers in the past," he said.
Freilinger said there likely won't be any incentives offered for affordable housing in the downtown area at the state or city levels, citing existing federal programs.
"At some point, we'll probably see more of that, but right now, because of the market-rate demand is so high, that's where you're seeing most of the development projects be in that price category," he said. "But it will change as as the market moves forward."
First District councilmember Denise Jackson said she expects residential growth downtown to spur additional developments.
"As more people are living and working in downtown, we expect to see additional convenience-oriented stores, as well as services, that eventually we hope to see open and serve our growing population," Jackson said.
At least one additional residential building is expected to open in the downtown market study area later this year.
"What we're looking at is that hopefully over the course of this next year, that we'll be seeing more buildings coming forward," Urich said.
