The Opportunity Upstairs
I am fortunate to work in a field that allows me to spend a great deal of my time visiting commercial business districts and meeting with the individuals who strive to preserve and revitalize those districts. They spend countless hours marketing the district through social media and elaborate and laborious events. Money is spent on marketing and district maps to try and attract more people to visit. Committees create business and building inventories to develop a greater understanding of what the district contains. Fundraisers and membership campaigns carry on in support all of these activities. I continue to be amazed at the amount of work being accomplished in these communities where revitalization has been made a top priority and the difference that is being made by a group of committed individuals.
Yet in district after district, the upper floors remain an enigma, a vestige of a quaint era when people used to travel vertically by stairs. First floor space is a priority in downtown as everyone wants to have retail shops to attract visitors and avoid appearing to have a vacancy problem. Upper floors are used for storage, pigeon habitats or district kindling. People seemed surprise when a fire occurs, yet it shouldn’t be a total surprise considering the amount of square footage in a tightly packed district full of flammable materials that goes unchecked for years. The inevitable result of any building that is not maintained is fire or structure failure, it is not a matter of if, but when.
These upper floors are far from a liability though. They are opportunity disguised as storage. Earning income from 1/2 or 1/3 of an asset makes as much sense as buying a car and removing the back seats and trunk. The cost of maintenance remains the same, but the utility is reduced dramatically. While I understand that there will be more debt, utility costs and property management fees associated with occupying the upper floors, it is still proportional and makes for a sound investment. Upper floor housing is actually a much better investment then first floor commercial when you look at typical vacancy rates. First floor commercial space is harder to fill than upper floor housing, which in turn costs the property owner more money in lost rent, turnover costs and marketing fees. A typical property owner must maintain the building systems and exterior with income from one floor instead of spreading the cost over multiple tenants. While any investment is a risk, I believe property owners would find upper floor housing to be a safe bet and may find that their municipality has a plethora of tools and or incentives available to assist with the process.
The benefits of upper floor housing are tremendous and revitalization organizations would do well to make this a priority when it comes time to strategic planning. Upper floor residents generate considerably more income for property owners, providing them with the resources to maintain and improve their buildings. Downtown residents spend five times more in the district then downtown workers. This is a huge benefit to all of the restaurants and retailers located within the district. Residents also give the district a vibrant and welcoming feel by creating a neighborhood ,where before there was just a shopping district or an office park.
The key to sustainable districts is multiple uses, as each use relies on the other use to survive. How many entertainment districts have dried up in previous years? Are office parks and suburbs going to attract the next generation of workers and residents? Mixed use districts have been around since the advent of cities and we would be wise to make sure our downtowns continue to offer every use.