photo by: Nick Krug

The Bauer Farm Apartment complex, which rests along Bauer Farm Drive off of Sixth Street in West Lawrence, is pictured under construction in September 2016.

Among the already standing apartments in Lawrence, the lines have been chalked to allow for thousands more.

But as construction cranes and multistory apartment complexes have joined the skyline, the question of whether the city is allowing for too many apartments has also arisen.

About 2,500 apartments are currently in progress in Lawrence, and the city is currently zoned to allow for 6,000 more, according to the Multi-dwelling Inventory Report recently presented to the City Commission. At current construction rates, the land inventory allotted for apartments could account for decades of growth.

With such numbers in front of them, city leaders will try to determine how the future of housing in Lawrence might diverge from its present.

“We really need to look at those numbers hard,” said City Commissioner Lisa Larsen. “We just can’t take them at face value because things will change as our generations go forward. We need to look into them really deeply to see exactly what those numbers mean.”

Numbers game

The report found that the number of apartment units either in construction or that have received some level of approval is about 2,500. That does not count projects that have been proposed but remain under review. That figure isn’t far from the total number of apartments built over the past 10 years, which is about 3,000.

While the report included a snapshot of the present, its focus is on future plans for multi-dwelling housing, defined as a structure that contains three or more units. As currently zoned, there is potential for approximately 6,000 more apartment units within the Lawrence city limits. Based on current construction market trends, that’s an inventory of about 37 years for the downtown district and 21 for the rest of the city.

The city’s comprehensive zoning plan only covers 20 years at a time, and the inventory numbers stood out to some commissioners.

“When I heard those numbers it really caught me off guard,” Larsen said. “I was surprised to hear that, so it does give me pause to think about what does that really entail.”

Generational shift

The report does point out that the inventory numbers are based on the assumption that construction rates will continue at the same pace they have for the past 10 years. City Manager Tom Markus said determining capacity based on past construction rates may not accurately reflect society’s shifting attitudes about housing.

“I think, quite frankly, different generations have different attitudes about what they see as the American dream in terms of housing,” Markus said. “I think there’s been a de-emphasis toward ownership.”

That trend is illustrated by how construction of apartment units compares to that of single-family homes. Since 2009, the city has seen more apartment units built than single-family or duplex units. From 2009 through June of 2016, about 67 percent of all new residential construction in Lawrence was apartments or other multifamily units, while 33 percent was single-family or duplex homes.

Markus said he thinks it’s good to see that the city has plenty of capacity planned for more apartments because demand for apartments could increase as housing norms continue to change. For example, Markus said providing for more dense housing, especially in downtown areas, is an issue emerging across the country. Markus said that trend is apparent in Lawrence and is a reversal of the once dominant growth of single-family homes farther from urban centers.

“Here you have this tale of two cities,” Markus said. “You have this kind of urbanized community in the old town area and then you have suburban Lawrence west of Iowa, and maybe even somewhat closer in. So you can see the evolution, that we’re kind of going back to what was.”

What counts as inventory?

The report did not look at proposals for apartments that have been filed, but are still currently under review. One such proposal has been filed by a group led by Lawrence businessman Tim Stultz. Those plans are outside the current city limits and call for a 55-acre apartment development that would house about 240 apartments. The project would be built on the farm field that is on the south side of 31st Street, across the street from the new Menards home improvement center.

Stultz said he wasn’t certain all of the land in the multi-dwelling inventory is actually easily accessible for building new apartments.

“It all comes down to what’s developable, what can you actually get a site plan approved and pull building permits and go start building on,” Stultz said. “Not very much of that ground, I would imagine, is development ready.”

Stultz said because of that, the inventory numbers don’t necessarily speak for themselves.

“There may be that much ground that is zoned and unimproved, but all of it will be very difficult to develop for one reason or another,” he said.

Larsen agreed that the characteristics of the land in question is something to look more closely at, and hearing from other groups about how they evaluate the numbers will be part of that consideration for her.

“I want to speak with some of those on the building side, on the real estate side, as to how they evaluate these numbers, because they’ve obviously indicated that they look at them a little differently,” Larsen said. “So, I want to hear more about what they’ve got to say.”

Markus also noted that the capacity within the city didn’t necessarily rule out other options for growth.

“That doesn’t mean, for example, that you don’t look at longer range opportunities and where we would grow and how we would grow,” he said.

Vacancy rate

The city’s new report tracks apartment zoning inventory, but doesn’t include a measure of how many existing apartments are unoccupied. A couple of other reports, however, track those numbers to some extent and show that even as more apartments have been built, vacancy rates in Lawrence have been going down in recent years.

The Lawrence Apartment Market Overview is done annually by Keller, Craig & Associates Real Estate Appraisers. A survey done as part of the market report found that vacancy rates in Lawrence have been decreasing since 2011, and puts the current rate at about 3 percent. The 3-percent vacancy rate was calculated based off of a survey of 69 apartment complexes with 6,112 total units throughout Lawrence.

According to the most recent census data, the overall rental vacancy rate for Lawrence is 5.3 percent. That calculation includes a margin of error of 1.5 percent and goes beyond just apartments by counting all types of rental units, such as homes or duplexes. The total number of renter-occupied units in that calculation is about 19,000.

Markus said he thinks a key component of the demand for apartments has to do with societal shifts from both millennials and retiring baby boomers. At the same time, Markus said the model of rented apartments and owned single-family homes isn’t one Lawrence has to follow so strictly.

“Ownership doesn’t necessarily have to be a distinction between multiple and single,” he said. “I actually think that what I would like to see is a balance, so if it is multiple there’s a balance between ownership and rental.”

What’s next

The city’s new report will likely inform multiple aspects of local government, one of which is ongoing planning. Both the City Commission and the Horizon 2020 steering committee are currently working on planning documents that will govern growth in Lawrence.

Larsen agreed with Markus that shifting attitudes about housing, especially for millenials, will be a part of the discussion.

“They’re not as much into home ownership and that seems to be changing pretty significantly, so we have to take all of that into consideration,” Larsen said.

Markus also said he’s in the process of working on an “environmental scan” to gather more input on the community’s stance on the future of housing and other factors such as more shared transport and more services within walking distance — both of which he said could mean less parking and therefore denser housing.

“Hopefully, we think about those things and we kind of build nimbleness as things change,” Markus said.

The City Commission is set to begin work on its first strategic plan, which going forward will be redrafted every two years. The commission will hold six meetings to draft the plan, with the idea to have it complete in time for budget discussions in summer 2017. The policies in the Horizon comprehensive plan will cover the next 20 years, and inform the strategic plan.