Uneasy Rhetoric

Carl beat me to the punch writing about the article in today’s Bee talking about how developer John Saca expects downtown condos to sell for about $500 a square foot. That means that, if we take the Aura as an example, their eminently livable, even for a family of three, two-bedroom plus den layout, at a spacious 1,505 square feet (that’s almost twice what we’re living in now), would sell for about $750,000.

Oh well, I guess two 30-something young urban professionals with good jobs and a burning desire to live downtown isn’t their target market.

(By the way, I’m serious about the Aura – as much as I’ve complained about the exterior being kinda ugly, I think the sample layouts really do show how condos can be livable).

Obviously, several factors come together to make tower living a premium, the most obvious being the tower itself. It costs a lot of dough to build high. This is why I argued for the possibility of some squatter, but still high density, condo-type developments (note to all: I’m not saying don’t build the towers, I’m saying don’t build just towers). You still attract people downtown, and the size of your potential market increases.

Right now, despite Saca’s and other’s enthusiasm, their market is limited to families in about the upper 20 percent of incomes (see below), or with substantial personal wealth. Their less expensive, smaller units would be attractive primarily to empty-nesters, older childless couples, and the odd young hipster who made it big.

If you can find a way to bring the price of high-density living down, you increase the size of your market and go a long way to building a truly vibrant community downtown. Saca points out that the 1,800 units proposed for the coming few years pales in comparison to a strip-mall suburb like Elk Grove (I fondly remember a different Elk Grove) building 3,000 units a year. The problem is, unless you work to attract the same kinds of potential buyers who are looking at Elk Grove, you will never really make a dent in the suburban sprawling development in this town.

Yes, I’m bitter, and yes, it’s personal. As I’ve said before, we’re exactly the kind of people you’d want living downtown. Sure, we could find a nice rental, but I’ve been a rental dweller all my life.

I find that people often underestimate their general financial situation – people with incomes in the top 20 or 30 percent of the population tend to think they are “just average.” So, I give you the HUD estimated decile distributions of family income for 2005, Sacramento PMSA. Bear in mind, these are incomes, not personal wealth. If you make $20,000 a year but have six million in the bank, you ain’t poor (and you need better investment advice).