Cranes and conversions: Multifamily housing booms in Pierce County
During the 2021 EDB Annual Meeting, renowned urbanist and economist Richard Florida discussed how cities are becoming more vibrant places for people to live, work and visit. Tacoma-Pierce County has the opportunities and amenities people are looking for, and investors know it.
“Developers are coming to Tacoma and Pierce County,” said Austin Kelley, Senior Vice President and Shareholder for Kidder Mathews, the West Coast’s largest independent commercial real estate firm. “Sales of big properties and population are increasing, and massive amounts of multifamily units are in the pipeline.”
Thousands of units rising in Tacoma
Tacoma is an emerging city, Kelley said. It’s estimated that the city will need 45,000 new multifamily housing units by 2040 to meet the need in its urban core.
Currently, more than 4,000 new units are under construction or in the city’s permitting process. The population in those and future units continue to boost economic development.
- New residents moving into the area purchase local housing, food, services and more.
- Added population is beneficial for companies considering locating in Tacoma-Pierce County, as well as large employers in Seattle who continue to allow employees to work from home.
- More housing stock in Tacoma means an increased tax base.
- Proximity to high-opportunity job markets in Tacoma and the South Sound ensures the demand for housing in the area will continue to soar.
“Tacoma has become such an attractive market for development,” said Jeff Robinson, City of Tacoma Community and Economic Development Director. “The city is relatively affordable compared with other Puget Sound cities, such as Seattle and Bellevue, and offers diverse and first-rate amenities that create a high quality of life for residents and visitors.”
More options, partnerships
To help meet the need for housing, in November 2021 the city modified its Multifamily Property Tax Exemption Incentive. The changes expand the geographic area where financial incentives are allowed for the construction of multifamily housing that provides affordable units. The program helps establish more affordable housing in Tacoma and gives developers additional opportunities to partner with the city.
While housing construction in Tacoma is hot, conversions are also in the mix. In December, Spokane-based InterUrban Development purchased the 16-story office tower at 1119 Pacific Ave. in the downtown core. The company plans to build 60 residential units in the 109-year-old building.
Growth throughout county
- Copperberry Condos (South Hill Regional Growth Center): Mixed-use development with 12 condos and office space.
- 2nd Street Apartments (Downtown Regional Growth Center): 29-unit apartment building.
- Puyallup AOB (330 3rd, downtown): Transit-orient development with 60-to-90 condos.
- Dos Lagos (South Hill Regional Growth Center): Mixed-use development with office space and 142 apartments.
- East Town Crossing (E. Pioneer Ave. at Shaw Rd.): 193-unit apartment building.
“The new housing options will have something for everyone,” said Meredith Neal, Economic Development Manager for the City of Puyallup. “These developments will bring more shoppers to support local stores and workforce housing to support our growing businesses.”
The City of Lakewood has more than 200 multifamily units in permitting that are expected to be under construction in 2022. In addition, the multiphased Lakewood Station TOD is under contract. A development timeline is pending for the proposed transit-oriented development, which would cover nearly 9 acres and include approximately 671 units across apartment buildings and townhomes.
In the City of Bonney Lake, the 470-acre, master-planned community of Tehaleh continues to grow. In July 2021, the Newlanddevelopment was among the top-50 top-selling master-planned communities in the United States. New multifamily units are part of the plan, today and in the future.
- Wesley at Tehaleh, a 228-unit, multifamily senior housing development, opened in September 2021.
- For Phase 2 of Tehaleh, 11 percent of development is expected to be multifamily homes.
No slowdown in sight
“This is just the beginning,” Austin Kelley said. “It takes a while to develop these projects, so we will always be playing catchup to population increases because of increasing jobs. This is not a blip on the radar.”
Multifamily apartment buildings and condos aren’t the only hot commercial real estate game in the region. Along with the sale of the office tower at 1119 Pacific Ave., two other high-profile property deals happened in January. Kirkland-based MJR Development nabbed the Tacoma Financial Center for more than $41 million. Boyd Watterson Asset Management, a Cleveland company, laid out $58 million for the Columbia Bank Center.