Topeka real estate needs evolving

City officials are looking for ways to encourage people to move to the Topeka area. Lower cost of living, along with the ability to easily commute to Lawrence and Kansas City can make Topeka a great option for young professionals, families and retirees alike.

“At the National Association of Realtors Conference this year, head economist Lawrence Yun informed us that millennials are tending to move out of the larger cities to some degree. He stated that this is driven by the high cost of living,” said Luke Thompson, president of the Sunflower Association of Realtors.

Thompson says that employers, including the federal government, are also recognizing that lower cost of living equals lower demand for wages from employees. As a result, employers are moving jobs out of high cost of living areas.

According to Thompson, Omaha, Neb., is one of the top five cities that millennials are finding their way back to live.

“I think that is encouraging for a city like Topeka,” Thompson said.

One of the challenges Topeka faces is having enough affordable housing to support residential growth. Inventory of houses on the market is low, and more home remodel and addition permits are granted in the city each year than permits for new single-family construction.

“The city is undertaking a housing market study currently to better understand what the sweet spot is for new housing development and how that relates to meeting our affordable housing goals,” said Bill Fiander, planning and development director for the city of Topeka.

Fiander anticipates that future residential units could be concentrated in the downtown area through repurposing of existing buildings for lofts and apartments.

“There is quite a bit of marketplace share yet to be realized downtown,” Fiander said. “New construction will be less of a factor but come into play as rising values and incentives are put in place to help bridge finance costs. Don’t be surprised if the old state hospital grounds has a niche for mixed use development, including new residential.”

Since commercial development is influenced by where people are or will be, Fiander predicts an expansion of downtown commercial properties in Topeka as well. He believes that as more people move into the downtown area, there will be increased demand for third places — areas that don’t include a person’s home or workplace — where residents can socialize in proximity to their own neighborhoods.

“Having authentic or different spaces from everywhere else that make those areas unique,” Fiander said. “Third spaces need to complement work/home connections.”

He points to areas such as the downtown plaza, green spaces, the riverfront, and art venues as in-demand features that up what he calls an area’s "cool factor" for living. These neighborhoods will need to be walkable, with complete streets, trail and bike facilities and bark parks. Fiander envisions neighborhoods rich in culture that include restaurants for socializing, as well as easy access to grocery stores.

Another population that will drive future housing development in Topeka are

buyers entering into their retirement years. As baby boomers and Gen Xers leave the workforce, many will be looking to downsize or find options for aging in place.

“There is definitely a demand for maintenance-provided housing that is affordable,” Thompson said. “When I am shopping with buyers for this type of housing, we have had a hard time finding property. We frequently have to wait for something to come on the market.”

The current national trend is that people are less mobile than they have been in the past, preferring to stay in the same city or even in the same neighborhood where they have lived for decades. This trend is expected to reshape how housing looks as compared to past generations.

Aging Americans are more likely to remodel or add on to their existing homes to accommodate their changing needs rather than moving to assisted living facilities as they might have in the past. This can include cooperative living situations between generations of the same family.

“We are seeing and will see more multi-family, attached units, and age-restricted facilities to keep up with demographics between empty nesters and millennials,” Fiander said. “We should be accommodating accessory dwelling units, such as smaller units within or on the same property as single-family homes.”

According to Fiander, a second challenge that will need to be addressed before growth can occur in Topeka is property values, which he says are a double-edged sword when it comes to housing development.

“The home buyer’s dollar goes so much further here than it would in most of the country, but the developer or builder’s dollar also returns less on investment than it would in most of the country,” Fiander said.

One program that the city already offers to incentivize building and redevelopment in some areas of town, including downtown Topeka, is the Neighborhood Revitalization Plan. Under the NRP, property owners making improvements that raise the appraised value of residential property by 10 percent, or of commercial property by 20 percent, are eligible for tax rebates.

The rebates are good for 10 years on historic properties, in designated intensive care neighborhoods and on newly constructed infill housing. The program was designed to promote revitalization and conservation of these areas of town and to promote growth.

“We need to think about where our density makes the most sense, but overall, the greater density we can achieve in the most compatible manner, the more competitive we will be,” Fiander said. “And we’ll be able to service our growth without overstretching our infrastructure network.”

Thompson has a positive outlook for the future of real estate in the capital city.

“There seems to be momentum for growth,” he said. “I feel like much of the development around downtown will draw people closer to city center, and much of the commercial space being revitalized along Topeka’s main thoroughfares is definitely encouraging. It’s great to see new businesses being built and shopping centers repopulating.”

Shanna Sloyer is a freelance writer from Topeka. She can be reached at [email protected].

Shanna Sloyer, Special to The Capital-Journal