Why does OKC have such a lack of condos and townhouses?

[adaniel]

This is both an observation and a rant, so bear with me.

I have noticed compared to other cities, OKC has a serious dearth of any quality condo and townhome developments. I am talking about the entire city, not just the core area, as we all know the 2008 crash derailed any hope of large scale condo developments in that area. A quick look on Zillow reveals that OKC has 102 condos and townhouses for sale. That compares to 188 for Tulsa, 66 for Little Rock (of course Little Rock has 67% fewer people than OKC but only 35% fewer listings), and 276 for Kansas City. I realize this isn't super scientific and browsing through the listings showed a lot of 70's shag carpet specials.

I also remember a story in the Journal Record that revealed than up to 9% of people surveyed would like to own a condo/TH but they consisted of 1% of total housing units in the city. Even in my very suburban hometown, townhouse developments, many quite high end, have been popping up and selling out fast.

I have always felt that OKC's housing stock is very undiverse; if you don't want a standard suburban lot or something semi rural you are really out of luck here. At the same time, with more young people moving here, baby boomers looking to downsize, and people waiting later to have kids if at all, you would think developers would start looking seriously at adding some for sale multi family units. Am I really asking too much here?

[Pete]

Because:

1. Single family homes are super cheap.
2. Because it's very easy to get anywhere in OKC, so people can just move to the most affordable option (houses)
3. Previous condo / townhouse developments have sold very poorly due to reasons 1 & 2.
4. Appreciation rates are well below singe family homes


In fact, I asked this question a few years ago and it was rhetorical because I knew the answer: Has OKC EVER had a successful condo project?

The answer at the time was an absolute NO.

All the projects in Deep Deuce (Maywood Lots, The Hill, Brownstones, Block 42, Central Avenue Villas, etc.) were having a terrible time selling their units. Things have turned around but it took years and years after completion. That is a very bad news for a developer.

The one exception has been the Centennial. It sold out quickly.

Besides that, the city is littered with townhome and condo projects that completely failed or spent years in low-sales pergutory. And not just downtown, all over the place.


It's starting to change in the downtown areas due to the access to all the urban amenities, but for the most part condos and townhouses have been very bad investments for both the developers and purchasers.

[Pete]

BTW, you can still buy a very nice home in Mesta Park (not to mention Gatewood, Jefferson Park, etc.) for well less than almost all the condo options downtown.

[Urbanized]

Everything Pete said is correct. To distill it down even more: cheap, abundant land with absolutely zero barriers to new development on the fringe.

[Pete]

Rather than a pure townhouse or condo, patio homes seem to have found a niche around OKC.

Even Gallardia has relatively small lots given the size of the homes.


When it comes right down to it, land is so cheap around OKC it doesn't make sense to squeeze a lot of units into a small space. Construction is by far and away more expensive than the land. Out here in California, it's just the opposite.

So, rather than share a wall or two or three with neighbors, people can opt for a stand-alone home with a low or zero maintenance small yard. And those projects seem to do pretty well.


I should add that I think the Waterford sold pretty well, as another notable exception to the dozens and dozens of projects that have largely failed.

[Urbanized]

Location, location location. It's probably why one day some condo projects downtown will make a certain amount of sense.

[Garin]

What part of town are you look in?

[bchris02]

OKC finally started getting the attention of real estate speculators just as we were approaching 2008. Projects that had not broken ground when the recession hit were cancelled. Had the 2008 recession happened in 2010, OKC would probably have a few downtown high-rise condo towers.

[adaniel]

So OKC has too much cheap available land but Tulsa, Little Rock, Kansas City, and my hometown of Plano Texas do not? Not trying to be rude here but this assumption does not hold up.

Maybe because you are coming at it from a strictly utilitarian stance; I am looking at it from a lifestyle perspective. Lots of people (myself included) have busy lifestyles and do not have time for yard maintenance nor do they need 2,000 square feet to heat, cool, or maintain. I don't think I am some special snowflake; more people would buy a quality condo on townhouse if it was offered. In fact, I am posting this after I read these articles recently:

Aging Boomers to Boost Demand for Apartments, Condos and Townhouses - Real Time Economics - WSJ

And these.

http://www.tennessean.com/article/20...side-Nashville

Condo conundrum: Lots of demand, not enough building | Star Tribune

While Nashville and Minneapolis are bigger than OKC, they are largely sprawling urban areas with lots of cheap land (although less so for Minneapolis).

As you pointed out, the Waterford and a handful of other condo developments are holding up well here, because they were built at a high quality and have a strong HOA.

And I will politely disagree that there are a lot of patio homes developments available in OKC. I would actually jump at one, but the only developments I can think of are currently are Gaillardia and Edinburgh, both of which are well north of 400K. I could be wrong though.

[bchris02]

Little Rock, Tulsa, Charlotte, etc all have very cheap land as well. That isn't the issue. It's all about timing and the fact OKC's proposals had the unfortunate luck of coming too close to the recession, therefore had not broken ground, therefore cancelled.

[zookeeper]

So OKC has too much cheap available land but Tulsa, Little Rock, Kansas City, and my hometown of Plano Texas do not? Not trying to be rude here but this assumption does not hold up.

Maybe because you are coming at it from a strictly utilitarian stance; I am looking at it from a lifestyle perspective. Lots of people (myself included) have busy lifestyles and do not have time for yard maintenance nor do they need 2,000 square feet to heat, cool, or maintain. I don't think I am some special snowflake; more people would buy a quality condo on townhouse if it was offered. In fact, I am posting this after I read these articles recently:

Aging Boomers to Boost Demand for Apartments, Condos and Townhouses - Real Time Economics - WSJ

And these.

http://www.tennessean.com/article/20...side-Nashville

Condo conundrum: Lots of demand, not enough building | Star Tribune

While Nashville and Minneapolis are bigger than OKC, they are largely sprawling urban areas with lots of cheap land (although less so for Minneapolis).

As you pointed out, the Waterford and a handful of other condo developments are holding up well here, because they were built at a high quality and have a strong HOA.

And I will politely disagree that there are a lot of patio homes developments available in OKC. I would actually jump at one, but the only developments I can think of are currently are Gaillardia and Edinburgh, both of which are well north of 400K. I could be wrong though.

You make some valid points here. There really are many people who would pay MORE for LESS as long as it came with convenience, nothing too large that they feel lost in it, etc. The minimalist and simplicity movement is growing, and they're looking at much more than square feet.

My problem with the whole condo thing is outrageous HOA fees that when tacked on to your mortgage, they're simply unaffordable for many. In fact, I guess that's basically what you were saying about the patio homes. Good post, adaniel.

[Pete]

Little Rock, Tulsa, Charlotte, etc all have very cheap land as well. That isn't the issue. It's all about timing and the fact OKC's proposals had the unfortunate luck of coming too close to the recession, therefore had not broken ground, therefore cancelled.

The only condo / townhouse project I know of that was cancelled was the forerunner to the Edge.

There just hasn't been the demand for these types of projects... I could name dozens that actually were built and were pretty big failures.


adaniel, if you would provide a price range, house size, and general area, then we can point you to some of the developments that might be suitable.

[onthestrip]

I think the reasons there have been a lack of them (developers going for more rentals since '08, along with already mentioned reasons) are starting to disappear. Financing is starting to come around as well as demand for for-sale units. I think we will begin to see more projects, starting with Lisbon Lofts, come along in downtown/midtown in the next few years. We will also see more land of St. Anthonys used for more for-sale projects as they own a scattering of midtown properties, many of them suited for townhome type projects.

It'd also be nice to see OKC encourage more density in the core and try to prevent single family homes being built on individual lots. Basically I want more, and I think we will see more, of housing similar to Lisbon Lofts which should begin construction soon.

[Pete]

The reason there are so few of these projects is because all the previous ones have been failures. And often huge, awful failures.

What people say they want and what they actually buy are usually two completely different things, and there has simply not been the demand.

[OKVision4U]

You make some valid points here. There really are many people who would pay MORE for LESS as long as it came with convenience, nothing too large that they feel lost in it, etc. The minimalist and simplicity movement is growing, and they're looking at much more than square feet.

My problem with the whole condo thing is outrageous HOA fees that when tacked on to your mortgage, they're simply unaffordable for many. In fact, I guess that's basically what you were saying about the patio homes. Good post, adaniel.

Whoever places the 1st High-End Residential Tower ( 25 stories ) in the CBD, will have the demand to fill it 100%...w/ all the amenities, it will move quickly.

[bchris02]

Whoever places the 1st High-End Residential Tower ( 25 stories ) in the CBD, will have the demand to fill it 100%...w/ all the amenities, it will move quickly.

I think it depends on if its apartments or condos. A lot of the developments in Charlotte and in Little Rock had to be repurposed as apartments following 2008 because they weren't selling as condos.

[betts]

Just cutting lots to 25' widths helps density a lot and that's what's happening in SoSA. As houses near the core are torn down and land values skyrocket, skinnier houses become logical. It's the perfect compromise: not a condo, but markedly less lawn to keep up. We may see more and more of that as young people who have rented downtown want to buy and yet stay close to amenities.

[OKVision4U]

I think it depends on if its apartments or condos. A lot of the developments in Charlotte and in Little Rock had to be repurposed as apartments following 2008 because they weren't selling as condos.

The price p/sf will be roughly the same, so either /or. I'm surprised that we have not seen this type of development being announced.

[Anonymous.]

The reason there are so few of these projects is because all the previous ones have been failures. And often huge, awful failures.

What people say they want and what they actually buy are usually two completely different things, and there has simply not been the demand.

Maybe he is lumping the Cotton Exchange in there?



I agree, OKVision4U, the first residential tower that goes up is going to make a killing. And this is why I play the lottery.

[adaniel]

Just cutting lots to 25' widths helps density a lot and that's what's happening in SoSA. As houses near the core are torn down and land values skyrocket, skinnier houses become logical. It's the perfect compromise: not a condo, but markedly less lawn to keep up. We may see more and more of that as young people who have rented downtown want to buy and yet stay close to amenities.

This would actually be a good compromise and I am a bit surprised this hasn't already caught on. The inner loop in Houston is filling up with these "skinny homes" on lots about half the size of a typical suburban lot. And for the most part they are still pretty low maintenance. As an aside I am REALLY rooting for Lisbon Lofts because that may be the thing that jump starts new for sale development.

You make some valid points here. There really are many people who would pay MORE for LESS as long as it came with convenience, nothing too large that they feel lost in it, etc. The minimalist and simplicity movement is growing, and they're looking at much more than square feet.

My problem with the whole condo thing is outrageous HOA fees that when tacked on to your mortgage, they're simply unaffordable for many. In fact, I guess that's basically what you were saying about the patio homes. Good post, adaniel.

Thanks. If anything I have been thinking more about this because I have friends who SFHs that were way too big for them and now they hate having to mow grass, pay for ac/heat, maintenance, etc. But looking around there is really not a lot of choices for them. You are right about more people embracing a "less is more" mantra and would be willing to pay if it is of high quality.

The only condo / townhouse project I know of that was cancelled was the forerunner to the Edge.

There just hasn't been the demand for these types of projects... I could name dozens that actually were built and were pretty big failures.

adaniel, if you would provide a price range, house size, and general area, then we can point you to some of the developments that might be suitable.

FWIW I think condos during the "bigger is better" 2000s were a tough sale nationally, and especially after the 2008 crash. But demographics are changing and they are becoming more doable for a lot of people. But lets face it developers here are sloooooowwww to adapt to any new trends. And thank you for the offer to help, but as of now I am only dipping a toe into the market. I want this to be a discussion more than anything.

[OKVision4U]

The CBD could have a couple of towers, Bricktown could have a couple of 12 - 16 story towers for high end apartments.

[Spartan]

I think you guys are missing the point. Property laws in Oklahoma are weird. I forget the exact specifics, but I know Richard McKown went into a 5 minute lecture once about how state law sucks and needs revisions. There may be a legal issue with HOAs in condos.

Obviously state law is a bigger factor than excessive land, because there should still be enough condo supply in a major U.S. metro to account for "different strokes for different folks." This is why I'm so militantly anti-suburb; because we're overbuilt there and it's doing nothing for us. We really need to diversify our housing supply, badly. The morons elected to the State House would consider that blasphemy though.

[Pete]

FWIW I think condos during the "bigger is better" 2000s were a tough sale nationally, and especially after the 2008 crash. But demographics are changing and they are becoming more doable for a lot of people. But lets face it developers here are sloooooowwww to adapt to any new trends. And thank you for the offer to help, but as of now I am only dipping a toe into the market. I want this to be a discussion more than anything.

I am talking about failures before, during and after the 2000's.

Unless I was looking downtown where new construction is the only option, I'd be looking at existing properties. I just looked through the listings on Realtor.com and there are a bunch of options, and they are cheap.

And because the resale stock is so inexpensive and because past projects have failed miserably, you aren't going to see a lot of new development because there simply isn't the demand at new construction prices -- apart from downtown and even there the sales are far from brisk.

What we are seeing are droves of people renting nice apartments, which is why there are so many more of those projects being built.

[Pete]

I think you guys are missing the point. Property laws in Oklahoma are weird. I forget the exact specifics, but I know Richard McKown went into a 5 minute lecture once about how state law sucks and needs revisions. There may be a legal issue with HOAs in condos.

Obviously state law is a bigger factor than excessive land, because there should still be enough condo supply in a major U.S. metro to account for "different strokes for different folks." This is why I'm so militantly anti-suburb; because we're overbuilt there and it's doing nothing for us. We really need to diversify our housing supply, badly. The morons elected to the State House would consider that blasphemy though.

Hard to discuss this without specifics but there have been tons of condos built in OKC.

And again, besides wanting an inexpensive, well-located, well-built condo -- which isn't going to happen due to the math of development -- what exactly are we missing from property diversity?

[Spartan]

Hard to discuss this without specifics but there have been tons of condos built in OKC.

And again, besides wanting an inexpensive, well-located, well-built condo -- which isn't going to happen due to the math of development -- what exactly are we missing from property diversity?

We have nothing but ranch homes. Are you arguing the point about diversity of housing supply?