Labor market drives urban living in Frisco
Community Impact | Lindsey Juarez | August 10, 2016
When it comes to new apartment development in the Dallas-Fort Worth area, Frisco is one of the hot spots, according to information from Axiometrics, a Dallas-based research company with a focus on apartment real estate.
As of July 18, the Uptown Dallas market had the most apartment development in the area, with 3,073 new units to open this year, followed by the Collin County and Richardson markets.
Frisco has 1,727 new units that are either up for lease or will be up for lease later this year as well as an additional 1,580 units under construction, bringing the total to 3,307 new units that will be open within the next few years.
AMLI Frisco Crossing near the Dallas North Tollway and Gaylord Parkway is contributing 325 units to that total. The complex’s community manager Ashley Dodds said she is not worried about filling up those units. Frisco’s apartment occupancy rate is 95.7 percent.
“We definitely think there’s enough demand, especially with all of the development in the area,” Dodds said. “We recently just completed a project in West Plano that’s about three miles down the road. That was the fastest lease up in AMLI history. We stabilized in about seven and a half months.”
This multifamily development growth is being spurred by job growth in the area, said John Lettelleir, Frisco director of development services. Many new apartments in Frisco are concentrated in or near the $5 Billion Mile and other mixed-use developments where new jobs will be located, he said.
“When I’m talking about jobs, I’m thinking of these mixed-use urban centers, such as Frisco Station, Wade Park,” Lettelleir said. “This is where you have the office component, but you also have the residential component.”
Most apartments coming into Frisco are urban-living units, which are on average denser than traditional garden-style apartments and are typically placed on a street grid with the building adjacent to the sidewalk. Urban-living apartments also have parking garages, whereas garden-style apartments have surface parking. These types of apartments can typically be found in mixed-use developments, such as Frisco Square.
The demographics driving the urban-living development are young, single professionals and senior citizens. The similarity between both groups is that neither have children, said Tim Nelson, Realtor and Frisco City Council member.
“Those with kids are usually looking for something else with a little bit more space, a little bit more flexibility, parks, backyards, play sets, pools,” Nelson said. “…We have quite a diverse inventory of that type of space. But if you think about it, for someone who’s single in this town, there aren’t really a lot of options.”
Single professionals are moving to Frisco for the jobs available, whereas senior citizens are downgrading from a single-family home to an apartment often to be closer to family, Nelson said.
Apartment developer JPI, which is building the 424-unit Jefferson Stonebriar project at Warren Parkway and Ohio Drive, decided to build in Frisco because of the job growth in the area.
“The $5 Billion Mile and Legacy Business Park developments have solidified Frisco as one of the highest job density areas in Dallas-Fort Worth, especially with the corporate relocations of Toyota, FedEx and Liberty Mutual, among others, which alone are forecast to bring over 9,000 new jobs to the area,” said Matt Brendel, JPI’s senior vice president and development partner.
Many new mixed-use developments and office parks, such as the developments within the $5 Billion Mile, are including multifamily living in their plans, Lettelleir said. Existing office developments, such as Hall Park, are also looking to add multifamily living.
“The office parks of yesteryear were where people would come in the morning, they would leave in the evening and then it’s dead,” he said. “The labor market is desiring to be in these types of urban, mixed-use areas. Not everybody, but most of them are, and companies are taking note of that.”
The average rent in urban-living apartments is typically one of the most expensive because it costs more to produce one of these complexes, Lettelleir said. The current average rent for established apartments in Frisco is $1,249 per month, according to Axiometrics. For the new apartments up for lease this year, the average rent will be $1,446 per month.
Frisco City Council member Will Sowell said he has had concerns in the past with the density that apartments can create in the city, adding that he sees single-family home development as more of a priority.
However, he said urban-living apartments do make sense within certain developments, such as along the $5 Billion Mile.
“We certainly need to provide opportunities for great and unique living spaces in Frisco for people who are searching for jobs in Frisco, who may be younger and not quite ready to buy a house,” Sowell said. “I think we all recognize that. But I do think that we need to make sure that we moderate that versus single-family.”
Urban-living apartments have one of the highest assessed values when it comes to property taxes, Lettelleir said. Assessed values of urban-living complexes are on average about $5.4 million per acre while garden-style apartments are assessed at about $1.5 million per acre.
The property values generate extra money for the city, Lettelleir said.
Urban-living apartments could also have a positive effect on the business community, said Tony Felker, Frisco Chamber of Commerce president. Multistory urban-living complexes can be built to have the first floor dedicated to commercial space, which can draw restaurants, retailers and office space.
These apartments can also house the workforce for companies moving to the area or already established in the area, providing employees easy access to work, Felker said.
“I hear a lot of people saying having an apartment where they can live, work and play is a good thing,” he said. “As we’re looking at the workforce coming into town and looking for places for them to live, urban living is going to be a good option for them.”
Urban-living apartments can pose both a problem and solution for transportation. The higher density of the complexes could lead to more road congestion as more people move in.
Lettelleir said to manage congestion, the city needs to look into traffic management solutions. One thing that helps is to make sure these developments are concentrated along major highways, such as the Dallas North Tollway, so minor thoroughfares are not overwhelmed with traffic, he said.
“It’s not a simple fix,” Lettelleir said. “What it comes down to is when everybody wants to use the road at the same time, you’re going to have a traffic problem.”
On the other hand, urban-living developments could ease congestion by allowing residents the option to not use a car as often, Nelson said. Having a multifamily complex where residents can walk to work or retail and dining options may reduce the need for a car or lead people to share vehicles, he said.
“I fundamentally believe that in my lifetime here, there will be people who won’t own cars,” Nelson said. “They’ll share cars. We already have cars that can drive themselves basically. You have Uber. People are going to be able to just get cars on demand.”
Though the residential aspect of Frisco has been known for its single-family housing, not everyone wants to live in a house, which is why the city is focusing on providing more diverse housing options, Nelson said.
“[Frisco] is not going to stay a town of 150,000. It’s not going to stay a town of 200,000. It sure as heck isn’t going to stay that town of 25,000 when I first moved here,” he said. “You have to understand that that’s a natural progression of the city. And we are a city; we’re not a town. I think we’re doing our best to do it right.”