Scottsdale Arizona Real Estate Blog

Michael Clancy
The Arizona Republic
Sept. 19, 2007 06:24 PM  

Phoenix planners have seen the future, and it looks a lot like Desert Ridge. With a new citywide emphasis on density and height to accommodate ongoing growth, the northeast Phoenix master planned area seems to fit the bill perfectly.

When complete, close to half of all the residential units in the 5,700-acre area will be what Phoenix considers “multifamily units.”  These include rental apartments, condominiums, town houses and other buildings that hold housing for more than one family.The units are spread throughout the area, although the biggest are concentrated in the so-called “core” of the Desert View Village planning area at Tatum Boulevard and Deer Valley Drive.

At that location, four complexes are in the works.

• Shade, a completed rental apartment complex on the southwest corner of Deer Valley and Tatum, has 342 units, and is more than 90 percent occupied.

• Gray Development Co. owns property on the northeast corner, where almost 900 units currently are approved.

• Toscana at Desert Ridge, east of the Gray property, will have, when completed, more than 1,500 units.

• CityNorth, currently under construction east of Desert Ridge Marketplace, could have as many as 1,500 units.

Adding in additional apartment block along 56th Street and in other parts of Desert Ridge, the Specific Plan for the area counts between 10,000 and 11,000 multifamily units for the area.

Altogether, the Specific Plan calls for less than 24,000 homes overall.

“Density is a big part of the growth solution,” said Terry Feinberg, president of the Arizona Multihousing Association. Considering land costs and infrastructure demands, “it is the only way to be efficient.”

Changing demographics

Ranging in price from about $250,000 to $500,000, the units are purchased by a variety of people who in many ways reflect the changing demographics of the city and the nation. There are plenty of them.

At least 10,000 multifamily dwelling units ultimately will be built in Desert Ridge, close to half of 24,000 homes that will stand there once development is complete.

City planner Alan Stephenson says it is too soon to estimate the number, however, because developers often are provided flexibility to build different kinds of units.

Feinberg, president of the Arizona Multihousing Association, said Desert Ridge is a special case, where land prices and desirability of the area drive the need for multifamily dwellings.

The basic economics dictate that, he said. If land sells for $1 million per acre, as land in Desert Ridge has, a developer can put up a smaller number of high-priced single-family homes or, if allowed, a larger number of lower-priced condos.

Feinberg, whose organization represents rentals, said most people make a conscious choice to rent or live in a condo. It all has to do with location, amenities and low-maintenance.

Desert Ridge appeals because it is situated along a freeway, Loop 101, and is part of an upscale section of the Valley.

Jay Butler of Arizona State University’s Arizona Real Estate Center, said most units of the type being sold at Desert Ridge or nearby Kierland are being picked up by higher end customers, including seasonal visitors, well-off professionals who do not have children, or empty nesters, those whose children have grown and left the home.

Sometimes the units are part of mixed-use developments, which offer retail and office uses as well as private homes.

“That is the craze nowadays,” Butler said. “There is no evidence people really want that.”

Evidence or not, the units appear to be popular.

Shade, a 342-unit apartment complex across the street from Desert Ridge Marketplace, has rates ranging from $915 to $1,745 a month. It is 92 percentoccupied.

Toscana, a 1,500-unit complex, is being built as it sells, so its 358 sales represent close to 100 percent occupancy. The units there go for amounts ranging from $250,000 to $375,000.

“Density is an expensive lifestyle,” Butler said, adding that none of this housing is within reach of average working people.

Stephenson, the city planner, said Desert Ridge represents what the city would like to see at all 15 of its village cores.

He said Desert Ridge, being built from the ground up, is hard to compare with other parts of town, which were not master planned in the same manner.

“This is an area where the city expects the most intensity,” he said, including commercial and residential locations.

He said the city has seen and promoted “a change in development styles” where village cores have taller buildings, more residents and more businesses, including retail, office, and hotel properties.

The Bucks, a Canadian couple who spend winters in the area, bought a place at Toscana and love the area.

“There is plenty to do right outside our door,” Bruce Buck said.   www.theholmgroupaz.com