Are downtown KC’s rents pricing out too much of the middle class?

Two years ago, West Coast transplants Lisa and Farzad Alemi found their dream apartment in downtown Kansas City.

At around 1,100 square feet, the couple’s two-bedroom penthouse at One Light Luxury Apartments isn’t big, but its views are huge: floor-to-ceiling windows overlook Crown Center, the Crossroads Arts District and the Bartle Hall Pylons.

Similar One Light units cost $2,800 per month and come with luxe amenities such as a state-of-the-art gym, a theater room and a rooftop pool and deck. The Alemis say the cost is well worth the convenience of living steps away from shopping, restaurants and the streetcar — and a bargain compared to what they paid for smaller rentals in Seattle and San Francisco.

“This is the best place we’ve ever lived,” said Farzad Alemi, a surgeon at the Kansas City VA Medical Center.

Downtown Kansas City’s ongoing revitalization has sparked a population boom. But that has come with rising rents, which is pushing many would-be residents out of the city center, including many who work downtown.

“I would love to live downtown,” said Courtney Lewis, 40, who works at the Central Library. “I would love to raise my toddler in the vibrancy of the city.

“He’s 2 1/2 and loves riding the streetcar. And whenever we drive away from the buildings, he’ll say, ‘That’s downtown!’”

But Lewis and her partner, who works for a nonprofit, are just average wage-earners. Together they make around $55,000 a year, much of it spent on daycare for son James.

“We’re that missing middle” when it comes to downtown affordability, said Lewis. They’re too affluent to qualify for income-restricted homes. And they’re not affluent enough to live comfortably in a family-suited luxury apartment renting at two grand a month.

Who else would be in the missing middle?

Other downtown employees, such as: clerical workers, receptionists, baristas, nurse aides on Hospital Hill, and people who clean or guard plush office buildings. Or those working full time at downtown banks and restaurants.

What downtown needs is “workforce housing,” said Michael Frisch, an architecture professor at the University of Missouri-Kansas City. “Anyone making $10 to $20 an hour ... is being priced out of most apartments. And that’s a lot of people.”

For higher wage-earners, downtown in the last decade has gone from mostly residential ghost town to one of the hottest draws in the metro — especially among young professionals wanting to live close to nightlife and cultural amenities, and empty-nesters leaving behind suburban cul-de-sacs.

More than 26,000 people live in the city center, according to the Downtown Council. That’s a huge jump from 2002, when 4,000 residents occupied the area bordered by the Missouri River, 31st Street, the state line and the 18th & Vine Jazz District.

Sean O’Byrne, vice president of business development with the Downtown Council, said he expects downtown’s residential population to reach 30,000 by 2020, and 40,000 by 2027.

Developers are trying to capture that demand in gleaming high rises and converted office buildings and hotels.

Ten years ago, downtown apartments rented for around $1 per square foot, said developer John Bennett, Jr. Now the average is around $1.65, and many luxury apartments are leasing for a historic high of $2 per square foot.

There’s no shortage of residents willing to pay the rising price: 97 percent of downtown apartments are currently occupied, according to the Downtown Council.

One Light, one of the priciest addresses downtown, is 100 percent occupied, and its owner The Cordish Companies is building a second high rise called Two Light a few blocks south. The $105 million tower is now leasing and scheduled to open next year.

Bennett is vice president of KC Loft Central, which owns or manages more than 1,000 units in the downtown area. He says the average downtown renter is a young professional who wants to spend $1,000 or less on a studio or one-bedroom apartment in the center of the action.

“They like being able to say, ‘I live downtown,’” he said. “That’s cool, but it wasn’t always the case.”

A few years ago, that average renter might’ve worked at a bar downtown, Bennett said. Now he or she is more likely to have a corporate gig at Cerner.

Bennett’s next project is The New Yorker, a nine-story building at 12th and Baltimore built as Hotel Bray. When it’s done, the building will house retail on the ground floor and 29 apartments. Most units will be small — 500 to 600 square feet — and they’ll rent for less than $1,000 per month.

But for many people who would like to live downtown, including families, $1,000 for a 600-square-foot one-bedroom won’t work.

It’s that way in many U.S. downtown districts that have incentivized the private development of renovated lofts and new high-rises under the “luxury” banner.

“In reality there are only two flavors that new apartments come in,” said Jim Thomas, a partner in Indianapolis-based Cityscape Residential, which is building hundreds of luxury units around the metro. “Luxury and low-income.”

Both types of housing are apt to garner government support. In Kansas City and elsewhere, leaders eager to restore downtown vitality lavish tax abatements onto developers promoting luxury, while federal tax credits have long existed for companies that create “income-restricted” housing for the needy.

According to the Downtown Council, about 27 percent of downtown’s 7,821 residential units are reserved for low-income tenants.

Old Town Lofts manages 480 such units. Their one-bedroom apartments cost between $650 and $730, and two-bedroom apartments cost $750 to $850. Tenants who live alone must earn less than $31,740 annually to qualify, and couples or roommates who live together must make a combined total of less than $36,240.

But falling in the gap between the poor and the urban chic are several metro residents who replied to The Star’s Facebook invitation to comment on downtown’s residential offerings.

“We moved out of downtown because we couldn’t keep up with the increase in rent!” wrote Rosisella Blakney. Sheridan Smilodon, who has a family of five, chimed in: “I work at a college and my significant other is a disabled veteran, so we definitely don’t have the means.”

Tony Evangelista is a bartender in the Power & Light District that has boosted downtown’s appeal. He estimated that half of the employees around the entertainment district have found apartments near or around downtown. “It’s tough,” said Evangelista, 33.

He and a roommate were lucky to find a two-bedroom unit in the River Market for $1,450 per month.

“I have a day job in the insurance industry, which helps pay our bills,” Evangelista said.

One way to add “workforce housing” downtown, some are saying, is to boost tax incentives for luxury projects that set aside 20 percent of units for “affordable” rent — under $900, for example. Kansas City Councilman Quinton Lucas, chairman of the Housing Committee, expressed support for such measures at a meeting with the Land Clearance for Redevelopment Authority, one of the city’s incentive-granting agencies.

Kansas City could learn from Denver, said Michael Duffy, a former chairman of the redevelopment authority.

He said that after the Mile High City awarded tax breaks for luxury developers to build whatever they wanted, “downtown employers suddenly woke and said, ‘Nobody is wanting to work for us. The housing is too expensive.’”

He said Kansas City hasn’t moved quickly enough to promote workforce housing: “I’m afraid that we are taking Denver’s route.”

But Kansas City is still much more affordable than Denver. O’Byrne said luxury apartments in the center of the Mile High City can cost as much as $4 per square foot — double the current going rate of luxury apartments in downtown Kansas City.

So far there appears to be no shortage of demand for the new luxury apartments shaping KC’s downtown skyline. But as more units go up, developer Thomas predicted, the supply of housing eventually will cause the market to soften and rents to stabilize.

Many downtown residents say it’s worth it to pay more for the downtown lifestyle.

Empty-nester Todd Beers pays $1,075 for a 605-square-foot studio at East 9 at Pickwick Plaza, a new apartment tower in a former hotel built in 1930.

“It’s awesome,” said Beers, 57, who works in IT for the city and used to live in a three-bedroom house in Shawnee. “I live four blocks from work. I walk home every day for lunch. It’s six blocks to the grocery store.”

On weekends, he walks to restaurants and bars or hits the City Market to stock up on produce for the week.

Convenience is also what keeps the Alemi family downtown now that they’re parents to a 4-month-old son, Nima. The family enjoys riding the streetcar to Union Station and listening to concerts in the Power & Light District from their living room couch.

Nima’s nursery has views of the Liberty Memorial and the towering blue crane over Two Light.

“He loves looking out the windows,” Lisa said.

Rick Montgomery: 816-234-4410, @rmontgomery_r

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