The Madison - NW Plaza luxury apts

[Metro]

Well its July any updates? Absolutely love the idea of this project and location.

There won’t be any updates until rents vs construction costs allow you to build without incentives. The only update I suspect we will ever see is a for sale sign

Perhaps a dumb question but why couldn't this project get incentives?

[langosta]

Well its July any updates? Absolutely love the idea of this project and location.

There won’t be any updates until rents vs construction costs allow you to build without incentives. The only update I suspect we will ever see is a for sale sign

Perhaps a dumb question but why couldn't this project get incentives?

The developer chose not to apply. They could apply but their chances are low due to the politics of the Plaza area location. Keep in mind we can’t even relatively average apartments incentives and many projects with incentives + affordable aren’t penciling out.

[TheLastGentleman]

Keep in mind we can’t even relatively average apartments incentives and many projects with incentives + affordable aren’t penciling out.

I keep hearing this from you and others, but I’ve still never, under any circumstance, ever seen a breakdown of cost for any of these projects showing the supposed “penciling”. If we’re supposed to take real estate developers, at face value, that being made to cut rent of a handful of units in exchange for economic breaks is somehow a critical blow, I’m unfortunately going to have a hard time believing it until I actually see how the sausage is made

[langosta]

You can take a sample financial model online and adjust it to compare.

Some simple math is that if 20% of units rent for 50% of market rate, then you are seeing a 10% overall reduction in revenues. Costs stay the exact same if not increase slightly.

The other issue users here have identified is that it is not a particularly efficient means of creating affordable housing. High rise units have a significant construction premium vs 5+1 which itself has a premium over slab on grade. If you really wanted to maximize affordable construction, you would build the affordable elsewhere and not in the tower itself.

Another issue is that developers only have so much flexibility. They need returns that can attract debt and equity investors to the project. Sometimes this is a local bank really just interested in KC but often it’s an outside bank or investor. As the project grows in size, the likely hood of needing non-KC capital increases exponentially.

[Metro]

You can take a sample financial model online and adjust it to compare.

Some simple math is that if 20% of units rent for 50% of market rate, then you are seeing a 10% overall reduction in revenues. Costs stay the exact same if not increase slightly.

The other issue users here have identified is that it is not a particularly efficient means of creating affordable housing. High rise units have a significant construction premium vs 5+1 which itself has a premium over slab on grade. If you really wanted to maximize affordable construction, you would build the affordable elsewhere and not in the tower itself.

Another issue is that developers only have so much flexibility. They need returns that can attract debt and equity investors to the project. Sometimes this is a local bank really just interested in KC but often it’s an outside bank or investor. As the project grows in size, the likely hood of needing non-KC capital increases exponentially.

I appreciate your posts that's what makes this place great. Very hard to find this kind of conversation with people around town. Forgive as this is kind of off topic but it sounds like the current climate in KC is less development friendly is there a chance a city like Omaha surpasses KC in population in the next decade? Google lists them at 487k while KC is at 508k

[langosta]

Maybe but look at the metro population sizes for what matters most