By ERIC A. HOWALD
Of the Keizertimes
From the outset of the Keizer Revitalization Plan, Community Development Director Nate Brown has said the city intends “to change the way it does business” with regard to development along River Road. However, the city can change its practices and still find itself in a market unable or unwilling to meet it halfway.
According to a Gap Analysis the Keizer City Council and Keizer Planning Commission will discuss in a work session Monday, Aug. 27, the market to develop or redevelop in Keizer is “soft but rising.”
That conclusion is based on trends in the rental market. An average Keizer rent pencils out to approximately $1.20 per square foot, or $900 a month for a 750-square-foot apartment.
“While it may sound like a lot of money, such rent levels will not justify new construction. Simply put, the rate of return will not be high enough for a bank to loan on a project at that rate,” states the analysis prepared by Otak, Inc., Angelo Planning Group, Johnson Economics, and Kittelson & Associates.
The $1.20 per square foot amount would mean about a 5.8 percent return on investment and builders would likely seek a 10 to 12 percent return before pulling the trigger on a new Keizer project.
Driving up the going rate per square foot would likely also require Keizer’s “downtown” to become a destination space that residents would pay more to be closer to. However, currently the city lacks entertainment options for anyone under the age of 21 and the diversity of services remains somewhat limited overall.
Another hurdle is the city’s low jobs-to-housing ratio. A balanced ratio is considered slightly more than one job per household. Keizer has .48 jobs per household and more than a third of them are in the retail sector. According to the study, economists suggests ideal communities have about 10 percent of their jobs in retail.
Additionally, new and redevelopment could potentially price some Keizer families out of Keizer completely. In the most rosy projections, the city could add as many as 2,500 new residences, but those will most likely come at the expense of those already in the lower income brackets.
“New buildings are generally built at the high end of the price range within the city. Rental residential buildings that redevelop are often also the ones with the lowest monthly rents,” the study suggests.