Downtown State College continues to develop.
Preliminary plans have been submitted for a seven-story, mixed-use building on East Beaver Avenue. The first floor and basement will be retail and commercial space, according to the borough’s planning and zoning department, while offices are proposed for the top floor. Apartments will take up the intervening floors, with 40 four-bedroom units planned.
The plans include 54 parking spaces, with 33 underground. In total, the project constitutes 98,000 square feet.
Highland Holding Group submitted the plans in August. The group could not be reached for comment.
“We’re just starting to review,” said Ed LeClear, the borough’s planning and zoning director. “They can always change if they did a miscalculation. This is very early days as far as what the final one will end up looking like.”
The current building, which houses Canyon Pizza at 260 E. Beaver Ave., will be demolished. Canyon Pizza, meanwhile, is moving a few blocks down Beaver Avenue as the properties reshuffle.
No official construction timeline has been set. The plans will go through a review process over the next two months, LeClear said.
As for the retail space, no tenants have been identified. Anne Messner, the borough’s senior planner, said Highland is reviewing options both in terms of fit and function.
“Right now it’s just a general space, so they are looking at possible tenants and trying to see if they need more of the proposed space,” she said, “and that can take some time.”
The proposed building adds to a growing list of rental and retail options in the borough. Planned or under-construction high-rises bookend the metro area, with cranes hovering over each edge of downtown. Retailers Target and H&M are set to open in the Fraser Centre next week, while the completion date for the 12-story, mixed-use Metropolitan, initially set for this summer, has been shunted to July 2017. At the other end of downtown near the curl of Beaver onto College Avenue, ground has been broken for Rise at State College.
Like the Metropolitan, Rise is a 12-story, mixed-use building. In August, developer CA Ventures announced Urban Market, a grocery store, as its first tenant. Rise is scheduled to be completed by summer of 2018, with pre-leasing to begin in fall of 2017.
“Among those three projects, I think you’re going to have well over 1,000 beds of supply there,” said Tommy Songer, a principal with Better Homes and Gardens Real Estate GSA Realty. “The question we’ve been asking the past three years during this boom is will that help with the affordability issue? We really haven’t seen that yet.”
With the East Beaver Avenue project, which has no official title at this point, development remains in its incipient stages. But, LeClear said, developers typically circle late summer on construction calendars — or just in time for the school year.
“In State College with student housing, there’s always an attempt to target late August of specific years,” he said. “So it seems reasonable that August of 2018 would be a target, but we don’t have that information. That’s just from our knowledge of how the market usually works.”
Increasing enrollment at Penn State is part and parcel of the rise in the borough’s housing options. Boasting the country’s seventh-largest student population, the university saw record numbers of incoming freshmen (8,730) and 133,600 applications overall for the fall 2016 semester. Students, meanwhile, saw about a 2 percent tuition increase after a respite for in-state rates the previous year.
“A lot of students, I’ve got to imagine some of them are struggling to find adequate housing at an affordable price,” Songer said. “(For) non-students looking for rentals downtown, it’s hard to find good housing at a reasonable rate even for single-family homes.”
To adapt, downtown is looking up. Prices have followed a vaulting skyline as cheaper options continue to ebb. Since a Fair Housing Analysis was conducted in 1991, some problems cited then — most notably a lack of affordable housing — still persist.
But the borough has also taken several steps to alleviate the pressure. In 1993, it enacted the Local Fair Housing Ordinance to protect buyers from discriminatory practices. A homebuyer program, established two years later, provided financial assistance to low-, moderate- and middle-income families.
And according to the 2015 Fair Housing Analysis, the borough helped to fund construction on 183 affordable rental units for low- and moderate-income families, the elderly and individuals with disabilities.
“There’s a lot of everyday people who would have a hard time affording a rental downtown,” Songer said. “The borough is a big player in trying to provide affordable housing, and I’m being told there is demand for affordable housing and there isn’t enough supply.”
The East Beaver Avenue project triggers the borough’s inclusionary housing ordinance, Messner said. Under the policy, the project will include three affordable units for households that meet the income requirements.
“We are a very expensive rental market as well as purchase market, so we are trying to find housing for households that have an income of 120 percent area median income or less,” she said.
According to the U.S. Census Bureau, the median gross rent in State College was $947, higher than both Centre County’s and the national median. In 2004, the average rent for a two-bedroom unit in the State College market was $1,150, the Department of Housing and Urban Development reported. In 2011, that was about the same price for a one-bedroom rental.
About a third of renter households could afford the established rate in 2004, HUD estimated.
LeClear said, for a four-person household, 120 percent of the area median income for Centre County is $88,320. Another income target to meet the affordable housing requirements is 80 percent AMI, or $58,900 for a four-person household.
“That’s a four-person household, so for a one-person household that 80 percent AMI number is $41,250 and a 120 percent AMI household is $61,920,” LeClear said. “Those numbers are relatively high compared to other jurisdictions. It just shows you how squeezed we are from an affordability standpoint in the region.”
Across the country, similar hikes — especially in the Northeast and on the West Coast — have accreted in recent years. According to HUD, the median asking rent for unfurnished rentals was $1,394 in 2015 — an about $300 increase from 2010.
With demand ineluctable, supply has followed suit. The proposed high-rise for East Beaver Avenue, Songer said, may help relieve some of that burden. But he added more than additional units are needed to ensure the borough remains not only a good place to work, but also an affordable place to live.
“Everybody has to come to the table,” he said. “If more affordable housing was built, could it be rented? I think the answer would be a certain yes.”