The concept of city resurgence isn't just talk. The past decade saw an average of about 250,000 permits issued each year for new housing units in central cities, representing more than 20 percent of the total residential permits issued nationwide. Most of the permits issued within core cities were for single-family development.

"Most downtowns have the basic ingredients: old warehouse districts that are sitting empty; all the necessary infrastructure, including roads, sidewalks, lighting, sewers, electricity, and water; and easy connection to mass transit," says Robert Lang, director of urban and metropolitan research for the Fannie Mae Foundation.

With the average number of households growing by 6 percent in central cities each year, there is increasing demand for more quality residential units downtown, says Gary Garczynski, CEO of National Capital Land of Woodbridge, Va., and the NAHB president-elect.

Downtown desire

Census data show that downtowns attract younger residents. The median age of households in central cities was 44 in 1997, compared to 47 in the suburbs and 49 in non-metropolitan areas. While there is some indication that the aging baby boomers are leading a return to the central cities, the number of retirees moving downtown currently is statistically insignificant, the census found.

Younger people might be more attracted to downtown living simply because there are more rental properties in inner cities. A recent study found that 51 percent of occupied housing stock in central cities is rental, compared to 27 percent in suburbs and 25 percent in non-metropolitan areas.

"But the demand does not seem to be for more rental housing, but, in fact, for more homes for sale," Lang says. "What people are looking for is good-sized, well-built multifamily units mostly, but there also is some demand for single-family housing downtown, too."

Looking ahead

If cities decide to focus on increasing residential districts, they can be successful, says Dayton, Ohio, Mayor Mike Turner. "Most inner cities have good mass transit, nearby entertainment, good shopping, and cultural attractions like museums, theaters, and such," Turner says. "City governments just have to learn to sell the concept of building downtown to home builders. For instance, we have a development of condominiums that will sell from $300,000 to a million that will be connected to the new performing arts center we are building downtown. That's the kind of innovation you need to bring people back downtown to live."

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