Adam Ducker, director of urban real estate for RCLCO, speaking at a ULI event in Kansas City.
Kansas City’s suburbs have fueled population growth in the metropolitan area over the last 70 years, a post–World War II pattern common across most large cities in the United States, and it does not appear that expansion is slowing anytime soon, even as parts of Kansas City’s urban core are also enjoying resurgence, said panelists at a recent ULI event in Overland Park, Kansas.
“There may be a national conversation about whether the suburbs are alive and well, but it’s not a local one,” said Frank Lenk, director of research services for the Mid-America Regional Council, an organization that promotes cooperation among nine counties of about 2.1 million people. “While Kansas City is seeing urban growth, we still have areas in decline that may mitigate over time but not reverse entirely. That challenge is more urban than suburban.”
Lenk made the comments at a ULI Kansas City event convened in January to discuss Kansas City’s suburbs and how they stacked up against other cities identified in “Housing in the Evolving American Suburb,” a study conducted by ULI’s Terwilliger Center for Housing and RCLCO (formerly Robert Charles Lesser & Co.), a strategic adviser for property planning, development, and investment. Appropriately, the event was held at the recently opened Johnson County Arts & Heritage Center, which includes a history museum celebrating local suburbia and is set in a renovated bowling alley and ice skating rink in Overland Park, Kansas.
According to Adam Ducker, a panelist at the event and a managing director with Bethesda, Maryland–based RCLCO, 78 percent of Kansas City’s population lived in the suburbs in 2015, which is comparable with the national average. Only 9.4 percent lived in the city’s urban areas, which was about 7 percentage points below the national average. Nearly 75 percent of Kansas City’s minority population lived in the suburbs in 2015, as did a large majority of millennials, two trends that were also on par with national trends. Yet while Kansas City’s urban population fell for decades, from 2010 to 2015 it grew an average of 2.1 percent annually, about 70 basis points shy of growth in the surrounding suburbs.
“From post–World War II through 2010, suburbs were growing at the expense of urban places,” Ducker said. “But just in the last five to seven years, Kansas City has gone through a transition, and now we have a paradigm in which each area is growing at nearly the same rate.”
Nationally, the ability to buy large single-family homes, to enjoy convenient highway access, and to get access to better schools are among the reasons that people move to the suburbs, according to the study. But demographic changes have begun to fuel demand for different types of suburban neighborhoods. While millennials have been slower than previous generations to form households, they are exhibiting a preference for urban settings—shopping, restaurants, and recreational activities a walk away. In addition, an increasing number of empty nesters who occupy single-family homes will be looking for alternative housing in the coming years, Ducker said.
“We’ve been good at building single-family homes in America, and in the last few years we’ve gotten good at mid-rise mixed use,” he explained. “But we’re missing ‘middle-housing’ developments that provide a diversity of homes appropriate for different ages, lifestyles, and price ranges.”
In Kansas City, suburban developers are beginning to address the changes, but often they need incentives for public improvements, and resistance from neighbors and local governments frequently thwarts those efforts, Lenk said. That is particularly true concerning mixed-use redevelopments that threaten to change the character of infill neighborhoods.
“There are unique development opportunities in the suburbs, and that poses a promise and a problem because they’re hard to get done at the right scale and they take a lot of negotiation,” he said. “We’re doing a good job, but we may not get the critical mass of those projects that we’d like.”
Among other developers, Kansas City–based Block Real Estate Services (BRES) is pursuing developments to meet changing housing and community tastes along Interstate 435 in western and southern Johnson County. The highway rings the city and is the focus of developers of all property types, said Aaron Mesmer, a specialist in acquisitions and investment sales for the development and brokerage firm, who was also a panelist.
In 2015 and 2016, BRES opened 582 luxury units in two large apartment communities at Lenexa City Center near the highway. Lenexa has poured tens of millions of dollars into infrastructure improvements to help turn approximately 200 acres (81 ha) into a downtown, which at buildout will total 3 million square feet (279,000 sq m). Although the Great Recession slowed Lenexa City Center’s progress, a handful of developers have added apartments, retail, lodging, offices, and civic uses in the district over the past few years. BRES wanted to tap into the energy of City Center as well as nearby Shawnee Mission Park, a 1,600-acre (647 ha) recreational district that features boating, fishing, horseback riding, mountain bike trails, and other activities, Mesmer said.
About six miles (9.6 km) to the southeast, Block is developing the $450 million CityPlace mixed-use community on 90 acres (36 ha) near the College Boulevard office corridor parallel to I-435. The project will include 600,250 square feet (55,700 sq m) of office space, nearly 1,400 apartments, a 116-unit senior living facility, and 40,000 square feet (3,700 sq m) of retail space. A fire sparked by a welding torch during construction last year destroyed two buildings of the five-building, 344-unit Royale apartment project, setting back development for a couple of months.
Last summer, the company began laying the groundwork for a $30 million, 120,000-square-foot (11,100 sq m) office building. Its Apex mixed-use building is also under development and will feature ground-floor retail in a 407-unit luxury apartment building offering studios, townhouses, and live/work units among its various floor plans. City Place also connects to an extensive trail system that traverses Johnson County and links to trails in Kansas City, Missouri.
“We’re definitely busy in both the suburbs and the urban core of the city,” Mesmer said. “But in the suburbs, our focus has been to find places adjacent to or a part of a very active environment so that we’re not just building something in a cornfield.”