FARGO — "A bit unprecedented" is how Jim Gilmour describes the number of apartments recently built and currently under construction in downtown Fargo.
"We've seen a lot of apartments in the last five years," said Gilmour, the city's director of strategic planning. "As the downtown improves, it's become a more attractive place for people to live."
Many see the new construction as a positive, while others have concerns that gentrification could price out low-income renters. For better or worse, the building boom is changing the landscape and look of downtown.
In some areas, the contrast between luxurious and austere is striking.
On Fourth Avenue North, the emergency food pantry is now kitty-corner to a new apartment, 300 Lime, boasting a complimentary espresso bar, yoga studio and pet spa. About a block west, the renovated Woodrow Wilson High School offers quartz countertops and oversized closets, with rent starting at $890 up to $1,590 per month. The apartment towers over the few aging single family homes left in the immediate neighborhood.
In the past five years, a total of more than 800 apartment units have been built or are planned in the downtowns of Fargo and Moorhead, city permit records show.
In the nearly 30 years Clayton Nelson has lived in downtown Fargo, he's never seen so many new apartments pop up.
The 71-year-old and his friend, Forest Herness, 75, of Moorhead, sat on a turquoise bench along Broadway as Nelson used his cane to point north and south at all the ongoing construction.
Across the street from the Graver Inn apartments, where Nelson has lived for 27 years, is Roberts Commons. Known as RoCo, it's one of a dozen new apartments recently built downtown. Unlike his low-income apartment, Nelson said the new ones like RoCo are "spendy."
"It's ridiculous what they pay for these things. But people like to live downtown," Nelson said. "They don't have to scoop snow or mow the lawn."
Herness thinks the developments are an improvement. "It keeps the kids downtown to spend money. If they keep moving south or west, pretty soon downtown would die," he said. "The young people aren't buying houses. They want to turn the (apartment) key and go."
Brittany Zimmerman, owner of Affairs by Brittany Bridal in downtown Fargo, was one of the first tenants to move into RoCo in May 2018, and she's already signed a lease to move into the Dillard apartments once they open in August.
"I live and work downtown, so it's nice not having to commute," she said. "I really like it down here. They take care of everything."
Zimmerman pays about $2,000 a month for her two-bedroom, two-bathroom unit. She said the rent is "totally reasonable for what you get out of it." Despite her rent being higher than a previous mortgage, she said it's all inclusive and everything is brand new.
Building across the metro area
Citywide, Fargo has added 140 new multi-family buildings in the past five years. That includes owner-occupied units, like condos and row houses, plus an abundance of apartments, many of which are downtown.
West Fargo and Moorhead are seeing similar growth in apartments. In the past five years, 23 new apartment buildings were constructed in West Fargo — that’s a total of about 770 units, according to city permit records.
Moorhead has set a goal of adding 500 units to its downtown over five years. Derrick LaPoint, president and CEO of Downtown Moorhead Inc., said the city is halfway to that goal after it was announced last year.
Citywide, Moorhead has added 40 apartment buildings in the past five years, amounting to more than 900 units. Nine of those buildings, a total of about 280 units, are in downtown.
LaPoint said when he started his job, many people told him Moorhead's downtown needed restaurants and hotels.
"The one glaring thing to me was we needed people to support what we already have, let alone to attract anything new," he said. "We need more people, whether that was apartments or condos or senior living."
Until recent developments kicked off, LaPoint said along Center Avenue from the Red River all the way to Dilworth there was just one housing unit. Now, Simon Warehouse is being renovated to offer 65 apartment units.
"It's changing a lot with these projects," he said. "We know we can't be downtown Fargo, nor do we want to be. We’re focusing on this neighborhood approach."
Other apartment buildings are on the horizon for Moorhead.
Bolig Square, with 30 apartment units overlooking the Red River, is planned for the corner of Fourth Street and Center Avenue. The four-story building will include commercial space — a mixed-use approach the developer, EPIC Companies of West Fargo, brought to the corner of Eighth Street and Main Avenue with the Block E project.
Enough affordable housing?
Of the apartments recently built or currently under construction in downtown Fargo, one is being advertised as affordable, which is generally defined as rent no higher than 30% of a household's income.
The Edge Artist Flats, 1321 5th Ave. N., will offer below-market rent for its 42 units, with some as low as $100 a month. The highest rent would be $922, depending on renter income.
Gilmour said 15 years ago, most apartments downtown were in the low-income range, so the city set out to change that. "One of the goals of the city is to bring more housing downtown at market rates. That's what's being achieved," he said.
There are about 3,000 existing apartment units downtown, Gilmour said, and 600 of those are subsidized for low-income households.
Apartment units that rent for around $700 a month are considered affordable for most Fargo residents, he said. Units in the affordable range account for about 50% of all existing units downtown, he added.
City Commissioner Dave Piepkorn knows affordable apartments are hard to come by. When searching for places with his son a few years ago, he said rent for most one-bedrooms was around $1,000 a month.
Piepkorn said it's important to have affordable housing, but there is a demand for high-end living. City Center Lofts, 404 4th Ave. N., won't be ready for tenants until later this year, but already he said two floors of condos are sold.
"We’re just a growing community, and you have to provide housing the people want," Piepkorn said.
City Commissioner John Strand said there is a growing concern of gentrification with all this downtown development.
"I've had a difficult time embracing some of our (tax) incentives we have in place for apartments in downtown when I know the concern of gentrification going on and people being pushed out to other edges of town," he said.
Strand has been especially vocal about rising rent. He said service industry workers, for example, should be able to live and work downtown. He said it's critical to "keep a handle on growth" and not have the balance tip too far in favor of developers than residents.
Creating more workforce housing and making homeownership more attainable for residents is what Strand wants to see included in this growth.
Kilbourne Group President Mike Allmendinger said downtown Fargo is going through a gentrification process. But he said Kilbourne apartments are built on former surface parking lots, so the projects aren't getting rid of any existing, affordable housing.
Kilbourne plans to make 106 apartment units available this year in downtown. In 2020, the company plans to add another 160 units and in 2021 another 150 units, he said.
Asked if the higher rent of Kilbourne housing could raise the rents of other apartments downtown, Allmendinger said that with the availability of more units hopefully there is a place for everyone.
“We have families living in our projects, and we have empty nesters. We have young urban professionals. There’s quite a diverse group of people that are living in our projects in downtown Fargo – of income levels and age group," he said.
Though Kilbourne has partnered with affordable housing developers, including selling land for the Artist Edge Flats, Allmendinger said his company focuses on providing market-rate housing. This is due to higher construction costs downtown driving the price point.
RoCo, Block 9, Dillard, Bostad and Woodrow Wilson are all Kilbourne projects, though Allmendinger noted that Kilbourne is not the only developer doing business downtown.
Some developers are working on affordable housing, and the experts in that area are Fargo Housing Authority and Beyond Shelter. Allmendinger said Kilbourne doesn't want to compete with those groups applying for limited affordable housing tax credits.
“We understand the change that’s occurring," he said. "There’s more change happening in downtown Fargo than other neighborhoods."