The Tulsa Forum by TulsaNow

The Mayo420 apts are giving tours during Mayfest.
They were a bit bummed that I wasn't a prospective tenant, but were more than happy to show me the digs.    I was impressed.  I took a look at the two bedroom.  Very nice.   I was under the impression these were to be more "low end".   Not the case.

Awesome! Do you know the hours? I doubt they'll be giving tours until 11 p.m. and I want to go on a few!

I went through the tour today at lunch. She made me wear a hard hat, then took us up to the eighth floor to a 2 bedroom, 1450 square foot apartment. She also said they had 600 square foot units and 2,000 square foot apartments as well.

The living room was nice size and had a view to the east. I could still make out the people at Mayfest down below, but was high enough to get above the parking garages to see other buildings. I liked that they were keeping enough of the historical stuff to qualify for the tax breaks, but were supplementing where necessary. A good example were to keep the windows in the bedrooms facing north, but adding a storm window on the inside.

They were impressive and the prices were affordable in my opinion at $1.25 a foot. If I can find a way to get my kids into military school and sell my house in east Tulsa, I am in.

I saw a 600(+/-) square foot unit yesterday, and I too was very impressed. She said they'd be there until around 7:30 tonight and tomorrow, and would leave earlier on Sunday.  Everyone should go through the building!

Sounds pretty nice.  Great if you make some money and don't need any space.  Or if you do need moderate space and make a crap load of money :P

Took a tour. Nice place, but pricey!

I think the smallest ones were $900/month, and those have windows facing another building that's five feet away, so it's almost like having no windows. Plus you still have to pay for parking, which isn't cheap.

I thought these were gonna be affordable? Don't see many young professionals being able to afford many of the rents on these new downtown living options, not when there are similarly sized places for half the price south of downtown, brookside, and everywhere else in town. And those places probably have windows to the outside.

Affordable is in the eye of the beholder.  I've visited friends and relatives living in St. Louis, Phila, and Boston living in "affordable" (at least 2 incomes) housing.  Not necessarily dumps but certainly not newly renovated either.

The pricing doesn't sound too terrible for living downtown, but to put it in perspective, when I moved out of an apartment complex in south Tulsa a little over a year ago, we moved because they were raising the rent on our 1200sqft apartment to $900 a month. It was one of the newer places, too. When we moved in in '04 or '05 we were paying $650 a month.

It's a chicken and egg situation.  So far downtown Tulsa doesn't have all the things that make living downtown affordable with the higher rents. I am thinking of being without a car, walkable, effective public transit, etc.  I hope someone can afford the first steps to enable the miracle for those that want an affordable downtown.  I contend that affordable housing is what's left over from a long time ago before it gets gentrified.  A lot of older cities still have that.  I don't think it exists so much in Tulsa which is part of our problem.

The $900 ones are small one bedrooms, like 600 SF or something like that. Those prices aren't gonna draw the kind of people who'll help bring downtown to life. Not when there are similar size apts for $500 at 18th/Boston and Brookside.

That's really true.  Downtown living is typically not very affordable.  Back when I was in graduate school, I lived in downtown Indianapolis in a roughly 450 sq foot apartment where my rent was $730 a month ($40 of which was for a secure parking spot in the garage - I didn't need to drive much, but I wanted my car in a secure place where I didn't have to worry about it and I also didn't have to worry about trying to find a parking spot on the street when I did drive).  Anyway, the apartment was truly not affordable for me, since I only had an $800 a month stipend (after taxes) , but I was only two blocks from school and a block from where I did my graduate work.  There is a grocery store downtown, but I mostly shopped in the outskirts because it was a lot cheaper.  So, what's my point?  Well, I think there are probably some crazy people out there who are/were like me and will be willing to shell out a lot of money for their habitation just to be downtown. . . at least I sure hope so.  I would even strongly consider moving downtown as long as I could buy and have some sort of outside space.   

Bingo. Twentysomethings aren't able to afford custom outfitted "lofts" (luxury apartments, really). They need unimproved warehouse space and upper stories of old retail buildings to turn into genuine lofts. They need old four-story apartment buildings and ancient transient hotels of the sort that were abundant in Tulsa before urban renewal. One of the unfortunate outcomes of the new "loft" construction north of Cherry Street was the clearance of spaces that were affordable by the young people we say we want to attract and retain, affordable abodes within walking distance of jobs, recreation, and transportation.

Most of what I saw in "Urban Renewal" in Phila, PA was teardown without rebuild.   There may have been some exceptions but they were not the norm.

Yeah, you have to be pretty loaded to waste $2,000 a month on an apartment when you could pay off a similar sized house in 6 or 7 years.

Seems there are plenty of people that are willing to pay for things like Hummers instead of getting something practical.  Not all descisions are based on  "most affordable/best investment" scenarios. A lot of people would rather die and go to heck than live in a stand alone house or typical "suburban style" apartment complex. I have a friend who has always either lived in a highrise here in Tulsa or in another city.  Imagining him living in a house.... couldnt picture it lol.  Would not fit his personaltity at all.   

You have to be pretty loaded  well off financially to spend $2000/mo on anything.

We all have different priorities and desires.  If someone wants to pay more to live downtown, that's fine with me.  I have some toys that someone else would ask why I would ever spend so much money on "that".

Absolutely. The word "waste" is also tricky. If you see your home as an investment, well, that time may be passing by. There are probably better investments. I have no issue with people who consider their home for its utilitarian value or its potential for enjoyment rather than as an investment. That is not a waste.

That said, until there is more utility value downtown, it remains rather expensive to live there. They need a grocery, a dry cleaners, good dependable mass transit, etc. Its happening though and I really like downtown.

I can't fathom living in one of the cheaper apartments there, with the windows facing another building that's five feet away. Sounds like a nightmare to never be able to see people, activity or even the weather outside your window.

Early this morning the fog was so thick downtown I couldn't see any of the tall buildings. If you lived at those $900 apartments at the Mayo, you wouldn't even know there was fog. Seems prison-like.

There isn't much gray area..  If you are talking about living in one of these places for 1 year.  Then maybe.  But you are in theory going to be living in some sort of shelter you are paying for, for about 50 or 60 years.

A $250,000 mortgage over 30 years is about $1500 a month.  Now lets just say that the house is worth $0 at the end of 30 years.  I will also say that it costs $500 a month extra to own a home each month (taxes,insurance).  Then you pay $2000 a month on your apartment for 30 years.  You spent the same amount of money (assuming that they don't raise your rent in 30 years *yeah right*.  You are guaranteed a value of $0 and you still have to pay $2000+ a year from then on.

You buy a $165,000 house you are going to be saving a lot more and have about another $500 a month to *invest* of your money.

But you do get to live right upstairs from a ton of businesses that are open M-F 10am-3pm!

This isn't really a matter of getting a return on your investment.  It's buying a lifestyle that some people want.  It's not for me but who am I to try to say they are wrong or wasteful.  I don't drink coffee so I could say it's a waste of money to buy coffee at Starbucks.  I do like good beer and don't mind spending $8-$10/six pack to get good flavor.  Some would say it's a waste of money to buy anything more expensive that MillerCoorsBud Light.   Living downtown in an expensive (in my opinion) place is the same thing on a grander scale.

My original statement was that you would have to be pretty loaded to drop $2k a month into nothing.  I didn't say there weren't people who could/would want to do it.  Hopefully maybe some of them might even be under 40.

You buy a $165,000 house and you'll be paying about $1400 a month after taxes, insurance, and everything. And it won't be nearly as nice as the newly renovated apartment. At least compare apples to apples, eh?

Except you will never own that apartment.  Assuming you bought in a stable area and took care of your property: when you pay off the house, it's yours and it will have appreciated in value over the 30 years.  The apartment will still belong 100% to your landlord.

Is $900 really the cheapest apartment they have? Seems rather high. Tulsa isn't Boston or NYC or Chicago. There just isn't enough of a convenience factor to warrant that price right now. I guess I'll keep my $625/month nice apartment in Riverview for now.

I would like to live downtown but I would want a condo that I owned and it would have to be big enough to hold all the stuff in my 3,000+ sq foot house and still be affordable.  Not gonna happen.

It all depends on the length of the loan.  You can take a 50 year mortgage out on the house.  The cost all depends on how long the loan is and the interest rate.  That will lower your monthly cost.  You also have to assume that your rent will go up with inflation.

Even if your house is worth $0 after 30 years you still can live in it and only pay taxes.

My view on the rent is that this was a historical remodel with original doors, some flooring, original elevator cabs, etc. Based on that, rent rates should be a bit on the high side. Better to set your expected rate and have a few vacancies that set too low and spend years trying to get them up. I was really surprised that the rates did not include electric and/or at least one parking space in the adjacent garage though.

If I lived there I could theoretically go down to one car and have lower utility costs which could save a few hundred a month. If they open some non-historical remodels at $1psf or lower, I might seriously consider it.

Did anyone who went on a tour take any pictures?  If so please post them.  These lofts will be a great addition to downtown.  And I agree, it would be nice to see one of those older mostly vacant buildings (ahem, Tulsa Club) turned into raw space for condos that you can buy.  I know I would be very interested in something like that.

David Schutler posted one on facebook:
http://www.facebook.com/photo.php?pid=3824203&op=1&o=global&view=global&subj=1430046218&id=608609419

There is more and more groundswell against the Washington politician & Madison Ave ad men created myth that owning your home is the "Great American Dream".

According to Money Magazine the 2009 median price for a home in Tulsa was $111k.  Over 30 years at 6% interest you would pay $240k in principal and interest.  Looking at it from a historical perspective, if you purchased a home in Tulsa for $42k in 1980 assuming it kept up with inflation it would be worth $111k today, or the median home price, a "gain" of $68k.  Now, let's assume you put 20% down on that home, secured a mortgage for $33k at 13.20% (the cost of a mortgage in May 1980), made every payment for 30 years and never refinanced and made necessary repairs/improvements to keep in the same condition as at purchase.  Total principal & interest?  $133k or $22k more than what the inflation adjusted value would be.  That amount doesn't include the cost to buy, sell, taxes, insurance or what the basic necessary repairs/improvements would be.  So you'd be in the "hole" at payoff and need to "pay yourself rent" for the next 5-6 ($320/mo = former mortgage payment) years to be back to even.

Now, if you say the house appreciates at 5% a year (a fair Tulsa MSA appreciation) for 30 years your home would be worth $182k in 2010.  At that point you would be pretty close to break even depending upon the amount of maintenance the home would have required.

As a personal example, I purchased home around TU in 2004 for $89k.  I sold it last year for $126k.  I had made about $10k in improvements beyond the standard upkeep.  Our mortgage was at 6.65%, at closing I recieved a nice check, but then I looked at the statement and saw that I had paid more in interest in those 5 years than I was was making after improvements, my original buying fees & my selling fees.

Living in a rented apartment is a much less risky (no repair budget, meager renters insurance) and in some ways financially savvy way to live.  Major urban areas all over the world have a much lower home ownership % than Tulsa.  NYC had record homeownership levels in 2007 and still only 1/3 of units were owner occupied.  In Tulsa roughly 60-70% of all housing units are owner occupied.  Last I checked personal wealth in NYC was a bit higher than Tulsa.  Obviously there are other conditions that attribute to that, but the point it renting seems to be good for 2/3 of the residents.

As Americans (especially in middle America, where land is cheap) we've allowed the Realtors & home builders coalitions (and politicians with tax credits, deductions & manipulating interest rates) to shape our mindset.

Sorry for the rant, I'm a homeowner myself and think owning a home is great, but many Americans are not fully aware of the cost of owning a home.  As part of the renaissance of our downtown we need to show people that renting a downtown unit is not financial suicide.  As a renter you have much more flexibility to change careers, relationships, etc.

If owning real estate is a bad deal, then 2/3 of NYC real estate would not be owned by investors who are renting out the property.  I suspect they aren't doing it for long term loss.

I agree rental properties have their place as does ownership.  There are good reasons to rent as you mentioned: if someone anticipates their job or life circumstances will change in the near future, or if they don't want maintenance issues.  Some people can't buy because of poor credit or they don't have enough cash for a down payment.  Perhaps we would not have been through the ugly burst of the housing bubble if the government hadn't espoused the notion that everyone should have a shot at the dream of home ownership.

One of the bigger leaps the example you cited makes is assuming anyone keeps a home to the full term of their mortgage,  that no one pays down their mortgage early by making extra principal payments, nor that the owner didn't refinance to a lower interest rate, or cash out equity at one point which they invested into a business or other substantial investment which has made many returns, or invested in a remodel which further increased the value of the home.  The example also doesn't take into account that the gain in equity could have been cashed out at some point via sale and that equity ploughed into a larger home which also appreciated, nor does it take into account that someone might have paid that house off in 15 years, bought another house and they've been collecting rent on the original house for the past 15 years.

I realize not everyone falls into the perfect scenario.  From a static example, I get the point the article is making, and if someone could rent for 30 years at a rate which allowed them to save money to an amount equal to what they would have in home equity, then rent isn't such a bad investment.  However, after the 360th payment (assuming no re-fi's along the way), the homeowner is done paying.  With rent, you continue to pay rent for another 20 or 30 years or how ever much longer you live.

Could a moderator split off the to rent or own debate?

Are there any new condo's downtown going in?

I went on this tour during Mayfest. We only toured one room and it was Suite 803.
http://www.mayo420.com/floorplan803.html
It was much more spacious than I had originally thought. The living area and kitchen were loaded with windows and lit up the place nicely. The bedrooms aren't very big but that may have been due to the king-sized beds they placed in each room. Overall, it was nice, but I'm just not interested. Like what others have said, why pay so much for something you'll never own...

You can also pay off your credit card with minimum payments...  nobody thinks that's a good idea.. why is it OK on the biggest debt anyone takes on?

I've worked very hard to put more than the minimum towards our home's principal..   Looks like I'm going to end up paying a total of $55K in interest for the life of my median Tulsa home's mortgage.  Not too shabby.. and I'm aware most can't do this.   But pretending interest is the same as rent (like rent, it's what the homeowner is throwing away).. and figuring in appreciation  ( a meager amount for our average Tulsa home )..    When the house gets payed off, our "rent" will have averaged $193/mo  ($480 without appreciation)...  And the average will continue to go down every month I'm no longer paying interest.

I've obviously payed more than $193/mo... but I consider the rest money saved/invested/put-away/etc.

Owning is right for some people and it's not right for others. Some people prefer not to take the risk of losing money on the house, for example. Some prefer to let others worry about maintenance issues.

Owning a house may turn out to be a great deal if you manage to find one without any hidden issues that need fixing and time the market correctly. It also might turn out to be a terrible deal.

During the bubble, in a lot of areas, rent was cheap compared to a mortgage. Needless to say that's when you don't want to be owning. When rent is significantly more expensive than a mortgage, it may be time to think about buying a house. It is by no means always best to own, especially given how illiquid houses can be at times.

I took a tour of the two model units last night and was very impressed.  They are the two corner units along Main on the 8th floor.  It was too dark to take pics of the views but they are very nice.  Both are 2 bedroom/2 bath and rent for $1800/month.  Here is a pic of the kitchen:
(http://img.photobucket.com/albums/v316/bg918/Picture022.jpg)

How are they doing renting this out?  Is it almost full?

They finally took down that scaffolding that created a creepy (esp. at night) sidewalk tunnel. For joy!!!