Study: Ottawa’s downtown has few flaws, great potential

Work has already begun on filling demand for upper-level housing

Michael Stumpf, principal owner of Place Dynamics of New Berlin, Wis., (standing) fields a question from Ottawa commissioners Tom Ganiere (from left) and Brent Barron during Thursday's public meeting regarding a feasibility study on downtown upper-level residences.

Growth of Ottawa is being impeded by its housing market, but there’s reason for optimism.

That was the conclusion of a study of downtown housing and short-term rental feasibility performed by Place Dynamics and revealed at a public meeting at Ottawa City Hall on Thursday night.

“You say to yourself, ‘This is a downtown that has turned a corner.’”

—  Michael Stumpf, principal owner of Place Dynamics

The study, paid for by a Department of Commerce and Economic Opportunity RISE (Research Illinois to Spur Economic Recovery) Grant, showed Ottawa has several flaws in its housing development, but is deemed “still ahead of the game” by the study company’s leader.

Michael Stumpf, principal owner of Place Dynamics of New Berlin, Wisconsin, has been familiar with the Ottawa/Starved Rock State Park area for years and agrees Ottawa could be growing even faster than it is if not for a lack of existing short-term and quality long-term rentals in the downtown area.

“As an officer in the U.S. Army Reserve and National Guard, I drove through the area often and back in the day, it was pretty rough,” Stumpf said. “This was a depressed area … but now I’m impressed. There has been a lot of very positive change.

“You look at the canaries that show you where an area is headed and you see quality restaurants, the coffee shops, the bakeries, then you look at the buildings being rehabbed and how people are using the exposed brick and the quality units they’re putting up, you say to yourself, ‘This is a downtown that has turned a corner.’

“It is a very viable area. There’s a lot of opportunity here.”

Stumpf added he would love to do an economic plan that could include an “infill” of vacant lots with multi-use structures.

The study refers to 33 vacant upper-level spaces in the downtown area, of which 22 are candidates for renovation. The others have structural limitations that would make renovations cost prohibitive.

It suggests having those developed could increase the economic impact to the city from $9.437 million to $12.682 million over the next five years.

The flaws in the downtown area and housing in general in Ottawa encompass:

A slow pace of new construction, not unusual for a rural area not yet fully recovered from the effects of the COVID pandemic.

Few homes for sale, and that existing older housing does not meet the expectations of younger, older and small household buyers.

Potential homebuyers are being priced out of the market because of the scarcity.

The study showed there is a demand for more high-quality rentals, ones for example provides increased power needs for younger renters and fewer stairs for older ones, that could prove more lucrative for property owners, should they decided to renovate them.

Ottawa Mayor Robb Hasty noted several buildings have already been purchased with the intent to develop them with upstairs residences and that plans for downtown open lots – like the so-called “hole in the ground” at 205-207 W. Main St., where new construction is taking place – are reason for optimism.

“I do believe there is a lot of potential here and that we have a lot of people here in the community that see that potential,” Hasty said. “It’s no secret that I myself am a downtown resident, so obviously it’s something that I see value in. I see it as being a part of our larger plan to develop the riverfront, and the more entertainment we bring to the downtown, the more people will want to be downtown.”

Ottawa’s Economic and Community Development Director Dave Noble agreed some are already “seeing the opportunity and jumping on it,” creating what he believe more renovations than the city’s seen in the previous 20 or 30 years.

He added there is the potential for the rental property above a downtown retail store could provide the building owner more revenue than the retail store itself.

“But in some cases, they leave the residential areas empty. You’d think that doesn’t make much sense,” Noble said. “Some just don’t want to deal with it … We’re going to look to see if there are groups they could partner with who will handle the day-to-day. The owner could renovate it, they could manage it and they can still make the income. There are a lot of ways to put it together.”