The Kings County Board of Supervisors has approved an agreement to hire Empire Economics to assess the market potential and risk of the planned community in southeast Kings County dubbed Quay Valley.

The consultant vows it has no financial relationship to the developer. The project was first submitted to the county back in February.

The developer will pay the $55,000 for the study approved by the supervisors Oct. 4 to be completed by Empire in seven weeks with a draft and a final report submitted by year’s end.

The presentation notes that “the California housing market recovery has recently experienced a significant shift, compared to historical patterns, as millennials, due to their unique cultural and financial conditions, have opted to reside in apartments within urbanized areas, rather than seeking traditional single-family homes in suburban/rural areas. Consequently, the significantly higher demand for apartments in urbanized areas has effectively reduced, to a large degree, the traditional demand for single-family homes in the suburban/rural areas. Accordingly, Empire will perform a systematic analysis of how these recent shifts from prior development patterns have impacted the urbanized areas of San Francisco and Los Angeles as compared to the suburban/rural areas of the Central Valley.”

“Projects with relatively high residual land values have a cushion that protects them from economic and real estate downturns. By comparison, projects with minimal residual land values become economically infeasible when downturns occur.”

Empire says it will perform an analysis of the residual value of product types in Kings County during the 2000 to 2016 time frame, which encompasses both a housing market bubble followed by an implosion of the real estate market. Changes in the market are likely to affect the feasibility of Quay Valley, suggests the consultant.

There are expected to be 25,906 residential units and almost 21 million square feet of nonresidential products in Quay Valley, and so it has a long-term development horizon and is likely to be subject to the various phases of the real estate cycle, according to the consultant.