Despite the sluggish housing market, which resulted in the inclusion of a hotel in the development originally geared toward permanent residents, the city is confident urban housing is the right choice for East Lansing. Tim Dempsey, East Lansing’s community and economic development administrator, said the slow housing market isn’t permanent.

But given the slow market, some residents are skeptical that the market for condominiums and townhomes isn’t as strong as the city thinks.

Ann Nichols, president of the Oakwood Historical District Neighborhood Association — which includes one of the city’s proposed developments — is critical of the city’s development plans.

“The Abood company wants to put a hotel where condos were supposed to go because they’re not selling,” Nichols said. “I have very grave doubts about the ability to sell the condos they’re building in West Village and they want to build at City Center II.”

After examining the amount of urban housing available in East Lansing in 2004, city officials found there wasn’t enough housing to satisfy the nation’s two largest housing segments: empty nesters and buyers younger than 30.

Together, these groups make up more than half of the nation’s population, said Laurie Volk, vice president of Zimmerman Volk Associates, a New Jersey-based real estate market research firm that specializes in urban housing.

“There are fewer and fewer traditional family households,” Volk said. “What people are finding is that the population is interested in urban housing choices that provide close access to work and shopping opportunities.”

The housing crisis hasn’t had a strong effect on Albert Place Condominiums, an urban housing development being built at Albert Avenue and Bailey Street.

Doug Cron, associate broker of Cron Management, said he attributes interest in the project, which is expected to be completed by summer, to its location. Five of the development’s 36 units have sold within three weeks of going on sale.

“We’re selling things and other people aren’t,” Cron said. “If you were out in Okemos with this kind of project, I don’t think you would have that type of interest.”

Some of that demand can be traced to MSU and the amount of new faculty the university is hiring, said Steve Webster, MSU’s vice president for governmental affairs.

Five years ago, 60 percent of MSU faculty was nearing retirement age, and the last three years have seen the number of faculty rise, he said. And from 2005 to 2007, the number of tenure-system faculty has grown by 62.

“They will be coming from places around the country and around the globe that already have housing options like the ones East Lansing is trying to create,” Webster said. “They will be looking for lower maintenance urban living and at this point in time that housing option doesn’t exist.”

Because East Lansing is home to a major university, it’s more likely to see growth in high-tech jobs than many other cities, said Jeff Smith, a senior analyst for Anderson Economic Group, an East Lansing based economic research group.

Since many young professionals don’t yet have mortgages, they haven’t been hurt as badly by the housing crises as other groups, Smith said.