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City officials aim to alleviate local housing shortage

Published 4/2/2012 in Progress

By ANGIE HAFLICH

ahaflich@gctelegram.com

The housing dilemma, or what some call the housing crisis, has been in the spotlight for some time now. It has prompted city officials to try to come up with various incentive plans aimed at spurring development. Some of these plans have gone by the wayside, but in some cases, the conversation itself has spurred people into action.

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Laurie Sisk/Telegram Work continued recently on a new mutli-unit apartment complex on North Campus Drive.

Laurie Sisk/Telegram Work continued recently on a new mutli-unit apartment complex on North Campus Drive.

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Brad Nading/Telegram Homes are for sale in a cul de sac under development in the first phase of a project in the 3300 block of East Spruce Street in Garden City.

Brad Nading/Telegram Homes are for sale in a cul de sac under development in the first phase of a project in the 3300 block of East Spruce Street in Garden City.

One argument that community members make is that government should allow the market to fix itself and just let free enterprise run its course. Others say that there are just too many hurdles standing in the way of that happening.

Regardless of one's viewpoint about it, most communities in southwest Kansas are facing some type of housing shortage. Because it is such a widespread problem, Lona DuVall, director of the Finney County Economic Development Corp., also serves on the Western Kansas Rural Economic Development Alliance, a regional task force that aims to address the housing issues faced throughout western Kansas. From serving on that, DuVall said, she sees a number of similarities among communities.

"We did some surveys just among our group, asking 'What is it going to take in your community to get houses built, what are you short, what will your community throw in?' And in these surrounding communities, where their school district owns excess land, they're saying 'We would donate the land, if someone would just come build a house,'" she said.

The lack of new housing starts in Garden City is driven by several factors, including lot availability, land values and infrastructure costs.

"Probably the biggest complaint I hear from builders is that there aren't enough lots within the city limits for them to build on," Kaleb Kentner, planning and community development director for Garden City, said. "We have lots available. It's just we haven't had any new subdivisions built in quite awhile, which means the lots that are left are not the most desirable lots to build on."

Another obstacle is land values.

"Besides not having enough lots, developers when they come in, probably their biggest issue is the cost of land. ... They're saying people are wanting from $10,000 to $20,000 per acre for land in Garden City, which is probably on the very high market side, especially if you compare the land prices in some of the big metro areas," he said.

Infrastructure costs, which include electricity, gas, water and sewer lines, as well as carving out roads, alleys and easements, range from $12,000 to $16,000 per lot, Kentner said. Those costs, coupled with the maximum price buyers are willing to pay for homes in Garden City, are the main factors hindering development.

"Our market at the top end, as far as houses selling quickly, whether new or used, are between $100,000 and $180,000. And if you go higher than that, you narrow the number of buyers that you have," he said.

Because of this hurdle, the city does offer the Residential Incentive Program, which waives building permit fees and offers a $3,000 cash incentive to builders, but Kentner said this hasn't had enough of an impact on the costs, so it hasn't driven much in the way of development.

This prompted he and Mike Muirhead, public utilities director, to propose another type of incentive, the Neighborhood Development Incentive Program, in which the city would burden the costs of developing the utility infrastructure. It also would provide cash incentives for building single- or multi-family homes. The proposal was to add a $2.50 surcharge to utility bills, the proceeds of which would have gone to further incentivize builders. The city commission, however, voted it down as residents expressed resistance to the plan.

DuVall said that while she understood this resistance, the benefits were not explained well enough to residents.

"You're spreading out that mill levy a little bit further so you're reducing your own costs. And that's not in anyway to put down the mentality of the citizenry. It's just hard to understand that. Even economists struggle to show you how it works, but it does work, and it does help when you can spread it out like that," she said. "I think really, that's the piece that we were missing. The builders were saying that would work ... get this much more as an incentive to build it, then it takes the edge off and we can sit on it for another month if we have to. Didn't work out that way."

Kentner said that he has asked DuVall to have a housing market study prepared for 2012, similar to one completed in 2009, in which the population and housing availability in Garden City, Holcomb and Finney County is evaluated. The 2009 report found that there was a replacement need of five housing units annually.

"We are looking at upgrading that report because we haven't really addressed any of those shortcomings yet. ... This is pretty telling when you look at these numbers and, unfortunately, an update is probably not going to show that we've made much improvement at all," DuVall said.

Scott City is an example of the way that simply opening the topic up for discussion has prompted action by its citizens. Katie Eisenhour, executive director of the Scott County Development Committee, said that is the most positive result she has seen from the housing evaluation, which came about when The Scott County Development Committee contracted with RDG Planning and Design of Omaha, Neb., to evaluate the community's housing situation in November 2010.

"Sometimes you plant the seed just by making the discussion a topic that's out in the open and it seems to raise awareness and people watch a little more closely to assess for themselves whether or not there is need," Eisenhour said. "It took us a year. It was a little slow there for a while, and a lot of people thought we weren't getting anything accomplished, but what we learned is, it was in that quiet time that the community was digesting the information."

As a result, some community members who own land have stepped forth and a local businessman, after selling his business, reinvested it into housing by building four duplexes and three single-family residences.

"It's kind of just been the private market that has been doing this," Eisenhour said.

In their proposal to city, county and the planning and zoning commission, Eisenhour said she and other members of the task force said, "We don't see any developer wanting to come to our community to just dig in and go, until our own community puts some skin in the game ... so less than two weeks after we met, the county and the city discussed it — to make some land, some options available for people who wish to build."

Eisenhour said, "This conversation and the subsequent article brought a lot of interest in from the community. Some individuals with land — contiguous to town — maybe now they're interested where they weren't before. So the best thing that the housing task force has done is get the conversation rolling. It's a little slow and deliberate, but that's kind of the Scott City way."

DuVall describes Garden City in much the same light.

"One of the things that protects us so nicely from recessions and so forth is we really are a risk-averse community out here. ... We make really solid decisions," she said.

She also said that one way or another, the housing shortage will be addressed.

"We've proven that when the need arises, we will make it happen. ... Most of the builders we have here are longtime residents of Finney County and Garden City, and they know that when the time comes, we'll be ready. We'll all mobilize and we'll have houses," she said.

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