2020 housing study shows 'incredible shortage' in Garden City
Garden City has a lack of housing.
The shortage is at all levels – from rentals to single-family homes. The shortage is not just in one area.
Lona DuVall, president/CEO of the Finney County Economic Development Corporation, said the shortage is due to little housing construction over the past 20-25 years. The area is now feeling the full impact.
Homes were not being built for numerous reasons, the first of which is the community has builders not developers, and developing a property is different from house building, DuVall said.
Builders are not developers, builders build the homes and developers take a piece of land, get it ready for construction by leveling the land, adding infrastructure such as streets, extending electrical, sewer, water and gas lines, etc. and creating a plan for how many properties to add, DuVall said.
"All of those costs have to be calculated somewhere," she said.
In the community people who want to build homes rather than develop property, so there was a long period where no one was doing any large-scale developments.
There are economic concerns when developing land, DuVall said, and the 2008-09 housing crisis is a good example of what happens when development is overexerted.
Las Vegas is a prime example, DuVall said. Developers wanted in the market because money was easy and anyone could get a home, so properties were built when there wasn't a demand.
When banking crashed, developers ended up having to demolish the houses because people couldn't get a mortgage with a "wink and a handshake" anymore and it destroyed the housing market, DuVall said.
"There's been little glitches like that throughout the decade, so developers have certainly gotten themselves in trouble in the past and not everybody's willing to take that risk, but for us it was a combination of all of those things," she said. "We didn't have developers in the community, we didn't have developers willing to come in from outside the community to do it and quite frankly we were out of land."
It wasn't until the Rural Housing Incentive District tool came available a little over 10 years ago that it was affordable to develop the land the community had because of the lack of infrastructure, DuVall said. Until then, housing construction was basically at a standstill.
The RHID tool allows developers to recoup on the cost of development by using incremental tax growth, they receive funds back from increased property values, DuVall said.
"We have not had a housing development done without the RHID tool in 10 years," DuVall said. "They wouldn't have happened (without it) because you just can't afford them."
The city and county aren't going to pay for the infrastructure because they have to recoup the costs somewhere, usually from the taxpayers, so it's up to the developers to pay for it, DuVall said. The RHID tool is the only way to get new infrastructure without putting city or county money on the line.
"That is what makes it most expensive here, is that the land is costly, it takes a lot to get the land prepared for a project and land's expensive too," she said.
Garden City is over 1,000 housing units short just to get caught up with the demand in the community and the gap grows every year, DuVall said.
"Every year we're a few more houses behind because we're not building them fast enough to meet the demand, just the natural demand," she said.
A housing study is done every two years by an outside contractor and the most recent one from 2020 shows an "incredible shortage," DuVall said. It doesn't even include the empirical plant and the 300 direct employees they will be hiring and the additional 1,900 additional employees created from indirect jobs related to the 300 direct jobs.
Hunter Carson, executive director of High Plains Housing Development Corporation, a non profit, said the most recent housing study done of Garden City said about 120 homes need to be built each year to meet the current demand.
The problem is 120 homes are not being built a year, one reason is the cost of building materials has gone up. In the past year lumber costs have increased almost 140%, Carson said.
According to Carson, materials are having to be subsidized so people can afford to build houses that at the end people will be able to afford to buy. Keeping housing affordable is a problem and is part of the reason for the housing shortage as there's a cylindrical effect to housing and how people move from rentals to owning a home.
DuVall said the best way to describe the housing cycle is to think of the lifestyle of a family – a person moves to a new town or out of their parent's home into an apartment. Then they get married and move to a starter home, have children and then moved to the next level of home and so on.
"The whole time that this person is moving through their life cycle of homes there's somebody right behind him who's following in their tracks and they move through their life cycle of homes," she said.
The problem in Garden City is for 25 years they weren't building, and the people coming through the cycle got to the house they, for instance, would raise their family in but they never got to the next home and when the children are gone there is no reason to leave, Duvall said.
"This creates a juggernaut where there's no where to go from this mid-section, but moving people out of that mid-section is what makes housing affordable at the front end," she said. "You have to have that constant turn-over of those entry level homes.
"You can't build the entry-level homes at the price that people expect an entry level home to be."
Entry level homes should be older stock that's come available, but because there was no construction, a generation and a half of moving through the housing cycle was lost.
"It's a dastardly effect, it really is," Duvall said.
Carson said one way to impact home ownership is to get entry-level homes available through the Abandoned Housing Act.
According to Carson, court process organizations such as High Plains can acquire abandoned homes, renovate them and get them back on the market at an affordable price.
"We can bring a lot of those properties that otherwise would just sit there and rot away and bring them back onto the market and at the same time you are adding new life into some of these older neighborhoods," he said.
DuVall said the housing shortage has an effect on both community growth and economic development. You can't have one without the other and people are needed for both.
"We've got substantial growth happening year over year in Finney County, so every time an employer wants to hire, every time a new business is going to open up in the community, our unemployment rate is so low that you have to recruit workforce," she said. "You have to bring new workforce here for any job you've created."
Workforce coming into the community has many needs in common and housing is one of those needs, DuVall said. People need a place to call home.
Heath Hogan, USD 457 deputy superintendent, said having available housing is important.
The school district recruits from all over the country and housing is one of the first things people want to explore, Hogan said. They mainly see a shortage of rental properties which new employees typically look for to get established in the community.
"Hopefully from our end we work on the retention and getting them established in the community and maybe eventually they buy a house," he said. "But that rental property is extremely important."
DuVall said while a lack of rental units and entry-level housing is a problem the community is also lacking in higher-level housing.
"Most of the workforce we're recruiting, they're moving here because the pay is significant enough that it's a career move, they're coming to build their career," she said. "So for them, it's not necessarily level house, it could be that $260,000 house or $300,000 house, whatever."
DuVall said employers have told her that they have had a high-level, senior executive position recruited, but they couldn't find housing or childcare or other basic human needs.
"We have to meet those needs or we miss out on community members, we miss out on growth," she said. "The shortage is truly to the point that it's a detriment, we're actually harming our employers, they're having a hard time making hires because they simply don't have anywhere for folks to live."
The shortage is also effecting the people that grew up in Garden City and want to stay and raise their own family and have their own home but they can't find one.
"Literally every sector of our society is being impacted in one way or another because we don't have adequate, diverse housing available in the community," she said.
Housing is needed in every sector.
"I think it's just imperative that people understand it's not that we need 20 apartment buildings, if we had 20 apartment buildings the whole housing crisis is solved," she said. "No, our shortage is desperate, we have reached a crisis point."