Housing supply

NWA cities strive to expand housing supply to accommodate region’s growth

Growth in northwest Arkansas continues.

Following the release of census data in August that showed Fayetteville was now the second-largest city in the state, an article published by online media company Visual Capitalist ranked the northwest metropolitan area of Arkansas as the sixth fastest growing metropolitan area in the nation.

It seems almost certain that growth will only continue in northwest Arkansas over the next decade. However, what is less specific is whether the area will have the housing supply to accommodate it.

“We haven’t produced enough housing to keep up with the number of people coming into northwest Arkansas,” said Mervin Jebaraj, director of the Center for Business and Economic Research at Sam M. Walton College of Business. the University of Arkansas. “When I look over the horizon, I don’t see as much construction as is needed to keep prices stable or reduce prices. This requires an increase in supply, which requires a major change in how we manage housing in Northwest Arkansas.

Increasing this supply requires a multifaceted approach centered on analysis, zoning policies and other barriers to housing development, in addition to strategic city planning and the formation of public-private partnerships.

Mervin Jebaraj

And, it requires greater overall coordination at the regional level, which is lacking in Northwest Arkansas, although recent efforts have been launched to address this need.

THE TRUE COST
A study by the Walton Family Foundation (WFF) in 2019 projected that nearly 80,000 families would move to the four major cities in northwest Arkansas – Bentonville, Fayetteville, Rogers and Springdale – by 2040. To cope to this growth, about half of the new homes built in the region must serve working households, defined as a family of four earning between $33,000 and $78,000, and low-income households, defined as a family of four people earning less than $33,000.

Another recent WFF study assessed housing policy in Northwest Arkansas and highlighted numerous challenges and threats to curbing rising housing prices in the region, including the continued development of low-income single-family housing. density, high land costs and lack of land capacity. in the currently demarcated areas.

Recommendations for creating more affordable housing included:

  • Form stronger regional partnerships.
  • Educate local leaders and the community on the importance of affordable housing.
  • Reform zoning codes to encourage affordable housing development.

Although single-family homes are the foundation of most housing markets, they come at a cost to a growing metropolitan area, especially those built in suburban subdivisions further and further from the downtown core. Not only are single-family units ineffective in meeting housing supply needs, but they also place greater pressure on cities to create and maintain infrastructure to support them.

“There are impacts to the city’s fiscal resilience,” said Jonathan Curth, director of development services for the city of Fayetteville. “Whenever one of these subdivisions is built, the city takes over the water, sewer and streets. Whereas downtown you can have 40-50 people living on a quarter mile of water, sewer and street. [In subdivisions] you may have four houses. But you should always keep them both to the same degree.

It also creates additional financial pressure on these owners. A recent trend in urban planning focuses not just on housing, but on its interconnected relationship with transport, which can lead to additional costs for those who live further away from amenities or their place of work.

jonathan courth

“It sounds great in the short term if you can find a $200,000 house. But in the long run you run into the problem of transportation costs, Curth said, adding that the price of the house is “not the true cost of housing because many people who qualify for houses have to live further away. . Suddenly they have to pay more for gas, more for car payments – just all these extra transportation costs.

And the growth of the region’s outlying towns can also pose problems when residents aren’t spending money in their home towns. And when sales tax revenue doesn’t grow in proportion to the city itself, it puts a financial strain on the city.

“If you could just draw a line around an area and say, ‘This is all the land we have to work with for residential and development in northwest Arkansas,’ and keep the rest of the Benton and Washington counties for agriculture and wilderness… There are many benefits to that,” said John McCurdy, Director of Community Development for the City of Rogers. “Because it reduces the long-term cost of maintaining these cities. You don’t want these cities to go bankrupt.

“That’s why it’s a regional conversation,” McCurdy added. “As a Rogers, I don’t have a voice in these small towns. But I think it’s morally incumbent on us to think about what we do as cities. We can’t just say no to urbanization because we don’t want to have that density and push it back into the county. Because if we do that, it hurts all of us.

GROWING PAINS
In many ways, the housing crisis is part of the region’s broader growing pains due to the urbanization of an area with a high quality of life where people want to live.

John McCurdy

“There doesn’t seem to be an end to the demand. Right now, if you build it, they’re going to buy it,” McCurdy said. “Part of that is just growing pains. This area is only growing. At some point, we’re going to have to recognize that living here is going to cost more.

Yet cities have tools at their disposal to guide growth, including strategic planning for greater population density in places where they can easily access transportation, as well as “neighborhood centers” that act as small-scale town centers with a gas station, restaurants and office space.

“A lot of livable towns grow that way, where there’s a neighborhood bar, and you’re near a bodega,” McCurdy said. “These are passive policy-based approaches to encourage the development of more housing that revolves around centers of density.”

Cities are also encouraging affordable housing developers by “simplifying the red tape” and exempting these housing projects from paying additional costs such as permit fees.

But by far the most useful tool cities have to influence housing supply is property zoning. Rogers, for its part, has moved to a forms-based code that allows for mixed development and “virtually unlimited density in these core parts of our city,” according to McCurdy.

While “much” of Fayetteville is still zoned for single-family development, Curth said the city council “has welcomed requests to rezone properties to allow for much higher densities and a mix of housing types.” .

“I think we could be more proactive in targeting certain areas where we know there will be growth and encouraging a mix of housing types where we currently see single-family zoning,” Curth said.

REGIONAL APPROACH
A key takeaway from the recent WFF report was to take “a regional approach” to developing and diversifying housing in northwest Arkansas, an approach that has historically been lacking in the region. This effort focuses in part on identifying and removing municipal barriers to development in the area.

Jeremy Pate

“If you’re a developer in northwest Arkansas, in many ways the city limit doesn’t apply to you,” said Jeremy Pate, senior program manager at the Walton Family Foundation. “You develop projects where the needs are and where the market demand is. It is therefore essential to have a general understanding of what these municipal regulations are and how they affect the ability of developers to produce housing.

As an example, Pate cited the differences in fees and review cycles for construction projects in different cities in the region.

“It’s not that they all have to be the same, but there can be more coordination between a lot of these communities,” he said. “So those are the types of things that this study highlights – zoning, parking regulations, are there any fees that can be waived for housing affordability in particular that affects income people low to medium.”

But changing to accommodate the region’s explosive growth also requires a change in mindset.

“We’re in this painful, awkward growing phase,” McCurdy said. “We’re like tweens, where we go from a big city to a small town. And it’s just a different paradigm that’s going to rub people the wrong way and bemoan the “good old days” and all that. We are culturally moving towards an acceptance where people prefer to live in this kind of multi-family urban environment rather than a McMansion in a housing estate. And that’s something our people aren’t used to.