Solving housing ‘dilemma’ critical to eco-devo efforts

By Rod Haxton, editor

Some call it a dilemma. Others refer to it as a challenge.

By whatever name, everyone acknowledges there is a housing shortage in Scott City.

How to deal with it? That’s the challenge facing city and county officials.

“We have a dilemma that became even more pronounced in 2011,” said Katie Eisenhour during a presentation by the Housing Task Force on Monday evening. “It’s taken years of progressive leadership to put us in this situation.”

While acknowledging the community has made a significant investment in several key areas, including a new high school and construction of a new hospital, the economic development director said “we may have underestimated” the growing demand for single-family and rental housing.

The Scott County Development Committee contracted with RDG Planning and Design, Omaha, Nebr., to evaluate the community’s housing situation and those findings were reported to the community in November 2010. The Housing Task Force was created as a result of that study in an effort to look at ways of addressing the shortfall.

Task force member Scott Noll pointed out that little has been done to create opportunities for new housing. No outlying housing subdivisions have been developed since 1978.

“A lot of focus has been put into infrastructure improvements. We simply underestimated one slice of the infrastructure pie,” said Noll, referring to the need for housing.

According to the RDG study, Scott City needs six new dwellings to be constructed annually in order to meet anticipated growth. Since then, developers have added 15 single-family or multi-family units and this hasn’t eliminated the problem.

While the number of new housing starts has exceeded projections, it hasn’t been enough to meet the needs of young families and employees wanting to relocate to Scott City.

“We’re right back to where we started (in 2010),” says city building inspector Paul Kasselman. “The housing that’s available is very limited.”

Business Limitations

The shortage of housing, says task force member Frank Mercurio, is that it also limits the growth potential for local businesses.

“New businesses see opportunity in Scott City, but if there is no housing they will go elsewhere,” said Mercurio, president of the Kansas Livestock Association Environmental Services division in Scott City,

Speaking from personal experience, Mercurio began looking for housing in February 2010 and even had to live out of a motel. He is in the process of building a new home because no other housing was available.

“We had the choice of building a home or living elsewhere, like Garden City, but this is where we want to live,” says Mercurio. “We want to expand and bring new employees into our office, but for that to happen we need somewhere for them to live.”

He said the KLA would like to expand its local operations, which would mean more employees, but that can’t happen until there is adequate housing.

“And this situation would be magnified even more if a large employer were to look at locating here,” he added.

It was suggested that the city and county need to work together on finding an answer. One idea offered by City Treasurer Junior Strecker was for the city and county to use their idle funds to help with land acquisition, housing renovation, etc. As land is sold and homes put on the market this money would be returned.

No one, says Strecker, is benefiting from money earning one-quarter of a percent interest.

Meeting the Demand

So what are people looking for?

According to Eisenhour, the list includes just about everything and anything:

•single-family units for purchase or rent.

•multi-family duplexes and triplexes.

•moderate to custom-built homes.

•available . . . livable rentals.

It was emphasized that if efforts could be initiated to boost the housing market it would result in “non-traditional economic development.”

For example, under one scenario, 22 acres of farmland could be purchased for $250,000. The owner of this land is currently paying $123 annually in real estate taxes.

However, if this were to be developed as a subdivision with 20 houses valued at $250,000 each, it would generate about $115,000 in property taxes annually for the city and county.

This is in addition to the economic activity directly linked to the housing construction.

“The opportunity is here. With help, we can make this happen,” said Noll.

The consensus of the task force is that by creating the opportunity for construction of upper-end housing it would open up less expensive housing in the community. The theory is that this would result in more housing for all economic groups.

“But we need to get past talking and research,” said Eisenhour. “We need to take the next step.”

Lewis said there should be enough information available for the community to move forward.

“A year ago, it was a matter of educating the public about how tight the housing situation is,” he said. “A tight market is good, but it does limit our growth.”

Lack of Rental Property

As more people have chosen to purchase rental property as an investment, it was explained that this has resulted in the lack of lower-priced starter homes.

At the same time, a dilemma on the other side of the coin is the lack of rental property - at just about any price.

While acknowledging the problem, the task force said it has neither the money to get directly involved, nor the desire to interfere.

“We want to keep government involvement at a minimum,” Schmitt said. “Let the market determine how the housing shortage is addressed.”

As for a time frame should the wheels begin moving forward, that would be another issue. While there is a desire to see something done quickly - or at least this year, Scott City Mayor Dan Goodman said there is a limit to what the city could do in the short term.

“We have to budget for (the construction) of streets and utilities,” he said.

However, there is interest in getting this started. According to Strecker, “a banker I talked to says there are two or three contractors who are ready to come here. But they don’t want the cost of developing infrastructure.”

So what’s next?

If a sub-division is to be developed, the city will need to determine where this will occur. According to Kasselman, the builders he’s visited with are most interested in doing something on the southwest edge of town.

“We need to be moving fairly quickly on the property. That has to be the first priority,” Eisenhour said.

The task force made no recommendations and there was no commitment offered from city or county representatives in attendance.

“It’s a dilemma, but we believe that it’s something that we, as a community, are capable of solving,” Schmitt added.