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City addresses lack of housing


Hays, in contrast to many cities nationwide, hasn't seen its housing bubble burst. In fact, the city is looking at ways to address what many view is a housing shortage.

Housing prices in Hays have remained strong throughout the economic downturn of the last few years, bucking the trend many areas have experienced.

Ellis County Appraiser Dean Denning attributed Hays' bullish housing market to several factors.

"Look what we have for unemployment," he said. "Practically nothing.

"And the oil industry has been good for the last few years. Farming has been fairly good. Our retail is holding up. ... Hospital's doing great. College is doing great. We don't have down parts of our economy. As long as people have jobs, they can make house payments and they can trade up if they want to."

Housing values are on the increase in the neighboring cities of Ellis and Victoria as well, Denning said. And, although those values lag 15 percent to 20 percent behind Hays, the housing market continues to be strong in those cities.

Real estate agents, Hays Board of Realtors President Lyn Klein said, are encouraging buyers to take advantage of real estate opportunities in neighboring towns.

"There's some very good buys in those other communities, and I think that's what we're trying to work right now is trying to get people to look outside the city of Hays," he said.

According to recent housing sales analyses Denning has conducted, housing prices in Ellis County are continuing to increase. In fact, he said, the last time the Hays market took a hit was in 1984, when it decreased 30 percent in two years.

"It took six years to get back what we lost in two," he said. "But since 1992, it's been nothing but up."

In a city that averages 100 to 125 homes on the market at a time, Hays had approximately 40 on a given day in February, according to Klein. Houses in the $125,000 to $175,000 price range, he said, are in shortest supply.

Lack of housing inventory of this magnitude is unusual, Klein said.

"Hays and this area is very unique for the conditions we're in right now," he said. "There are a lot of areas that are opposite of what we are now."

Klein said he looks forward to positive outcomes from a city of Hays task force, which now is working to address housing issues.

The task force, said City Manager Toby Dougherty already, is seeing some positive results.

"It's funny, because we talked about this housing issue and we developed this plan of attack, and we've already had some people from outside the community show up and start looking around," he said. "Part of the problem is just getting people to look at possible solutions.

"If we do nothing else, I'd say we've already accomplished that."

Low- to moderate-income housing is an area of concern, one which Overland Property Group LLC, hopes to address with a 32-unit apartment project recently given a thumbs up by Hays city commissioners.

Due to a competitive market, OPG was denied tax credits by the state last year for the same project.

"There's a few changes this year to the program that make the funding a bit harder and makes us be a little more creative," said Matt Gillam of OPG. "But we still feel good about our chances of receiving tax credits this year for the property."

OPG's application to the state was submitted in February. The credits will be announced in May.

In addition, OPG has expressed an interest in locating local partners for a market rate housing development, according to Aaron White, executive director of Ellis County Coalition for Economic Development.

The city of Hays is considering establishment of a Rural Housing Incentive District, which would help offset development costs in relation to a housing project, in response to a request by OPG.

"(An RHID) can be a significant cost benefit and make a project fly that might not otherwise," White said.

Although he said he understands the reluctance of some residents to support the idea of an RHID, Dougherty said the Hays housing market has demonstrated that perhaps other incentives are needed.

"If the market's not going to take care of it, then from a policy standpoint you have to see what can be done to incentivize that," Dougherty said. "So when you start looking at incentives, you try to look at what could be done to incentivize the development without throwing burden or cost on the public at large.

"And an RHID is a good example of that."

Interest in Hays projects is beginning to emerge from other developers, White said. Representatives of a few companies have met with White regarding development of multi-family apartment-style housing and an affordable single-family home project. White said local partners for the projects are being considered.

Addressing the need for more housing inventory and greater diversity of offerings, White said, were key elements of a recent Hays housing needs assessment. In addition, the city of Hays comprehensive plan recommended the city needs 90 new housing starts annually to address the growing need in the community.

"We're well behind what the consultant thinks we should be to keep up on affordable housing, to have the right mix of housing," he said.

But White is confident housing needs can be met.

"Hopefully, we can keep locating potential partners and we could connect folks from outside the region with folks in the community who are interested in working with some of these issues to come up with some affordable housing solutions," he said. "It's going to be exciting.

"We've got some folks showing some interest in this area, and hopefully we can make something happen."