Grow Hays, the nonprofit economic development agency for Ellis County, is working on a project to build 18 affordably priced houses in town over the next 24 to 36 months.
The homes would ease what Grow Hays executive director Doug Williams says is a serious shortage of starter homes in Hays.
If all the parts of the project come together, the houses, on the east side of town, would be priced from $175,000 to $225,000, Williams said, using a program launched by the state of Kansas in 2014 called Rural Housing Incentive Districts.
“Other communities have used it extensively,” Williams said. “I believe Dodge City has had 17 of them. Garden (City) has used it extensively too. We just haven’t done it. We believe it’s time, and we’re trying to put one together.”
RHID relies on approval from the city of Hays to allow a residential developer to tap the increased property taxes from a new development to cover their cost of building new streets, laying water and sewer line, and installing curb and gutter and sidewalks.
Typically the public infrastructure costs for a new development are paid through special assessments tacked on to the price of the new homes. That cost can run $30,000 a lot, said Williams, so an RHID lowers the cost of home ownership 20% to 30%.
“If things go as I hope they will, it would be a local developer and primarily local builders,” Williams said during an interview Wednesday at the Grow Hays offices, 219 W. 10th. “I’ve got a site identified, I’ve got a developer that I’m talking to, I’ve got a builder that I’m talking to. I’m hoping that prior to year-end to approach the city with an application for an RHID, and then that starts the clock ticking.”
An RHID relieves developers from bearing the infrastructure cost by passing on to them over 20 years the additional property taxes from the increased value of the developed lots.
Declining to name the landowner, developer or contractor yet, Williams did say the location is near Hays Medical Center. The homes would have three bedrooms, two baths, a two-car garage, and some with a basement and some without.
Key to the project is a landowner willing to reduce the asking price, Williams said, saying part of the motivation is philanthropy and part is that the project will enhance the value and saleability of the landowner’s adjacent land.
“That’s why they’re willing to come off their asking price considerably,” Williams said, “and without that, this would not be feasible at all. It all starts with affordable land.”
Grow Hays normally wouldn’t concern itself with affordable housing, he said, but it’s tied to the area’s 1.9% unemployment causing a shortage of skilled workers, such as plumbers, electricians and welders. Employers tell Williams that prospective employees from out of the area turn down jobs in Hays because of the lack of affordable housing.
In Hays this year through September, there were eight residential building permits, he said.
“It’s a sad number. We need to be in the 20 to 30 range. We’re not keeping up with demand,” Williams said, which is driving up prices. “This is a down year, this is a really poor year, the residential construction business has pretty much come to a halt here ... We believe we’re going to have a difficult time attracting a workforce without resolving this affordable housing problem.”
He said there’s a market for the starter home, but the solution will take community involvement.
“That’s what I’m really asking for in this whole project. I’ve approached the landowner and said this is something we need in this community. I’ve approached subcontractors, I’ve approached product suppliers. There’s a lot of people in this food chain: lumber yards, subcontractors, the builder,” Williams said. “I’m asking everybody to dig deep and maybe be a little easier on their pricing so we can have something to help the community overall, because this is important.”
Reaction has been good, but it’s the early stages.
“We’ll see what it is when the rubber meets the pavement,” he said. “I think everybody recognizes that we have an issue with affordable housing. They recognize that if you can build 18 houses of this nature over the next 24 to 36 months, those are dollars that replicate numerous times over this economy.”