On this episode of the Post Podcast, Grow Hays executive director Doug Williams shares information about the ongoing apartment construction in Hays.
Transcript:
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James Bell
Over 100 apartments will open soon in Hays, Grow Hays, Executive Director Doug Williams shares with this that impact of those apartments on the housing market and more on this episode of the Post Podcast.
Grow Hays executive director Doug Williams
turnkey properties LLC has brought forth an application for an Rh ID, which is a rural housing Senate District, which is a program that helps pay for some of the infrastructure and that type of thing. These type of projects and it's a, it's a 36 unit apartment complex, at the corner of fourth and fourth, which is right behind the old Washington school property. In South Hays, it will be 36 units for buildings with nine units each if I've got my math right, so much. And they will be both one and two bedroom units with garages and multi storey with garages on the main floor, because it's in the floodplain, you have to do some things a little bit differently. And so there will be garages on the main ground level, and then apartments above. So a good project and should be should be a very positive addition to that part of town.
James Bell
Yeah, very cool. Very cool. So you know, RH IDs, we've we've talked about these a lot. And I think it was maybe two or three segments ago, we talked about kind of all of these tax incentive districts, but this one that gets seems to be getting used pretty regularly here in Hays,
Grow Hays executive director Doug Williams
it is it's, it's a good tool for a developer to use to try and recover some of the infrastructure costs that they have to incur in putting in a development. So that can be sewer water, Electric Gas, some other costs are eligible to be recovered, and it's recovered through the tax increment, meaning today, the taxes on that property are zero, it's been a school, when that apartment complex is complete, and it's probably 36 units, you can just take that easily, probably times $100,000 per unit, that's $3.6 million dollars, the property taxes are going to probably be 30 to $40,000 a year, well, a portion of that can come back to the developer to pay for some of those infrastructure costs until he is recovered his costs on those. And so it's a good program really doesn't cost the taxpayers anything. Because it's all based on the creation of taxes and not taking any of the property taxes that are currently in place. So it's a good program, it encourages development that we badly need. And so he was taking the first step last night with the City Commission next Thursday, they will adopt a resolution to start the process of acquiring that RH ID designation, which is about a 90 day process, it has to be approved by the Kansas Department of Commerce, it is in approved by the city that we have to bring forth the housing study that shows the need, which we have a say that shouldn't be too hard. That's not That's not a tough requirement to meet. And then we have to get that it has to go to the county in the city, or I'm sorry, the county and the school district, both of which have to approve it as well. So it's a process that has to be gone through, but we're confident that it will happen. And we'll see some activity down there sometime in August or September is when the plan would be to start.
James Bell
Yeah, you know, I really like on these deals, it seems like everybody is willing to accept that the RHA D programs are are a necessity. And to me, it's a win win win. Because just as exactly as you say, it's not taking away tax revenue. It's just using that tax revenue to offset the cost of the infrastructure and everybody or nobody's losing any money. It's all it's all net gain.
Grow Hays executive director Doug Williams
Well, that's That's correct. I mean, the only way that you would say that, that it's a loss of any tax revenue is if you think that this developer would do this project without this particular incentive. 99 times out of 100. That's not the case, they would just not do it, because it doesn't make economic sense. So these things have to be put in place to allow them to recover these costs. And these are, these are things that are going to be in existence for decades, you know, the infrastructure, for example, the heart of America Tallgrass addition that those streets and the sewer and the water that'll be in place for a long, long time. And it really cost the taxpayers nothing. Because the development just wouldn't have happened if it wasn't for these incentives. And this this program for the developer to recover some of these costs. So they're good programs. They don't take any existing tax revenue, and they're accomplishing what they're they're set out to do, which is to provide housing in a market in a market that's much needed. And that's why they send in the application to the Department of Commerce, because they assess whether or not you You truly have a housing need. Now we, we can say this is obvious, and it is here. But still they go through the process of making sure that this isn't something that's been given when there really isn't a need for this type of housing.
James Bell
Okay, you know, also we talk a lot about, you know, housing, like homes, but the apartment piece is something I think that it kind of is been maybe overshadowed by that lack of available homes for sale. But this project is just one of many that are going on. And I think if I'm let me check here, oh, yes, the there's over 100 or nearly 100 apartment units that are about to be completed here in Hays, right.
Grow Hays executive director Doug Williams
There are there there are, I think 102 or 104 units that are either currently under construction, or that will be started in the near future. This been 36 of them this project at fourth and fort, of course, right in front of it is the Washington school renovation that Oberlin property group is doing. And that's 14 units. And they're there right at the end of that I believe they're having an open house here in the next week or two,
James Bell
I was gonna say I think I was speaking to somebody in the community not too long ago, who had toured one and said it was just a amazing apartment, maybe a little bit on the pricier side for a college student. But what a great location.
Grow Hays executive director Doug Williams
Well, the good news, I guess for that is that they're not eligible to rent to college students, Oh, those are income regulated apartments and they to hit the income qualified and to hit the price, the demographic that they have to appeal to it's not students that people have to be non students. And they're, they rent below market rate to certain amount, that's one of the factors to that program that the developer has to comply to is they have to rent them below market rent for a certain, I think believe it's 15 years, in order to get the tax credits that they got that allowed them to construct this thing, but I'm eager to see it, I haven't seen it. And that's a great repurpose of a building that in a great location down there by the aquatic Park and that kind of thing that that really should be good. And then there are other projects around town as well, Ellis estates on 33rd Street, that's a project that geared towards retirees and seniors, they've got 42 units under construction, if you've driven over there, as of late, you can see the steel starting to come up out of the ground and a lot of activity over there. And then there's a couple of duplex projects in town going on to so it's over, I counted, it's about 102 or 104 total units going up right now or in the near future will be being built and we we have a strong need for nice apartments in this community, we don't have enough. And consequently, it that does drive rents up, you know, real estate, housing markets are supply and demand based. And when you don't have enough choice, you know, rents go up. If the demand is high, and the supply is low, that's what causes rents to go up. So if we add some supply, it should soften those rents a little bit and give people some choices.
James Bell
It helps to on the the home buying piece, right because those folks that we talked about a little while back about your housing rehab program, and the housing that might be eligible for those programs are just getting rented right now there because there's such a need that they're just rent, they're turning them out. So I wonder if you wanna talk a little bit about that as well how that might affect the overall housing picture?
Grow Hays executive director Doug Williams
Well, you know, when you add inventory to a market, whether it's rental property, whether it's new homes, it does free up other property. And that's the argument that everybody likes to make when they when they say that the $225,000 is not an affordable home. Well, that's very subjective, everybody has a different opinion as to what is affordable. But the reality is, when that $225,000 home is completed, and somebody buys it, they probably have another home, that they're moving out of maybe for 125 or 150, or whatever, they may move out of an apartment that somebody can then rent and that opens up. And so when you add inventory to a market, you soften the pressure on these upward prices of both the cost of housing in terms of buying as well as renting. So inventory added to a market is a very good thing. Now it's it's always a challenge to balance that because you you really have certainly I've been in the other side of that as a landlord and it's not a fun place to be when there's nobody to rent it and rents are continually dropping and and you know that that's you've got a payment to make and you don't have enough rent coming in to make that payment. That's not a good situation. So we strive for that balance but we're way out of balance right now with way too much demand and way too little supply of both apartments and homes.
James Bell
How long you know, with this 100 units coming on, how long will the impact take to really kind of, as you say, you know, soften out even out across the, I don't know, Ellis County, I guess you might say,
Grow Hays executive director Doug Williams
I think that we've got so much pent up demand that it's going to take a while, you know, we've got these 100 units that are going to be constructed. But it's going to take a couple of years to get these constructed. We've got 10 homes in the Tallgrass second edition that are nearing completion. Actually, a couple of them are closing, I think this week, I was told by the builders, the others will be closing pretty quick. And there's another 14 or 15 that are going to be you know, if you go out there right now, there's a lot of dirt flying around because they're digging basements and putting in basements. So there's going to be another 1516 homes constructed in the next six months. So that that will help add to it. But I think we're still a ways away from meeting the demand as well as the opportunity for people who are looking to relocate into our community, we're still not even with all these apartments. And with this construction going on, I don't believe we're still getting to the point where we need to in terms of having sufficient inventory in our market to meet the demand.
James Bell
Yeah, you know, you mentioned those builders, we were Are you are kind enough to host a tour with the city leaders down there. Oh, I think it was maybe two weeks ago now. Yes. And I happen to go down there. And I got to the opportunity to talk to a couple of those builders. And yeah, they were more or less saying many lots as we can get our hands on, we're ready to go.
Grow Hays executive director Doug Williams
Yeah, the challenge right now is, you know, we had 36 lots in phase one. And there's 29 of them are spoken being going to be built on right away here. And so we're trying to get the engineering done for the next phase of 18. Lots and hope to start that this summer. But I know we're gonna run out of lots, I can just see that before we can get the next phase up and going. But we're going to try real hard to get there before we do run out. But at the pace of things are going we're going to run out a lot. And then we're going to be wishing we had done more to begin with.
James Bell
Yeah, I'm wondering, you know, I know, there's always stuff bubbling under the surface that you can't talk about, but are there some similar projects kind of in the works or, and I know, there's there's also the private construction going on as well, in Ellis County, right, a little bit of
Grow Hays executive director Doug Williams
that the challenge with the private construction is that they build one at a time, typically. And this is the first time in, I would say 40 years that I have seen in our community. And I've been here for all of them, that I have seen a builder building at this scale like they're doing in the tall grass edition, you know, we're eight at a time six at a time. We haven't seen that for a long, long time. So we're starting to see some some that are building the way that builders need to, to hit certain price points, you know, they need to build at scale, you build them one at a time. And that that doesn't. You can't get any economies of scale, any efficiency. But if you've got eight of them in a row, you can make a deal with your foundation guy. And he just comes in and does all eight of them in a row. And then your framework follows him man and building more in the way that they do and metropolitan areas. In terms of building scale. Yeah,
James Bell
you know, you drive towards the Denver on i 70 used to see him break rows and rows of these houses, they're cookie cutter, they look exactly the same. Well,
Grow Hays executive director Doug Williams
not not really what we're after. But we're certainly after, you know, some scalability and getting some inventory to the market. And that to when when you can buy a brand new house for $225,000. That's absolutely going to cause some of the other inventory to have to soften. Just because people always like new. Same with apartments, people like new it makes sellers of homes have to step up their game and maybe do some updates before they sell it makes apartment owners have to clean theirs up and have their you know, maybe do some maintenance things that they don't have to do right now. Because they rent either way, there's no choice. So if we can add some inventory to the market, that will be a very good thing.
James Bell
Yeah, you know, and again, going back to the tour of these houses, I don't think we've got to talk about this yet at least not on air. I was really impressed with the builds on all three but also the take the three builders had were so very different. And it I mean, they're all kind of a similar size. But the very different have a very different personality in the builds. I think
Grow Hays executive director Doug Williams
I agree. You know you've got some with basements, you've got some without, you've got different floor plans different ways they have finished it out. And so and that's great that diversity in the options out there is terrific. That way we can appeal to you know, maybe a family who has a growing family who wants some more room so that a basement might be important for future expansion. They're not finished but at some point in time they can finish the basement and add some additional living space. They're the one the basement houses have egress windows and the things that you would want in a basement but by the same token, the slab homes are all zero entry. So Though if you've got somebody that is older, that doesn't want to deal with steps and that kind of thing, they've, they've got us an option for them too. So lots of options out there. That's going to continue, I think they're going to continue to see some slab, some basements, different types of floor plans, the one thing they all have is at least 1000 square feet and at least a two car garage because we want to get the cars off the street, as opposed to lots of street parking, which makes it a little bit difficult on those streets to go up and down when there's cars on both sides on the street.
James Bell
But again, really good homes and I think, are you planning on another tour out there where people might go check those out in the near future?
Grow Hays executive director Doug Williams
I'd like to that I'd love to have a public open house out there. The problem is that they're all sold ahead of time. And so once people are wanting to move in, I hate to traipse people through, you know, three fourths or 90% done house because it's it's hard to see what it's really going to be like when there's no countertops or the flooring in in yet or what have you. But I'd love to get ahead of the game where we could have a public open house and people could really see what's happening out there. Because it's it's pretty cool. I mean, I have not taken anybody in any of those houses out there that have thought that this isn't a good thing. You know, I think everybody that went through from the city, the county or anywhere else school district thought that hey, this is this is badly needed. And this is a great development. Absolutely.
James Bell
Well, Doug, I can tell you, we got to get over the news. But any last thoughts before we go?
Grow Hays executive director Doug Williams
I just I just encourage people to drive out by the Housing Development at 22nd. Wheatland and see what's going on because it's impressive. And also keep an eye on these other projects we talked about as they go up because they're going to be exciting. They're going to be great addition star community
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