In my previous column, I spent some time discussing how economic and community development has evolved over the past two decades. In this column, I want to explore the important role that housing plays in a community’s economic growth and stability.
Background:
Improving available housing was the top economic development priority identified in a community visioning session organized by the Sidney-Shelby Economic Partnership (SSEP) in late 2018. Participants reviewed economic and community data, discussed trends and reviewed outcomes in order to prioritize housing as the top priority. This issue is not unique to Shelby County and communities across the nation are being challenged by what has been deemed by many as the “national housing crisis.”
The attached graph shows new single-family housing starts in Shelby County peaking in 2007 prior to the great recession. Housing starts then began a sharp decline until leveling off around 2013. Data shows a slight increase over the past two years, yet overall Shelby County housing starts are about one quarter of the pre-recession levels.
Why is this important? — We must compete for talent:
The global talent battle is clearly driving discussion and actions related to housing issues. Author Mark Lautman outlines the economic threat facing communities in his book, “When Boomers Bail: A Community Economic Survival Guide.” Lautman predicted numerous challenges that communities will face replacing workers when the boomer generation retires. There also appears to be mounting evidence that communities who fall behind on “Housing and Placemaking” will struggle to attract talent. A lack of available housing makes population growth unlikely and challenges our community’s ability to expand the amenities that people want in the community. Restaurants, bars and entertainment establishments tend to locate in areas where housing is vibrant and populations are growing. Therefore, improving the number of housing starts in Shelby County is an important economic development priority.
Understanding the growth problem and solutions:
In addition to the 2018 visioning session, SSEP held subsequent sessions with local and regional developers to chart a pathway forward. The 29 business and community leaders concluded that our community needed to create a plan and begin executing that strategy. The following is a list of the key elements of the strategy:
• Perception — Change the negative perceptions of Sidney/Shelby County. Identify and amplify the positives.
• Incentives — Further explore the role of incentives for housing development.
• Marketing/Create Awareness — Educate young people about workforce opportunities.
• Partnerships/Cooperation — Municipal cooperation with private developers is critical.
• Regulatory Restrictions — Identify issues that hinder development and ways to remove risk.
• Placemaking — Leverage downtowns and build more of a sense of place in Sidney and Shelby County.
In 2019, SSEP asked Mark Locke of Ryan Homes to meet with area leaders to discuss how his company approaches housing development in the region. Ryan Homes is currently the largest single-family home builder in the Dayton Region, with a 40% market share. Ryan Homes looks at recent new home comps and existing housing rental rates. If they don’t identify a viable clientele that could move from rental to ownership with about a 10% step up, they probably won’t move forward in the community. Due to increasing development costs, they also expect the community to work closely to keep costs down, including using CRA incentive.
Progress to date:
Looking at the 2019 and 2020 numbers, some progress has been made. Countywide, new housing starts has increased over the past two years. The villages of Jackson Center, Botkins, Anna, Russia, and Fort Loramie have either expanded or are bringing on new housing lots. These communities have utilized a variety of incentives and worked closely with private developers to facilitate the new housing investments. In addition, recent re-zoning of 177 acres of land at Interstate 75 and St. Marys Avenue in Sidney will expand the single and multi-family opportunities. Work has also begun on the 36 unit housing development at 2420 Wapakoneta Ave. in Sidney. Finally, TownePlace Suites is scheduled to open later this year, adding 80 units for people seeking an alternative for a long-term stay in the area.
The new Sidney Downtown and Riverfront Development Plan also addresses the issue of housing revitalization in the historic districts adjacent to downtown. The plan calls for a targeted neighborhood revitalization strategy, including new funds to catalyze these efforts.
Summary:
SSEP will continue to encourage the key recommendations of our housing visioning sessions and work with our communities to enact policies to make housing more available and affordable for the current and future residents of Shelby County. Below you will find the key eight points that came out of our work in the housing arena:
1. Talent attraction is a challenge for our companies and affordable housing is a key factor.
2. Subdivision development and carrying cost have increased & developers struggle to make the numbers work.
3. Developers need municipal cooperation and flexibility to reduce development costs.
4. Community Reinvestment Area (CRA) incentives are needed to reduce costs.
5. Density will need to be addressed to make middle-market homes more affordable.
6. There is a need for more market-rate housing that aligns with the millennial market.
7. Housing redevelopment strategies need to be developed and carried out in target neighborhoods.
8. Our communities need initiatives to encourage more amenities (placemaking).
Now that we have covered the importance of housing, my next column will focus on the critical role that workforce training and education plays in the overall economic health of a community.
