Congress, developers, industry players work to solve affordable housing issue

Bigfoot. The Loch Ness Monster. Affordable housing. Do any of these mythical creatures really exist? Those comparisons may be an exaggeration, but at least there is a concerted effort from leaders and the masses to seek and find one of them.

For years, Northwest Arkansas has struggled with a housing market that remains pricey yet resilient. Leaders know they must do more to keep the American dream of homeownership available to a surge of newcomers to the region and to a generation of residents whose incomes range from modest to healthy. While Northwest Arkansas has challenges to its seemingly never-ending growth, this issue of affordable housing is a national problem.

Commercial real estate leader Marshall Saviers with Cushman & Wakefield / Sage Partners, who also sits on the board of the Northwest Arkansas Council, is one of many focused on the issue for years.

“Every high-growth region is going through this, but it’s exacerbated here,” Saviers said.

He knows one solution is for housing developers to pursue more “infill” projects, in which urban and suburban areas with existing water and sewer infrastructure are reinvigorated with new living concepts that reduce development costs.

“We need to be doing more infill developments and not just throwing up things that create an infrastructure strain,” he said. “The more infill developments you have, the better you can have more economies of scale. You can do it at a lower price. We need more of that.

“Frankly, we need more subsidies and things that the government’s just going to have to help here, whether that be state or federal, to make sure that we have places for the people to live that work and are nurses and teachers. This isn’t just for lower income [people] that don’t have jobs. This is for a lot of the people that we rely on every day in the service economy.”

FEDERAL HELP
Congress — at least Arkansas’ congressional delegation — has heard the message and is working on some solutions. It helps that two members are in a position to be driving needed change. U.S. Rep. French Hill, R-Little Rock, a former banker, leads the House Financial Services Committee. As chairman, he has spearheaded a bill called the Housing for the 21st Century Act.

The bill streamlines federal processes and modernizes programs, supports manufactured housing, and boosts veteran housing access. The legislation emphasizes reducing regulatory barriers, increasing local flexibility, and improving financing for affordable, manufactured and small-dollar mortgage homes. It has already cleared the U.S. House of Representatives on a strong bipartisan vote of 390-9 — unheard of in this age of hyperpartisanship.

“I think it was a good statement that we can work together in the House on a bipartisan basis on important policy issues,” Hill said. “We linked in the 21st Century Housing Act our reforms to HUD [U.S. Department of Housing and Urban Development] with how we can make community banks more successful, have more capital to deliver to local communities. I think that accounts for why we got 390 votes.”

Some of the changes in the bill address HUD building codes, modular building techniques and building off-site exceptions. There is a Senate counterpart bill called the ROAD to Housing Act, and it offers similar changes to HUD to allow for more creativity in addressing the affordable housing shortage.

U.S. Rep. Steve Womack, R-Rogers, a former mayor and the congressman for the high-growth Northwest Arkansas region, is no stranger to housing constraints. He’s seen the go-go years in NWA. From his perch as chairman of a congressional appropriations committee that oversees HUD, Womack can help deliver money and policy changes that could help with the housing challenge.

“I’m going to stop short of calling it a housing crisis,” Womack said. “But we do have a lot of headwinds as it concerns housing in general. I talked about it yesterday with a roundtable group about just Northwest Arkansas. Land prices, building prices and ultimately housing prices have gone through the roof.”

He sees Hill’s bill as a needed solution and points out that one of its provisions — Community Development Block Grant (CDBG) funding — can be used in ways to address the housing challenge.

“The CDBG program, thanks to the package of French Hill, can now be used to develop new housing,” he said. “That’s a component of it that is beneficial.”

The legislation moving through Congress offers more money and incentives, new zoning and land use policies, and faster regulatory approval of changes to help with housing. Once the House and Senate bills merge and are signed by the president, the real need will center on HUD implementing regulations to allow locals to move forward under the changes.

MOBILE TO MODULAR
The federal legislation also seeks to modernize the use of manufactured housing to help with affordable housing needs.

J.D. Harper, executive director of the Arkansas Manufactured Housing Association, is enthusiastic about the federal changes. His industry knows it can do more to help solve affordable housing shortages. It will not only require changes from the federal level to the local level but also a shift in the public’s perceptions of manufactured housing away from the traditional “double-wide mobile home.”

“We’re excited about Congress focusing on housing affordability — in both the ROAD to Housing Act and Housing for the 21st Century Act by Congressman French Hill — particularly since the bills address issues of importance to factory-built housing providers,” Harper said.

He said the legislation removes antiquated requirements and affirms HUD’s role as the primary regulator for housing construction. Harper said the legislation establishes frameworks to encourage more inclusionary planning and zoning policies at the state and local levels and will bolster the development of affordable housing stock throughout the country.

“The removal of the ‘permanent chassis requirement’ contained in these bills will allow producers to embrace more modern architectural designs — including two-story factory-built homes — and help make manufactured homes more compatible in single-family neighborhoods,” he said.

The manufactured housing industry is piloting a number of programs across the country and wants to do more in Arkansas. A small town in Versailles, Ky., has seen a modular home development offering single-family homes with porches, modern amenities, and open floor plans in the 2,400- to 2,800-square-foot range. These three-bedroom, two-bathroom homes can be built at various price points under $300,000. There are also options being developed for smaller, lower-cost housing.

The key is tapping the advances in modern, modular construction and materials to allow for less expensive construction while maintaining a quality finished product. Harper thinks his industry can be an even bigger part of the housing solution, whether that is in these new single-family dwellings or building pieces of bigger projects that address multifamily or the infill projects that Cushman & Wakefield’s Saviers discussed.

“This isn’t your grandfather’s mobile home industry anymore,” Harper said. “There are many ways our industry can help with lower-cost construction while maintaining very high-quality standards. We’d like to be a part of the solution for many communities.”