City U plans multifamily housing in Bentonville core

NWA Democrat-Gazette/FLIP PUTTHOFF New apartments are under construction Wednesday in Bentonville.
NWA Democrat-Gazette/FLIP PUTTHOFF New apartments are under construction Wednesday in Bentonville.

BENTONVILLE -- The Planning Commission took steps to allow a multifamily housing development Tuesday by approving the City U multifamily housing project.

The apartment complex will include 375 units in more than 24 buildings of various sizes. The project will be on four sites over the 9 acres between Southeast Third and Southeast Fourth streets in the downtown Market District.

Other business

Bentonville’s Planning Commission met Tuesday and approved:

• Renewing the permit for Happy Hearts Early Learning Center, 2305 SW 15th St.

• The plat for Garrison Village Subdivision, Southwest Halsey Street.

• Development plan for Discovery Storage, Southwest Crockett Street.

• Development plan for Lot 13 Building, 3301 SW Municipal Drive.

• Development plan for a parking lot at 2914 SE. I St.

• Increasing the maximum rear fence height in the downtown neighborhood districts from six to eight feet.

• Splitting Lot 4 of the Cavness Subdivision, Southwest Crockett Street, to create Lots 6-7.

• Adjusting the property line of Lot 5 and part of Lot 4 of the Scoggan Subdivision, 448 S.W. C St., creating Lot 6.

Source: Staff report

Bentonville Housing LLC owns the land. The company's address is 700 S.E. Fifth St. Suite 1, the same as RopeSwing Group, a hospitality company managed by Tom Walton.

City U was the first development project addressed by the Northwest Arkansas Regional Housing Task Force and was designed to take into account sustainability and affordability in housing, said Bill Burckart, councilman and task force member.

The task force was comprised of area industry representatives and city, state and federal planners, he said, and spent 14 months examining regional housing needs. Burckart said the task force's overall findings will be released in a report in the weeks ahead.

Affordable housing is considered to be any in which renters or buyers aren't paying more than 30% of their income on housing costs, Burckart said, adding City U is an example of how development needs should be addressed for city planning.

According to the U.S. Census Bureau, the average median household income in Bentonville was $79,259 in 2017.

"What they were trying to do is make this a great example project of how you blend these needs of sustainability, affordability and [being] community-oriented," he said, explaining residents have expressed the need to meet those three housing aspects. "We really need to provide affordability inside the city core," he said.

Affordable housing in Northwest Arkansas is a necessity extending beyond Bentonville, though, said Mervin Jebaraj, director of the Center for Business and Economic Research at University of Arkansas.

Jebaraj said he contributed to developing the Skyline Report, which is sponsored by Arvest to compile detailed data on the commercial and residential real estate market in Benton and Washington counties.

The report revealed a genuine demand for multifamily developments in the region, Jebaraj said.

According to the report, the vacancy rate for all multifamily properties in Northwest Arkansas decreased to 3.5% in the second half of 2018 from 3.9% in the first half of 2018. The rate was 4.5% in the second half of 2017.

Vacancy rates in Bentonville decreased from 5.4% in the second half of 2017 to 3.7% in the second half of 2018, the report said. There are also more than 3,300 rental units, 54.8% of the city's current inventory, that have been announced or are under construction for new multifamily projects in Bentonville.

"In terms of pace of growth in the market, Bentonville is faster than any other city in Northwest Arkansas," Jebaraj said.

The city is close to being on target for rental costs despite the growth, he said, with $685 per month average lease rates for multifamily units, he said. The regional lease rate is $675 per month.

Neighboring cities have lease rates of $725 for Fayetteville, $673 for Rogers, $570 for Springdale and $548 for Siloam Springs, Jebaraj said. He attributed the higher rates in Fayetteville to the practice of renting multifamily unit space by the bed for college students. Such units often include amenities reflected in higher lease rates, he said.

The lease rates for City U aren't available, and Tyler Overstreet, senior planner, said the city doesn't require developers to provide target rents, include sale prices or to factor affordability in as part of the criteria for development approval.

The city must develop some formal practices to ensure its providing affordable housing as city planning continues to develop, though, Burckart said.

"We have planning policies, but we really don't have a charted path to real local housing policy," he said, adding the city also doesn't participate in any state or federal housing finance programs. "We don't currently utilize those right now, but there's great opportunity out there to do so."

He said the city strives to be a place in which anyone who wants to live there, can.

"Our goal as a city is to be as diverse as possible," Burckart said. "We have very low unemployment, we have job opportunities at all wages, but not everybody can afford to live here."

NW News on 06/19/2019

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