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Land availability for housing in Northwest Arkansas shrinking

by Stacy Ryburn | March 29, 2021 at 1:00 a.m.
Construction machinery stands idle Thursday, March 18, 2021, at the site of Rausch-Coleman‰Ûªs incoming Prairie View subdivision in Prairie Grove. Land available to build housing is shrinking in the four major cities of Northwest Arkansas, but some smaller towns are seeing a boom in housing construction with their amount of available land. Visit nwaonline.com/210322Daily/ for today's photo gallery. (NWA Democrat-Gazette/Andy Shupe)

Editor’s note: This story is second in a four-part series exploring the challenges and possible solutions for providing affordable housing in the region’s larger cities.

Other stories - NWA following urban sprawl pattern

More than 40% of the vacant pieces of residential land in the four major Northwest Arkansas cities disappeared in the span of a decade.

The shrinking amount of empty land means cities must squeeze homes closer together, allow multifamily housing where single-family exists or force working-class people to move outside the city away from their jobs, services and amenities.

Combating soaring housing and living costs will require comprehensive, regionwide planning, experts agree. The cost of land and construction is continuing to rise. Vacant land that is available typically lies at the

edges of the major cities and within smaller cities seeing a surge in residential construction.

A solution begins with cities changing policies on land use to encourage developers to build more affordable housing, exploring private-public partnerships to build affordable housing and preserving the lower-priced housing that exists.

The number of vacant residential parcels in Fayetteville dropped 30% from 2010 to 2020, according to the Washington County Assessor's Office. Parcels are pieces of land identified for tax purposes and can differ from the lines drawn for a lot in a subdivision.

Fayetteville had 4,149 vacant residential parcels in 2010 and 2,886 in 2020. Springdale had 1,730 such parcels in 2010, and by 2020, had 928, a 46% drop.

In Benton County, Rogers had a 47% drop in vacant residential parcels, from 3,255 in 2010 to 1,733 in 2020. Bentonville experienced the largest decrease among the four cities at 54%, with 3,610 in 2010 and 1,669 in 2020.

There is nuance to the data.

Jonathan Curth, development services director in Fayetteville, said the way parcels are drawn up may not accurately reflect a land's use. For instance, Walker Park was platted as a subdivision years ago but was never built. Sometimes, empty land is not reflected as a vacant parcel in county records, he said.

Fayetteville may have a lower percentage drop in vacant residential land compared to the other three major cities because of large farms at the city's edges, Curth said. Many properties within the city's interior have been held by families for a long time with no intention of development, he said.

Fayetteville's numbers on vacant land might also indicate a degree of success with the city's policy to encourage infill development, Curth said. The term refers to building densely on vacant or underused land within a city's urban core, rather than allowing dense residential development on the outskirts of town.

Plan ahead

Land prices usually account for about 30% of a home's sale price, and the market varies widely in Northwest Arkansas, said Sterling Hamilton, real estate broker with Cushman & Wakefield/Sage Partners in Rogers.

Some factors are more predictable than others.

Fayetteville's school district creates a sort of concentrated growth boundary compared to Springdale's sprawling school district, he said. Fayetteville also typically boasts schools that rank higher on national lists, Hamilton said. Last year, U.S. News & World Report named Haas Hall Academy in Fayetteville and Fayetteville High School the No. 2 and No. 4 high schools in the state, respectively.

New homes cost an average of $258,273 in Springdale, according to the Center for Business and Economic Research at the University of Arkansas. In Fayetteville, it's $265,026.

Schools serve as one of several factors contributing to the market value of land and, subsequently, homes, Hamilton said.

Some cities have more stringent zoning and development regulations than others. Topography plays a role. Having to build utility connections such as water and sewer can drive up costs.

Intangible factors, such as the perception of a place, also affects land prices, he said.

Guiding the way

The four major cities have comprehensive plans or growth maps to guide the type of development in different areas.

Fayetteville has its 2040 plan and a future land use map. Springdale has a land use plan and map. Rogers has a comprehensive growth map. Bentonville has its community plan and future land use map.

Curth said Fayetteville has already taken some indirect steps to promote affordable housing for working-class families, including zoning decisions to increase residential density and provide opportunities for different types of homes to be built. Those decisions largely are guided by the city's future land use map, he said.

"That's kind of working on a macroeconomic theory of supply and demand," he said. "If we're not making the potential for more supply, then demand is going to stay the same and prices are going to continue to go up. If we increase the potential for supply, then demand could be adequately met or overly met and potentially drive costs down."

Fayetteville's 2040 plan calls for a number of measures to support affordable housing. The city wants to set a numerical target to define affordability, for instance.

The federal government defines affordable housing as housing in which no more than 30% of a household's income goes toward direct costs such as mortgage or rent payments and the cost of utilities. The Center for Neighborhood Technology in Chicago defines attainable housing as combined housing and transportation costs not exceeding 45% of a household's income, with 30% for housing and 15% for transportation expenses.

Other measures in Fayetteville's plan include finding new revenue sources to help build affordable housing and removing city regulatory barriers preventing affordable housing development. The city also wants to create a database of affordable units for prospective homebuyers and renters to use and a list of incentives for developers to easily access.

Same goal, different plan

Springdale updates its land use plan every two years. Although the plan doesn't specifically address affordability, it does try to promote a variety of housing types and densities in different parts of the city, said Patsy Christie, planning director.

The Springdale City Council recently approved adoption of a zoning code it is referring to as a Springdale Elective Enhancement District. The option allows flexibility with lot sizes and placement of a building closer to the street, Christie said.

"We're using it more as an incentive to be able to maximize use and maintain affordability," she said.

The Rogers comprehensive growth map has three regional centers for commercial and higher density residential development. Those are along both sides of Interstate 49 to the west, along Eighth Street to the east and a corridor along Walnut Street.

The map also has more than 20 areas at major intersections designated for commercial uses surrounded by medium density residential development such as townhomes or courtyard houses.

The plan attempts to keep intact the majority of low density, residential homes with up to six units an acre, while identifying parts of the city where more dense residential development is appropriate, said John McCurdy, the city's community development director.

"What we've done is try to open the aperture as wide as it can be to create as much opportunity to increase the housing stock in Rogers as we responsibly can," McCurdy said.

Bentonville's plans have stated goals to support affordability and to create opportunities for new development. The community plan says the city wants to increase density in certain areas to reduce land cost per unit. The land use map shows medium to high density residential in and near downtown, as well as areas along Regional Airport Boulevard and spots near Crystal Bridges Museum of American Art.

One of the goals behind the city's plans is to allow residents to stay in the city as they age, said Tyler Overstreet, planning services manager. A young professional may want to move to the city and live in a studio apartment downtown, he used as an example. As the person starts a family, there are plenty of options for single-family homes within the city. When a person ages, there will be smaller homes, townhomes or condominiums closer to services.

"By providing for a variety of housing options, it can allow people to become a part of the community at a variety of price points," he said.

Staying ahead

Some of the smaller towns in Northwest Arkansas want to provide services and amenities like the larger cities with an emphasis on gaining tax revenue. Centerton adopted a comprehensive plan in October, which includes a land use plan.

The plan puts commercial development primarily along Centerton Boulevard and Tycoon Road, with pockets for higher density at major intersections. Residential development fans out from those areas, with the blocks closest to the commercial areas designated for medium or high density residential and shifting to lower density closer toward the center of town.

Centerton's population grew 60% from 8,871 in 2011 to 14,203 in 2019, according to U.S. Census data. Developers, mostly of subdivisions, have reached out to the city in recent years wanting to build at a rapid clip, said Lorene Burns, the city's planning director. Planners wanted to keep the town from becoming all homes with few amenities and services, she said.

Although Centerton residents are used to driving to Bentonville or elsewhere for most services -- Mayor Bill Edwards said he was one of them before becoming mayor -- that model is unsustainable, he said.

Bentonville West High School came to the city in 2016 and became one of the most populated high schools in the state with more than 2,000 students. Residential development followed, Edwards said, and the city needs commercial development to help keep people in the city and gain sales tax revenue.

"We've got more commercial things coming. That was our hope," he said. "Our rooftops -- that doesn't really bring the city revenue or services. Like one of my previous peer mayors said, we need the cash registers."

Public options

The Northwest Arkansas Regional Planning Commission often helps cities develop land use or growth plans. The plans consider the commission's own projections of density and population to provide an idea of where each city wants development and what kind, said Tim Conklin, assistant director.

However, no inventory of available land, location and acreage exists for the region. National experts say cities should come up with their own sets of data to achieve housing goals.

Cities should start by creating an inventory of existing affordable housing and do what they can to prevent those units from disappearing from the market, said Ed McMahon, senior resident fellow with the Urban Land Institute in Washington, a member organization of real estate and land use experts.

Planners then will have an idea what type of new residential development the city needs, he said. Developers in growing markets typically provide large and expensive single-family homes or luxury condominiums or apartments that are small and expensive, he said.

Those types of residential developments typically are the most profitable and pop up in areas with high land costs, he said. Cities have to get creative to encourage the "missing middle" of housing developments -- smaller complexes, duplexes through quadplexes or townhomes, he said.

One option is redevelopment of commercial property. Large shopping malls and centers or big box stores are being converted to housing across the country. Hotels or motels that have gone out of business also can provide an affordable option once renovated, he said.

Bill Burckart, a developer and Bentonville City Council member, said it's time for the region to think outside the usual. The region won't be able to house the workforce it needs unless it addresses the problem, he said.

"Different is scary, but we have a real opportunity here," Burckart said. "It's a lot cheaper than building roads."

Stacy Ryburn can be reached by email at [email protected] or on Twitter @stacyryburn.

Construction machinery stands idle Thursday, March 18, 2021, at the site of Rausch-ColemanÍs incoming Prairie View subdivision in Prairie Grove. Land available to build housing is shrinking in the four major cities of Northwest Arkansas, but some smaller towns are seeing a boom in housing construction with their amount of available land. Visit nwaonline.com/210322Daily/ for today's photo gallery. 
(NWA Democrat-Gazette/Andy Shupe)
Construction machinery stands idle Thursday, March 18, 2021, at the site of Rausch-ColemanÍs incoming Prairie View subdivision in Prairie Grove. Land available to build housing is shrinking in the four major cities of Northwest Arkansas, but some smaller towns are seeing a boom in housing construction with their amount of available land. Visit nwaonline.com/210322Daily/ for today's photo gallery. (NWA Democrat-Gazette/Andy Shupe)
Construction machinery stands idle Thursday, March 18, 2021, at the site of Rausch-ColemanÍs incoming Prairie View subdivision in Prairie Grove. Land available to build housing is shrinking in the four major cities of Northwest Arkansas, but some smaller towns are seeing a boom in housing construction with their amount of available land. Visit nwaonline.com/210322Daily/ for today's photo gallery. 
(NWA Democrat-Gazette/Andy Shupe)
Construction machinery stands idle Thursday, March 18, 2021, at the site of Rausch-ColemanÍs incoming Prairie View subdivision in Prairie Grove. Land available to build housing is shrinking in the four major cities of Northwest Arkansas, but some smaller towns are seeing a boom in housing construction with their amount of available land. Visit nwaonline.com/210322Daily/ for today's photo gallery. (NWA Democrat-Gazette/Andy Shupe)
Dirt work continues Wednesday, March 24, 2021, at the site of Rausch-Coleman's incoming Prairie view subdivision in Prairie Grove. Land available to build housing is shrinking in the four major cities of Northwest Arkansas, but some smaller towns are seeing a boom in housing construction. Check out nwaonline.com/210329Daily/ and nwadg.com/photos for a photo gallery.
(NWA Democrat-Gazette/David Gottschalk)
Dirt work continues Wednesday, March 24, 2021, at the site of Rausch-Coleman's incoming Prairie view subdivision in Prairie Grove. Land available to build housing is shrinking in the four major cities of Northwest Arkansas, but some smaller towns are seeing a boom in housing construction. Check out nwaonline.com/210329Daily/ and nwadg.com/photos for a photo gallery. (NWA Democrat-Gazette/David Gottschalk)
Dirt work continues Wednesday, March 24, 2021, at the site of Rausch-Coleman's incoming Prairie view subdivision in Prairie Grove. Land available to build housing is shrinking in the four major cities of Northwest Arkansas, but some smaller towns are seeing a boom in housing construction. Check out nwaonline.com/210329Daily/ and nwadg.com/photos for a photo gallery.
(NWA Democrat-Gazette/David Gottschalk)
Dirt work continues Wednesday, March 24, 2021, at the site of Rausch-Coleman's incoming Prairie view subdivision in Prairie Grove. Land available to build housing is shrinking in the four major cities of Northwest Arkansas, but some smaller towns are seeing a boom in housing construction. Check out nwaonline.com/210329Daily/ and nwadg.com/photos for a photo gallery. (NWA Democrat-Gazette/David Gottschalk)
Dirt work continues Wednesday, March 24, 2021, at the site of Rausch-Coleman's incoming Prairie view subdivision in Prairie Grove. Land available to build housing is shrinking in the four major cities of Northwest Arkansas, but some smaller towns are seeing a boom in housing construction. Check out nwaonline.com/210329Daily/ and nwadg.com/photos for a photo gallery.
(NWA Democrat-Gazette/David Gottschalk)
Dirt work continues Wednesday, March 24, 2021, at the site of Rausch-Coleman's incoming Prairie view subdivision in Prairie Grove. Land available to build housing is shrinking in the four major cities of Northwest Arkansas, but some smaller towns are seeing a boom in housing construction. Check out nwaonline.com/210329Daily/ and nwadg.com/photos for a photo gallery. (NWA Democrat-Gazette/David Gottschalk)
More News

New home price sales

The average sale price of a new home in Northwest Arkansas’ most populated cities is as follows:

Cave Springs — $413,478

Bentonville — $382,757

Rogers — $341,407

Tontitown — $338,552

Centerton — $322,590

Lowell — $276,682

Pea Ridge — $268,147

Fayetteville — $265,026

Springdale — $258,273

Farmington — $247,349

Bella Vista — $239,588

Prairie Grove — $217,885

Siloam Springs — $205,250

Gentry — $199,736

Highfill — $197,771

Gravette — $172,166

Source: Center for Business and Economic Research, University of Arkansas

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