Trend versus tradition

Cities face challenges of multifamily housing

NWA Democrat-Gazette/SPENCER TIREY Mario Gueveca works May 18 on a house in the Mansions, a multifamily development off Mill Street in Springdale. The face of housing in Springdale is changing with different kinds of upscale developments.
NWA Democrat-Gazette/SPENCER TIREY Mario Gueveca works May 18 on a house in the Mansions, a multifamily development off Mill Street in Springdale. The face of housing in Springdale is changing with different kinds of upscale developments.

SPRINGDALE -- Eve Smith walks two blocks to and from work each day -- rain, snow, sleet or hail. She rides her bicycle two blocks in the other direction to access the Razorback Greenway. And the amenities of downtown Springdale such as restaurants and her art studio beckon just one block away.

Smith, 44, visual arts and program director at the Arts Center of the Ozarks, lives in a 350-square-foot studio apartment above the Kent Hirsch law firm. She described her space as "cozy" and "romantic." Two other apartments share the second floor.

"I've always wanted to live where I was working, creating and playing in the same place," Smith said. "Even though I'm in the middle of downtown, when I'm here, I feel like this is my alone time, my quiet time. I can go downstairs and go to a concert and have a drink when I want to."

The face of housing is changing, and national trends are showing up in Northwest Arkansas' cities. That includes Springdale, said Patsy Christie, director of the Planning Department. More people, especially young professionals, are making their homes in multifamily housing.

Multifamily real estate

There is a complex dynamic between multifamily housing, residential rental housing and residential home ownership being influenced by several factors including: quantity of multifamily supply, quantity of rental housing, interest rates, underwriting standards and unemployment rates among others, according to the Skyline Report sponsored by Arvest Bank.

Highlights from the second half of 2017

• Number of apartment complexes in Springdale: 103

• Number of units: 6,549

• Number of apartment complexes in Northwest Arkansas: 751

• Number of units: 38,230

• The vacancy rate of multifamily housing in Springdale was 1.8 percent, up from 0.9 percent in the second half of 2016.

• The vacancy rate for all multifamily properties in Northwest Arkansas sat at 4.5 percent. It was 4.2 percent in the first half of the year and 3.2 percent in the second half of 2016. The increase was the result of new construction, making more units available.

• In Springdale, 150 new rental units were announced or under construction in multifamily projects. This is 2.2 percent of the current inventory.

• The average lease rate per month for a multifamily property unit in Northwest Arkansas was $645.62, with the median lease at $593.

Source: The Skyline Report

photo

NWA Democrat-Gazette/SPENCER TIREY Rows of houses are under construction in the Mansions, a multifamily development off Mill Street in Springdale. The face of multi-housing in Springdale is changing with different kinds of upscale developments.

"Not everyone wants a single-family home with a yard to take care of," Christie said.

"They want more of a community atmosphere," added Kevin Parsley, chairman of the Planning Commission.

Parsley was standing on the Bentonville square recently while responding to questions via cellphone. He noted shops and restaurants with housing above them.

"The Walmart Neighborhood Market is here, yet, just four blocks away, there are single-family homes and different forms of multifamily housing," he said.

There are many different kinds of multifamily housing, but people still fear multifamily projects, Christie said.

"We've got to change the mindset."

Apartment occupancy in Northwest Arkansas has hovered around 98 percent since 2014, according to real estate firm CBRE. The firm counts 31,500 units throughout the region. There are about 1,900 units under construction or set for development.

Rogers has the highest average rental rate for all sizes of apartments among the four major cities at $841 per month. Bentonville is next at $762 monthly. Fayetteville's average rent is $686 and Springdale is the least expensive at $576, according to CBRE's findings.

Mervin Jebaraj with the University of Arkansas' Center for Business and Economic Research said neighborhood residents feeling anxious about nearby developments is a natural consequence of the growth in Northwest Arkansas. It's happening more frequently among cities, just as it did in the early 2000s before the recession hit, he said.

Residents worry their neighborhoods will look vastly different once multifamily and commercial developments come in, Jebaraj said.

"I think you're always going to have this push and pull between people who want to build more housing to accommodate more people and the existing neighborhoods who don't like the idea of change," he said.

Robert Garza pictures small units built on an equally small budget when he thinks multifamily housing. Garza spoke during a public hearing on rezoning a property for a multifamily project during the May meeting of Springdale's Planning Commission. He acknowledged he didn't know details of the proposed complex.

"I have a nice house on a nice property in town, and now they want to put a housing development right on the back of it," he said.

The development will encompass 75, 1,400-square-foot town homes with two bedrooms, two and a half bathrooms and garages, said Gary Stith, the developer.

"Our project will include garages, green areas, picnic tables and other amenities. We will build fences between our place and the others. We want to be a good neighbor," he said.

Garza said he would be more accepting of a project if it was expensive. He worries about an increase in crime that might come with a multifamily unit.

Jeff Taylor, spokesman for the Police Department, said crime rates might seem higher in multifamily complexes simply because more people live there. He compared a city of 3,000 people with a city of 300,000 people. The incident rate might increase, but the percentage would be about the same.

"I've worked here 20 years, and there are apartment complexes where I remember only going on one call," he said. "Of course, some we go to more frequently have a lot more people."

The idea denser, more affordable multifamily housing coming to an area will lower property value and heighten crime is a common misconception around the country, said Jennifer Raitt, director of planning and community development with Arlington, Mass., about 30 minutes northwest of Boston. Raitt also is a volunteer member of the American Planning Association focusing on housing policy issues.

The opposite is true, she said. No data exist to corroborate the idea lower-priced housing worsens a situation where crime already exists. On the flip side, there's nothing to show higher density brings crime to an area where it didn't predominantly exist before, Raitt said.

Property value tends to increase with new investment, regardless of if the investment is multifamily or dense housing development, she said.

"There are a lot of things at the root of these discussions," Raitt said. "It's always challenging to change and to accept change of any kind. It doesn't matter if it's affordable development. Some communities have a hard time welcoming any new development."


It can be hard to build multifamily developments in Springdale, said Tom Embach Sr. of Leisure Homes. His current project is the Mansions on Mill Street -- 56, three-bedroom units, some of which will be housing for senior citizens.

"They have very stringent planning zones," Embach said of the city. "Which is good, because we want to build a quality building. They can help you achieve that."

Both Christie and Parsley say the building standards and codes developed by the Planning Commission ensure quality construction and communities.

"We look at a piece of property, how it looks, how it fits into the existing environment," Christie said.

Planning commissioners think of the worst case scenario of what could be built on a property when they consider rezoning because some developers would just build to minimal standards.

The city constantly reviews its design standards. For example, a builder might want to use a particular type of vinyl siding. The city might require a higher grade less likely to be damaged, Parsley said.

The city put a moratorium on multifamily housing in 2004 as it created design standards, which were adopted in November of that year. This was done in response to a development that looked like military barracks, Christie said.

"That's not the sort of environment we wanted," she said. "Too many people in one place has an impact. There was not enough room to wander through the buildings."

The city now requires the developer to add green spaces and amenities such as water features, pathways, picnic areas and barbecue grills as a proposed development moves from minimum density to maximum density.

"You increase quality outside and add incentives to make a complex a higher quality," she said.

"We've been building in Springdale since 1990," Embach said. "They are our favorite city administration. They are helpful, and they are interested in the project. They have a wonderful climate for developers."


Other cities in Northwest Arkansas have different approaches to density and multifamily housing.

Bentonville largely lets the market decide what needs to go where, within the parameters of the city's zoning code, Mayor Bob McCaslin said.

"It's a common-sense approach, is all it is," he said. "It's not our role as a municipality to mess with the supply or the demand."

The city has had a general plan since 2007 to help guide city leaders. An update, the Bentonville Community Plan, is in draft form and will serve as a road map as Bentonville grows and changes over time, according to the city's website.

People coming to Rogers, just like the rest of Northwest Arkansas and the nation, increasingly want to live in multifamily communities within walking distance of amenities, said John McCurdy, the city's director of community development.

Rogers has a planning committee that looks exclusively at density of development. The committee reviews whether the transportation and utility systems of an area can support a proposed development and if the development would negatively affect the surrounding area, McCurdy said. The city tries to accommodate what new residents want without threatening neighborhoods, he said.

"As we look to recruit high-quality individuals to move here, a lot of those folks don't want a 3-acre lot with 2.8 acres of mowing on their weekend," he said. "They want to live on the greenway. They want to walk across the street and grab dinner, or maybe hop on their bike and ride a few blocks to work."

Fayetteville tries to usher multifamily and dense development whenever it can and where appropriate, said Garner Stoll, development services director.

The city has been preaching infill development for a long time and is looking to more clearly define what the term means, Stoll said. The basic idea is to create nodes of urban development without expanding to the far reaches of town. The city wants to hear from residents and developers to get a better sense of what constitutes as appropriate development within those nodes as it updates its overall master plan this year.

City leaders have some idea of what residents don't want, such as student housing towering over neighborhoods or major thoroughfares crossing through neighborhoods, Stoll said. Affordability is a challenge. Planning staff has emphasized regulating building size over number of units as a way to handle the issue, he said.


The picture of family housing in Springdale isn't yet in focus.

"We are still learning about more of multifamily housing's newest trends," Parsley said.

The code for downtown Springdale already provides for different housing types -- including a mixture of commercial and residential, single-family homes with a carriage house and studios, Christie said.

Housing also will develop along the trail systems, she expects. Doctors at Arkansas Children's Northwest have expressed interest in riding bikes to work, and Tyson Foods has a significant number of employees who ride bikes.

"People like the opportunity to use the trail system to get around," she said. "Not everybody wants a car."

Christie also knows housing options for seniors and veterans are needed. She considers time-share units possible as people come to the area for recreation. "Even some RV parks -- the one at Cave Springs is beautiful."

NW News on 05/27/2018

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