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A development company hopes to build 150 units of rental housing at the southeast corner of The Shops at Lake Havasu, in a little-used portion of the shopping center’s parking lot.

Rising home prices throughout the country are creating housing needs for communities everywhere.

Housing experts say there are multiple tools that can be used to address workforce housing shortages, but there is no magic, one-size fits all, answer.

Luis Torres with the Texas Real Estate Research Center said a city or county can help out directly by purchasing homes or subsidizing the purchase of land for affordable housing – but both of those options do cost taxpayers’ money.

Alex Schwartz, a Professor of Public and Urban Policy at The New School in New York, said sometimes local governments offer low interest rates on home loans – although he said that likely wouldn’t help much now with interest rates already extremely low.

Torres and Schwartz both said local governments need to be mindful of their regulations when housing prices are already at a premium.

“I think one of the biggest things is to not try to implement more regulation,” Torres said. “I think the issue is to try not to introduce more cost burdens on the home builders.”

Schwartz said governments could also tweak the building code requirements or land use regulations like minimum lot or house sizes, in an effort to encourage affordable housing development.

“That will reduce the cost,” he said. “If you are only building large houses on large lots, that housing is not going to be as affordable.”

Torres said another common tactic is for local governments to create partnerships with private businesses in an effort to tackle the issue.

“There are some solutions, but it is a question at the end of the day of private industry and government getting together and discussing what the best outcome for us is,” Torres said. “But definitely don’t add more cost and red tape for the home builder.”

Locally, Lake Havasu City officials have said they prefer to foster private partnerships to develop workforce housing rather than have the city jump into the real estate market itself.

“The city is not in the business of building houses or being a landlord,” said Lake Havasu City Manager Jess Knudson. “The city’s role is to bridge partnerships and bring the people to the table that we think would create some synergy with others. You need the investors, you need the landowners, you need the developers, and water experts and all those folks who need to be in the room to make the project advance. So we are doing our best to build those partnerships on the public side and on the private side.”

Knudson said the city encourages any type of new construction project to reach out and work with the city, but Havasu is particularly interested in potential workforce housing developments. He said the city can help encourage such development through giving the potential investor the resources they need to complete their plans, walking them through the city’s zoning, and more. Mayor Cal Sheehy said in some cases the city helps to bring people together who can partner on affordable housing developments.

“If we have a land partner we will bring together a financial partner,” Sheehy said.

Sheehy said he is meeting regularly with about five such groups who are exploring different methods and types of workforce housing for various projects in the area.

Partnership for Economic Development CEO James Gray said his organization is also involved in helping out with anyone interested in workforce housing developments. He said the PED tries to help out in any way they can, ranging from finding a piece of land to identifying state financial incentives available for the project.

City officials say there are several groups exploring various potential workforce housing models to see if a project is financially viable in Lake Havasu City.

“We are hopeful that one or more of these projects will be able to move forward that will give some relief for attainable and workforce housing measures within our area,” Sheehy said. “We are also expanding that to areas outside of the city boundaries, so county areas that make sense like Havasu Heights that can offer another type of solution.”

In the end, however, the city says it will be up to private industry to move forward with any particular potential solution.

“When it comes down to the details [the city is] not putting any money in, we are not putting land in, so we need to bring those people together,” Sheehy said. “We are very involved, but obviously we have less say when I have no money in the game. But we have a lot of influence and we use it to bring awareness to the issue, which is how we started before the pandemic.”

Lake Havasu City does have a say in the permitting process and zoning within city limits, however, and the City Council has signaled that they are interested in working with anyone who is willing to address the issue. Knudson said city staff is currently looking into a city ordinance in Flagstaff that pushes affordable housing permit applications to the top of the pile in an effort to reduce wait times. He said staff may bring a proposal to the City Council at a future meeting.

“If it is something that is working we are going to take a close look at it and duplicate it, or improve on it,” Knudson said.

Any development outside the city limits would be under Mohave County’s jurisdiction. The county’s Economic Development Director, Tami Ursenbach, said the county is also pushing for affordable housing developments.

“Every developer that comes in and is willing to spend money, I talk about affordable housing,” Ursenbach said. “What are they willing to do? Will they consider putting in affordable workforce housing? We have some that are going through and putting pencil to paper to see what will work out on the property they have already purchased – and it is not just one company, it is several. So it is up to those companies to decide what they are going to do, but those discussions are happening now.”

Ursenbach said prior to the pandemic most of the conversations regarding workforce housing have been on a case-by-case basis with a specific business, city or geographic location. But the county is starting to move towards a more comprehensive approach to the problem. At its first meeting in August the Mohave County Board of Supervisors discussed putting together a county-wide roundtable to bring communities together to talk about the issue and potential solutions.

The Supervisors decided to delay the roundtable for the time being in order to give county staff time to put together some information and take stock of the options available.

Mohave County Community Services Director Michael Smith told the Supervisors that his department is currently looking into several possibilities, including commissioning a new housing study. He said there hasn’t been one done in a long time – in Mohave County or any of its cities.

“The Mohave County Housing Authority will be presenting a proposal to the Board of Supervisors to facilitate the collaboration, and seek partnerships of various entities in an effort to address the housing needs of Mohave County,”

Smith said. “The Mohave County Housing Authority cannot successfully address the housing problem without the community’s support.”

Ursenbach said it is still too early to say what will come out of the county’s efforts, or even what options are on the table. But the goal is to start coming up with some of those answers soon.

“We are at a point where we need to bring in our attorneys, which we haven’t done yet, and figure out legally what we can and can’t do,” she said.

What it will take

The pandemic certainly contributed to the local and national workforce housing crisis, and side effects of covid have also made the issue more difficult to address.

Gray noted that the cost of building materials like wood, lighting, electrical and glass have all risen over the last year – and those extra costs make it more difficult to produce housing at a low cost.

“The problem right now is trying to build housing at an affordable model, to fit the environment which is not affordable,” Gray said.

The challenge is to work out a way to cut costs enough to create a solid business plan.

“Essentially, for development of a new building, it is going to end in how well the building performs,” Gray said. “How much does it cost, and what are the fundamentals? Ultimately in the end, it is going to come down to a formula where they have to offset the risk for the reward. Those percentages are a lot lower than people think. It is very thin.”

Chad Nelson with A Team Real Estate said right now spec-homes appear to be more attractive to developers and investors because they offer a much more immediate payoff and there is a high demand for those types of housing as well. With the limited inventory of single family homes on the market Nelson said it takes about 10 to 24 months from start to finish with a high probability that the home will sell quickly in this market.

But workforce housing is a much more long term investment and therefore a larger risk.

“Getting those investors to think about long term investments like workforce housing doesn’t typically work because the investment doesn’t really pay off until about 15 years,” Nelson said. “Most investors that have the cash to do something like that are typically older investors and they just don’t want to roll the dice.”

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(19) comments

#remove46

This has "failed shopping mall" written all over it.

shutthefrontdoor

Got to hand it to the city fathers with all this rhetoric about the work force, housing for the masses and the local economy. Here is how the problem is addressed . . . . . Paradyme Investments will be celebrating the beginning of Paradyme Storage with a groundbreaking ceremony at 9 a.m. at 80 Retail Center Blvd., obviously something this city needs! Featured guest speakers will include city officials, Chamber of Commerce, and CEO of Paradyme Investments Ryan Garland. Paradyme Storage is “a luxury product, that will parallel the growth of Lake Havasu", that's correct, a "luxury product" paralleling the growth of Havasu!, conducive to sumptuous living, elegance, or refinement of living rather than a necessity. Did I miss something in the aticles of concern?

Paradyme Storage is “a luxury product, that will parallel the growth of Lake Havasu,” according to a press release.

1947

They need several junked cars and boats parked in the lot to make the rendering believable.

1947

Lake Havasu City is a cheap vacation destination. Places like Maui are very expensive vacation destinations. The people that work in hospitality in Maui face far higher housing costs than hospitality workers in Lake Havasu. Maui workers are doing fine and they smell good too!

1947

Just another white elephant added to the zoo at the shops. I thought we are facing problems with water.

Joe Nobody

During some work meetings on justifying upgrading controls for 50+ year old equipment, etc., the first option always is:

1. Do nothing.

(List the consequences.)

2. An so on

mermaid

Really, these look like “The Projects”

1cubwin

Far from it. You’ve clearly never spent any time around section 8 housing.

1947

I have and these look like new section 8 housing.

Mac81671

I think that will be a great idea out by the mall. In the original plans there was supposed to be a hotel where the boat and trailer place is at near he depot. That will bring people out to the mall area and will lead to more commercial and industrial development where we actually have the land to use. Great idea!!! Hope it comes through sooner than later.

KZabinski

One thing may not seem to have to do with the other at first blush, but in the overall picture, these subjects are interrelated: If we are looking into the present future challenges, let us first resolve our medical facilities and staffing challenges (for example, a physician owned for profit hospital), and bring in additional retailers to occupy The Shops. Yes, housing may need to be resolved - but so do other services and infrastructure. Let’s not put the cart before the horse.

#remove46

Sounds like "what came first, the chicken or the egg"? you cant bring in additional retailers to occupy the Shops, is the employees have no place to live?? Stores open..no employees??? This should have all been addressed long before this. We're already too late, but something for sure needs to be done.

1502

That picture would be the nicest looking building in Havasu.

shutthefrontdoor

This is and has been an on going problem, often written about and spoken of and maybe a little late in the planning efforts as we continue to construct single family homes and an abundance of storage unit complexes. Rental prices have increased by 18% over the course of the past five years. Money Magazine says “monthly payments are the highest in 30 years” and adds that the median rent has doubled in the past two decades. The National Low Income Housing Coalition released an extensive report in 2018 reflecting the state of the nation, a great example right here in LHC. Their findings: 1) The necessary median wage to afford a two-bedroom apartment is approximately $21.21 while the federal minimum wage sits low at just $7.25 an hour 2) A minimum wage worker would have to put in 122 hours of hard labor every week (the approximate equivalent of three full-time jobs) in order to reside in a two-bedroom apartment 3) Even a one-bedroom apartment would require a service worker to take on at least two jobs. Experts cite several factors for the lack of affordable housing, some touched upon in the article including: lack of budget, multiple foreclosures, expensive building materials, unaffordable land, greed, fraud within low income housing institutions and/or lack of surveillance of government run programs. New housing alternatives being addressed could significantly reduce homelessness, from tiny homes to shipping container architecture to unexpected temporary residential fixtures like greenhouses and converted abandoned shopping malls. There is a very broad spectrum of different types of individuals who have housing insecurity and the disparity in wages plays a major role, but the problem is also in the housing budget and the houses themselves.

Hcarolyn

Everyone keeps harping on "Minimum wage" - fact is that was never meant to be a "living" wage,. These were the jobs high school students worked and some elderly retired wanting to subsidize their income. Now we have people who are refusing to work these jobs unless they make $20 an hour never giving a minutes thought to the fact the wage has to be covered in the cost of goods - already a burger and fries at a drive through is creeping up to $15 - this will create less buyers and fewer employees. Inflation is creeping toward annualized 15% with no end in sight. There is [or was under Trump] over 10 million jobs available for people willing to go to trade schools and learn how to do something -- which is needed these days since our schools no longer teach the basics of life subjects - like woodshop for instance. And I for one don't want "shipping container" homes here in town. Want to build them out in the desert - fine. Fact is we have a water problem and the building needs to be expensive and rare not more building with even more water demand - but no one is talking about water which is going to hit us all right between the eyes. The West can only absorb so many water users before we run out.

Re homeless - most have issues that cause them to be homeless - things like mental illness, alcoholism, etc. These are people who absolutely will not care for a property they would be moved into and soon we would be a city with slum areas even worse than around some of our already existing cheap apartments on the North Side.

Sonny

[thumbup]

BigBob

hc - And another compassionate conservative weighs in.

1947

Compassionate conservatives feel the pain of others, we just don't believe we need to pay for the recovery process. Compassionate conservatives take care of their own and try not to burden others. We feel our own pain!

Too old for this

Sometimes you just run out of compassion for some people. Usually, those people bring this on themselves. You should make your home like a short term rental for homeless people and rent out everything except your basement. You could pick up a few bucks, show your compassion, and still have your little bat cave for trolling the internet.

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