Plans filed for used-car dealerships on Sixth Street, Haskell Avenue; Lawrence home prices continue to soar
Lawrence is experiencing a used-car boom. In my house, a used-car boom usually just means my muffler has fallen off again. In Missouri, it means the car actually has fallen off its cement blocks. But in Lawrence it means there is a genuine increase in businesses getting into the used-car market.
As we have reported, longtime auto salesman Scott Teenor has opened 6th Street Auto in a newly constructed building near Sixth and Colorado streets. We’ve also reported that plans have been filed for a new building to be constructed at the entrance to the East Hills Business Park. As currently planned, that building would house Crimson & Blue Motors.
Now, two more plans have been filed for used-car lots in town. The first one is at the former location of the Zarco gas station at 1415 W. Sixth St. David Williams, a longtime auto salesman in Kansas City, plans to open Deals on Wheels Automotive at the site.
Williams said he plans to stock anywhere from 15 to 20 vehicles at a time and will try to focus on affordable, later-model vehicles. Williams, who has been in the car-selling business since 1981, said he thinks the increase in the number of used car lots is a sign of the times. The average age of vehicles rose during the recession. People now are needing to replace those older vehicles, but don’t yet feel confident enough to spend the type of money required for a brand new car.
“I think people are getting a little wiser with their money,” Williams said. “To buy a brand new car and drive it off the lot and see it depreciate by 30 percent, that is tough.”
Williams said he hoped to have the business open in the next few weeks. Look for some renovation work to occur at the site, but it will be minor. The business will keep the current building and the canopy that used to to cover the gasoline pumps.
Also look for some work to occur at a commercial building along Haskell Avenue. Lawrence-based Premier Auto has filed plans to move from its current home at 23rd and Haskell to 27th and Haskell in the building that formerly housed the shop and offices of Chaney Inc.
Ryan Blum, owner of Premier Auto, said he’s making the move because he’s tired of leasing space. He has the chance to buy the old Chaney building and said the new space should allow his business to grow.
“It will give us quite a bit more space,” Blum said. “The shop is about 50 percent larger. It will have more parking. It will allow us to carry a few more cars.”
Blum said additional space is needed because the company — which has been operating for 10 years in Lawrence — has grown beyond just a used-car business. The company also does vehicle leasing and auto detailing, and has a rental fleet of Penske moving trucks.
Blum said he hopes to have the new location open by late July.
In other news and notes from around town:
• “Boom” isn’t exactly the word I would use to describe Lawrence’s real estate market currently. Perhaps “bang,” as in the sound a starter pistol makes. If you are looking to buy a home in Lawrence, you had better be prepared to move fast. That’s been the case for the last several months, and the most recent report from the Lawrence Board of Realtors shows that is still the case.
The median number of days a home sits on the market before it sells is down to 16, according to the report.
Once you do start to move on a house, the next word to come to mind may be “ouch.” That is perhaps getting mumbled a bit as people see what is happening to Lawrence home prices.
As buyers become more competitive for the relatively small numbers of homes on the market, prices have been rising. The increases were dramatic for May, the most recent month for which Lawrence data is available. According to the report, the median selling price for homes sold thus far in 2017 is $182,900. That’s up 7.6 percent from the same time period a year ago.
The good news, for the industry anyway, is there still seems to be plenty of buyers on the market. That was in question after April’s report, which showed home sales decreased by 9.4 percent compared with April 2016. Realtors blamed a lack of available homes for sale.
But May was a big bounce-back month. Lawrence home sales in May increased by 7.5 percent compared with May 2016. Year to date, Lawrence home sales now total 485 and are up 6.8 percent compared with the same period a year ago.
But there also was a worrisome number in the May report. The number of active listings on the market stood at 248 for the month. That’s down from 260 in May 2016 and continues a months-long downward trend for homes on the market. That downward trend is what is driving home prices up.
It is an interesting — and powerful — trend to watch. City Hall officials are trying to plan for how they can make housing more affordable in Lawrence. Thus far, many of their efforts have focused on subsidizing particular housing projects, which may add a few dozen affordable housing units at a time. But, if the entire Lawrence housing market — thousands of homes — is seeing values increase dramatically, how much good does it do to add a few dozen affordable homes at a time? And, of course, not everyone sees rising home values as a bad thing. Some people see it as their largest investment is growing in value.
As someone once said, who knew this subject could be so complicated? More on that later, though. For now, here’s a look at some other statistics from the May report of the Lawrence Board of Realtors.
— Sales of newly constructed homes continue to boom. Year to date there have been 51 sales of newly constructed homes. That’s up 34 percent from the same period a year ago.
— As builders have built more homes in Lawrence, the price for new homes has gone down. Year to date, the median selling price for a newly built home is $299,900. That’s down 4.6 percent from last year’s median of $314,500.
— The higher home prices are equating into a big dollar year for the local real estate industry. Year to date, the total dollar value of homes sold in Lawrence stands at $105 million. That’s up 13 percent from the same period a year ago.
“Affordable housing” is as big of a buzzword at City Hall as “Halloween candy” is in my household. So, city leaders don’t need any extra push to work on the affordable housing issue, but they have gotten a national reminder anyway. A new report is out that lists Lawrence as the most expensive city in the state of Kansas.
The financial news site 24/7 Wall Street — which provides its content to large national sites like USA Today, MSN, Time and others — has listed the most expensive city in every state, based on 2014 cost of living data from the federal Bureau of Economic Analysis.
The report, which was getting big billing on MSN.com earlier this week, has good news and bad news in it for Lawrence. The good news is that the cost of living in Lawrence is 5.7 percent less than the national average. So, it is still cheaper to live in Lawrence than in lots of other places in the country. However, lots of those other places are not in Kansas. The report found the average cost of living in a Kansas community is 9.3 percent less expensive than the national average. So, a little math tells us that Lawrence is about 3.6 percent more expensive than the average Kansas place.
Although that is not a great number for Lawrence, it isn’t terrible either. Sometimes when you hear people talk about Lawrence you would think it costs 30 percent more to live here than elsewhere in Kansas, not 3 percent. Think of it this way: If Lawrence residents just made 3 percent more than the average Kansan, Lawrence’s higher prices essentially would be negated. But that’s not the case. Instead, Lawrence’s median household income is about 15 percent lower than the statewide average.
In other words, if Lawrence has an affordability problem, it may not be because goods and services cost so much more here. It may be because we just make less money than other communities. I know this is not a new revelation, but it is one I find worth repeating nonetheless.
One other point to note about this report: I’m not sure it really can definitively state that Lawrence is the most expensive city in the state. I think it would be more accurate to state that it is the most expensive metro area in the state of Kansas. The report’s authors didn’t look at every city in the state, but rather every metro area. That’s significant because every Johnson County community is included in the Kansas City metro area, which for the purposes of this study was counted toward Missouri. I still think it is more expensive, for instance, to live in Overland Park. I would guess that’s definitely the case for a place like Mission Hills, which I’m pretty sure is a real place, but can’t confirm because every time my old beat-up F150 and I ask for directions, we end up in Edgerton.
But there are other numbers that put Lawrence’s cost of living into perspective. The U.S. Census Bureau last month released new 2015 figures for cities greater than 65,000 in population. So, here’s a look at some data related to housing, rentals, and incomes: (Note: Manhattan, one of my favorite cities to compare us with, isn't large enough to have been included in this latest Census report.)
Median value of owner-occupied housing
— Lawrence: $179,100
— Overland Park: $249,000
— Olathe: $207,700
— Topeka: $102,800
— Wichita: $124,400
— Lawrence: $814
— Overland Park: $1,022
— Olathe: $912
— Topeka: $744
— Wichita: $734
Median household income:
— Lawrence: $46,564
— Overland Park: $81,144
— Olathe: $80,242
— Topeka: $43,860
— Wichita: $46,894
— Kansas: $53,906
Make of those numbers what you will. Certainly, Lawrence’s household income numbers are affected some by Lawrence being a university community that has lots of students who don’t earn full-time livings. But that doesn’t account for all the difference. As we’ve reported, there’s also some reason to believe Lawrence has an inordinate amount of part-time employees even for a university community.
One thing the numbers tell me is that it may not be accurate to say Lawrence is the most expensive city in the state. Clearly, housing and other goods cost more in Johnson County.
Measuring how expensive an item is only looks at its cost. Measuring how affordable something is also looks at your ability to pay for it. It seems like that is where Lawrence’s struggles are. Perhaps it is an obvious distinction to everyone. Hopefully it is clear to those who are studying affordable housing issues in Lawrence because trying to make housing cheaper in Lawrence will require one set of strategies while trying to raise incomes will require a different set.
Housing and self-storage units planned for area north of Rock Chalk Park; city to host budget sessions next week
Plans for a major new residential area north of Rock Chalk Park are in the works, and the first signs of commercial development near the sports complex also are showing up at City Hall. But the commercial plans may not be what you expect.
Plans have been filed for about 13 acres of self-storage units just north and west of the Rock Chalk Park sports complex.
If that leaves you scratching your head, that shows you don't understand all that will be going on at the city's new recreation center at Rock Chalk Park. In addition to it being a magnet for youth tournaments, it also will host a variety of adult leagues. And if you have ever seen a group of 40-year old men play basketball, you know it looks like a medical device aisle has exploded: Knee braces, ankle braces, elbow braces, and braces for parts that we didn't even know we had until we hit 40.
It only make sense to store all those braces in a nearby self-storage unit because the trucking costs to haul all that gear back and forth eats a fellow alive.
Well, maybe that is not the main thinking behind the proposal. It may have more to do with the approximately 600 homes that could be built north and northwest of the sports complex.
Plans at City Hall have been filed to rezone about 115 acres of property from agricultural to a mix of single-family and industrial zoning. Specifically, 25.2 acres would be zoned for 5,000 square-foot single family lots, 76.2 acres for 7,000 square-foot single family lots, and 13.3 acres for light industrial, which would house the storage units.
The property is south of North 1750 Road and east of the South Lawrence Trafficway. An entity led by Lawrence businessman Michael Garber owns the property and has filed the plans. Basically, the property is the next piece of property north of the city's recreation center, and it also includes property to the northwest of the recreation center as well. But any new houses won't be directly adjacent to the recreation center. The city and Kansas University Endowment own some wooded property north of the recreation center that will be used for trails and nature areas. That area will be a buffer between the recreation center and the new neighborhood.
That's assuming that there will be a new neighborhood. This project has some significant approvals to win from City Hall yet. In addition to the rezoning, it also likely will need an amendment to the city and county's comprehensive plan, Horizon 2020. The plan doesn't provide a lot of guidance for how the area should develop, but there are indications that it doesn't envision it developing with as much residential density as proposed.
In terms of the number of 600 new homes, that is a true estimate at this point. David Hamby, the engineer with Lawrence's BG Consultants, told me his firm hasn't yet drawn plans showing that level of detail. But based on the acreage and proposed zoning, I believe 600 is at least in the right ballpark.
The storage unit development will be an interesting part of the discussion at City Hall too. The zoning requested for the units is light industrial, which would allow a lot of other uses besides a storage unit. The proposed site is basically between the South Lawrence Trafficway and a Westar electric substation. (More on that substation in a moment.)
Hamby said Garber's long-term plans for the industrial zoning are storage units. In other words, the storage units aren't just a mechanism to bide some time. Hamby said he expected there would be some use restrictions placed on any zoning to ensure that whatever happens there is compatible with the proposed residential and also with the recreation uses at Rock Chalk Park. Hamby said current plans call for a lot of landscaping, which would basically make the storage units tough to view from the busy South Lawrence Trafficway.
We'll see what type of reception the project receives at City Hall, but it was always in the back of people's minds that the Rock Chalk Park project was supposed to spur development in the area. Thus far, it is spurring quite a bit of interest in new homes in the area.
• One company that is certainly betting on new development in the area is Westar Energy. It has filed plans at City Hall to expand the existing electrical substation that is just northwest of Rock Chalk Park. As I've said many time before, the only thing I know about electricity is to not touch the red wire, so I don't have technical details on the project. But the application listed it as a $10 million expansion and said it was being designed to handle additional demand for electricity in the northwest area of Lawrence.
• I know several of you are wondering when the hotels and gas stations and restaurants are going to start showing up around Rock Chalk Park. Well, none of that has been filed yet at City Hall, and I haven't heard it blowing in the wind either, although I may just be standing in the wrong place.
The property immediately south of Rock Chalk Park, the Mercato development, is zoned for a lot of commercial development, but it is not exactly designed for hotels and gas stations. It is designed to be a more traditional development to house a couple of big-box retailers. That is one of the reasons why the owners of that property — a group led by the Schwada family — were successful in getting commercial zoning for property just west of the South Lawrence Trafficway. It was argued it could more easily accommodate the type of businesses needed to support the Rock Chalk development. But there will be significant expense to extend city water and sewer service to the site west of the SLT.
Certainly Mercato could change its plans to accommodate more Rock Chalk Park-oriented development. There is a significant amount of housing included in the Mercato development, and some of it is very near the track and field stadium. We'll see whether that develops residentially, or whether there is a push to make that more commercial oriented. I really have no idea how it will shake out, but it should be an interesting area to watch.
In other news and notes from around town:
• Creating the city's 2015 budget will include discussions on everything from spending tens of millions of dollars for a new police headquarters building to finding money to repaint the crosswalks on city streets.
City Hall leaders now want to find out what else is on your minds. The city will be hosting two public listening sessions next week to get input on the 2015 budget. They are set for:
— 5:30 p.m. Monday at the Union Pacific Depot, 402 N. Second St.;
— 5:30 p.m. Thursday at Fire Station No. 5, 1901 Stewart Ave.
Commissioners will begin deliberating on the budget in earnest in June and will approve a budget by early August. This will be the first year in recent memory that the city has hosted these budget hearings out in the community. Traditionally, they've set aside some time at a City Commission meeting to take general comments on the budget, but usually not many people show up to speak.
• A brief housekeeping note: Town Talk will be off tomorrow. My kids' summer fun with 4-H pigs is pulling me away from the office. I'll be helping park cars and direct traffic at the large antique auto swap meet at the Douglas County Fairgrounds. The parking is part of a fundraiser for my kids' 4-H club. Come see me — as long as your brakes work.
More LJWorld City Coverage
The buzz you've been hearing around Lawrence perhaps has been the hum of a power saw or the steady pounding of a hammer.
With half a year in the books, one of the emerging stories of the Lawrence economy is the solid year local builders are putting together. New numbers from City Hall show builders have started more single-family and duplex homes in 2013 than at any point since the recession. And when it comes to apartment construction, they're more than doubling their previous pace.
Here's a quick look at totals through June for three key metrics.
The total value of projects under construction in Lawrence through June is up 52 percent compared to the same period a year ago and up 94 percent compared to the low point of 2009.
• 2013: $75.1 million • 2012: $49.3 million • 2011: $49.8 million • 2010: $47.6 million • 2009: $38.7 million
Single family and duplex building permits are up 33 percent from the same time period a year ago and are up nearly 128 percent from their low point in 2009:
• 2013: 87 • 2012: 65 • 2011: 59 • 2010: 75 • 2009: 38
Apartment construction, which historically has been up and down, is going through a boom period. The number of apartment units under construction in the first half of 2013 is up 103 percent from the same time period a year ago:
• 2013: 374 • 2012: 184 • 2011: 63 • 2010: 0 • 2009: 172
I've already got my boots off, so let me do this math for you. If I've counted all my fingers and toes properly, the number of apartments built in the last five years has outnumbered the number of houses/duplexes built by 793 to 324.
Since we're doing math, here's another interesting number: Lawrence's population as of July 1, 2012, was 89,512. As of July 1, 2008, it was 90,520. (Confession: I cheated and used Census Bureau figures here. My wife and kids wouldn't take their shoes off.) That's 1,008 fewer people, but during that time we've added 419 new apartment units and 237 new houses/duplexes. City officials, however, have taken exception to these Census Bureau population estimates because they think the city's population has been undercounted. The city contends that population has grown slightly during the time period.
Either way, it sure seems that apartment construction, in particular, is outpacing the growth of new residents. If that's true, it would be interesting to see the vacancy rates of some of the older, less maintained apartment complexes in the city. It doesn't get much discussion at City Hall, but it is plausible to think that one of the larger issues of the next decade is how those old apartment complexes get redeveloped in the future.
Whether you leave your shoes on or off, that is likely to involve some pretty complex ciphering.