Critics say proposed growth plan that limits annexations will make Lawrence housing more expensive
photo by: Journal-World File Photo
City leaders will soon consider a new growth policy that encourages infill development as the most cost-effective way for the city to grow, but some local organizations are concerned the plan’s growth restrictions would make housing in Lawrence even more expensive.
The Lawrence City Commission will soon consider the new comprehensive plan, Plan 2040, which lays out policies that will shape how the city grows for the next 20 years. Plan 2040 prioritizes development within the city’s boundaries and requires developers to meet several requirements to annex land to expand those boundaries. The city maintains that growth needs to be focused in certain areas to manage infrastructure costs, but the Lawrence Board of Realtors, Lawrence Home Builders Association and the local chamber of commerce have all expressed concerns about the annexation restrictions, saying they could make both new and existing housing more expensive.
Lawrence Board of Realtors Governmental Affairs Director Danielle Davey said Lawrence needs more affordable housing at all levels, and that she thinks the proposed growth policy will exacerbate the city’s affordable housing shortage.
“Housing is really quickly getting to where it’s not affordable even at that middle income level and we’ve got a real need for more housing in that (middle), work force price point,” Davey said. “Our bottom line has always been that we want to see that need met in our community, and we think that this policy takes us in the wrong direction from that goal.”
The cost of growth
But local government leaders say the city needs to consider the effect expanding the boundaries has on the city and its taxpayers. Though developers pay for the installation of new streets and utility infrastructure, the city is responsible for maintaining that infrastructure once it’s built and ensuring new areas of the city are serviceable by emergency personnel. Mayor Lisa Larsen said the city needs to ensure that new developments that expand the city’s boundaries aren’t increasing the burden on taxpayers.
“Whether growth pays for itself is obviously the big question,” Larsen said. “And so when you start to look at growing the community beyond the current boundaries, that’s one of the biggest factors you’ve got to determine: What is it going to take so that that growth does pay for itself?”
The proposed plan prioritizes infill development by requiring that annexations of new land into the city limits only occur if demand for the proposed development is established and the developers provide a community benefit. Annexations are further limited to areas that are reachable by current fire and medical services and readily serviceable with utilities. Land that is not readily serviceable by emergency services and utilities would only be annexed if the development proposal were found to be the only way to address an identified community need.
Planning and Development Director Scott McCullough said in an email to the Journal-World that the framework of the policy is that the city cannot afford to grow in any and all directions. He said the community needs to focus growth, intentionally and by design, to areas that are best able to support growth from an infrastructure and service standpoint, allowing the city to better manage infrastructure maintenance.
Commissioner Matthew Herbert said he was an advocate of the annexation restrictions. He said that if the city is going to expand its boundaries, then that land should be adjacent to the city because it results in the cheapest infrastructure costs for the city.
“I think it’s a smart way to look at it when our infrastructure costs are already so expensive,” Herbert said. He noted that some utility infrastructure is failing sooner than expected, and the city needs to be very careful with the fact that any new annexations will increase the city’s maintenance costs.
The Chamber wrote a letter to the commission stating that the policy effectively limits development to the existing city limits and that the Chamber anticipates that the policy will accelerate the already increasing cost of housing and development in general. Chamber President and CEO Bonnie Lowe said that while her organization does support infill development, it comes down to supply and demand.
“Because when the supply goes down, the existing lots within the city limits will inevitably become more expensive,” Lowe said.
Lawrence Home Builders Association Executive Director Bobbie Flory agreed. The association also sent a letter to the commission urging city leaders to consider the “predictable impact on housing affordability” that the annexation limitations and community benefit requirements would have.
Though Herbert said the high cost of development exists with or without the new policies, he said concerns that the growth policies could exacerbate high housing prices are valid and need to be considered.
“I do believe that any time you place regulations upon development, that it tends to cost those developments more money,” Herbert said. “That’s true of almost all regulation across the board. The question becomes ‘is the trade-off worth that additional cost?’ And I don’t know; that’s a tough call to make.”
A big point of contention in the proposed Plan 2040 is the requirement that newly annexed land must create a community benefit that goes beyond the normal benefits that new housing provides to a community. In other words, adding new homes to the city’s housing stock isn’t enough of a benefit on its own. Developers will need to show something else if they want to get new lands annexed into the city. Potential community benefits include affordable housing, employment, preservation or provision of land, or the construction of amenities or facilities for a public purpose.
Flory said that the cost of the community benefit requirements will be added to the cost of each lot and be passed along to the homebuyer. She also said that uncertainty about what the provision of a community benefit will cost also increases risk for developers and makes it more difficult for them to invest in the community.
“They know what their sewers are going to cost, they know what their streets are going to cost, they know what their raw land is going to cost,” Flory said. “But there is a great big question mark on what that community benefit is going to be, and that question mark creates risk. ”
Davey said the additional expense of providing a community benefit would also affect the type of houses built, because developers would build houses in higher price ranges, where there is more room in the profit margin to absorb those costs.
The Lawrence Board of Realtors proposes — and the Lawrence Home Builders Association agrees — that the requirement to provide a community benefit should be removed. Instead, the board is suggesting that projects that provide a community benefit should be preferred and eligible for incentives, which would be identified in collaboration with city staff. Davey said she thinks that proposal strikes a balance.
“We’re not saying get rid of the community benefit altogether, but let’s not make it a requirement that necessarily limits that kind of development,” Davey said. “It’s something we can use as a negotiation point; it’s something that the city can try to incentivize or offset if that’s something that the city really wants to get out of development.”
Larsen said she does strongly believe that there should be government and private partnerships to start addressing the city’s affordable housing issue, but said exactly how that will work with Plan 2040 is yet to be seen. She said the plan won’t provide the intricate details of how its policies will be implemented, but that those details would ultimately be addressed.
“That’s going to come later, through staff reports and staff research, and that will provide more of the details of how we’re going to implement this plan,” Larsen said.
Herbert said a lot of the feedback he’s gotten about Plan 2040 has related to the community benefit requirement, and he expected a lot of time would be spent discussing that element of the plan. He said the city ought to be looking at future development to make sure that if it’s not going to “pay for itself,” it at least offers a community benefit. However, he said developers also need to know what is expected of them.
Whether either viewpoint has data to back up its assertions will likely be another key part of the discussion going forward. Flory noted that a 2001 study of eight Lawrence subdivisions indicated that those subdivisions did cover the costs of providing city services in their areas. She said the study is outdated and that the city should consider updating it.
“As the city and the county consider this new requirement on development, I think that the decisions made should be based on real data and not talking points or perceptions about what is paid for and what is not,” Flory said.
Larsen agreed that the city needs more data on the topic to inform its discussion. She said until the city sees hard numbers, it doesn’t know whether growth will pay for itself or whether the proposed growth policies would make housing more expensive.
“I think it’s something to always look at for sure,” Larsen said. “I don’t see any hard data to prove it yea or nay, and that’s something that I think would need to be part of that discussion.”
Planning Manager Jeff Crick said that Plan 2040 is tentatively scheduled to go to the City Commission for discussion at its meeting Aug. 20, but that the commission would ultimately decide.