Bonham Housing Action Plan Final Presentation to the City Council of Bonham Texas March 11, 2019 1
Daniel Oney • Denison High School • Austin College • University of Texas – Dallas • Senior Economist Virginia General Assembly • Research Manager City of Dallas • Founder Axianomics, LLC • Managing Director Newmark Knight Frank 2
BHAP History • The City of Bonham launches Bet on Bonham and Bonham Needs Rooftops in 2017 • Texas Downtown Association, Manufacturers Roundtable in 2018 • Study Elements: 1. Statistical profile of Bonham market (demographics, economics, housing trends) 2. Residential market analysis (effective demand for housing in Bonham) 3. Housing Action Plan Playbook (strategies and tactics to coordinate housing policy) 3
Challenge • Winners and losers in rural America • The City of Bonham is growing, adding families and new industry. • The Bonham Housing Action Plan (BHAP) will guide policy to create an investment friendly housing market. • The BHAP is a multi-year, multi-tactic initiative to attract housing at many price points but focusing on homes for middle-income and young professional households. 4
Bonham’s Economy is Strong Economic Development Announcements: Job Growth (5-Year Annual Average Rate) 8.0% 3.3% Unemployment Rate 3.7% 2.8% Manufacturing Retail Professional Services 5
Bonham’s Population is Growing 750 Net New Households 8,100 City Residents in the Next Decade 34,400 in the Bonham Micropolitan Statistical Area 1,500 new 18-44 year old’s by 2028 6
Bonham Households are Earning More Wage Growth Since 2015 26.0% 21.3% Average Household Income 11.0% $56,400 Annual Average $37,800 $52,700 $43,400 Total Manufacturing Professional Services 7
Bonham is Investing in its Future New $30M High School will give students the latest facilities and Lower Bois D'arc Creek Reservoir resources. photo by Kyle Porter bringing stable water supply and economic impact New strategic planning framework for downtown, infrastructure, parks, workforce and housing $18M restoration will return the Fannin County Courthouse to its 19 th Century beauty 8
Bonham Has a Housing Gap Bonham has a 400 unit home gap because of population growth and underinvestment since the Great Recession. Much of the gap resulted from strong 400 Missing competition for investment in the Homes! DFW market. But Bonham’s market is becoming more competitive. 9
Single Family Indicators for Growing Demand 65 % Since 2015 $188,000 3 Months In 2018 Sale Average Sale Housing Prices Prices Supply 10
The Market Can Support Housing Variety Multiple Products Multiple Price Townhouse Points Duplex $115K to $300K Single-Family 11
BHAP Playbook • A guide for the City of Bonham, the Bonham Economic Development Corporation (BEDCO) and community stakeholders to attract new housing investment. 12
BHAP Playbook Elements • Community Vision • Visioning Bonham • Market Awareness • BHAP studies • Comprehensive Housing Strategy • Multiple options • Reinforcing elements 13
BHAP Playbook Elements • Preparation Work: Being ready for growth • Subdivision: Fast, flexible units, variety of prices • Traditional Neighborhood: Challenging strategy to restore downtown prosperity • Home Renovation: Jumpstart virtuous cycle of reinvestment • Prefabricated Housing: Potential to deliver workforce housing, demonstration project • Multifamily Development: Support new arrivals and families in transition 14
Preparation – Ready to support housing Initiative or Major Element Question Annexation Review ETJ and long-term needs No excuses for developers to look elsewhere Zoning Review and update code • Vision – to signal where Bonham is headed Development Review and update code • Market awareness – to demonstrate demand and price points • Development policy review – to identify Resources Evaluate staffing and infrastructure potential bottle necks • Infrastructure – to meet growth needs Services Confirm service capacity 15
Subdivision – Foundation priority Housing Unit Goal = 150 New Units Pros Cons 1. Builders can fine-tune 1. May require mains utility product to meet. construction. emerging market trends 2. May require enhanced 2. Potential to deliver large building inspection • Marketing to appropriate developers. number of units. capacity. • Challenge municipal services (subdivision 3. Potential to provide a 3. May require review and process, plan review and building mix of single-family upgrading zoning and inspections.) types. development codes to • Annexation, infrastructure and ongoing 4. Easier administration by have maximum city services. working with a single community benefit. • Fiscal analysis and developer impact fees developer. so new development pays its own way. 16
Traditional Neighborhood – Strengthen downtown Housing Unit Goal = 70 New Units Pros Cons 1. Housing variety for 1. Code may need to singles, young couples, change. families with children, 2. Infrastructure upgrades: empty nesters. sidewalks, street lights, • Rebuild the heart of Bonham. 2. Maximizing existing drainage and landscape • Encourage housing variety on vacant land streets and utilities. 3. Homeowner concerns in blocks around the square. 3. Preserve historic about density buildings. 4. Finding the right • Single family, duplex, four plex, “mother- in-law suites”. 4. Increasing the market for developers. retail, restaurants. • Potential to transform image - what small Texas towns “should” look like. 5. Increasing opportunities to walk and bicycle. 6. Reducing car trips and vehicle miles traveled. 17
Home Renovation – Jumpstart reinvestment Housing Unit Goal = 300 Renovated Units Pros Cons 1. Potentially large number 1. Working with of participants for homeowners with no relatively little cost. developer experience. 2. Can tie to property tax – 2. Administrative costs for • Encourage owners to reinvest. no cash out of pocket. relatively small projects. • Many potential participants. 3. Small impact on City 3. Upfront funding if grant services. program. • Small grants or property tax rebates – few 4. Supports local trades $100s of dollars each. and labor work. • Create virtuous cycle. • Demonstrates City commitment across Bonham. 18
Home Renovation – Jumpstart reinvestment (cont.) Program Recommendations and Outline: • Part of overall housing strategy – demonstrated City’s Example calculation: commitment. 1. Set grant at 10 times increased • Clear and predictable regulations. value. • Set a total budget - example: $70,000 in the first year, 2. Assume new roof for $8,000, and $10,000 per ward plus $20,000 available after a ward used this raises the value of the home up its $10,000 allocation. by $5,000. Keep the regulations simple: 3. Every year this $5,000 increase generates an additional $34.32 in 1. Single-family homeowner eligibility. 2. Current on City taxes and fees. City property taxes. 3. Minimum required investment - 10 to 20 percent of 4. So, the total incentive to the the appraised value of the home or $8,000 and homeowner will be $343.20. This $15,000 per home. represents a 4.3% savings on the 4. Estimated investment approved before eligible work roof is completed. 5. A standard development agreement (contract). 6. Improvements completed quickly and subject to building inspection verifications (photos, invoices and receipts.) 7. Paid in a lump sum after post-renovation appraisal. 19
Prefabricated Housing – Accommodate workers Housing Unit Goal = 50 New Units Pros Cons 1. Potentially faster than 1. Risk of confusing manually-built homes consumers 2. Potential buyer cost (prefabricated & mobile savings homes play different • Clustered in townhouse or infill 3. Minimal zoning or code potential roles.) developments – neighborhood effect. changes required. 2. Given transportation • Potential cost savings over manually-built 4. Less dependent on costs, savings may not be housing – time savings, labor costs. skilled trades for on-site as much as expected. • New homes on permanent foundations. work. 3. Maximum savings Mobile home has temporary foundation. 5. Potential to brand require relatively large • Assembly-line precision in a climate- Bonham as a number of units. controlled factor setting. prefabricated home 4. Fewer skilled trade demonstration hub. employment • Assembled on site. opportunities. 20
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