[Electronic-lan] The Pace of Apartment Constructi

Sat Dec 16 14:14:43 CST 2017

All –

I have learned that some people on the LAN listserv did not get the attachment including a table and notes on the growth of demand for and supply of housing in Lawrence from 1990 through 2016.

The attachment is publicly available at:

	https://www.dropbox.com/s/l3v3b3ibr0cc7n4/Lawrence%20Housing%20Market%20Growth%201990%20to%202017%20notes.pdf?dl=0

Here are some quick answers to the various questions raised:

Does excessive growth affect property taxes?  

The aggregate value of property in any economy is a function of demand for the property, not the total supply of the property.  Thus, the aggregate value of homes is a function of the amount of income that all of the homeowners in the community devote to housing consumption.  This aggregate value is independent of the number of homes.  If we allow the supply of homes to be overbuilt, then the average value per home goes down.  As a result, overbuilding actually lowers the per unit value of homes, which lowers the taxes.  The problem with lowered value is that it discourages investment in older homes in older neighborhoods.

Is growth just more housing?  

If you are a developer, then that is what you want the public to believe, but more housing is not always a good idea.  If you care about the community, you want growth in income, growth in wages and growth to a higher standard of living for our citizens.  The problem with developers is that they just want to build more real estate and pin the label “anti-growth” on progressives.  We are very pro-growth in jobs and income.  From time to time, we need to oppose growth in real estate because it is excessive.  The growth of supply should follow (not lead) in close correspondence to the growth in demand.  When supply grows faster than demand, it is good to opposed excessive development.

Bedroom community versus independent community

This is really an economic development issue.  Factoid:  25% of Lawrence workers work outside of Douglas County; 27% of US workers work out of their county of residence.  Thus, Lawrence is neither a bedroom community nor an island.  The level of out-of-county commuting is about normal for the US.

Capacity of Existing Infrastructure

The update to Horizon 2020 does address the capacity of infrastructure.  The problem is that the update expects the limits of infrastructure to pace development.  You can see from my 1990 to 2016 housing analysis that the limits of infrastructure does a very poor job of managing growth.

Is the steering committee still taking comments? 

The Committee took comments through many channels for years.  The Committee is taking the position that it is time to stop receiving public input and send a draft plan to the Planning Commission, the City Commission and the Board of County Commissioners.  I believe that the public will have ample opportunity for further input as these three bodies deliberate on the draft update to Horizon 2020.

All the best,

Kirk

Kirk and Jeannie McClure
707 Tennessee Street
Lawrence, Kansas 66044-2369
785.842.8968
mcclurefamily at sbcglobal.net

From: Melinda
Sent: Saturday, December 16, 2017 11:56 AM
To: Carol Bowen; electronic-lan at lists.ku.edu; Kirk McClure
Subject: Re: [Electronic-lan] The Pace of Apartment Constructi

5. How does this excessive growth affect our property taxes? They continue to increase, and we now depend on renewing ten-year sales taxes to fund infrastructure improvements, as well. (Question 2 on the ballot last month.)

On 12/16/2017 11:10 AM, Carol Bowen via Electronic-lan wrote:
Kirk, thank you for this information. I listened to some of the Steering Committee meeting.  

1. I got the impression that growth  is just more housing. 

2. Their discussion  did not have a vision of what we want to be. The default is we will be a bedroom community. 

3. The committee is not understanding the needs of a bedroom community versus the needs of an independent community. 

4. I did not hear a discussion of capacity of existing infrastructure.  The lack of awareness hurts the existing neighborhoods and streets   

Am I missing something?

Is the steering committee still taking comments? 

~ Carol's phone

On Dec 16, 2017, at 10:01 AM, Kirk McClure via Electronic-lan <electronic-lan at lists.ku.edu> wrote:
LAN Members –

Please see the attached analysis that I prepared addressing the long-term overbuilding in housing.

The real estate industry is prone to overbuilding.  This is true in all sectors, residential, retail, office, industrial, hospitality, etc.  This is true nationwide and in Lawrence.  The industry needs the public sector to regulate the pace of development.  Too much development is bad; overbuilt markets hurt existing space and older neighborhoods.  Too little development inhibits healthy turnover and the correct pricing of space.  The goal should be managed growth, which means growth in supply in close correspondence with the growth in demand.

Managed growth does not happen without concerted effort by the local government guided by instruction from staff planners.  Long-range planners should present annual reports to the Planning Commission.  The reports should include the type of analysis that I sent to you.  The analysis should be expanded from just housing to retail (comparing growth in inflation adjusted retail spending to growth in retail space); to office (comparing growth in office sector jobs to the growth in office space; etc.  The report should establish a sense of the Planning Commission’s past performance (are the various submarkets overbuilt? Balanced? Underbuilt?) and a sense of objectives for the next year or two (e.g.: Lawrence is expected to add 140 new renter households and needs x new rental units to absorb this growth).  Without these benchmarks, the Planning Commission is letting developers set the pace of growth, and we have seen this fail time and time again.

I suggest that LAN as well as neighborhood organizations push for growth management to be included in the updated Horizon 2020.

All the best,

Kirk

Kirk and Jeannie McClure
707 Tennessee Street
Lawrence, Kansas 66044-2369
785.842.8968
mcclurefamily at sbcglobal.net

<Lawrence Housing Market Growth 1990 to 2017 notes.pdf>
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"The first lesson to be learned by every citizen who desires to bring about a higher life in our American cities is that he must take an active part in managing the affairs of his own city." 
--Theodore Roosevelt, The Outlook Magazine, Dec 21, 1895

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