Reposted with permission by the Hobbs News Sun.
CURTIS WYNNE | NEWS-SUN
EUNICE — With a new ordinance, the Eunice City Council hopes to spur housing development on city-owned property.
“We have a lot of city-owned property, especially around the lake and the golf course,” said City Manager Jordan Yutzy. “We have such a housing shortage, we need to get it developed.”
The ordinance, passed by a unanimous vote of the council, allows the city to reduce costs to developers and lower the purchase price of new homes. A development fee will be added to the property tax over a period of 10-15 years, Yutzy said.
“What we’re going to do is add a fee onto the property tax for a set number of years, determined by council, at an interest rate which is concurrent with what we’re making now on our savings account, right around 3%,” Yutzy said. “The homeowner will have that additional cost for 10 or 15 years. … It’s averaging about $20 a year, but what it’s doing is lowering the cost of the property by $20,000-$30,000.”
By cutting the developer’s costs up front and helping the homebuyer by reducing the cost of a new home, Yutzy said more affordable housing will become a reality.
“It’s creating a lot more affordable housing for the area. After talking with Realtors in town, the people who are buying homes are first-time homebuyers. Their credit is not as great,” Yutzy said. “It’s easier to qualify for a loan like this than it is for a brand new construction or something else with a higher value. Usually, when you get above $150,000 to $160,000, first-time homebuyers have trouble coming up with the down payment.”
Already in the works to be developed is city property in the area behind the police station and near an existing apartment complex, with sufficient land for about 30 homes.
Yutzy said a developer is working under the new ordinance with an engineering firm to place manufactured housing on permanent foundations. Currently planned are 1,700-square-foot, three-bedroom and two-bathroom homes.
“These will sell for under $120,000 apiece, whereas if we sold (the developer) the land and had him do it, they would be looking at $160,000,” Yutzy said.
The ordinance also provides for city help to provide infrastructure, the cost of which will be added to the impact fee to be paid for by the homeowner over time.
The number of years the homeowner will pay the fee will be determined by the city council, based on the planned development and the size of the land, not the house.
“This is land that’s owned by the city. We’re not really out any money. It’s essentially found money,” Yutzy explained. “We’re earning the same interest we do on our savings account, so if it takes them 15 years to pay it off to make it easier on the homeowner, we’re not out anything.”
According to the ordinance, development fees will be based on the following:
A. The appraised value of the city-owned property being developed; and
B. The engineering estimated cost of expanding water and sewer to the development if the expansion is paid for by the city; and
C. The engineering estimated cost of any road construction for the development if the construction is to be paid for by the city; and
D. The engineering estimate to relocate any other infrastructure that the city is responsible for.
Development fees will be paid yearly, starting one year after the area is subdivided or construction starts, whichever occurs first. All properties in the same subdivision are required to have the same time frame for payment, according to the ordinance.