08/08/2021
For those that don't get the Paris News or their online subscription (I took out the pics to save space as it's a long read). Most important is the City's Zoom meeting this week the 12th at noon and you can attend to voice your concerns at Zoom Meeting ID is 841 0599 1245, and the passcode is 813711. Now the article:
No Place to Call Home part three: Paris is 1,000 doors short, so why are builders leaving?
Paris is 1,000 doors short, so why are builders leaving?
• By Kareyn Hellmann The Paris News
• Aug 5, 2021 Updated 23 hrs ago
Construction is taking place within Paris city limits, as seen at the Days Inn along North Main Street.All new construction or renovations must meet City of Paris building codes.
• By Kareyn Hellmann/The Paris News
A crew works on a plot of land along North Main Street in Paris. Builders say they face various obstacles building in Paris, including at-times contradictory code enforcement. The city says growth continues and codes are enforced to ensure the safety of the people.
• By Kareyn Hellmann/The Paris News
Editor’s Note: No Place to Call Home is a three part series looking at the lack of affordable housing in Lamar County and Paris. Part one introduced the issue, part two examined the affordability of existing property, and part three analyzes the reasons local developers are leaving Paris despite high demand for construction.
When Kenneth Dority, Stacy Cunningham and Kenneth Millsap began building in Paris, they did not foresee a plethora of problems. But when they ended up losing more money than they made, they sold their remaining properties, packed their bags and left, despite the seemingly opportune building environment they left behind.
The City of Paris is 1,000 doors short of having an adequate supply of housing, Horizon House director Shelly Braziel said. The lack of available housing — combined with other factors — creates a perfect market for building affordable housing. However, when builders lose more in fees and fines than they’ll make in revenue, they leave.
Reno Mayor Bart Jetton has described Paris as “nightmarish” to build in. Paris officials say the city’s codes are there to protect lives, and builders and developers who come to Paris from elsewhere understand that importance.
Inconsistent code enforcement
Contradictory building codes top the developers’ list of grievances against the city. Cunningham offered examples of inconsistent code enforcement — one of the largest reasons he stopped building within city limits.
“They’ve over-complicated it. And depending on who comes out there from the city, one person will tell you one thing, another will tell you something else, and I could give you example after example of that. Go talk to anybody that’s in the process or was in the process of remodeling or building anything in the city, and you’ll hear those stories,” Cunningham said.
Once, he said, three different inspectors came by one of his properties, each asking for different requirements, and Cunningham couldn’t find where some of those requirements were backed by the codes on record.
“Don’t make them spend $80,000 to get a $40,000 rental unit on the market. Because they’re not going to do it, or it’s not going to be affordable housing,” Cunningham said.
Dority used to conduct his business in Paris, turning vacant lots into affordable housing and rental property.
“It just seemed like at every turn the city tried to give me trouble. Ordinances changed and how they applied the codes changed from job to job,” Dority said.
His last three projects in Paris were dealbreakers.
“They made us put in a sidewalk, and if you went next to the properties around, there’s not even sidewalks within a mile. So we put sidewalks on our property that go nowhere. And then once they were there inspecting the project, (they) told us how they wanted it done, inspected it, passed it. And then probably a month later when they were doing a different inspection, the guys over at billing and management came in and failed our sidewalk... You were here, inspected it, passed it, and now you’re coming back and failing it?” Dority said.
Among Dority’s projects was a $400,000 home. His windows passed inspection the first time, but when the inspector came back for another inspection, he rechecked the windows and failed them.
“It definitely cost me money and time. Reordering things, delays on construction. It’s just the way I couldn’t make money doing what I was doing, so I just went back to Broken Bow, Oklahoma and am building there,” Dority said.
“I could have gone way down the road with this project thinking everything’s fine, and then we come back and re-inspect the place, and I have to totally tear out things. So I just didn’t want to get in a partnership with someone that wouldn’t stand by the fact that they made a mistake and wouldn’t basically stand behind me or frankly care if I did construction there or not,” Dority said.
Common sense code enforcement
Local developers say they’ve struggled to meet all standards of the newest international building codes. Due to strict requirements beyond the scope of a local developer’s paycheck, they choose to build in cities where the codes are looser and make more practical sense.
Several developers, including Millsap, have called for “common sense code enforcement,” or rules that balance safety and practicality.
“You’re going to hold me to the same standard in Lamar County as you’re going to hold people in Dallas? My revenue is not going to cover it. It’s not practical. You go to Dallas, my revenue streams would be able to cover the cost of putting in sprinkler systems or the cost of building new sidewalks or installing fire hydrants or things of that nature. It’s not comparable,” Millsap said.
Enforcements can become strictly by-the-book affairs — enough to lose economic practicality in the process.
“There’s things like when you’ve got the red stripe down on the parking lot, well in that red stripe, you have to write ‘No Parking, Fire Lane.’ And the distance between one wording and the next wording on that red strap can be no more than 24 feet apart. Well, they go out and measure them, and if it’s 25 feet, that 1 foot makes a difference. That’s what we’re looking at, minor things like that,” Millsap said.
“I agree there should be a fire lane, and I agree it should say ‘no parking.’ But if I put it at 25 feet instead of 24 feet, you’re going to fail me and make me redo it? You’ve got to be kidding me. It’s just things are not practical. It’s not easy to do business in the City of Paris,” he added.
Permitting struggles
Cunningham said he battled expensive time delays and permitting requirements. He used an 11,000-square-foot warehouse to store supplies, plumbing, appliances and other tools for the buildings he worked with.
However, after eight years of Cunningham paying taxes on the property, the city offered him an ultimatum: pay a vacant building fee or obtain a certificate of occupancy.
“So they want to come in and tell me that I need to use that building for its intended purpose. I am. I’m using it for the purpose I bought it for. Why would I get a CO? We’re not open to the public. These are my guys working in and out of here,” he said.
The city inspector told him it would be easy to get a CO, so Cunningham pursued the permit. Yet, to receive it, he had to bring the entire building up to current codes — a costly endeavor. After remodeling the building and obtaining his CO, the city still charged him the initial vacant building fee for the upper floor of the building.
“I said ‘I’m done. I’m not doing it.’ I’ve talked to a couple more investors that I know. I sold 14 properties last year, and I told them, ‘I’ll sell everything I own inside the city limits of Paris, and I’m done. I’m not doing it.’ And I’m in the process of selling everything I own. Fourteen or 15 last year and several more this year,” Cunningham said.
Not in my backyard
Neighborhood residents will often complain of duplexes being built, citing increased crime rates or property devaluations. Nicknamed ‘not in my backyard’ protests, residents often cause multifamily development operations to fall through, even on land already zoned appropriately for the build.
A recent Paris City Council meeting brought more than 40 people to protest a planned multi-family development near a Northeast Paris neighborhood. The builder had already purchased the plot and planned to develop multifamily dwellings, appropriate for the property’s zoning. However, neighbors and concerned residents requested the property be rezoned to a single family residence, presenting a petition of more than 50 signatures.
“The neighborhood is made up of a diverse group of working families and retirees,” Angie Gifford said on behalf of the petitioners. “As a single mother of two, I worked two jobs for eight years to afford that house. Brownwood is a very desirable neighborhood, and it’s beyond me why anybody would approve the deprivation of our neighborhood with duplexes that bring in transient people and devalue our property.”
City Council sent the decision back to the Planning & Zoning Committee.
The same situation impacted Millsap when he attempted to rezone a plot to a multi-family dwelling in Reno. Following neighbor protests, Millsap’s request was denied. Later in the meeting, Reno city councilors commented on the lack of affordable housing in the city.
“I could go back. We could just keep going back; I could apply again and again, and eventually it’s going to be pushed through. But if the neighbors don’t want it, even though I own the property, and I feel like I’ve got a right to do it — they could have bought the property, but they didn’t. I bought it, and I bought it for my use… They want to tell me what to do with my property. How about I just sell it, and you do what you want to with it,” Millsap said.
Rising material costs
Some issues stretch beyond the city’s authority. Following the pandemic, which reduced manufacturing of buildings in early 2020, global construction and raw material costs have spiked. For example, the price of copper has increased by more than 67% of its assessed value from June 2020.
“National construction costs and all have gone up because of the national economy. It’s been driven by the federal government just flooding the economy with money. The cost of lumber is two and a half times what it was costing. The cost of metal — you can’t even get anybody to bid copper wiring. If you want a roll of copper wiring in order to wire a house for electricity or an apartment complex, you call them this morning, you pick it up that day. If you wait until the next day, you have to get a new price,” Realtor Jim Bell said.
“What the federal government doesn’t realize is how badly they have forced inflation up in the whole economy. That’s called inflation, and inflation can go back down. So if you buy all this stuff to build something today, and you build it, and then all of a sudden, the prices of all the materials go down, you can’t get your money back out of what you built. So that’s why nobody really wants to build. That’s nationwide for the cost,” Bell said.
Lumber prices have come back down, a welcome turn by developers. The price of lumber has fallen to within 0.7% of its value from August 2020. Compared to its spike in May, lumber prices dropped by approximately 200%.
The volatility can lead to builders waiting for better markets, uncertain if prices will remain stable or crash. Combined with other uncertainties in the building market, local and national, builders may struggle to estimate cost potential and margins effectively.
High property valuations
By all accounts, investors would appreciate high property values, especially if they get discounted prices on lots auctioned by the city. However, affordable housing developers cite increasing property values as another obstacle towards providing low-income housing.
“If I have a rent house, and I want to have a positive cash flow of $200 a month after paying my taxes, insurance and maintenance fees, and they go up on my taxes double, what do you think is gonna happen to the rent for that person that’s in the house? And what’s going to happen to affordable housing?” Cunningham said.
The Lamar County Appraisal District attempts to appraise properties at the same price as what a similar location would sell for. However, due to low housing availability, people will pay more than the asking price on a property to ensure they get it, driving all property values higher in the process.
Furthermore, if the appraisals do not reflect the final sale price of properties, the state will cut funding to schools in relation to the difference between appraised and sale values.
“(The Appraisal District’s) saying, ‘we need to get our values up,’ but just because the people that are not good stewards of their finances are overpaying, they’re making all of us suffer. And they’re preventing us from being able to provide affordable housing because if your taxes go up considerably like that, you have to go up on the rent, if that’s your source of income. It’s not about being a slumlord or a landlord who’s trying to profit off the less fortunate. It’s a matter of economics,” Cunningham said.
Impact
The combination of building code obstacles, permitting struggles, rising material costs, not in my backyard mindsets and increasing property valuations all contribute to an unpredictable and costly building environment, developers say.
“Because we’re such a small community and county, it’s too easy. If I’m going to put in a mechanic shop, I”m not gonna do it right here. I’m gonna go two, three miles that direction, be out of the city, still in Lamar County, throw up a metal building in a field and put in a business. And take the same business that I would have here, just right outside the city limits. So it’s hurting growth within the city,” Millsap said.
Hotelier, developer and Paris City Councilman Mihir Pankaj said he has had no trouble building in the city or working with the officials, but he doesn’t deny a problem might exist. As the board president for the United Way of Lamar County, Pankaj is well aware there’s a need for more development of affordable properties.
In partnership with Mack and others, council member Pankaj might represent the first step towards a solution.
“At the end of the day, no one’s trying to stop anyone from developing or anything like that. We want development, but we want to do it in the right way, the safe way. It needs to be professional. It needs to be done correctly. But at that same token though, if there is something that is off or if there’s something going on, then we need to have good communication about that and making sure that things are happening correctly,” Pankaj said.
He plans to work with the council to alter some residential building ordinances to promote common sense code enforcement.
“Mr. Mack and his team are working diligently to make sure that we are representing the best interest of all developers, but obviously when it comes to some of these things that are common sense ordinances, it’s hey, we don’t really need to do this. It will take some time, but it will come about eventually. But again, the more that we sit down and talk about it, the more conversations we have, the better we can formulate a plan of action to go forward and make those appropriate changes,” Pankaj said.
“Whether you’re a private citizen, a business owner or you work with the city, everyone wants to just see this community grow and see their businesses grow. You want to see things develop. So I think that is a really important initiative. That’s one initiative that I personally am honing in on a little bit more. We want to continue to build the relationship between developers and builders. It takes a community to be able to build,” he added.
The city’s response
City officials emphasize the importance of safety.
“All the building codes are essentially built around important life safety measures, and the codes have evolved over time. Paris has quite the history with tragic fires in the past. Dating back to just over 100 years ago, the whole downtown burned. Back in the day, there was no codes, they just built. And now there’s all kinds of rules — first of all how to prevent them before they get out of control, and most importantly how to get people out of there, you know, in the event that there is a fire,” said Andrew Mack, Director of Planning and Community Development.
For the most part, complaints of contradictory ordinances have been shrugged off by city officials as either exaggerations or misinformation. Though many local builders say they have thought about leaving due to the inconsistent code enforcement, Mack continues to see new growth.
“We have numerous builders and projects coming before us right now. So we will continue to see growth in this community. It’s interesting. It seems that sometimes we have more concern expressed from the people who work in this area but less trouble and concern with the people who work all through the country and understand the codes and requirements. So that is an area that we’re working now diligently to address,” Mack said.
Though City Council has some power to amend codes, inspectors follow the latest city-adopted international codebooks.
The City of Paris will often hold auctions on the courthouse steps to sell vacant lots at discounted prices. Builders that buy the property to develop new homes will not have to pay back taxes or extensive fees. Discounting a property encourages its sale and promotes development within the city.
The City of Paris also references its partnership with Habitat for Humanity and the HOME program as another way it encourages development of low-income housing in the city.
Proposed solutions
Millsap, Cunningham, Dority and others have stopped building in the city of Paris, but if changes are made, they are willing to come back.
“Number one, I think they should listen more to the people who are out there making those things happen. And I think as the City, they need to decide on what are the rules, make them clear, and then help those people achieve that instead of the way that it appears that you’re working against them,” Cunningham said.
“There should be someone within the city willing to help me get through that, not willing to stop me and tell me I can’t do it because of XYZ, which is pretty much what they do. They should be encouraging me, ‘come, let me help you go through the process. This is what we’re going to do to make it happen,’” Millsap said.
To educate local builders about code restrictions and take a step towards open lines of communication, the city will host an educational forum in the fall to discuss different permitting and building requirements. The city is still trying to iron out the details, but it hopes to reach out to builders, contractors, subcontractors and investors to hear their thoughts, Pankaj said.
Community meeting
Affordable housing is a complex issue with many problems and few solutions. For those looking for more information or a way to be involved, community leaders will meet on Aug. 12 at noon over Zoom to discuss the affordable housing situation in the city of Paris and come to a sustainable long-term solution. In attendance will be many of this article’s sources and will range from nonprofit leaders and investors to city officials and realtors. The general public is also welcome to attend the panel. The Zoom Meeting ID is 841 0599 1245, and the passcode is 813711.
https://theparisnews.com/news/article_9214362a-f60b-11eb-9995-f71d7d47d059.html
Paris faces a lack of affordable housing due to crowded facilities, property valuation increases and contradictory building code enforcement. The final part of No Place to Call Home discusses the
