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Thursday PM Daily | July 18, 2019
Panelists at the discussion on housing affordability included (left to right) Karl Eckhart, vice president of intergovernmental affairs for the National Association of Home Builders; Lauren Johnson, director of communications and community outreach for the Polk County Housing Trust Fund; Dan Garrett, vice president of originations for WNC; and Eric Webster, general manager of Berkshire Hathaway HomeServices First Realty. Photo by Kathy A. Bolten
‘Houses being built today in Des Moines would not be built tomorrow,’ local real estate expert says
By Kathy A. Bolten | Senior Staff Writer

Area homebuilders and real estate agents provided a preview of what they likely will say tonight during a public hearing in Des Moines about changes to the city’s proposed zoning code.

The Home Builders Association of Greater Des Moines and the Des Moines Area Association of Realtors today sponsored a panel discussion about housing affordability and how changes to Des Moines’ zoning code could affect homebuyers’ ability to purchase newly constructed houses.

Eric Webster, general manager of Berkshire Hathaway HomeServices First Realty, told the more than 150 people at panel discussion that the price gap between newly built houses and existing houses is already wide. In Des Moines, newly built houses sell for about $200 per square foot; existing houses sell for around $130 per square foot, he said.

The proposed changes to the zoning code are "going to drive that price per square foot up significantly," Webster said. "And that’s going to widen the gap even further between resale and new construction.

"Houses being built today in Des Moines would not be built tomorrow based on [the city’s proposed] minimum square footage requirements, garage and basement requirements," he said.

Webster said he estimated that about 60 houses currently under construction in Des Moines could not be built under the proposed zoning code.

Des Moines is in the midst of updating its zoning code, which provides development guidelines for its industrial, commercial and residential districts. The proposed code spells out the types of materials that can be used in various types of developments, including housing. It also sets minimum square footage requirements for different styles of houses and mandates that new houses have basements and garages.

City officials have said the new requirements will provide Des Moines higher valuations that will generate more in property tax revenue to help pay for city services provided to both existing areas and new development areas. About 40% of the property in Des Moines is tax-exempt, so the city must look for ways to create valuation that generates property tax revenue, officials say.

In addition, city officials say homebuilders can ask for variances from city staff, the Plan and Zoning Commission and the City Council if the houses they want to construct don’t comply with the proposed city code.

Officials have said that the city provides homebuyers with affordable housing through Des Moines’ existing housing stock and multiple-family housing.

"Basically, they’re saying, ‘We don’t want to have housing affordability,’ " said Karl Eckhart, vice president of intergovernmental affairs for the National Association of Home Builders, based in Washington, D.C. Eckhart is originally from Iowa and worked with former Iowa Sen. Tom Harkin.

"I never thought Des Moines would be a place that would want to get rid of housing for nurses or teachers or firefighters," he said.

Webster said it’s problematic for governmental officials "to mess with the free market."

"Builders that are here in the room should be able to decide what they think is the right [type of house to build] in certain areas … and what features to include," he said.

The Des Moines Plan and Zoning Commission is holding a public hearing on the proposed zoning code at 6 p.m. today at the Richard A. Clark Municipal Service Center, 1551 E. Martin Luther King Jr. Parkway.

 
MEMBERSHIP EXCLUSIVE CONTENT
Is Des Moines turning its back on affordable new houses? Homebuilders think so
The average value of a building permit for a single-family house in Des Moines in June was $155,785, city records show. The average square footage, 1,251.
     
And that type of housing is what’s needed to meet future workforce needs in the Greater Des Moines area, a recent analysis showed. The study showed that 16,500 newly constructed houses priced below $175,000 will be needed in the next two decades to house workers paid low- and moderate-income wages, workforce segments expected to grow in the next two decades.

The city of Des Moines is inching closer to adopting a new zoning code that includes development guidelines for single-family houses. Several homebuilders say the guidelines will make newly built houses unaffordable for buyers with moderate incomes.

Why Des Moines officials want to eliminate a portion of the home buying population from the newly built home market baffles builders. City officials, though, said Des Moines’ existing housing stock is affordably priced, as are new houses built on infill lots.

That response doesn’t satisfy builders, however.

"We’re seeing a shift in our market – from custom built to houses that are affordable for the blue-collar worker, teacher, police officer, firefighter and nurse to buy," said Dan Knoup, executive officer of the Home Builders Association of Des Moines. "These are people Des Moines desperately needs, but they are eliminating their ability to buy a newly built home in the city."

Continue reading to learn more about homebuilders’ stance on Des Moines’ proposed changes to its zoning code and city officials’ response. Read more

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Toys R Us is coming back to the United States
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Aug. 8: From Diapers to Dogs: How Disruption Transforms Business
Host: West Des Moines Chamber of Commerce
About: Innovative benefits and a cultural transformation, including "bring your dog to work day" and infants at work every single day, have caught the attention of media outlets across the country and made sizable impact on employee engagement. From the "Today Show" to the National Academy of Sciences, people are interested in what makes the culture of Girl Scouts of Greater Iowa so unique. Beth Shelton, CEO, will share how they make decisions and support their 120 staff members, and the business outcomes they've experienced.
When: 11:30 a.m. to 1 p.m.
Where: Des Moines Golf and Country Club
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