[REN #858] Housing Market: Fast Growth vs. Smart Growth

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Housing Market: Fast Growth vs. Smart Growth,Real Estate News for Investrors Podcast Episode #858

A sleepy town in North Carolina has become the victim of its own popularity. Lake Wylie is a lakefront community that has mushroomed in size since the year 2000. Unfortunately, population growth has outpaced the town’s ability to keep up, and local officials have placed a temporary ban on new development. This is just one example of a city that needs “smart growth” instead of “fast growth.”

The Wall Street Journal just did a profile on the uncomfortable situation facing the town of Lake Wylie. (1) Newcomers were attracted to the area because it had a good school system, low taxes, a small town feel, and a short commute to Charlotte. But over the last 20 years, the population tripled to 12,000 people. That may not sound like a lot but the town’s infrastructure hasn’t kept up. The Journal says, a 20-mile commute now takes about an hour-and-a-half, schools don’t have space for new kids, and the water system often fails.

Moratorium on Growth

To give the town time to come up with a better plan, local officials approved a 16-month moratorium on new commercial and residential development. Real estate agent, Kelly Trites, told Inman News the town needs to cut back on new homes while it ramps up in other areas, “We’re kind of running out of room and we don’t have the infrastructure really to carry it.” (2)

Class size has been growing, while streets are becoming more clogged. There are so many newer families in the area that 80% of the population was born in another state. That’s according to Realtor.com, which also reports that 40% of the households have school-age children. (3) The school system is trying to raise enough money to quickly build three new schools.

Commercial development is also out of balance. Councilmember Allison Love said in the Journal article that the main road is basically overrun with car washes and self-storage places, while there are hardly any restaurants or doctors’ offices.

The lack of an efficient water delivery system has been very frustrating for residents. The Journal says, residents have been under a boil advisory a dozen times in two years. For a good part of last year, they were also banned from watering their lawns, washing cars, and filling their swimming pools. To help pay for water from agencies and for upgrades to their own system, their water bills have gone sky-high. They are more than triple what people typically pay in other parts of the state.

Getting the Town Back on Track

Planning manager, Diane Dil, says, they have a few goals to work on during the moratorium. One is to come up with a plan for the remaining undeveloped areas. Another is to build new roads that connect neighborhoods to cut down on highway traffic. Chamber of Commerce president, Susan Bromfield, says, “It’s all happened so quickly. You want growth, but you want planned growth.”

Even with the moratorium in effect, there’s so much development underway, it might not look like there’s a moratorium. The Journal says more than 3,000 homes and apartments are in various stages of construction. If you’re curious, Realtor.com says the median price of a home in Lake Wylie is $344,000.

Getting Ahead of the Curve

Pro-growth economist Rob Salvino says, rapid growth is something that’s happening across the Sunbelt and that officials should try to get ahead of the curve. He says, moratoriums are bad for the housing market and “It’s more of a question of, ‘Are you going to admit that it’s coming and work to try to make it the best we can?’”

Links:

(1) The Wall Street Journal Article

(2) Inman Article

(3) Realtor.com Report

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