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City suggests program to encourage housing development

City Manager Joe Neeb and other city employees say that their plan to reimburse housing developers for the cost of building streets, sidewalks and other municipal infrastructure will help address a “severe shortage” of housing in the city. The program was presented at a Thursday meeting of the Roswell City Council Legal Committee. (Lisa Dunlap Photo)

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City of Roswell employees want to introduce a new program that would help developers intending to build homes or multifamily projects here, including the partnership involved in a planned 800-home subdivision that already has presented concepts to city officials.

The Municipal Infrastructure Reimbursement Program was introduced to city councilors during a Thursday meeting of the Legal Committee. Described as a new program for the city, it would reimburse housing developers for the streets, sidewalks, water lines and sewer lines that the city will own after projects are completed.

The three committee members attending — Judy Stubbs, Jason Perry and Barry Foster — voted to have the entire city council consider the program during the council’s next meeting, scheduled for Oct. 14.

Community Development Director Kevin Maevers said that the city has been working for several years on various programs to encourage the building of housing units here because of the “severe shortage” of existing units, whether executive homes or affordable “workforce” housing.

“We need to develop a system where we can prime the pump just a little bit and go ahead and get that development moving forward,” Maevers said.

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He said the COVID-19 pandemic also has created a shortage in labor and building materials, which gives additional impetus to a program that would help developers afford to undertake new projects.

“We are doing this not to reimburse the homes themselves,” Maevers added. “We are reimbursing the cost of putting in the municipal infrastructure.”

City Manager Joe Neeb said that residential real estate companies in the area told him two years ago, when the city and the Roswell-Chaves County Economic Development Corp. hosted a housing summit, that the city needed twice the number of available housing units on the market as it had to meet job growth needs. He said he was also told that infrastructure costs often result in significantly higher prices for finished homes.

Mike Espiritu, president of the Roswell-Chaves County Economic Development Corp, said the Infrastructure Reimbursement Program is a “great step forward.”

He explained that housing is often an issue in his business recruitment or business expansion efforts.

“The No. 1 thing, after the workforce is, ‘Where are we going to put them?’” he said. “If they can’t find a place to house them, we are not going to get companies to come here.”

Maevers said that the Roswell City Council would approve an annual budget for the program and could inactivate it if the housing situation changes.

Developers interested in the assistance would have to sign a development agreement with the city, which would be subject to the approval of the Roswell City Council and would require construction within a certain time. Existing development agreements already approved by the city would be eligible until Dec. 31, as the resolution is worded now.

After the housing units have been issued certificates of occupancy and the infrastructure has been determined by the city’s Engineering Department to meet required codes and city standards, the developers of single-family homes could receive as much as $10,000 per single-family unit and $5,000 for each unit in a multifamily development, with a cap of $200,000 per project. Neeb estimated that reimbursement probably would not exceed 70% of infrastructure costs.

There also would be caps on reimbursement based on the square feet of liveable space in the developments, with higher rates available for developments south of Second Street.

“We are really trying to facilitate the construction of workforce housing especially in the south side of the city,” said Maevers, indicating that job growth is expected at the Roswell Air Center.

Set reimbursement rates based on the footage of water and sewer lines or sidewalks and streets also have been suggested.

Foster encouraged the city to require proof of sales of the single-family homes before reimbursement. He said that requirement would promote owner-occupied housing, as opposed to out-of-area developers building many homes intended for rentals only.

City staff indicated that one project that would be helped by the program would be The Oaks, an 800-home subdivision planned for the northwest section of the city in the area of West Country Club Road and North Sycamore Avenue. The developers include MAC Real Estate Inc., a company owned by Jim and Holly Mitchell, and DWD Consulting Inc. of Pinon, New Mexico, a partnership that has built residential subdivisions in Hobbs.

The partners of the subdivision joint venture have presented their master plan concepts for The Oaks to the city already, and Maevers said the city thinks their project would warrant reimbursements, including the cul-de-sacs that the city would like the developers to build.

He also said the Roswell reimbursement program is adapted from one that has been used by the city of Hobbs for several years.

Planning staff with Hobbs were not immediately available for comment. The city of Hobbs website indicates Resolution 6579 was passed in August 2017 with an expected budget impact for that year of $600,000. Of that amount, $100,000 was intended for affordable housing.

City of Hobbs documents also indicated that other housing incentive programs passed in February 2012 and June 2012 resulted in 997 multifamily units and 296 new homes being built, with the city providing about $8.2 million to developers.

“When I met with the Hobbs folks by phone,” Espiritu said, “they mentioned to me that, if they hadn’t done this (infrastructure reimbursement), they wouldn’t have received the development in their community.”

Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at reporter02@rdrnews.com.

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Lisa Dunlap is a general assignment reporter for the Roswell Daily Record.