An expensive corner
But let the market play its game
THE CENSUS is done, and it shows northwest Arkansas is still growing like a weed (it is also growing weed, but that’s a different topic altogether). The census numbers have been looked through, reviewed and analyzed—and now the results of a new study shed light on a problem in that corner of the state.
Funny thing when a lot of people want to live in a single area:
It tends to drive housing prices up. Supply and demand nearly always works. Which is why they call it a law. The demand to live in NWA is high, but the supply of affordable housing isn’t. That’s what the study from Smart Growth America, a Washington-based nonprofit group, shows.
It’s no wonder folks want to live in northwest Arkansas. The amenities and job opportunities are incredible. So many people are moving to NWA that if you remove that chunk of land, the last round of census data show Arkansas’ overall population would have decreased.
It’s challenging to find affordable housing in that region because of all the folks moving there. What do they call that? A seller’s market?
How much has the cost of housing increased in Benton and Washington counties? Quite a bit.
“The average sale price for a home in Benton or Washington county rose 44 percent in the last five years, according to another survey, the Arvest Bank Skyline Report,” the papers say. “The latest version of that report was released Aug. 31. The average home price jumped 16.2 percent from January to June when compared to home prices from January 2020 to June 2020, the Arvest report found.”
Forty-four percent? No wonder folks have a hard time finding affordable housing.
This is why you see towns outside Fayetteville and Bentonville growing quickly as well. When someone can’t find an affordable home in Bentonville, they look to Centerton or Bella Vista.
And when a family can’t find a home in their price range in Fayetteville, they look to Farmington or Prairie Grove.
For anyone else that wants to live in downtown Fayetteville, maybe within walking distance of the Walton Arts Center or the Farmers Market, forget about it. It’s hard enough to find housing that isn’t specifically made for students. And if you do find a place, odds are it’ll make your wallet weep just looking at the price.
So what’s the solution? Here’s a hint. It isn’t rent control. That stifles new development, which is the only real solution. If there are too many people competing for too few affordable houses, then developers need to construct more affordable houses. That’ll remove pressure on the market and bring prices down. This is one of the lessons of the dismal science that’s easily explained.
What tends to stand in the way of development right now? Regulations and zoning requirements from cities that make the cost of building lower-cost homes prohibitive. This can lead to developers building more high-end structures that cater to wealthy buyers. It’s great that developers make a profit and keep workers employed. But it doesn’t really do anything to offset the pressure in the affordable market.
Then there are building costs and materials, which right now are pretty expensive. Covid-19 has created a bottleneck for plenty of supplies, causing a shortage.
The good news is that officials recognize the problem. That’s why the Walton Family Foundation commissioned this research in the first place. The more data city leaders have highlighting issues of affordable housing, then theoretically, the easier it’ll be to craft solutions that tackle the problem.
NWA is a great place to live, as evidenced by how many currently call the place home. It just needs to get affordable homes up as fast as possible to ensure everyone who wants to live there can afford to.