Hot Springs board to adopt housing strategy plan

Statistics provided to the Hot Springs Board of Directors earlier this month showed a fifth of the city’s residents live below the federal poverty line of $27,750 for a family of four.

With a fair market rent of $807 for a two-bedroom home in the city, many families are priced out.

“Hot Springs has an outsized number of relatively low paying service industry jobs made up primarily of permanent residents that are dependent on seasonal tourism upcycles and down-cycles,” the city’s Community Development Block Grant administrator said in a report provided to the board at its Aug. 6 goals and priorities workshop.

“For a resident making state minimum wage ($11 an hour), they must work 43 hours minimum per week to afford fair market rent.”

The report said someone with a $37,000 salary, the average for a fulltime position in the city, will pay more than a third of their after-tax income on rent.

“Sensible personal finance principles typically recommend no more than 30% of your income be directed toward housing costs,” the report said.

With rents outpacing inflation, District 5 Director Karen Garcia told the board families can’t save money for a down payment on a home.

“Conventional loans have to have 20% down,” she said, noting rising housing costs have led to more multigenerational living arrangements.

The city plans to commission a housing strategy plan. Deputy City Manager Lance Spicer told the board the city is rating and ranking submissions it received from the request for proposals issued earlier this summer. The board set a goal to adopt a housing strategy plan by next year.

“We’re really going to spend money to hire somebody to come in here and tell us how to do affordable housing?” District 4 Director Carroll Weatherford asked the board. “He’s going to tell

us to change the code. We can change the code. We’ve coded ourselves to death. We write ordinances we can’t enforce now.”

Spicer said the strategy will tie into the zoning code update the city commissioned. The board last month awarded Camiros Ltd. a contract not to exceed $229,000 to harmonize the code with the long- range land use plan the board adopted in 2020.

Minimum lot sizes the code mandates in residential zones can discourage builders, Spicer said. According to the code, lots in the suburban residential, or R-2, zone must be at least 12,000 square feet if they’re next to city water and sewer service. The minimum in the low/medium density, or R- 3, zone is 7,000 square feet for interior lots and 7,500 for corner lots

Lowering the minimums would allow more units to be built on a parcel and maximize builder profits.

“That does sometimes make it more palatable to them,” Spicer said.

City Manager Bill Burrough told the board the code limits where apartments can be built. The medium/ high density residential, or R- 4, zone is the only residential district where apartments are permitted by right. They can be granted on a conditional basis in the lakes area residential, or R- L, zone.

Multifamily dwellings with more than 12 units per acre are not permitted by right in any residential or commercial zone.

Code restrictions may be contributing to demand for housing outstripping supply. Weatherford, a builder, told the board some properties are renting for more than twice as much as they were last year.

“People will put it on the market, and they’ll get it, because there’s no place to rent,” he said. “Somebody will figure out how to get the money to pay the rent.”

Weatherford said new units his company is building in the Shady Heights Apartment Homes subdivision will rent for $1,400 a month.

“It’s Lakeside (School District), and we can get it,” he told the board. “That’s not affordable housing.”