Patrick Hoban painted an alarming picture about the future of Bloomington’s housing market Tuesday as Bloomington City Council members continue to examine how to address a significant residential shortage.
Hoban, president and CEO of the Bloomington-Normal Economic Development Council, noted population growth estimates project a need for 4,500 additional homes by 2025.
“The terrifying part is, if you project that out to 2030 and 2035, it’s saying you need 16,000 houses,” said Hoban, adding that neighboring communities have capitalized on Bloomington’s strong job growth amid a lack of affordable housing.
“Our demand went so high, so fast, that we're just we're bleeding money,” said Hoban. “So to me, it's trying to find out if we can get more product, get more development here, we can start capturing that, duplicating what our surrounding communities have done. They've noticed our growth, and they've started incentivizing housing, and again, they're taking our workers.”
During its Committee of the Whole meeting, the council heard three presentations, beginning with an update on community housing data from Hoban and Mid-Illinois Realtors Association President Tracy Patkunas.
Patkunas said a snapshot of the current market shows just 99 homes listed for sale in Bloomington-Normal, both single-family residences and condos, with 35 of those being new construction. She said in a healthy market, there would be between 600-800 homes available.
“There are no new construction homes for under $250,000; the majority of those are ranging anywhere between $300,000-$500,000. And as far as those 64 active existing homes, there are only three under $100,000,” said Patkunas.
“We have 18 homes over $400,000, so kind of not in our ‘affordable housing’ range. And between $100,000- $300,000, the most sought after price ranges, they all have less than one month of supply of inventory.”
Housing incentives and initiatives
The council also heard a presentation from deputy city manager Billy Tyus and development services director Kelly Pfeifer on potential housing incentives and initiatives. Those possible incentives include fee reductions and tax credits over the next two years to spur development.
“Realizing that there wasn't a desire [for Bloomington] to be the financier or development partner, where you're giving directly hundreds of thousands to millions of dollars to people, we are coming forward with a possible standardized incentive that accomplishes that, we believe, but that also utilizes some of the existing tools that can be used to help fund projects,” said Tyus.
In a resolution adopted last July, the council set four priorities to address the residential shortage: establishing a standardized housing incentive; enhancing housing rehabilitation in blighted areas; focusing on intergovernmental collaboration; and completing a review of zoning and subdivision codes.
That action followed the McLean County Housing Coalition’s update last May to its earlier report on area housing and homelessness suggesting it was getting even harder for people to secure housing.
Tyus said the possible standardized incentive for developers could be reducing fees by anywhere from 50-100% for projects sought in TIF districts and enterprise zones, if the council approved. There also could be waivers of sales or food and beverage taxes for commercial portions in any mixed-use developments.
While many council members seemed open to the ideas, some wanted more time or a clearer picture of the financial impacts on the city.
“For me, I personally feel it would be a bit reckless for me to react in the moment without really thinking about it,” said Ward 3 representative Sheila Montney.
“As I think about something like the food and beverage, what's on my mind is the existing restaurants, the existing businesses that we have, and what are we doing to ensure that there aren't unintended consequences of creating disadvantage to them competitively.”
Tyus noted the incentives would be meant to spark development that already isn’t happening.
“It's not simply for a restaurant coming in and getting built. It's part of a larger project that also includes much needed affordable housing. So to me, that's a significant difference,” said Tyus.
Bloomington-Normal Community Land Trust
Tuesday’s two-hour meeting also included a report on the efforts of the nonprofit Bloomington-Normal Community Land Trust [BNCLT].
“What a community land trust is, it basically acquires a parcel of land, parcels of land, throughout a community and holds that parcel in perpetuity,” said BNCLT president Mark Adams. “Really making sure to promote affordable housing and sustainable development, and making sure that there's more access to home ownership, wealth building, as well as multi-family housing.”
Already this month, Bloomington took steps to advance development of a new subdivision along Fox Creek Road. Meanwhile, another developer has plans to build a large apartment complex at the vacant former Verizon site along East Empire Street.
Hoban noted the housing crunch is making it more expensive for people to live in Bloomington-Normal, leading to a growing number of people living outside the two municipalities and commuting to work.
“Across the board, we are more expensive than Peoria, Champaign, Springfield — I even put Decatur up there. It's cheaper to live there,” said Hoban.
“I don't like going into economic updates in our surrounding communities and hearing about them brag about building houses and retail based off of all of our growth, but that's what they're doing. It’s highly competitive, and right now they're eating our lunch.”
