Planning Commission - Minutes

Date: 
Wed., Mar. 8, 2017

Commissioner Erz called the meeting to order at 7:00 PM.  Commissioners Caplinger, Doherty, Fialka, Hamm, Rebman, Flaiz and Medelez were present.  Chairman Saylor was absent. 

Minutes

Minutes of the February 8, 2017, regular Planning Commission meeting were approved as written.  

New Business

The Planning Commission is hosting an open discussion on the housing needs of Hermiston.  City Planner Spencer opened the discussion with an overview of the staff report.  Hermiston has had a slow and steady growth rate for the last 20 years.  After the economy stabilized from the recession in 2008, the housing starts have not returned to historic growth levels.   In order to meet the population forecasts, Hermiston will need an additional 2,000 to 4,000 houses over the next 15 years.  This breaks down to approximately 2,700 single family homes, 650 multi-family, 288 duplexes and 216 three or four plexes.   There are roughly 2,700 acres of residentially designated buildable land available.  The majority of this land is not currently serviced by City utilities and infrastructure development would need to occur.  There are several areas in town that can accommodate in-fill development. 

Luke from Monte Vista Homes, which builds detached single family homes, gave the methodology for pricing the subdivisions to determine the feasibility of a project.  They back into the lot price based on the sales price of the finished home.  The sales price is set by the market.  The costs of materials is determined as well as the cost of building permits, real estate, finances, escrow fees, etc.  The money left after those costs are subtracted from the end sales price is the amount available to purchase the land.   The main issues Monte Vista has encountered in Hermiston is the cost of trade labor and the cost of raw land due to installing the needed infrastructure.  Hermiston’s trade labor cost is higher than that of some metropolitan areas.  There is a shortage of available labor and that drives the price higher.  The High School students working with the Builders Association to build the trade homes is a help.  More local trade schools or apprenticeships may be helpful.  The price that landowners are asking for raw land in Hermiston is high compared to the land’s value.  This keeps the price high even though the supply is not low.  Luke referenced the Highland Summit development and the cost of improving Townsend Road and installing the booster pump.  These costs raise the cost of the lot too high to do the project.  When the cost of the lot rises to the point of needing to increase the sale price of the finished house to over $200,000 it significantly lowers the number of potential buyers.   Developers are hesitant to speculate as they do not want to be stuck holding land with a high cost basis.  Banks are also more stringent on their lending practices.  He doesn’t see 300 homes a year being built in Hermiston with the cost of trade labor and raw land being so high.  Developers can reduce the finished price by lessening building standards, but it doesn’t reduce the cost by much.

Monte Vista would not use in-fill lots as it is not their business model but there are some who would.  He would consider developing some of these lots to sell to the individual builders.  Developing a process that would allow in-fill development without a variance may help encourage this type of development.  The partition process would still require public hearings where neighbor concerns can be voiced.   Commissioner Rebman would like to see a streamlined process for in-fill development. 

Some cities defer SDC payment until the homes are complete.  This can be helpful, as long as the fees do not increase.  The cost of water booster pumps is about $200,000.  One suggestion is for the City to pay for the pump and have the developer pay it back in increments as each building permit is pulled.  Some of these improvements could be completed through an LID.  In the past, the City has been left with finished lots to sell.  The City bears the risk when using this process. 

Mayor Drotzmann suggested the minimum lot size could be reduced to increase the number of lots to help spread the costs of development.  He feels this is the biggest pressing issue we have to face as a community.   As the City continues to grow we have to figure out solutions to meet the housing need and concerns of the developers.  We will either need to start paying more for our houses or put more on less.

Doug Barak responded that the market has supported the reduced lot sizes.  He referenced local flag lots that sold just fine.  People are willing to have a smaller lot for an entry level home that is priced right.  Subdivisions with entry level homes tend to have adults who work and do not have time to maintain a large yard.  Larger lot sizes may be more important for the higher priced homes.  Approving land uses does not actually reduce land values of neighboring properties.   In-fill development would probably create an impetus for neighborhood gentrification. 

Luke- reducing side yard setbacks to five feet from the current seven feet would help increase available lots in subdivisions.  He suggested reducing the front yard setback as well.  What works in other jurisdictions is to have setbacks to foundations at twenty feet and covered porches to ten feet.

Eldon Homes pointed out that some people buying entry level homes will move on to higher end homes after several years.  It is short-sighted to only consider the entry level homes. 

Frank Gehring is a builder in Hermiston.  He suggested increasing the percentage of lot coverage allowed in each zone.  This would allow the builders to add a little bit more profit with upgrades.  He agreed that it is tough to find affordable land in Hermiston.  He thinks the front and rear setbacks are good, but could reduce the side yard setbacks a little bit. Mr. Gehring would like to see some industrially zoned land changed to residential.  The City is currently working on rezoning acreage on E Diagonal Blvd. 

Mr. Hadley is a local land use attorney.  The City Council and the Planning Commission will have to pay attention to what is available and what developers can do and realize they will not be able to accommodate everybody’s emotions.  Development in the City has not decreased property values.

Chas Hutchins is the City’s engineer.  He discussed the City’s Capital Improvement Plan that has been developed over the last several months.  The northeast edge of town could use another water reservoir or booster pump as the water pressure is low there.  There are some bottlenecks in the existing sewer system.   The last plan was completed over 20 years ago.  Without a current plan, it is difficult to identify the problem areas.  Some street projects have been identified.  These are expensive and the costs continue to increase.  This CIP is still in draft form.  The population when the last master plan was completed was 9,000.  The current population is over 17,000.    Anderson Perry is completing a water system model.  This allows developers to run scenarios of the impact development will have on the water system.

Byron Smith is the City Manager of Hermiston.  Working with existing large employers, 75 to 80% of their management live in the Tri-Cities.  To continue to move forward, we need those higher paid employees to live here and invest in our community.   The rezoning of the E Diagonal Blvd properties is an example of something the City can do to encourage development. 

Planner Comments and Unscheduled Communications

There are agenda items for the April 12 meeting.

UEC is installing a substation at the intersection of E Elm Ave and NE 10th St. 

Meeting adjourned at 8:51PM.


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