The City Council of Webster City considered plans to develop a fifth addition to the Brewer Creek subdivision at a work session held on Monday evening.
At the meeting, City Manager Ed Sadler recommended that the City purchase about 22 acres of land near Beach Street and U.S. Highway 20. Then, he recommended that the City initially develop about 16 acres of that land. Considering land acquisition and development costs, Sadler said the total cost for the plan would be about $2,131,000. Under the plan, the City would purchase land for 49 lots and initially develop 35 lots.
Sadler said he based his recommendations on a housing study commissioned by the City. He said as local businesses continue hire new employees, the demand for housing will rise. As such, Sadler said the City Council has to be proactive.
"This is a year and a half to two-plus years between the time you decide to do something and the time you're ready to start building houses," Sadler said.
The size of the proposed lots vary based on their location. Sadler said the smaller lots could accommodate townhouses or duplexes to meet demand for lower-cost dwellings. Webster City Mayor Doug Getter said Webster City does not have developers for homes which people with an income of $30,000 to $40,000 could sustain. He said Webster City also faces the challenge of not having new construction to appraise with.
"We cannot depend on Webster City defining the bar because our current history is such that we don't have new properties to benchmark against," Getter said. "All we have is existing properties, fixer-uppers, and to an appraiser, they're going to look at an immediate area."
Getter said other areas of the proposed lots would be more attractive for custom-built homes.
Councilman Logan Welch said it would make sense for the City to own the proposed lots. However, Welch said he's concerned about how the community might react to such a plan, citing the spec-homes which the City recently purchased. He said the City should sell those homes before breaking ground on new land.
"I think it was a mistake," Welch said. "I feel that moving forward, preaching the gospel that we need more homes in this community which I agree, 100 percent, we need to have that behind us before we move into this."
Welch said the City should aggressively price the homes, take a loss on them, and then move onto the purchase and development of the Brewer Creek addition. Sadler said such action would set a negative precedent.
"If we're going to have new houses here, are we going to subsidize them all? Because that's the message you send the minute you decide to take a big loss," Sadler said. "Do you negotiate this? Fine, that's not the issue. But, to sit there and say we've now had them for three weeks, we're going to sell it for less than it cost to build it, that's the definite wrong message to send."
Welch said that action would send a message to the community that the City Council learns from its mistakes. He said that it's harder to sell homes as the season turns into fall and then winter. As such, the City would have to drop the price anyway and the homes would not likely sell until spring of 2015. Still, he reiterated that he was in favor of implementing the plan at a later date.
"This is awesome. I hope this is Webster City someday. However, I feel that we need to figure out some stuff we started before we move on to this," Welch said.
As the City Council met in a work session, no formal action was taken on Monday night. Getter asked that councilmen sleep on the plan and continue to consider it.