Eureka Springs is currently experiencing two major challenges closely related to each other. Affordable housing to either buy or rent is increasingly difficult to find, and employers – especially in the hospitality industry –are dealing with labor shortages. Neither issue is unique to Eureka Springs, as average cost of a home in the U.S. went up 19.2 percent between July 2020 and July 2021, and 4.3 million Americans quit their jobs in August, the most in one month since 2000.
At the same time, building supply costs – lumber, steel, heating and air conditioning systems, electric and roofing – have gone up significantly, and it can be difficult to find skilled construction labor. Some experienced builders are reportedly booked more than a year out.
The Mayor’s Task Force on Economic Development met Oct. 13 to discuss these issues. It was clear there is frustration because neither issue is one that is easily solved. Mayor Butch Berry said it is something of a chicken and egg situation. What comes first? Building affordable housing or attracting more workers? Berry said some restaurants are opening on limited days and hours because they can’t find enough staff.
There are programs on television about a trend towards building tiny homes. While those sound like a good deal, Berry said they can be very expensive per square foot. It still takes quite a bit of money to provide water and sewer to homes, even if they are small. And there is a state ban on composting toilets that might be used to reduce costs for installing sewer.
Berry, an architect, said prices have gone up dramatically for all kinds of housing since pre-Covid. Even manufactured or modular housing is not cheap, and there are zoning and Historic District Commission restrictions on those.
Berry said manufactured or modular housing is an option that might be part of the solution. But many areas in town aren’t zoned for manufactured housing, and costs for that type of housing have also gone up considerably from pre-Covid.
Alderman Autumn Slane, co-owner of Grotto and Sauced, said they recently brought in four workers from Oklahoma, but have been unable to find housing for them. Slane said they need more workers and are frustrated at how much the housing shortage is impacting their business and other businesses.
Sandy Martin, Chair of the Mayor’s Task Force on Economic Development, said there are a number of potential solutions being studied including repurposing shipping containers into homes—which appeared to have a lot of support from others attending the meeting. Having available land with water, sewer and other infrastructure is one of the biggest hurdles.
“Land is a big deal,” Martin said. “We need a benevolent benefactor willing to donate land.”
Alderman Terry McClung, a real estate agent, expressed doubt that there is anyone who has enough land and a willingness to donate it that could be found within the city limits of town. Eureka Springs often has higher building costs than other communities because of the challenges presented by the steep terrain. Foundations cost more, and it can be prohibitively expensive to a small development project if a sewage lift station has to be built.
Martin said other possibilities include public-private partnership, land trusts, and rent-to-own homes. She said local banks have programs to educate people on how to qualify for home loans. Often having an adequate down payment is a barrier, but loans and grants are available for potential developers and buyers.
“Berryville and Green Forrest have tackled the issue and have built several different projects including some with the help of the biggest employer in the county, Tyson,” Martin said.
Jim Nelson, a local retail business owner, suggested that the city look at recent articles in Dwell Magazine that detail successful efforts to build low-income housing in other areas.
“There are other programs out there that we can copy such as what has been done with ECHO Village,” Nelson said.
Kent Turner, a real estate agent, said there are some state programs that do not require down payments and some also provide assistance in purchasing a home.
Robert Evans, who with his wife, Andrea, have purchased four shopping centers in Holiday Island, said there is some desperation out there with people unable to find a place to live.
“Our pretty place is what makes us money,” Evans said. “But how do we get from dreams to reality for housing? We need places that rent for $400 to $500 a month to be affordable to local workers.”
McClung said that even starting today, it would be two to three years before a housing project could be built and opened. Martin suggested looking at a 30-60 unit complex, possibly using the shipping container concept.
McClung said whatever is done needs to be practical.
“Don’t bite off too big a chunk to chew,” he said.
Something that could be done much quicker which has been considered in the past is conversion of a hotel to long-term rental units. Several smaller hotels have done this over the years. Berry said a problem is that most hotel owners don’t want to be landlords.
“There is also the issue that many motels would have to be retrofitted to meet building codes, such as installing sprinkling systems for fire suppression,” Berry said.