Local workforce struggles to find affordable housing

Cookie Cutter Neighborhood

Cookie Cutter Neighborhood

Image description
Cost-burdened households
Image description
The rising cost of rooftops
Image description
Class A living
A study conducted by economic research and consulting firm Community Development Strategies revealed the New Braunfels workforce struggles to afford housing locally.

CDS President Steve Spillette shared the findings with City Council at its Feb. 11 meeting.

“We were interested in determining the level of demand for various types of housing associated with the workforce that is employed in New Braunfels,” Spillette said. “To do that we studied several levels of geography, mostly [the 78130 ZIP code].”

“[Four Rivers Association of Realtors] told us the best way to get [accurate numbers] for the New Braunfels market is 78130,” Michael Prats, a senior market analyst for CDS who led the study, said.

The need for the study


Chester Jenke, vice president of economic development for the New Braunfels Economic Development Corp., said a focus area of the EDC’s 2017 strategic plan is the exploration of affordable workforce housing, adding that the most recent housing study did not contain current data because it was completed in 2011.

In February 2018, city officials told Community Impact Newspaper that New Braunfels was still an affordable place to live compared to other areas despite the region’s rapid growth. However, CDS’ study revealed surrounding cities such as Schertz, Seguin and Universal City offer significantly lower-priced housing options.

Spillette said CDS compared the level of demand to the types and cost of housing supplied in the area relative to the workforce and its housing needs. CDS found the largest and fastest-growing industry sectors—such as retail, accommodation and food service—have lower wages.

Figures in the study were based on the U.S. Census Bureau’s most recent estimates, which indicate 70 percent—or 23,373—of the New Braunfels workforce reside outside the city limits.

Michael Meek, president of the New Braunfels Chamber of Commerce, said one contributor to the city’s affordable housing predicament is that it is a desirable place to live, and that demand drives up home prices.

“It’s an issue everywhere; it’s not just here,” Meek said. “It’s exacerbated in New Braunfels because of our fast growth and because of our tourism industry.”

A commuting workforce


Meek said the number of employees commuting to the city for work presents a variety of issues.

“Seventy percent of our workers are getting their paychecks and going back to Selma, Schertz and Seguin to spend their paychecks,” he said.

Meek added that employers are also negatively affected when employees live further away because absenteeism increases and employee retention decreases because workers often seek employment opportunities closer to where they live.

New Braunfels resident Nicholas Sralla said he finds himself on the opposite end of the spectrum. For more than nine years, he has commuted an hour to his job in San Antonio in order to afford to live in New Braunfels.

When it comes to affordable housing, Sralla said the city is focused on the wrong side of the equation.

“We need to start diversifying our job base and bringing in higher paying jobs,” Sralla said. “When you drive through the city most of the businesses which are here and driving the population boom are from small retail and hospitality jobs.”

Meek also believes bringing higher-wage jobs to New Braunfels will be key moving forward. However, with more retail expected to pop up in coming years, more lower-wage jobs will be created.

“It’s a double-edge sword because do you want them to earn their paycheck and then go to San Marcos and spend their money there?” Meek said.

Sralla said while he believes there is a place for retail and accommodation jobs, the abundance of them in New Braunfels is hurting the community.

“That’s how people start out and that’s a great place to do it,” he said. “As the city grows and matures, you have to think beyond instant gratification.”

Homeowner hardships


As research unfolded, CDS found that 22 percent of owner-occupied units in 78130 are housing cost-burdened, meaning more than 30 percent of their gross household income is spent on direct housing costs. He added that household incomes ranging from $41,780-$60,000 need homes priced $150,000-$225,000, and inventory is low.

“It wasn’t that long ago that you were selling new homes under $200,000, but due to land prices and other cost factors, those housing prices have [increased],” Spillette said.

Spillette also noted the city’s aggressive impact fee increases play a role in driving up home prices because developers must spend more on infrastructure in order to deliver their products.

A shortage of affordable rentals


Beyond the difficulty of homeownership, Spillette stressed the significant financial stress faced by renters.

“It’s your rental situation that’s probably even more of an extreme situation for you, which is the case actually commonly that we’ve been seeing around Texas in other markets,” Spillette said.

He said New Braunfels has some of the highest rental costs per square foot in the area, specifically mentioning the greater ease of affordability in Seguin, which lies 10 miles to the east.

Spillette said also contributing to renter woes is the overabundance of Class A rental units, with more to come in master-planned developments. While these types of properties offer top-class amenities, CDS found that the average occupancy rate among Class A apartment complexes is 88 percent.

“You really want to be up towards 93-94 percent,” he said.

Meek cited the number of homeowners opting to capitalize on the area’s tourism economy by using their homes as vacation rental properties rather than making them available to long-term tenants.

Recommended solutions


Spillette said more than 5,000 rental units are needed in the city to get more residents out of unaffordable living situations. His firm offered solutions to City Council that will be part of ongoing discussions.

“The city is trying to do something about the issue,” Prats said. “You don’t have that in every city.”

Investing in the preservation of existing affordable workforce housing was one recommendation as well as a temporary worker housing program that could include RV parks, manufactured housing worker camps or mobile tiny homes.

Supporting the construction of income-restricted and subsidized multifamily rental units is also on the list as well as providing a temporary housing support program for the homeless, seasonal employees and low-wage workers.

However, Sralla said he believes low-income housing is not the answer.

“When it comes to this [subsidized] housing argument, what we’re essentially doing is we’re subsidizing the low-income jobs that are coming into New Braunfels,” he said.

CDS said down payment and soft second mortgage financing assistance programs, as well as city incentives for developers to provide new housing in target price ranges could also help tackle the affordable housing problem.

“We want to widely distribute what I consider bankable information to the development community, both single-family and multifamily, because it clearly shows how many units can be occupied or sold or rented if at a certain price,” Meek said.

Sralla said with the proposed affordable housing solutions, he fears his home will depreciate in value.

“Pulte homes is opening 3,000 -square-foot homes for $330,000, and so that is a very stark discount for every other home in the entire city quite honestly,” Sralla said. “... If you actually look at Zillow or Realtor.com, our entire subdivision’s home value has gone down by about $20,000-$30,000 ever since the Pulte home developer started selling homes late last year.”

Beyond housing, transportation assistance programs could also alleviate financial stressors.

“Right now they’re having to live so far out of New Braunfels that the transportation costs are hurting their household budgets,” Prats said.

Meek said tweaking local codes and ordinances that were put in place before the housing issues presented themselves would also be beneficial. He suggests legalizing garage apartments—commonly referred to as mother-in-law suites—which currently is not allowed in New Braunfels.

“I know [the affordable housing issue] seems like it’s insurmountable, and probably in total it is,” Meek said. “But we need to try to make progress on it as much as we can.”
By Rachel Nelson
Rachel Nelson is editor of the New Braunfels edition of Community Impact Newspaper. She covers local business, new development, city and county government, health care, education and transportation. Rachel relocated to Central Texas from Amarillo in 2009 and is a graduate of Texas State University's School of Journalism and Mass Communication.


MOST RECENT

High School Seniors were honored at the CHS graduation on June 3, 2020, in New Braunfels. (Lauren Canterberry/Community Impact Newspaper)
PHOTOS: Canyon High School seniors celebrate graduation

The Canyon High School graduating class of 2020 was celebrated at an in-person graduation ceremony on Wednesday, June 3.

CMS also unveiled an interactive map that lets users search any nursing home in the U.S. to see its COVID-19 cases. (Courtesy Adobe Stock)
CMS reports 321 coronavirus deaths in Texas nursing homes, nearly 32,000 nationwide

CMS also unveiled an interactive map that lets users search any nursing home in the U.S. to its COVID-19 cases.

There were four new cases of the coronavirus reported between both Comal and Guadalupe counties on June 4. (Community Impact staff)
Two new cases of COVID-19 reported in New Braunfels

Two additional cases were reported in Guadalupe County but their location has not been confirmed.

Source: Comal County/Community Impact Newspaper
70th change order approved for new Comal County Jail

As the jail nears completion, $908,522 of the county’s $2,471,535 contingency has been used to address change orders.

Texas Gov. Greg Abbott announced Phase 3 of his Open Texas plan June 3. (Brian Rash/Community Impact Newspaper)
Gov. Greg Abbott's June 3 guidelines allow most Texas businesses to operate at 50% capacity

Texas Gov. Greg Abbott continues to lift coronavirus-related business restrictions.

As of June 3, there were 71 cases of the coronavirus confirmed in New Braunfels since the pandemic began. (Courtesy Adobe Stock)
Comal County COVID-19 case count at 111, Guadalupe County at 148

There were 21 cases of the coronavirus confirmed across both counties since June 1.

Legendary baseball player Nolan Ryan has long enjoyed ranching. Now, he and his team are preparing to open a butcher shop in Round Rock to showcase Goodstock, Nolan Ryan Beef and other Texas-made products. (Photo courtesy Nolan Ryan)
Nolan Ryan to open Round Rock butcher shop and 20 other Central Texas business updates to know

Read the latest news on Central Texas businesses from Community Impact Newspaper's latest coverage.

New Braunfels Utilities will resume collecting late fees and enforcing disconnections on July 1. (Ian Pribanic/Community Impact)
New Braunfels Utilities to resume late fees and disconnections for missed payment

Customers have until June 30 to set up a payment plan with NBU.

Census reinstates some field operations in Texas following coronavirus delay. (Courtesy U.S. Census Bureau)
Census reinstates some field operations in Texas following coronavirus delay

Operations began in Fort Worth, Dallas, Austin and San Antonio beginning May 25.

Well over 100 people participated in the New Braunfels Black Lives Matter protest on June 2. (Warren Brown/Community Impact Newspaper)
PHOTOS: New Braunfels residents protest June 2 over the death of George Floyd

Roughly 200 protesters went to Main Plaza in downtown New Braunfels on Tuesday to protest the death of George Floyd in Minneapolis.

Pillars Christian Learning Center to open new location in 2021

The preschool is for children aged 6 weeks to 4 years.

New Braunfels had 62 confirmed cases of the coronavirus on June 1, up from 31 at the end of April, a 96.7% increase. (Community Impact Newspaper staff)
Comal County confirms 100th COVID-19 case

The new case is a resident of New Braunfels.