Housing boom has pros and cons for county residents
Joe Harris
Of the Suburban Journals
Jefferson County Journal
To find growth and opportunity the saying used to be, "Go west young man." But recent trends in the real estate market in the St. Louis area may modify that statement to, "Go south, young man."
The numbers speak for themselves. During the past five years the number of new home permits issued in unincorporated Jefferson County has risen 25 percent from 974 in 2000 to 1,218 in 2004. A total of 1,336 new home permits were issued in 2003, the highest total in the five year span, representing a 37 percent increase from 2000.
"I really think Jefferson County is going to be a the next spurt of growth for the entire region," said Rick Avila, vice president of Alpha Omega Construction Inc. "There is a lot of undeveloped land. In St. Charles, you can't build without driving one and a half hours."
Growth in Jefferson County cities is experiencing a similar boom.
The number of new home permits in Arnold jumped from 33 in 2000 to 157 in 2004, nearly a 500 percent increase. Hillsboro has seen a similar jump from two permits in 2002, to 35 in 2004. In Festus, home construction is up 400 percent, from 42 homes in 2001 to 160 in 2003.
Most of Hillsboro's increase can be attributed to the new Eagle Ridge subdivision that Alpha Omega is building. Avila said he has plans for two other subdivisions in Hillsboro. He believes better roads and accessibility make the area a prime building location.
"The new highway (21) coming down to Hillsboro is important," Avila said. "Once that new highway is in, it will just take 20 minutes to get to south (St. Louis) county without any traffic."
"St. Charles County has filled up and the distance to St. Louis has gotten so far that people are looking to go south," said Happy Welch, Festus pubic works director. "(Interstate) 55 gives people easy access to the city and the prices are still low. Land out here is relatively inexpensive so people want to move to this area."
Festus, known as the commerce center for the southeastern portion of Jefferson County, has welcomed the residential boom with open arms. Welch said it has led to the increase of commercial development in Festus along the Highway A and Interstate 55 corridors.
"Look at Home Depot and Lowes," Welch said. "They looked at where the population was concentrated, drew a 10 to 15 mile radius and decided that's where they wanted to locate. Other businesses are drawn to us because of the location."
County commissioners have the last say in all zoning and development matters in unincorporated Jefferson County. Pat Lamping, 2nd District Commissioner, said that can be a delicate balance at times.
"You try as hard as possible to mediate between the property rights of one individual versus the property rights of another individual," Lamping said. "Many times we'll hear, ?when I moved here, the lot next to me was vacant and I want it to remain vacant.' The rights of the owner have to be balanced with the rights of the people who are already there.
"Obviously you try to develop the property to the most effective and best use. The county exists almost exclusively on sales tax revenue. Commercial development usually follows residential development."
But all of the residential development does not come without a price. County Assessor Randy Holman feels the brunt of it everyday.
Holman's office is in charge of assessing every piece of property for the entire county. He said a total of 1,960 new homes were added to county tax rolls in 2004, an average of 178 new homes a month. That's quite a workload for a staff of four.
"Our numbers are based on occupancy, that is when they go on the tax roll," Holman said. "We had a little decrease after 9-11, but it has picked up again. It's just more challenging. It takes a lot of good planning. We try to make our staff work an entire area at once to limit travel. Hopefully we can add some staff in 2005."
According to Holman, Jefferson County recently overtook St. Louis County for the first time in number of new home permits issued.
"I think it is a natural transition in an area that is getting saturated," Holman said. "It is a natural transition to go south. We have good north-south thoroughfares that are important to the people who commute back and forth to St. Louis. We also have a good reputation with our public school systems."
Aside from property assessments, residential growth also puts a strain on community services. More homes and people put a higher demand on schools, police, fire and ambulance services.
Lamping wishes he would hear more from those entities during the planning and zoning process, but rarely gets any feedback.
"During the planning and zoning process, all providers of services are apprised of the development," Lamping said. "Unhappily, we often do not hear from schools or other entities."
Individual cities are helping service agencies brace for the growth. Welch said the Festus police and fire departments are growing and recent improvements to the water and sewer treatment plants have allowed growth to occur.
New developments can also bring improvements to existing neighboring areas. Lamping said infrastructure improvements to the entire area often accompany new developments.
"We look to see if a project will bring benefits to areas," Lamping said. "For instance, most new subdivisions, subdivisions with lots less than three acres, are required to have a sanitary sewer collection system. Often times, this brings an expansion of sanitary sewer collection systems, expansion of drinking water systems and a lot of times, road improvements."
Aside from new neighbors, current county residents are also being affected by the new developments with increasing property values. This is an assessment year, and Holman expects to see big increases for county property owners.
"Assessors react to the market, we don't predict the market," Holman said. "Compared to two years ago, we're seeing a minimum of a 10 percent increase in the most part . . . simply on appreciation only, it's the highest increase I've ever seen."
A higher assessment doesn't necessarily mean higher taxes though. Holman said higher property values might bring down the tax rate that will be set in September.
A lower tax rate is not out of the question. The City of O'Fallon, in St. Charles County, has had seven decreases in its tax rate in the past eight years. O'Fallon is considered one of the fastest growing cities in the Midwest.
"The positive spin is that home and real estate is the biggest investment most will ever make," Holman said. "It is good to see a good, healthy appreciation."
Avila has seen the appreciation firsthand. The first homes in Eagle Ridge were built a year ago at an average base price of $125,000. That average has risen to $135,000.
And like it or not, the trend is not expected to change anytime soon.
"Home values will continue to go up as long as the economy stays strong and interest rates stay down," Avila said. "The interest rates are the most important because right now people living in an apartment can afford a $125,000 base home."
The Jefferson County housing boom
(The following is the number of new home permits issued in a given year)
Town
2000 2001 2002 2003 2004
Jefferson County (unincorporated)
974 1,154 1,154 1,336 1,218
Arnold
33 43 77 90 157
Hillsboro
NA NA 2 8 35
Festus
NA NA 42 116 160
Joe Harris
Of the Suburban Journals
Jefferson County Journal
To find growth and opportunity the saying used to be, "Go west young man." But recent trends in the real estate market in the St. Louis area may modify that statement to, "Go south, young man."
The numbers speak for themselves. During the past five years the number of new home permits issued in unincorporated Jefferson County has risen 25 percent from 974 in 2000 to 1,218 in 2004. A total of 1,336 new home permits were issued in 2003, the highest total in the five year span, representing a 37 percent increase from 2000.
"I really think Jefferson County is going to be a the next spurt of growth for the entire region," said Rick Avila, vice president of Alpha Omega Construction Inc. "There is a lot of undeveloped land. In St. Charles, you can't build without driving one and a half hours."
Growth in Jefferson County cities is experiencing a similar boom.
The number of new home permits in Arnold jumped from 33 in 2000 to 157 in 2004, nearly a 500 percent increase. Hillsboro has seen a similar jump from two permits in 2002, to 35 in 2004. In Festus, home construction is up 400 percent, from 42 homes in 2001 to 160 in 2003.
Most of Hillsboro's increase can be attributed to the new Eagle Ridge subdivision that Alpha Omega is building. Avila said he has plans for two other subdivisions in Hillsboro. He believes better roads and accessibility make the area a prime building location.
"The new highway (21) coming down to Hillsboro is important," Avila said. "Once that new highway is in, it will just take 20 minutes to get to south (St. Louis) county without any traffic."
"St. Charles County has filled up and the distance to St. Louis has gotten so far that people are looking to go south," said Happy Welch, Festus pubic works director. "(Interstate) 55 gives people easy access to the city and the prices are still low. Land out here is relatively inexpensive so people want to move to this area."
Festus, known as the commerce center for the southeastern portion of Jefferson County, has welcomed the residential boom with open arms. Welch said it has led to the increase of commercial development in Festus along the Highway A and Interstate 55 corridors.
"Look at Home Depot and Lowes," Welch said. "They looked at where the population was concentrated, drew a 10 to 15 mile radius and decided that's where they wanted to locate. Other businesses are drawn to us because of the location."
County commissioners have the last say in all zoning and development matters in unincorporated Jefferson County. Pat Lamping, 2nd District Commissioner, said that can be a delicate balance at times.
"You try as hard as possible to mediate between the property rights of one individual versus the property rights of another individual," Lamping said. "Many times we'll hear, ?when I moved here, the lot next to me was vacant and I want it to remain vacant.' The rights of the owner have to be balanced with the rights of the people who are already there.
"Obviously you try to develop the property to the most effective and best use. The county exists almost exclusively on sales tax revenue. Commercial development usually follows residential development."
But all of the residential development does not come without a price. County Assessor Randy Holman feels the brunt of it everyday.
Holman's office is in charge of assessing every piece of property for the entire county. He said a total of 1,960 new homes were added to county tax rolls in 2004, an average of 178 new homes a month. That's quite a workload for a staff of four.
"Our numbers are based on occupancy, that is when they go on the tax roll," Holman said. "We had a little decrease after 9-11, but it has picked up again. It's just more challenging. It takes a lot of good planning. We try to make our staff work an entire area at once to limit travel. Hopefully we can add some staff in 2005."
According to Holman, Jefferson County recently overtook St. Louis County for the first time in number of new home permits issued.
"I think it is a natural transition in an area that is getting saturated," Holman said. "It is a natural transition to go south. We have good north-south thoroughfares that are important to the people who commute back and forth to St. Louis. We also have a good reputation with our public school systems."
Aside from property assessments, residential growth also puts a strain on community services. More homes and people put a higher demand on schools, police, fire and ambulance services.
Lamping wishes he would hear more from those entities during the planning and zoning process, but rarely gets any feedback.
"During the planning and zoning process, all providers of services are apprised of the development," Lamping said. "Unhappily, we often do not hear from schools or other entities."
Individual cities are helping service agencies brace for the growth. Welch said the Festus police and fire departments are growing and recent improvements to the water and sewer treatment plants have allowed growth to occur.
New developments can also bring improvements to existing neighboring areas. Lamping said infrastructure improvements to the entire area often accompany new developments.
"We look to see if a project will bring benefits to areas," Lamping said. "For instance, most new subdivisions, subdivisions with lots less than three acres, are required to have a sanitary sewer collection system. Often times, this brings an expansion of sanitary sewer collection systems, expansion of drinking water systems and a lot of times, road improvements."
Aside from new neighbors, current county residents are also being affected by the new developments with increasing property values. This is an assessment year, and Holman expects to see big increases for county property owners.
"Assessors react to the market, we don't predict the market," Holman said. "Compared to two years ago, we're seeing a minimum of a 10 percent increase in the most part . . . simply on appreciation only, it's the highest increase I've ever seen."
A higher assessment doesn't necessarily mean higher taxes though. Holman said higher property values might bring down the tax rate that will be set in September.
A lower tax rate is not out of the question. The City of O'Fallon, in St. Charles County, has had seven decreases in its tax rate in the past eight years. O'Fallon is considered one of the fastest growing cities in the Midwest.
"The positive spin is that home and real estate is the biggest investment most will ever make," Holman said. "It is good to see a good, healthy appreciation."
Avila has seen the appreciation firsthand. The first homes in Eagle Ridge were built a year ago at an average base price of $125,000. That average has risen to $135,000.
And like it or not, the trend is not expected to change anytime soon.
"Home values will continue to go up as long as the economy stays strong and interest rates stay down," Avila said. "The interest rates are the most important because right now people living in an apartment can afford a $125,000 base home."
The Jefferson County housing boom
(The following is the number of new home permits issued in a given year)
Town
2000 2001 2002 2003 2004
Jefferson County (unincorporated)
974 1,154 1,154 1,336 1,218
Arnold
33 43 77 90 157
Hillsboro
NA NA 2 8 35
Festus
NA NA 42 116 160
