Economic forecast rosy, housing market lags for Highland Lakes

CONNIE SWINNEY• PICAYUNE STAFF

Building permits for new housing construction have increased in the past couple of years in cities such as Marble Falls, but economy experts have expressed concerns that the housing market has not kept pace with the residential needs of the local workforce. File photo

Building permits for new housing construction have increased in the past couple of years in cities such as Marble Falls, but economy experts have expressed concerns that the housing market has not kept pace with the residential needs of the local workforce. File photo

MARBLE FALLS — Development plans and incentives as well as fuel prices prompted a recent uptick in building permits; however, lack of housing in the wake of a soon-to-be-opened regional hospital could drive away income from Burnet and Llano counties should cities fail to coax residential projects to the area, officials warn.

According to analysis by area city and economic officials, a recent building activity snapshot indicates an economy on an upward trajectory.

“From our perspective, it’s looking pretty good,” Marble Falls City Manager Mike Hodge said. “With the recent developments approved by the city council, we’re going to see a lot of new construction pop up around the hospital, and then we’ve also got some in-field development that’s occurring along the (U.S.) 281 corridor.”

The Scott & White Hospital-Marble Falls, located in the Hurd Regional Medical Center on Texas 71 just off U.S. 281 on the southern edge of the city, is scheduled for an Aug. 3 grand opening and considered a catalyst for economic growth.

Marble Falls officials also credited a year-old program called Build Marble Falls, which allows developers to waive permit and water-tap fees, potentially saving thousands of dollars on each project.

Such a program should offer incentives for new developers as the city lays the groundwork for infrastructure, Hodge said.

The latest efforts involve the potential annexation by the city of an area known as Gregg Ranch, 300 acres in the southwest corner of Texas 71 and U.S. 281, less than a mile from the entryway of the regional hospital site.

“It’s a voluntary annexation process to bring, basically, the entire development into the city limits to provide the full range of city services to the development,” Hodge said. “This site is more prone to development because of the geology. The utility construction is going to be less expensive than we see in other parts of Marble Falls.”

As many as 1,500 new homes are planned by Harvard Investments Inc. at Gregg Ranch with homes potentially ranging from $180,000 to $250,000, utilizing infrastructure extended to the area connected to the hospital.

“When the city extended the water and sewer for the hospital, they oversized it, and we’re looking at this and taking advantage of the oversizing,” Hodge said.

A public hearing on the proposed Gregg Ranch annexation is scheduled for Jan. 27 with the final reading and potential vote Feb. 17 at city hall.

The city of Horseshoe Bay, just northwest of the hospital, stands to gain as well from the hospital development and reported increases in construction permits for residential projects compared to the same time last year.

“Our permits for fiscal year ’14 were up considerably over the prior year — homebuilding construction, single-family houses. The first three months of this physical year are trending a little bit higher than the same time last year,” Horseshoe Bay City Manager Stan Farmer said. “It’s just indicative that the economy is coming back.”

Farmer believes climbing oil and gas prices in the past several years have fueled new construction.

“I know the price of oil just dropped, but it did help that the price of oil was up very high until recently,” Farmer said.

Growth has sprouted in Horseshoe Bay West and the Escondido, high-end housing and a golf course development, just off Texas 71 and FM 2147.

“When the mortgage crisis hit, (home construction) went massively down in ’09 and ’10, and then every year, it slowly increased,” Farmer said. “We’re back to the pre-mortgage crisis levels. It helps with the tax-base growth, and it also brings lots of wonderful people who retire here.”

Economic development experts expressed concern that the influx of jobs related to the healthcare industry still could outpace the housing market growth for Marble Falls, Horseshoe Bay and surrounding communities.

“We did see an uptick in 2014 compared to the previous three years, but it’s still not where we need it to be, especially with the demands that we’re going to see with the hospital opening this year,” said Christian Fletcher, executive director of the Marble Falls Economic Development Corp.

With new developments thriving just east of Marble Falls in western Travis County and communities such as Bee Cave and Lakeway, the potential exists for employees of the burgeoning healthcare industry in Marble Falls to look for residential options in those areas.

“With the hospital, these are going to be some of the best paychecks earned in Marble Falls’ history,” Fletcher said. “We don’t want people living in another community coming into (this) community, earning a great paycheck and taking it back to their community to spend it at restaurants and retail and everything else. You also lose out on ad valorem tax base.”

Other than the concentration of potential new development south of town, home builders have primarily limited their interest in construction of additional “workforce housing” in areas such as Mormon Mill Road in the northeast side of Marble Falls, Fletcher said.

“There will be a lot of people moving to our area, and we just don’t have enough housing to support that of employees and residents,” he said. “What our market has been traditionally has been higher-end in terms of new construction, custom, people who want to retire in the Highland Lakes. For them, money is not such a challenge as it is for people who want to raise a family, work and live here.”

connie@thepicayune.com

Economic Growth Snapshot in the Highland Lakes

The following figures regarding new development, building permits and home construction values in Burnet and Llano counties were provided by the Marble Falls Economic Development Corp.:

ACTIVE AND NEW DEVELOPMENTS

  • Marble Falls: Mormon Mill area, Flat Rock Springs, Gregg Ranch, Wind Cliff (<$16,000/ac)
  • Burnet: Highland Oaks, Eagle’s Nest, Honey Creek
  • Horseshoe Bay: Escondido, Summit Rock

NEW CONSTRUCTION OVER THE PAST 5 YEARS

— Burnet County

  • 669 total permits in 5 years; average value $264,000
  • 2014 permit total: 132
  • Low value: $8,000; high value: $2,000,000

— Burnet

  • 109 total permits in 5 years; average value $200,000
  • 2014 permit total: 31
  • Low value: $80,000; high value: $600,000

— Horseshoe Bay

  • 155 total permits in 5 years; average value $617,000
  • 2014 permit total: 42

— Marble Falls

  • More new residential permits in 2014 than 2011, 2012 and 2013 combined — 15 (2014) vs. 12 (2011-13)
  • 45 total permits over 5 years; average value $230,000
  • Low value: $50,000; high value: $875,000

3 Responses to “Economic forecast rosy, housing market lags for Highland Lakes”

  1. Roy says:

    Hmm. If the Flat Rock springs is such an active development then WHY has there not been one home built in that development since it all started. They hit the big times News in 2010 and talked all about how marble Falls would soon start seeing roof tops going up in that place.So far nada..And Gregg Ranch is not even annexed into the city yet.Its merely a concept at this point.

  2. Steve says:

    There is nothing being built in the Windcliff development either. It is in a great location and proximity to the schools and has been approved almost as long as Manzano mile has been there. All these development locations and No homes going up. The city still does the permit waivers for fees and that has not done much of anything to kick start the housing boom. Why have these things not happened the leaders ask. Gee Maybe it could be because Marble falls has to high of taxes and an enourmous Debt service load. Maybe it could be the poor permitting process. Lots and lots of factors as to why the Lag in housing.

  3. Judy N says:

    It’s amazing to get the full details of how a new hospital can impact so many aspects of a community including jobs, housing and infrastructure. In Napa we are anticipating the construction of a new Costco, and similar details have been revealed to the community as well.

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