by Regan Pence, ASLA
I am a practicing landscape architect in Omaha, Nebraska, and I have grown to love the community and the projects I have been a part of. Since my move to Omaha seven years ago, I have often questioned why there is such an absence of variety in housing options in Omaha. The options appear to be incredibly limited compared to some of the other cities I have lived in or visited. Omaha is a city within proximity of several larger metropolitan areas, and Metropolitan Omaha is nearly 1,000,000 people. So, what is the reason for the lack of diversity in homes?
Over time, I ruminated more and more over this question. The lack of housing product is not necessarily a new issue, and innumerable metropolitan areas around the world have already experienced these crossroads. The difference with many of those areas, however, is that they arrived at a conclusion many years ago. Eventually, there is always a tipping point that requires innovation to survive. Upon approaching that tipping point, the conversation evolves from how we can continue to provide housing, to how do we thoughtfully provide housing to everyone (while being respectful of our resources).
Fortunately, I have had the opportunity to assist with numerous projects and explore countless new housing concepts. Unfortunately, there are occasions where the housing concepts I’ve worked through don’t seem to get the traction I expect—even if they are proven concepts borrowed from successful projects in other municipalities. After spending time thinking over this reluctance, I began to understand that perhaps I was selling ideas that were forced or premature for the region. Until recently, there was a lack of demand for innovative housing products. Developers were profitable, and the community was content with the current supply. Recently, however, I’ve started to hear a buzz on the street. People are curious as to where the new housing products are, what is the missing-middle, and why am I living next to a corn field?
In response, I began to deliberate with some of our local development community. I sought to understand the challenges from all points of view, rather than simply focus on the designer or academic perspective. Below you’ll find pieces from one of those discussions.
What are the current conditions in the Omaha market?
Salaries didn’t keep up with housing prices and home prices are becoming inflated. Residential developers and builders are bumping up against a ceiling due to the inability for their customers to afford their products. New home customers are settling for lower grade housing due to their inability to afford the current prices. Everyone is getting bumped; the custom home clients are settling for semi-custom and the semi-custom are settling for tract homes and so on. In the developer and builder world, this is a first sign of a slowing market.
What is causing the higher home prices?
It appears to be a combination of items from land to commodities, labor, taxes, and interest rates. Traditionally, greenfield land in Omaha has been relatively cheap to develop, but now it is starting to run out of the low-hanging fruit. The land available is in high demand and it comes with lots of strings attached. Wetlands, topography, floodplain, entitlements, and lack of infrastructure all require lots of time, attention, and money. It is becoming very costly to develop greenfield land in Omaha. Also, since the trade negotiations started with Canada and overseas, lumber and steel prices have become unpredictable. When these costs go up, the developer takes a hit and extra costs are also passed on to the customers. Sometimes this can amount to tens of thousands of dollars added to the bottom line of a new home.
There is also a severe labor shortage. Construction crews, companies, and contractors are spread far too thin and there doesn’t appear to be enough qualified labor available to ease the pain. Heavy premiums are paid to find qualified contractors and the crews are working heavy overtime. Again, this cost is passed along to the customer.
And, as always, taxes—they always go up and new builds are paying over 2.5% property tax a year. Fortunately, interest rates are low for now, but everything else is high. From a developer’s perspective, an interest rate hike will be the straw that breaks the camel’s back. Once this happens, the writing will be on the wall and the market will slow.
What is the future for residential development in Omaha?
Things will most likely proceed as-is for a while. It’s been profitable to do things the same way they’ve been done the last 50 years, but now we’re approaching a crossroads. There are new developers with different approaches entering the market. Many of the new-guard are focusing their energy inwards and towards the city center. They are innovative and motivated and understand the new trends. As a community, we have been overreaching and density is the answer. Density can significantly lower land development cost and material cost. Development sites with existing infrastructure and utilities are becoming very attractive and are beginning to compete at the same price point as greenfield land. If a developer can drop home prices with density, while delivering the same level of finish, then this product is still approachable and within reach of new customers. Product A has the same square footage of Product B, but Product A is priced X percent less, and it’s closer to town.
We still haven’t seen many higher density missing-middle developments in Omaha. Where’s the resistance?
As previously mentioned, it’s been profitable to use the same proven recipe. There aren’t bad intentions, but greenfield development has traditionally been the path of least resistance. On the surface, it rewarded the customers with large open lawns and ownership and rewarded the developer with profitability. Below the surface, it was creating challenges to the landscape, infrastructure, and affordability. As a community we’ve been hesitant to take a risk and now we’re beginning to work together to understand how all the pieces fit together. Now, with the higher development cost, we must react with creativity and innovation.
To summarize my discussions, there appears to be a need for a three-pronged approach:
- As landscape architects and designers, it’s our responsibility to provide exposure to new ideas and help educate the community and our clients.
- Work with leaders in the community to find an approach to new housing trends that will be receptive and welcomed.
- Lastly, take a leap of faith and experiment. Maybe the first handful of new housing ideas aren’t a home run, but rather, a step in the right direction that can be continually improved upon for the next version.
Regan Pence, ASLA, is Landscape Architecture Practice Lead at Lamp Rynearson in Omaha, Nebraska. He has served as an officer for ASLA’s Community Design Professional Practice Network (PPN) since 2018.