1. How do multi-family developments benefit the City of Rowlett and its citizens?
Multi-family developments are helping the City diversify its tax base and housing stock. In general, higher density brings certain benefits that purely single-family neighborhoods may not. For example, higher density can attract a different mix of retail than usually is attributed to an area dominated by single-family. In addition, restaurants need volume to be successful and higher density areas can be desirable markets for restaurateurs.
In Rowlett, multi-family units also contribute to our property tax base and water rates.
Property Tax: Each multi-family property owner is assessed a tax based on the respective property’s assessed value. The City’s tax rate for properties with multi-family dwellings is identical to its tax rate for properties with single family dwellings with the exception that properties that are rented do not qualify for certain tax exemptions such as Homestead, Over 65 and Disabled Persons. For property taxes paid in 2019, the City’s tax rate is $0.757173 per $100 of assessed value.
Based on Rowlett’s own experience, a multi-family development will generate approximately $18,163 in property taxes per acre. By comparison, a single-family development zoned as SF-10 (10,000 square foot lots) will generate $4,255 per acre for $200,000 homes. A single-family development zoned as SF-8 (8,000 square foot lots) will generate $5,724 per acre for $200,000 homes. This means that it takes 3-4 times the amount of acreage of single-family units to equal the tax revenue of one acre of multi-family assuming a taxable value of $200,000. A tax value of $300,000 per single-family unit would still take 2-3 times the amount of acreage as one-acre of multi-family.
Water Rates: The North Texas Municipal Water District (NTMWD) is the City’s contracted water supplier. The contract requires the City to pay for a minimum of 3.2 billion gallons of water per year from NTMWD, the cost of which influences water rates for every customer in Rowlett. The City delivered approximately 2.3 billion gallons to customers in fiscal year 2019 (ending on September 30, 2019). Therefore, the cost of the unused water, $2.8 million in fiscal year 2019, had to be spread over the entire customer base.
With more customers, more water is expected to be sold. This then reduces the amount of unused water for which we all pay. New customers will have a positive impact on future water rates for all customers. The addition of higher fees charged to multi-family units has also benefitted our water rates as single-family homes no longer subsidize multi-family.
2. How many multi-family developments and units are there in the City?
A dwelling unit typically consists of some combination of living/sleeping areas, a bathroom(s), and a kitchen. A multi-family development is a structure or collection of structures, each designed to contain more than one dwelling unit. For the purposes of this discussion, multi-family incudes apartments, condominiums and age-restricted units (i.e. 55+). It does not include nursing homes, assisted living units or mobile home parks.
Table 2 lists the multi-family developments in Rowlett, which are all multi-structure complexes of apartments or condominiums. In this case, ’Built’ means all primary construction is complete and the City has issued a Certificate of Occupancy; whereas ‘Under Construction’ means that the City has issued a building permit but not yet performed final inspections and/or issued a Certificate of Occupancy
3. How many multi-family developments and units are planned?
As of January 2020, there are currently five multi-family developments planned but not yet under construction, which are listed in Table 3. In this case, ‘Planned’ means the City has formally accepted preliminary plans into the development process but has not yet issued a building permit.
Note: Number of units is subject to change. Building Permits have not been issued for these projects.
4. How many of the multi-family developments and units in Rowlett are planned for senior residents?
There are currently three multi-family developments in Rowlett either built or under construction that have (will have) a minimum age criterion as a leasing requirement, which are listed in Table 4. This list does not include assisted living facilities or other specialized nursing/medical care facilities, which are not considered multi-family developments.
Note: Number of senior living units is part of the grand total listed in question #2 above.
5. How does the number of multi-family units in Rowlett compare to neighboring cities?
Measuring the number of multi-family dwelling units based on population provides a useful and meaningful way to compare numbers of multi-family units in Rowlett and other cities.
The Apartment Association of Greater Dallas (AAGD) was founded in 1959 and is one of the largest local rental housing associations in the United States. AAGD recently published its 2020 Multi-Family Fee Survey report, which includes comparative data from cities spread across its service area. Based on the AAGD data, there are 61 multi-family units for every 1,000 residents in Rowlett. Table 5 lists the number of multi-family units for every 1,000 residents of several other DFW cities. Comparatively, Rowlett has fewer multi-family units for every 1,000 residents than 21 of the 23 cities listed. The AAGD report includes multi-family units that are built or under construction.
6. What incentives have been provided for the construction of new multi-family developments?
The City has a variety of economic development tools available to attract new businesses to Rowlett, including property tax rebates, property tax abatements, impact fee waivers/reductions, permit fee waivers/reductions, and job grants. Although the City does not actively market incentive packages for multi-family developments, it has chosen to use incentive packages to catalyze development in certain locations. The City evaluates incentive requests on a case-by-case basis according to its Economic Development Incentive Policy.
The multi-family projects Rowlett has directly incentivized are as follows:
Village of Rowlett-
The City agreed to grant land to the developer in the amount of $2,120,000; waive water, wastewater and street impact fees for the project; grant infrastructure improvements to the developer in an amount not to exceed $1,950,000; and to rebate 100% of its portion of the developer’s property taxes between 2017 and 2031. The rebate for FY2019 was $227,152.
The City agreed to waive roadway impact fees in an amount not to exceed $902,493; and to rebate 57% of its portion of property taxes in an amount not to exceed $2,129,450 over a 10-year period. Although the incentive was approved, the developer failed to meet the performance criteria required to collect the incentive payments and, therefore, did not qualify for the incentive. Therefore, no incentive was paid for FY2019 or will be paid in the future.
Bayside / Sapphire Bay-
The City created a tax-increment reinvestment zone (TIRZ) for the Bayside/Sapphire Bay area. Under the agreement, the TIRZ will receive 50% of the property taxes paid for the first twenty years (i.e. 2015-2034) for site work, public domain and open space, and infrastructure purposes.
Non-Incentive Projects supported by Rowlett:
There are other multi-family projects that are not directly incentivized by Rowlett. This includes the age-restricted development Lakeview Point, which is a tax-exempt project sponsored by the Rowlett Housing Finance Corporation. The City will be paid a property tax equivalent amount under a payment-in-lieu-of-tax arrangement under that agreement. The City also entered into a short-term loan arrangement with the age-restricted development Evergreen, which was paid back in the same year. Additional detail can be found on the City’s Economic Development Transparency Page.
7. Can the City’s absorb the units currently being built?
Since the inception of Realize Rowlett 2020 in 2011 and the Form Based Code in 2012, over 3,000 multi-family units have been either built or are under construction, which is an average of approximately 410 units each year. According to a study commissioned for the 2019 Comprehensive Plan update, Rowlett can absorb up to 527 units annually over the same period with average rents approaching $1,400. As a result, the delivery of new multi-family units between 2012 and 2019 totaled approximately 920 units below what the City can absorb. Among other variables, the absorption analysis accounts for existing street, water, and wastewater infrastructure capacity and planned future expansion.
While the market ultimately will make the decision about how many units should be built in what timeframe, there are indicators that Rowlett may be reaching the limits of what it can currently absorb based on its absorption rate and the units currently under construction or planned. If all of these units were built today, it could take 5+ years for the market to adjust.
8. What is the rent range for these apartments?
The Multi-family units being built in Rowlett today are high quality and, in some cases, luxury style units. Many developments include amenities often found in higher income neighborhoods such as pools, community centers, open space, dog parks and trails. The rent range for six of the most recently completed units are listed in the charts below.
9. Are drivers living in apartments to blame for the increased traffic we see City wide?
Only a small percentage of the overall traffic in Rowlett can be attributed to those living in apartments. For example, there are currently 636 apartment units along Lakeview Parkway from Chiesa to Scenic Drive, with another 342 in the construction or planning phase. Upon buildout, these developments are expected to make up approximately 14% of the traffic in the peak evening hours. Breaking it down to specific areas on Lakeview Parkway, 8.53% of the peak evening traffic at Scenic Drive is attributed to these drivers, with 2.2% near Dalrock and 3.8% at Chiesa.
The biggest driver of our traffic is derived of pass-through traffic from east of Rowlett. 15,189 cars a day pass westbound on Hwy 66 near Scenic Drive. While some of that is returning Rowlett citizens who attend school or work in Rockwall, many of these trips are from people travelling through Rowlett. This is borne out by recent data collected that reflects peak hours to be high volume are westbound in the morning and eastbound during evening traffic. The highest traffic count of any section of Rowlett is just west of PGBT where traffic counts total 22,605. This suggests that pass-through traffic could account for as much as 67% of total traffic along State Highway 66.
10. Are the new apartments contributing to Rowlett’s crime rate?
Rowlett is consistently listed as one of the safest cities in Texas ranking 9th in the most recent update from SafeHome.org. The luxury multi-family, senior living, workforce housing or mixed-use developments being built in Rowlett do not have any more impact on crime than comparable single-family developments. The crime rate in Rowlett is impacted and being driven by the substantial and significant growth in the region. Numerous factors, including easy access from I30 and PGBT, DART light-rail, and socio-economic demographics have a bigger impact on Rowlett’s crime rate than the existence and addition of multi-family developments.
At less than 2% for the last three years, police calls for service at apartments make up a very small portion of the overall call volume as the chart below demonstrates. Even with the number of apartment units more than doubling from 2018 to 2019, the number of calls per unit has decreased.
11. What is driving the development of these Multi-Family Units?
There is not a simple answer to this question but there are some factors contributing to the growth of quality, multi-family units. First, in a December 2019 article, State Demographer, Lloyd Potter stated that the population of Texas is growing by 1,039 every day. This growth is made up of 524 more births than deaths and 515 new residents moving to Texas from other states and countries. He also stated that “Texas has added more population than any other state” every year since 2006.
Second, a huge demographic shift occurred after the Great Recession. Many workers are choosing to live in apartments and condominiums rather than face the uncertainty and cost of owning a single-family home. This paradigm shift is significant and is being seen in north Texas from the increase in the construction of multi-family units as well as the high occupancy rate. In a November 2019 Dallas Morning News article by Steve Brown, he indicated that almost 44,000 apartments are being built in North Texas and that the predicted vacancy rate is 7.7%. In fact, DFW has averaged 8.1% and 8.0% in 2018 and 2019 according to the Real Estate Center at Texas A&M University outperforming Houston and San Antonio and right on par with Austin.
Multi-family is not the only rental outlet for today’s families. In Rowlett, there are an estimated 2,000+ single-family homes that are rented representing over 10% of the entire stock of single-family homes.
12. What has been the Community’s feedback on housing diversity?
In September of 2011, the Realize Rowlett 2020 Comprehensive Plan was adopted. That document provided a framework for future development moving forward over the next nine years. The Comprehensive Plan established 13 opportunity areas that individually identified the desired product types that were anticipated to be developed within each district, including higher density residential types such as townhomes, condominiums and apartments. An analysis was included in the final document that outlined the applicability of this category as it aligned community desire with market support. The outcome of this study resulted in the reinforcement of higher density residential as a recommended product type for seven “Opportunity Areas” in key locations throughout Rowlett. Throughout the document, the Comprehensive Plan acknowledged the desire to provide a more diverse housing stock throughout the City.
One of the guiding principles of Realize Rowlett 2020 was to “make Rowlett a community that is attractive to people at all stages of their lives”.
Following the adoption of Realize Rowlett 2020, amendments to the Comprehensive Plan were made in November 7, 2012 and April 15, 2014, to further the vision of the opportunity areas. In 2012, specific areas such as Woodside Living, Healthy Living, Signature Gateway, and Downtown were further studied and rezoned to Form Based Code districts. All four Opportunity Areas included Form-Based Urban Village Districts that permit multifamily, as an allowed use. In 2014 the Northshore area was further studied and rezoned to Form Based Code districts. With the rezoning initiative, three more Form-Based categories were created and incorporated into the Form Based Code: Rural Neighborhood, Urban Neighborhood, and Commercial Center. The new districts were intended to tie into the existing Form Based Code to provide for a more complimentary range of density necessary to meet the community’s vision. Both Urban Neighborhood and Commercial Center were established with limitations on multi-family development and are described below:
Requires a minimum mix for 20% of the total units constructed to be comprised of any combination of: Mixed-Residential, Shopfront and Mixed-Use.
Mixed-Residential units will be evaluated as part of a larger mixed-use development and may only occupy 25 percent of the land area (excluding parks and streets) or building square footage in a Regulating Plan/Phased Development Plan or Development Plan. A request to deliver more than 25 percent Mixed Residential will require approval by Major Warrant.
In 2019, the City of Rowlett adopted an update to the Comprehensive Plan that primarily focused on updating six Opportunity Areas: North Shore, Active Living, Signature Gateway, Lakeside Center, Business Beltway, and Southshore. The update also provides a Future Land Use Plan to infuse an additional layer of strategic guidance for anticipated and desired land use patterns. The update builds upon the successes of Realize Rowlett 2020 and provides further direction for how Rowlett should develop in the future. View the 2019 Rowlett Comprehensive Plan.
The vision of the updated Comprehensive Plan is “to balance Rowlett’s growth with its small town feel to provide a place with affordable and diverse housing, quality restaurants and retail, and major employers; while caring for its existing neighborhoods and maintaining its roads and infrastructure”.
A major theme and key goal that came out of the update was to provide housing that supports various lifestyles and population demographics within the community. This added emphasis on housing diversity not only tied back to the Realize Rowlett 2020 plan, but also reinforced a continued vision to deliver a mix of housing to the single-family residential product that represents a super majority of Rowlett’s current housing stock.
13. Is the City planning for all of this growth?
Yes. The City uses several tools to anticipate future growth and plan for improving street, water, wastewater, drainage, and facilities infrastructure to accommodate it, which includes the following:
- Master Thoroughfare Plan
- Parks, Recreation, & Trails Master Plan
- Water and Wastewater Master Plan
- Drainage Master Plan
- Capital Improvement Plan
- Comprehensive Plan (Future Land Use Plan)
- Facilities Assessment
Although each of these plans is tailored for a specific purpose, they all work together to provide the City with a comprehensive way to plan and prioritize infrastructure projects based on current and future needs. Funding projects falls outside the scope of these plans but is addressed through other method such as selling bonds and collecting impact fees.