What do more renters than homeowners mean to Fort Smith?

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2020 census records show Fort Smith renters outnumbered homeowners for the first time.

What does this mean for the city in the long term, given the expansion of rental apartments in Chaffee Crossing, the low supply and high demand for apartments and more jobs in the region?

Real estate market

There are 40,226 residential units in Fort Smith, including single-family homes, maisonettes, and apartments, according to the 2020 census. Around 12% of these are vacant apartments.

And the prices for these houses keep rising. In 2020, the average home price was $ 140,986. That year, that price rose 12% to $ 153,263.

Demand for home ownership has increased across the country, but supply has not been able to keep up.

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“The Fort Smith real estate market is typical of markets across the country,” said Clif Warnock, real estate agent at Warnock Real Estate. “There has been a strong surge in available housing units over the past 15 years. In 2006 there was a surplus of 2.1 million units and by 2020 it has changed to a deficit of 4.8 million units.”

Roads will be completed and lots will be staked Thursday June 10 at the location where new affordable homes will be built on Mallory Ln in Chaffee Crossing.

Warnock estimates it will take about 11 years for this to recover.

He explained that at record low interest rates, an average home worth $ 150,000 a month would rent for $ 1,300, while a mortgage on the same property would be around $ 840.

Farrah Shoppach, a Fort Smith real estate agent, said during the COVID-19 pandemic that the best time to convert renters to homeowners was due to low interest rates despite low inventory.

The low inventory is due to interest rates, according to Shoppach, and mortgage and refinancing rates are low. Buyers buy faster than sellers bring more inventory to market.

This low inventory has also led people to rent for short periods of time until they find the home they want.

Apartment buildings in Fort Smith as seen Thursday, Dec. 24.

Rental market

According to census data, the average gross rent in Fort Smith is $ 719. The data also shows that according to 2019 estimates, the highest number of people moved into a new unit in 2017 or later.

The number of people who moved into a unit in 2017 or later was 12,543. An estimated 11,299 rented apartments and 1,244 moved into their own home. In 2015 and 2016, only 4,540 new apartments moved.

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“I think that even if tenants are increasing, it means the city is growing,” said Shoppach. “Someone is coming to our area for the first time and taking a temporary footprint that we hope we can convince them to take that permanent footprint and buy a house.”

The Barracks at Chaffee will transform the old US Army barracks in Fort Chaffee into a residential, work and play community with apartments, social areas and businesses.

So far in 2021, Fort Smith had 12 new housing units built, but the number of maisonettes reached 53 or 106 units. This is a change compared to 2020, when 120 residential units and 68 maisonette units were built.

Chaffee Crossing continues to grow, adding rental homes to the community. According to Lori Robertson, Marketing Director at Chaffee Crossing, the proportion of single-family homes has declined.

A project to bring apartments to the Fort Chaffee barracks will add an estimated 90 more units. After Meadows Construction finishes building row houses at The Reserve apartment complex, another row house project will begin in Chaffee Crossing.

In July, The HUB at Providence, a combination of residential and commercial properties, added 12 one-bedroom lofts, bringing the total number of units to 32 lofts and nine townhouses.

What that means for Fort Smith

“Our property taxes are based on market value numbers, and as long as that remains healthy the summary should be,” said Zach Johnson, Sebastian County Assessor. “If it’s a private home claiming the homestead, they enjoy a tax credit of $ 375 along with a projected annual increase of no more than 5%.”

If this property should become a rental property, the upper limit will be adjusted from 5% to 10%.

“Once again, this is all based on established market values ​​for our area. So if the shift between owner and rent resulted in a decrease or decrease, it would have a negative impact on the summary, at least during the revaluation period.” said Johnson. “While we haven’t seen booming growth like some of the neighboring areas in Arkansas, our values ​​have remained stable and are slowly seeing some increases in certain sectors such as residential housing.”

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With landlords paying property tax in the same way as homeowners, property tax still comes into town, but whether there will be a negative impact on property tax remains to be seen.

Jimmie Deere, Director of Building Services at Fort Smith believes this will be good for the city in the long run.

Arkansas Gov.  Asa Hutchinson, center right, joins Mars Petcare and city and state officials on January 15, 2021 to celebrate the announcement of a $ 145 million expansion to the Mars Petcare Fort Smith manufacturing facility.  Also pictured are Fort Smith Regional Chamber of Commerce Board Chairman, Curtis Ralston, left;  Arkansas Secretary of Commerce Mike Preston;  Mars Petcare Site Manager Michael Poffinbarger;  and the Mayor of Fort Smith, George McGill.

“As the population grows, the workforce grows too, which is great for the city as a whole,” he said.

Mars Petcare also currently has two ongoing expansions in Chaffee Crossing, which will create 262 jobs in the area.

Ebbing Air National Guard Base will add 12 F-16s and 12 F-35s to the base by 2023. This is expected to bring 825 military personnel to the area.

There aren’t many homes in the city right now and the relocation of about 825 people to the area will skyrocket the need for more housing, Warnock said in an earlier report.

“In our scope of the next 24 to 36 months, we are preparing for the need for 500 apartments due to the growth,” said Shoppach.

Because of this, Shoppach believes that the number of renters exceeding owners can be temporary.

Ty Thompson is the Crawford County reporter for the Press Argus-Courier. He can be reached at [email protected]


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