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Ace Building Inc. completed several new homes in the Dayton area in 2021 including this home on Fourth Street.

If you’re hoping to move to Sheridan County, you’re not alone, according to city of Sheridan Community Development Director Wade Sanner.

The pandemic years of 2020 and 2021 have brought an influx of new residents to Sheridan as part of a “rising trend of suburbanization and movement to rural areas,” according to mortgage loan company Freddie Mac.

As local communities grow, it is important to be “proactive not reactive,” Ranchester Mayor Peter Clark said during a Dec. 7 town council meeting. And local governments are doing just that through a county housing study sponsored by the Sheridan City Council, Sheridan County Commission and Sheridan Economic and Educational Development Authority. The study was presented to the public on Jan. 12, and was the culmination of months of hard work by San Francisco-based land use firm Gruen Gruen and Associates.

“We’ve known for a while that we have a housing crisis, but we haven’t known where we should be focusing,” County Administrative Director Reneé Obermueller said. “This study will tell us, based on demographics and inventory, what we are lacking and what we should be concentrating on.”

The recently completed study is the first since 2006, according to Sanner. That study left local governments with several housing goals including providing a full range of housing choices in Sheridan County; promoting the preservation and affordability of existing housing stock; creating innovative partnerships between government and the private sector; and facilitating and supporting housing activities carried out by community groups and individuals.

However, a lot has changed in 15 years, and a new study was necessary, Sanner said.

“The last study didn’t even account for the changes in the market that happened during the 2008 recession,” Sanner said. “It’s a completely different landscape now, and this project was overdue.”

The study, which particularly focuses on housing needs in the municipalities of Sheridan, Dayton and Ranchester, considers community demographics and current housing inventory to determine what types of housing are especially needed, according to Aaron Gruen of Gruen Gruen.

What makes this study different from others the organization has performed is it will “look at the economics of developing housing” in Sheridan, Gruen said, and what local governments can do to make development of affordable housing a reality.

“You can have demand for hamburgers, but if the price of meat goes way up, people may not be willing to pay the price to make hamburgers profitable to sell,” Gruen told the Sheridan County Commission in October. “Housing’s the same way. You can have a demand for housing, but the economics of producing it can make it not profitable for the developers. So one of the things we want to look at is what are the economics of developing housing here, and are there policies or actions we can take that would make it more profitable?”

The principal finding of the study, according to Sanner, is that additional development is indeed needed in Sheridan County: both in affordable rentals like duplexes and apartment buildings, and in market-rate housing.

“The main issue we’re having is what we thought,” Sanner said. “We can always use more affordable housing such as duplexes and apartments. When it comes to single-family homes, we’re not as tight as we thought, but there still is need, because if more single-family housing is available, some of the people currently in duplexes and apartments would move to a single-family home, and that would open up some of the lower-cost housing. Housing diversity is important, and it helps everybody.”

Sanner said development of affordable housing, or the lack thereof, is typically “market-driven.” Developers often cannot recoup their development costs from tenant rent, Sanner said, so they usually choose not to gamble on something that could prove financially risky.

The housing study includes suggestions of how to reduce that financial risk for developers, Sanner said.

For example, one suggestion involves moving one-time municipal and utility fees from a fixed scale to a sliding scale based on the size of housing unit. This type of fee structure would incentivize the creation of smaller and less expensive housing units.

Other policy actions and incentives recommended to facilitate affordable housing development include changes in parking requirements, an expedited permit process and monetary incentives such as land grants, tax abatements and lower or abated fees.

While the study recommends policies that encourage affordable housing development, it does not recommend the implementation of inclusionary zoning, Sanner said. In inclusionary zoning, a given share of new construction is required to be affordable by people with low to moderate incomes.

According to the housing study, all development is good development, Sanner said, and it doesn’t make sense to prioritize one type of housing over the other.

“It’s easy to get very myopic and say we need to focus on this one issue,” Sanner said. “But usually there’s a broader and more reasonable way to approach things. That’s why the consultant recommended against inclusionary zoning. We just need to stand back and let the market do its thing.”

Other suggestions included in the study include identifying locations in the city to increase the allowable population densities per acre, and changing zoning to encourage residential and mixed uses. The city will also need to expand public infrastructure, such as public roadway and water and sewer improvements, to locations that could serve as potential new neighborhoods.

The study also recommends supporting employer-assisted housing programs, preparing for a growing need for senior housing and creating a rental assistance program for low-income residents.

Sanner said the consultants’ recommendations will require community and government buy-in to move forward. But he said he anticipated an overall embrace of the survey results, which he said were “moderate and politically acceptable positions which can be implemented relatively easily.”

“It’s not going to be a silver bullet, but it does provide a path forward, and it provides the data to support our positions and dispel myths about housing in the county,” Sanner said.

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