KENDALLVILLE — Who will be able to afford new homes in a proposed 70-home subdivision in southeast Kendallville?

Mayor Suzanne Handshoe sees it as housing development for families, maybe those who are have already establishing themselves in the region or are working professional jobs in the city.

Developer BST Capital LLC is planning to purchase a 35.6-acre lot at Sherman Street and Waits Road. The plan is to develop the area into 70 lots comprised of 56 single-family homes and 14 retirement-style villas.

At an East Noble School Corp. Board of Trustees meeting last week — East Noble owns the lot and plans to sell — developer Brad Griffith estimated new homes would be constructed in the price range of $150,000 to $250,000, although it was unclear whether that price included the price of the lot.

Although builders nowadays would struggle to build anything sizable for cheaper, the price point raises some questions about affordability, especially in Kendallville, which has a lower median income than Noble County as a whole.

The median household income in Kendallville is just $37,232, according to the U.S. Census Bureau, lower than Noble County’s median income of $52,393.

According to a NerdWallet mortgage calculator, examples of monthly payments — which include mortgage, homeowner's insurance, taxes and mortgage insurance, if required — could be from $914 per month for a $150,000 house with a 20% down payment, to $1,113 for a $0 down mortgage; $1,134 for a $200,000 with 20% down or $1,400 per month with 0%; and $1,362 for a $250,000 home with 20% down or $1,695 monthly for a 0% mortgage.

A measure of housing affordability is that monthly housing costs shouldn’t except 30% of gross income, meaning someone earning the city’s median income would be “burdened” by any monthly payment above $930, although lenders might not even make a mortgage for a pricier house on that income.

But “families” — defined by the Census as two or more people related either by blood or marriages living in the same household — have higher median incomes. Family households have a median income of $48,606 in Kendallville, while “married-couple families” are even higher at $56,042.

Handshoe sees the new subdivision being very similar to Orchard Place, the last major subdivision platted in Kendallville in the late 1990s.

The houses in Orchard Place are assessed in a range from about $120,000-$275,000. A large number of the homes are valued in between $120,000-$150,000, with a few larger, pricier homes scattered on larger lots.

Most of that subdivision was built out by the time the Great Recession hit in 2008, but even now those newer houses sell quickly whenever they hit the market, the mayor said.

“I think it is going to attract families to Kendallville which is what we need,” Handshoe said. “Orchard Place is very comparable to what they’re intending to do. Every house that is available out there is sold within a week or two.”

Some people have claimed it will take the new subdivision 20 years to build out, but Handshoe sees the time frame as much shorter. While the final lots in Orchard Place have only been finally sold and built recently, the bulk of it was filled out within 10 years.

Griffith also noted at the East Noble meeting that the subdivision would be open to whatever builder was interested and meets some design covenants, so construction could potentially be quickened if multiple builders are all constructing at the same time.

“(Councilwoman) Amy Ballard has had three people from Huntertown already contact her about ‘Do you know when those are going for sale?’” Handshoe said.

“Because we are in a place where we’re so desperate for housing, I’m not seeing 20 years,” the mayor added.

But who can afford the homes?

The retirement-style villas likely won’t be as much of an issue, since current homeowners who are retired or empty-nesters would be able to sell their existing home in order to fund all, or at least most of, the purchase price of a villa.

The single-family homes, on the other hand, may be a little out of the price range of a first-time buyer, the mayor acknowledged.

One potential market immediately available would be buyers in higher-paying management or professional jobs who have a higher income. In many cases, the mayor said, those higher earners aren’t living in Kendallville in part because the city lacks housing to meet their budget and needs.

“Far too many times when we’re attracting a new leader for a business, a new plant manager is being rotated in, they can’t find a place initially to live. They rent a place in Huntertown and that’s where they gravitate to,” Handshoe said.

The other potential market could be families seeking an “upgrade” home — something bigger or newer to move up into after selling their first home — that then leaves behind their older, cheaper home for a first-time buyer.

“(Housing) between the $90,000-$150,000 price range, that is one of our main goals,” for first-time buyers, Handshoe said.

The good news is that Kendallville’s older stock, when available, is usually pretty affordable. In fact, in a recent study that named Kendallville the 33rd best place in the U.S. to live, the analysts specifically highlighted Kendallville’s low-cost housing as a major boon.

Older houses usually do need work over time. Handshoe cites herself as an example for convincing her husband to buy an old house for them, one that the mayor said they’ve put thousands of dollars into over the years. But, if they ever decide to leave, that house is move-in ready, she said.

One issue that Kendallville battles is that many older homes, however, aren’t move-in ready when they go up for sale, which is why neighborhood revitalization efforts and the new Kendallville Restorations Inc. nonprofit are aimed at trying to identify homes that, with the right owner and the right amount of work, can be saved from becoming blighted properties and instead become good first-time-buyer homes.

Adding new housing stock, even at a little higher price point, and working to improve older, less expensive homes, are the “multi-pronged” attack Kendallville is taking on housing, Handshoe said.

Correction: This story has been updated to better explain that monthly housing payments cited from a mortgage calculator also include monthly taxes and insurance payments, which are typically included in a monthly mortgage bill from a lender.

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