Overland Park wants to hire KC nonprofit to build affordable homes around $400K

Overland Park is eyeing a partnership with a recently established Kansas City housing nonprofit to develop single-family homes and duplexes on city-owned land that would cost less than the average home price in the city.

“The Planning Department, in our history, our job is to help people meet their dreams and in this case I think we’re talking about that in its essence: the opportunity to pursue the American dream of homeownership,” Assistant City Manager Jack Messer told an Overland Park committee on Monday night.

“Housing, or better stated, the lack of housing … has been an issue for quite some time.”

New homes in Overland Park average about 5,000 square feet and $500,000, Messer said. The issue echoes throughout Johnson County as attainable housing stock — which typically refers to homes $300,000 or less — continues to shrink.

With the market delivering large homes and luxury apartments, the city government wants to try something new to bring more diverse housing options to the table.

The new homes they’re aiming to build would come in at an estimated $400,000.

Messer and the Planning Department approached the committee with a proposal to negotiate a development agreement with Driven Development Housing — a nonprofit with ties to prominent local developer VanTrust Real Estate and the VanTuyl family — to develop small scale, single-family homes on about 2 acres of city-owned land at 167th Street and 170th Terrace and and Switzer Road.

The city and nonprofit proposes to sell these homes to first responders, teachers, nonprofit workers and health care workers — many of whom have been “priced out of the communities they serve,” said Christina Fenwick, Driven Development’s director of housing development.

After about an hour of discussion, the Finance Administration and Economic Development Committee agreed and unanimously approved the proposal — giving the Planning Department the green light to begin drafting a development agreement with Driven Development.

“I remember buying my first house. It was 1,800 square feet, it was $159,000 in 2002,” Ward 6 Councilmember Christoper Newlin said as the discussion wrapped up. “You can’t get that here anymore. … My kids can’t get that and I do have an aspiring teacher who will voice concerns about housing to me.”

“I think it’s important I, at least, take this first step.”

The agreement would need to come back to the committee at a later date and go through the approval process from both the Planning Commission and the City Council before any building can begin.

“I want to emphasize that tonight is the first step, we have not developed anything,” Messer said. “We have a couple pieces of property and we have an opportunity that we are introducing for the first time to the committee for you to say whether it’s worthwhile to take the first step.”

Using the Portfolio Homes program

The city currently owns the parcels of land in question thanks to the Public Works Department acquiring it for a thoroughfare project.

When the Public Works team reserved all the land they needed, about 2 acres were leftover.

“So staff talked about how we should use this leftover property and there is a city use for it,” Messer said. “One of those individuals was the parks director and we identified a need for a park (but) it was too small.”

Instead, Messer said the Planning Department would like to see the city use the land as a pilot for the Portfolio Homes program — a free selection of pre-designed and pre-approved, small scale home building plans at no cost to a resident or developer.

Using Portfolio Home plans, the land could hold six structures, with nine units — with three duplexes and three single-family homes — on 167th and Switzer, and five single-family homes on 170th Terrace and Switzer, Messer said.

Messer said that other developers have approached the city, saying they like the Portfolio Homes program, but don’t want to be the first to build it out.

“Proof of concept, proof of use is what we’re after,” he said.

Unlike major developers, Driven Development expects “no profit going back to investors,” Fenwick told the committee.

“We want to focus on delivering that attainable housing and opportunity for homeownership,” Fenwick said.

Cost concerns

As of Monday, the price point for these homes is estimated to be around $400,000 — a cost that worried some City Council members on the committee.

“The price point, $400,000, as someone who works at a nonprofit I still can’t afford that. I rent,” Ward 3 Councilmember Amy Scrivner said. Scrivner was elected last November and works for BikeWalk KC.

“So, if we’re serious about this, and this maybe gets back to eligibility and who we’re targeting with these homes, is what else can we do to help make these accessible for first responders, teachers, those service workers we say we value so much, but make it so difficult to live here.”

Messer said in response that he doesn’t want to get to a place where the $400,000 price estimate becomes an obstacle, rather encourage the city to find ways and use partnerships to drive costs down.

Ward 6 Councilmember Chris Newlin —who lives in the middle of these two parcels — said that he received emails from constituents with concerns about impacts to the character of the neighborhood and decreasing property values.

“I think that drops in property value, I would say, ‘Show me the place we dropped in property value,’” Messer said in response. “We haven’t dropped in property value in this city … Decline produces property value issues. Development increases property value.”

What is Driven Development?

Driven Development stemmed from VanTrust trying to create a rent-to-own housing nonprofit back in 2019 and 2020, but efforts stalled during the pandemic.

VanTrust and the VanTuyls — a prominent wealthy family based in Arizona with deep ties to the KC region — helped the nonprofit get off the ground, but the entity is separate from the major Kansas City developer, Fenwick said.

“We have the benefit of using staff and the office to use institutional construction and development expertise, but (we’re) mission-driven,” she said.

They renamed the organization to Driven Development and began working on a few apartment buildings in midtown about a year ago. As of Monday, the nonprofit has acquired, begun construction or built about 220 units of housing all on the Missouri side of the state line.

Three of those are brand new single-family homes. The nonprofit will begin on the next seven in the next couple of months, with plans to do 14 single-family homes total, Fenwick said.

“They are on the east side of KCMO, they are infill lots with environmental issues, title issues — we work through clearing and getting site and title ready,” she said.

In Overland Park, Driven Development proposes a rent-to-own model, where Driven Development would set the rent and save a portion of it to later help residents with a down payment. Driven Development would offer a sale when the resident is ready.

“Our intention is that these all become owned properties. We are not going to sell them to investors. We are going to sell them to people in those categories,” Fenwick said, referring to teachers, first responders and health care workers in the community.

Before construction can begin, a development agreement between Driven Development and Overland Park would need to come back to the committee at a later date and go through the approval process from both the Planning Commission and the City Council before any building can begin.