Legislation would help rural housing need

Sunday, April 4th 2004, 12:00 am

By: News On 6

OKLAHOMA CITY (AP) -- Legislation to bring affordable housing to rural Oklahoma would be a godsend for economic development, as well as improving the quality of life in non-urban areas, supporters say.

At least two bills dealing with the rural housing shortage have quietly been going through the legislative process and are now on general order in the Senate.

"It's bad, we need help out here," Rep. Dale Turner, D-Holdenville, said of the housing shortage in rural communities.

"Every time we turn round, if we get a nibble about getting some jobs, housing seems to be a major stumbling block," says Turner, former economic development coordinator at Wes Watkins Technology Center in Wetumka.

The crux of the problem, says Rep. Abe Deutschendorf, D-Lawton, is that it is too costly for homebuilders to construct moderately priced housing in outlying areas.

Deutschendorf thinks a bill he is sponsoring with Sen. Bruce Price, D-Hinton, is the answer to that problem.

House Bill 2293 would authorize income tax credits up to $2.7 million to start FirstHome Development, a housing component manufacturing facility.

The business would build components or systems to construct single-family residential dwellings, significantly reducing onsite labor costs, supporters say.

Another venture capital tax credit plan designed to stimulate construction or rehabilitation of affordable rural housing is sponsored by Turner and Sen. Jay Paul Gumm, D-Durant.

Both bills cleared the Senate Finance Committee last week.

"The problem is the starter homes in the $50,000 to $90,000 range -- there are just not enough of them," said Gumm. "The profit margin from those homes is much smaller than on the more expensive homes. We are trying to make it more advantageous for builders to be able to construct these homes."

Although Deutschendorf's heart is in helping rural communities, his bill as passed out of the finance panel would not limit component housing to rural areas.

He said FirstHome has plans to build 300 houses a year in rural areas, but will work with other builders to construct homes in urban areas.

The housing shortage in Oklahoma was set at 38,464 in a 2000 University of Oklahoma study, Deutschendorf said.

"With 38,000 homes needed, we cannot even start to build all of them," said Steve White, spokesman for FirstHome.

He said his company would work with other builders wanting to construct low-cost housing. "We are going to do a passthrough on everything we build, so they can build it at our costs.

"Any other builder can be a participating builder. We are not going to exclude anybody."

White's company has several plans for two-and-three-bedroom houses under $70,000.

"The idea is to cut the labor costs on the job site," he said. "By automating the process, labor costs can be reduced by as much as 50 percent, compared to performing all the labor on site."

He said the homes will have quality components and will be "identical in every respect to traditionally site-built homes."

House Bill 2293 passed the House on a 58-39 vote after some members questioned the advisability of another tax credit program, noting the experience of Great Plains Airlines in Tulsa, which got millions of dollars in tax credits and then went bankrupt.

Deutschendorf said his housing proposal is not analogous with the Great Plains program in any way.

"There's an incredible difference," he said. He said there is clearly a need for more housing in Oklahoma, where Great Plains was "trying to create a demand and a need" for its airline.

Also, he says, there will be a 3-1 return on the tax credits through sales taxes, income taxes from jobs created and property taxes paid by homebuyers.

Deutschendorf cited Oklahoma Department of Commerce figures showing FirstHome's building program would produce $8.1 million in tax revenue over five years. He said that figure could easily double with other homebuilders taking advantage of the company's component construction methods.