Olathe Growth Projections December 2007
City of Olathe Five-Year Growth Forecast 2009 Budget Process Current Conditions The number of new residential units built in Olathe for 2007 will likely be the lowest number since 1991. For 2007, 581 permits were issued for the construction of new single family homes, 22 new duplex units were permitted, and 4 new four-plex units were permitted. In comparison, for 1991, 543 permits were issued for the construction of new single-family homes. This continued slow down is being caused by a number of factors, the most notable is the national sub-prime lending situation that has resulted in more restrictive underwriting practices. The sub-prime lending situation is having a negative impact on the overall national economy. While the nation is not experiencing a recession, there is concern that the sub-prime lending situation may drag the national economy into a recession. The previous low in single-family residential permits occurred in 1991 in the midst of a national recession. In 2006, 786 new multi-family residential units were permitted for construction. This was the highest number of multi-family permits since over 800 permits were issued 2001. While the construction of multi-family units is somewhat dependent on economic conditions a larger factor is the ability of the local market to absorb the newly constructed units. Typically, a “spike” in the construction of multi-family units is followed by a multi-family unit construction slowdown over the next three to four years. This is exactly what happened in 2007, which saw the permitting of only four (4) multi-family residential units. In addition to 2006, similar spikes in the construction of multi-family units occurred in 1994, 1999, and 2001. The low number of new residential units permitted will result in the lowest number of a new residents added to Olathe in 15 years. For 2007, the city will add approximately 1,600 new residents, a population increase of approximately 1.4%. This is nearly half of the city’s typical population growth rate of 2.5% to 3.0%. Unlike the residential construction industry, non-residential construction continued at a high pace with the permitting of approximately 1.9 million square feet of space. The permitting of a number of office building in the Corporate Ridge office park, the Pac-Sun distribution facility, and the West Village/Wal-Mart development combined to produce the largest annual amount of new non-residential construction since 1997. Future Conditions The growth of a community is based on a number of factors including the availability of land, infrastructure, school system, growing local/national economies, as well as the continued support of growth by elected and appointed officials. The majority of these factors have been positive for the City of Olathe and are reflected in the City’s continued growth.
Development Services Department 1
Olathe Growth Projections December 2007
However, the lending situation that the nation is currently experiencing, and in turn, the softening of the national home construction market, is impacting the local construction market. Planning staff expects that the local housing construction industry will likely bottom out in the first and second quarter of 2008 and begin to rebound. If the sub-prime lending situation does drag the national economy into a recession, then it will take longer for residential construction to regain momentum. All of these factors suggest that residential construction will remain at a similar level as 2007. If the nation is not pulled into a recession in 2008, residential construction will begin to recover in 2009. However, the continued growth of neighboring cities such as Gardner and Spring Hill will have a continuing impact of Olathe’s housing market. The growth in single-family home construction in these cities has likely had a negative impact on housing starts in Olathe, especially for lower price point homes. Because of the housing growth in these two cities it is anticipated that single-family residential permits will recover but not to the same level seen earlier in this decade. When the residential construction industry does begin its recovery the increase growth will occur to the south and west of the city. Currently Areas 2, 5, and 9 (see attached Growth Projections map) are the leading areas of new residential construction. It is expected that by 2009 the new in-fill construction that is occurring in Area 2 will reach its peak and that the necessary arterial street infrastructure improvements in Coffee Creek will be completed. The completion of the arterial streets in Coffee Creek will spur increased construction activity in Area 11. In 2009, Areas 2, 5, 7, and 11 will have the largest amount of single-family construction activity. The construction of multi-family units will begin to rebound in 2008 with Areas 1, 3, and 11 leading in the production of multi-family residential units. In 2008, non-residential construction will likely falloff from the high level of activity that occurred in 2007. The construction of retail commercial square footage will have the steepest decline. However, the BNSF intermodal facility proposed south of Gardner, as well as the planned I-35/159th Street interchange, are having an effect on construction activity in Olathe. The construction of industrial/warehouse space in Area 10 increased in 2007. For 2008, the construction of industrial/warehouse space is anticipated to be even greater in 2007. It is likely that at least one, and perhaps three, new large (250,000+ sq ft) industrial/warehouse building will be constructed in the southern portion of Olathe. Table 1 – Population Projections Year Population Projections January 1, 2009 126,000 January 1, 2010 128,900 January 1, 2011 132,400 January 1, 2012 136,100 January 1, 2013 139,400
Development Services Department 2
Olathe Growth Projections December 2007
For 2007, the City added approximately 310 acres to the city limits. Annexation of new property will continue at a similar pace. Table 2 – New Housing Units Projections Detached Attached Single-family and Multiunits family units 2009 880 610 2010 860 260 2011 890 180 2012 720 170 2013 730 570 TOTALS 4,080 1,790 Population Increase 4,100 3,000 2,900 2,400 3,500 15,900
The accompanying map divides the City into thirteen areas (1-13) and displays the expected growth across the City, breaking out single-family detached from single-family attached and multi-family. This dispersal is based on the City’s lot inventory, location of new preliminary plats, land anticipated to receive sanitary sewer service, undeveloped property and historic trends. These forecasts are based primarily on past growth rates of the City. If Olathe would enact new regulations or alter policies for growth that are significantly different from its neighboring cities of Lenexa, Shawnee, Overland Park and Gardner, the accuracy of these forecasts would decrease.
Development Services Department
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Olathe Growth Projections December 2007
Table 3 - Yearly Growth for Olathe, Kansas U.S. Census Bureau Olathe Development Services Estimate Growth Rate Estimate Growth Rate 1990 63,832 63,440 1991 66,218 3.7% 65,922 3.9% 1992 68,402 3.3% 67,703 2.7% 1993 70,531 3.1% 69,330 2.4% 1994 72,906 3.4% 71,531 3.2% 1995 76,672 5.2% 74,167 3.7% 1996 79,497 3.7% 77,401 4.4% 1997 82,174 3.4% 80,371 3.8% 1998 85,141 3.6% 83,466 3.9% 1999 88,192 3.6% 87,311 4.6% 2000 93,827 6.4% 93,870 7.5% 2001 96,299 2.6% 102,996 9.7% 2002 101,301 5.2% 107,156 4.0% 2003 105,468 4.1% 110,902 3.5% 2004 108,440 2.8% 114,209 3.0% 2005 111,278 2.6% 117,794 3.1% 2006 114,662 3.0% 121,611 3.2% 2007 123,258 1.4%
Development Services Department
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Olathe Growth Projections December 2007
· Æ
K-10
· Æ
K-10
Growth Projections for the City of Olathe 2009-2013
Area 1
· Æ
K-7
Area 2
§ ¦ ¨
35
College Blvd
Single Family Area 1 2009 2010 2011 2012 2013 Total Area 2 2009 2010 2011 2012 2013 Total Area 3 2009 2010 2011 2012 2013 Total Area 4 2009 2010 2011 2012 2013 Total Area 5 2009 2010 2011 2012 2013 Total Area 6 2009 2010 2011 2012 2013 Total Area 7 2009 2010 2011 2012 2013 Total 80 80 90 90 100 440 170 100 90 80 80 520 20 20 0 0 0 40 0 0 0 10 10 20 200 180 150 125 75 730 0 0 0 0 0 0 120 180 170 100 90 660
MultiFamily Area 8 150 2009 50 2010 0 2011 0 2012 150 2013 350 Total Area 9 80 2009 50 2010 30 2011 0 2012 0 2013 160 Total Area 10 150 2009 70 2010 0 2011 0 2012 0 2013 220 Total Area 11 0 2009 0 2010 0 2011 0 2012 0 2013 0 Total Area 12 20 2009 40 2010 50 2011 70 2012 20 2013 200 Total Area 13 0 2009 0 2010 0 2011 0 2012 0 2013 0 Total 0 30 50 0 80 160
Single Family 0 0 0 0 0 0 30 20 10 5 5 70 0 0 0 0 0 0 250 270 380 310 350 1,560 10 10 0 0 0 20 0 0 0 0 20 20
MultiFamily 0 0 0 0 0 0 10 0 0 0 0 10 0 0 0 0 20 20 200 20 50 100 300 670 0 0 0 0 0 0 0 0 0 0 0 0
119th St
Area 5 Area 4
Waverly Rd
Legend
City of Olathe
City of Olathe Ultimate Growth Area
Area 3
Area 3
127th St Santa Fe/ 135th St 143rd St
Area 6
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old 56
Area 7 Area 8
Cedar Niles Rd
Area 9
151st St
O
Gardner Rd
Development Services Dept. December 2008 BPD
Moonlight Rd
· Æ
old 56
§ ¦ ¨
35
t u
169
159th St
Area 11
167th St 175th St 183rd St
Area 10
Lakeshore/ Clare Rd
Area 12
Lone Elm Rd Woodland Rd
Area 13
Pflumm Rd
Hedge Ln
Ridgeview Rd
Black Bob/ Lackman Rd
Development Services Department
Mur-Len/ Renner Rd
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