Building More New Construction Homes in Tippecanoe County

Historically low inventory—it’s a phrase everyone is getting tired of hearing, and perhaps some are getting tired of saying it, too. But what does “historically low inventory” mean, exactly?

Let’s unpack what’s going on. In the Greater Lafayette area, we need around 600 to 800 new homes to be built every year to keep up with the pace of demand, according to Ryan Kennedy, President of the Builder’s Association of Greater Lafayette (BAGL). Currently, only around 400 to 450 home permits are being pulled per year in our area.

So, this is a good problem to have, right? Why don’t we just build more homes if the demand is there? What is going on?

There are a few factors, and it’s not all as easy as it sounds.

The north end of the county is positioned well to continue to handle the type of growth it has already experienced over the past 10 years, and it can handle the kind of expansion the Greater Lafayette area needs. Water and sewer services are already available, for instance, so we’ll likely see continued expansion on the northern end of town.

There’s also hope for continued growth in the southern end of Tippecanoe County, but that’s not such a quick or simple task. Developing raw land like we have in that area starts with getting it zoned. An R1 development must offer lots that are 75 feet wide, minimum (around 7,500 to 9,000 square feet), and they must have the ability to connect to utility services, which is always the hardest and most expensive thing to do when it comes to developing raw land into livable land. R-1, R-1A, R-1B developments provide housing density suitable for our community’s development needs

A rural estate is another type of subdivision development. A rural estate is less dense development than a traditional residential development. The Tippecanoe County Unified Zoning Ordinance states that the original tract of land (parent tract) must be 50% wooded and the lots must be a minimum of 2 acres averaged out across the development and water and sewer utilities must be more than a half-mile away. There may be no more than 12 lots in a rural estate. Rural estates help provide lots for consumer demand, but it is not a way to provide housing for the masses.

There is also an opportunity for growth going east toward Hoosier Heartland, but developing that land is probably going to be a 2-to-5-year process, which again, starts with zoning and then a well field to give water pressure to the area.

There are a few other factors in play when it comes to home building, as well.

One is access to skilled workers who can do the specialty work needed to build homes. The work is hard, and it takes time to train people in these professions. Young people joining fields where manual labor is required has dropped over time, and we need to bring more young people into these professions and train them well to do the work needed to build homes.

Another factor is the cost of raw building materials. Building materials continue to skyrocket (in part because of the effects of COVID-19 have had on the global supply chain). There is some hope that this will even out over time, but it’s something builders have to take into account with each home built.

The long and short of it is that Tippecanoe County is short on buildable lots. We have only about two years’ worth of inventory, so our shortage of new construction starts with land development and local officials working together to prime the raw land. The good news is that, if we can do that, there is some hope in sight for having more home inventory available to meet demand.