Bentonville is reducing the cost of housing by half. Yes, you read that right! But why are they going to do this?
Bentonville will cut home prices by half as part of Project Arrow to ensure housing remains affordable in Northwest Arkansas. The NWA Council’s goal is to retain “the missing middle” and avoid other issues most larger cities have faced, ensuring NWA remains a place where all are welcome.
In this post, I’ll discuss why Bentonville will cut home prices by half. I’ll also explain why Northwest Arkansas is focused on this project and cover the ramifications of this plan.
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Why Bentonville Is Cutting Home Prices in Half
Bentonville is cutting home prices as part of Project Arrow, which is finally being implemented after years of planning.
So, what is this plan, and why are they doing this? The reasons for this involve the NWA area as a whole.
An Initiative of the NWA Council
Northwest Arkansas has an organization unique across America called the NWA Council. It’s located adjacent to all the different cities in the region. This group makes decisions and organizes plans that help the cities set branding and bring people into the area.
Generally speaking, the NWA Council can make the investments that cities don’t necessarily have the capital or the incentivization to do.
Every five years or so, the Council sets and initiates a master plan. Throughout its execution, someone checks in to verify everything is organized and carried out properly. Every couple of years, should they encounter any issues, they put out a regional plan that identifies what needs fixing and explains how they’ll fix it. They address the problems, and the process continues.
The overarching aspect of NWA that’s different is that we’re all on the same team. Every single city is on the same team. Yet, we all compete against each other to outperform so that all consumers will benefit from living in Northwest Arkansas.
The NWA Council Is Avoiding a Housing Issue
Once housing gets too expensive, it’s hard to get prices back down. The NWA Council has heavily focused on affordable housing in Northwest Arkansas because they know it’s a potential future problem and the consequences of not prioritizing it.
For this reason, they’re having serious talks with all the NWA cities to put their own plans in place to help ensure housing stays affordable and gets even cheaper than it is now so that it remains affordable in the future. Cutting home prices is Bentonville’s plan for how to avoid potential housing issues—or, as I like to say, avoiding Austin.
Avoiding Austin’s Challenges
We’ve seen how Austin had issues when housing became out of control in high-growth areas. The problem is once you hit the threshold where you can’t stop, you just can’t stop.
Indeed, Northwest Arkansas has grown over the last ten years. However, the Council and NWA still have the luxury of having time on their side, so they’re investing their resources to avoid Austin’s issues.
NWA and Bentonville are doing an excellent job of adjusting to solve these problems before they become unmanageable.
It’s encouraging to see Bentonville develop its own plan. They pulled data sets for larger and smaller cities to understand how to avoid the issues that Austin, Portland, Seattle, Chicago, and many other places had. These plans address the potential issues before they become problems, so Northwest Arkansas doesn’t have to deal with them.
NWA Is for All People
Northwest Arkansas intends to be a place for all people. Therefore, it must be designed as a place for all people with different backgrounds and capabilities.
Understandably, we won’t be able to hire the best people and encourage them to move to Northwest Arkansas if housing is unaffordable. Cutting home prices by half is part of what Bentonville is doing to address this and avoid the problem that Austin and other cities have: the missing middle.
The Missing Middle
The missing middle is regular people like you and me, and when housing becomes unaffordable, we get priced out. Thankfully, many plans are in place to ensure it doesn’t. Addressing the issues of typical people who want to move here can fill that missing middle—which isn’t missing at the moment but could be.
To me, it’s a good sign that Bentonville and NWA are already trying to address this and work toward making it a place for all. If we weren’t proactive, NWA might become Austin.
Bellwether for the Future of NWA
Bentonville is a bellwether forecasting what Northwest Arkansas will look like in the future. If NWA is meant for all people, then every city must have plans to address affordable housing and the missing middle. But how will each city accomplish that?
Bentonville and the Council are setting the bar to begin pushing things forward. Once Bentonville starts, the other cities will follow suit with their plans. Remember, as I said before, every city competes against each other, yet we’re on the same team.
Flywheel of Economic Growth
The final part of why all this is happening is the economic flywheel of growth. There are four parts to economic growth, each part building upon the previous:
- Bring in people
- People bring businesses
- Businesses open jobs
- Jobs lead to affordable housing
If you have those four things, there’s a good chance you could have a fantastic place to live. So, the goal is to ensure all four parts are always available. If one piece is missing, it becomes challenging to grow an area.
For instance, we still have so many job openings we need to fill, so we need to bring in more people. If housing becomes unaffordable, then people won’t come here. Unaffordable housing also increases the salaries of people here, potentially hurting the stock prices of some of NWA’s bigger businesses. At that point, it becomes a cyclical problem of housing, jobs, people moving here, and businesses opening.
For sound economic growth, all four parts have to exist cohesively.
Now, if you’re interested in learning how Bentonville hopes to achieve this, check out part 2 of this series on Bentonville home price cuts.
Conclusion
One of the most significant factors in real estate is ensuring affordable housing. Thus, the NWA Council wants to cut housing costs quickly to ensure everyone can move to Northwest Arkansas and truly live, work, and play.