Shared walls and small yards. The new reality for entry-level homebuyers in the Tri-Cities

Take a look at the newest affordable entry-level homes in the Tri-Cities

Tri-Cities is getting more affordable housing in Pasco and Kennewick for first-time buyers.
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Tri-Cities is getting more affordable housing in Pasco and Kennewick for first-time buyers.

A Northwest home builder is on a mission to build affordable homes for first-time buyers, and it’s building in western Pasco.

Envision Northwest, based in Kirkland, is building 82 units at Pasco’s Chapel Hill.

Instead of single-family dwellings on traditional lots of 8,000 to 10,000 square feet, Envision is building townhouses with shared walls and individual lots that average only 4,200 square feet.

In an era of rising land and construction costs, townhomes are fast becoming the new normal for residential builders.

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Chapel Ridge Townhomes broke ground in late 2018 with 41 duplex-style buildings containing a mix of three- and four-bedroom homes that will sell for $236,000 and up. Noelle Haro-Gomez Tri-City Herald

Envision broke ground on Chapel Ridge Townhomes in late 2018. The model unit was set to debut this month.

The 41 duplex-style buildings contain a mix of three- and four-bedroom homes and sell for $236,000 and up.

Envision wasn’t always a townhome builder. It’s not even the only one building entry-level units in the Tri-Cities.

In Kennewick, Cedar Village neighborhood of townhomes is being developed at East 10th and Cedar, near the Benton County Fairgrounds. It is priced in the $200,000s.

Tri-Cities lot prices have been rising

Envision began as an affordable housing builder in California and arrived in the Tri-Cities in 2006. It built single-family homes on traditional lots, selling them for $200,000 and below.

CEO Austin Roupe said affordable housing is Envision’s bread and butter. But rising land costs challenged its business model.

“That just doesn’t really exist in the Tri-Cities anymore,” Roupe said.

In western Pasco, builders paid between $65,000 and $135,000 for ready-to-build home sites in 2018, according to sales recorded in Franklin County in late 2018, too much to keep new homes in the under-$300,000 range.

Envision had to adapt, said Roupe.

Envision Northwest is building 82 units at Pasco’s Chapel Hill. Noelle Haro-Gomez Tri-City Herald

Envision exited the Mid-Columbia market after the Great Recession to focus on the Seattle area. It returned last June, when it paid $2.25 million for the undeveloped 12.64-acre Chapel Hill site in western Pasco, along Interstate 182 east of Road 68.

Roupe said the company considered several options, including multifamily. It chose the townhome approach.

Each unit has its own garage, yard and parcel number and comes with fencing and landscaping. There is no homeowners association but buyers must conform to design requirements.

“We’re able to bring a good opportunity for first-time homebuyers to buy instead of rent,” he said.

High land prices challenge builders that focus on the entry-level end of the market, said Jeff Losey, executive director of the Home Builders Association of the Tri-Cities.

Townhomes aren’t for every buyer, but townhomes are gaining market share. Development is growing at an annualized rate of 23 percent, Losey said, citing a building industry analysis of Census Bureau housing statistics.

That’s substantial,” Losey said. “We’re not trendsetters, but that’s really one of the best ways to utilize land.”

Home prices rise in Tri-Cities area

Rising interest in townhomes comes on the heels of an intriguing year for Tri-City home sales.

The number of homes for sale is still in the 600 range, which is half of normal.

The median price for homes sold at the end of $2018 was $280,000, 5.6 percent more than 2017 and 21.7 percent more than 2016. The average price rose about 11 percent, to nearly $300,000, compared to 2017..

The pace of sales remained constant, with 4,394 homes sold in 2018 compared with 4,372 in 2017 and 4,377 in 2016.

Homes typically took a little more than a month to sell.

Cedar Village, a neighborhood of townhomes, is being developed at East 10th and Cedar, near the Benton County Fairgrounds in Kennewick. Noelle Haro-Gomez Tri-City Herald

Tri-City prices are below the national average. The median price of the 621,000 homes sold nationwide in December was $318,600 and the average was $377,000, according to Census Bureau figures.

Locally, it is rare to find new construction under $300,000 in Kennewick, Pasco, Richland and West Richland.

There were 36 newly built homes selling for $300,000 or less in the Tri-Cities on Friday, according to the Multiple Listing Service.

Eight were townhomes. Six of those were at Chapel Ridge. Another had a north Richland address. The other was at Kennewick’s Cedar Village.

“It’s hard to build a single-family dwelling in the affordable price range,” said Julie Lynch, an agent with Retter & Co. Sotheby International Realty. Lynch is the selling agent for Chapel Ridge.

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Wendy Culverwell writes about local government and politics, focusing on how those decisions affect your life. She also covers key business and economic development changes that shape our community. Her restaurant column and health inspection reports are reader favorites. She’s been a news reporter in Washington and Oregon for 25 years.