City, County & Local Affairs Committee - Senate and House
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Speaker 3
0:10
going to go ahead and see what that is. I'm going to go ahead and see what that is. I'm
Speaker 1
0:22
going to go ahead and see what that is. I'm going to go ahead and see what that is. I'm going to go ahead and see
Speaker 8
0:45
what that is. I'm going to go ahead and see what that is. Thank you.
Unknown speaker
3:27
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
All right, members.
Chair
Unverified
6:27
if y'all will start finding your way to your seats we're a few minutes late already I thought I'd give some people time to filter in here but if y'all make your way to seats we'll get this meeting underway or y'all just stand there keep talking that's fine too I don't mind we'll we'll stay here all day
all right chair sees a quorum we'll call this meeting to order i'd like to start off by thanking everybody for for being here showing up i know it's not easy for a three o'clock meeting on a thursday when some of y'all probably have kids playing football and games going on in your town some other stuff y'all want to watch but i really appreciate y'all being here i think it's it's a very important meeting i think it's going to be very informative and i'm looking forward to it we'll start off with a need a motion to approve
minutes of last meeting have motion in a second all in favor say aye all opposed all right that's passed so moving on first order of business item c on the agenda proposed housing policy initiatives duke mclarty with groundworks It's my understanding that Duke has been working with the Municipal League on a lot of these policy issues,
trying to figure out things that will work and work together, and I'll let him talk more about their process and what they've done. But if you'll state your
Representative R. Scott Richardson
Unverified
8:21
name, who you're with for the record, you may begin. I'm Duke McLarty. I'm the Executive Director of Groundwork, Housing for Arkansas. Mr. Chairman, I really, really appreciate the opportunity to share our work with the committee.
And there we go. We're off and running. Chairman Gonzalez, Chairman Bryan, I really, again, appreciate the opportunity to share Groundwork's thoughts. and uh learnings uh with the committee um as i uh groundwork was founded uh four years ago as the housing work stream of the northwest arkansas council a regionally focused economic
development business membership organization uh located in northwest arkansas this year we expanded our work statewide and the single most important thing we've done this year was get out of northwest Arkansas and spend time listening to the communities across the state we led with listening from April through June we held nine listening sessions nearly 500 people participated and those folks represented more than 80 municipalities across the state
Representative R. Scott Richardson
Unverified
10:29
scroll it okay okay that should work um we went to places that are growing quickly we went to places where growth is stagnant and we went to places that are trying to reverse decades of population loss. Despite those differences we kept hearing the same basic message
across the state. It's simply too hard to build housing in Arkansas. The specific problem may look different from community to community. In one place it may be the cost of land. Somewhere else it may be lack of builders or contractors. In another it may be zoning or building code requirements in others it's hundreds or thousands of vacant properties that the city cannot easily put back into productive use but the common thread was that these communities need more housing and there are often unnecessary
barriers standing in the way the four barriers that we heard again and again again, across the state, were blighted and vacant properties, outdated rules and codes, too few builders, and too little capital, and a mismatch between the kinds of housing people need and the kinds of housing our current system encourages us to build.
What we've tried to do with our legislative proposals that follow is to connect potential state policy directly to one of these four identified barriers to housing production. These tentative proposals for the 2020, excuse me, 2027 session, they're not final in form. We have draft legislation that we can share with anyone wanting to work on these issues, and we look forward to all of your input and thoughts on these. But each one of these proposals is rooted in conversations that we had around the state
wrong way sorry the first area that that we we are proposing um some thought is with regard to modular housing one of the strongest messages we heard particularly in smaller and rural communities is that there's no labor to build any new housing in some communities people told us that they may wait months or even years to find a contractor for a small project. This creates a structural problem that conventional site-built construction
alone cannot solve. Modular construction gives us another way to produce housing. Modular is a construction method, not a building type. Modular can be built to serve as single-family homes, duplexes, and other missing middle housing types, or even larger multi-family apartment buildings the important thing is that significant portions of the building are constructed in a controlled factory environment and then fixed to a permanent foundation our proposal would
create a cleaner statewide framework so a modular building constructed to the state code does not have to navigate a different building standard in every city around the state. Currently, modular buildings are subject to both local building codes and the state building code. Our proposal would remove that local building code exposure, so they're built just to one code, the state building code. The goal is not to replace traditional builders. It is to expand the number of tools available, particularly in places where labor shortages are
already constraining production. Approximately 40 other states have taken steps and established their own modular program. And it's designed to create a more predictable statewide path for this type of construction. The second proposal is a starter home small lot idea. And this may be one of the simplest examples of how regulation can directly affect housing costs.
In many communities, zoning requires a house to sit on a relatively large lot. That means that every new home must carry the cost of more land, more street frontage, more infrastructure, and even more yard than many buyers actually want. Our proposal would look at capping the government-imposed local minimum lot size requirements at roughly 3,500 square feet, anywhere a single family home is already allowed or proposed.
That does not mean that every home would have to be built on a 3,500 square foot lot. A developer, a homeowner, a property owner could absolutely build on a larger lot. The point is simply to limit the size of the lot that the government can require of that landowner. The illustration on the slide shows the basic math On roughly the same quarter acre of land where a traditional large lot standard might allow one home, smaller lots can allow up to three.
Arkansas is not alone at looking at this. Texas in 2025 passed something similar with the focus on new subdivisions. Idaho did something similar this year and Kansas has also addressed a small lot issue. The third housing proposal is commonly referred to as yes in God's backyard, or YIGBY.
This is kind of the counter to the yes in my backyard movement, or the compliment to the yes in my backyard movement. Across Arkansas, churches, not-for-profits, and other community organizations own land that's often underused. A generation ago, churches acquired land for future expansion that unfortunately is not going to come. In some cases, these churches would like to use that property to expand their mission to include housing,
but government regulations stand in the way of that desired use. These churches are often intimidated by the development and approval process, and therefore choose to operate as they have, while hundreds, if not thousands of acres, sit idle and unused. This proposal would create a buy-right pathway for churches and qualifying not-for-profits to build housing on land they already own and allow those churches to avoid a complicated and often subjective path forward.
Because the land on these churches is already paid for, There's no land bases in the development. Allowing churches to expand their mission to include housing is that much easier and could be more affordable. Again, some neighboring states that have looked at this include Virginia, Florida, Kentucky, Maryland, and Minnesota. Our fourth proposal, we're calling homes near jobs.
One thing we saw repeatedly on our listening tour was underused commercial land. There are corridors all over Arkansas with empty buildings, oversized parking lots, and vacant commercial parcels. Think about your community back home. Think about those corridors that are often traveled and then think about why there's not housing on that corridor. My guess is that housing is not allowed
on the piece of property that you're currently thinking about. Government restrictions on residential uses have kept that property owner from even considering housing on that property. This concept is fairly simple. Just allow multifamily as an approved use in commercially zoned lands. These developments will still have to go through a local approval process, but the landowner will now have more options when they imagine what is next for that property.
Allowing for housing in commercial corridors brings housing closer to jobs and services, and it can also bring new customers closer to existing businesses. In larger communities, allowing more housing along commercial corridors can also make public transit investments more effective and efficient. Our fifth proposal is state land bank authorization. Vacant and abandoned properties were among the most consistent concerns we heard and saw on our listening tour.
Pine Bluff, for an example, is dealing with more than 14,000 vacant lots that the city is responsible for mowing multiple times a year. Other cities talked about the cost and time involved in demolition, tax delinquent property, and parcels that may sit vacant for decades. This proposal would establish clear statutory authority for land banks and allow cities, counties, and potentially regions to create them through interlocal agreements.
The idea is to give communities a permanent mechanism for acquiring, holding, clearing Title II, and eventually returning problem properties back to productive use. Just to be clear, we're not proposing any use of eminent domain. We're not proposing that legal due process be reduced in any way. We're just proposing that the state affirmatively allow cities the ability to create a land bank and give them guidance, guardrails, and structure on how to establish one.
Paragould has already established a land bank that's a model for our state. And earlier today, we awarded Mayor Agee our Housing Visionary Award. He speaks passionately about the increase in school funding and tax revenue his town has seen because of the work of his land bank in bringing over 50 non-performing properties back into productive use our last policy proposal is an idea around pre-approved development plans
this is aimed especially at smaller communities that may not have a deep pool of developers, of architects, or builders. Similar to the modular thoughts, pre-approved plans would ease the development path for smaller builders and contractors, enabling them to do more. The concept would be for a state entity to maintain a catalog of pre-approved housing designs. A builder or property owner could select one of those plans knowing that much of the design and code review
has already been completed and been approved. That pre-approval reduces uncertainty, limits time, and upfront costs. Pre-approved plans can be particularly useful for vacant infill lots where a community may have had plenty of land available, but just not enough development capacity to design a new project for every home that's needed. For smaller towns, it creates something closer to an off-the-shelf
development option while still allowing communities to maintain attractive and appropriate building design. So I left these next few slides in here because the groundwork team has put a lot of brain damage into our building code this year. We have not done that alone. We've done it in partnership with the Arkansas Code review committee which was in the it was on a regular three-year code review cycle and i want
to give that code review committee a lot of credit because they they welcomed us they heard our concerns and through that review process they have expanded what is being allowed to be built in the state and one of those is single stair apartment buildings this is where a single stairway is built in the middle of a building and the apartments are around the outside that was passed on tuesday as a recommendation for legislative adoption in this coming session
and what is allowed is four stories statewide current law is is three stories so it adds one story statewide and where certain criteria are met buildings can go up to six stories similarly i won't get into the like real geeky stuff but but one of the policy ideas that we were working with the code review committee on was right sizing sprinkler requirements specifically
around build apartment buildings small apartment buildings that are the same size as a single family home stack duplexes like the example on the upper left of your screen are now included in what the building code review committee put forth and additionally it's recommended that all small apartment buildings only be required to have a a less robust sprinkler system than what is
currently required these efforts will bring down development costs ensure that safety remains and make more housing financially viable to be built i'd like to just take a second again and thank the the Arkansas Code Review Committee for their inclusion of groundwork in their review process. I'd specifically like to thank State Fire Marshal John Hogue and Diane Hughes from the State Fire Marshal's Office, Michael Archdeacon from the Arkansas Code Officials Association,
Chief Jeremy Ashley of the Arkansas Fire Marshal's Association, and the Arkansas Association of Fire Chiefs. In summary, these are the six areas of focus that we have spent time on, that we have some model legislation on, that we welcome the opportunity to discuss with any of you. We welcome your feedback. We welcome your amendments. We welcome your partnership through this legislative process.
These are four other possible areas that we've identified that we have not dedicated as much thought and effort to. We do not have legislation drafted on these. The first one is to allow a density bonus for federal tax credit developments. This would maximize the investment that's being made on these developments. The second one is a planning thought that would require larger and faster-growing cities
to have a comprehensive land-use plan that is tied to realistic growth projections. And once that plan is adopted, there would be no need for every project to go before a city council for approval because the debate has happened on the master plan. This is a way to, again, create a more predictable path for development in cities.
The third one is that existing uses be allowed to be reconstructed by right. in some instances our older and legacy buildings were built for one use and then the zoning code changed during the life of that building and often the owner or owner of that property would like to to replace it and use it in a similar manner and sometimes they're prevented to do that because the zoning code has has shifted under their feet and then finally clarity on
what is actually required to go to public review and what is actually required is is different than many projects particularly items that go to planning commission review platt and site plan reviews are often going to planning commissions and we don't think that's necessarily required And, again, this brings an opportunity to inject a subjective standard into that review process
and opens the opportunity for projects to not get approved and get shut down. So with that, consider groundwork a resource. Consider us a research organization, a collaborator, and I welcome any questions. All right, it looks like we have some questions popping up
Representative Denise Jones Ennett
Unverified
28:32
Thank you, mr. Chair, I have a question for you great presentation in this proposal did you all consider? Using the Arkansas housing trust fund or how that can be worked in
Senator Mark Johnson
Unverified
28:49
this proposal we We did not spend a lot of time examining it just due
Representative R. Scott Richardson
Unverified
28:56
to its lack of funding You know if it's an area that that
You'd be interested in exploring you know how other states are using similar finance mechanisms I'm more than happy
Representative Denise Jones Ennett
Unverified
29:13
the problem was we could never find a source to fund it So I would definitely like to talk to you about that yes thank you happy to represent a
Representative Matt Brown
Unverified
29:27
brown you're recognized thank you mr. chair appreciated
your presentation mr. McLarty could you please explain what a
Senator Mark Johnson
Unverified
29:34
land bank is yeah I'm happy to a land bank is it takes different shapes in in different communities and different states. But generally,
Representative R. Scott Richardson
Unverified
29:52
it would be a mechanism that either a city, a county, or a collection of cities or counties could establish.
Representative Matt Brown
Unverified
30:05
Would they be buying up property from the current owner? That
Representative R. Scott Richardson
Unverified
30:12
is one way that, say, I mentioned Paragould's land bank in my presentation. Paragould acquires their land through purchase. So the mayor himself is tracking down landowners and making an offer on their land. Most instances, you know, these are owners who are out of state.
They're children, you know, who have moved away. Sometimes they don't even know they own the property. And they will settle on a purchase price, and the city actually takes ownership of that property. The city then, through the land bank, put certain conditions that they would like to see on the property as it's redeveloped. So the city will put these up for public auction, and builders or developers will bid on them,
Understanding the conditions that are on the property, and those conditions can range from how much time the builder has to start building a home. What the land bank ensures doesn't happen is that it's another absent owner that gets a hold of the property with no intent of doing anything with it, because the land bank can attach those conditions to it.
You know, we're open to, you know, how that property is acquired and put into the land bank. You know, I think tax delinquent properties could be something, you know, worthy of exploration. We heard stories on our listening tour of cities spending, you know, tens of thousands of dollars in maintenance and mowing and then eventually tearing down a structure.
And then they have no way to recoup those costs. It often, you know, they put liens on it, but it gets sold at public auction through the land commissioner's office. Oftentimes those liens are extinguished and the city is, you know, out. And the purchaser often has no intent of building anything on that property. So it would create a way for the
Senator Mark Johnson
Unverified
32:39
city to try to ensure that a new structure is built.
Representative Matt Brown
Unverified
32:45
Follow-up? Did you all discuss anything that cities might be able to do with regard to abandoned properties and absentee landlords that aren't keeping up their property? We have not discussed
Representative R. Scott Richardson
Unverified
33:08
like a punitive approach or some way to hold them accountable. Some way for the
Representative Matt Brown
Unverified
33:15
city, maybe just to acquire the property from the current owner.
I know we had a situation near me where a tree, I drove by it one day and there were a whole bunch of trees. A couple of them had been hit by lightning. And I could see that this tree was going to fall. It was going to fall soon, and it was going to land in the neighbor's yard. And there was nothing that could be done even about that tree. And it did fall, and it did fall in the neighbor's yard and tore up their fence. But it would be nice if cities had a way that they could enforce something on these landowners that aren't taking care of their properties.
Representative R. Scott Richardson
Unverified
34:01
Yeah You know, I think this is this is where the land bank, you know could play a role it would create that entity for that property and that title to go to To try to give the city some control over the next use
Speaker 35
34:17
of that property. Thank you All right, Senator Bryant you're recognized. Thank you. Mr. Chair
Senator Joshua Bryant
Unverified
34:31
I've got to just, as you went through your presentation, just quick questions kind of pop on my mind that maybe the committee can gain some more information. When we talk about modular
homes and running them through just one building, the state code instead of the HUD code, and simplifying that where consumers have access to that, what barrier does a consumer or citizens inside of a city face right now if they had a
city parcel that they wanted to stack a modular-type constructed home on?
Representative R. Scott Richardson
Unverified
35:01
So, it's a really good question. Generally, I want to make a distinction between manufactured housing and modular. You know, manufactured is built to the HUD standard, as you said. Modular would be built, you know, with studs in the same manner that a site-built home would in the state of Arkansas. So your question is, what are the barriers for a modular home to be placed currently?
Senator Joshua Bryant
Unverified
35:38
I'll give you an example. Sure. 300-home subdivision built in the 80s. Yeah. A few homes burned down or
get hit by a tornado, and now it's a vacant lot. Yeah. I go get a build quote. The insurance company gave me $400,000. My cheapest build quote is $500,000. i drive past a a lot that sells these modular homes i go to the city can i put this there where it may look close to the others because it's single family but instead of all brick it's
going to have maybe not as much brick or etc like what what is a what is a consumer or resident roadblock
Senator Mark Johnson
Unverified
36:19
now versus what proposals you might be asking us to to
Representative R. Scott Richardson
Unverified
36:25
yeah i i think the roadblock WOULD BE THAT LOCAL APPROVAL PROCESS. YOU KNOW, THESE WOULD BE CERTIFIED AND APPROVED AT THE FACTORY AS BEING BUILT TO THE STATE CODE.
YOU KNOW, IT WOULD STILL HAVE TO FIT, I THINK, THE LOCAL ZONING FOR THAT BUILDING TYPE. But really, the modular, I guess, market is limited in Arkansas because we have this exposure to local building standards. So we've talked to modular builders who won't enter the state because they need the entire state to be their market. They can't build, you know,
Senator Joshua Bryant
Unverified
37:15
So if we're able to do a state code that says we're only going to follow the International Code Council's model for the International Residential Code and a producer comes into central Arkansas
and starts mass-producing these, would we need statutory regulations to require cities to adopt this type of construction to be able to
Representative R. Scott Richardson
Unverified
37:40
place it into a legacy-built community? I think that could be helpful, but we're approaching modular with our thoughts more as an alternative construction technique and not a building type.
So our thoughts are the modular unit would fit, say, single-family zoning, or it would fit multifamily. So by right, they could put them in
Senator Joshua Bryant
Unverified
38:02
there and place them on a lot that had traditional construction. That's right. I'm going to, Mr.
Chair, I'll keep going. Well, I
Chair
Unverified
38:12
got a quick question. On those building codes, the state code versus the potentially 500 different city codes that we have in the state. I don't know that all these small cities have building codes, but the ones that do.
What are the differences going to be in those codes? What are we looking at? Is one based
Representative R. Scott Richardson
Unverified
38:37
on health and safety issues, the other based on? Health safety, you know, up in northeast Arkansas, earthquake risk. You know, there's different features at times that need to be included in those local building codes. You know, fire sprinkler requirements. Until recently, you know, in Rogers, Arkansas, they were requiring sprinklers in duplexes, and that was kind of a one-off.
So it was the state code was the floor, but cities could go beyond and add additional requirements on top of
Senator Mark Johnson
Unverified
39:10
the state code. Thank you, Mr. Chair. And just looking at
Senator Joshua Bryant
Unverified
39:16
Proposal 3, the yes in God's backyard, I think the chair leaned over and asked me about property taxes. So you have a church that's been there for 50 years, sits on 10 acres, yes in God's backyard, says, hey, by rights, you're going to be able to build affordable housing behind you.
How would the tax structure go with those when traditional churches are tax exempt? Yeah, Senator, I, that
Representative R. Scott Richardson
Unverified
39:39
is probably an area that we need to talk in and collaborate. I, I, you know, I have to be honest that we have not thought about the tax implications. Okay. I just thought
Senator Joshua Bryant
Unverified
39:51
you said other States have considered this and I'm just curious if they've able to, I'm happy to follow up with
you on that. Proposal number four about homes near jobs, about allowing multifamily by right and commercially area.
I know we've got several communities that were built as bedroom communities. Their zoning and planning rules relaxed the need for commercial because people were fleeing commercially viable cities
to build residential communities. As residential communities kind of overtake the property, the corridors are now backing up to backyards instead of leaving two or three acres for land to build commercial. If cities rely on sales tax as their primary source of revenue, how do cities feel about this particular one?
I don't know how I feel about it, just property rights in general, but knowing that cities survive
Representative R. Scott Richardson
Unverified
40:48
on sales tax, where do you see this going with our partners? Yeah, I think our friends at the Municipal League, and we've been in virtually constant contact with them, You know, I think they would identify that potentially as a challenge that their members would have with this. You know, I think our argument would be many of these would be vacant parcels along these commercial corridors that aren't producing taxes as they are.
So, you know, this is an opportunity to bring life back to those structures. It doesn't require, you know, that it be multifamily. It's just an allowed use and gives, you know, that decision back to the landowner ultimately. All right. Thank you, Mr. Chair. All right. Representative
Chair
Unverified
41:39
Rye, you're recognized. Thank you, Mr. Chairman. Server, let me ask you
Representative Johnny Rye
Unverified
41:45
this. It's a little bit off, but since 2021 when we had COVID, it seems like everything has changed.
Inflation has just increased tremendously since that year. Will this help with that situation? I mean, being able to buy this type of home and at the same time you have some land out there that hasn't been used, it's just been old dilapidated property that's turned into something good. you think that could help both sides representative
Representative R. Scott Richardson
Unverified
42:17
i what's happened with real estate in arkansas is not necessarily unique to arkansas it is a national trend as you pointed out coming out of
covid um you know real estate prices and property appreciation was was massive um where i think we have a unique opportunity is is to make some of these changes to try to ease that financial pain at least on the housing side of things um you know it is our focus is is on market-based solutions uh with this work um to try to enable the development community to deliver more and
deliver more faster um and in the cities that have done this um i think another presenter today will We'll share some of the data, especially out of Austin, where they have built so much more new housing that rent prices and home prices are actually starting to come down. But you've got to hit that point of oversaturation to see that happen. So I think there is a path to relief with this,
Speaker 86
43:32
but these are just a few of the levers that we feel like the state
Representative Denise Jones Ennett
Unverified
43:45
Mr. Chairman. Representative, we're back to you. Thank you, Mr. Chair. I have one more question from my constituent out in the crowd. In established neighborhoods with no requirements for comparable design, What do appraisers say three houses on one lot would do to sell the sell value of the homes around them?
Representative R. Scott Richardson
Unverified
44:06
I have not raised this specifically with an appraiser. That's an interesting question that I don't know that we've thought about, but I'm happy to do so. My inclination is that it would not negatively impact the values because the total investment on that acre would actually be greater
than just that single home on that acre if they're added together. But like I said, I'm happy
Senator Mark Johnson
Unverified
44:48
to dig into that. We'll follow up later on with that. Sure thing.
Senator Mark Johnson
Unverified
45:01
mr chairman uh mr mcclory thank you for the work y'all did on this this is very helpful uh as you know recently uh our own congressman hill authored a very major piece of housing legislation i'm very proud of him for
passing it uh it i hope will result in some more opportunities especially for first-time homebuyers Our median age of people buying their first home has gone up significantly since my wife and I first bought our home. And a lot of young couples with good incomes literally can't afford a home right now. And I'm looking at things that will bring it down. One of the things that Congressman Hill told me about, he felt that some of the reforms to the HUD code
and doing away with the steel chassis requirement being one of the obvious ones will help lower the cost of an equivalent square foot house because of that. He also mentioned to me that we would see a building maybe that's four times as big as what you think of as a modular home now because you can build them in sections and move them, it appears that you made the distinction
between manufactured homes, what we used to call mobile homes or even trailers, and modular. That is melding somewhat. You could look at a building and say, well, that was built in a factory, and now you can't. It can be just as good. The only difference is it was built in pieces and moved there. I've said for many years that if we built cars the way we built houses, nobody could afford a car.
And so some of these efficiencies, I'm just, would you think that the greatest impediment to realizing those efficiencies that help more people get into their first home to help. And, of course, this goes to rental units too. We're talking about a housing shortage and a situation like, as you know, Mississippi County is creating some tremendous incentives to get people to move there and to get houses built because, you know, they've got the jobs,
but they want those people that are working there to live there as well. So can we hopefully overcome, is the greatest impediment going to be the tendency of, I'm going to call it inertial tendency of localities to try to apply what probably in some ways is an obsolete manner of regulation, that is local codes. I mean, I don't want to name a town because I was going to use this one as an example,
but I don't want to pick on anybody, but let's just say Podunk, Arkansas, has an electrical inspector, and he wants someone with a factory-built home to tear out a sheetrock wall so he can inspect it. Is there a way we can enact that where it would prohibit? And I'm not taking away local control. I'm taking away local control where it's not appropriate. Is there a way that we could work on that and do that? And have you all looked at suggestions in that area?
We have looked at that. Let me start. We
Representative R. Scott Richardson
Unverified
48:36
actually awarded Congressman Hill our Housing Visionary Award for this year. That's great. Thank you. He just really did tremendous work, and, you know, it's been praised as the biggest housing piece of legislation in a generation to get passed. So we're really, really proud of that work. With the modular inspection piece, in our legislation, we propose that we lean on what this body passed, I think it was in 2023, third-party inspections, to allow for those inspections to happen at the factory.
And so the modular company will employ inspectors who will certify the final build-out that it is built to the Arkansas Building Code. And that certification will stay with that unit all the way to the site. So it arrives on site, and the foundation, the plumbing, all of that would be inspected locally. But then that local inspector will have that building inspection as reference to complete the project.
Senator Mark Johnson
Unverified
49:59
I'm familiar with that, and I understand that most places, and I hope you concur, that that would be a third party. He would not be an employee of that manufacturer. He'd be a contractor, someone who is certified to be an inspector. much as an architect puts their stamp on a set of plans. Is that analogous to that? Yes, sir. Okay, great. All right, thank you for your answers. I'm very
excited about the work y'all are doing and appreciate it. Thank you, Mr. Chairman.
Representative R. Scott Richardson
Unverified
50:32
you recognize us? Thank you, Mr. Chairman. I got a quick question. Looking at the modular homes and the things that you guys are doing at Groundwork, which is great work, have you put any thought or did any research regarding containers and how they're being used? I'm seeing a lot of container homes and dual-use communities and things like that. Have you done any research on that to talk about the validity of that?
No, we haven't. I think we would probably land on we're kind of indifferent as far as what is used to say build a modular unit. If a builder was able to find efficiencies, particularly around cost, by using something like that, so long as it is built to that code and that standard, I think we would be open to it.
Speaker 40
51:33
specifically with containers no we didn't look at that okay thank you
Chair
Unverified
51:36
some definitely not an expert on that but I would think these the containers being just an empty shell of a building basically you could move that in and it will still be subject to inspection of these from from these local cities now because you're gonna have to add the plumbing add the electric add all that stuff to it after it gets there so yeah you're recognized yeah and
Representative R. Scott Richardson
Unverified
52:01
and that's That's kind of what I was asking because I've seen some cities that don't have anything to regulate how they're inspected because nobody's used them before.
So that's kind of where I was going to kind of get an idea on
Chair
Unverified
52:16
that. But thank you, Mr. Chair. All right. Do you have a question? All
Senator Joshua Bryant
Unverified
52:20
right. Senator Bryant, you're recognized. I just want to say I appreciate the work Groundwork has done. I've attended a couple
of your meetings, kind of know what you're pitching. Is it safe to sum up Groundwork is saying build, baby, build? um and if if government needs to get out of the way we need to help them get out of their own way to increase capacity
Speaker 133
52:41
to lower the overall cost that's absolutely a correct characterization okay
Senator Joshua Bryant
Unverified
52:44
i just want to i want to jump real quick i see another presenter is going to touch inside the pre-approved development plans um it's something that i'm i'm working on independently as well just because i've seen we got a couple communities in in the region i live in that have done this And the first time I was excited, I looked at it, and then I realized that one of the cheapest plans they have is about $350,000 to build. And I was like, that really doesn't help the goal to get towards affordable housing. And the other community had cheap designs, but then they put them in an area where the lots were $250,000 minimums.
And so there is a right intent, just bad rollout maybe. But my theory and thinking is IRC governs residential construction. I've telling on myself here, I've, I've turned in plans to cities, waited three months to get them approved and then built a completely different plan. Yeah. And nobody knew, but, but me and the homeowner, right. Uh, because really you're inspecting as you're building, right. You have, you know, 16 second inspection points in some areas,
you got 12 inspection points and others, um, is the idea that there is no plan review process for residential construction other than site setbacks certification f david that i'm going to follow the irc why is that not a viable option for something that is so unique to the individual whether it's customer spec they all follow the same code um i can understand ibc the international building code for commercial construction is a completely completely different animal whereas you know
we're asking cities that hey spend you know hundreds of thousands of dollars with the architect buddies to come up with six design plans that a consumer can just go pull off the shelf or a builder pull off the shelf i'm not going to do that personally but if i was a builder and i said hey i'm going to turn in a five page it's going to have five sheets you know what code am i following what's my basic four plan what's my you know basic electrical plan what's my basic hvac plan what's my basic plumbing plan everything else you don't need any detail on you're going to give me
the same day permit because it's going in a residential area and then I go build it because you're going to come out there 16 different times uh which is another completely different subject sure I know that's a long way around proposal number seven or I'm sorry proposal number six but what what is groundwork have you thought of
Speaker 26
55:15
that have you have you broached that theory or discussed it you know our our thought is that
Representative R. Scott Richardson
Unverified
55:21
these plans would be approved at the state level and be available to be placed anywhere in the state where it meets that zoning code.
Your specific example of getting one thing approved and then building something else is a wrinkle in this that we had not thought about, that phenomenon actually occurring. Our goal is to, you know, create a predictable path forward to give assurance that you're not going to hit the approval desk, the planning desk, and it just get outright denied or have a bunch of changes.
And our thoughts are the catalog would include everything from, you know, panelized wall sections all the way up through small apartment buildings, and we highlighted the work of a gentleman in Pine Bluff who's using panelized wall sections to build modular now, and when we were with him in Pine Bluff, he almost got emotional thinking about what that pre-approval would do because he could build those wall sections much faster and keep his shop
working. But that dynamic you explained is not a dynamic that we had thought about. But we're using these as an idea to to bring that predictability uh to the developers idea i think you know in a dream scenario smaller contractors you know would maybe take these plans and get comfortable with them and build a new business of just building you know these pre-approved plans
because that approval's already done um but um we also you know have have thought you know that that these again would be approved at the state level so i don't think we're asking each city to take this on and and spend a lot of money to produce these plans um you know we we can potentially work on identifying funding uh outside of government to to pay for the architecture um certainly with uh you know whatever entity is going to hold the plan certainly with their input
But, um, yeah, we're really just looking at expediting the review process. Seeing no more questions.
Chair
Unverified
58:04
Thank you for your presentation. Thank you for your work. And, uh, thank you for having the easiest name on this
Representative R. Scott Richardson
Unverified
58:13
agenda to pronounce. Well, uh, Mr. Chair, I, I cannot appreciate, um, you and, and this committee anymore for, uh, availing yourselves to this and, uh, consider us a resource.
research partner uh whatever you need we'll certainly stay in touch
Chair
Unverified
58:30
all right thank you very much up next item e presentation on housing policy changes in other states and localities oh then my skip i'm sorry hang on i skipped d my fault uh memphis fire code john ziana That's why I keep her up here.
She keeps me straight. You'll just state your name and
Speaker 138
59:14
presentation. Thank you, Mr. Chairman. I'm John Zena with Interval LLC. It's a pleasure to be before you today to talk about some of the work that we've done in Memphis. your neighbor to the east related to supporting small multifamily particularly as infill housing
through adjustments to building and fire codes and what that has meant for for our community I was asked by Duke to be a part of this I think because of what was then some of the open questions around um the building items that as as he talked um you've had some success on and so i certainly commend you on the progress there on building code but hopefully what i share today
Speaker 140
1:00:08
demonstrates not only um you know why this matters and provide sort of a real
Speaker 138
1:00:17
place why this matters that's close to Arkansas, but how also requirements that may be individually reasonable compound to create costs that greatly limit supply
Speaker 140
1:00:29
in communities like Memphis and communities all over Arkansas, and some of the steps
Speaker 138
1:00:35
that we took in Memphis.
So I mentioned now I'm principal of Interval LLC. I spent the last 20 years in working in local government in Memphis, the last 10 years of which I was
Speaker 140
1:00:50
the director of planning and development, as well as the chief of development and infrastructure for the city of Memphis. Both of those roles included not only oversight of planning and zoning, but also the building code department for memphis and shelby county so it's the largest code department in the state
of tennessee i've also written some work based on some of our experience published through the center for building in north america which is a non-profit that is largely involved in a lot of the progress around single stair reform and other building code reforms that have taken place in the last few years what that that publication is around hidden code barriers to middle-scale housing that go beyond zoning and so I'll talk very
briefly about zoning and a lot about everything else today so but I want to start with Malone Park Commons it's in the uptown neighborhood just north of downtown and Malone Park Commons is the reason why we started even going down the path of considering what needed to change in building and fire codes in memphis in order to advance goals of creating more housing supply and particularly more diverse housing supply in infill neighborhoods throughout
Speaker 138
1:02:13
memphis malone park commons sits on two-thirds of an acre
It is 35 units. That's two four-unit live-work buildings, four fourplexes, and 11 cottage court units, detached cottage court units that are all in the center. When developer Andre Jones got the land from Malone Park Commons, it was platted as six single-family lots, so roughly a tenth of an acre per lot.
Um, and what he ultimately did with it is what you see on the slide, which was to produce over 50 units, dwelling units, um, per acre, um, on a small infill lot, uh, north of downtown, nothing over two stories. Uh, as you can see, everything is neighborhood scale. Um, and that photo there at the bottom shows you how the four plexes fit right in with the live work, which has a sandwich shop on the ground floor, residential on the top floor.
This is exactly the type of community building that we're trying to do in Memphis. And then I think a lot of communities all over the country are also trying to do. But Andre ran into some issues primarily with the building code. Zoning was not his issue. He had to get a simple zoning variants. It took him a couple of months to clear that hurdle. And legally, he was on his way to start building Malone Park Commons. But Andre ran into challenge after challenge after challenge
from not only building code and fire code requirements, getting Malone Park Commons delivered, but also through utility requirements. At the time I was director of planning and development, he came to me to ask for assistance because what he was proposing to do and what he had been entitled to do was in line with what the city wanted to see, not only for the uptown community, but also was in line with the city's comprehensive plan of how we wanted to grow inward as a city. But like I said, his challenge was really that he was trying to build
a building type that was governed by a completely different set of standards, the IBC, even though the scale of what he was building was well in line with what would otherwise be allowed in the IRC. So you see the photo on the left there is one of his four plexes under construction next to an existing single-family home that shows really how the scale of those two buildings equate. So as you all know, IRC includes single-family, duplex, townhouses, accessory
structures not more than three stories. The minute you go to a third unit, you jump into the IBC. And that cost cliff, it not only has implications in the IBC itself, where roughly 30 percent more per unit of cost can be added from that cliff, but that cliff is also mirrored in many other requirements, many of which are local, but that can, again, sort of add up, compound to create costs that prevent otherwise the housing supply that we want in our communities from happening.
Within the codes themselves, there are differences
Speaker 140
1:05:51
such as who can build them. IRC can be built by single-family contractors. Permitting for building a site is usually simpler, whereas IBC is much more
Speaker 138
1:06:05
complex and has to be done by a commercially licensed contractor. In many places, the IRC can just be
Speaker 140
1:06:14
done, can allow for builder-prepared plans.
The standards follow prescriptive structural tables, whereas buildings in the IBC require professional stamp, architectural, structural,
Speaker 138
1:06:29
civil, et cetera, engineering drawings. There's simpler permitting processes and systems oftentimes for residential buildings versus buildings that go through IBC or often commercial building types.
The fire safety differences are fairly stark. 48 out of the 50 states generally exempt one-
Speaker 140
1:06:54
and two-family buildings from any sprinkler requirements. Usually it's just smoke alarms and fire rated separations that are required, whereas once you jump into the IBC, there are sprinkler requirements, usually beginning with NFPA 13R. If there is some sort of mix, vertical mix of commercial and residential, it often triggers NFPA 13.
Speaker 138
1:07:19
Based on the size of the structure, NFPA 13 may also be required. NFPA 13D is used for IRC single-family construction, but like I just said, 48 out of the 50 states largely exempt that. So there is a less costly alternative that is available in NFPA 13D, but they're not as frequently seen in the wild as NFPA 13 are and 13 because of those exemptions.
But the cliff does not stop there. There are differences often between residential and commercial buildings relative to parking, relative to taxes, relative to commercial or to trash pickup residential and commercial that have cost implications. There are often differences in stormwater requirements, even though the footprint of the building may be exactly the same, commercial stormwater requirements are oftentimes found to be more strict than residential requirements.
Utility requirements often carry the same cliff where with buildings that are built as residential structures have more straightforward traditional utility connection policies as well
Speaker 140
1:08:37
as fees. Once you get into that three-unit and above, there are often not only requirements for larger meter sizes, upgrades required to water and sewer, and there are other devices like backflow preventers that may also be required.
There are energy code differences between IRC and IBC. There are accessibility differences between IRC and IBC. The stair requirements, which have been noted a moment ago, are more relaxed for IRC. And then once you go to four stories, it sounds like there's
Speaker 138
1:09:19
been some progress there. Additional stairs are required. There's also an existing building code. So even if a building was built without a lot of these components, and once it goes to be
Speaker 140
1:09:34
converted or even remodeled, there may be some triggers that drive more cost increases as well.
Vertical mixed use, like I said, often requires commercial sprinklers, whereas more horizontal mixed use, you can get away with less involved. systems so all these things kind of
Speaker 137
1:09:54
weighed on us as we were thinking through how to make malone park commons happen in
Speaker 138
1:10:00
2022 memphis and shelby county worked through the code development process locally through our building code advisory board our city council and county commission passed
Speaker 140
1:10:10
a local amendment to the irc that allowed for up to six units into our residential code
Uh, that became, that began, uh, enforcement in
Speaker 138
1:10:21
January on January 1, 2022. Uh, very shortly after that, uh, we were, uh, we got intervention from the Tennessee state fire marshal's office, uh, to prevent us from continuing to, uh, enforce that. Uh, we spent a couple of years, um, trying to negotiate with the state fire marshal's office to get to a point where we still could, um, achieve some of the cost savings that our efforts were designed to create, but still address his concerns.
Ultimately, that ended in going to the legislature in 2024. The city of Memphis, working
Speaker 140
1:11:01
with the Tennessee Home Builders Association, as well as the Mortgage Bankers Association, secured passes of legislation that would allow for a proportionate fire separation alternative for three- and four-family buildings. It does allow 13-D for three- and four-family buildings. It also allows two-hour separations in place of any sprinkler system for three- and four-family buildings.
The state fire marshal ended up being neutral on that bill, and so it was passed, and it has been in effect since. It was written as a permissive bill, so local governments
Speaker 138
1:11:41
don't have to adopt it into their code. Many have. But that also meant three to six families had to go back to the International Building Code. Since then, we continued to take a look at what could be done around continuing to expand our approach towards supporting, you know, quote, unquote, the missing middle, what we generally call middle-scale housing, up to 24 units.
In the same year that this bill was passed, Tennessee's state legislature also passed a single-stair bill that allowed cities, same type of approach, permissive ability to adopt a single-stair provision up to six stories, four units per floor. And so 24 seemed like a magic number for a lot of reasons. Number one, so that we could sync with what had already been done around single stair.
But also because as we looked at the different types of housing that are considered in the missing middle, what we see is not just three-family and four-family and six-family. We also see small courtyard apartments that may comprise of 24 units and may not be any taller than two stories, but are present not only in the landscape in Memphis, but present in many older cities throughout the state.
So what we did was to, this time, instead of working against the state fire marshal, in concert with the Tennessee State Fire Marshal's Office, in concert with, obviously, our building official, and our fire official drafted an appendix to our IBC, again, keeping three to 24 units in the IBC, not moving them to the IRC, develop proportional standards for a variety of items sprinklers and alarms obviously sort of
started the conversation since that that was where we began with the legislation but we also talked about requirements around egress structural requirements so that they could mirror more of the prescriptive pathways that are in the residential code plan review as well as use mix so that appendix was given the blessing, of course, by the Tennessee State Fire Marshal's Office. It was adopted by the Memphis City Council and County Commission in 2025. It remains in effect.
It has been in effect for over a year now. There have been multiple projects that have taken advantage of this appendix. And the good news is this is creating a little bit more of a conversation, not only in Tennessee, but in other communities around the country. We were fortunate, my company was fortunate to receive some grant support from Pew Trust to research the cost comparison as well as structural fire safety, structural and fire
safety impacts for prototype buildings that are within the scope of the Memphis Appendix. We are working with Wiss, Jane and Elstner, an engineering company. Among many notable things that they've done. They worked with the state of Minnesota very recently on a safety report for Minnesota's single stair efforts. So they come with some experience looking at these issues around attempting to address building code challenges from a structural and fire safety
parity perspective we expect to have some results from their work within the next month and hope to be publishing findings of our research by the end of the year we the international code council has also established what they call the g13 committee on high density residential that is a committee of the building code and fire code action committees where international code council themselves are looking at what proposals potentially could be
brought before the building code and fire code action committees for amendment either into the residential code or the building code to better enable middle-scale housing they have certainly i think heeded the call of many to address this matter which is exciting to see them do I am a member of that committee, so I've had the chance to not only participate in those meetings and share the work that we've done in Memphis with them, but also understand how their deliberations take place.
I'm happy to say that one of the first things that we've addressed as a committee was in thinking about the scope of the committee, looking at up to 24 units. so there could be some really good parity between some of the examples here from Memphis that I'm sharing with you and the work that we've done and what ultimately may go into their committee's report. So with that, I'm available for any questions, and I just want to thank you again for inviting me to be a part of this today.
I look forward to seeing what progress you make here in
Senator Joshua Bryant
Unverified
1:17:15
the state. Thank you very much. Members, does anybody have
Representative Matt Brown
Unverified
1:17:27
any questions? uh representative brown this is well this is a question but um i mentioned um affordable housing to um a mayor recently and they said oh no no we don't want any more we don't want to hear that word because, um, they, they equate it with low income housing. Um, so how would you address that?
Speaker 138
1:17:54
variety of different categories, um, when just objectively speaking, when you talk about, um, um, the goals for housing production, um, I, you know, you may hear affordable housing you may hear attainable housing you may hear workforce housing obviously market rate housing um let me just kind of give you a little bit more of sort of the sober perspective of memphis memphis has a housing challenge it is largely an affordable a quality
affordable housing challenge and by that i do specifically mean that the largest gap that Memphis has is providing quality housing for households that earn 60% or below the area median income. So it is a challenge to provide affordable housing to many, many, many Memphians. And going back to some of the questions and comments that were raised a moment ago about how costs are
escalating, not just here in Arkansas, but across the country. And those costs ultimately are passed along to the end user there have got to be some strategies that we think about to where we can effectively deliver on not just market rate housing or workforce housing but affordable housing as well because ultimately you know the the ranges of 20 to 40 percent 40 to 60 percent 60 to 120 percent of area median income those are real and those aren't going to change no matter
Senator Joshua Bryant
Unverified
1:19:30
what we want to call. Thank you. Thank you, Representative Brown. Any other members have any more questions? I've got, I've just got a couple of questions. Malone Park Commons, was that,
was that privately held and it's still held by the original developer or was he making some of
Speaker 138
1:19:50
these available for purchase afterwards? Uh, he, uh, holds the entire, the, all the properties on the side
Senator Joshua Bryant
Unverified
1:19:55
still yes so the net output was he was able to keep market rates keep his rates below market
to be able to make them affordable for that's correct local people as you were being as you were working i'm not gonna say against the tennessee fire marshal's office but just had a an opportunity to disagree were they mainly steering inside the the fire code section or the building code as well
Speaker 138
1:20:20
i would say both um and and thank you for making that clarification because we did spend a lot of time trying to work with them to get to a compromise.
And ultimately, they were willing to give us compromises, but nothing that we got back really helped to solve the cost issue. But it was both building code and fire code concerns that they raised. But as I mentioned, once we got to the point of advancing to thinking about the appendix and working with them, same thing. We worked on both.
And, in fact, that appendix, even though it's adopted into the IBC, it was written with sort of corresponding notes for the existing building code as well as the fire code that were also adopted in. So all of these things sync together. Okay. All right. Thank you
Senator Joshua Bryant
Unverified
1:21:16
very much. Thank you for being very much All right members next we'll go down to item number e to discuss housing policy changes in other states and localities with Tushar Kanzal
Apologize if I got that wrong Thank you for being here if you would just the mic should be already on if you'll just Correct your correct my pronunciation and and who you're with and you may
Tashar Consul
Unverified
1:21:50
begin No apologies needed. Thank you, Senator. Thank you, Chair Gonzalez, Senator Bryant, and members of the committee for the opportunity to provide testimony. My name is Tashar Consul. I'm a senior officer with the Housing Policy Initiative at the Pew Charitable Trust.
Speaker 157
1:22:04
We're a nonpartisan, nonprofit organization. We do research and policy work, in my case, about housing and housing policy across the United States. The foremost issue affecting housing costs is a national shortage of, let's see here, there we go, four to seven million homes, including a shortfall of more than 6,000 in Arkansas. Due to this shortage, housing costs have grown significantly, and rents have reached historic highs in the state in recent years.
Arkansas's home prices were 51% higher in 2025 than they were just back in 2018. And from 2018 to 2025, median rents in the state rose 33%. Fundamentally, Arkansas has too few homes available. The state saw a steady drop-off in home construction between 2005 and 2011 and is still dealing with the repercussions from that decline today. As a result, Arkansas's for-sale housing inventory is only 77% of what it was in 2018. And today, 40% of Arkansas renters are spending more
than 30% of their income on rent. So they're officially cost burdened. Furthermore, Arkansas recorded an all-time low estimated average household size of 2.39 individuals. And 64% of households in the state today only have one or two people living in that home. So with smaller households, more starter homes and more smaller homes would be needed even if Arkansas hadn't increased its population by 4.9%, almost 5%, between 2015 and 2025 over the past 10 years.
There's extensive evidence that inflexible land use regulations and lengthy and uncertain permitting processes are a major driver of this housing shortage and the high prices we're seeing today. States and localities across the country have recognized this and are taking steps to address these issues, building more housing and making housing more affordable. The rest of my testimony will outline the policies Pew's research has shown to be particularly effective in boosting housing supply and how those policies apply to Arkansas.
So I'm going to start with one of the policies outlined by Groundwork, kind of starter homes or minimum lot size reduction. Regulatory barriers to building starter homes include minimum lot sizes, minimum square footage requirements, lot coverage requirements that specify how much land must be left open on a plot of land, in other words, yard space, and large setback requirements that mandate the distance a home can be built from the edges of the property. As the cost of land beneath the house is typically 25 to
30 percent of the total project cost, requirements to purchase large plots of land and leave much of the area open makes housing too expensive for many buyers today. These restrictions force aspiring homebuyers to purchase more land or more house than they need, thereby driving up the price of homes, limiting how many homes can be built on each acre, and putting homeownership out of reach for working families. Evidence shows that updating land use rules to allow builders and buyers more
choices opens up greater affordability. For example, in Houston, Texas, they reduced their minimum lot size from 5,000 square feet to 1,400 square feet citywide. This change led to more than 80,000 homes being built that were previously blocked by the regulations that had been in place. These new townhomes on smaller plots of land had a median assessed value of $340,000, $200,000 less than the $545,000 median value of other new single-family homes in the city.
As you can see on this slide, that also means that these new townhomes were accessible for purchase to people earning just about the median income, 105% of the area median income. And so that means your everyday teachers, firefighters, service workers, and the like. Currently, local jurisdictions in Arkansas can set their own minimum lot sizes, which range from, you know, as little as 5,000 square feet, but are often much larger than that, up to an acre or more.
By making it easier to build starter homes, Arkansas can bring homeownership within reach for more residents throughout the state, while also improving affordability across the board. As others have noted, including Duke, other states that have enacted similar reforms include Texas and Kansas, each at about 3,000 square feet, and Idaho, which is allowing 12 homes per acre with lots as small as 1,500 square feet allowed. So 1,500 is what Houston did. Next policy I'm going to go to is letting churches and nonprofits build homes on their land.
This is what Duke referred to as Yigbe, yes, in God's backyard. So one solution, another solution that state lawmakers are implementing, including in states like Connecticut, Florida, Oregon, and Virginia, and there's some more states outlined here on the slide, is allowing religious organizations to build housing for low and moderate income residents on land they own. Some organizations have long sought to build such housing, but have been stopped by zoning restrictions and protracted permitting processes.
Because religious nonprofits can build this housing without buying additional land or needing to make a profit, allowing this approach can increase the stock of affordable housing with a lower government subsidy than would otherwise be required, or even without any subsidies. Clarifying that churches and religious nonprofits or other nonprofits, as state law allows, may use their land for affordable housing means that the permitting and regulatory requirements they must comply with are less onerous, which reduces costs and speeds up timelines to begin building.
That improvement increases the overall supply of housing and improves affordability. Pew conducted a nationally representative survey on housing issues, and 81% of Americans favored allowing religious nonprofits to build affordable housing on land they own with a simplified permitting process. Low and moderate income housing is in short supply, and evidence shows building more of it benefits residents and communities while also reducing homelessness. Senator, I think you had asked a question earlier about how property taxes would work.
It, you know, varies somewhat state to state and varies based on kind of the leasehold rules and the exemptions, you know, written into state law. But generally speaking, if it is kind of regular old housing that's built on, you know, church land, that would be taxed at kind of regular property tax rates. If the church kind of remains leasehold, then, you know, that would kind of, that's the piece that depends on how state law is written to govern that specific piece of it.
By making it easier for religious institutions and other qualified nonprofits to build housing on land they own, Arkansas can allow faith institutions to build housing in alignment with their mission. A third policy area I want to talk about here is allowing apartments and townhomes in commercial corridors. So Pew's research on the outcomes of state and local policies finds that legalizing housing on all commercially zoned land is the single most effective reform, boosting housing production and reducing rent growth at a rapid clip.
If a three-story office building is allowed on a main road, then a three-story apartment or condo building should be allowed there, too. The sorts of small and mid-rise apartment buildings allowed under these laws consistently rent for less than single-family homes. Housing built near commerce can enable both affordability and walkability, reducing traffic and commuting costs. An important part of this reform is removing minimum parking mandates, which adds substantial costs, thereby driving up rents and discouraging construction.
Allowing housing in mixed-use buildings in commercial areas also speeds up permitting and reduces the onerous requirements that have previously stymied apartment construction in many areas. After Tyson's Virginia, outside of Washington, D.C., enacted similar reforms, the city saw the highest housing production and slowest rent growth in the state. Minneapolis's version of this reform also sharply slowed rent growth. These policies are also good for economic activity, as businesses have more potential customers and employees living nearby.
This solution has become even more relevant recently as many areas continue to experience high post-pandemic office vacancy rates, not to mention e-commerce. In addition to providing these benefits, this approach is also popular. Pew's housing survey found that 75% of Americans favor allowing apartments to be built near commerce. In light of these successful outcomes, 16 states, including Montana, Texas, Washington, California, and Florida, have passed similar laws on a bipartisan basis to make it easier to build housing near jobs.
Arkansas, too, can allow housing to be built in underused commercial areas and thereby use the land and infrastructure that communities have already invested in while improving housing affordability. I
Tashar Consul
Unverified
1:32:04
think I forgot a slide here, but here are your 16 states. that have allowed housing
Speaker 157
1:32:10
to be built near jobs, near transit. On to pre-approved plans. So one component that contributes to the costs and delays associated with small housing projects, such as accessory dwelling units, which Arkansas allowed last year, two years ago,
single-family homes, and small multifamily buildings, is the design and review process. Depending on the size and type of building, a custom set of construction plans can cost tens of thousands of dollars and take months to move through plan review, only to then return with correction requests that send architects back to the drawing board. Pre-approved building plan programs address this problem directly. Municipalities, or in this case maybe the state, develop or commission a library of code-compliant designs that any qualified buyer can use.
with plan review reduced to a brief site-specific confirmation rather than a full architectural review. For small builders, this cost savings on design fees can make a project financially viable. South Bend, Indiana's pre-approved housing plan program includes nine residential designs, a couple of which you can see here on this slide, but they include a two-bedroom cottage, one, three, and four-bedroom single-family homes, two duplexes, and a six-unit apartment
building. Each design has several exterior option packages. When a builder selects a pattern book design, the South Bend Building Department requires only a site plan and land survey. The department commits to responding within just two business days. In the first three years of the program's existence in South Bend, South Bend reported issuing permits for 223 new housing units, approximately seven percent of all new residential homes permitted citywide the city estimated that
builders saved five thousand ten thousand dollars per home on the design review process and as you can see here it also speeds up your project timeline claremore oklahoma near tulsa also has a pre-approved plans program after four years in operation claremore's pre-approved plan pattern book includes 29 designs, ranging from single-family homes to an eight-unit apartment building. The city reports even stronger results in South Bend in terms of the share of permits using
pre-approved plans. 25 new homes have been built using pre-approved plans, roughly 12% of all new homes for which permits were issued during that five-year period. The time savings for pre-approved ADU and duplex designs were particularly striking. The city estimated an 80% reduction in approval time for these plans, with permits issuable within 24 to 48 hours of a qualifying application. Claremore also offers setback flexibility as an additional incentive for builders using pattern
book designs, thereby reducing site-specific complications on smaller lots. At the state level, Arizona and California have passed legislation requiring municipalities to create proof-proof plan programs, but Oregon has taken the more efficient approach of creating a suite of permit-ready building plans at the state level. Arkansas, too, can help bring down the cost of new housing and speed up permitting by creating a state-level proof-proof plan program. And I'm going to touch on building codes here. I know that there has been already
some really, really admirable agreements with the Arkansas Code Review Committee. I do want to emphasize kind of how important these are. Often there's so much focus on zoning. Building codes is something that can make a big difference in terms of the cost of building. So current building codes often prevent or make more expensive the building of smaller multifamily housing. Making small revisions to building codes that encourage this type of development while retaining essential safety requirements can help
to bring down costs and add much needed new supply, particularly near jobs and in desirable locations. As John Zena described, the residential code adopted by states and localities is based on the International Residential Code, while the code for multifamily housing is based on the International Building Code. I'm going to skip through some of this given his detailed description and spare you. But I do want to share that Pew has found that new buildings, both single-family
and small and multifamily, are much safer than older ones when it comes to fire death rates. The fire death rate for apartments built since 2010, which includes duplexes built under the residential code, is about 18 times lower than the fire death rate for single-family homes or apartments built before 1970. And modern single-family homes, which are built under the residential code are far safer than older homes. So allowing smaller multifamily buildings to be built under the less costly residential code can make them financially feasible to build
and provide more options and lower costs and safer homes for potential tenants and homeowners. Various states such as North Carolina, Rhode Island, Tennessee, and Utah recently moved three and four-unit buildings under their residential code. Austin, Texas has done so as well, while Dallas moved to three to eight-unit buildings under their residential code with certain additional requirements. Alpaxo, Texas has three and four-unit buildings under their residential code and
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does not require sprinklers for buildings up to two stories and 16 units.
Speaker 157
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At present, Arkansas currently applies the costlier multifamily code starting at three units, as we heard. However, you know, kudos to the code review committee for their very welcome agreement to implement some reforms to bring down, to kind of right-size the building code requirements for small multifamily buildings and make these more financially feasible. Another modernization to the building code is that many states, including Idaho, Montana,
and Texas have passed is to enable the construction of smaller apartment buildings with just one staircase. Being able to build with one staircase instead of using bulkier two-staircase models means small apartment buildings can fit on small lots and include family-sized apartments of three or more bedrooms. Currently, many, many apartments tend to be just studio one- or two-bedroom apartments, it's really hard to raise a family in one of those. Wide, deep building layouts that
include two staircases and a long corridor prevent most apartments today from having cross-ventilation or fitting buildings into existing cities and towns that only have smaller infill lots available. As we know, until now, Arkansas has only allowed buildings over two, has only, has required buildings over two stories to have two staircases. Sorry, excuse me. And again, very much welcome the recent agreement with the Code Review Committee to enable smaller apartment buildings to have a
single staircase. Though the requirement for two staircases in a long corridor stems from concerns about fire safety from an earlier era with less advanced building technology, evidence now shows that single stair apartment buildings are no less safe than other small apartment buildings. Countries like Austria, France, and Japan that allow one staircase generally have lower rates of fire death than we do here in the United States. New York City and Seattle have allowed
one staircase for buildings up to six stories for many decades, and yet have no fire deaths in their single stair buildings due to the lack of a second staircase in the 12 years of data that my team at Pew analyzed, showing that modern fire safety measures can make small buildings with one staircase safe. I'm going to skip past this. So Pew's research has shown that there are many policies states like Arkansas can adopt that improve housing affordability, provide residents
with more housing options, and strengthen local communities. Thank you so much for the opportunity testify i'm happy to take
Chair
Unverified
1:40:50
any questions all right we have any questions from committee members the ones few that are left in here seeing none thank you for for your presentation thank you moving on to our final presentation item f pacific legal foundation colleen
if you will state your name and who you're with for the
Speaker 168
1:41:36
record you may begin All right. Thank you, Mr. Chair, members of the committee. For the record, my name is Colleen Lindgren, and I am a senior state policy manager at
Pacific Legal Foundation where I have the privilege to work with legislators and allies and a lot of folks who like who are in this room every day around the country who seek principled solutions to everyday problems like access to housing. PLF is a non-profit public interest law firm that has dedicated decades to defending clients free of charge when their constitutional rights are violated and we have a long record of defending property rights protecting against regulatory abuse and overreach
and helping Americans achieve their dreams free of arbitrary interference. With over 2,500 cases litigated, including 18 wins at the U.S. Supreme Court, and dozens of policy reforms enacted at the state and federal level, we aim to ensure that the everyday concerns of individuals, small business owners, farmers, builders, families, and others have representation in the court of law and in state capitals. Today's Natural State Housing Summit appropriately built up to coming before this committee to
discuss one of the primary concerns so many in the state of Arkansas have, which is access to housing. For decades across the country, opportunity has declined and costs have increased and we're all here today because we recognize that the country and the state are in a crisis. But the good news is that state legislators are in the perfect position to address this problem with principled and practical approaches. The even better news is that the systemic solutions are not new. We do not have to reinvent the wheel. We just
have to return to our founding principles, the principles of individual liberty that made the American dream possible. Property rights are the cornerstone of liberty and the right to own enjoy and use your land is this is a source of personal security, dignity, and prosperity that enables individuals to shape their destiny. America's founders knew this. The Fifth Amendment to the U.S. Constitution guarantees that Americans shall not be deprived of life, liberty, or property without due process of law, nor shall private property be taken for public use without just compensation. And the 14th Amendment reiterates this, the
protection of life and liberty and property, and also adds that no state shall make or enforce any law which shall abridge these privileges. And Arkansas's founders similarly recognize these principles and in Article 2 of the state constitution they affirmed that the right of property is before and higher any constitutional sanction and they also added protections like the Fifth Amendment does for when land is devalued or outright taken. And yet too often these constitutional promises are either tossed
aside or outright attacked. Since a destructive Supreme Court decision around a hundred years ago courts have largely ignored rights to land use and governments at every level often enact laws and regulations that devalue property and trample individual rights. And the result has really been the erosion of robust building, remodeling, and charitable housing options like that have been discussed today that really were able to meet individuals and families where they were at. And the American dream and the Arkansan dream can't and should not be prescribed.
So this was highlighted by our friends from the U.S. Chamber earlier today when they discussed the need for all types of housing. We hear and speak a lot about the missing middle, which is a very real problem, and many Americans decades into their careers can't afford to move in to what used to be starter homes for couples right out of college, let alone think about growing a family. But then you have many single people or couples who work from home and so also need office space. Others might be caring for aging parents or offering friends a space to live. And aging Americans are increasingly unable to downsize because small homes are at a premium.
And the individuals below them can't move up. They can't buy them out. And so a variety of factors go into the decisions around jobs, housing, and life goals. And a robust market helps individuals thrive at all phases of life. And so with this foundation, there's a lot of room for Arkansas to build, figuratively and literally. The committee has already heard many topable ways to address real-time and urgent needs when it comes to providing housing options. So in my remaining time, I'd like to discuss some additional ideas that I think complement what has already been presented to get to the root of the problem.
And then also highlight some ways that Arkansas is already leading and building on reforms like the ADU legislation that was passed a few years ago. Property rights being the foundation of innovation, sustainability, and opportunity are not merely legal entitlements. They're the framework through which people create value, steward resources, and foster and pass opportunity on to future generations, which Secretary Jester mentioned earlier today. And I've grouped the following proposals into what I think of as three pillars of constitutional housing reforms.
So first, ensuring that good decisions are protected from frivolous or unfair objections. One of the panelists earlier today discussed the tension between individual and public needs. And the Constitution prioritizes individual liberty and justly compensating individuals when it's violated. But for decades, in practice, we've been flipping the script. And so it's time to turn it back, to focus on individual needs and rights. And when faced with concerns about changes, many of these concerns that are at least expressed often focus solely on preference-based things,
like color or style over true public health and safety concerns, which are real things that communities need to address and deal with. And as Professor Dunkelman noted earlier in his presentation, you cannot be endlessly protected from change. So I believe that a presumption of liberty and goodwill is the way forward. And so PLF offers two solutions highlighted here and linked there for those who received the presentation via email, that are based on this assumption that try to create predictable,
that creating predictable processes and ensuring localities who are trying to offer more options are not prevented from doing so. So states should prevent legal challenges by unharmed parties from delaying or killing approved projects. They should also ensure that a small number of individuals cannot undo approved zoning changes that promote property rights. So in essence, when projects have already gone through the local democratic process and been approved unharmed individuals or entities shouldn't be able to get extra bites at the apple in court or at City Hall to be able to impede. The second pillar in
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1:48:27
these in these reforms addresses how states can erect guardrails and transparency measures that can be
Speaker 168
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used to work alongside localities. So several simple yet significant approaches can be taken. First, you can require a demonstration of compelling government health and safety interests, which include nuisances, for governments at any level to limit uses of property. And also in the same breath, require courts to apply the same level of review in land use cases as in other cases dealing with fundamental rights. The Fifth
amendment is no less than the first and should not receive less scrutiny when in court. Next, states should ensure that property owners are protected from arbitrary limitations on uses of property, often referred to as downzoning, which devalues it and limits their freedom to put it to productive use. If this isn't possible for some reason, then just compensation must be offered, but that should always be the secondary idea. Next is
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1:49:28
an area where Arkansas is already leading the way here
in this area of transparency. A few
Speaker 168
1:49:34
years ago, meaningful permitting timelines, which I think somebody mentioned earlier, were already set that ensure reasonable timeframes are set to process approvals. This has been done in several, I want to say around a dozen states around the country. Some states apply them in different ways, but this is really impactful. As we all know, time is money, especially in building. or remodeling or any other sort of project. And one way to continue ensuring the predictability and participation in the market that Arkansas has already set would be by adding buy rate protections,
which I believe somebody also mentioned. And so in that instance, if project applications followed all objective rules, they shouldn't be unfairly delayed by subjective review. This creates uncertainty, it disincentivizes investment, and it treats applicants in an unequal manner. The last reform in this pillar seems almost too silly to be true. But sadly, it's something we're actually fighting in multiple places around the country. The right to have roommates. So for many Americans, not only is the companionship of roommates desirable, safer, and just cost-effective,
but it's the way many defray mortgage expenses and begin to invest in the housing market. And yet, localities around the country are increasingly implementing bans on unrelated individuals living together. Even in places like Kansas, even in the heartland of America, in Kansas, PLF is currently representing a family who opened their home to a friend that needed a place to live for a while. These individuals were all working adults, living in a normal neighborhood, yet they were split up due to an unconstitutional and arbitrary law targeting that originally targeted lower income and young individuals.
And so states like Arkansas can address this issue by just proactively ensuring that that doesn't happen in your state. And lastly, this last pillar is another area where Arkansas is taking the lead. And this is exactions reform, which might not sound exciting, but it's critical. So exactions, for those who are not familiar, are amounts of money that are demanded and required by government entities on top of the usual permitting and processing fees, taxes, and other building-related costs that we're all familiar with.
They usually purport to do two main things. To either offset impacts or to create affordable housing. But this is a very loose term. And historically, there's little accountability to what this really means. And so PLF's first win at the Supreme Court almost 50 years ago included a ruling that exactions to address impacts or uses must be proportional to the harm or the impact being caused. And so, for instance, if new development is going to increase the costs and needs of the neighborhood sewer water system,
proportional fees can apply. However, the government can't use this power to grab more than it is owed or more than what the impact is. And in 2023, nearly 50 years later, PLF won another case representing the gentleman that you can see on this slide here named Mr. Sheets. And he's a grandfather in California who takes care of his grandson. And he was charged nearly $25,000 to put in a driveway on a small lot where he had already received approval to put a manufactured home which was his retirement home and he challenged this and after several years
in court the court ruled in his favor relying in part on the previous win and and clarifying that clarifying the process that governments need to go through to show their work and that individuals do have a right to challenge this and so Arkansas has already taken steps in this direction have with a law in the books that requires municipalities to show their work when issuing these types of fees. And this is a great first step to ensuring that government at all levels are accountable when issuing financial mandates of this kind. And another area for growth would
be to proactively protect individuals from exactions charged in the name of making housing affordable. And we've heard a lot about this term affordability today. And it's something that I think on every side of the argument on housing, we hear a lot about this. And somebody earlier mentioned kind of an all of the above approach. And that's really the approach that we believe that we take at PLF and we believe the Constitution takes, which is not favoring one thing over another, but letting the market and individuals be able to obtain what they need and want.
And so when we're talking about protecting people from what might be termed affordable housing exactions, localities approach these things in different ways, but the principle is usually the same. And there's not one type of affordable housing, and you can't, in effect, charge an amount of money or require some sort of set-aside, penalizing one homeowner in the name of creating an opportunity for another. And often what we also see anecdotally is that people don't want deed-restricted housing because they recognize that it isn't going to help them gain future equity or value. And so
it actually is oftentimes not really getting to the people who really need help. And so making building one home more expensive to make another less expensive really defies logic, and it limits choices for everybody and the state can again address this very proactively and so in conclusion I would just encourage everyone that a presumption of liberty of the freedom to build to remodel to provide housing through charitable means ensures that Americans can continue to thrive to invest in their families and
their communities and to care for each other and so as my friends who've already sat up here today have said please see PLF as a resource not only as you look at reforms but also for issues that may arise for constituents and you know we would love to be helpful we would love to help address these concerns in these communities that are they're very real for you and very real for the citizens you represent and so I was thank you for your time the QR codes have my contact information and a handout of some of these model reforms that I've discussed
Senator Joshua Bryant
Unverified
1:55:28
I'm happy to take any questions sir Bryant you're recognized thank you you You mentioned the Kelo decision out of
Connecticut with the Supreme Court. I think my research back whenever we were looking at some element domain laws a couple of terms sessions ago, Arkansas is one of a few states that did not adopt any state action based on that decision to basically prevent that type of decision from happening
at a state level. Do you know where Arkansas stands regarding that decision? And then is there any subsequent decisions that have passed through the courts that would deter us from even needing any type of legislation? Sure. So
Speaker 168
1:56:12
I believe you are correct. I can definitely double-check and fill up with you on that. That was not one of the cases that POF litigated, but I think we were amicus in that case. And it did set off a wave around the country for anyone who was paying attention of states wanting to reform. I am not aware of any other cases that would, in effect, kind of undo the need to do this.
I think the Private Property Restoration Act, which was a few slides back and was actually introduced by the chair in 2024, is something that would really help you get at that issue if you're looking to pursue that. But that's definitely something I'm happy to do a little more digging on and follow up more offline.
Chair
Unverified
1:56:59
all right um i don't see any other questions oh hang on i said senator johnson you're recognized thank thank you
Senator Mark Johnson
Unverified
1:57:06
mr chairman i'll be quick uh miss lingren thank you for that and it's a follow-up on
uh uh senator bryant's mention of kilo you mentioned our constitutional sanction that sets property rights above all other rights and i like to think that that insulated us somewhat it from a similar thing with Kilo where you were basically saying that if we can take your property in eminent domain and tear it down and sell it to a developer that'll put in a more higher assessed value property then that's a public purpose and I can't see how in Arkansas with that
constitutional provision that someone could say it could be a higher public purpose since We've defined in the Constitution what that highest purpose is, but I will help my friend Senator Bright if he wants to pass one that will give us a little extra level of insurance on that. But at the time that happened, I remember many people saying that that provision in the Arkansas Constitution protected us from that type of thing. But whatever you want to do, Senator, we'll do it.
Speaker 168
1:58:19
Thank you, Mr. Chairman. Thank you, ma'am. Yeah, thank you. And I'll just add to respond to that quickly. Arkansas does have very clear language, like you said. We have seen other states where similar challenges have arisen. And states like Arizona, which was one of the first ones to respond to Kilo, also has very similar provisions in its constitution. But the legislature did want to act to clarify that they are paying attention. And if that is something that you will want to do, we're more than happy to help. But you are correct. There is very strong language in the constitution.
And so that is a really good
Chair
Unverified
1:58:57
place to be starting. All right. Thank you for that. I just had a couple of questions myself. Could you explain downzoning, give us some examples of what downzoning is and what
Speaker 168
1:59:10
just compensation should or could be for that? Sure, absolutely. So downzoning, generally you think of it as it's related to uses. And so any time your property use, usually the term is related to types of uses that are approved.
So usually, and usually that's done through zoning, right? So the concept of down zoning means you were at this level and you had 10 uses, say, that were already approved when you bought your property. And now a new, you know, municipal code or county code or whatever it may be, something at the state level, has come in and has said, oh, now you can only have eight. So we've taken away two. And so we see this a lot of times come up in issues of mixed use, where something was allowed for mixed use.
So you could have residential and commercial together. You could, you know, be entrepreneurial with what you were building and services you were providing. And then, you know, that changes, right? That permission changes. And so that is a devaluation of your property, right? Now you've been limited as to what you can do. You can maybe now only have a commercial spot. You can maybe now only have residential. It could be things like taking away the right to have an ADU. I mean, there are all sorts of things. So basically, every use you have adds value to your property because it adds opportunity.
So anytime that's taken away, first of all, we would love to see states say, you can't do that unless there's a compelling government health and safety issue to do that. But if they do it, if they feel they need to move forward with some sort of rezoning or something, then we believe that property owners constitutionally are entitled to receive compensation and that can be determined through appraisal processes. So you would say something like, you know, at the date that this decision was made, the day before, my property was assessed at this value.
Now my property is being assessed at this value. I'm owed the difference. That's a very simple way. There are other issues that have come up, but that's the most
Chair
Unverified
2:01:18
common one. all right thank you for that one more quick one maybe uh by right development has been brought up a few times this afternoon um i think mostly in reference to churches building by right on on their property um could you explain a little bit about that and and why if it's okay for
Speaker 22
2:01:33
a church it shouldn't be it shouldn't be okay for any other property owner yeah i mean i'm by by
Speaker 168
2:01:45
it it and what i want to stress about by right is that it doesn't remove the ability it doesn't remove permitting processes it doesn't remove you know important health and safety regulations it allows localities to continue to have those but what it says is that if you have a process you have to apply it fairly so you cannot treat applicants differently who have done all the things you've paid the fees you've completed the application you have you've done all the assessments you've done whatever was required
to receive a permit to move forward on whatever the project might be, right? You could have something from development to a church wanting to add some, you know, tiny homes to somebody who's wanting to do a modeling project. Your family's growing. You want to add a bedroom. All of these types of things can be caught up in these local processes. And so the idea behind buy-right approval is that if those processes have been set out and you have met them and there are no, you know, extenuating circumstances with public health and safety issues, you can't treat projects differently.
So what we hear on the country a lot of times in cities are two identical projects are happening in different parts of town, and for whatever reason someone doesn't like something in this part of town, this one doesn't move forward, but this one does. But they've both done the same things. So this creates uncertainty, right? It creates higher costs. It disincentivizes investment. And so the real principle behind it is if you're going to have these rules, you have to apply them fairly. And so I think that's why it pairs so well with so many of the things that we've talked about today is
You're looking at these issues. You're trying to pair back But you're also trying to say where necessary to have these processes and regulations. You have to
Chair
Unverified
2:03:29
be fair about it All right, thank you very much seeing no further questions You're dismissed and no further business. We are adjourned Thank you.
Agenda
A. Call to Order
B. Consideration to Approve August 12, 2026, Meeting Minutes [Exhibit B]
C. Overview of Proposed Housing Policy Initiatives [Exhibit C] - Duke McLarty, Executive Director, Groundwork Arkansas
D. Presentation on Memphis Fire Code Changes in the International Code Council and International Residential Code [Exhibit D] - John Zeanah, Principal, Interval
E. Presentation on Housing Policy Changes in Other States and Localities [Exhibit E] - Tushar Kansasl, Senior Officer, Housing Policy, Pew Charitable Trusts
F. Presentation on Deregulation and Housing Policy [Exhibit F1-F2] - Kileen Lindgren, Senior State Policy Manager, Pacific Legal Foundation
G. Other Business
H. Adjournment
Documents
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Chair
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Representative R. Scott Richardson
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Representative Denise Jones Ennett
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Senator Mark Johnson
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Representative Matt Brown
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Senator Joshua Bryant
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Representative Johnny Rye
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Tashar Consul
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