Article Courtesy of The Daytona Beach News-Journal

By Clayton Park & Eileen Zaffiro-Keanclayton

Published July 13, 2016  

A housing boom that has triggered both optimism and concern is about to hit Volusia and Flagler counties, much of it along Interstate 95 where more than 12,000 new homes are under construction or planned.

"I really feel Volusia and Flagler counties are on a launching pad for further growth," said Scott Vanacore, president of Vanacore Homes in Ormond Beach, a builder with homes under construction in both counties.

After the high-flying boom of the mid-2000s and the deep plunge of the Great Recession, industry leaders are seeing signs this time of a steadier, sustainable pace with more resident-buyers and fewer investors looking to flip homes.

Officials in East Volusia cities say they'll be ready for the challenges of increased traffic and greater demand for utilities, police and fire. They say planning and tens of millions in new tax revenues will help them handle the road and infrastructure expansion that new residents and commercial development will require.

Not everyone shares that rosy outlook. A coalition of environmental groups has sent a letter to the U.S. Army Corps of Engineers accusing the agency of violating the Clean Water Act and the Endangered Species Act by approving a "suite" of Volusia County projects on a piecemeal basis rather than considering regional impacts on water quality and wildlife habitat.

Here's a look at what's driving the growth and the impacts it is expected to have on the area.

GOING UP, UP, UP

Housing starts in Volusia so far this year, through May, are up 31 percent compared to the same period in 2015, a year that saw the most permits for new homes issued in the county since 2007.

Permits for new homes in Flagler County, which saw housing starts last year rise to the highest level since 2006, are up 28 percent year-over-year through May.

Fueling the growth is a steady influx of newcomers both from the Northeast and other parts of Florida where real estate prices are higher, builders say.

At ICI Homes, roughly half of the people buying new homes are newcomers to the area, with the rest locals looking to move up, said Rosy Messina, a vice president with the company.

Jim Mather, a vice president with Paytas Homes in Port Orange, said he is cautiously optimistic that the housing boom now getting underway is not a bubble, like the one that devastated the local economy a decade ago when it burst.

"Ten years ago, 30 percent of the new homes we were selling were to investors who were trying to flip them (for a quick profit by reselling them at a higher price)," Mather said. That's not the case this time around, he said, adding, "Everything we've sold has been going to people to move into."

Still, Mather concedes, "Ten years ago, a lot of people felt it (the real estate boom) would keep going. We missed a lot of signals back then, but we've learned a lot. We're looking for the indicators now. We track a lot more data now than we used to, such as how long spec homes sit before they sell and what percentage of homes we sell are being occupied."

Another reason to be hopeful that the latest surge in growth can be sustained is the pace, which has been steady but gradual, compared to the manic growth the area saw a decade ago, said Jake Hickson, president of the Volusia Building Industry Association.

"I think (the present rate of growth) can be managed, but it can't be growth at all costs," he said.

MAGNET FOR COMMERCIAL DEVELOPMENT

More residents means more tax revenues for area cities and the county, rising property values and a greater demand for goods and services, which is already spurring an increase in new restaurants and shops, including the Tanger Outlets mall under construction in Daytona Beach on the east side of Interstate 95, set to open Nov. 18.

Along Daytona Beach's International Speedway Boulevard, construction is expected to begin soon on the multifamily residential portion of the One Daytona mixed-use development across the street from Daytona International Speedway. That project is expected to include 276 apartments, all expected to be ready for move-in by the end of next year, according to Craig Neeb, executive vice president and chief development and digital officer for International Speedway Corp., the overall developer for One Daytona.

One Daytona, which will include 300,000 square feet of retail, dining and entertainment including a 12-screen Cobb Theatres movie complex and a Bass Pro Shops outdoor gear store, comes on the heels of ISC's completion in January of its $400 million Daytona Rising makeover of the Speedway to make it a year-round destination.

"I think there's a real good synergy between what's happening with the Speedway (and the surge in new home construction)," said local real estate observer Sheriff Guindi, owner/broker of Prudential Commercial Real Estate FL.

"There's been a pent-up waiting period for this to happen," Guindi said, noting that the increase in commercial development and in housing starts is no coincidence.

"Commercial (development) follows rooftops, there's no question about it," he said. "You're not going to have 10,000 homes come on line and infrastructure (to support those new residents) not be on hand to meet them."

DAYTONA BEACH: BRACING FOR GROWTH

Daytona Beach will be adding thousands of new homes over the next decade at I-95 and LPGA Boulevard, further down LPGA toward International Speedway Boulevard/U.S. 1 and in the One Daytona development. City Commissioner Rob Gilliland's zone includes all of that.

Gilliland points out that the 3,400-home Minto development, which recently was dubbed Oasis Daytona, will be the biggest residential development the city has ever seen. The biggest now is Pelican Bay, which has about 1,800 homes, he said.

The LPGA community has about 1,000 homes now, and will have about 1,500 or 1,600 at full build out, Gilliland said.

"What we're seeing in Volusia County is unprecedented for this area," said Emory Counts, Daytona Beach's director of community and economic development.

Oasis Daytona in and of itself will likely spur roadway changes, Gilliland said, possibly adding a new connector road between LPGA Boulevard and State Road 40 and a new overpass straddling I-95 at Hand Avenue in Ormond Beach.

Finding the millions of dollars needed will be a challenge, Gilliland conceded, but if the new roadways do come to be they'll become economic drivers because they'll make the land around them more valuable to investors and developers, he said.

The new homes themselves will be the biggest force for new development and improvements, he said. Hundreds of thousands of square feet of new retail is likely to follow both in Daytona and nearby, he said.

Counts said the city is already getting ready for the impact of thousands of new residents, but it's a delicate balance.

"You build to future capacity, but not too far into the future," Counts said.

"Fortunately, in some of the areas like roads and infrastructure, we have some plans that are in place," Counts said. "That will be able to grow as the area grows."

PORT ORANGE: DECADES OF PLANNING

For more than 20 years Port Orange's city government has been getting ready for land owners close to I-95 to pull the trigger on new neighborhoods, and that time has arrived.

"We did planning in the 1990s to make sure there was water, sewer, parks, roadways," said Tim Burman, Port Orange planning manager. "We made sure that was all in place or could be constructed. ... A lot of this had been in the plans, so now we're just moving forward on it."

Following close behind the homes is new commercial development along Williamson Boulevard and Dunlawton Avenue, which has been widened to six lanes.

Port Orange Mayor Allen Green looks at the expansion of his city through the lens of a 77-year-old man who remembers the town of his childhood that was much smaller and exported its oranges and oysters. He laments mom-and-pop shops getting pushed out of business by big-name operations.

"I'm not the biggest fan of unlimited housing," Green said. "We just produce people and there's a limit to that."

Green worries about all the new residents finding jobs, enrolling more kids in local schools and flooding onto the roads.

"It's created almost gridlock, and the quality of life has been diminished by traffic," he said. "In my opinion, we're out of balance."

Green, who owns a commercial construction company, understands home builders have a right to what they're doing, but he wishes more new industry and commercial operations would locate in Port Orange. Businesses send the biggest property tax checks that help pay for things that keep a city alive.

New Smyrna Beach officials want the same thing. The tax base there is about 85 percent residential, said City Manager Pam Brangaccio, and she and others would like to see more commercial and industrial growth.

New housing developments might get them there. Brangaccio said higher-end retailers have told city officials in the past that income levels aren't high enough in the area, but she said some of the new communities could change that.

ENVIRONMENTALISTS WORRY

The environmental groups protesting the Army Corps of Engineers' approval process focus their complaint on the extension of Williamson Boulevard and related development projects south of Daytona Beach, including the Woodhaven project by ICI Homes, the proposed Farmton development in southern Volusia County and the proposed Restoration development near Edgewater and New Smyrna Beach.

"Several related projects in Volusia County aim to open a swath of undisturbed, ecologically valuable land to development and urban sprawl from cities along Florida's eastern coast," according to a "Notice of Violations" letter to the Corps. "The Corps' piecemeal approval of individual projects, and its deliberate disregard for obvious indirect and cumulative impacts, constitute clear legal violations."

The letter asks the Corps "to remedy these violations in order to avoid litigation."

The groups being represented by a Washington, D.C. law firm include the Friends of Spruce Creek Preserve Inc., Volusia-Flagler Sierra Club, Florida Sierra, 1,000 Friends of Florida, the Democratic Club of Northwest Volusia County, IDEAS For Us, and the Sweetwater Coalition of Volusia County.

They seek "an Environmental Impact Statement that considers all direct, indirect, and cumulative impacts from a suite of related projects in Volusia and Brevard counties" and of "formal consultation with the United States Fish and Wildlife Service regarding these projects' impacts on federally threatened and endangered species."

Derek LaMontagne, a longtime Port Orange resident involved in the Sierra Club, said he is especially concerned about the current project to extend Williamson Boulevard in his city 2 1/2 miles further south to accommodate housing development at the proposed 600-home Woodhaven community. The area that would be affected includes wetlands that are critical to maintaining the health of the Spruce Creek ecosystem, he said.

"Any project that could cause harm to our ecosystem should be halted immediately until a proper environmental impact statement study can be completed," he said. "This study is eight years overdue at least."

Debbie Connors, a longtime Port Orange resident, has been watching the latest surge in new home construction from a unique standpoint.

In her day job as executive director of the Port Orange South Daytona Chamber of Commerce, Connors' role is to encourage economic growth.

But for the past seven years, she also has been a member of the Volusia Growth Management Commission, whose mission is to encourage responsible growth by helping cities coordinate development with neighboring municipalities.

"Area leaders need to be cautious in approving new development projects, but I think the guidelines have been set well," Connors said.

Connors believes the growth the area is now experiencing was inevitable, given its prime location along Florida's east coast and lower cost of living compared to more heavily populated areas, such as South Florida and Orlando.

"I'm a little bit nervous about the increased traffic," she said, but added that the area is better equipped to handle growth now, thanks to infrastructure improvements, including the widening of several key thoroughfares.

"I think we're in a better position than we were a decade ago," she said.