A pair of homebuilders is drawing attention to east Pasco not as a center for warehouses and food processors, but as a hot spot for new homes with above-average price tags.

The two builders – Ramgar Homes and Empire Bros Construction – are building homes with prices approaching $400,000 near East A Street and Heritage Boulevard, bordering the Tierra Vida community to the west.

Broetje Family Trust created Tierra Vida as a community-focused mix of single- and multifamily units catering to workers at its orchards. The area has been a destination for moderate housing since at least 1990, when the Pasco Processing Center brought food-processing jobs to Pasco.

The $400,000 price tags are a game changer for the area, said Mike Gonzalez, Pasco’s economic development director, who said the latest wave of commercial development – Amazon Inc., Darigold, Reser’s Fine Foods, Local Bounti – are changing the narrative that east Pasco is an undesirable place to build and to live.

“I think smart developers know that proximity-wise, there’s going to be housing needs,” he said.

The builders see opportunity in an overlooked area.

“Pasco is no longer going to be the low-income homes that it used to be,” said Hilario Zaragoza, owner of Empire Bros, which has 19 lots in development. “It’s getting to where people desire to be in east Pasco.”

The demand exists

Empire builds smaller homes starting at $358,000. He said his homes are all speculative, “nothing fancy,” and they sell before they’re finished. The most recent sold for $360,000 in May.

Ramgar, a new company led by Jose Ramirez, is shooting for a slightly higher price point by attending to quality touches and starting prices of nearly $390,000. It is building 14 homes on a three-acre site it bought from the city of Pasco and subdivided.

The first three are complete and sold within days at prices between $389,000 and $399,000, said Kimberly Rose of the Kenmore Team, the real estate firm that represents Ramgar.

Ramirez said his agents were reluctant to test the $400,000 waters at first, but he persisted.

Rose acknowledged that brokers don’t like to be the first. In the Tri-Cities, new development has focused on the west side, skipping over the east, she noted.

She’s pleased with how well the project was received and said once dirt started moving, she fielded daily questions.

“This is a niche market that hasn’t been touched. Our area has been focused on growth going toward the west side.”

The city’s Gonzalez said the small developments are at the vanguard of a transformation coming to east Pasco. Land isn’t as scarce there as elsewhere because of the stigma associated with the area.

He predicts that will disappear as developers see success. The Columbia River and Sacajawea State Park are both nearby, as is Interstate 182, ticking some of the boxes homebuyers seek.

“I’m really excited,” he said. “East Pasco is going to become a very coveted location. It’s going to be a place that people want to live.”

Dave Retter, president of Retter and
Co. | Sotheby’s International, isn’t surprised to see development start. His company is not involved with either project but it will represent a separate builder, JMS Development, when it builds homes and businesses at nearby Osprey Pointe in coming years.

The entire region is bereft of lower-priced homes, with only 41 listed for $375,000 or below in the entire region in early June, according to Retter’s database. That is a problem.

“Not everyone wants a million-dollar home or can afford one,” Retter said. “We have to find a way to build affordable.”

‘Game-changing project’

Rangar’s 14-home subdivision near East A Street, dubbed East Franklin, is the first project for the firm and for its owner, Ramirez.

A native of Vancouver, Washington, he transferred to the Tri-Cities during the Great Recession while working in the mortgage and finance industry. His finance background inspired his interest in real estate.

He moved to Pasco and loved the low cost of living. He puzzled over the area’s reputation, which residents loved. He scouted for a site to launch his homebuilding vision, thinking he would build one home at a time, or perhaps two, and began the process three years ago.

He planned to build $275,000 homes in $230,000 neighborhoods – above-average quality but not outrageously above-average.

“I’m going to build a game-changing project in an area where you don’t see our product,” he said.

He landed on the vacant, three-acre property and purchased it before news of Amazon’s plans were made public. The e-commerce giant is building a pair of massive warehouses less than a mile away that will employ more than 1,000.

The three-acre site posed a challenge. Instead of building a single home, he was faced with building 14, and the roads, utilities and other infrastructure work to support that.

He enlisted his brother-in-law, Juan Ochoa, who owns Skills Development, as a partner and project manager to help with the daunting task. Lauriano Garcia, land developer, rounds out the team.

The Covid-19 pandemic halted their work for a year, but Ramgar secured approval for a subdivision along with financing through Key Bank. Ramirez made real estate his full-time career, tapping into his 401(k) to support himself and his family until it begins paying off.

Over the course of the pandemic, building supply costs soared and the $275,000 price target faded.

By the time the team was ready to build the first three homes, with models named La Niña, La Pinta and La Santa Maria, materials and home values had jumped. Lumber costs rose to $57,000 per home, from $17,000.

“We had to absorb that,” he said. Fortunately, from a seller’s point of view, home values rose too. The median price in the Tri-Cities rose to $441,000. In east Pasco, it was $325,000 in May, according to the Tri-City Association of Realtors. The seven east Pasco homes sold in May spent just two days on the market on average.

Although East Franklin was priced above its neighbors, 30 potential buyers lined up for the first three homes, many with families already living in the surrounding neighborhoods.

Ramgar’s next project will be at West Court Street and 42nd, where he recently purchased a 2.5-acre site and will remodel an existing home and build eight more.

It will not develop the three-acre site bordering the current project. While Ramgar paid $179,000 for its property, the neighbors told Ramirez they wanted $1 million.

“I’m not paying $1 million,” he said.

Zaragoza, of Empire Bros., was drawn to east Pasco for similar reasons.

He founded the company in 2018 after a decade in the homebuilding industry. East Pasco is coming into its own, he said.

“People seek it out. It’s a desirable area, not like before,” he said.

Ron Almberg, president of the Tri-City Association of Realtors and a broker for Keller Williams Tri-Cities, said only a few builders focus on the lower end of the housing market. Outside of east Pasco, new homes can start at $413,000.

“Good luck finding any new construction that’s under $400,000,” he said. That said, he believes Pasco’s east side could soar.

“That whole area is going to change and it’s going to become a lot more desirable to live over there,” he said.