5.0. HRSR 09-22-2003 ITEM 1 8.
City
ik1I
River
MEMORANDUM
TO: Housing and Redevelopment Authority
FROM: Scott Harlicker, Senior Planner y0
DATE: August 25, 2003
SUBJECT: Housing Study
Background
At it March meeting,the HRA approved the attached six part housing workplan.At the
August meeting staff will present the results of the Elk River Housing Analysis.After staff's
• presentation,the HRA will be asked to discuss the information,the housing balance the city
should strive to maintain and.identify initiatives that staff should pursue regarding the city's
housing stock.
Attachments
• Housing Workplan
• Apartment Inventory
• Map of Townhouse Developments
• Map of Single Family Residences by Year Built
• Map of Single Family Residences $170,000 or Less
• Map of Single Family Residences and Multi-Family Parcels
• Article from League of MN.Cities on Affordable Housing
Analysis
Overview
Staff utilized 2000 census data and collected building permit information to create a data
base that was used to analyze the City's housing stock and to compare the housing inventory
of Elk River to that of surrounding communities (Big Lake,Ramsey, Otsego etc.).The 2000
Census data was used for comparison between communities.Census data, along with
building permit information and Sherburne County assessment data,was used to analyze Elk
• River's housing stock.This report will focus on Elk River's housing stock including age,
HRA/Housing
August 25,2003
Page 2 -
cost,year built and the percentage of multi family units. The comparison with surrounding
communities includes type of dwelling,year built and costs. •
Existing Conditions
The City of Elk River has a mix of housing types. The housing types included in our
inventory were apartments, single family detached homes and single family attached homes
(townhouses and twin homes).As of May 2003 there were 6,587 dwelling units.
Type of unit # of units % of total
Single Family Detached 4,759 72.2%
Single Family Attached (townhouses) 660 10.0%
Single Family Attached (twin homes) 112 1.7%
Apartments 1,056 16.0%
Total 6,587
There are also a small number (77) of mobile homes and duplexes that were not included in
the analysis.
The current housing inventory in Elk River is predominantly single family, either attached or
detached. Currently 84% of the dwelling units are single family and 16% are multi family.
Single Family •
Single family units include a mix of detached single family homes, attached townhouses and
attached twin homes.As of May 2003 there were 5,531 single family units.
Type of unit # of units % of total
Single family detached 4,759 86.0%
Single family attached (townhouses) 660 11.9%
Single family attached (twinhomes) 112 2.0%
Total 5,531
Most of the single family units are detached (86%). Townhouses make up 11.9% of the
attached single family units and twin homes make up 2%. The majority of the townhouse
and twin home developments are located on the east side of the city.The attached
Townhouse Development Map shows the location of the townhouse developments and the
total number of lots in each development.Most of these developments include both
townhouse and twin homes.
The majority of the single family housing stock in Elk River is less than 25 years old.
According to Sherburne County assessment data,in the last 10 years 42% of the total 5,309
single family units have been constructed; 48.8% have been constructed since 1990; 71.6% •
have been constructed since 1980, and 84.4% have been constructed since 1970.The older
S:\PLANNING\Scott\HRA 8-25 housing.doc
•
HRA/Housing
August 25,2003
Page 3
• homes,those that were constructed prior to 1960, are generally located in the old Village of
Elk River.There are also some older farmhouses scattered in the throughout the city.
Lot Availability
As of January 14, 2003 there were 1,267 single family lots available. Of those 1,267 lots, 465
(36.7%) were townhouses/twin homes and 802 (63.2%)were single family detached.Most
of the lots are located within the Urban Service Area;municipal sewer and water is available
to 979 (77%) of the lots. The remaining 288 lots (23%) are located in the agricultural or rural
residential districts.
Apartments
For the purposes of this report, apartments are defined as a dwelling unit,which is not
located on its own lot, but is in a building that has 4 or more units. The ratio of multi-family
units to single family units has steadily decreased over the past 13 years.
Year # of Units Percent of Total Units
that were apartments
1990 814 19.3%
2000 1056 18.2%
2003 1066 16.2%
• The total number of renter occupied units has also decreased.Renter occupied units can be
either multi-family units, single family homes that are rented, accessory apartments or
duplexes.
Year # of Units Percent of Total Units
that were Renter Occupied
1990 951 25.5%
2000 1228 21.7%
2003 1238 18.7%
The city does not track rental units unless they are in multi-unit buildings of 4 or more units.
However, based on the 2000 Census,there were 1228 renter occupied units and 1056 of
those units were located in multi-family buildings. That means that there were 172 rental
units that were not in multi-family buildings.
The following table shows the year that the apartment was constructed,the number of units
and the percentage of the total number of units:
•
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HRA/Housing
August 25,2003
Page 4
Year Built # of Units Percentage of Total Units •
1960-1969 115 10.8%
1970-1979 120 11.3%
1980-1989 484 45.8%
1990-1994 269 25.4%
1995-2000 68 6.4%
The majority of the apartments in Elk River have been constructed within the last 25 years.
In fact,more than 30% have been constructed within the last 15 years.A detailed inventory
of apartment buildings is included on the attached apartment inventory table. The city has a
rental housing program that requires each apartment building be inspected and licensed
every year.According the Housing Inspector,the current vacancy rate for the market rate
units is running about 6%to 8%. Earlier this year,when the interest rates were dropping,the
vacancy rate was about 10%.
Lot Availability,Multi-Family
There is only one lot that is currently vacant and zoned to allow multi-family. The parcel is
located on the north side of the Burlington Northern Railroad tracks on the east side of
Proctor.
Affordability
According to the updated housing plan prepared by the Central Minnesota Housing •
Partnership,the median sales price of a single family home in 2000 was $160,000. If an
annual 8% sale price increase is assumed,the median sale price of a single family home in
2003 is $205,473. Single family homes include both attached (townhouses) and detached
homes.
According to the 2000 Census,the median rent in 2000 was $592. If an annual 5%rental
increase is assumed,the median rent in 2003 is $690.The median rent includes all renter
occupied units, not just apartments.
Regional Context
When taken in the regional context, Elk River's housing inventory reflects the fact that Elk
River functions as a min-regional center. The following table compares Elk River's housing
inventory with that of 7 adjacent communities:
•
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HRA/Housing
August 25,2003
Page 5
• 2000 Census Housing Information
1
Elk Big Lake Big Lake Livonia Burns
Data Source River Otsego Township City Township Township Ramsey Zimmerman Totals
Total#Units 5782 2117 2167 2194 1254 1136 5946 1021 21617
1 unit
detached 4216 1744 2124 1766 1242 1115 5712 814 18733
1 unit
attached 432 14 8 67 0 4 91 27 643
2 units 46 19 13 7 8 4 16 0 113
3-20+units 1057 0 0 235 0 0 67 91 1450
Mobile
Homes 31 307 22 119 4 13 85 89 1563
Year Built
1999-2000 282 51 162 264 94 56 275 88
1995-1998 960 223 331 532 252 165 1053 250
1990-1994 986 353 280 278 180 216 1034 191
1980-1989 1639 318 519 375 254 228 1032 172
1970-1979 913 865 563 248 307 214 1984 160
1960-1969 369 92 124 170 80 102 392 40
1940-1959 299 86 96 208 25 37 94 68
1939-
• earlier 334 129 92 169 62 118 107 52
Median Value
Owner
occupied $144,800 $132,700 $155,200 $123,900 $154,500 $157,500 $143,500 $115,000
Median Rent
Renter
occupied $599 $525 $1,261 $536 $663 $575 - $938 $430
Total#
occupied 5664 2062 2106 2117 1222 1123 5906 1018
Owner
occupied 4436 1991 2051 1785 1187 1097 5756 963
Renter
occupied 1228 71 55 332 35 26 150 55
Elk River has 26% of the total dwelling units of all 8 communities listed on the table. Elk
River also has 67% of the townhouses. The most telling comparison is in apartments. Elk
River has 73% of all the apartments in the study area. This reflects the fact that Elk River
has the highest concentration of employers and jobs in the area.Three townships and the
City of Otsego do not have any apartments.The City of Big Lake has the next highest
number of apartments with 235 (16% of the total). The only community in the area that
III plans on increasing the number of apartments is Ramsey.The preliminary plans for their
"Town Center" project include 520 apartments.
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Page 6
The median value of owner occupied dwellings in Elk River compares favorably with the
four other cities in the region.The three townships all had higher median values. •
City Median Value Owner Occupied Dwelling
Elk River $144,800
Ramsey $143,500
Otsego $132,700
Big Lake $123,900
Zimmerman $115,000
Township Median Value Owner Occupied Dwelling
Burns Twp. $157,500
Big Lake Twp. $155,200
Livonia Twp. $154,500
Needs Analysis
Regional or Local Approach
The city needs to address a policy decision, decide whether a regional or local approach
should be used when assessing the housing needs and goals for Elk River. Elk River
functions as a mini-regional center for the surrounding area and the question that needs to •
be asked is, "should our housing policies reflect that role?" Elk River supplies 26% of the
total housing units for the area,which reflects the City's role as a mini-regional center.
However,the city also supplies 73% of the apartments for the area. Elk River also supplies
about 67% of the townhouses/twinhomes for the area.
When the mix of housing types is examined at a local level,the mix is quite different.The
mix of apartments to single family drops to 16.2% apartments.The mix of townhouses to
detached single family is also quite different. The mix of townhouses to detached single
family is 14%townhouses to 86% detached single family.
Housing Balance- unit type, affordability
Historic trends seem to indicate that the percentage of multi-family units to owner occupied
units is decreasing and will continue to decrease unless the city makes a conscience decision
increase that percentage. Currently there is only one 2.42 acre parcel that is vacant and
available for multi-family development.
The current ratio of multi-family to single family dwelling, (16%to 84%),is low compared to
communities that experienced their growth prior to the 1980's and high compared to those
communities that experienced their growth during the 1980's and 1990's. Planning theory is
that a good mix of multi-family to single family is around 20%.
The trend in townhouse development is the opposite of multi-family.The ratio of
townhouse units to detached single family units has been steadily increasing. In 2000,the
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August 25,2003
Page 7
• mix between townhouses and detached single family units was 10.1%townhouses to 89.9%
detached single family.Currently,townhouses make up about 13% of the single family units.
Townhouse lots make up about 37% of the vacant single family lots while detached single
family lots make up 63%. If the current ratio of vacant townhouse lots to vacant detached
single family lots continues,the percentage of townhouses to detached single family will
increase.
What is "Affordable"?
Housing affordability is based on 80% of the area's gross median income; of that 80%,no
more than 30% should be used to meet housing needs.The current median income for
outstate Minnesota is $65,000; 80% of that is $52,000.When broken down into an hourly
wage, $52,000 per year equates to $25 an hour.When determining affordable housing, staff
used $52,000 for a family of four as the base wage. Based on this amount a family could
theoretically afford a mortgage of about$1074 per month, or house and lot with a value of
$170,000.
Options
The following options are available if the city determines that there is a need for additional
housing types and affordability:
• Zone land appropriately.There is currently a lack of land zoned that would allow
• development of a multi-family housing project.The only zoning district that allows
multi-family dwellings is the R4 district.There is one vacant lot in Elk River that is
zoned R4. The city could increase vacant land available for multi-family dwellings by
rezoning specific properties to R4.This land would have to be within the Urban
Service District,undeveloped, and should be within walking distance to commercial
districts. There is some land that fits these criteria. There is a vacant parcel on the
west side of Jackson Avenue, east of Lions Park that is currently zoned C2;there is
also undeveloped land along Twin Lakes Road,near the MnDOT park and ride
facility,that might also work.
• Redevelopment.This option would also include rezoning to the appropriate zoning
district to allow multi-family.The most likely area for this option would the village
core area. There are many possibilities for this option;however, it would likely
involve the redevelopment of older single family dwellings.These dwellings provide
much of the affordable single family units in the city.By redeveloping these parcels
affordable single family units would be replaced by multi-family units.
• Accessory or"mother-in-law" apartments. This option involves allowing accessory
apartments to single family dwellings. Typically these apartments are located above
garages, in walk-out basements, or on second floors. These types of apartments are
currently not allowed in any of our single family districts.These apartments would
provide affordable units and would also provide homeowners with extra income.
•
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Page 8
• Density bonuses /Amend zoning requirements. The zoning code could be amended •
to allow higher densities in developments. The higher density would reduce the cost
for each unit.The city could also offer density bonuses if builders include affordable
units in the development. A formula could be developed that would allow extra
market rate units for affordable units.
• Housing Rehabilitation. The city could establish a housing preservation and
rehabilitation program. Since most of the affordable single family housing is older, a
plan to preserve and rehab this existing housing stock would be an effective way to
maintain the city's affordable housing supply.
• Tax Increment Financing. State law enables cities,HRAs and EDAs to administer
development,redevelopment or rehabilitation activities that are financed by the
increase in property taxes generated by the activity.This tool can be used to
redevelop blighted areas and construct low and moderate income housing. The city
and HRA could consider a policy to provide TIF for the redevelopment of blighted
residential areas and/or new construction of low and moderate income housing.
Staff believes that the most effective way to address the issue of providing an opportunity
for affordable housing would be to utilize each of the options outlined above. There is no
one "silver bullet" that can address the need to strike a balance in housing stock, both by
type and affordability. Each of the above options provides an opportunity to deal with
housing in a comprehensive matter.
•
•
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•
Apartment Inventory
St.Name St.Number Year Built Number Unit Senior
5th St 543 1960 6
Proctor Ave 814 1965 21
Angel Ave 925 1965 24
School St 1175 1965 16
Gary St 18594 1967 36
Norfolk Ave 330 1968 4
Irving Ave 433 1968 8
3rd St 7 1972 15
3rd St 23 1972 15
Baldwin Ave 365 1976 12
Baldwin Ave 379 1979 24
Main St 241 1979 4
Meadowvale 1860 1979 8
Rd
Evans Ave 350 1980 63 yes
Freeport 200 1985 4
Ave
III School St 1111 1985 24
191 1/2 Ave 11755 1985 18
Evans Ave 300 1985 36 yes
3rd St 420 1985 6 yes
School St 1109 , 1986 24
Freeport 847 1986 40
Ave
School St 1115 1987 24
3rd St 300 1987 18
3rd St 340 1987 18
191 1/2 Ave 11940 1987 80
School St 1001 1988 61
3rd St 380 1988 18
Auburn PI 631 1989 24
Evans Ave 355 1990 112
School St 1227 1990 51
Evans Ave 280 1992 53 yes
Holt Ave 385 1992 23
Highland Rd 11798 1992 30
Lions Park 1105 1995 68
Dr
Baldwin Ave 337 1973 30
School St 805 1970 12
5th St 151 1986 26
Auburn PI 2003 10
III
S:\PLANNING\Scott\HRA 8-25 housing.doc
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G;O 'Y R "Nsl NG. 'YO'UR. C I7 'Y
• , .
A Best Practices Review of Preserving Housing
By Jody A.Hauer
uality housing does more than For certain housing strategies, Min- had adopted for rental properties contain-
provide shelter. It stimulates nesota cities have typically worked with ing two or more units. With the annual
neighborhood vitality, adds to another (or several other) agencies—a mailing to property owners notifying
economic development, and housing and redevelopment authority, them of upcoming inspections, Mounds
sustains local tax bases. In the the county, a community action agency, View's inspector began including a list of
report, Preserving Housing:A Best nonprofit housing organizations, or a common maintenance-code violations—
Practices Review, the Legislative regional development commission. items like inoperable smoke detectors
Auditor's Office describes best Best practices in preserving housing. and improper clearance to electrical
practices for local governments involved To be successful, cities first have to equipment. The list allows owners to fix
in preserving housing stock. The report determine their housing needs and see problems prior to inspections, reducing
also features examples of local agencies how they relate to other long-range the number of deficiencies and staff
that have adopted best practices. planning concerns in the community. time for re-inspections.
Preserving existing housing is neces- This analysis often requires housing Certain housing strategies offer
nary for three practical reasons. expertise that cities, especially smaller incentives to preserve residential strut-
First, Minnesota has an increasing ones, have to obtain from consultants tures. They include financial assistance,
number of households. Across the state, or other housing experts. housing information and expertise, and
the number of households grew 15 per- Once cities identify housing needs, a direct rehabilitation and repair services.
• cent between 1990 and 2000. House- best practice is determining appropriate One example is the use of a "remodeling
holds tend to be smaller than before: responses to those needs. This means advisor," as is done through the housing
the number of one-person households setting housing goals and objectives— and redevelopment authorities in Rich-
shot up 23 percent over the decade, a process that should involve local field and South St. Paul.With experience
and average household size decreased leaders—and evaluating a broad range in the building industry, the remodeling
in all regions of the state. of options. advisor helps homeowners with questions
Second, although the number of One best practice in deciding on on renovations, ideas for remodeling,
housing units grew, it lagged behind appropriate housing strategies is to and general cost estimates.
the rising number of households. In determine whether cities have sufficient Another best practice is communi-
2000, Minnesota had 92 households for internal capacity or whether they should caring housing information in timely
every 100 housing units compared with rely on outside professionals. Roseville ways and multiple languages, when
89 households for every 100 housing is one of several metropolitan cities , necessary. Melrose used its city's spring
units a decade earlier. opting to use the Housing Resource newsletter to remind residents of the
Third, Minnesota's housing stock Center, an arm of the nonprofit.Greater need to obtain building permits for
is aging. In 2000, more than half of Metropolitan Housing Corporation. residential building improvements. The
Minnesota's housing units were at least The Center employs construction newsletters have also contained inforrna-
30 years old. This is an age by when managers who answer remodeling lion about the city's rental-inspection
many major building systems—roofs questions and help residents evaluate program in English and Spanish versions
and furnaces, for example—need to contractors' bids. It also administers to help its numerous Spanish-speaking
have been replaced. several home-improvement financing renters.
Local government involvement in programs on the city's behalf. The report is available in the "Pro-
preserving housing. Cities have adopted .Housing strategies. Among housing gram Evaluation" section of the Office
property maintenance codes, established strategies that communities may choose of the Legislative Auditor web site at:
rental-unit inspection programs, required are adopting local codes with standards www.auditor.leg.state.mn.us. The
inspections before homes may be sold, for maintaining residential properties. web site contains supplementary mate-
provided housing-improvement infor- One best practice for administering vials and links not found in the written
mation and expertise, encouraged proper housing-related codes is to encourage report. Readers may also contact the
adnninistration of the state building voluntary compliance, in turn, minirmiz- Legislative Auditor's Office at (651)
0 code, and offered financial subsidies to ing resources needed for enforcement. 296-4708 for a copy. r
leverage private investments. Best prat- As one example,Mounds View
tices are tied to each of these housing took steps to encourage compliance _Jody A. Hatter is project manager with the
strategies. with the maintenance standards the city Office of the Legislative Auditor.
MAY -JUNE 2003 MINNESOTA CITIES 13
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• MEADOWVALE 26 \
14
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