7.3 HRSR 01-04-2016 City of
El Request for Action
River
To Item Number
Housing and Redevelopment Authority 7.3
Agenda Section Meeting Date Prepared by
General Business February 1, 2016 Amanda Othoudt, EDD
Item Description Reviewed by
2015 Housing Study Presentation Cal Portner, City Administrator
Reviewed by
Action Requested
Hear presentation from Maxfield Research on the updated 2015 housing study.
Background/Discussion
At their June 1, 2015,meeting, the HRA authorized entering into an agreement with Maxfield Research to
conduct a comprehensive housing study to assist in determining availability of different segments of
housing in Elk River and in planning for the future of the housing market in the community.
Vice President Matt Mullins and Research Analyst Brian Smith of Maxfield Research will present the
results of the Housing Study to the HRA and City Council. The last housing study was conducted in
2012. An executive summary of the analysis can be found on pages 1-5 of the report.
Staff has invited several local developers,various civic organizations and community members to attend
the event. Following the presentation, the complete report will be available on the city's website.
Financial Impact
N/A
Attachments
• Maxfield Research PowerPoint Presentation
• 2015 Maxfield Housing Study
P ® IERE ® BY
NATURE
Comprehensive Housing Needs Analysis
City of Elk River
(DRAFT Copy -For Discussion)
December 4, 2015
Ms. Amanda Othoudt
Economic Development Director
City of Elk River
13065 Orono Parkway
Elk River, MN 55330
Dear Ms. Othoudt:
Attached is the Comprehensive Housing Needs Analysis for the City of Elk River, Minnesota
conducted by Maxfield Research and Consulting LLC. The study updates the previous housing
study completed in 2012 during the economic downturn and projects housing demand from
2015 through 2025. The updated study provides recommendations on the amount and type of
housing that could be built in Elk River to satisfy demand from current and future residents over
the next decade.
The study identifies a potential demand for over 1,500 new housing units in Elk River over the
remainder of the decade and beyond (2015 to 2025, including a va
Demand will be spread across all product types; including 787 for-sale units, 442 general-
occupancy rental units, and 296 senior units. The existing single-family finished lot supply is
dwindling; thereforenew platted developed lots will be needed soon to meet future housing
demand. Detailed information regarding recommended housing concepts can be found in the
Conclusions and Recommendations section at the end of the report.
We have enjoyed performing this study for you and are available
questions or need additional information.
Sincerely,
MAXFIELD RESEARCH AND CONSULTING LLC
Matt Mullins Brian Smith
Vice President Research Associate
Attachment
612-338-0012 (fax) 612-904-7979
7575 Golden Valley Road, Suite 385, Golden Valley, MN 55427
www.maxfieldresearch.com
TABLE OF CONTENTS
Page
EXECUTIVE SUMMARY........................................................................................................ 1
DEMOGRAPHIC ANALYSIS ................................................................................................... 6
Introduction.................................................................................................................... 6
Elk River Study Area Definition ....................................................................................... 6
Population and Household Growth Trends and Projections .......................................... 8
Population Age Distribution Trends ................................................................................ 9
Household Income .......................................................................................................... 11
Tenure by Age of Householder ....................................................................................... 14
Household Type .............................................................................................................. 15
Tenure by Income........................................................................................................... 18
Net Worth by Age of Householder ................................................................................. 20
EMPLOYMENT ANALYSIS.................................................................................................... 22
Employment Growth Trends ........................................................................................... 22
Major Employer Interviews............................................................................................. 28
HOUSING CHARACTERISTICS ............................................................................................... 31
Introduction.................................................................................................................... 31
Residential Construction Trends 2000 to Present .......................................................... 31
American Community Survey .......................................................................................... 33
Age of Housing Stock....................................................................................................... 33
Housing Units by Structure and Occupancy or (Housing Stock by St ....... 35
Housing Units by Occupancy Status and Tenure ............................................................ 37
Owner Occupied Housing Units by Mortgage Status ..................................................... 38
Owner-Occupied Housing Units by Value ....................................................................... 39
Renter-Occupied Units by Contract Rent........................................................................ 40
RENTAL MARKET ANALYSIS ................................................................................................ 41
Introduction.................................................................................................................... 41
General Occupancy Rental Projects................................................................................ 41
Pending Rental Developments in Elk River ..................................................................... 49
Rental Market Interview Summary ................................................................................. 50
SENIOR HOUSING ANALYSIS ............................................................................................... 51
Senior Housing Defined ................................................................................................... 51
Senior Housing in Elk River .............................................................................................. 52
TABLE OF CONTENTS
(continued)
Page
FOR-SALE MARKET ANALYSIS ............................................................................................. 59
Introduction ..................................................................................................................... 59
Overview of For-Sale Housing Market Conditions.......................................................... 59
Home Resales by Price....................................................................................................64
Home Resales per Square Foot ( PSF).............................................................................65
Current Supply of Homes on the Market.........................................................................67
Elk River Lot Supply..........................................................................................................73
HOUSING DEMAND ANALYSIS ............................................................................................ 78
Introduction ..................................................................................................................... 78
Demographic Profile and Housing Demand .................................................................... 78
Housing Demand Overview ............................................................................................. 79
Estimated Demand for For-Sale Housing ......................................................................... 83
Estimated Demand for General Occupancy Rental Housing ........................................... 84
Estimated Demand for Independent Adult Few Services Senior Housi ...................... 86
Estimated Demand for Affordable Independent Senior Housing.................................... 88
Estimated Demand for Subsidized Senior Housing ......................................................... 89
Estimated Demand for Congregate Senior Housing ........................................................ 90
Demand Estimate for Assisted Living Housing ................................................................ 92
Estimated Demand for Memory Care Housing ................................................................ 94
RECOMMENDATIONS AND CONCLUSIONS........................................................................ 97
Introduction/Overall Housing Recommendations .......................................................... 97
Recommended Housing Product Types .......................................................................... 100
For-Sale Housing ............................................................................................................. 100
General Occupancy Rental Housing ................................................................................ 106
Senior Housing ................................................................................................................ 108
Challenges and Opportunities
Challenges and Opportunities......................................................................................... 111
APPENDIX -DEFINITIONS.................................................................................................... 114
LIST OF TABLES
Table Number and Title Page
D1.Population and Household Growth Trends and Projections, Elk River, 1990 to 2025.9
D2.Population Age Distribution, Elk River, 2000, 2010, 2015, and 2020 ........................... 10
D3.Household Income by Age of Householder, Elk River, 2015 & 2020 ............................ 13
D4.Tenure by Age of Householder, Elk River, 2000 and 2010 ........................................... 16
D5.Household Type Trends, Elk River, 2000 and 2010 ...................................................... 17
D6.Tenure by Household Income, Elk River, 2000 and 2013* ........................................... 20
D7.Net Worth by Age of Householder, Elk River, 2015 ..................................................... 21
E1.Resident Employment,SherburneCounty, 2000 2015*........................................... 24
E2.Covered Employment Trends, Elk River, 2000, 2005, 2010, and 2014 ........................ 25
E3.Major Employers, City of Elk River, June 2012 ............................................................. 32
HC1.Residential Construction, City of Elk River, Annual Building Permits Issued, 2000 to
2015*............................................................................................................................ 32
HC2.Age of Housing Stock, Elk River, 2013*......................................................................... 34
HC3.Housing Stock by Units in Structure, Elk River, 2000 and 2013*.................................. 36
HC4.Housing Stock by Occupancy Status and Tenure, Elk River, 2000 to20................... 37
HC5.Housing Units by Mortgage Status, Elk River, 2013* ................................................... 48
HC6.Units by Value,Elk River, 2013* ................................................................................... 39
HC7.Units by Contract Rent, Elk River, 2013*...................................................................... 40
RM1.General Occupancy Rental Housing, City of Elk River, October 2015 ......................... 43
RM2.Common Area Features/Amenities, City of Elk River, October 2015 ........................... 46
SH1.Senior Housing Units By Type, City of Elk River, October 2015 .................................... 52
SH2.Senior Housing, City of Elk River, October 2015 ........................................................... 53
SH3.Unit Features/Building Amenities/Services, Existing Senior Housi
Elk River, October 2015 ................................................................................................ 55
FS1.Home Resales, City of Elk River, 2000 to June 2015..................................................... 60
FS2.Single Family and Multifamily Residential Sales, City of Elk Rivgh 2015 62
FS3.Home Resales by Sales Price & Product Type, City of Elk River, 2014 .......................... 64
FS4.Housing Sales Per Square Foot (PSF), Elk River, 2005 to June 201 ............................. 66
FS5.Homes Currently Listed For-Sale, City of Elk River, August 2015 ................................. 68
FS6.Active Listings by Housing Type, Elk River, August 2015 .............................................. 69
FS7.Active Listings by Housing Type, Elk River, August 2015 .............................................. 70
FS8.Active Listing by Year Built, Elk River, August 2015...................................................... 72
FS9.Subdivision & Lot Inventory Detached Housing Units, City of Elk River,
nd
2 Quarter 2015 ........................................................................................................... 74
FS10.Subdivisions & Lot Inventory Attached Housing Units, City of Elk River,
nd
2 Quarter 2015 ........................................................................................................... 75
LIST OF TABLES
(continued)
Table Number and Title Page
FS11.Vacant Lot for Parcels Platted, Sherburne County, 2000 to Presen ........................... 76
HD1.For-Sale Housing Demand, Elk River, 2015 to 2025..................................................... 77
HD2.Rental Housing Demand, Elk River, 2015to 2025........................................................ 78
HD3.Market Rate Adult/Few Services Housing Demand, Elk River, 2015 & 2020............... 80
HD4.Affordable Independent Senior Housing Demand, Elk River, 2015 & 2020 ................. 82
HD5.Subsidized Independent Senior Housing Demand, Elk River, 2015 & 2020 ................. 83
HD6.Market Rate Congregate Housing Demand, Elk River, 2015& 20120......................... 84
HD7.Market Rate Assisted Living Demand, Elk River, 2015 & 2020 ..................................... 87
HD8.Memory Care Demand, Elk River, 2015& 2020........................................................... 90
CR1.Summary of Housing Demand, City of Elk River, November 2015 ............................... 97
CR2.Recommended Housing Development, City of Elk River, 2015 to 2025 ...................... 99
HA4. Elk River Area Housing Affordability Based on Household Income ........................... 111
EXECUTIVE SUMMARY
Purpose and Scope of Study
Maxfield Research and Consulting LLC was engaged by the City of Elk River to update the
Comprehensive Housing Needs Analysis for the City of Elk River that was completed in 2012.
The Housing Needs Analysis provides recommendations on the amoun
that should be developed in order to meet the needs of current a
choose to reside in the City.
The scope of this study includes: an analysis of the demographic
of the City; a review of the characteristics of the existing hou
trends; an analysis of the market condition for a variety of renand for-sale housing products;
and an assessment of the need for housing by product type in the
the number and types of housing products that should be consider
supplied.
Demographic Analysis
The City of Elk River is forecast to add an additional 1,602 people and 742 households
between 2010 and 2020.
The population in Elk River is aging and older age cohorts are a
percentage of the total population. Over the next five years, the age 55 to 64 cohort will
continue to have the highest growth numerically (791 people, or 38%), but significant
growth is also forecast in the age 65 to 74 cohort (716 people, or 60%) and 75+ households
(262 people, or 27%). Older adults and younger seniors (those between the ages of 55 and
74) in these high growth age cohorts are the target market for a
products.
The overall median household income in 2015 in Elk River is estimated at about $78,300.
This is substantially higher than the Twin Cities Metro Area at $67,795.
Between 2000 and 2010, homeownership rates increased from 78.3%
of Elk River
The Countys unemployment rate of 4.2% in 2015 is slightly higher than the State of
Minnesota (3.9%) and lower than the Nation (5.5%).
Housing Characteristics
In total, Elk River is reported to have approximately 8,810 housing units, of which about
6,650 are owner-occupied, 1,602 are renter-occupied, and 457 are vacant as of 2015.
Owner-occupied housing units account for about 78% of the Citys total housing stock.
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MAXFIELD RESEARCH & CONSULTING, LLC.
EXECUTIVE SUMMARY
The City of Elk River issued permits for the construction of 2,704 new residential units from
2000 to 2010. That equates to 246 units annually. However, 91.5% of development
occurred from 2000to 2006. New residential construction declined significantly from 2006
through 2012. Permits have increased since the recession but not near the leve
in the early 2000s.
Approximately 81% of Elk River homeowners have a mortgage. About 24% of homeowners
with mortgages also have a second mortgage or home equity loan.
66% of homeowners in the United States have a mortgage.
Rental Housing Market Analysis
In order to assess the current market conditions for rental housMaxfield
Research and Consulting LLC conducted an inventory of subsidized (i.e. housing that is
income-restricted to households earning at or below 30% of the Area Median Income),
affordable (i.e. housing that is income-restricted between 30% and 80% of the Area Median
Income) and market rate (i.e. housing that is not income-restricted) projects located in the
City.
In total, Maxfield Research inventoried 931 general occupancy market rate rental units in
the City of Elk River spread across 22 multifamily developments (16 units and larger). At the
time of the survey, there 49 vacant units(5.3%). Of which 28 vacancies were located in Elk
Park Estates that recently underwent a change in management. Excluding Elk Park Estates,
the market rate vacancy rate totals 2.3%. Typically, a healthy rental market maintains a
vacancy rate of roughly 5%, which promotes competitive rates, en
choice, and allows for unit turnover.
Elk River has a total of 54 subsidized units within two buildingable units
across five developments. The buildings feature a variety of un-
spectrum of household types. There were four units vacant at the time of the survey for a
rate of 1.3%. A healthy income based rental market typically maintains rou
vacancy rate.
Coachman Ridge (Tax-Credit) recently opened in November of 2015 with 52 units. All of the
units were leased prior to opening.
Low vacancy rates in all general occupancy rental products indicate pent-up demand for
additional rental housing in Elk River.
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MAXFIELD RESEARCH & CONSULTING, LLC.
EXECUTIVE SUMMARY
Senior Housing Market Analysis
There are eight senior housing facilities located in Elk River w412units. There
were three vacant rental units and one ownership unit for sale at the time of the
This equates to a vacancy rate of 1.0%. This indicates a need for additional senior housing
units.
Guardian Angels by the Lake are the only facility that offers senior housing with services.
The development contains 60 assisted living units and 30 memory The recent
expansion absorbed quickly and the units have remained steadily
For-Sale Housing Market Analysis
The average and median resale price of homes in Elk River was ap216,840 and
$209,975respectively as of June 2015. The median sales price over the last decade peaked
in 2005. From 2005 to 2011, median sales prices have declined by 44%. Since 2011, the
median sale price has recovered increasing by 59% through June 2015.
Home sales have remained relatively steady in Elk River with an average of roughly 400
homes annually in Elk River since 2010. Considering that Elk River has a supply of nearly
6,500 owned homes in 2010, this represents turnover of almost 6%
annually.
The median list price of homes for sale in Elk River was about $245,960 in June 2015. Based
on a median list price of $245,960, a household would need an income of about $63,225 in
order to afford to make monthly housing payments of about $1,245
payment, 3.75% 30-year fixed mortgage). A household with significantly more equity (in an
existing home and/or savings) could put more than 10% down and a
home. About 67.8% of Elk River households have annual incomes at or above $63,225.
As of July 2015, Elk River had a total of nearly 200 vacant lots within 25subdivisions. All of
the subdivisions were platted between 2000 and 2014. Only 3% of Lots were platted after
2010.
The lot supply benchmark for growing communities is a three-to five-year lot supply. This
supply of lots is appropriate as it provides adequate consumer choice but minimizes
developers carrying costs. Given the number of existing platted lots and the annual
absorption of single-family lots over the past few years, we conclude that Elk River
currently just under a three-year lot supply indicating the need for additional platted lots.
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MAXFIELD RESEARCH & CONSULTING, LLC.
EXECUTIVE SUMMARY
Housing Needs Analysis
Based on our calculations, demand exists for the following gener
between 2015 and 2025:
Market rate rental 265 units
o
Affordable rental 133 units
o
Subsidized rental 44 units
o
For-sale single-family 601 units
o
For-sale multifamily 186 units
o
In addition, we find demand for multiple senior housing product 20, demand
for senior housing is forecast for the following:
Active adult ownership 0 units
o
Active adult market rate rental 77units
o
Active adult affordable 42units
o
Active adult subsidized 0 units
o
Congregate 102 units
o
Assisted living 47units
o
Memory care 28units
o
Recommendations and Conclusions
Based on the finding of our analysis and demand calculations, thchart on the following
page provides a summary of the recommended development concepts by pr
the City of Elk River through 2025. Detailed findings are described in the Conclusions and
Recommendations section of the report.
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MAXFIELD RESEARCH & CONSULTING, LLC.
EXECUTIVE SUMMARY
RECOMMENDED HOUSING DEVELOPMENT
CITY OF ELK RIVER
2015 to 2025
No. of
Purchase Price/Pct.Development
Units
Monthly Rent Range¹of TotalTiming
Owner-Occupied Homes
Single Family 2
Entry-level>$225,000175-20031%2016+
Move-up$250,000 - $350,000320-35056%2016+
Executive$350,000+75-8013%2017+
Total570-630100%
Townhomes/Detached Townhomes/Twinhomes 2
Entry-level>$200,00050-6031%2018+
Move-up$200,000+110-13069%2016+
Total160-190100%
Total Owner-Occupied730-820
General Occupancy Rental Housing
Market Rate Rental Housing
Apartment-style$950/1BR - $1,450/3BR180-20078%2017+
Townhomes$1,200/2BR - $1,500/3BR50-6022%2016+
Total230-260100%
Affordable Rental Housing
Moderate Income 3
Apartment-style90-10073%2017+
Moderate Income 3
Townhomes30-4027%2016+
Total120-140100%
Total Renter-Occupied350-400
Senior Housing (i.e. Age Restricted)
Moderate Income 3
Active Adult Affordable Rental40-4227%2016+
Active Adult Market Rate Rental 4
$900/1BR - $1,200/2BR+50-6036%2019+
Independent Living (Congregate)$1,750/1BR - $1,950/2BR60-8045%2018+
Assisted Living$2,750/EFF - $4,000/2BR40-5029%2017+
Memory Care$4,000/EFF - $5,000/2BR26-2818%2017+
Total144-164100%
Total - All Units1,224-1,384
¹ Pricing in 2015 dollars. Pricing can be adjusted to account for inflation.
2
Recommendations include the absorption of some existing previo
3
Affordablity subject to income guidelines per MHFA. See Table H
4 Alternative development concept is to combine active adult affo
community
Note - Recommended development does not coincide with total dema
types based on a variety of factors (i.e. development constraint
Source: Maxfield Research & Consulting, LLC
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MAXFIELD RESEARCH & CONSULTING, LLC.
DEMOGRAPHIC ANALYSIS
Introduction
This section of the report examines factors related to the current and future demand for for-
sale and renter-occupied housing in Elk River, Minnesota. It includes an analys
and household growth trends and projections, employment data, pr
household income data and household tenure data for Elk River. A review of
characteristics provides insight into the demand for various typ over
the next decade.
Elk River Study Area Definition
The draw area for determining current and future housing demand in the City of Elk River is
based on traffic pattern orientation, proximity to other communi
officials and community stakeholders, natural and manmade geogra
knowledge of the draw areas for housing. The Study Area is defined as Elk River proper
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MAXFIELD RESEARCH & CONSULTING, LLC.
DEMOGRAPHIC ANALYSIS
Elk River is the county seat in Sherburne County. Sherburne County is northwest of the Twin
Cities Metro Area and included in the Greater Metropolitan Statistical Area. The City of Elk
River is about 35 miles northwest of Minneapolis and40 miles southeast of Saint Cloud. The
main routes to Elk River are US Highways 169 and 10, along with
Elk River Location in Relation to Sherburne County and the Twin Cities Metro Area
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MAXFIELD RESEARCH & CONSULTING, LLC.
DEMOGRAPHIC ANALYSIS
Population and Household Growth Trends and Projections
The following graphs show population and household growth trends
from 1990 to 2025. Table D-1 presents data from 1990 to 2010 from the U.S. Census with
projections to 2025adjusted by Maxfield Research and Consulting LLCbased on data from local
building permit data, ESRI (a nationally recognized demographics provider), and the Minnesota
Department of Administration/Office of Geographic and Demographi
According to the U.S. Census Bureau, the City of Elk River conta
8,080 households in 2010. Over the last decade, the Elk Rivers
significantly. Through 2010, the population increased by over 6, while its
household base grew by over 2,400 households (43%).
Elk River
Population Trends
1990 - 2020
1990
30,000
2000
25,000
2010
25,632
20,000
2020
24,576
22,974
2025
15,000
10,000
16,447
11,143
5,000
0
Based on our review of growth trend projections for Elk River, c
building permit history, we project that Elk River will continue to see growth through
but at a much lesser rate than the past two decadesdue to the Recession and slowdown in
the housing market.Between 2010 and 2020, the City of Elk River is projected to addnearly
2,100 persons (9%) and 850 households (10.5%).
Elk River Study Area
Household Trends
1990
1990 - 2020
10,000
2000
2010
9,253
8,000
8,822
2020
8,080
6,000
2025
5,664
4,000
3,732
2,000
0
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MAXFIELD RESEARCH & CONSULTING, LLC.
DEMOGRAPHIC ANALYSIS
Household growth trends are a more accurate indicator of housing
growth since a household is, by definition, an occupied housing
comparison of historic and projected population and household gres shows that
household growth is projected to continue to outpace population
large part, to the aging of the baby boom population into their -nester years.
TABLE D-1
POPULATION AND HOUSEHOLD GROWTH TRENDS AND PROJECTIONS
ELK RIVER
1990 to 2025
Change
U.S. CensusProjected1990 to 20002000 to 20102010 to 2020
Estimated
199020002010201520202025No.Pct.No.Pct.No.Pct.
Population
Elk River11,14316,44722,97423,54724,57625,6325,30447.66,52739.71,6027.0
Sherburne County41,94564,41788,49999,975106,667111,95822,47253.624,08237.418,16820.5
Wright County68,71089,986124,700143,740155,175163,61021,27631.034,71438.630,47524.4
Households
Elk River3,7325,6648,0808,3538,8229,2531,93251.82,41642.77429.2
Sherburne County13,64321,58130,21234,31036,87439,0417,93858.28,63140.06,66222.1
Wright County23,01331,46544,47351,81556,33059,8508,45236.713,00841.311,85726.7
Sources: U.S. Census; Minnesota Planning; ESRI, Inc; Maxfield R
Population Age Distribution Trends
The following graphs show the age distribution of the City of El
2010, as well as estimates and projections for 2015 and 2020, respectively. Data provided in
Table D-2 for the 2000 and 2010 distributions are from the U.S. Census. Maxfield Research and
Consulting LLCcalculated the 2015 estimate and 2020projectionbased off of data obtained
from ESRI Inc., and theMinnesota Department of Administration. The following are key t
in Elk Rivers age distribution:
The majority of age groups in Elk River experienced strong growt
to 2010. The baby boomers ages 55 to 64 experienced the largest rate of growth increasing
by 109% (1,143 people) followed by the 45 to 54 age group increa
the largest numerical growth).
Over the current decade, mostage groups are projected to continue to grow in all age
cohorts albeit a much lower rate than during the last decade. T
below age 44 are projected to have slight increases as these gro
baby bust generation.
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MAXFIELD RESEARCH & CONSULTING, LLC.
DEMOGRAPHIC ANALYSIS
Adult Population Age Distribution
Elk River
2000 to 2020
8,000
7,000
20002010
6,000
20152020
5,000
4,000
3,000
2,000
1,000
0
18-2425-4445-6465+
Age Cohort
The 55 to 64 age cohort is projected to increase by nearly 791 p
54 age group is projected to decline by 436 people (-12%). These older adults and seniors
may be considering downsizing into low-maintenance or independent living housing.
TABLE D-2
POPULATION AGE DISTRIBUTION
ELK RIVER
2000 - 2020
Number of PersonsChange
2000-20102010-2020
2000201020152020
No.No.No.No.No.Pct.No.Pct.
17 & under5,1466,5556,4446,4891,40927.4-66-1.0
18-241,3951,7572,0211,86536225.91086.2
25-342,4613,2043,2503,52274330.23189.9
35-443,1173,5843,2973,49346715.0-91-2.5
45-541,9633,5353,4293,0991,57280.1-436-12.3
55-641,0492,1922,5822,9831,143109.079136.1
65-746631,1881,5001,90452579.271660.3
75+6539591,0241,22130646.926227.3
Total16,44722,97423,54724,5766,52739.71,6027.0
Sources: U.S. Census Bureau; ESRI, Inc.; Maxfield Research & Co
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MAXFIELD RESEARCH & CONSULTING, LLC.
DEMOGRAPHIC ANALYSIS
Household Income
The estimated distribution of household incomes in Elk River for5 and 2020 is shown in the
following graphs. The data in Tables D-3 and D-4 was estimated by ESRI, Inc.The data helps in
ascertaining the demand for different housing products based on
specific cost levels.
The Department of Housing and Urban Development defines affordab
families as 30% of a households adjusted gross income. Maxfield Research and Consulting LLC
uses a figure of 25% to 30% for younger households and 40% or mo
generally have lower living expenses and can often sell their ho
toward rent payments.
A generally accepted standard for affordable owner-occupied housing is that a typical
household can afford to pay 3.0 to 3.5 times their annual income-family home.
Thus, a $50,000 income would translate to an affordable single-family home of $150,000 to
$175,000. The higher end of this range assumes that the person
payment and closing costs, but does not have savings or equity i
would allow them to purchase a higher priced home. The following are key points:
The median household income in Elk River in 2015was estimated to be about $78,305. Elk
River has a higher median income compared to the Twin Cities Metro Are
Overall, incomes are expected to increase by about 10% between 2015 and 2020, or about
2.0% annually. This will result in the median income in Elk River increasing from $78,305 in
2015 to about $86,198 in 2020.
Between 2015 and 2020, the number of households will increase in all but two age grou
in Elk River. The largest numerical gain will be in the 65 to 74 age group, with a projected
increase of 228 households.
Non-Senior Households
In 2015, roughly 4% of the non-senior households (15 to 64 years of age) in Elk River had
incomes under $15,000 (248 households). All of these households would be eligible for
subsidized rental housing. Another 4% of Elk Rivers non-senior households had incomes
between $15,000 and $25,000 (271households). Many of these households would qualify
for subsidized housing, but some could also afford affordable or older market-rate
rentals. If housing costs absorb 30% of income, households withes of $15,000 to
$25,000 could afford to pay $375 to $625 per month. Average mon-
bedroom units in Elk River are about $862 (shown in Table R-1 in the Rental Housing
Analysis section).
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MAXFIELD RESEARCH & CONSULTING, LLC.
DEMOGRAPHIC ANALYSIS
Median incomes for households in Elk River peak at $96,191for the 35 to 44 age group in
2015. Households in this age group are entering or are in their peak earning years. The
majority of households (87%) in this age group are homeowners. 20, the median
income for the 45 to 54 age group is projected to increase to $102,476 a 6.5% increase.
The median resale price of homes in Elk River was $209,975throughJune 2015(see Table
FS-1). The income required to afford a home at this price would be60,000 to
$70,000, based on the standard of 3.0 to 3.5 times the median incom
households do not have a high level of debt). In 2015, 70% (4,696 households) of Elk Rivers
non-senior households had incomes greater than $60,000.
Growth and Income Trends by Age of Householder
Elk River
2015 to 2020
2,000$120,000
1,800
$96,191
$100,000
1,600
$90,274
1,400
$79,696
$80,000
$75,720
1,200
$59,863
1,000$60,000
$40,056
800
$40,000
2010
600
$45,303
2015
400
$20,000
2010 Income
200
0$0
15-2425-3435-4445-5455-6465 -7475+
Age of Householder
Senior Households
The oldest householders were likely to have lower incomes in 2015. In Elk River, 5% of
households ages 65 to 74 had incomes below $15,000, compared to 10% of households age
75 and over. Many of these low-income older senior households rely solely on Social
Security benefits. Typically, younger seniors have higher incom
to work or are married couples with two pensions or higher Socia
Generally, senior households with incomes greater than $30,000 can afford market-rate
senior housing. Based on a 40% allocation of income for housing
rents of at least $1,000. About 475 senior households (75+) in Elk River (49% of senior
households) had incomes above $30,000 in 2015. Seniors will often move from rural areas
to cities such as Elk River that provide more medical and other
12
MAXFIELD RESEARCH & CONSULTING, LLC.
DEMOGRAPHIC ANALYSIS
TABLE D-3
HOUSEHOLD INCOME BY AGE OF HOUSEHOLDER
ELK RIVER
(Number of Households)
2015 and 2020
2015
Total<2525-3435-4445-5455-6465 -7475+
Less than $15,00036425564247784670
$15,000 to $24,999455255643628579105
$25,000 to $34,99949938956662737788
$35,000 to $49,9991,04352213140170155126187
$50,000 to $74,9991,51854291236284254269130
$75,000 to $99,9991,6493126836345531316257
$100,000 or more2,8263046580780249117556
Total8,3532551,4441,6971,8821,449934693
<$25,0008195011285109163125175
$35,000+7,0351671,2371,5461,7111,213732430
Median Income$78,305$45,303$75,720$96,191$90,274$79,696$59,863$40,056
Twin Cities Med. Incom$67,795$34,820$58,146$81,972$88,167$80,649$58,179$37,464
2020
Total<2525-3435-4445-5455-6465 -7475+
Less than $15,00032524473332664777
$15,000 to $24,99933719412930537293
$25,000 to $34,99939731714437547288
$35,000 to $49,99989843175103107133129208
$50,000 to $74,9991,43548267201197239317167
$75,000 to $99,9991,8983432239342839423890
$100,000 or more3,5323661797183769128793
Total8,8222351,5401,7731,6661,6301,162817
<$25,00066243886262119119170
$35,000+7,7631611,3811,6671,5681,457971559
Median Income$86,198$50,168$85,936$102,476$100,124$90,002$68,761$44,478
Twin Cities Med. Incom$78,703$37,641$68,180$92,464$99,756$93,254$69,137$42,675
Change
Total<2525-3435-4445-5455-6465 -7475+
Less than $15,000-39-1-9-9-15-1217
$15,000 to $24,999-118-6-15-14-32-32-7-12
$25,000 to $34,999-102-7-24-22-25-19-50
$35,000 to $49,999-145-9-38-37-63-22321
$50,000 to $74,999-83-6-24-35-87-154837
$75,000 to $99,99924935430-27817633
$100,000 or more70661521643520011237
Total469-209676-216181228124
<$25,000-157-7-24-23-47-44-6-5
$35,000+728-6144121-143244239129
Median Income$7,893$4,865$10,216$6,285$9,850$10,306$8,898$4,422
Twin Cities Med. Incom$10,908$2,821$10,034$10,492$11,589$12,605$10,958$5,211
Sources: ESRI, Inc.; Maxfield Research & Consulting, LLC
13
MAXFIELD RESEARCH & CONSULTING, LLC.
DEMOGRAPHIC ANALYSIS
Seniors who are able and willing to pay 80% or more of their inc
housing would need an annual income of $37,500 to afford monthly rents of $2,500, which
is about the beginning monthly rent for assisted living in ruralareas of Minnesota. In Elk
River, there were only an estimated 430 older senior (ages 75 an
incomes greater than $37,500 in 2015. Seniors age 75 and over are the primary market for
assisted living housing.
Tenure by Age of Householder
The following graphs show the number of owner and renter househo
group as of 2010. The data in Table D-4 on Page 18 shows thepropensity of households to own
or rent their housing based on their age.
In 2010, 80% of the households in Elk River owned their housing.
2000. Homeownership rates have slightly declined for those ages 25 to 64 in Elk River due
to the declining housing market and the poor economic climate.
units built over the decade we can assume that many of the singl-family homes have been
converted to rental properties.
Elk River
Homeowners by Age of Householder - 2010
100%
87.3%
87.1%
84.6%
83.6%
1,500
72.2%
80%
62.7%
1,544
1,696
60%
40.6%
1,000
1,079
1,029
40%
No. of Homeowners
500
619
20%
Homeownership Rate
405
106
00%
Age of Householder
The proportion of renter households decreases as households age
senior years when rental housing is a more viable option than ho
60% of Elk Rivers households between the ages of 15 and 24 rent
compared to householders ages 35 to 64 who were overwhelmingly h
more than 15% of the householders in each 10-year age cohort renting their housing.
Although the propensity for households ages 15 to 24 to rent thee 25
to 44 age groups had, by far, the largest number of renters with
having 396 renters and the 35 to 44 age group with 281 renters.
account for slightly over 40% of all renter households.
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MAXFIELD RESEARCH & CONSULTING, LLC.
DEMOGRAPHIC ANALYSIS
Elk River
Renters by Age of Householder - 2010
500100%
No. of Renters
40080%
396
Pct. Renters
59.4%
30060%
37.3%
27.8%
281
157
251
20040%
15.4%
16.4%
12.9%
12.7%
155
10020%
241
121
00%
Age of Householder
Between 2000 and 2010, the number of renter households increased
Over the decade, the number of renters increased at a growth rat
number of rental units developed through 2010, its clear that the number of-family
rental homes has also increased due to the economy and decline i
Household Type
The following graph shows the breakdown of the type of household
2010. Table D-5 illustrates the data which is useful in assessing housing dema
household composition often dictates the type of housing needed rred.
From 2000 to 2010, Elk River observed the largest numerical incr
families that are married without children (830 households, or 5
households married without children can be attributed to couplesger to have
children, and the baby boomers aging into empty nester years.
Persons Living Alone experienced the second highest numerical in
(highest growth rate of 62.5%) in Elk River during the 2000s. T
senior population. As the frailty level of these seniors increa
their homes in pursuit of housing with services. However, the r
seniors, and their fears of the market can be affecting their deons to move out of the
homes and into age-restricted housing.
Elk River also had significant increases in single-parent households (a gain of 378
households, or 51%). With only one income, these families are m
affordable or modest housing, both rental and for-sale.
15
MAXFIELD RESEARCH & CONSULTING, LLC.
DEMOGRAPHIC ANALYSIS
Roommate households had the second highest rate of growth in Elk
The number of roommates grew by a 55%, or 160 households. This, however, was
lowest numerical increase of all groups. This reflects the tren
together before marriage and delaying having children until late
non-family households rooming up and sharing housing costs during
Tenure by Income
The following graph shows the number of renter households in Elk
2000 and 2013(5-year American Community Survey estimates). The data provided in-6
is useful in that shows the housing options and preferences for
affordability. The Department of Housing and Urban Development
housing as not exceeding 30% of the households income. It is important
the higher the income, the lower percentage a household typicall
lower income households, as well as many young and senior househnd more than 30%
of their income, while middle-aged households in their prime earning years typically allocate
20% to 25% of their income.
As income increases, so does the rate of homeownership. The 2013 estimates for Elk River
indicates that 89% of those households earning $50,000 or more owned homes compar
to 56% for households with incomes between $35,000 and $49,999, 54% with incomes of
$25,000 to $34,999, and 50% of households with incomes of $24,999 or less owned their
housing. Many of these lower-income homeowners are seniors who live on fixed incomes
but have paid off of their mortgage.
Although, many of the lower-income households rent their housing, the largest number of
renters (397households or roughly 22% of all renters) have incomes between $35,000 and
$49,999followedclosely by those with incomes from $50,000 to $74,999 (374 households
or 21% of all renters). Should these households allocate 25% of their income on housi
they could afford monthly rents of roughly $730 to $1,550 per month. The incomes near
$35,000 could afford rents offered at most rental developments i
incomes could afford rents that are significantly higher than the rents at most market-rate
apartment units in Elk River.
Typically, renter households with incomes of $20,000 or less qua-
subsidized housing, where rents are often based on sliding scale (30% of income). Based on
a 30% allocation of income, these households could afford monthl
$500. As of 2013, there were 312 households in Elk River with incomes of $20,000 or less
renting their housing.
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MAXFIELD RESEARCH & CONSULTING, LLC.
Households
DEMOGRAPHIC ANALYSIS
Renter households with incomes of between $20,000 and $35,000 ar
for affordable rental projects with a shallow subsidy (housing
rents slightly below market rents, such as those financed througousing
Finance Agencys Section 42/Low-Income Housing Tax Credit program). These households
can typically afford housing costs of from $500 to $875 per mont
estimated 451 renter households in Elk River with incomes betwee000 and $35,000.
It is important to note that seniors are often able and willing,
their income on rental housing that meets their needs since they
retirement, their childrens education or major purchases (home,etc.). This is
particularly true in senior rental projects where support serv
assistance are available. In fact, research has shown that, in
50% of residents not only allocated all of their income but spent-down assets in order to
afford monthly housing and service costs.
TABLE D-6
TENURE BY HOUSEHOLD INCOME
ELK RIVER
2000 and 2013*
20002013*
OwnRentOwnRent
No.Pct.No.Pct.No.Pct.No.Pct.
Less than $5,0004659.73140.34637.77662.3
$5,000 to $9,9993325.69674.42856.02244.0
$10,000 to $14,9997323.324076.713658.19841.9
$15,000 to $19,99910045.212154.811549.811650.2
$20,000 to $24,99915958.211441.810947.212252.8
$25,000 to $34,99930153.126646.938253.732946.3
$35,000 to $49,99965183.113216.951356.439743.6
$50,000 to $74,9991,30088.117511.91,32678.037422.0
$75,000 to $99,9991,05995.6494.41,28590.014310.0
$100,000 to $149,99954598.491.61,58793.81046.2
$150,000 or more164100.000.070997.9152.1
Total4,43178.2 1,23321.86,23677.6 1,79622.4
* Data for 2013 is from US Census, American Community Survey (5-Ye
Source: US Census Bureau; Maxfield Research & Consulting, LLC.
Net Worth by Age of Householder
Table D-7 presents data on the net worth of households by age in Elk Riv5.
Information in the table is sourced from ESRI with adjustments f
base as calculated by Maxfield Research &Consulting, LLC. Net worth is defined for an
20
MAXFIELD RESEARCH & CONSULTING, LLC.
DEMOGRAPHIC ANALYSIS
individual, the value of aperson's assets, includingcash, minus all liabilities. The amountby
which the individual's assets exceed their liabilities is considered the net worth of that person.
Data in the table is calculated as the total value of a househol
(unsecured or secured by assets). Overall, the median net worth
is about $215,064 and the average is $632,168.
There is a strong correlation between household age and net wort
age of 25 have substantially less net worth (median of $20,584) compared to households
between the ages of55 and 64 (median of $250,001). Net worth declines as adults age into
their seniorsyears, which is likely due to these households spending down assets to
support their living costs following retirement?
TABLE D-7
NET WORTH BY AGE OF HOUSEHOLDER
ELK RIVER
(Number of Households)
2015
Age of Householder
TotalUnder 2525-3435-4445-5455-6465 -7475+
Less than $15,0001,0311013062031451335687
$15,000 to $34,999401531258354421626
$35,000 to $49,99926825906535281411
$50,000 to $99,99995740278255157956171
$100,000 to $149,99963814168140122856941
$150,000 to $249,9991,034142232562171618677
$250,000+3,77112106421,095861602359
Total 8,1002471,4011,6441,8261,405905671
Median Net Worth$215,064$20,584$75,767$171,652$250,001$250,001$250,001$250,001
Average Net Worth$632,168$45,783$158,099$445,138$735,457$983,767$1,151,689$578,786
Data Note: Net Worth is total household wealth minus debt, secu
in pension plans, net equity in vehicles, IRAs and Keogh account
shares, stocks, etc. Examples of secured debt include home mortg
credit card debt, certain bank loans, and other outstanding bill
Finances, Federal Reserve Board. Detail may not sum to totals du
Sources: ESRI; Maxfield Research & Consulting, LLC.
With significant residual net worth in later life many seniors will have sufficient funds to
cover the costs of living in senior housing alternatives. The sage 75+ seniors with
little or no net worth will rely on public subsidies in order to
that meet their needs.
Households often delay purchasing homes and instead choose to re
sufficient net worth to cover the costs of a down payment and closing costs associated with
home ownership. This will be especially true in the short-term as tightening lending
requirements make mortgages with little or no down payments more
21
MAXFIELD RESEARCH & CONSULTING, LLC.
EMPLOYMENT ANALYSIS
Employment Growth Trends
Since employment growth generally fuels household growth, employ
indicator of housing demand. Typically, households prefer to linear work for convenience.
However, housing is often less expensive in smaller towns, makin
for households concerned about housing affordability.
The graphs on the following page depict recent employment growthburne
County and are shown in Tables E-1 and E-2. Table E-1 presents resident employment data for
Sherburne County from 2000 through September2015. Resident employment data is
calculated as an annual average and reveals the work force and number of employed persons
living in the County. It is important to note that not all of these individuals nec
the County.
Table E-2 presents covered employment in Elk River from 2000 through 2014. Covered
employment data is calculated as an annual average and reveals the number of jobs in the
County, which are covered by unemployment insurance. Most farm jobs, -employed
persons, and some other types of jobs are not covered by unemplo
included in the table. The data in both tables is from the Minne
Employment and Economic Development. The following are key tren
employment data:
Labor Force/Resident Employment
Between 2000 and 2014, Sherburne County experienced an increase in both its labor force
and the number of employed residents. Between 2000 and 2014, the Countys labor force
increased by 11,855persons (31%), while the number of employed residents increased by
10,898 persons (30%). Since 2010, the labor force has increased by only 346 persons (l
than a 1% increase) compared to the total employed which increased by 1,646 persons
(3.6%). This has resulted in the unemployed person decreasing by 1,300 people (-31.5%)
After the peak year of 2008 however, both the labor force and employeddeclined
until 2014 in which the total employed surpassed 2008 with 47,00. The labor force in 2009
was slightly lower than it was in 2008 but has been steadily incng from 2012.
The unemployment rate in Sherburne County was lowest (3.0%) at the beginning of the
period in 2000. The unemployment rate fluctuated from 2000 to 2006 but remained
relatively steady. Since 2006, the unemployment rate in Sherburne County has increa
rapidly to a high of 9.1% (2009) and was higher than both the State and the Nation from
2007 through 2009 (slightly less than national average in 2009). As of September 2015, the
unemployment rate has fallen to 4.2%, below the nation which is at 5.5%, yet remains
slightly higher than the State of Minnesota at 3.2%.
22
MAXFIELD RESEARCH & CONSULTING, LLC.
EMPLOYMENT ANALYSIS
Up until 2006, the unemployment rate in Sherburne County has bee
the State of Minnesota. The rate remained roughly a full percentage point higher from
2006 through 2010. Since 2010, the unemployment rate difference compared to the State
of Minnesota has been shrinking and in 2014 was back to earlier figures. Both the County
and the State unemployment rates are below the national average.
LABOR FORCE AND EMPLOYED RESIDENTS
SHERBURNE COUNTY
2000 to 2015*
52,500
49,592
49,759
50,000
47,500
47,646
46,531
45,000
42,500
40,000
Total Labor Force
37,904
Total Employed
37,500
36,748
35,000
Year
UNEMPLOYMENT RATE
SHERBURNE COUNTY
2000 to 2015*
10.0%
9.6%
9.1%
9.0%
Sherburne
Minnesota
8.0%
U.S.
7.0%
7.8%
6.0%
5.5%
6.0%
5.1%
4.6%
5.0%
4.2%
4.0%
4.9%
4.3%
4.0%
3.2%
4.0%
3.9%
3.0%
3.0%
2.0%
2000200120022003200420052006200720082009201020112012201320142015*
Year
23
MAXFIELD RESEARCH & CONSULTING, LLC.
EMPLOYMENT ANALYSIS
TABLE E-1
RESIDENT EMPLOYMENT (ANNUAL AVERAGE)
SHERBURNE COUNTY
2000 to 2015*
TotalMinnesotaU.S.
LaborTotalTotalUnemploymentUnemploymentUnemployment
YearForceEmployedUnemployedRateRateRate
200037,90436,7481,1563.0%3.2%4.0%
200139,49638,0011,4953.8%3.8%4.7%
200241,52439,5521,9724.7%4.5%5.8%
200343,31041,0902,2205.1%4.9%6.0%
200445,02542,7802,2455.0%4.7%5.6%
200546,52944,5132,0164.3%4.1%5.1%
200648,06445,9912,0734.3%4.0%4.6%
200748,73846,2992,4395.0%4.6%4.6%
200849,59246,5313,0616.2%5.4%5.8%
200949,29344,8214,4729.1%7.8%9.3%
201048,99044,8674,1238.4%7.4%9.6%
201148,84045,3553,4857.1%6.5%8.9%
201248,75645,7543,0026.2%5.6%8.1%
201348,90946,3092,6005.3%4.9%7.4%
201449,18647,0012,1854.4%4.1%6.2%
2015*49,75947,6462,1134.2%3.9%5.5%
Change 2000-1011,0868,1192,9675.4%4.2%5.6%
Change 2011-143461,646-1,300-2.7%-2.4%-2.7%
* 2015 data is the average from January through September.
Sources: Minnesota Workforce Center; Maxfield Research & Consul
Covered Employment by Industry
Overall, the number of covered jobs in Elk River increased by 44%, or 3,870 jobs since 2000.
Covered jobs have remained relatively stable with few small declines from 2005 through the
economic recession. The City of Elk River is currently at its h over the period
with 12,737 jobs in 2014.
Nearly all of the growth has occurred in the Education and Healt61%).
Without the substantial growth in this industry, the City would
in covered employment, however at a much lesser rate over the period.
The Education and Health Services sector has overtaken the Trade, and
Utilities sectors for the largest portion (29%, or 3,745jobs) of the jobs in Elk RIver as of 2014
The Trade, Transportation, and Utilities sector accounted for 22% (2,765jobs) of covered
jobs in the City.
24
MAXFIELD RESEARCH & CONSULTING, LLC.
EMPLOYMENT ANALYSIS
The Education and Health Services industry has more than doubled in jobs over the period,
adding 2,378jobs (174%). There were nineother sectors that experienced growth which
include by numerical growth: the top four were Public Administration which added 305jobs
(53.5%), Trade, Transportation, and Utilities which added 295 jobs (12%), Manufacturing
which added 232 jobs (319%), and Other Services which added 131 jobs (34.5%).
Of the 11 industry sectors in Elk River, twoof those experienced a loss in covered jobs over
the period (Information Sector and Financial Sector). The Construction industry has
regained its employment increasing to 610 jobs in 2014 from 389 in 2010.
Covered Employment Trends
Elk River
2000 through 2014
13,000
12,737
12,000
11,000
10,946
10,000
10,298
9,000
8,867
8,000
200020012002200320042005200620072008200920102011201220132014
Year
TABLE E-2
COVERED EMPLOYMENT TRENDS
ELK RIVER
2000, 2005, 2010, and 2014
North American Industrial Classification System (NAICS)
Change
Average Number of Employees 2000 - 2014% of total
Industry2000200520102014No.Pct.2000200520102014
Natural Resources & Mining6413991912742.20.7%1.3%0.8%0.7%
Construction5447543896106612.16.1%7.3%3.6%4.8%
Manufacturing1,2021,0731,2431,43423219.313.6%10.4%11.4%11.3%
Trade, Transportation, and Utilities2,4703,0042,6022,76529511.927.9%29.2%23.8%21.7%
Information108635563-45-41.71.2%0.6%0.5%0.5%
Financial Services373476394330-43-11.54.2%4.6%3.6%2.6%
Professional and Business Services9007358811,33343348.110.1%7.1%8.0%10.5%
Education and Health Services1,3671,8023,0313,7452,378174.015.4%17.5%27.7%29.4%
Leisure and Hospitality8891,1028429809110.210.0%10.7%7.7%7.7%
Other Services38042454351113134.54.3%4.1%5.0%4.0%
Public Administration57072687587530553.56.4%7.0%8.0%6.9%
Totals8,86710,29810,94612,7373,87043.6100%100%100%100%
Source: Minnesota Workforce Center; Maxfield Research & Consult
25
MAXFIELD RESEARCH & CONSULTING, LLC.
875
875
726
570
511
543
424
380
980
842
102,1
889
745,3
031,3
802,1
367,1
333,1
881
735
900
330
394
476
373
63
55
63
108
765,2
602,2
004,3
470,2
434,1
243,1
073,1
202,1
610
389
754
544
91
91
139
64
No. of Covered Jobs
EMPLOYMENT ANALYSIS
Inflow/Outflow
The following graph shows the inflow and outflow of workers in Elk River. Outflow reflects the
number of workers living in the Citybut employed outside of the City while inflow measures the
number of workers that are employed in the City but live outside.
Technically, Elk River can be considered an exporter of workers, as the number of residents
coming into the Elk River(inflow) for employment is less than the number of residents leaving
the city for work (outflow). Elk River however has a significant number of employees coming
into the city for employment (approximately8,334 workers) and thus the city could also be an
importer or jobs as well. Thenet difference between the net inflow to net outflow of workers
was that 976workers left Elk River than commuted to the city.
City of Elk River: Inflow/Outflow
27
MAXFIELD RESEARCH& CONSULTING, LLC.
EMPLOYMENT ANALYSIS
Major Employer Interviews
Maxfield Research and Consulting LLC interviewed representatives of large employers in Elk
River in October2015. The interviews covered topics such as recent trends in job growth,
projected job growth, job types, and average hourly wages or ann
were also asked about housing needs of their employees. Intervi
employers not only provide data regarding commercial job growth, but a
attitudes and perceptions regarding housing demand in any given -3 on the
following page shows the top employers located in Elk River from 2012, this is the most
updated data available from the City of Elk River. Maxfield Research has adjusted employee
counts where applicable through interviews.
The following are key points from the interviews with major empl
It remains to be said by employers that housing continues to be a hindrance to their
companies and hiring practices. There may be isolated issues with employees, but overall
housing is not an issue. Most production, manufacturing, and retail employees are hired
from the surrounding area and currently reside within the community or nearby area.
Employees typically commute roughly 20 to 30 minutes to Elk River
Elk River.
Although a lack of transitional rental housing continues to exist due to very low vacancy
rates, any employee looking to relocate will typically commute while loo
purchase.
None of the companies interviewed had a relocation program in plA relocation
program is not really needed to attract potential employees according to employers. In
addition, employees living choices range from the northwest Twi
Cloud.
Although the majority of manufacturing/processing jobs are fille
professional and education jobs are filled by people from throughout Minnesota. The
community perception of Elk River is good. People are attracted to the strong school
district and level of service and retail that the area provides.
deciding factor.
The largest employer in Elk River is the ISD-728, which employs about 2,400 people. ISD-
728 employment hasincreased employment over the past few years with the growth in
student enrollment. Although there was some decline in enrollment early this decade, the
district has avoided further cutbacks. Overall, housing has not been an issue and there has
not been much relocation of employees to Elk River.
28
MAXFIELD RESEARCH& CONSULTING, LLC.
EMPLOYMENT ANALYSIS
The majority of employers interviewed noted stable in increasing employment over the past
three years. When asked about growth in the future, many indicated that they expect to
remain stableor experience slow growthover the next few years.Companies are remaining
cautious although the market continues to improve.
TABLE E-3
MAJOR EMPLOYERS
CITY OF ELK RIVER
2012
EmployerProducts/ServicesEmployee Count*
ISD #728Education1,600
Sherburne CountyGovernment595
Wal-MartRetail Store394
Guardian Angels of Elk River, Inc Nrsing/Housing 317
Great River Energy Electric Utility 236
Tescom Corporation Pressure Control Devices 187
City of Elk River Government 159
Menards Retail Store 150
Cornerstone Auto Resource Automobile Sales 147
Coborn's Grocery Store 122
Sportech, Inc Plastics Thermoforming 112
Cub Foods Grocery Store 132
Metal Craft Machine & Engineering Precision Machining 105
Cretex Companies, Inc.Precast Concrete Products 100
Crystal Distribution, Inc Custom Curb Adaptors 100
The Home Depot Retail Store 100
Morrell Companies Professional Trucking Transport 100
The Bank of Elk River Financial Institution 99
E & O Tool and Plastics, Inc Injection Molding 98
Fairibault Foods, Inc Pouch Packaging 79
First National Financial Services Financial Institution 43
Quality Label , IncLabel Printing42
Total5,017
* Employment figures are estimated.
Sources: City of Elk River; Maxfield Research & Consulting, LL
Typical wages for those working at large local retail businesses range from $9.00 to $14.00
per hour. These positions are prime candidates for rental housi
employed by residents currently living in the surrounding area o
from their current place of residence if hired new.
Based on our interviews, professional service jobs typically stafrom around $35,000 to
$40,000 annually. Households with an income of $35,000 could af
costs of $875, based on spending on 30% of their gross income on housing.
29
MAXFIELD RESEARCH& CONSULTING, LLC.
EMPLOYMENT ANALYSIS
Considering a household with an annual income of $35,000, and us
that a household can afford to pay a mortgage that is 30% of the
owner-occupied housing (assuming they have limited debt and not includty), a
household with this income could afford a home priced at $87,500
households in Elk River have two incomes, however. Using the sa
a household with two persons each earning $35,000 annually couldhome priced
from $175,000 to $210,000.
30
MAXFIELD RESEARCH& CONSULTING, LLC.
HOUSING CHARACTERISTICS
Introduction
The variety and condition of the housing stock in a community pr
attractive living environment. Housing functions as a building
goods and services. We examined the housing market in Elk Riverg data on the age
of the existing housing supply; examining residential building t
housing data from the American Community Survey that relates to
Residential Construction Trends 2000 to Present
Maxfield Research obtained data from the City of Elk River on the number of bu
issued for new housing units in Elk River over the past decade aSeptember2015.
Table HC-1 displays permits issued for single-family homes, townhomes/twin homes, and
multifamily dwellings of three or more units. Multifamily units-sale
(condominium, twinhomes, and townhomes) and rental projects.
The City of Elk River issued permits for the construction of 2,704new residential units from
2000 to 2010. That equates to about 246 units annually since 2000. After 2010, Elk River
has added only 330 units, or 66 per year. Of the 330 units added, 16 of those units were
apartments unit replaced due to fire.
Through 2006, the City of Elk River issued 93% of the overall peover the
decade. Over that period, residential construction averaged over 354 units per yea
However, beginning in 2007, which was the start of the Great Rec
started declining rapidly, and from 2007 to 2010 the City has av
year. Since 2007, 75% of the units (419) have been single-family homes, 137 units (25%) in
three multi-family apartment buildings and the remaining (19 units) being
rowhomes/townhomes.
Since 2012, the City of Elk River has only issued an average of 71 residential permits (single-
family) and built an additional 52 unit affordable rental building. The City also added three
detached townhomes and replaced 16 apartment units that we destred by fire. This
indicates an improving housing market although much more conservative than in the
previous decade.
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MAXFIELD RESEARCH & CONSULTING, LLC..
HOUSING CHARACTERISTICS
Residential New Construction (Total Units)
Elk River
2000-2015*
350
Single-Family
300
Town/Twinhomes
250
Multi-family 3+ Units
200
150
100
50
0
Year
(*2015 Data through October 6)
TABLE HC-1
RESIDENTIAL CONSTRUCTION
CITY OF ELK RIVER
ANNUAL BUILDING PERMITS ISSUED
2000 to 2015*
Permits Issued
Single-Family Townhome/Multifamily Total Housing
Twinhome
Homes3+ UnitsUnits
20001722686284
20011621876256
20021941832244
200328537228550
200430012235547
20051954145344
2006150298250
2007104012116
2008250025
2009160420
20101505368
2011110011
2012360036
2013820082
201468368139
2015620062
Total '00 to 101,6181179692,704
Total 11' to 15259368330
* Data through 10/6/15.
Sources: City of Elk River; Maxfield Research & Consulting, LLC
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MAXFIELD RESEARCH & CONSULTING, LLC..
HOUSING CHARACTERISTICS
American Community Survey
The American Community Survey ( ACS ) is an ongoing statistical
U.S. Census Bureau that is sent to approximately 3 million addre
gathers data previously contained only in the long form of the decennial census. As a r
the survey is ongoing and provides a more up-to-date portrait of demographic, economic,
social, and household characteristics every year, not just every
highlights data collected between 2009 and 2013. Tables HC-2 to HC-7 show key data for Elk
River Elk River.
Age of Housing Stock
The following graph shows the age distribution of the housing st
the U.S. Census Bureau and 2013 from the American Community Survey (5-Year). Table HC-2
includes the number of housing units built in Elk River, prior t
since. The following are key points derived from Table HC-2.
In total, Elk River is estimated to have nearly 10,000 housing units, of which about 8,415
are owner-occupied and just over 1,300 are renter-occupied. In total, owner-occupied
housing units account for about 86.5% of Elk Rivers total housing stock.
The highest number of homes was built during the period from 2009. Overall,
roughly 27% of the total housing units were built during this period. Less than 10% of Elk
River housing stock was built before 1970. Some of these housing units may be dilapidated
and in need of replacement or repair.
AGE OF HOUSING STOCK
Elk River
2013*
2,750
2,500
2,250
2,000
1,750
1,500
1,250
1,000
750
500
250
0
Before1940s1950s1960s1970s1980s1990s2000sAfter
19402010
Decade Constructed
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MAXFIELD RESEARCH & CONSULTING, LLC..
HOUSING CHARACTERISTICS
Housing Units by Structure and Occupancy or (Housing Stock by St)
Table HC-3 shows the housing stock in Elk River by type of structure and
2013. Data for 2000 is from the U.S. Census and 2013data is from American Community
Survey.
The dominant housing type in Elk River is the single-family detached home, representing
about 73% of all housing units as estimated in 2013.
There are only about an estimated 840total housing units located in buildings of more than
10 units, or about 11% of the housing stock.
According to the data, an estimated 2% of the Elk Rivers housin
2000. As shown in Table HC-4 on Page 37, vacant units increased to 5% in 2010. ACS data
for units in structure does not account for vacant units.
It is important to note, however, that the Census definition of
includes: units that have been rented or sold, but not yet occupseasonal housing
(vacation or second homes), housing for migrant workers, and eve-up housing.
Thus, the U.S. Census vacancy figures are not always a true indi
available for new households wishing to move into the area.
Housing Stock By Units In Structure
Elk River
2013*
450
400
Owner Occupied
350
Renter Occupied
300
Vacant
250
200
150
100
50
0
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MAXFIELD RESEARCH& CONSULTING, LLC.
HOUSING CHARACTERISTICS
TABLE HC-3
HOUSING STOCK BY UNITS IN STRUCTURE
ELK RIVER
2000 and 2013*
20002013*
NoPct.NoPct.
Owner occupied:4,431100.06,236100.0
1, detached4,04391.25,36386.0
1, attached3197.275912.2
2 to 4 units400.900.0
5- to 9-plex70.200.0
10 to 19 units00.0250.4
20 to 49 units00.000.0
50 + units00.0721.2
Mobile home220.5170.3
Renter occupied:1,233100.01,687100.0
1, detached1159.339623.5
1, attached675.434620.5
2 to 4 units574.6754.4
5- to 9-plex705.71448.5
10 to 19 units29824.21448.5
20 to 49 units36529.643325.7
50 + units25220.41106.5
Mobile home90.7392.3
Total occupied:5,664100.07,923100.0
1, detached4,15873.45,75972.7
1, attached3866.81,10513.9
2 to 4 units971.7750.9
5- to 9-plex771.41441.8
10 to 19 units2985.31692.1
20 to 49 units3656.44335.5
50 + units2524.41822.3
Mobile home310.5560.7
Vacant/Vac. Rate:1182.0----
1, detached581.4----
1, attached4610.6----
2 to 4 units00.0----
5- to 9-plex33.8----
10 to 19 units00.0----
20 to 49 units112.9----
50 + units00.0----
Mobile home00.0----
* Data for 2013 is from US Census, American Community Survey (5-Ye
Sources: US Census Bureau, Maxfield Research & Consulting, LLC
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MAXFIELD RESEARCH & CONSULTING, LLC.
HOUSING CHARACTERISTICS
Housing Units by Occupancy Status & Tenure
Tenure is a key variable that analyzes the propensity for househ
housing unit. Tenure is an integral statistic used by numerous
private sector industries to assess neighborhood stability.TableHC-4 shows historic tenure
trends for 2000 andwithestimates for 2015 andprojections for 2020(ESRI, with adjustment by
Maxfield Research).
Even though both owner- and renter-occupied housing units increased substantially over
the decade, their percentage of total housing units decreased sl
number of vacant units. Owner-occupied units decreased from 77% in 2000 to 76% in 2010
and renter-occupied units from 21% to 19%. Consequently, the number of vac
units was only 2% in 2000 while increasing to over 5% in 2010. Projections through 2020
indicate a stabilization of owner-occupied housing and vacant units.
TABLE HC-4
HOUSING UNITS BY OCCUPANCY STATUS & TENURE
ELK RIVER
2000 to 2020
Elk River
Year/OccupancyNo.Pct.
2000
Owner Occupied76.6
4,431
Renter Occupied21.3
1,233
Vacant2.0
118
Total100.0
5,782
2010
Owner Occupied75.8
6,478
Renter Occupied18.8
1,602
Vacant5.4
462
Total100.0
8,542
2015
Owner Occupied77.9
6,650
Renter Occupied19.9
1,703
Vacant5.4
457
Total103.1
8,810
2020
Owner Occupied75.4
7,012
Renter Occupied19.2
1,790
Vacant5.3
495
Total100.0
9,297
Sources: U.S. Census Bureau; ESRI; Maxfield Research & Consultin
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MAXFIELD RESEARCH & CONSULTING, LLC.
HOUSING CHARACTERISTICS
The percentages in Table HC-4 compared to Table D-6 on Page 23 are due to the additional of
vacant unit totals. Table D-6 does not account for vacant units and thus percentages are
slightly different.
Owner-Occupied Housing Units by Mortgage Status
Table HC-5 shows mortgage status and average values from the American Com
for 2013(5-Year). Mortgage status provides information on the cost of home
analyzed in conjunction with mortgage payment data. A mortgage
where the property is pledged as security for repayment of debt.e has priority
claim over any other mortgage or if its the only mortgage. A s
mortgage is called a junior mortgage, a home equity line of cr
this category. Finally, a housing unit without a mortgage is owned free and clear and is debt
free. The following key points summarize findings from Table HC-5.
Approximately 81% of Elk River homeowners have a mortgage. About 24% of homeowners
with mortgages also have a second mortgage and/or home equity loan. Comparatively,
about 66% of homeowners in the United States have a mortgage.
The average home value of a home with a mortgage from Elk River
approximately $216,650. By comparison, the same value in the U.S. is about $263,629, or
22% higher than Elk River.
TABLE HC-5
HOUSING UNITS BY MORTGAGE STATUS
ELK RIVER
2013 (5-Year Estimate)
Elk River
Twin CitiesMN
Mortgage Status
No.Pct.Pct.Pct.
Housing units without a mortgage1,18419.024.230.4
Housing units with a mortgage/debt5,05281.075.869.6
Second mortgage only 423 6.85.64.7
Home equity loan only 990 15.915.312.6
Both second mortgage and equity loan 85 1.40.80.7
No second mortgage or equity loan 3,554 57.054.251.6
Total6,236100.0100.0100.0
Average Value by Mortgage Status
$216,650
Housing units with a mortgage$265,537$231,401
$256,762
Housing units without a mortgage$250,624$202,693
Sources: U.S. Census Bureau - 2013 ACS;
Maxfield Research & Consulting, LLC
Owner-Occupied Housing Units by Value
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MAXFIELD RESEARCH & CONSULTING, LLC.
HOUSING CHARACTERISTICS
Table HC-6 presents data on housing values summarized by nine price range
refers to the estimated price point the property would sell if t
single-family and townhome properties, value includes both the land and the structure. For
condominium units, value refers to only the unit.
Over one-third of the owner-occupied housing stock in Elk River is estimated to be valued
between $200,000 and $299,999 (36%).
The median and average owner-occupied home in Elk River is $206,300 and $224,226,
respectively. Twenty-three percent of the Elk Rivers home values are valued under
$150,000.
TABLE HC-6
UNITS BY VALUE
ELK RIVER
2013 (5-Year Estimate)
Elk River
Twin CitiesMN
Home Value
No.Pct.Pct.Pct.
Less than $50,000911.53.56.1
$50,000-$99,9993726.04.410.4
$100,000-$149,99994615.212.016.6
$150,000-$199,9991,55625.022.221.4
$200,000-$299,9992,22935.730.725.0
$3000,000-$499,99995215.319.414.8
Greater than $500,000901.47.85.7
Total6,236100.0100.0100.0
$206,300
Median Home Value$221,493
$187,900
$224,266
Average Home Value$261,926
$222,672
Sources: U.S. Census Bureau - 2013 ACS;
Maxfield Research & Consulting, LLC
Owner-Occupied Units by Value
Elk River - 2013 ACS (5-Year)
2,500
2,229
2,000
1,500
1,556
1,000
952
946
372
500
91 90
0
Less than$50k to$100k to$150k to$200k to$250k to$300k+
$50k$99.9k$149.9k$199.9k$249.9k$299.9k
Home Value
39
MAXFIELD RESEARCH& CONSULTING, LLC.
HOUSING CHARACTERISTICS
Renter-Occupied Units by Contract Rent
Contract rent (also known as asking rent) provides information on the monthly housing costs
for renters. Contract rent is the monthly rent agreed to regard
fees, or services that may be included. Key findings from Table-7 follow.
The median and average contract rents in Elk River were $794 and $898, respectively.
Based on a 30% allocation of income to housing, a household woul
about $31,760 to afford an average monthly rent of $794.
Approximately 34% of Elk River renters have monthly rents ranging from $500 to $749.
Another 35% of renters have monthly rents ranging from $750 to $ Over 48% of
renters have monthly rents of $1,000 or greater.
Housing units without payment of rent ( no cash rent ) make up o4% of Elk River
renters. Typically units may be owned by a relative or friend w
allow occupancy without charge. Other sources may include caretakers or ministers who
may occupy a residence without charge.
TABLE HC-7
HOUSING UNITS BY CONTRACT RENT
ELK RIVER
2013 (5-Year Estimate)
Elk River
Twin CitiesMN
Contract Rent
No.Pct.Pct.Pct.
No Cash Rent483.62.74.8
Cash Rent1,27896.497.395.2
$0 to $249644.86.17.9
$250-$49914410.97.315.1
$500-$74944633.624.729.0
$750-$99946334.930.524.6
$1,000+63147.631.423.4
Total1,326100.0100.0100.0
$794
Median Contract Rent$835$734
$898
Average Contract Rent$887$784
Sources: U.S. Census Bureau - 2013 ACS;
Maxfield Research & Consulting, LLC
40
MAXFIELD RESEARCH & CONSULTING, LLC.
RENTAL MARKET ANALYSIS
Introduction
Maxfield Research and Consulting LLC identified and surveyed larger rental properties of 16 or
more units in the Elk River. In addition, interviews were condu
developers, rental housing management firms, and others in the c
Rivers rental housing stock.
For purposes of our analysis, we have classified rental projects into two groups, general
occupancy and senior (age restricted). All senior projects are Senior Rental
Analysis section of this report. The general occupancy rental projects a
groups, market rate (those without income restrictions), affordable, (those r
in order to keep rents affordable), and subsidized (those with i
allocation of income to housing).
General-Occupancy Rental Projects
Our research of Elk Rivers general occupancy rental market included22 apartment
properties (16 units and larger) in October 2015. These projects represent a combined total of
931 units, including 633 market rate units and 298 affordable/subsidized units. At the t
our survey, 45 market rate units and one affordable/subsidized units were vacant, resulting in
an overall vacancy rates of 7.1% for market rate units and 1.3% for affordable/subsidized. It is
important to note however, that 28 of the 45 market rate vacancies are located within Elk Park
Estates which has changed ownership and management. Excluding t decreases the
vacancy rate to 3.0%. We were unable to gather complete information forthe propertyof Elk
Ridge Estates.
The overall market rate vacancy rate of 5.3%, excluding Elk Park Estates drops the vacancy rate
to 2.4% which is lower than the industry standard of 5% vacancy for a stabiliz
which promotes competitive rates, ensures adequate choice, and a The
pent-up market indicates a possible need of additional rental housing
the rental market: low-income, moderate-income, and market rate. Table RMA-1 summarizes
information on general occupancy projects surveyed. The following a
survey of these developments.
Market Rate
Granite Shores, converted to rental in 2012, is the newest marke
building built in nearly 20 years. Granite Shores contains a total of 67 units and was
originally built as a for-sale condominium in 2006, but struggled to sell units and went i
foreclosure. Granite Shores has the highest rents in Elk River, at $1,129 to $1,589 per
month for one-bedroom units, $1,299 to $1,539 per month for one-bedroom plus Den
units, and $1,429 per month for two-bedroom units. The monthly rents are about 40% to
41
MAXFIELD RESEARCH & CONSULTING, LLC.
RENTAL MARKET ANALYSIS
50% higher than the other older market rate properties and had three vacancies at the time
of the survey.
One-bedroom monthly rents ranged from $675to $1,589 with rents per square foot from
$0.80 to $1.28. Two-bedroom monthly rents ranged from $725 to $1,429 with rents per
square foot from $0.69 to $1.38. Evans Meadows has six three-bedroom units that rent for
$1,965 per month ($1.31 per square foot).
Overall, the average price per square foot for units in Elk River is $0.93. The average price
per square foot rents for a efficiency unit is $1.16, $1.05 for a one-bedroom unit, $1.44 for a
one-bedroom plus den unit, $0.94 for a two-bedroom unit, and $0.90 for three-bedroom
units. The newest units built at Evans Meadows are renting at a price per square foot
ranging from $1.31 for three-bedroom units to $1.38 for one-bedroom units.
A common laundry room with coin-operated washers and dryers is available in all market
rate properties surveyed. Granite Shores has in-unit laundry and Tara Hills Estates has in-
unit hook-up for laundry. All of the properties surveyed have underground, attached, or
detached garages either included in the monthly rent or are avai ($25
to $50 per month).
Affordable/Subsidized
We identified five affordable projects (244 units) which are financed through the Low
Income Housing Tax Credit (LIHTC) program, otherwise known as th
The maximum income limit for residency at these projects is at 6
income. Income limits are represented for both programs in Figures 1 and 2 on page 48.
We also identified two subsidized projects (54 units). Both are
developments requiring rent of 30% of a residents adjusted gros
There have been three affordable developments built within the past 10 years. Coachman
Ridge is the most recent development which opened in November 20
was fully leased before the occupancy date. The other new affordable developments are
Jackson Place (32 units) which was built in 2007 in Downtown Elk River and The Depot at Elk
River Station (53 units) built in 2011 near the commuter rail station . The majority of the
subsidized and Tax-Credit properties were built 15 or more years ago.
All subsidized units were occupied and there were four vacant units in the affordable
properties as of October 2015 for a total vacancy rate of 1.3%. Typically, subsidized and
affordable rental properties should be able to maintain vacancy
housing markets. The low vacancy rates in the market indicate pent-up demand for
affordable and subsidized units and also are an indication of the current economic climate
in the area.
42
MAXFIELD RESEARCH & CONSULTING, LLC.
RENTAL MARKET ANALYSIS
TABLE RMA-2
COMMON AREA FEATURES/AMENITIES
EXISTING GENERAL OCCUPANCY RENTAL PROJECTS
CITY OF ELK RIVER
October 2015
Utilities and Parking
In Unit/Common Area Amenities
Projects
Market Rate Rental
Granite Shores Cent.YYYIUYYYNNYIIUG Included
Evans Meadows WYYYCNYYYYYIIIAG Included
Lions Park CAYSSCNNNYNNIIUG Indluded
Oak Crest WSNNCNNNNNNIIIDG Included
Ridgewood Manor WYSYCNNNNNNIIIDG Included
Tara Hills Estates WYYNHUNNNNNNIIDG Included
Elk Park Estates WYYNCNNNNNYIIIDG Included
Elk Ridge Estates WNNNCNNNNNNIIDG Included
Balmoral Apartments WYSYCNNNYNNIIDG$25
Elk Crossings WYNNCNYNNNNI IIDG$50
School Street WYNNCNYNNNNI IIDG$50
River Garden WYSSCNNNYNNIIIDG$50
Pineview WSYSCNNNNNNIIIDG$50
Lake Orono Estates W/SNSNCNNNNNYIIIDG$35
Affordable/Subsidized Rental
Coachman Ridge CAYYYIUYYYYNYIIIUG Included
The Depot of Elk River CAYYYIUYYYYNYIIIUG Included
Jackson Place CAYSYIUYYNNNNIIIUG Included
Dove Tree WYYYCNYNNNNIIIA/DG$45/$55
Lanesboro Heights WNYSHUNNNYNNIIDG$30
Dove Terrace WYSYCNYNNYNIIIDG$45
Auburn Place WYNNCNNNYNNIIIDG$40
Elk Ridge Manor CANNNCNNNYNNIIIDG Included
Note: Y=Available, N=Not Available; I=Included
CA=Central Air; W=Wall unit air; S=Some units; DG=Detached Garag
C=Common
Source: Maxfield Research & Consulting, LLC
Along with income limits for residents, the projects have maximu
a percentage of median income usually 60% of median income. Rents at the affordable
projects range from $695to $800 for one-bedroom units, from $70 to $900 for two-
bedroom units, and from $899to $1,025 for three-bedroom units. These rents are similar
to many of the market rate projects, and there is likely some ma
46
MAXFIELD RESEARCH & CONSULTING, LLC.
RENTAL MARKET ANALYSIS
Elk River General Occupancy Rental Housing Locations
Maxfield Research & Consulting, LLC
Key:
60 + Units
40-59 Units
Market Rate Affordable
1.Granite Shores 14. The Depot at Elk River Station
21-39 Units
2.Evans Meadows 15. Jackson Place
Less than 20 Units
3.Lions Park 16. Dove Tree Apartments
4.Ridgewood Manor 17. Dove Terrace Apartments
5.Tara Hills Estates18. Elk Ridge Manor
6.Elk Park Estates 19. Coachman Ridge
7.Elk Ridge Estates
8.Balmoral Apartments Section 8
9.Elk Crossings/School Street20. Lanesboro Heights Townhomes
10.River Garden Apartments 21. Auburn Place
11.Pineview Estates
12.Lake Orono Estates
13.Oak Crest Apartments
Because the two newer Tax
47
MAXFIELD RESEARCH & CONSULTING, LLC.
RENTAL MARKET ANALYSIS
Credit properties were built in the last five years, the properties offer more amenities than the
other older affordable and subsidized properties amenities inclu-unit washer and dryers,
dishwashers, central a/c units, and heated underground garages.
amenities are minimal at the older affordable and subsidized projects. All projects fe
attached or detached garages renting from $30 to $55 per month.
FIGURE 1
2015 MHFA/HUD Income Limits
Sherburne County
Income Limits by Household Size
1 phh2 phh3 phh4 phh5phh6phh7phh8phh
30% of median$18,210$20,790$23,400$25,980$28,080$30,150$32,220$34,320
50% of median$30,350$34,650$39,000$43,300$46,800$50,250$53,700$57,200
60% of median$36,420$41,580$46,800$51,960$56,160$60,300$64,440$68,640
Maximum Gross Rents by Bedroom Size
0 BR1BR2BR3BR
30% of median$455$487$585$675
50% of median$758$812$975$1,126
60% of median$910$975$1,170$1,351
Sources: MHFA; Maxfield Research & Consulting, LLC
Figure 1 above shows the maximum allowable incomes by household
affordable housing and maximum gross rents that can be charged b
Sherburne County. Comparing the maximum rents with the market r-1
we can see that all rental buildings except for The Depot at Elk
60% of the AMI and most units are below 50% of the AMI. The maj
rents below 50% of AMI are 20 years and older. The quick absorpn occurring at Granite
Shores, which offers the highest rents in the market and is the
indicates the market is willing and able to afford higher market
updated amenities are offered.
Subsidized Housing Assistance Program
In addition to subsidized apartments, Elk River also has a tena-based subsidy called Housing
Choice Vouchers to help lower income households find affordable housing. The te-based
subsidy is funded by the Department of Housing and Urban Develop
managed by the St. Cloud Housing and Redevelopment Authority (HR
Choice Voucher program (formerly Section 8 Certificates and Vouchers) qu
are issued a voucher that the household can take to an apartment
under HUD guidelines. The household then pays 30% of their adjucome for rent
and utilities, and the Federal government pays the remainder of d.
48
MAXFIELD RESEARCH & CONSULTING, LLC.
RENTAL MARKET ANALYSIS
Applicants in Elk River may be eligible for the program if their
shown in Figure 2, which are set by HUD on an annual basis.
Currently, the HRA is maxed out on the 873 vouchers they issue.
households have very low incomes, very few could afford rental h
the assistance of the voucher program. Demand for the program is high, as there is at least a
five year waiting list and currently stands at over 3,000 households. The funding for the
program is very low so the HRA cannot issue any more vouchers an
closed. The St. Cloud HRA manages their vouchers throughout St. Cloud, Benton, Sherburn
and Wright Counties. The HRA could not provide the amount being
River.
FIGURE 2
Income Limits
Sherburne County
Housing Choice Voucher Program
FmailyExtremely Very
SizeLow-IncomeLow-Income
1-Person$18,200$30,350
2-Persons$20,800$34,650
3-Persons$23,400$39,000
4-Persons$26,000$43,300
5-Persons$28,410$46,800
6-Persons$32,570$50,250
7-Persons$36,730$53,700
8-Persons$40,890$57,200
Source: St. Cloud HRA
Pending Rental Developments in Elk River Elk River
Maxfield Research and Consulting LLC interviewed City staff in Elk River to determine pending
and planned rental developments. As of November 2015, there are no rental developments
planned within Elk River.
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MAXFIELD RESEARCH & CONSULTING, LLC.
RENTAL MARKET ANALYSIS
Rental Market Interview Summary
Interviews with area rental property managers, real estate agents, developers, and other
persons familiar with the rental market in Elk River were conduc
of the rental housing market in the community. The following ar
interviews:
The majority of property managers stated that rental demandhas remained strong and
vacancy rates remain low. Most of the issues continue to revolve around finding the right
qualified tenants. Although they are usually fully occupied, most market rate prope
not maintain a waiting list, and if they do the list is relativeManagers state that
most vacancies will be filled relatively quickly over a few months. Most of the affordable
and subsidized properties maintain lengthy waiting lists due to strong demand for low-
income rental units. The subsidized properties in particular ha
Lanesboro Heights stating a five-year wait.
If an apartment is not available in Elk River, the potential ten
surrounding communities such as Rogers, Monticello, Albertville,
The majority of managers prefer not to divulge renter profiles and typically stated they had
a wide mix of tenants. Most of the managers indicated that the
locally.
Most managers indicated that very few, if any renters utilized the commuter rail for work
purposesas most renters work in the local area.
Many of Elk Rivers rental housing buildings are composed of lar-sized (30 to 60 units)
structures targeted at the low- to moderate-income market. The majority of these buildings
were built at least 20 year ago and do not feature a variety of
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MAXFIELD RESEARCH & CONSULTING, LLC.
SENIOR HOUSING ANALYSIS
Senior Housing Defined
The term senior housing refers to any housing development that
55 or older. Today, senior housing includes an entire spectrum
occasionally overlap, thus making the differences somewhat ambig. However, the level of
support services offered best distinguishes them. Maxfield Research and Consulting LLC
classifies senior housing projects into five categories based on
offered:
Adult/Few Services; where few, if any, support services are provided, and rents tend
modest as a result;
Congregate/Optional-Services; where support services such as meals and light housekeeping
are available for an additional fee;
Congregate/Service-Intensive; where support services such as meals and light housekeeping ar
included in the monthly rents;
Assisted Living; where two or three daily meals as well as basic support servic
transportation, housekeeping and/or linen changes are included ithe fees. Personal care
services such as assistance with bathing, grooming and dressing
available either for an additional fee or included in the rents.
Memory Care; where more rigorous and service-intensive personal care is required for people
with dementia and Alzheimers disease. Typically, support servi
to those found at assisted living facilities, but the heightened
demand more staffing and higher rental fees.
These five senior housing products tend to share several characte
individual living apartments with living areas, bathrooms, and k
they generally have an emergency response system with pull-cords or pendants to promote
security. Third, they often have a community room and other com
socialization. Finally, they are age-restricted and offer conveniences desired by seniors,
although assisted living projects sometimes serve non-elderly people with special health
considerations.
The five senior housing products offered today form a continuum
following page), from a low level to a fairly intensive one; oft
type overlap with those at another. In general, however, adult/few serv
attract younger, more independent seniors, while assisted living
tend to attract older, frailer seniors.
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MAXFIELD RESEARCH & CONSULTING, LLC.
SENIOR HOUSING ANALYSIS
CONTINUUM OF HOUSING AND SERVICES FOR SENIORS
Congregate Apartments w/ Optional
Townhome or
Single-Family HomeAssisted LivingNursing Facilities
Services
Apartment
Age-Restricted Independent Single-Family, Memory Care
Congregate Apartments w/
Townhomes, Apartments, Condominiums, (Alzheimer's and
Intensive Services
CooperativesDementia Units)
Fully Independent Fully or Highly
LifestyleDependent on Care
Senior Housing Product Type
Source: Maxfield Research & Consulting, LLC
Senior Housing in Elk River
As of October 2015, Maxfield Research identified nine senior housing developments
River. These projects contain a total of 412 units. Three of the projects are subsidized, while
the remaining six are market rate. Guardian Angels owns andmanages seven of the nine
properties.
Table SH-1 provides information on the total units by product type and Table SH-2 shows
detailed information on each development including year built, number of units, unit mix,
number of vacant units, rents, and general comments about each p
TABLE SH-1
SENIOR HOUSING UNITS BY TYPE
CITY OF ELK RIVER
October 2015
Active Adult/Few Services
OwnershipMR RentalAFF/Sub. RentalAssisted LivingMemory Care
12483115*6030
* All units are subsidized. There are no designated affordable
Source: Maxfield Research & Consulting, LLC
Market Rate Senior Projects
We identified five existing adult/few service senior project in Elk River with a to207
units. Two of the developments are ownership (124 units) and the other three are rental
(83 units) buildings. Pullman Place is the newest market rate devel
is a cooperative ownership product with 65 units. The remaining
older.
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MAXFIELD RESEARCH & CONSULTING, LLC.
Meals
Housekeeping
Laundry
Activities
Transportation
Guest Suite
Garage Parking
Exercise Rm.
Storage Lockers
Computer Ctr.
Library
Craft/Hobby Rm.
Dining Rm.
Community Rm.
Balcony/Patio
Walk-in Closet
W/D
Microwave Oven
Dishwasher
A/C
SENIOR HOUSING ANALYSIS
Elk River Senior Housing Locations
Maxfield Research & Consulting LLC
60 + Units
Key:
40-59 Units
Adult/Few-Services Ownership
21-39 Units
1.Pullman Place
Less than 20 Units
2.Elk Run Village
Adult/Few-Services Rental
Market Rate
3.Elk Terrace
4.Evans Park
5.Riverview Apartments
Subsidized
5. Riverview Apartments
6.Angel Ridge
7.Guardian Oaks
Assisted Living
8.Guardian Angels by the Lake
Memory Care
8. Guardian Angels by the Lake
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MAXFIELD RESEARCH & CONSULTING, LLC
SENIOR HOUSING ANALYSIS
Pullman Place is a limited equity cooperative. Cooperative prod
unit (or share) and then paying monthly fees which includes all
commons areas, and future building maintenance. Pullman Place srly quickly
when it opened at the height of the real estate market. However
purchased during the peak have lost value in their units. All unit types currently sell fairly
quickly compared to 2012 and a few years before.
Elk Run Village is a for sale age-restricted townhome development for active adults. There
are a total of 52 homes along with a clubhouse. All of the unit-level, two-
bedrooms with attached garages.
Monthly rent for the rental buildings ranges $517 for efficiency units at Riverview
Apartments to $1,109 for a two-bedroom unit at Evans Park. Unit sizes range from 320
square feet for an efficiency to 826 for a two-bedroom unit. Both of the market rate
buildings are about 30 years and older.
Subsidized Senior Housing Projects
There are a total of 138 units in two subsidized senior projectsOctober 2015, all of
the subsidized units were occupied indicating pent-up demand for subsidized senior rental
units.
Overall, the unit sizes at the subsidized senior projects are considerably smaller than many
of the previously mentioned general-occupancy rental projects. One-bedrooms range from
540 to 688 square feet and two-bedrooms range from 734 to 800 square feet.
Typically subsidized senior housing offers limited to no amenities. However Guardian
Angels has developed Angel Ridge and Guardian Oaks with common a
a grocery store, gift shop, beauty salon, dining room, community
and coffee shop. Personal care services are also available at an extra cost along
scheduled activities.
Subsidized senior housing offers affordable rents to qualified l
handicapped/disabled persons. Typically, rents are tied to resies and based on 30
percent of adjusted gross income (AGI), or a rent that is below
households meeting the age and income qualifications, subsidized
most affordable rental option available.
Senior Housing with Services
There is one facility in Elk River that offers assisted living a
Guardian Angels by the Lake is a 90 unit development opened in 1
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MAXFIELD RESEARCH & CONSULTING, LLC
SENIOR HOUSING ANALYSIS
expanded in 2012. A new 30 unit memory care wing was added in 2012 and the former 13
unit memory care wing in the original building, have been conver
Personal care services are provided a-la-carte for both assisted living and memory care. The
base fee included weekly housekeeping and linens. Assisted living included two meals per
day and memory care includes three meals per day.
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MAXFIELD RESEARCH & CONSULTING, LLC
FOR-SALE MARKET ANALYSIS
Introduction
Maxfield Research and Consulting LLC analyzed the for-sale housing market in Elk River by
analyzing data on single-family and multifamily home sales and active listings; identifyi
pending for-sale developments; and conducting interviews with local real est
developers and planning officials.
Overview of For-Sale Housing Market Conditions
Table FS-1 presents home resale data on single-family and multifamily housing in Elk River from
2000 through June2015. The data was obtained from the Regional Multiple Listing Services of
Minnesota and shows annual number of sales, median and average p
market, cumulative days on market, and percentage of sales that -mediated (i.e.
short-sale or foreclosure). It should be noted that lender-mediated sales were not categorized
until July 2008 and the cumulative days on market were not calcu
Table FS-2 breaks down resale activity from Table FS-1 into single-family and multifamily
resales. The following are key points observed from our analysis of this data.
Like across the Twin Cities Metro Area and the nation, pricing p
height of the real estate boom. The average and median sales pr
$254,000 and $234,900 respectively. For comparison, the Twin Cities Metro Area median
sales priced peaked at $230,000 in 2006.
Between 2000 and 2005, the median sales price increased annually from $159,000 to
$234,900, a gain of 48%. However, from 2005 to 2010the median sales price declined to
$160,000 (-32%). Since 2010, home resale prices have increased significantly rising to
$209,975 (31%).
Sales prices increased between 2009 and 2010, mostly a result of-time homebuyer
tax credit that was available in the second half of 2009 through September 2010. The
credit also spurred transaction activity, resulting in nearly 4017% over 2008
sales). However, the sales price was at its lowest in 2009 at $132,000.
median sales prices has rising annually and is at $209,975 (+59%).
The average number of resales has averaged about 405 sales annually during the last
decade. So far through June 2015, the number of sales has averaged 391. The years of
2013 and 2014 showed substantialimprovement in sales from early this decade.
The number of lender-mediated properties accounted for over one-half of all home
transactions between 2008 and 2012; peaking in 2010 and 2011 at 70%. Since 2012, the
number has come down substantially and was at about 12% through alf of 2015.
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MAXFIELD RESEARCH & CONSULTING, LLC
Resales
Sales Price
FOR-SALE MARKET ANALYSIS
TABLE FS-2
SINGLE-FAMILY AND MULTIFAMILY RESIDENTIAL SALES
CITY OF ELK RIVER
2000 through 2015 (1st Half)
MedianAverage
NumberSelling%Selling%
Yearof SalesPriceChg.PriceChg.
Single-Family
2000318$162,400--$175,779--
2001288$174,7007.6%$191,4338.9%
2002358$199,92514.4%$219,40114.6%
2003360$222,00011.0%$244,36611.4%
2004470$239,2507.8%$256,3514.9%
2005411$251,9005.3%$272,3836.3%
2006325$251,500-0.2%$273,7850.5%
2007252$249,230-0.9%$260,260-4.9%
2008262$205,950-17.4%$220,158-15.4%
2009308$172,950-16.0%$183,223-16.8%
2010235$181,0004.7%$193,9315.8%
2011273$160,000-11.6%$166,955-13.9%
2012293$175,0009.4%$181,4398.7%
2013350$189,4508.3%$202,38511.5%
2014353$214,90013.4%$225,62311.5%
2015^208$227,2505.7%$234,6924.0%
Pct. Change
00' - 14'11.0%32.3%28.4%
Multifamily*
200035$142,580--$145,163--
200136$146,4002.7%$154,2276.2%
200277$152,1974.0%$167,8038.8%
2003106$162,2006.6%$172,2222.6%
2004141$167,1233.0%$179,2534.1%
2005108$172,7753.4%$184,2272.8%
2006114$167,025-3.3%$176,956-3.9%
2007108$164,995-1.2%$169,623-4.1%
200878$132,500-19.7%$137,021-19.2%
200989$100,000-24.5%$107,015-21.9%
201078$107,4427.4%$110,5553.3%
2011109$90,000-16.2%$92,842-16.0%
201297$105,00016.7%$106,74615.0%
201395$117,50011.9%$119,31311.8%
2014113$135,00014.9%$150,57026.2%
2015^64$146,5008.5%$158,8185.5%
Pct. Change
00' - 14'222.9%-5.3%3.7%
^2015: Sales from January to June
* Multifamily includes twinhomes, townhomes, and condominiums (c
not listed in the MLS)
Source: Regional Multiple Listing Service of MN; Maxfield Resea
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MAXFIELD RESEARCH & CONSULTING, LLC
Medain Value
FOR-SALE MARKET ANALYSIS
Single-family housing types accounted for about 90% of all sales since 2000. Multifamily
resales were highest in 2007 when they accounted for 30% of totaSince 2008,
multifamily home sales have remained relatively stable accountinroughly 24% of total
sales
During the real estate boom, multifamily housing priced closely -family housing and
sold for about 12%to 25%less than a single-family home. However, during the later-half of
the last decade and early part of this decade multifamily pricing decreased substantially and
was priced about 44% lower in 2011. The gap between the housing types is slowly closing
with multifamily homes priced currently 35% lower than single-family homes.
Home Resales by Price
Table FS-3 shows the distribution of sales within nine price ranges from resales in 2014. The
graph on the following page visually displays the sales data.
Homes pricedfrom $150,000 to $249,999accounted for 58% of totalsingle-family home
resales in 2014. Conversely, homes priced under $100,000 and over $400,000 accounted
for less than 5% of resales.
Multifamily homes priced from $100,000 to $150,000 accounted for 59% of resales in 2014.
Another 21% priced from $150,000 to $199,999 and 16% from $200,000 to $249,999.
There were no multifamily homes sold over the price of $250,000.
TABLE FS-3
HOME RESALES BY SALES PRICE & PRODUCT TYPE
CITY OF ELK RIVER
2014
Single-familyMultifamilyCombined
Price RangeNo.Pct.No.Pct.No.Pct.
Under $100,00072.0%43.5%112.4%
$100,000 to $149,9993911.0%6759.3%10622.7%
$150,000 to $199,99910429.5%2421.2%12827.5%
$200,000 to $249,99910128.6%1815.9%11925.5%
$250,000 to $299,9994412.5%00.0%449.4%
$300,000 to $349,9993710.5%00.0%377.9%
$350,000 to $399,999123.4%00.0%122.6%
$400,000 to 499,99982.3%00.0%81.7%
$500,000+10.3%00.0%10.2%
Total353100.0%113100.0%466100.0%
Sources: Regional Multiple Listing Service of Minnesota, Maxfiel
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MAXFIELD RESEARCH & CONSULTING, LLC
FOR-SALE MARKET ANALYSIS
Overall, 75% for all home resales in 2014 were priced from $100,
3% of home are sold for less than $100,000 and only 4.5% sold for more than $350,000.
Based on the median price of $210,000 in Elk River as of the first half of2015, a households
monthly payment (assuming 10% down and principal/interest, insurtaxes, and 4%
mortgage interest rate) would be about $1,350. The income required to afford a home at
this price would be about $54,000based on purchasing a home utilizing 30% of their
adjusted gross income (and assuming they do not have a high leve
equity). In 2015, 74% (4,964 households) of Elk Rivers non-senior households had incomes
greater than $54,000, meaning that three-quarters of non-senior households in Elk River
can afford a median-priced home in the city.
Resales by Price Point & Type: 2014
90.0%
80.5%
80.0%
SFMF
70.0%
60.0%
50.0%
41.1%
40.5%
40.0%
30.0%
15.9%
20.0%
13.9%
10.0%
3.5%
2.3%
2.0%
0.3%
0.0%
<$100k$100k-$200k$200k-$300k$300k-$400k$400k-$500k$500k+
Sales Price
Home Resales per Square Foot ( PSF )
Table FS-4on the following page shows the distribution of sales from 2005 to June 2015. Data
is provided the existing homes and new construction in Elk RiverThe graph on the following
page visually displays the sales data.
The median and average price per square foot has declined significantly since 2005. The
median price per square foot was $122 in 2005 declining to its lowest point in 2011 at $69
per square foot (-43%). Since 2011 the price per square foot has steadily increase to $9
per square foot (39%) as of June 2015.
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MAXFIELD RESEARCH & CONSULTING, LLC
FOR-SALE MARKET ANALYSIS
Before the housing bust and the Great Recession, the price per sfor existing
home was about 10% to 20% less than new home construction.In 2007, the price per
square foot between the two was exactly the same. Since 2007, price per square foot for
new home construction has been considerably higher. The highestoccurring in
2012 when the new home construction was 71% higher. New home construction is
currently 50% higher as of June 2015.
TABLE FS-4
HOUSING SALES PER SQUARE FOOT (PSF)
ELK RIVER
2005 to June 2015
MedianAvg.Existing HomeNew Const.
Year
PSFPSFMedian PSFMedian PSF
2005$122$131$116$140
2006$117$126$114$127
2007$113$121$113$113
2008$92$98$90$118
2009$79$82$76$103
2010$82$85$79$107
2011$69$72$68$111
2012$76$80$76$130
2013$86$92$84$130
2014$94$98$91$136
2015*$96$102$93$140
* Through June 2015
Source: Regional Multiple Listing Service of MN, Maxfield Resea
Elk River Sales per Square Foot (PSF)
$140
Median PSFAvg. PSF
$120
$100
$80
$60
$40
$20
$0
Year
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MAXFIELD RESEARCH & CONSULTING, LLC
FOR-SALE MARKET ANALYSIS
For comparison, the median PSF cost for housing in the Twin Cities is $113 PS
existing home and $152 PSF for new construction. Existing construction is about 18% less
than the Twin Cities median; however new constructionis only about 8% less PSF than the
TwinCities median.
Current Supply of Homes on the Market
To more closely examine the current market for available owner-occupied housing in Elk River,
we reviewed the current supply of homes on the market (listed for sale). Tables FS-5 through
FS-8homesshows currently listed for sale in Elk River. The data was provided by the Regional
Multiple Listing Services of Minnesota and is based on active listings in August 2015. MLS
listings generally account for the vast majority of all resident
Table FS-5 shows the number of listings by property type (i.e. single-family,
townhome/twinhome, or condominium) while Table FS-6 shows listings by home style. The
following points are key findings from our assessment of the act-family and
multifamily homes listed in Elk River.
About 150 homes were listed for sale in Elk River as of August 2015. Single-family homes
accounted for 73% of all active listings. The remaining listing
were no condominiums listed.
The median list price in Elk River was $245,960 for single-family homes and $215,725 for
multifamily homes). The median sale price is generally a more
housing values in a community than the average sale price. Aver
easily skewed by a few very high-priced or low-priced home sales in any given year, whereas
the median sale price better represents the pricing of a majorit
market.
Based on a median list price of $245,960, a household would need an income of about
$63,225 in order to afford to make monthly housing payments of about $1,581 (assuming a
10% down payment, 4.00% 30-year fixed mortgage). A household with significantly more
equity (in an existing home and/or savings) could put more than afford a
higher priced home. About 67.8% of Elk Rivers non-senior households have annual
incomes at or above $63,225.
About 21% of listings in Elk River are priced under $175,000 and none of those listings are
priced under $100,000. Homes priced from $200,000 to $299,999 account for 45% of those
listed in August 2015. Higher priced homes ($300,300 to $399,999) consist of 21% of the
listings and those $400,000 constitute 7%.
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MAXFIELD RESEARCH & CONSULTING, LLC
FOR-SALE MARKET ANALYSIS
The majority of multifamily listings (44%) are priced between $200,000 and $249,999 and
between $125,000 and $174,999 (44%). For single-family listings, 16.5% are priced
between $150,000 and $199,999, 43% are priced between $200,000 and $299,999, and
28% are between $300,000 and $399,999.
TABLE FS-5
HOMES CURRENTLY LISTED FOR-SALE
CITY OF ELK RIVER
August 2015
1
Single-FamilyMultifamily
Price RangeNo.Pct.No.Pct.
< $99,99900.0%00.0%
$100,000 to $149,99954.6%922.0%
$150,000 to $174,99987.3%1024.4%
$175,000 to $199,999109.2%00.0%
$200,000 to $249,9992018.3%1843.9%
$250,000 to $299,9992724.8%37.3%
$300,000 to $349,9991917.4%12.4%
$350,000 to $399,9991211.0%00.0%
$400,000 and Over87.3%00.0%
109100%41100%
Minimum$114,900$104,900
$625,900$328,350
Maximum
Median$279,900$215,725
Average$285,456$197,080
1
Includes townhomes (attached & detached), twinhomes, and
condominiums
Sources: Regional Multiple Listing Service of MN
Maxfield Research & Consulting, LLC
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FOR-SALE MARKET ANALYSIS
Elk River Active Listings - August 2015
35
31
Single-FamilyMultifamily
30
27
25
20
18 18
20
15
10
9
8
10
5
3
5
1
0
Under $100k$100k to$150k to$200k to$250k to$300k to$400k+
$149.9k$199.9k$249.9k$299.9k$399.9k
List Price
TABLE FS-6
ACTIVE LISTINGS BY HOUSING TYPE
ELK RIVER
August 2015
Property TypeListingsPct.
Single-family10972.7%
Townhome/Twinhome4127.3%
Condominium00.0%
Total150100.0%
Sources: Regional Multiple Listing Service of MN; Maxfield
Research & Consulting, LLC
The majority of active single-family listings are among one-story and two-story housing
types with 33% and 32%, respectively. The remaining types are distributed fairly evenly.
Detached townhomes comprise the majority of current townhome listings (49%). Side-by-
side townhomes are the next largest type townhome listing at 39%
twin home and quad townhomes listed.
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MAXFIELD RESEARCH & CONSULTING, LLC
FOR-SALE MARKET ANALYSIS
TABLE FS-7
ACTIVE LISTINGS BY HOUSING TYPE
ELK RIVER
August 2015
Avg. List Avg. Home SizeAvg. List PriceAvg. Age
Property TypeListingsPct.PriceSq. Ft.Per Sq. Ft.of Home
Single-Family
One story3633.0%$283,2752,467$1151986
1.5-story32.8%$176,5001,651$1071944
2-story3532.1%$314,9792,795$1132001
Modifed 2-story109.2%$358,4703,310$1081999
Split entry/Bi-level109.2%$213,0821,832$1161995
3-level split54.6%$231,9002,201$1051990
4 or more split-level109.2%$248,8002,442$1021991
Total109100.0%$285,4562,554$1121992
Townhomes/Twinhomes
Detached Townhomes2048.8%$244,0981,605$1522015
Twin Homes49.8%$152,6311,313$1161996
Side-by-side1639.0%$151,1191,526$992003
Quad12.4%$169,9001,850$922006
Total41100.0%$197,0801,552$1272008
Condominiums/Cooperatives
Condominium 100.0%
Total0100.0%$0$00
Total150$261,3002,280$1151997
Source: Regional Multiple Listing Service of MN; Maxfield Resea
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FOR-SALE MARKET ANALYSIS
Average List Price by Type
$350,000$140
Avg. List PricePSF
$127
$300,000$120
$116
$115
$112
$107
$103
$250,000$100
$200,000$80
$150,000$60
$100,000$40
$50,000
$20
$0$0
1 story1.5-story2 story+Split entry3-level split+Townhomes
Housing Type
Listings by Housing Type - Elk River
Townhomes
27.3%
3-level split+
10.0%
Split entry
6.7%
2 story+
30.0%
1.5-story
2.0%
1 story
24.0%
0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%
Pct.
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FOR-SALE MARKET ANALYSIS
TABLE FS-8
ACTIVE LISTINGS BY YEAR BUILT
ELK RIVER
August 2015
Number ofPct.Avg.
DecadeListingsListingsList Price
1900 to 190910.7%$124,900
1910 to 191910.7%$169,900
1920 to 192910.7%$139,100
1930 to 193921.3%$142,400
1940 to 194900.0%n/a
1950 to 195921.3%$165,000
1960 to 196910.7%$249,900
1970 to 1979138.7%$227,815
1980 to 19891711.3%$274,012
1990 to 19992617.3%$253,008
2000 to 20095134.0%$279,088
2010+3523.3%$270,425
Subtotal150100.0%
Source: Regional Multiple Listing Service of MN, Maxfield
Research & Consulting LLC
Listings by Decade Built: Elk River
60
51
50
40
35
30
26
17
20
13
10
2 2
1 1 1 1
0
0
1900s1910s1920s1930s1940s1950s1960s1970s1980s1990s2000s2010s
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MAXFIELD RESEARCH & CONSULTING, LLC
FOR-SALE MARKET ANALYSIS
Elk River Lot Supply
TablesFS-9, FS-10, and FS-11 showan inventory of lots within platted subdivisions in Elk River.
The table includes information on the year the subdivision was p
platted, number of lots developed, lots available, and type of lThe data in Tables FS-9 and
FS-10 was provided by Metrostudy (a nationally recognized firm providi
residential housing market). The data in Table FS-11 was provided by Sherburne County.
The following terms are used in the lot inventory tables:
Annual Starts and Closings: The sum of activity for the most recent four quarters.
Closing: Defined as when a move in has occurred and the home is occu
Future Lots Inventory: Future lots are recorded after a preliminary plat or site plahas
been submitted for consideration by the city.
Lot Front: Range of all lot sizes within the subdivision; based on the l
Occupied: A buyer has taken possession of the home that was previously
construction or a model home.
Price: Range of all base home price offered within the subdivision
Starts: The housing slab or foundation has been poured.
Total Lots: A summation of all lots platted in a subdivision, including t
under construction, and vacant.
Vacant Developed lot (VDL): The subdivision is considered developed after subdivision
streets are paved and vehicles can physically drive in front of
The following are key points from Tables FS-9 and FS-10:
nd
As of 2 Quarter 2015, Elk River had a total of 200 vacant lots within 26
However, 188 of the vacant lots were single-family lots while 11 vacant lots were attached
lots.
The majority of the subdivisions (20) were platted between 2000 oughly 54% of
the lots were platted between 2004 and 2006, the peak years of t
There have been three subdivisions platted recently in over the past two years.
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FOR-SALE HOUSING ANALYSIS
TABLE FS-11
VACANT LOT FOR PARCELS PLATTED
SHERBURNE COUNTY
2000 to Present
20122015
City/Township
Elk River253117
Baldwin Township248193
Becker6937
Becker Township221130
Big Lake11843
Big Lake Township7043
Blue Hill Township152142
Clear Lake4025
Clear Lake Township3629
Haven Township76
Livonia Township244162
Orrock Township244178
St. Cloud2612
Palmer Township1213
Princeton1011
Santiago Township124
Zimmerman9453
Subtotal1,8561,198
Source: Sherburne County, Maxfield Research & Consulting, LLC
Only 5% of the available lots are within thee subdivisions that
Consequently, nearly all the demand for new construction today i-family lots as
townhome product suffered more soduring the recession and has not recovered to the
same degree as single-family product.
Although the current single-family vacant lot is waning as few new subdivisions have been
platted since the recession; there are enough lots in the short-term to meet lot demand. In
addition, there are 369 lots classified as future lots that will
future lots to finished lots to meet forthcoming demand.
The median lot size for new single-family construction is about 0.40 acres for single-family
product type and 0.10 acres for attached housing products. Alth
attached lots identified in Table FS-10; they are actively marketing twinhomes and detached
townhomes in the West Oaks subdivision. Kliever Lake Fields is also actively marketing
detached townhomes.
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FOR-SALE HOUSING ANALYSIS
The average price of new construction in Elk River is approximat
square foot for single-family housing. Comparatively, new construction detached
townhomes and twinhomes are priced similar to single-family housing and averaging prices
around $236,000 ($152 PSF).
According to recent data provided by Sherburne County, vacant pl
significantly since 2012. Elk River experienced a decline from 253 lots in 2012 down to 117
lots in 2015. This equates to just over half of the platted lots in Elk River being absorbed
since 2012.
Pending For-Sale Developments
According to the City of Elk River, there are no pending for-sale housing developments in the
planning process at this time.
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HOUSING DEMAND ANALYSIS
Introduction
Previous sections of this study analyzed the existing housing su
demographic characteristics of the population and household base in Elk Rive
the report presents our estimates of housing demand in Elk River5through 2025.
Demographic Profile and Housing Demand
The demographic profile of a community affects housing demand and the types of housing that
are needed. The housing life-cycle stages are:
1.Entry-level householders
Often prefer to rent basic, inexpensive apartments
Usually singles or couples in their early 20s without children
Willoften double-up with roommates in apartment setting
2.First-time homebuyers and move-up renters
Often prefer to purchase modestly-priced single-family homes or rent
more upscale apartments
Usually married or cohabiting couples, in their mid-20's or 30's, some
with children, but most are without children
3.Move-up homebuyers
Typically prefer to purchase newer, larger, and therefore more
expensive single-family homes
Typically families with children where householders are in their
30's to 40's
4.Empty-nesters (persons whose children have grown and left home) and
never-nesters (persons who never have children)
Prefer owning but will consider renting their housing
Some will move to alternative lower-maintenance housing products
Generally couples in their 50's or 60's
5.Younger independent seniors
Prefer owning but will consider renting their housing
Will often move (at least part of the year) to retirement havens
Sunbelt and desire to reduce their responsibilities for upkeep a
maintenance
Generally in their late 60's or 70's
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HOUSING DEMAND ANALYSIS
6.Older seniors
May need to move out of their single-family home due to physical
and/or health constraints or a desire to reduce their responsibi
for upkeep and maintenance
Generally single females (widows) in their mid-70's or older
Demand for housing can come from several sources including: hous
housing preferences, and replacement need. Household growth nec
housing unless there is enough desirable vacant housing available to absorb the increase in
households. Demand is also affected by shifting demographic fac
population, which dictates the type of housing preferred. New h
need is required, even in the absence of household growth, when existing units no longer meet
the needs of the population and when renovation is not feasible
physically or functionally obsolete.
Rural areas tend to have higher proportions of younger household their housing than
in the larger growth centers or metropolitan areas such as the Twin Cities Metro Area. In
addition, senior households tend to move to alternative housing
conditions are a result of housing market dynamics, whichtypically provide more affordable
single-family housing for young households and a scarcity of senior hou
older households.
The graphic on the following page provides greater detail of var
within each housing life cycle. Information on square footage, average bedroo
and lot size is provided on the subsequent graphic.
Housing Demand Overview
The previous sections of this assessment focused on demographic
demand for housing in the Elk River. In this section, we utilize findings from the economic and
demographic analysis to calculate demand for new general occupanhousing units in Elk
River.
Housing markets are driven by a range of supply and demand facto
submarket. The following points outline several of the key vari
Demographics
Demographics are major influences that drive housing demand. Ho
formations are critical (natural growth, immigration, etc.), as
of householders, incomes, etc.
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TYPICAL HOUSING TYPE CHARACTERISTICS
Target Market/Unit/HomeLot Sizes/
Housing Types
1
DemographicCharacteristicsUnits Per Acre
Entry-level single-familyFirst-time buyers: Families, 1,200 to 2,200 sq. ft.80'+ wide lot
2.5-3.0 DU/Acre
couples w/no children, some 2-4 BR | 2 BA
singles
Move-up single-family2,000 sq. ft.+80'+ wide lot
Step-up buyers: Families,
couples w/no children3-4 BR | 2-3 BA2.5-3.0 DU/Acre
Executive single-familyStep-up buyers: Families, 2,500 sq. ft.+100'+ wide lot
couples w/no children3-4 BR | 2-3 BA1.5-2.0 DU/Acre
Small-lot single-familyFirst-time & move-down buyers: 1,700 to 2,500 sq. ft.40' to 60' wide lot
5.0-8.0 DU/Acre
Families, couples w/no children, 3-4 BR | 2-3 BA
empty nesters, retirees
Entry-level townhomesFirst-time buyers: Singles, 1,200 to 1,600 sq. ft.6.0-12.0 DU/Acre
2-3 BR | 1.5BA+
couples w/no children
Move-up townhomesFirst-time & step-up buyers: 1,400 to 2,000 sq. ft.6.0-8.0. DU/Acre
Singles, couples, some families, 2-3 BR | 2BA+
empty-nesters
Executive townhomes/twinhomesStep-up buyers: Empty-nesters, 2,000+ sq. ft.4.0-6.0 DU/Acre
3 BR+ | 2BA+
retirees
Detached TownhomeStep-up buyers: Empty-nesters, 2,000+ sq. ft.4.0-6.0 DU/Acre
retirees, some families 3 BR+ | 2BA+
CondominumsFirst-time & step-up buyers: 800 to 1,700 sq. ft.Low-rise: 18.0-24.0 DU/Acre
1-2 BR | 1-2 BAMid-rise: 25.0+ DU/Acre
Singles, couples, empty-nesters,
retireesHi-rise: 75.0+ DU/Acre
Apartment-style rental housing675 to 1,250 sq. ft.Low-rise: 18.0-24.0 DU/Acre
Singles, couples, single-parents,
some families, seniors1-3 BR | 1-2 BAMid-rise: 25.0+ DU/Acre
Hi-rise: 75.0+ DU/Acre
Townhome-style rental housingSingle-parents, families 900 to 1,700 sq. ft.8.0-12.0 DU/Acre
w/children, empty nesters2-4 BR | 2BA
Student rental housing550 to 1,400 sq. ft.Low-rise: 18.0-24.0 DU/Acre
College students, mostly
undergraduates1-4BR | 1-2 BAMid-rise: 25.0+ DU/Acre
Hi-rise: 50.0+ DU/Acre
Senior housingRetirees, Seniors550 to 1,500 sq. ft.Varies considerably based on
Suites - 2BR | 1-2 BAsenior product type
1
Dwelling units(DU) per acre expressed in net acreage (minus rig
Source: Maxfield Research & Consulting, LLC
Economy & Job Growth
The economy and housing market are intertwined; the health of th
broader economy and vice versa. Housing market growth depends on job growth (or the
prospect of); jobs generate income growth which results in the f
and can stimulate household turnover. Historically low unemployment rates have driven both
existing home purchases and new-home purchases. Lack of job growth leads to slow or
diminishing household growth, which in-turn relates to reduced housing demand. Additionally,
low income growth results in fewer move-up buyers which results in diminished housing
turnover across all income brackets.
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Consumer Choice/Preferences
A variety of factors contribute to consumer choice and preferenc
family status is the primary factor for a change in housing type-
nest families, etc.). However, housing demand is also generated the turnover of existing
households who decide to move for a range of reasons. Some hous-
up, downsize, change their tenure status (i.e. owner to renter o
a new location.
Supply (Existing Housing Stock)
The stock of existing housing plays a crucial component in the d
are a variety of unique household types and styles, not all of w
consumers. The age of the housing stock is an important component for housing demand, as
communities with aging housing stocks have higher demand for rem
replacement new construction, or new home construction as the cu
provide the supply that consumers seek.
Pent-up demand may also exist if supply is unavailable as householders postpo
new housing product becomes available.
Housing Finance
Household income is the fundamental measure that dictates what a
pay for housing costs. According to the U.S. Department of Housing and Urban Developmen
(HUD), the definition of affordability is for a household to pay
income on housing (including utilities). Families who pay more than 30% of their income for
housing (either rent or mortgage) are considered cost burdened an
affording necessities such as food, clothing, transportation and
The ability of buyers to obtain mortgage financing has been incr the
Great Recession as lenders have overcorrected from the subprime
many borrowers have remained on the sidelines as lenders have en
requirements, thereby increasing the demand for rental housing.
Mobility
It is important to note that demand is somewhat fluid between ot
communities and will be impacted by development activity in near
communities outside Sherburne County.
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Estimated Demand for For-Sale Housing
Table HD-1 presents our demand calculations for general occupancy for-sale housing in Elk
Riverbetween 2015 and 2025.
The 65 and older cohort is typically not a target market for new-sale
housing, therefore, we limit demand from household growth to only those households under
the age of 65. According to our projections, the Elk River is expected to increase by estimated
704 households under the age of 65 between 2015 and 2025. Of this projected household
growth, we estimate that 82% have a propensity to own, thus projected demand from
household growth total 577 households.
TABLE HD-1
FOR-SALE HOUSING DEMAND
ELK RIVER
2015 to 2025
Demand from Projected Household Growth
704
Projected HH growth under age 65 in the Market Area 2015 to 2025¹
2
(times) % propensity to own
x82.0%
577
(equals) Projected demand from new HH growth=
Demand from Existing Owner Households
3
Number of owner households (age 64 and younger) in Market Area (
5,745
(times) Estimated percent of owner turnover 4
x55%
3,160
(equals) Total existing households projected to turnover=
8.3%
(times) Estimated percent desiring new housingx
261
838
(equals) Total demand from HH growth and existing HHs 2015 to 20=
15%
(times) Demand from outside Elk River Market Area
986
(equals) Total demand potential for ownership housing, 2015 to 2
Single Multi-
Familyfamily*
5
(times) Percent desiring for-sale single-family vs. multifamily
x80%20%
(equals) Total demand potential for new single-family & multifa=789197
6
(minus) Units marketing or approved platted lots (undeveloped an
-18811
(equals) Excess demand for new general occupancy for-sale housin=601186
1
Estimated household growth based on data from Table D-1 as adju
2
Pct. of owner households under the age of 65 (U.S. Census - 201
3 Estimate based on 2010 owner households and new owner household
4 Based on on turnover from 2010 American Community Survey for ho
5 Based on preference for housing type and land availability
6
Approved platted lot data does not account for the scattered lot
* Multi-family demand includes demand for townhomes, twinhomes, an
Source: Maxfield Research & Consulting, LLC
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MAXFIELD RESEARCH & CONSULTING, LLC
HOUSING DEMAND ANALYSIS
Demand is also forecast to emerge from existing Market Area hous
An estimated 5,745 owner-occupied households under age 65 are located in the Elk River in
2015. Based on mobility data from the Census Bureau, an estimated 55% of owner households
will turnover in a ten-year period, resulting in 3,160 existing households projected to turnover.
Finally, we estimate 8.3% of the existing owner households will seek new for-sale housing,
resulting in demand for nearly 261 for-sale units through 2025. Combining the demand from
new household growth and from household turnover equals a total demand for 838 for-sale
housing units from 2015 to 2025
Next, we estimate that 15% of the total demand for new for-sale units in the Elk River will come
from people currently living outside of the Market Area. A small portion of this market will be
former residents of the area, such as snow-birds heading south for the winters. Adding
demand from outside the Elk River to the existing demand potential, results in a total estimated
demand for 986 for-sale housing units by 2025.
Based on land available, building trends, and demographic shifts
population), we project 80% of the for-sale owners will prefer traditional single-family product
types while the remaining 20% will prefer a maintenance-free multi-family product (i.e. twin
homes, townhomes, or condominiums).
We then subtract the current identified platted lots that are un
After subtracting the current lot supply in subdivisions (188 total single-family lots) we find
total demand through 2025 resulting in 601 single-family lots and 186 multifamily lots.
Estimated Demand for General-Occupancy Rental Housing
Table HD-2 presents our calculation of general occupancy rental housing d
This analysis identifies potential demand for rental housing tha
households and turnover households.
The 65 and older cohort is typically not a target market for new
housing, therefore, we limit demand from household growth to onl
the age of 65. According to our projections, the Elk Riveris expected to increase by 704
households under the age of 65 between 2015 and 2025.
Demand is also forecast to emerge from existing Market Area housrough turnover.
An estimated 1,450renter-occupied households under age 65 are located in the Elk Riverin
2015. Based on mobilitydata from the Census Bureau, we estimate renter household by age
group forturnover in a ten-year period, resulting inexisting households projected to turnover.
Finally, we estimate the percentage of the existing renter households that willdesirenew rental
housing, resulting in demand for 244rental units through 2025.
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HOUSING DEMAND ANALYSIS
Combining demand from household growth plus turnover results in
for 375 rental units over the next 10 years. Next, we estimate that 15% of the total demand for
new for-sale units in the Elk River will come from people currently living outside of Elk River for
a total of 442 rental units.
We then estimate the number of rental units each product type co
This capture rate is estimated based on the current products andduct pricing within in Elk
River along with household incomes for current renters. We fin44
subsidized housing units, 133 affordable rental units, and 265 market rate units.
From the total demand for general occupancy units, we subtract any development under
construction or proposed at market equilibrium (95% occupancy) t
demand in Elk River. At the time of this study there was no one
and thus, excess demand remains for 44 subsidized units, 133 affordable units, and 265 market
rate units.
Estimated Demand for Independent Adult/Few Service Senior Housin
Table HD-3 presents our demand calculations for market rate independent s
River in 2015 and 2020.
In order to determine demand for independent senior housing, the
to those households that are both age and income qualified. The-qualified market is
defined as seniors age 55 and older, although independent livingwill primarily attract
seniors age 65 and older.
We calculate that the minimum income needed to afford monthly re
seniors with this income could afford a monthly rent of $1,165 based on spending 40% of their
income, which is much higher than the rents of $635 to $734 for two-bedroom units at Elk
Terrace and slightly higher than rent of $1,109 at Evans Park for two-bedroom apartments.It is
important to note that the existing developments are both over 2
development would garner the higher rents. In addition, we add households with incomes
between $25,000 and $34,999 who would be able to supplement thei
proceeds from a home sale. We estimate the number of age/income-qualified senior
households in Elk River in 2015 to be 2,558 households.
Adjusting to include appropriate long-term capture rates for each age cohort (0.5% of
households age 55 to 64, about 5.0% of households age 65 to 74,
75 and over) results in a market rate demand potential for 119 independent senior rental u
in 2015.
Some additional demand will come from outside Elk River. We est25% of the long-
term demand for independent senior housing will be generated by iding
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MAXFIELD RESEARCH & CONSULTING, LLC
HOUSING DEMAND ANALYSIS
outside Elk River. This demand will consist primarily of parent
River, individuals who live just outside of Elk River and have a
as former residents who desire to return. Together, the demand from Elk River seniors and
demand from seniors who would relocate to Elk River results in a-term demand for
159 active adult units in 2015.
Independent demand in Elk River is split into housing that offerrental
housing. Based on the current product available in Elk River, w
demand will be for adult ownership housing (63 units) and 60% will be for rental housing (95
units).
TABLE HD-3
MARKET RATE ADULT/FEW SERVICES HOUSING DEMAND
ELK RIVER
2015 & 2020
20152020
Age of HouseholderAge of Householder
55-6465-7475+55-6465-7475+
# of Households w/ Incomes of >$35,000 1 1,2137324301,412928789
# of Households w/ Incomes of $24,999 to $34,999 1 7377887279113
++
(times ) Homeownership Rate87%84%63%87%84%63%
xx
(equals) Total Potential Market Base=1,277796485=1,475994860
(times) Potential Capture Rate x0.5%5.0%15.0%x0.5%5.0%15.0%
(equals) Demand Potential =64073=750129
Potential Demand from Market Area Residents=119=186
(plus Demand from Outside Market Area (25%)2+40+62
(equals) Total Demand Potential=159=248
Renter-Renter-
Owner-Owner-
OccupiedOccupiedOccupiedOccupied
(times) % by Product Typex40%x60%x40%x60%
(equals) Demand Potential by Product Type=63=95=99=149
(minus) Existing and Pending MR Active Adult Units 3-111-72-111-72
(equals) Excess Demand for MR Active Adult Units=0=23=0=77
1
2020 calculations define income-qualified households as all hou
between $30,000 and $39,999.
2
Based on project manager interviews and historical trends. We
3
Existing and pending are deducted at market equilibrium (95% oc
Source: Maxfield Research & Consulting, LLC
Next, we subtract existing competitive market rate units (minus
for sufficient consumer choice and turnover) from the owner and
the existing competitive market rate units results in total demaotential for zero adult
owner-occupied units and 23 adult rental units in 2015.
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MAXFIELD RESEARCH & CONSULTING, LLC
HOUSING DEMAND ANALYSIS
Adjusting for inflation, we have estimated that households with
and homeowners with incomes of $230,000 to $39,999 would income
independent senior housing in 2020. Considering the growth in tt base, the
income distribution of the older adult population in 2020, the methodology projected that
there will be no demand for adult owner-occupied units and increase to 77 adult rental units
in the City of Elk River by 2020.
Estimated Demand for Affordable Independent Senior Housing
Table HD-4 presents our demand calculations for affordable senior housing for households with
incomes qualifying at or below 50% and 80% of AMI in Elk River i
In order to arrive at the potential age and income-qualified base for low-income and affordable
housing, we include all senior (65+) households that qualify for the income guidelines for one-
and two-person households in 2015 at or below 50% and 80% of AMI ($30,350 and $52,650).
Adjusting to include appropriate long-term capture rates for each age cohort (1.5% of
households age 55 to 64, about 10.0% of households age 65 to 74, and 20.0% of households
age 75 and over) results in a market rate demand potential for 2
units in 2015.
TABLE HD-4
AFFORDABLE INDEPENDENT SENIOR HOUSING DEMAND
ELK RIVER
2015 & 2020
20152020
Age of HouseholderAge of Householder
55-6465-7475+55-6465-7475+
# of Households w/ Incomes of $28,000 to $52,650233208262197213288
(times ) Percent Renter Households13%16%37%13%16%37%
xx
(equals) Total Potential Market Base3033972634107
=
(times) Potential Capture Rate x1.5%10.0%20.0%x1.5%10.0%20.0%
(equals) Demand Potential =0319=0321
Total Market Rate Demand Potential=23=25
(plus) Demand from Outside Market Area (40%)+15+17
(equals) Total Demand Potential=39=42
(minus) Existing and Pending Aff. Independent Units 1-0-0
(equals) Total Demand Potential in Market Area=39=42
1
Includes existing and pending units at 95% occupancy, or market
Source: Maxfield Research & Consulting, LLC
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We then estimate that seniors currently residing outside of Elk
demand for affordable senior housing. This demand includes seni
River that would move to the city, as well as those who would recate from other places of
residence (i.e. rural areas, other areas of the state and out-of-state). Together, demand from
Elk River seniors and demand from seniors who would locate to El
affordable units in 2015.
There are no affordable senior rental properties in Elk River and thus, the t
demand remains at 39 units in 2015.
Following the same methodology, we project that excess demand capturable in Elk River is
calculated to increase slightly to 42 affordable independent senior housing units by 2020.
Estimated Demand for Subsidized Senior Housing
Table HD-6 presents our demand calculations for subsidized senior housing5
and 2020.
The 2015 income qualifications for extremely-low income housing in Sherburne County are
$18,200 for a one-person household and $20,800 for a two-person household. Seniors with
incomes meeting these guidelines are designated as having low in
subsidized housing; households with incomes above these guidelin
necessary to obtain market rate housing would be candidates for affordable housing. Senior
living at a Section 202 building pay their rent according to the
monthly income). Households with incomes slightly above 50% of M
affordable housing, with rents usually set at 50% to 80% of MFI, and would not qualify for
deeply-subsidized housing. It should be noted that many senior househo
income categories own their homes and therefore have untapped eq, upon the sales
of their homes, can be used toward market rate housing.
Maxfield Research & Consulting LLCcalculated demand for subsidized senior housing as
displayed in Table HD-5. We assume that all households over the age of 65 with incomes of
$20,800 or less in Elk River are income-qualified and would be candidates for subsidized senior
housing. In 2015, we find a total of an estimated 223 households over the age of 65 in Elk River
meeting these age- and income-qualifications.
We estimate that approximately 30% of the total age/income-qualified market would both
need and desire subsidized senior housing. The remaining househither remain in
their homes until in need of housing with services or obtain aff
with assistance from family members or through the sale of a hom
30% capture rate, results in an estimated potential demand for 67 subsidized senior housing
units in Elk River in 2015 and 66 units in 2020.
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TABLE HD-5
SUBSIDIZED INDEPENDENT SENIOR HOUSING DEMAND
ELK RIVER
2015 & 2020
20152020
Age 65+ Households w/Incomes < $20,000223220
(times) Percent of Income Qualified Seniors Needing/Desiring Subx30%30%
(equals) Demand Potenital from Market Area residents=6766
(plus) Demand From Ouside the Market Area (40%)+4544
(equals) Total Demand Potential for Subsidized Senior Housing in112110
(minus) Existing & Pending Subsidized Senior Units in Market Are-118118
(equals) Total Market Area Subsidized Senior Housing Demand Pote=00
* Competitive subsidized units, minus a 7% vacancy rate.
Source: Maxfield Research & Consulting, LLC
We anticipate that at least 40% of the demand for subsidized sen
come from seniors currently residing in surrounding communities
River to be near their family or for other reasons. Including dom outside of Elk River
increases total demand potential to 112 units in 2015 and 110 units in 2020.
From this potential demand, we subtract the existing number of c
Elk River. Currently, there are only two identified subsidized senior buildings in the Market
Area with a total of 122 units and are both fully occupied with waiting lists. Subtracti
units, minus a 3% vacancy factor, results in sufficient subsidized units in Elk River in both 2015
and 2020. The existing subsidized housing units are sufficiently serving t
through 2020.
Estimated Demand for Congregate Senior Housing
Table HD-6 presents our demand calculationsfor congregate housing in Elk River in 2015and
2020.
The potential age-and income-qualified base for congregate senior housing includes all senior
(65+) households with incomes of $35,000 as well as homeowner households with incomes
between $25,000 and $35,000 who would qualify with the proceeds from the sales of their
homes. The proportion of eligible homeowners is based on the ho
seniors, as identified in the demographics section of this studyncome,
and asset-qualified households in Elk River is estimated to be 1,282 households in 2015.
Adjusting to include appropriate capture rates for each age coho
to 74 and 11.0% of households age 75 and older) results in a loc
congregate units in 2015.
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TABLE HD-6
MARKET RATE CONGREGATE HOUSING DEMAND
ELK RIVER
2015 & 2020
20152020
Age of Age of
HouseholderHouseholder
65-7475+65-7475+
732430928489
# of Households w/ Incomes of >$35,000¹
778879113
# of Households w/ Incomes of $25,000 to $34,999¹++
84%63%84%63%
(times) Homeownership Ratexx
65556671
(equals) Potential Market==
797485994560
(equals) Total Potential Market Base==
1.5%11.0%1.5%11.0%
(times) Potential Capture Rate²xx
12531562
(equals) Demand Potential =+=+
6577
Potential Demand from Market Area Residents==
2226
(plus) Demand from Outside Market Area (25%)++
87102
(equals) Total Demand Potential==
3
00
(minus) Existing and Pending Congregate Units--
87102
(equals) Excess Demand for Congregate Units==
¹ 2020 calculations define income-qualified households as all households with incomes greater than$40,000 and homeowner
households with incomes between $30,000 and $49,999.
² The potential capture rate is derived from data from the Summary.S. Population: National Health
Interview Survey, 2007 by the U.S. Department of Health and Huma
needing assistance with IADLs, but not ADLs (seniors needing ass
are primary candidates for assisted living.).
3
Existing and pending are deducted at market equilibrium (95%
occupancy).
Source: Maxfield Research & Consulting, LLC
We estimate that seniors currently residing outside of Elk River will generate 25% of the
demand for congregate senior housing. This demand will consist
children living in Elk River, individuals who live just outside
the area, and former residents who desire to return upon retirement. Toget
from Elk River seniors and demand from seniors who are willing t87
units of congregate senior housing in 2015.
Since there are no existing congregate units in Elk River, we do
potential by any competitive units. As a result, demand is calculated for 87 congregate units in
Elk River in 2015.
Adjusting for inflation, we estimate that households with income
senior homeowners with incomes between $25,000 and $35,000 would
housing in 2017. Following the same methodology, demand is calculated to increase to 102
units through 2020.
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Demand Estimate for Assisted Living Housing
Table HD-7 presents our demand calculations for assisted living senior ho
2015and 2020. This analysis focuses on the potential private pay/market rate demand for
assisted living units.
The availability of more intensive support services such as meal
care at assisted living facilities usually attracts older, frail
Overview of Assisted Living (which is a collaborative research project by the American
Association of Homes and Services for the Aging, the American Se
National Center for Assisted Living, and National Investment Cen
Care Industry), the average age of residents in freestanding assisted living fac
in 2008. Hence, the age-qualified market for assisted living is defined as seniors ages
over, as we estimate that of the half of demand from seniors und almost all would be
from seniors over age 75. In 2010, there were 1,024 seniors age 75 and older in the PMA.
Demand for assisted living housing is need-driven, which reduces the qualified market to only
the portion of seniors who need assistance. According to a study completed by the U. S. Census
Bureau (2008 panels of the Survey of Income and Program Particip
seniors needed assistance with everyday activities (from 25.5% of 75-to-79-year-olds, to 33.6%
of 80-to-84-year-olds and 51.6% of 85+ year olds). Applying these percentages to the senior
population yields a potential assisted living market of 370 seniors in the PMA.
Due to the supportive nature of assisted living housing, most da
monthly rental fees, which allow seniors to spend a higher proportion of t
housing with basic services. Therefore, the second step in dete
for assisted living housing in the PMA is to identify the income-qualified market based on a
seniors ability to pay the monthly rent. We consider seniors i
$40,000 or greater to be income-qualified for assisted living senior housing in the PMA.
Households with incomes of $40,000 could afford monthly assisted living fees of $3,000 by
allocating 90% of their income toward the fees.
According to the 2009 Overview of Assisted Living, the average arrival income of
residents in 2008 was $27,260, while the average annual assisted
($3,107/month). This data highlights that seniors are spending assisted
living and avoid institutional care. Thus, in addition to households with incomes of $40,000 or
greater, there is a substantial base of senior households with l-
qualify based on assets their homes, in particular.
Sixty-three percent of the age 75+ households in the PMA are homeowners-
to-date median resale price of homes in the PMA was $209,975. Seni
the median resale price would generate about $197,367 in proceedng costs. With an
average monthly fee of $3,000, these proceeds would last just ov
living facility, which is longer than the average length of stay
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months according to the 2009 Overview of Assisted Living). For each age group in Table HD-7,
we estimate the income-qualified percentage to be all seniors in households with income
above $40,000 (who could afford monthly rents of $3,000+ per mon
estimated seniors in homeowner households with incomes below $40,000 (who will spend
down assets, including home-equity, in order to live in assisted living housing). This resu
total potential market of 211 units from the PMA in 2010.
TABLE HD-7
MARKET RATE ASSISTED LIVING DEMAND
ELK RIVER
2015 & 2020
20152020
NumberNumber
PercentPercent
NeedingNeeding
NeedingNeeding
11
AssistanceAssistance
Age groupPeopleAssistance¹PeopleAssistance¹
100133
75 - 7939425.5%52025.5%
103114
80 - 8430733.6%33833.6%
167187
85+32351.6%36351.6%
370433
Total1,0241,221
2
57%56%
Percent Income-Qualified
211243
Total potential market
51%51%
(times) Percent living alonex
108124
(equals) Age/income-qualified singles needing assistance=
1517
(plus) Proportion of demand from couples (12%)³+
122141
(equals) Total age/income-qualified market needing assistance=
4
40%40%
(times) Potential penetration ratex
4956
(equals) Potential demand from PMA residents=
3338
(plus) Proportion from outside the PMA (40%)+
8294
(equals) Total potential assisted living demand=
5
4747
(minus) Existing market rate assisted living units-
3547
(equals) Total excess market rate assisted living demand=
1
The percentage of seniors unable to perform or having difficult
Participation (SIPP) files, conducted by the U.S. Census Bureau.
2
Includes households with incomes of $40,000 or more (who could
estimated owner households with incomes below $40,000 (who will
assisted living housing).
3
The 2009 Overview of Assisted Living (a collaborative project o
residents are couples.
4
We estimate that 60% of the qualified market needing assistance
advanced senior housing with the assistance of a family member o
skilled care facility.
5
Existing and pending units at 93% occupancy. We exclde 15% of u
Source: Maxfield Research & Consulting, LLC
Because the vast majority of assisted living residents are singl
Overview of Assisted Living), our demand methodology multiplies
the percentage of seniors age 75+ in the PMA living alone. Base2010 Census data, 51% of
age 75+ households in the PMA lived alone. Applying this percenge results in a total base of
211 age/income-qualified singles. The 2009 Overview of Assisted Living found t
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residents in assisted living were couples. There are a total of 108 age/income-qualified seniors
needing assistance in the PMA including both couples and singles
We estimate that roughly 60% of the qualified market needing sig
would either remain in their homes or less service-intensive senior housing with the assistance
of a family member or home health care, or would need greater ca
facility. The remaining 40% could be served by assisted living
market penetration rate of 40% results in demand for 49 assisted living units in 2010.
We estimate that a portion of demand for assisted living units i
outside the PMA. Applying this figure results in total potentiand for 82 market rate
assisted living units in the PMA.
Next, existing assisted living units are subtracted from overall
competitive number of units based on an estimated 15% of units that are occupied by lower-
income seniors using the Elderly Waiver program, to pay for their services in an assisted living
environment. Overall, we subtract 47 competitive units (after accounting for a 7% vacancy
rate) from the demand potential, resulting in 35 units of excess demand for assisted living
housing in the PMA.
By 2020, total excess demand for market rate assisted living uni Elk River is projected to
increase to 47 units.
Estimated Demand for Memory Care Housing
Table HD-8 presents our demand calculations for market rate memory care s
Elk River in 2015 and 20120.
Demand is calculated by starting with the estimated Elk River se
2015and multiplying by the incidence rate of Alzheimers/dementia among this populations
age cohorts. According to the Alzheimers Association (Alzheimers Disease Facts and Figures,
2007), 2% of seniors ages 65 to 74, 19% of seniors ages 75 to 84
are inflicted with Alzheimers Disease. This yields a potential market of 299seniors in Elk River.
Because of the staff-intensive nature of dementia care, typical monthly fees for this
housing are at least $4,000 and range upwards of $5,000 when incackages.
Based on our review of senior household incomes in Elk River, ho
sale data, we estimate that 30% of seniors in Elk River would ha
sufficiently cover the costs of memory care housing. This figure takes into account married
couple households where one spouse may have memory care needs an
income for the other spouse to live independently. Multiplying the number
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Alzheimers/dementia (299 seniors) by the income-qualified percentage results in a total of 111
age/income-qualified seniors in the Elk River in 2015.
TABLE HD-8
MEMORY CARE DEMAND
ELK RIVER
2015 & 2020
20152020
65 to 74 Population1,5001,904
(times) Dementia Incidence Rate¹x2%x2%
(equals) Estimated Age 65 to 74 Pop. with Dementia=30=38
75 to 84 Population701858
(times) Dementia Incidence Rate¹x19%x19%
(equals) Estimated Age 75 to 84 Pop. with Dementia=133=163
85+ Population323363
(times) Dementia Incidence Rate¹x42%x42%
(equals) Estimated Age 85+ Pop. with Dementia=136=152
(equals) Total Senior Population with Dementia=299=354
(times) Percent Income/Asset-Qualified²x37%x38%
(equals) Total Income-Qualified Market Base=111=134
(times) Percent Needing Specialized Memory Care Assistancex25%x25%
(equals) Total Need for Dementia Care=28=34
(plus) Demand from Outside Market Area (40%)+18+22
Total Demand Potential=4656
(minus) Existing and Pending Memory Care Units³-28-28
(equals) Excess Demand for Memory Care Units=18=28
¹ Alzheimer's Association: Alzheimer's Disease Facts & Figures (2009)
² Income-qualified households consider 3/4 of those with incomes greater than $60,000 plus 15% of homeowners with
incomes below this threshold.
³ Existing memory care units less units occupied by public pay res7% vacancy rate.
Source: Maxfield Research & Consulting, LLC
According to data from the National Institute of Aging, about 25
memory care impairments comprise the market for memory care hous
considers that seniors in the early stages of dementia will be adependently with the
care of a spouse or other family member, while those in the late
require intensive medical care that would only be available in s
this figure to the estimated population with memory impairments yields a potential market of
about 28 seniors in Elk River.
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We estimate that 40% of the overall demand for memory care housi
come from outside of Elk River. Demand from both inside and out46
memory care units in 2015.
We reduce the demand potential by the 30 competitive units (less a 93% occupancy rate).
Subtracting these competitive units decreases the excess memory 18 units.
Demand is calculated for 18 memory care units in the City of Elk River in 2015. Following the
same methodology, demand is calculated to increase to 28 memory care units through 2020.
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Introduction/Overall Housing Recommendations
This section summarizes demand calculated for specific housing p
recommends development concepts to meet the housing needs foreca
recommendations are based on findings of the Comprehensive Housing Needs Assessment. The
following table and charts illustrate calculated demand by produ
recognize that housing demand is highly contingent on projected
growth could be higher should increased job growth ensue and the overall economy continues
to improve.
TABLE CR-1
SUMMARY OF HOUSING DEMAND
CITY OF ELK RIVER
Novemeber 2015
Type of Use2015-20252015
General-Occupancy
Rental Units - Market Rate265
Rental Units - Affordable133
Rental Units - Subsidized44
For-Sale Units - Single-family601
For-Sale Units - Multifamily186
Total General Occupancy Supportable1,229
20152020
Age-Restricted (Senior)
Market Rate
Adult Few Services (Active Adult)2377
Ownership00
Rental2377
Congregate87102
Assisted Living3547
Memory Care1828
Total Market Rate Senior Supportable163254
Affordable/Subsidized
Active Adult - Subsidized00
Active Adult - Affordable3942
Total Affordable Senior Supportable3942
Source: Maxfield Research & Consulting, LLC
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General-Occupancy Demand by Type
2015 to 2025
For-Sale Units - Multifamily
186
For-Sale Units - Single-family
601
Rental Units - Subsidized
44
Rental Units - Affordable
133
Rental Units - Market Rate
265
0100200300400500600700
Units
Senior Housing Demand by Type
2015 & 2020
2015
Adult - Owner
2020
23
Adult - Rental
77
87
Congregate
102
20
Assisted Living
47
18
Memory Care
28
39
Affordable
42
Subsidized
0102030405060708090100110
Units
Based on the finding of our analysis and demand calculations, Ta-1 provides a summary
of the recommended development concepts by product type for the
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important to note that these proposed concepts are intended to avelopment guide to
most effectively meet the housing needs of existing and future hThe
recommended development types do not directly coincide with tota
Table CR-1.
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TABLE CR-2
RECOMMENDED HOUSING DEVELOPMENT
CITY OF ELK RIVER
2015 to 2025
No. of
Purchase Price/Pct.Development
Units
Monthly Rent Range¹of TotalTiming
Owner-Occupied Homes
2
Single Family
Entry-level>$225,000175-20031%2016+
Move-up$250,000 - $350,000320-35056%2016+
Executive$350,000+75-8013%2017+
Total570-630100%
2
Townhomes/Detached Townhomes/Twinhomes
Entry-level>$200,00050-6031%2018+
Move-up$200,000+110-13069%2016+
Total160-190100%
Total Owner-Occupied730-820
General Occupancy Rental Housing
Market Rate Rental Housing
Apartment-style$950/1BR - $1,450/3BR180-20078%2017+
Townhomes$1,200/2BR - $1,500/3BR50-6022%2016+
Total230-260100%
Affordable Rental Housing
3
Apartment-styleModerate Income90-10073%2017+
3
TownhomesModerate Income30-4027%2016+
Total120-140100%
Total Renter-Occupied350-400
Senior Housing (i.e. Age Restricted)
3
Active Adult Affordable RentalModerate Income40-4227%2016+
4
Active Adult Market Rate Rental$900/1BR - $1,200/2BR+50-6036%2019+
Independent Living (Congregate)$1,750/1BR - $1,950/2BR60-8045%2018+
Assisted Living$2,750/EFF - $4,000/2BR40-5029%2017+
Memory Care$4,000/EFF - $5,000/2BR26-2818%2017+
Total144-164100%
Total - All Units1,224-1,384
¹ Pricing in 2015 dollars. Pricing can be adjusted to account
2
Recommendations include the absorption of some existing previo
3
Affordablity subject to income guidelines per MHFA. See Table H
4 Alternative development concept is to combine active adult affo
community
Note - Recommended development does not coincide with total dema
types based on a variety of factors (i.e. development constraint
Source: Maxfield Research & Consulting, LLC
Recommended Housing Product Types
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For-Sale Housing
Single-Family Housing
Table HD-1 identified demand for about 790 single-family housing units in Elk River through
2025. However, after accounting for the existing 188 vacant si-family newer lots in Elk
River (see Table FS-9); demand is reduced to about 600 new lots in Elk River through 2025.
Based on historic construction activity over the past three year
about 70 new single-family units per year in Elk River; down substantially from the early part of
last decade when about 220 units on average were added between 2
The lot supply benchmark for growing communities is a three- to five-year lot supply, which
ensures adequate consumer choice without excessively prolonging -carrying costs.
Given the number of existing platted lots in Elk River and the nhomes constructed
annually, the current lot supply is able to meet demand only for about two to three years.
Although Table FS-9 identified 369 future lots; many of these subdivisions may sti
speculative based on preliminary plat information prior to the housing bust of last decade.
Therefore, new lots will need to be platted or moved from future
to meet future demand.
Due to the age and price of the existing housing stock in Elk Ri
housing stock appeals to entry-level buyers. Entry-level existing homes, which we generally
classify as homes priced under $150,000 will be mainly satisfied-family homes
as residents of existing homes move into newer housing products in the Elk River Area,
such as move-up single-family homes, twinhomes, rental housing and senior housing. A m-
up buyer or step-up buyer is typically one who is selling one house and purchasin
usually a larger and more expensive home. Usually the move is desired because of a lifestyle
change, such as a new job or a growing family. Based on our int
move-up homes are generally priced from $250,000 to $350,000. Execut-level homes are
loosely defined as those homes priced above $350,000. Most of these homes would be b-
to-suit new construction in one of the citys newer subdivisions or
located on the fringe of Elk River.
The average base price of all new construction actively marketing in Elk River is approximately
$250,000, or about $135 to $140 PSF for single-family housing stock. Although there would be
substantial demand for a new single-family housing product priced under $200,000, financially
it will be extremely difficult to develop even with public assistance due to infrastructure
and rising labor and material costs. Based on land and building costs, it is very difficult to build
new single-family homes for less than $225,000.
Because there only 188 vacant lots, new lots will be needed in the next few years to meet buye
demand. Many of the existing lots in Elk River are flat and ta-time and move-up
buyers; we also recommend additional choice lots that cater to
the topography for walk-out lots and more vegetation on the property. We also recommen
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considering smaller lots that will increase density while bringi
infrastructure costs.
For-Sale Multifamily Housing
A growing number of households desire alternative housing types
detached townhomes, and twinhomes. Typically, the target market-sale multifamily
housing is empty-nesters and retirees seeking to downsize from their single-family homes. In
addition, professionals, particularly singles and couples withou
townhomes if they prefer not to have the maintenance responsibil-family home.
In some housing markets, younger households also find purchasing multifamily units to be
generally more affordable than purchasing new single-family homes.
Over the past fifteen years, multifamily resales have averaged a
River; however the median sales price has been about 33% lower t-family housing.
Currently, the West Oaks subdivision is marketing a variety of twinhomes and detached
townhomes in Elk River.
Based on the changing demographics and the need for alternative
calculated for 186 new multifamily for-sale units in Elk River through 2025. Since 2007, there
have been only three new townhome/twinhome units constructed in Elk River as this sector
experienced severe downturn during the recession. However, give
and the high growth rate in the 55+ population (especially 65-74 age cohorts), Elk River would
benefit from a more diversified housing stock.
These attached units could be developed as twin homes, detached
townhomes/row homes, or any combination. Because the main target market is empty-nesters
and young seniors, the majority of townhomes should be one-level, or at least have a master
suite on the main level if a unit is two-stories. The following provides greater detail into
townhome and twinhome style housing.
Twinhomes By definition, a twin home is basically two units with a shared wall with each
owner owning half of the lot the home is on. Some one-level living units are designed in
three-, four-, or even six-unit buildings in a variety of configurations. The swell of support
for twinhome and one-level living units is generated by the aging baby boomer generat
which is increasing the numbers of older adults and seniors who -maintenance
housing alternatives to their single-family homes but are not ready to move to service-
enhanced rental housing (i.e. downsizing or right sizing).
Traditionally most twin home developments have been designed wit
prominent feature of the home; however, todays newer twin homes have much more
architectural detail. Many higher-end twin home developments feature designs where one
garage faces the street and the other to the side yard. This de
prominence of the garage domination with two separate entrances. Housing products
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designed to meet the needs of these aging Elk River residents, m
in their current community if housing is available to meet their
the foreseeable future.
Twinhomes are also a preferred for-sale product by builders in todays market as units can
be developed as demand warrants. Because twinhomes bring higher
economies of scale to the construction process, the price point -
alone single-family housing. As previously mentioned, there are a number of new twin
homes under construction in the West Oaks subdivision; however t
to be in demand as many older adults and seniors will move to th
substantial equity in their existing single-family home and will be willing to purchase a
maintenance-free home that is priced similar to their existing single-family home. Move-up
twin homes has especially been popular in the Twin Cities Metro
years.
Twinhome Examples
Standard Twinhome garage on endStandard Twinhome garage in middle
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Executive Twinhome with alternate garagesExecutive-style Twinhome front facing garage
Detached Townhomes/Villas An alternative to the twinhomeis the one-level villa product
and/or rambler. This product also appeals mainly to baby boomer
seeking a product similar to a single-family living on a smaller scale while receiving the
benefits of maintenance-free living. Many of these units are designed with a walk-out or
lookout lower level if the topography warrants. We recommend lo
to 55 feet with main-level living areas between 1,600 and 1,800 square feet. The mai
level living area usually features a master bedroom, great room, dining room, kitchen, and
laundry room while offering a flex room that could be another
room, or exercise room. However, owners should also be able to
the option to finish the lower level (i.e. additional bedrooms, game room, storage,
den/study, etc.) and some owners may want a slab-on-grade product for affordability
reasons. Finally, builders could also provide the option to build a two-story detached
product that could be mixed with the villa product.
Pricing for a detached townhome/villa will vary based on a slab-on-grade home versus a
home with a basement. Base pricing should start at $250,000 andfluctuate based on
custom finishes, upgrades, etc.
Detached Townhome/Villa Examples
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Cottage-style (alley-loaded garage) Executive-style side garage entrance
Villa Garage in front 2-story tuck-under
Side-by-Side and Back-to-Back Townhomes This housing product is designed with three
or four or more separate living units in one building and can be
configurations. With the relative affordability of these units -level living, side-by-
side and back-to-back townhomes have the greatest appeal among entry-level households
without children, young families and singles and/or roommates ac
However, two-story townhomes would also be attractive to middle-market, move-up, and
empty-nester buyers. Many of these buyers want to downsize from a single-family home
into maintenance-free housing, many of which will have equity from the sale of th
single-family home.
Side-by-side townhomes have been slow to recover from the recession. Many of the
townhome developments completed last decade in Elk River had man-mediated
sales and were attractive for real estate investors. Recently
townhome developments move forward in the Twin Cities; however tve been
located in high demand communities where the single-family market has priced many
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buyers out of the market. New construction townhomes in Elk Riv
but this sector should begin to turn should land costs escalate priced out of
many new single-family subdivisions.
Townhome Examples
3-Plex (one-level living w/basement)Tuck-under garage
Row-house style Back-to-back style (6-Plex)
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General Occupancy Rental Housing
Our competitive inventory identified that the vacancy rates for
rental product is below market equilibrium indicating pent-up demand for rental housing. The
few newer products that have entered the market in the past few rs have all performed
well. Coachman Apartments which began marketing in 2015 has abs
occupancy date. Due to the age and positioning of the remaining existing rental -
1990 construction), a significant portion of units arepriced at or below guidelines for affordable
housing, which indirectly satisfies demand from households that -qualify for financially
assisted housing. However, the growing renter base is seeking newer rental propert
additional and updated amenities that are not offered in older developments. Although
ownership housing in older homes in Elk River is generally affordable for first-time home
buyers, some are choosing to rent due to fears of past housing m
Maxfield Research and Consulting LLC calculated demand for 265 market rate and 133
affordable rental housing units in Elk River through 2025. New general-occupancy rental
housing can be developed immediately and will continue to be in
decade.
Market Rate RentalThe existing market rate rental supply in Elk River has a mix of
and household types represented. A new rental project will also
profile, including young to mid-age professionals as well as singles and couples across the
age span.
Because there is demand for 265 units; new market rate product w
across multiple buildings and developments. We recommend new middle-market to upper-
middle market rental project(s) with roughly that will continue to attract a diverse resident
profile; including young to mid-age professionals as well as singles and couples across all
ages. To appeal to wide target market, we suggest a market rate
unit mix consisting of one-bedroom units, one-bedroom plus den units, two-bedroom units,
and a few two-bedroom plus den or three-bedroom units.
Monthly rents (in 2015 dollars) should range from $950 for a one-bedroom unit to $1,450
for a three-bedroom unit. Average rents in Elk River are roughly $1.04 per
we recommend that monthly rents at a new development should char
per square foot to be financially feasible. Monthly rents can
annually prior to occupancy to account for inflation depending on o
conditions.
New market rate rental units should be designed with contemporar
open floor plans, higher ceilings, in-unit washer and dryer, full appliance package, central
air-conditioning, and garage parking.
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Market Rate General Occupancy Rental TownhomesIn addition to the recommended
traditional multi-story apartment projects, we find demand exists for larger townh
units for families -including those who are new to the community and want to rent until
they find a home for purchase. An additional 50 to 60 rental townhome units could be
supported in Elk River over this decade. We recommend a project with rents starting at
approximately $1,200 for two-bedroom units to $1,500 for three-bedroom units. Units
should feature contemporary amenities (i.e. in-unit washer/dryer, high ceilings, etc.) and
an attached two car garage.
Affordable General Occupancy Multifamily HousingThere have been three affordable
developments built since 2007 in Elk River. These developments
successful and have maintained nearly 100% occupancy since openiUnlike the market
rate supply, existing affordable properties are typically dominailies with children
who find it more difficult to afford ownership property and mark
The success of the moderate income affordable Coachman Ridge (53
by Duffy Development near the transit station continues to suppoe excess demand
shown for affordable housing. These projects would have income-restrictions established
by HUD and would likely target households with incomes between 5
median income; however some could be workforce units with affordability up to
AMI.
We find that demand exists for about 100 affordable units through 2025. Affordable
housing attracts households that cannot afford market rate housi
income-qualify for deep subsidy housing. Affordable projects attract a br
people based of tenants based on the unit type. One-bedroom units target singles and
couples, whereas two and three-bedroom units target families. Some retired seniors
would also be attracted to an affordable concept. We recommend an afford
that would target residents at 50% to 60% AMI. A workforce hous
households from 80% to 120% AMI could also be pursued in Elk River.
Affordable General Occupancy Rental TownhomesRental townhomes affordable to
moderate-income households would also be in high demand throughout Elk River. There is
currently only one income based townhome development in the City
Section 8) that is full with a long waiting list. Affordable rental townhomes have been
found to very popular throughout many communities. These proje-
restrictions established by HUD and would likely target househol
50% to 80% of area median income; however some could be workforce units with
affordability up to 120% AMI. We recommend a project with two- and three-bedroom
units and a project of 30 to 40 units. Units should feature central air conditioning, full
appliance package, in-unit washer/dryer, an attached one/two car garage. Such
developments are popular with families that cannot afford housin-sale
market or market rate rentals.
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Senior Housing
As illustrated in Table CR-1, demand exists for almost alltypes of senior housing product types
in Elk River. Over the course of five years, there is demand fo
through 2020. The unmetof additional senior housing is recommended in order to provide
housing opportunity to these aging residents in their stages of later life. The development of
additional senior housing serves a two-fold purpose in meeting the housing needs in Elk River:
older adult and senior residents are able to relocate to new age-restricted housing in Elk River,
and existing homes and rental units that were occupied by seniors
new households. Hence, development of additional senior housing
needs of younger households are neglected; it simply means that ercentage of
housing need is satisfied by housing unit turnover. The types o
accommodate the aging population base are discussed individually
Active Adult Rental Demand was projected for about 75market rate active adult rental
units in Elk River through 2020. However, most of this demand will be closer to 2020.
Currently, there are three market rate active adult rental proje
was built in 1992, while the other two are over 30 years old. There may be seniors who
currently residing in general-occupancy housing that would consider a newer active adult
product.
Development of this product could be in separate stand-alone facilities or in a mixed-
income project. We believe a mixed-income building would be an ideal development
concept to create the most dynamic, inclusive community for acti
stigmas and potential neighborhood opposition of affordable hous
We recommend a new project of about 50 to 60 units later this decade. The project modest
rents with base monthly rents starting at $900 per month for one-bedroom units and from
$1,200 or more for two-bedroom units. The project should offer transportation, activities,
and optional services for housekeeping, etc.
Affordable and Subsidized Senior Few Services Rental Elk River demand for
affordable/subsidized senior housing isapproximately 40 units in 2020. All of the demand
was for affordable senior housing as the existing subsidized hou
current demand. Although this product would be well received by seniors in and n
Elk River area; it will be difficult to develop given the economies of scale needed and
financing challenges. Affordable senior housing will likely be-income tax credit
project through the Minnesota Housing Finance Agency (MHFA). MHFA recently started to
consider affordable senior housing projects under the tax credit program and is slowly
starting to expand financing for this product type.
Independent Living/Congregate There are no designated congregate units (meals and
limited support service) in Elk River, however, Guardian Angels services
at Evans Park at an extra charge. Demand was calculated for just over 100 congregate units
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over the next five years. Based on this demand, we recommend 60 to 80 congregate units
with a mix of one-bedroom, one-bedroom plus den, and two-bedroom units. Monthly rents
should range from $1,750 for one-bedroom units to $1,950 for two-bedroom units. The
monthly fees should include all utilities (except telephone and
television) and the following services:
Im OK program;
Daily noon meal;
Regularly scheduled van transportation;
Social, health, wellness and educational programs;
24-hour emergency call system; and
Complimentary use of laundry facilities.
In addition, meals and other support and personal care services
congregate residents on a fee-for-service basis, such as laundry, housekeeping, etc. When
their care needs increase, residents also have the option of recliving
packages in their existing units.
New independent housing could be developed adjacent to an existi
stand-alone development.
Assisted Living and Memory Care Senior Housing Based on our analysis, we project
demand to support an additional 47 assisted living units and 28 memory care units in Elk
River through 2020. Although we find demand, we recommend new units later this
decade. Guardian Angels is the primary senior housing provider
product toone of their existing facilities.
We recommend assisted living units include a mix of studio, and -bedroom, and a few
two-bedroom units with base monthly rents ranging from $2,750 to $4,000. Memory care
unit mix should be mostly studios and one-bedroom units with a few two-bedroom units
for couples with basemonthly rents ranging from $3,800 to $5,500. Memory care units
should be located in a secured, self-contained wing located on the first floor of a building
and should feature its own dining and common area amenities including a secured outdoor
patio and wandering area.
The base monthly fees should include all utilities (except telep
cable/satellite television) and the following services:
Three meals per day;
Weekly housekeeping and linen service;
Two loads of laundry per week;
Weekly health and wellness clinics;
Meal assistance;
Regularly scheduled transportation;
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Professional activity programs and scheduled outings;
Nursing care management;
Im OK program;
24-hour on site staffing;
Personal alert pendant with emergency response; and
Nurse visit every other month.
Additional personal care packages should also be available for a
above the required base care package. A care needs assessment ibe
conducted to determine the appropriate level of services for pro
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CHALLENGES AND OPPORTUNITIES
Challenges and Opportunities
Table CR-2 identified and recommended housing types that would satisfy the
Elk River over the next ten years. The following were identifie
opportunities for developing the recommended housing types (in nrder-
alphabetically).
Affordability. Based on current home prices, about 75% of Elk River householder
afford to purchase an entry-level home given todays pricing (see table on the following
page). Likewise, most householders (85%) can also afford the average market rate rent at a
one-bedroom rental project in Elk River. Because of this condition,
would not consider purchasing may do so earlier since the cost t-level home
is on-par with rental housing costs. The following chart compares the costs of
homeownership to rentals given todays housing costs based on a
to housing. We do note, however, that not all householders will
down payment that would qualify them to purchase for-sale housing.
TABLE HA-4
ELK RIVER MARKET AREA HOUSING AFFORDABILITY - BASED ON HOUSEHOL
For-Sale
(Assumes 10% down payment and good credit)
Single-FamilyTownhome/Twinhome
Entry-LevelMove-UpExecutiveEntry-LevelMove-UpExecutive
Price of House$175,000$250,000$300,000$150,000$225,000$300,000
Pct. Down Payment10.0%10.0%10.0%10.0%10.0%10.0%
Total Down Payment Amt.$17,500$25,000$30,000$15,000$22,500$30,000
Estimated Closing Costs (rolled into mortgage)$5,250$7,500$9,000$4,500$6,750$9,000
Cost of Loan$162,750$232,500$279,000$139,500$209,250$279,000
Interest Rate4.000%4.000%4.000%4.000%4.000%4.000%
Number of Pmts.360360360360360360
Monthly Payment (P & I)-$777-$1,110-$1,332-$666-$999-$1,332
(plus) Prop. Tax-$219-$313-$375-$188-$281-$375
(plus) HO Insurance/Assoc. Fee for TH-$58-$83-$100-$100-$100-$100
(plus) PMI/MIP (less than 20%)-$71-$101-$121-$60-$91-$121
Subtotal monthly costs-$1,125-$1,607-$1,928-$1,014-$1,471-$1,928
Housing Costs as % of Income30%30%30%30%30%30%
Minimum Income Required$44,984$64,263$77,116$40,558$58,837$77,116
Pct. of ALL Elk River HHDS who can afford175.9%60.8%52.0%79.8%65.9%52.0%
No. of Elk River HHDS who can afford16,0924,8864,1766,4135,2954,176
Pct. of Elk River owner HHDs who can afford281.4%65.9%55.8%84.0%71.9%55.8%
No. of Elk River owner HHDs who can afford25,0764,1113,4785,2404,4833,478
No. of Elk River owner HHDS who cannot afford21,1602,1252,7589961,7532,758
Rental (Market Rate)
Existing Rental New Rental
1BR2BR3BR1BR2BR3BR
Monthly Rent$850$950$1,300$950$1,200$1,350
Annual Rent$10,200$11,400$15,600$11,400$14,400$16,200
Housing Costs as % of Income30%30%30%30%30%30%
Minimum Income Required$34,000$38,000$52,000$38,000$48,000$54,000
Pct. of ALL Elk River HHDS who can afford184.8%80.5%70.3%80.5%73.4%68.8%
No. of Elk River HHDS who can afford16,8126,4645,6456,4645,8925,528
Pct. of Elk River renter HHDs who can afford259.3%50.9%74.4%50.9%38.3%32.1%
No. of Elk River renter HHDs who can afford21,0669141,336914688576
No. of Elk River renter HHDS who cannot afford27308824608821,1081,220
1
Based on 2015 household income for ALL households
2
Based on 2013 ACS household income by tenure (i.e. owner and re
Source: Maxfield Research & Consulting, LLC
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Lender-mediated Properties. As illustrated in Table FS-1, lender-mediated properties have
declined substantially since the housing downturn and Great Rece
Lender mediated properties (i.e. foreclosures and short sales) a
transactions between 2009 and 2011 before declining annually since and comprising a
12% of transactions thus far in 2015. The continued decline in l-mediated properties
will enhance the overall real estate market and pricing will con
losses of last decade. The median sales price is still down about 10%
real estate market; hence some homeowners are still upside down
more and more homeowners regain lost equity, the real estate marce
strong velocity as many owners desire trade-up housing.
Lot Supply. Tables FS-9 and FS-10 inventoried active subdivisions with available lots. Based
on our research there are under than 200 finished vacant single-family lots, not included
scattered lots throughout the city. Based on this lot supply and the rece
activity over the past few years, the current finished lot inventory is very low and is less
than three years. Therefore, future lots will be needed to be cd lots to
meet this demand. Because of the time frame to deliver lots (i.
infrastructure, etc.) new platted lots should begin in 2016 to e
ample to support new construction throughout this decade.
Mortgage Rates. Mortgage rates play a crucial part in housing affordability. Lo
mortgage rates result in a lower monthly mortgage payment and bu
home for their dollar. Rising interest rates often require home
payment in order to maintain the same housing costs. Mortgage ra
historic lows over the past several years coming out of the Grea
Federal Reserve has indicated they may begin raising the Federals December
2015 and into 2016 that would result in an increase in interest
the rate hike has increased buyer activity in 2015 as buyers are
hoping to avoid rate increases. The anticipated increases are projected to be small;
although affordability will be affected most economists do not a
the short-term. Low mortgage rates have been critical for the housing reco
in a market like Elk River that was affected by significant lender-mediated properties. A
significant increase in rates (+1% or more; over 5% in the short
the housing market and would slow projected housing demand.
The following chart illustrates historical mortgage rate averages as compiled by Freddie
Mac. The Freddie Mac Market Survey (PMMS) has been tracking mor
and is the most relied upon benchmark for evaluating mortgage in
The Freddie Mac survey is based on 30-year mortgages with a loan-to-value of 80%.
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Historic 30-year Mortgage Rates 1972 to 2015 (YTD)
18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
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APPENDIX -DEFINITIONS
Definitions
Absorption Period The period of time necessary for newly constructed or renovated
properties to achieve the stabilized level of occupancy. The absorption period begins whe
first certificate of occupancy is issued and ends when the last
of occupancy has signed a lease.
Absorption RateThe average number of units rented each month during the absorption
period.
Active adult (or independent living without services available) Active Adult properties are
similar to a general-occupancy apartment building, in that they offer virtually no se
have age-restrictions(typically 55 or 62 or older). Organized activities and occasio
transportation program are usually all that are available at the
lack of services, active adult properties typically do not commamore
service-enriched senior housing.
Adjusted Gross Income AGI Income from taxable sources (including wages, interest, capital
gains, income from retirement accounts, etc.) adjusted to accoun
contributions to retirementaccounts, unreimbursed business and medical expenses, alimony,
etc.).
Affordable housing Housing that is income-restricted to households earning at or below 80%
AMI, though individual properties can have income-restrictions set at 40%, 50%, 60% or 80%
AMI. Rent is not based on income but instead is a contract amou
households within the specific income restriction segment. It i
to low or very low-income tenants.
Amenity Tangible or intangible benefits offered to a tenant in the form of common area
amenities or in-unit amenities. Typical in-unit amenities include dishwashers, washer/dryers,
walk-in showers and closets and upgraded kitchen finishes. Typical c
include detachedor attached garage parking, community room, fitness center and a
patio or grill/picnic area.
Area Median Income AMI AMI is the midpoint in the income distribution within a specific
geographic area. By definition, 50% of households earn lessthan the median income and 50%
earn more. The U.S. Department of Housing and Urban Development
annually and adjustments are made for family size.
Assisted Living Assisted Living properties come in a variety of forms, but the tt market for
most is generally the same: very frail seniors, typically age 80
younger, depending on their particular health situation), who ar
services and personal care assistance. Absent an assisted living option, these seniors would
otherwise need to move to a nursing facility. At a minimum, ass
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two meals per day and weekly housekeeping in the monthly fee, wi
meal and personal care (either included in the monthly fee or for an additional cost). Assi
living properties also have either staff on duty 24 hours per da-hour emergency
response.
Building Permit Building permits track housing starts and the number of housing units
authorized to be built by the local governing authority. Most j
permits for new construction, major renovations, as well as othe
Building permits ensure that all the work meets applicable building and safety rules and is
typically required to be completed by a licensed professional.
and meets the inspectors satisfaction, the jurisdiction will is
Occupancy. Building permits are a key barometer for the health of the housing market and are
often a leading indicator in the rest of the economy as it has a
spending.
Capture Rate The percentage of age, size, and income-qualified renter households in a given
area or Market Area that the property must capture to fill the unit
calculated by dividing the total number of units at the property
and income-qualified renter households in the designated area.
Comparable PropertyA property that is representative of the rental housing choices
designated area or Market Area that is similar in construction
age.
Concession Discount or incentives given to a prospective tenant to induce signature of a
lease. Concessions typically are in the form of reduced rent or
term, or free amenities, which are normally charged separately,
Congregate (or independent living with services available) Congregate properties offer
support services such as meals and/or housekeeping, either on an
amount included in the rents. These properties typically dedica
building area to common areas, in part, because the units are smaller than in adult
in part to encourage socialization among residents. Congregate
older target market than adult housing, typically seniors age 75also above
those of the active adult buildings, even excluding the services
Contract Rent The actual monthly rent payable by the tenant, including any ren
on behalf of the tenant, to the owner, inclusive of all terms of
Demand The total number of households that would potentially move into
renovated housing project. These households must be of appropri
size for a specific proposed development. Components vary and ce, but are not
limited to: turnover, people living in substandard conditions, r-burdened households,
income-qualified households and age of householder. Demand is project
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Density Number of units in a given area. Density is typically measured in dwelling units (DU)
per acre the larger the number of units permitted per acre the higher the
units permitted results in lower density. Density is often pres
Gross Density The number of dwelling units per acre based on the gross site acreage.
Gross Density = Total residential units/total development area
Net Density - The number of dwelling units per acre located on the site, but exclu
public right-of-ways (ROW) such as streets, alleys, easements, open spaces, etc.
Net Density = Total residential units/total residential land are
Detached housing a freestanding dwelling unit, most often single-family homes, situated on
its own lot.
Effective Rents Contract rent less applicable concessions.
Elderly or Senior Housing Housing where all the units in the property are restricted for
occupancy by persons age 62 years or better, or at least 80% of the units in each
restricted for occupancy by households where at least one househ
age or better and the housing is designed with amenities, facili the
needs of senior citizens.
Extremely low-income person or household with incomes below 30% of Area Median
Income, adjusted for respective household size.
Fair Market Rent Estimates established by HUD of the Gross Rents needed to obtain
rental units in acceptable conditions in a specific geographic a
a given property would command if it were open for leasing at anor the
amount derived based on market conditions that is needed to pay
modest rental housing in a given area. This figure is used as a
payment standard amount used to calculate the maximum monthly sur families on at
financially assisted housing.
Fair Market Rent Sherburne County 2015
Fair Market Rent
EFF1BR2BR3BR4BR
Fair Market Rent$641$796$996$1,403$1,656
Floor Area Ratio (FAR) Ratio of the floor area of a building to area of the lot on w
building is located.
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ForeclosureA legal process in which a lender or financial institute attempt
balance of a loan from a borrower who has stopped making payment
the sale of the house as collateral for the loan.
Gross Rent The monthly housing cost to a tenant which equals the Contract Rent provided for
in the lease, plus the estimated cost of all utilities paid by t
Sherburne County in 2015 are as follows:
Gross Rent
Sherburne County 2015
Maximum Gross Rent
EFF1BR2BR3BR4BR
30% of Median$455$519$585$649$702
50% of Median$758$866$975$1,082$1,170
60% of Median$910$1,039$1,170$1,299$1,404
80% of Median$1,214$1,386$1,560$1,732$1,827
100% of Median$1,517$1,732$1,950$2,165$2,340
120% of Median$1,821$2,079$2,340$2,598$2,808
Household All persons who occupy a housing unit, including occupants of a -family, one
person living alone, two or more families living together, or an
unrelated persons who share living arrangements.
Household Trends Changes in the number of households for any particular areas over a
measurable period of time, which is a function of hew households
average household size, and met migration.
Housing Choice Voucher Program The federal government's major program for assisting very
low-income families, the elderly, and the disabled to afford decent,
in the private market. A family that is issued a housing vouche
suitable housing unit of the family's choice where the owner agrees to rent under the program.
Housing choice vouchers are administered locally by public housi
federal funds from the U.S. Department of Housing and Urban Deve
administer the voucher program. A housing subsidy is paid to the landlord directly by the publ
housing agency on behalf of the participating family. The family
between the actual rent charged by the landlord and the amount s
Housing unit House, apartment, mobile home, or group of rooms used as a separ
quarters by a single household.
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HUD Project-Based Section 8 A federal government program that provides rental housing for
very low-income families, the elderly, and the disabled in privately owned and managed rental
units. The owner reserves some or all of the units in a buildin
government guarantee to make up the difference between the tenan
rent. A tenant who leaves a subsidized project will lose access to the project-based subsidy.
HUD Section 202 Program Federal program that provides direct capital assistance and
operating or rental assistance to finance housing designed for o
who have incomes not exceeding 50% of Area Median Income.
HUD Section 811 Program Federal program that provides direct capital assistance and
operating or rental assistance to finance housing designed for o
disabilities who have incomes not exceeding 50% Area Median Inco
HUD Section 236 ProgramFederal program that provides interest reduction payments for
loans which finance housing targeted to households with income n
Median Income who pay rent equal to the greater or market rate o
income.
Income limits Maximum households income by a designed geographic area, adjusted fo
household size and expressed as a percentage of the Area Median
establishing an upper limit for eligibility for a specific housi
MAXIMUM RENT BASED ON HOUSEHOLD SIZE AND AREA MEDIAN INCOME
HENDRICKS COUNTY - 2015
Maximum Rent Based on Household Size (@30% of Income)
HHD Size30%50%60%80%100%120%
1
Unit Type
MinMaxMin. Max.Min. Max.Min. Max.Min. Max.Min. Max.Min. Max.
Studio11$366-$366$610-$610$732-$732$976-$976$1,220-$1,220$1,464-$1,464
1BR 12$366-$419$610-$698$732-$837$976-$1,116$1,220-$1,395$1,464-$1,674
2BR 24$419-$523$698-$871$837-$1,046$1,116-$1,394$1,395-$1,743$1,674-$2,091
3BR36$470-$607$784-$1,011$941-$1,214$1,254-$1,618$1,568-$2,023$1,881-$2,427
4BR48$523-$690$871-$1,150$1,046-$1,380$1,394-$1,840$1,743-$2,300$2,091-$2,760
1
One-bedroom plus den and two-bedroom plus den units are classifi
closet.
Note: 4-person Hendricks County AMI is $69,700 (2015)
Sources: HUD, Novogradac, Maxfield Research Inc.
Inflow/Outflow The Inflow/Outflow Analysis generates results showing the count
characteristics of worker flows in to, out of, and within the de
Low-Income Person or household with gross household incomes below 80% of Ar
Income, adjusted for household size.
Low-Income Housing Tax Credit A program aimed to generate equity for investment in
affordable rental housing authorized pursuant to Section 42 of t
program requires that a certain percentage of units built be restricted for occupancy to
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households earning 60% or less of Area Median Income, and rents
accordingly.
Market analysis The study of real estate market conditions for a specific type o
geographic area or proposed (re)development.
Market rent The rent that an apartment, without rent or income restrictions
subsidies, would command in a given area or Market Area consid
and amenities.
Market study A comprehensive study of a specific proposal including a review of the housi
market in a defined market or geography. Project specific marke
developers, property managers or government entities to determin
proposed development, whereas market specific market studies are used
house needs, if any, existing within a specific geography.
Market rate rental housing Housing that does not have any income-restrictions. Some
properties will have income guidelines, which are minimum annual incomes required in order
to reside at the property.
Memory Care Memory Care properties, designed specifically for persons suffer
Alzheimers disease or other dementias, is one of the newest tre housing.
Properties consist mostly of suite-style or studio units or occasionally one-bedroom apartment-
style units, and large amounts of communal areas for activities
staff typically undergoes specialized training in the care of this population. Because of the
greater amount of individualized personal care required by resid
higher than traditional assisted living and thus, the costs of c
conventional assisted living, however, which deals almost exclusively with widows or widower
a higher proportion of persons afflicted with Alzheimers diseas-person households.
That means the decision to move a spouse into a memory care facis
concern of incurring the costs of health care at a special facil
their home.
MigrationThe movement of households and/or people into or out of an area.
Mixed-income propertyAn apartment property contained either both income-restricted and
unrestricted units or units restricted at two or more income lim
Mobility The ease at which people move from one location to another.
Moderate IncomePerson or household with gross household income between 80% and
of the Area Median Income, adjusted for household size.
Multifamily Properties and structures that contain more than two housing uni
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Naturally Occurring Affordable Housing Although affordable housing is typically associated
with an income-restricted property, there are other housing units in communitie
indirectly provide affordable housing. Housing units that were
with income guidelines (i.e. assisted) yet are more affordable than other units in a communit
are considered naturally-occurring or unsubsidized affordable units. This rental sup
available through the private market, versus assisted housing pr
governmental agencies. Property values on these units are lower base
factors, such as: age of structure/housing stock, location, cond
school district, etc.
Net Income Income earned after payroll withholdings such as state and feder
social security, as well as retirement savings and health insura
Net Worth The difference between assets and liabilities, or the total valu
debt is subtracted.
Pent-up demand A market in which there is a scarcity of supply and as such, vac
very low or non-existent.
PopulationAll people living in a geographic area.
Population DensityThe population of an area divided by the number of square miles of land
area.
Population Trends Changes in population levels for a particular geographic area ov
specific period of time a function of the level of births, deaths, and in/out migration.
Project-Based rent assistance Rental assistance from any source that is allocated to the
property or a specific number of units in the property and is av
tenant of the property or an assisted unit.
Redevelopment The redesign, rehabilitation or expansion of existing properties.
Rent burden gross rent divided by adjusted monthly household income.
Restricted rent The rent charged under the restriction of a specific housing pro
subsidy.
Saturation The point at which there is no longer demand to support addition
affordable/subsidized, rental, for-sale, or senior housing units. Saturation usually refers to a
particular segment of a specific market.
Senior Housing The term senior housing refers to any housing development that is
restricted to people age 55 or older. Today, senior housing inc
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housing alternatives. Maxfield Research Inc. classifies senior
on the level of support services. The four categories are: Active Adult, Con
Living and Memory Care.
Short Sale A sale of real estate in which the net proceeds from selling the
cover the sellers mortgage obligations. The difference is forgiven by the lender, or other
arrangements are made with the lender to settle the remainder of
Single-family home A dwelling unit, either attached or detached, designed for use b
household and with direct street access. It does notshare heating facilities or other essential
electrical, mechanical or building facilities with another dwell
Stabilized level of occupancy The underwritten or actual number of occupied units that a
property is expected to maintain after the initiallease-up period.
Subsidized housingHousing that is income-restricted to households earning at or below 30%
AMI. Rent is generally based on income, with the household cont
gross income toward rent. Also referred to as extremely low income housing.
Subsidy Monthly income received by a tenant or by an owner on behalf of
difference between the apartments contract/market rate rent and
tenant toward rent.
Substandard conditions Housing conditions that are conventionally considered unacceptab
and can be defined in terms of lacking plumbing facilities, one
electrical system malfunctions, or overcrowded conditions.
Target population The market segment or segments of the given population a development
would appeal or cater to.
Tenant One who rents real property from another individual or rental co
Tenant-paid utilities The cost of utilities, excluding cable, telephone, or internet nssary for
the habitation of a dwelling unit, which are paid by said tenant
Tenure The distinction between owner-occupied and renter-occupied housing units.
Turnover A measure of movement of residents into and out of a geographic
Turnover period An estimate of the number of housing units in a geographic locat
percentage of the total house units that will likely change occu
Unrestricted unitsUnits that are not subject to any income or rent restrictions.
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Vacancy period The amount of time an apartment remains vacant and is available
market for rent.
Workforce housing Housing that is income-restricted to households earning between 80%
and 120% AMI. Also referred to as moderate-income housing.
Zoning Classification and regulation of land use by local governments a
categories (zones); often also includes density designations and
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