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HomeMy WebLinkAbout2002-03-25 Applicant Forwarding of January 2001 Marketing ReportInnovations in Senior Living Communities SENIOR HMS IN PARTNERS TO: Kris Danielson Community Development Director Oak Park Heights LETTER OF TRANSMITTAL FROM: Ken Hooge DATE: March 25, 202 ET: �5. = - "l'7'PeY+ ° Fes#: �.M�FwA.�"�'iaee.0� +'+L!'t•'M'_ �r'� Inter Office Overnight Marketing Report DESCRIPTION Senior Housing Partners, Inc. 2845 North Hamline Ave. Roseville, MN 55113 Phone: 651 631,,64:69. 30o Sent for your: Approval Zi Use Comments F.:1 Files Review Z Signature Information Prepared for: Washington County Housing and Redevelopment Authority St Paul Park, Minnesota January 2001 A Comprehensive Study of Housing Needs in Washington County, Minnesota xfield Research Inc. 615 First Avenue NE Suite 400 Minneapolis, MN 55413 612.338.0012 January 30, 2001 Ms. Barbara Dacy Mr. Lyn Robinson Washington County LIRA 321 Broadway St. Paul Park, MN 55071 Research Inc. Dear Ms. Dacy and Mr. Robinson: Attached is our report titled "A Comprehensive Study of Housing Needs in Washington County, Minnesota", The study provides an analysis of current housing market conditions as well as projections of demand for housing within eight submarkets in Washington County between 2000 and 2010, Our research indicated a need to construct nearly 20,000 additional housing units to satisfy demand from current and future residents within the County during the decade. Specific recommendations on the amount and type of housing needed for each of the eight submarkets can be found at the end of each section of the report as well as in the Executive Summary. We have enjoyed performing this study for you and are available should you have any questions or need additional information. Sincerely, MAXFIELD RESEARCH INC. Mary C. Bujold President Enclosure TABLE OF CONTENTS Page EXECUTIVE SUMMARY 1 DEMOGRAPHIC OVERVIEW 11 Introduction . 11 Demographic Overview 11 GENERAL OCCUPANCY RENTAL MARKET OVERVIEW 30 Introduction 30 Market Rate Rental Housing 30 Subsidized Rental Housing 31 Washington County HRA Rental Subsidy Programs 32 SENIOR HOUSING MARKET OVERVIEW 35 Introduction 35 Senior Housing Inventory/Market Conditions . 35 Market Rate Senior Developments . 36 Affordable Senior Developments. 37 Subsidized Senior Housing Developments 37 Geographic Distribution 38 Age of Senior Housing Stock 41 Pending Senior Developments 42 FOR -SALE HOUSING OVERVIEW .. 46 Introduction 46 Single-Family and Condominium and Townhorne Resales 48 Active For-Sale Housing Developments 54 Pending For-Sale Development 55 SPECIAL NEEDS OVERVIEW 56 Introduction .... 56 Disability Status 56 Quarterly Shelter Survey 59 Special Needs Facilities 61 STILLWATER MARKET AREA — DEMOGRAPHIC ANALYSIS 64 Market Area Definition 64 Demographic Analysis 64 Summary of Demographic Trends 72 TABLE OF CONTENTS (Continued) STILLWATER MARKET AREA — GENERAL OCCUPANCY RENTAL MARKET._ 73 Introduction 73 Market Rate Rental Projects 73 Subsidized Rental Projects 76 Pending Rental Developments in the Stillwater Market Area 76 STILLWATER MARKET AREA SENIOR HOUSING MARKET ..+ 78 Introduction 78 Subsidized Senior Projects 78 Market Rate Rental Projects 81 STILLWATER MARKET AREA -- FOR -SALE HOUSING MARKET 83 Introduction $ 3 Single - Family and Condominium and Townhome Resales ... 83 Active For -Sale Housing Developments 86 Pending For-Sale Development 88 STILLWATER MARKET AREA — SPECIAL NEEDS FACILITIES 90 Introduction vaacreasa.ssasss 90 STILLWATER MARKET AREA — CONCLUSIONS AND RECOMMENDATIONS 92 Introduction 92 Key Demographic and Market Factors 92 1-94 CORRIDOR MARKET AREA — DEMOGRAPHIC ANALYSIS 94 Market Area Definition 94 Demographic Analysis 94 Summary of Demographic Trends 101 I -94 CORRIDOR MAI= AREA — GENERAL OCCUPANCY RENTAL MARKET. 102 Introduction 102 Pending Rental Developments 102 I-94 CORRIDOR MARKET AREA — SENIOR HOUSING MARKET 103 Introduction ... P 103 Pending Rental Developments in the 1-94 Market Area 103 TABLE OF CONTENTS (Continued) Page I.94 CORRIDOR MARKET AREA — FOR -SALE MARKET 104 Introduction . 104 Single - Family Home Resales 104 Active For -Sale Housing Developments 106 Pending For -Sale Development 107 I..94 CORRIDOR MARKET AREA — SPECIAL NEEDS FACILITIES 108 Introduction 108 Special Needs Facilities 108 I-94 CORRIDOR MARKET AREA — CONCLUSIONS AND RECOMMENDATIONS 110 Introduction 110 Key Demographic and Market Factors ..... 110 OAKDALE MARKET AREA --- DEMOGRAPHIC ANALYSIS 112 Market Area Definition 112 Demographic Analysis 112 Summary of Demographic Trends 120 OAKDALE MARKET AREA — GENERAL OCCUPANCY RENTAL MARKET 121 Introduction 121 Market Area Rental Projects . 121 Subsidized Rental Projects 124 Pending Rental Developments in the Oakdale Market Area 124 OAKDALE MARKET AREA --- SENIOR HOUSING MARKET 127 Introduction 127 Subsidized Senior Projects 127 Affordable Senior Projects 131 Market Rate Rental Projects 132 Pending Rental Developments in the Oakdale Market Area 133 OAKDALE MARKET AREA — FOR -SALE HOUSING MARKET 134 Introduction 134 Single - Family and Condominium and Townhome Resales 134 Active For -Sale Housing Developments 136 Pending For -Sale Development 138 WASHINGTON CO Y 1Y V - Forest Lake Area 1V -White Bear Lake Area 111 - Oakdale Area V11 - Woodbury V111- Cottage Grove Area MAXFIELD RESEARCH INC. Washington County Market Areas Bird od \ow White Haar Laice (pant) ECUTIVE SUMMARY 1 - Stillwater Area 11 -1.94 Corridor 2 WASHINGTON COQ `( housing, it is unlikely that the market dynamics within Washington County will provide sufficient housing opportunities to support this group. • A small portion of these households may be satisfied through the development of move - up housing which will allow more affordable homes to be vacated and purchased by younger households seeking their first home. ▪ We foresee the greatest gap in demand arising within the rental - housing spectrum. The scarcity of high - density sites, sites that are not proximate to goods and services and a lack of strong public transportation in outer suburban markets will create difficulties in serv- ing this group and will largely result in them seeking opportunities elsewhere. This situa- tion is important in the several larger communities in Washington County that have de- veloped strong retail concentrations. These workers are paid relatively low wages and this industry requires a base of workers to fill positions. In order to sustain retail growth, this workforce must be housed. • As housing prices rise much more rapidly compared to wage levels, people seeking affordable housing will be forced to commute from greater distances unless that housing is developed nearer their place of work. • Existing senior households who have lived in Washington County for many years and who desire to remain in their communities will need housing to serve their needs. In ad- dition, the increasing older adult base in Washington County will result in the parents of these older adult children desiring housing near their offspring. • Existing land use patterns within Washington County will also constrain growth and development as urbanized areas are reaching development saturation and development beyond the existing Metropolitan Urban Services Area is several years away in some cases. Summary of Housing Needs The following summary table matrix (Table 1A) shows the projected number of housing units needed in Washington County by Market Area between 2000 and 2010. The matrix shows housing needs for the various housing categories, owner and renter, single-family and multifam- ily, general occupancy and senior, subsidized and market rate. Although housing demand at either end of the County is mutually exclusive, demand between market areas that are contiguous is not. To the extent that households are more mobile and different market segments are willing to seek out various housing products in other areas of the County or perhaps outside of the County, these numbers may experience slight fluctuations between Market Areas. MAXFIELD RESEARCH INC. )(ECUTIVE SUMMARY ›.4 ;z) rip ;D [1 i 'r ° v i7 00 kn N N o CD N tr) d N o0 kr) t - 0 0 CO 0 m 1 d m --Y 0 0 00 0 N N 0 Le) i M CY Nt " a L cn tZD 73 cz; N ) r r r) 0 0 Q C7 0 0 0 kn c*) • 0 0 in 0 0 o m 0 0 d N 4 t ca • N kn 0 •vt N 0 DO 0 d ' 0 0 0 CD 00 L() y tiD ria c 4 0 v 0 M 0 M M 0 0 V 0 WASHINGTON CO' Household Growth XECUTIVE SUMMARY Table 1B shows household growth separated by household tenure, owner and renter, for each Market Area in Washington County. The table shows estimates and projections of household growth by Market Area from 1990 through 2020 by decade. The table reveals that Woodbury is projected to experience the greatest growth over the next twenty years despite a slowdown in the early portion of the 2000s. Woodbury is expected to be followed by the Cottage Grove Market Area and then the Stillwater Market Area. The Oakdale Market Area is expected to exhibit less growth due to scarcity of available land for new devel- opment. However, a recently approved open space development ordinance in Lake Elmo now allows for up to .40 units per acre. This change is expected to encourage additional residential development in this community in the future. Market Conditions • Home prices are rising rapidly. Over the past five years, the median home price in Washington County rose 52.8 %, compared to 36.5% for the Twin Cities Metropolitan Area as a whole. A portion of this increase is a result of the higher proportion of newer housing in many communities in Washington County. Nevertheless, home values are rapidly escalating beyond the ability of moderate -- income households to afford them. • Rental vacancy rates are very low all across Washington County, well below the 5% level considered standard in a healthy rental market. Washington County is no exception within the Metro Area where rental vacancy rates have continued to remain below 5% for several years. A substantial lack of construction during the 1990s and continued house- hold growth has resulted in a very tight market. Now, due to rising land and construction costs, market rate general occupancy rental housing has been developed only at the upper end of the rent spectrum. This situation has fueled a move -up renter situation sufficient enough to sustain our continued low vacancy rates. However, rising rents at older prop- erties have placed a burden on many renters who rent because of economic necessity. • Rental vacancy rates across the Twin Cities Metropolitan Area continue to remain low. Even the significant amount of rental housing developed in Woodbury over the P ast two years caused the vacancy rate to rise above 5.0% for only one quarter after which time, it fell to roughly 3.3 %. This is testament to the substantial pent -up demand that existed in Woodbury for rental housing at that time. • Developing sufficient affordable rental housing has become a critical issue across the Twin Cities Metropolitan Area and, even through public /private partnerships, we have been unable to develop enough moderate -price rental housing to support demand. Pro- grams instituted through the Minnesota Housing Finance Agency (specifically the 4 (d) program -- Property Tax Classification) have not had a strong response from the devel- opment community. In communities where moderate rent or low rent housing has been developed, it has been the result of a combination of funding sources all combined to re- MAXFIELD RESEARCH INC. 5 WASHINGTON CO 'TY ,XECUT1VE SUMMARY Demand Calculations MAXFIELD RESEARCH INC. duce the rent levels sufficiently and maximize the market through relatively generous in- come qualifications. Tables IC and 1D show the calculation of owner and renter demand by Market Area for Wash- ington County. The demand calculations show demand for various housing categories, owner and renter, single - family and multifamily, general occupancy and senior, subsidized and market rate for each of the eight Market Areas in Washington County. • Although housing demand at each end of the County is mutually exclusive, demand between Market Areas that are contiguous is not. To the extent that households are more mobile and different market segments are willing to seek out various housing products in other areas of the County or perhaps outside of the County, these numbers may experi- ence slightly fluctuations between Market Areas. • Demand exists for a variety of housing product types within each Market Area. Each Market Area is not likely to develop housing that will meet the needs of all market seg- ments, due to land use restrictions, funding allocations and other considerations (prox- imity to goods and services, transportation, etc.). Although it is important to encourage a variety of housing products within each Market Area to meet the needs of households in the County, some needs may go unmet and/or need to be satisfied elsewhere. • Entry-level housing is also a significant need within the County and one that is rapidly becoming more difficult to provide. Rising land and construction costs are pricing hous- ing out of reach of many young households. While there is some entry -level housing turnover, the number of move -up housing units developed as compared to entry -level over the past several years has reduced the availability of these units in the marketplace. • Our interviews throughout the County revealed a strong need for moderate price rental housing to serve families, young workers and lower income seniors. To the extent that the County can encourage the development of this type of housing would assist in provid- ing workers to local businesses and enhance the economic base of the County and retain long- standing residents of the area. • There is also a significant need within the County for transitional housing that will provide support services for households that cannot easily mainstream into the primary housing market. For this group, lifestyle and other emotional and financial issues make it difficult for therm to stabilize their living situations. Often it is a matter of providing a transitional living situation to enable them to eventually mainstream into the traditional housing market. 6 WASHINGTON COI :Y Stillwater-I 1-94 - I I Oakdale - III White Bear Lake - IV Northeast - V Forest Lake - VI Woodbury - VII Cottage Grove - VIII Total - Washington Cty. Stillwater-1 1-94 - II Oakdale - Ill White Bear Lake - IV Northeast - V Forest Lake - VI Woodbury - VII Cottage Grove - VIII MAXFIELD RESEARCH INC. TABLE 1B GROWTH OF WASHINGTON COUNTY HOUSEHOLDS BY MARKET AREA 1990-2020 a 1990-2000 1 Market Areas No. Pct. 136 7.2 25 2.5 660 17.7 114 6.7 15 3.0 80 7.1 1,381 15.9 281 7.9 2,692 12.1 Market Areas No. Pet 1 2000-2010 No. Pct. 550 20.2 100 20.0 500 19.3 500 20.1 65 20.3 320 20.0 1,000 18.5 900 21.0 3,935 19.8 1 2010-2020 1 No. Pct. 580 19.4 100 19.2 600 23,5 550 18.7 50 20.0 340 20.0 1,000 20.0 900 20.2 4,120 20.2 vacgO4nera,_ 1 1990-2000 1,751 92.8 967 97.5 3,068 82.3 1,578 93.3 491 97,0 1,046 92,9 7,292 84.1 3,279 92.1 2000-2010 1 No. Pct. 2,175 79.8 400 80.0 2,090 80.7 1,990 79.9 255 79.7 1,280 80.0 4,400 81.5 3,395 79.0 Total - Washington Cty. 19,472 87.9 15,985 80.2 Sources: Bureau of the Census; Metropolitan Council; Maxfield Research Inc. 1 2010-2020 No. Pct. 2,410 80.6 420 80.8 1,950 76.5 2,390 81.3 200 80.0 1,360 80.0 4,000 80.0 3,550 79.8 CUTIVE SUMMARY Census Estimate Projection 1990 2000 2010 24.8 21.4 7.0 5.9 16.2 16.6 8.2 7,9 6.9 6.2 25.1 21.5 20.2 17.8 11.6 10.7 16.1 rgItg :p Census Estimate Projection 1990 2000 2010 75.2 93.0 83.8 91.8 93,1 74.9 79.8 88.4 16,280 79.8 83.9 15.0 78.6 94.1 83.4 92.1 93.8 78.5 82.2 89,3 85.0 21.2 7.5 17.1 11.0 7.7 21.1 18,0 13.1 16.0 79.0 94.3 84.1 89.2 93.8 79.7 81.5 89.0 84.0 7 cf) Q v in C7 C3 cz) N � � r4 Q ON '4 0 N Go CD ®, ci Q � -,- c) ►,n cn c:3 6 a 0 0 Q 6- c _ d + ,� - . Q -, - 0 0 - ....., L.,F 7 J- 0 a., .- > E t w 0 ) ' a a, " , ..:7 Q.) ▪ a 0 0 00 2 Z o Z 2 ck Z 0 > 0 Q C n, Q C� C7 C7 — N o o t d C7 r a N O 0 Q C D • CZ 0 Q m Nzt- N g a c v Q O to g • 0 0 • O0 .� Q c\ Ln a C� a 0 co CZ, co Ca g. O G� 00 g C3 0 0 e. 0 0 00 '. 0 0 'CZ) ▪ CO a 0 a O: a Q Cti3 v N' c r) N N r.4.• C' 0 0. 0\ p rry 0: \ 0 © N au z c �1 WASHINGTON CC NTY EXECUTIVE SUMMARY The demand calculations continue to show strong demand for move -up housing. This is a result of the aging baby boom generation. Based on a shift in demographics pointing to a somewhat reduced demand for move -up housing in the 2000s, we do not believe that this shift will signifi- cantly affect Washington County as the mobility of households in the Twin Cities Metro Area will allow people to cross market areas to find the housing they seek. This will continue to provide strong demand for move -up housing in Washington County, although the need for entry - level and moderate price housing will increase as a proportion of total housing needs. Also, rental demand will continue to remain strong despite the lack of product that has been developed to date. Development Programs Appendix A lists programs available for the development of housing and are not restricted to rural communities. We are seeing today that developing affordable housing has not been easy and that those developments that have been built are typically a combination of several different sources of funding and subsidies to make them work. Programs that have been successful in the past include essential function bonds, tax exempt bond financing and tax credit developments. Essential function bonds however are not backed by the guarantee of the community or the bonding entity that may restrict their ability to be sold via public sale. MAXFIELD RESEARCH INC. 10