Agenda - Council Work Session - 11/24/2009

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DEMOGRAPHIC ANALYSIS sures and declines in home prices overall has significantly increased the affordability of housing in the Twin Cities Metro Area. Still, households looking for homes priced under $100,000 will find it difficult to purchase without some downpayment or other assistance as there is limited product available at this price range. Most of those at the lower end ofthe wage spectrum will likely be forced to rent their housing if they are single, because wages will not support a home even in this sluggish market. Nevertheless, home affordability over- all has risen dramatically since the recession. For those who are employed and can fund a downpayment, there are opportunities to purchase. · On a rent basis, teachers earning the previously discussed young professional income could afford to rent an apartment for $850 per month while a registered nurse could afford a monthly rent of$1,350. Most other professions included in Table D-11 could afford rents of between $525 and $800 per month. Summary of Demographic Trends The current recession and slowdown in the for-sale housing market has impacted and will con- tinue to impact the rate of growth in the Market Area over the next several years. Growth has slowed substantially throughout the Metro Area and particularly in fringe suburban areas such as the Ramsey. The Metropolitan Council had forecast a total population base in excess of251,000 people by 2010. Our revised calculations place the population base at 236,245 by 2010 based on current market conditions. Although the total population and household base will be lower than originally forecast for 2010, total numerical growth has been held constant between 2010 and 2020, but has been reduced for the next few years through 2013. As such, total projected growth of approximately 32,110 peo- ple and 15,190 households has been weighted toward the second half of the next decade as the economy is expected to recover gradually over the next three to four years. The PMA is expected to see greater growth compared to the SMA, which is attributed primarily to its greater land supply to accommodate new housing and employment centers. Some house- holds will choose to commute to the core urban area for employment while others will move to the Market Area as new employment opportunities are developed. Because of a decline in home values, some households are choosing to purchase lower-priced housing in outlying suburban ar- eas and commute further to work to take advantage of lower mortgage payments. The strength of and growth in the local employment market is a strong indicator of an area's propensity to grow. Based on the nature of the employment base locally, many new hires to the area will have modest incomes and will need affordable housing opportunities in order to mini- mize their housing cost burden. Growth over the next five years will predominately be propelled by growth in the older adult and younger senior age cohorts (age 55 to 74). As these households become empty-nesters and/or re- tirees, a portion may decide to consider alternative housing, usually single-level townhomes, where the resident can be free from exterior home maintenance and upkeep. Although MAXFIELD RESEARCH INC.