Agenda - Council Work Session - 11/24/2009

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RENTAL HOUSING MARKET CONDITIONS housing. Typically, households earning up to 60% AMI are eligible for affordable housing. The monthly rent is a fixed amount but typically the residents' incomes must not exceed a maximum limit. The rent level set is based on affordability criteria for households earning incomes usually between 50% and 60% of the area median family income. · One ofthe five affordable developments-Sunwood Townhomes-is located in the City of Ramsey. Other affordable developments included in the inventory are located in Blaine, Champlin and Coon Rapids. · Six affordable housing communities with a total of288 housing units are included in our in- ventory. Of these 288 units, there are currently 26 available units for a vacancy rate of9.0%. This vacancy rate is above market equilibrium (5.0%), which reflects the impact ofthe cur- rent economic condition on the area's affordable housing developments. · Housing managers and rental agents commented that there has been some softening in the market for affordable rental housing. Job loss was a significant factor cited for the increased vacancy rate at area properties. Residents who have lost jobs are finding it increasingly diffi- cult to cover their expenses and many have vacated their apartment and moved in with family or friends. Since the vacancy rate is typically much less than 9% (according to the property managers), it is likely that the softness in the market is temporary and will improve once the economy begins to recover. · The majority of affordable units are two-bedrooms (58% of the total unit supply), and the remaining units have three or four bedrooms (24%) or one bedroom (13%). On a weighted average basis, one-bedroom units have 640 square feet and rent for $680 per month ($1.06 pst), two-bedrooms units have 1,030 square feet and rent for $845 per month ($0.82 pst) and three-bedroom units have 1,340 square feet and rent for $1,045 per month ($0.78 pst). Market Rate Rental Housing The following are key points from Table RH-3 regarding market rate rental projects: · The inventory of market rate projects is separated into two segments-newer rental commu- nities and older rental communities. Newer communities were built after 1980 and generally have higher price points than older communities. There are seven newer rental properties with a total of 1,149 units included in our inventory. One of the rental communities- Terrace Hill-is located in Ramsey. · Older market rate communities may have some overlap with affordable developments due to their price points. The survey included nine older properties with a total of 1,096 units. None of the older rental communities are located in Ramsey. MAXFIELD RESEARCH INC.