Agenda - Council Work Session - 11/24/2009

Home

CONCLUSIONS AND RECOMMENDATIONS Introduction The following section draws on the findings of our analysis regarding the workforce and afford- able housing needs in Ramsey, Minnesota. Following the introduction are recommendations on the types housing products needed in the City of Ramsey and the timing in which development of additional housing units will be feasible. Summary of Current Factors Impacting Housing Needs As a result ofthe current economic conditions, the rate of household growth in Ramsey has slowed substantially from earlier projections. Although significant household growth is forecast for the next decade, much ofthis growth will occur in the later half of the decade as the rate of household growth accelerates between 2014 and 2020. Over the next five years, an additional 1,400 households are forecast to be added in the City of Ramsey and 3,500 households in the remainder ofthe PMA and SMA combined. Realizing new housing demand from this forecast household growth will be contingent on a sufficient recovery in the economy, during and after which households will be able and willing to relocate and secure new housing. Our analysis reveals that the existing housing stock is adequately meeting the housing needs of Ramsey residents given the current economic conditions. Several multifamily for-sale develop- ments have significantly reduced the price of their townhome units, which has allowed a portion of new housing units to be affordable to workforce households that previously could not have af- forded new construction. Lender-mediated sales and deep discounts of previously owned single- and multifamily homes have also substantially increased the affordability of the for-sale housing stock and provided additional homeownership opportunities for workforce households. With the current housing market slowdown, it will take some time before existing for-sale inventory and the glut oflender-mediated sales moves through the market. Hence, in the near term, the exist- ing inventory of new and previously owned housing units are indirectly satisfying some of the housing needs of workforce households. In addition, the current housing tax credit incentive, low mortgage rates and reduced prices combine to make housing more affordable to qualified buyers. The rental market is currently hovering near market equilibrium (5.0% vacancy) for all housing product types surveyed in this analysis. Older and newer market rate properties are currently outperforming affordable housing, which has experienced a significant increase in turnover that has resulted in higher than typical vacancy rates. Subsidized housing continues to be in high demand in the Ramsey area and throughout the Metro Area. With the current lending environ- ment, it would likely be prohibitive to secure financing for additional subsidized housing units even though demand exists in the marketplace. Independent senior housing products are generally performing well, although new active adult product has been slow to sell or lease units, particularly in the Oak Grove area. With vacancy rates near market equilibrium and limited calculated demand, we do not recommend develop- ment of additional independent senior housing in the short-term. As the economy recovers t aging population base in Ramsey will drive demand for new senior housing developm . MAXFIELD RESEARCH 1Ne.