Agenda - Planning Commission - 09/01/2016

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RENTAL HOUSING MARKET CONDITIONS Competitive Market Area Rental Communities To gauge how market rate communities may be meeting the needs of moderate-income house- holds, Maxfield Research surveyed a sampling of the market rate communities (eight newer communities and eight older communities) in the Market Area. Information on location, number of units, vacancies, unit mix and sizes, and monthly rents are displayed in Table 20 and 21. A comparison of amenities and services is presented in Table 22. The following are key points from Table 20 and 21: • There are 1,255 units in the surveyed newer facilities in Table 20. Of these, 45 were found vacant. This translates to an overall vacancy rate of 3.86%, which is below the 5.0% level considered to be market equilibrium. Market equilibrium is considered by the industry to re- flect sufficient consumer choice and adequate turnover. An overall vacancy rate of 3.86% generally indicates that current demand exceeds current supply, although this number only represents newer rental facilities and not the market as a whole. • Monthly rents among the newer surveyed units averaged$725 for one-bedroom units ($0.97/sq. ft.), $865 for two-bedroom units ($0.86/sq. ft.), and$1,110 for three-bedroom units ($0.90/sq. ft.). It should be noted that all of the communities but three charged an addi- tional fee for enclosed parking (Cutters Grove, Dellwood Estates, and Champlin Drive in- clude enclosed parking in the monthly rent). Extra fees for parking ranged from$40 to $65 per month. • The surveyed older rental facilities consist of 1,096 units. There were 60 vacant units found in these facilities. This translates to a vacancy rate of 5.5%, which is just slightly above the 5.0% level considered to be market equilibrium. This vacancy rate indicates that current supply may be meeting current demand; however, desirability of the units could also be a factor in the higher vacancy rate. • Monthly rents among the older surveyed units averaged$670 for one-bedroom units ($0.86/sq. ft.), $776 for two-bedroom units ($0.78/sq. ft.), and$913 for three-bedroom units ($0.71/sq. ft.). All of the communities except for Woodland North charged an additional fee for enclosed parking. Extra fees for parking ranged from$40 to $50 per month. • Using the industry standard that households can afford a housing cost of 30% of their in- come, a single earning approximately $30,000 could afford the average one-bedroom rent in the newer apartments. Singles earning approximately $28,000 could afford one-bedroom units at older apartments. Two-person households would need incomes of approximately $36,000 and $32,000 to afford units at the newer and older communities,respectively. Over- all, our analysis of the market rate communities finds that these units, despite being market rate, provide housing to workforce households. MAXFIELD RESEARCH INC. 40