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Home My WebLink AboutAffordable Housing pptAffordable Housing Market Analysis for the Iowa City Metro Area Issues, Observations and Recommendations MULLIN LONERGAN ASSOCIATES -,~ Acknowledgements . AfFordable Housing Steering Committee: . Jerry Anthony, University of Iowa • Steve Gordon, AM Management • Karen Howard, City of Iowa City • Andy Johnson, Housing Trust Fund • Swe n Larson, Three B u l ls/ La rso n 6 u i l d e rs ,,,~;,; Steve Long, City of Iowa City ~ ,_ J Approach and emphasis • Are household incomes i n sync with the cost of housing? • Statistical analysis • Primary focus: AH needs of family and non-student households • Sub-prime mortgage debacle and slowing of the economy were not major factors i n determining affordable housing needs Why analyze housing needs? • Housing is a core value: • "a community of neighborhoods that provides safe, attractive and affordab/e housing for a// its residents" • What is the unmet need for affordable housing? . What factors prevent us from fully meeting the need for affordable housing? (barriers) • What positive steps can we take to expand the supply of affordable housing? Why do so many people want to live in Johnson County? Everybody's best place to live 12°°°°° • 4th fastest growing county in 100'°0° Iowa (6.1% increase in o so,ooo population since 2000) ._ Robust economy -added 4,600 a 60,000 jobs from 2000 - 2005 ~ 40,000 • Job growth in higher skill, higher wage sectors 2°,°°° • Safe neighborhoods ° ~ Johnson County Study Area 1960 1970 1980 1990 2000 Vibrant university town Household growth drives the housing market Household growth (10.8% since 2000) is outpacing growth in population (6.1%) Fewer marriages Later marriages More frequent divorces Longer life spans 140.0% 120.0° 100.0° 80.0° 60.0° 40.0° 20.0°~ o.o°r -20.0°~ • Every household needs a ~ dwelling ,or`~ ~o.- ~y, . ~J J'~ The housing market responds... • 8,700 new housing units created in ]C from 2000 - 2006 . $467 million in residential sales in JC in 2006 • 2,644 sales transactions in 2006 alone Household makeup is changing . More single person households as a of total households . Increase in empty nesters . More one person households 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% ^ 1990 ^ 2000 Married Couple Single Parent One Person Family Householder Householder Other Non- Fam ily Household 15,000+ daily commuters from outlying counties • 69% of persons employed in JC also live in JC . 20% of workers in JC live elsewhere . 11% of JC residents commute to jobs elsewhere Benton Linn Jones _,0e 298 -5514 290 4,434 Cedar -534 .,"~_", ~`~~~ r-~ -375 '` 1,294 Johnson SCOtt ~OWa 2,171 -253 _32~ ~ moo Muscatine ,- ~- _~___ 1,306 - -_ - i 2,879 -509 ~ Washington Source: U.S. Census Bureau, Population Division, Journey-To-Work & Migration Not all Johnson County residents are wealthy . 6,792 or 17% of all family households in Johnson County have household incomes < $25,000 . # of cost-burdened households (housing costs > 30% of income) is on the rise Incomes are not keeping pace with housing costs . Rea/median household income in Johnson County has declined 4% since 2000 . Median sales values reached $162,700 in 2006, an increase of 11% since 2001 (adjusted for inflation) ~_ --- `' ~: ,, _--~ 4 -_ -- __ __ -- _.~ ~ ~. ~- ,~ ~~ ~~ ~~;~ Cost burdened lower income* households in Iowa City . 1,358 family renter households paying more than 30% of income for housing . 1,445 owner households paying more than 30% of income for housing .719 family renter households paying more than 50% of income for housing . 559 owner households paying more than 50% of income for housing * Lower income = up to 80% of MHI HOMES IN .JOHNSON COUNTY ARE BECOMING A BIGGER BURDEN Ratio of median home price to median income 1990 2006 Housing affordability wage gap . An income of $53,150 is needed to purchase a median sales price home in JC ($162,700) . Median income households ($47,940) can afford sales $142,200 in Johnson County prices up to . Very limited supply of housing for households with incomes less than $25,000 -only 38 units sold for less than $60,000 in 2006 First-time buyers priced out of sales housing market $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 Annual Income Needed to Afford Median Sales Price Housing, 2006 $57,550 $ 50,65 0 ' $31,547 $32,700 $18,160 $12,720 e~ o .~ a ~~ ~ e y~ ~e 5a a~ e~ Iowa City needs people that need affordable Housing! a eo ~e e ~ yam o` L \ o ey ~ e~ t` o ` G e ~° o r ~ ~ ~,`~ ~y ~~ a~ fo Q. ~r or J ae ~a~ ~o ~ , a G~ fee o a~ e ~a e Le e a e \o o~ ~e ~ ea e e ~ ~` a ° ~o \~GO~~ \~GO~e e ~eae o~ ,~~ Median Wages Paid in Johnson County, 2006 Relative scarcity of lower cost listings . In 2006, only 389 sales transactions (15% of total transactions) less than $100,000 in value • Lower income and f i rst- time buyers must compete for a limited supply of lower cost sales housing ~.~: - ~~ t~ .~, ,~° °_ _.. ~. -~ . Limited rental housing options • When vacancy rate is low, tenants stay put: . 1.66% vacancy rate i n Pentacrest area . 2.56% vacancy rate in remainder of IC • .98% vacancy rate for 1 BR apartments 1.78% vacancy rate for 2 BR apartments . 4.47% vacancy rate for 3 BR apartments Source: Cook Appraisal, LLC • Single person renter household must earn $13.62/hr in order to a fford a 2 B R a pt. at t he H U D Fair M ar ket Rent o f $ 708 • Limited supply of subsidized and tax credit rental units in IC Demand for affordable housing Metro area Iowa City Existing demand (2000) Owner units 2,221 1,480 Family Renter units 2,095 1,502 Projected demand (2000 - 2012) Owner units 836 105 Family Renter units 1,519 544 Tota I demand (existing + projected) Owner units 3,057 1,585 Family Renter units 3,614 2,046 Production + Pipeline to 2012 ^ 2000 to 2006: Total production of .1703 market rate units affordable units (2000 . 242 non-profit units t0 2012): . 2,711 units . 56 TARP units (rehab) ,Average production ^ 2007 tO 2012: (2000 t0 2012): . 514 market rate units .226 units per year . 140 non-profit units .Average non-profit . 48 TARP units (rehab) production (2000 - . 8 Iowa City Housing 2012): Authority units 31 units per year Affordable Housing Deficit - 2012 . Total demand for metro area: . 6,671 units . LESS total production and pipeline: . 2,711 units . EQUALS total unmet affordable housing need: . (3,960 units) Barriers to affordable housing . Absence of vacant land zoned for multi-family . Neighborhood resistance to development and/or density increases (NIMBY) . High cost of land . Relative scarcity of new single family < $200,000 • Student demand keeps rents high . Declining federal subsidies for AH . Limited production of housing by AH developers housing Recommendations ~. Create a positive public image of affordable workforce housing z. Increase the supply of land zoned by-right for multi-family housing 3. Treat affordable housing as a special class of development 4. Create partnerships with developers and the University s. Adopt i ncl usiona ry housing policies Recommendations, continued. 6. Be prepared to provide incentives to private developers that agree to build mixed income communities ~. Capitalize the Housing Trust Fund of Johnson County; leverage federal trust fund $ $. Preserve existing at-risk affordable housing 9. Expand capacity of local non-profit AH developers ~o. Develop an administrative and policy framework in support of AH Contact information Affordable Housing Market Analysis for the Iowa City Metro Area MULLIN LONEP.Gr1N ASSOCIATES Eric Fulmer ericf~mandl.net 412.323.1950 ~ r _ -,~'~ ~~! ~"~-"' ~ ~~~~ ~ CITY OF IOWA CITY Steve Lon g steve-long ~ iowa-city.org 319.356.5230 For a copy of the report, visit www.icgov.org/affordablehousing