2. CCSR-HRSR 09-04-2012 SPEC JOINT

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HOUSING DEMAND ANALYSIS 6. Older seniors • May need to move out of their single-family home due to physical and/or health constraints or a desire to reduce their responsibilities for upkeep and maintenance • Generally single females (widows) in their mid-70's or older Smaller, outstate communities and rural areas tend to have higher proportions of younger households that own their housing than in the larger growth centers or metropolitan areas. In addition, senior households tend to move to alternative housing at an older age. These conditions are a result of housing market dynamics, which typically provide more affordable single-family housing for young households and a scarcity of senior housing alternatives for older households. Therefore, the age categories for housing life cycles will be somewhat different in Elk River than in communities located in the Twin Cities Metro Area. The baby boom generation will have the biggest effect on the housing market in Elk River as their life cycle continues. Baby boomers are currently ages 47 to 65, and as they age over this decade, they will increase the population in the age groups 45 to 54 and 55 to 64. The 45 to 54 and 55 to 64 age groups in Elk River will see increases of 213 and 826 people, respectively, over the next five years. Some of these baby boomers will prefer more expensive single-family homes, while others who become empty nesters may prefer to downsize or desire maintenance-free alternatives. With the baby busters following in the baby boomers' wake, the age group 35 to 44 will decline, somewhat decreasing the overall demand for move-up housing. Estimated Demand for For-Sale Housing Table HD-1 presents our demand calculations for general occupancy for-sale housing in Elk River between 2012 and 2017. Between 2012 and 2017, Elk River is projected to add 680 new households. Based on our analysis of household growth forecast in specific age cohorts, we estimate that 67% of these households will support demand for general occupancy housing products (i.e. vs. senior housing), generating total demand for 456 general occupancy housing units between 2012 and 2017. Demand for housing is apportioned between ownership and rental housing products. According to historic U.S. Census data, approximately 81% of households under age 65 owned their housing in 2010 in Elk River. Applying this percentage to the total demand for general occupancy units yields demand for 369 for-sale units between 2012 and 2017. Based on land available, building trends, and demographic shifts (increasing older adult population), we project 85% of the for-sale owners will prefer traditional single-family product MAXFIELD RESEARCH INC. 76