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

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DEMOGRAPHIC ANALYSIS lower living expenses and can often sell their homes and use the proceeds toward rent payments. A generally accepted standard for affordable owner-occupied housing is that a typical household can afford to pay 3.0 to 3.5 times their annual income on a single-family home. Thus, a $50,000 income would translate to an affordable single-family home of$150,000 to $175,000. The higher end of this range assumes that the person has adequate funds for down payment and closing costs, but does not have savings or equity in an existing home which would allow them to purchase a higher priced home. The following are key points: • The median household income in Elk River in 2012 was estimated to be about $82,040. Overall, incomes are expected to increase by about 22% between 2012 and 2017, or about 4.5% annually. This will result in the median income in the Elk River Elk River increasing from $80,043 in 2012 to about $100,430 in 2017. • Between 2012 and 2017, the number of households will increase in all but two age groups in Elk River. The largest numerical gain will be in the 55 to 64 age group, with a projected increase of 277 households. Non-Senior Households • In 2012, roughly 2% of the non-senior households in Elk River had incomes under $15,000 (128 households). All of these households would be eligible for subsidized rental housing. Another 5% of Elk River's non-senior households had incomes between $15,000 and $25,000 (279 households). Many of these households would qualify for subsidized housing, but many could also afford "affordable" or older market-rate rentals. If housing costs absorb 30% of income, households with incomes of$15,000 to $25,000 could afford to pay $375 to $625 per month. Average monthly rents for one-bedroom units in Elk River are about $743 (shown in Table R-1 in the Rental Housing Analysis section). • Median incomes for households in Elk River peak at $102,432 for the 45 to 54 age group in 2012. Households in this age group are in their peak earning years. The majority of households (87%) in this age group are homeowners. By 2017, the median income for the 45 to 54 age group is projected to increase to $107,653, a 5% increase. • The median resale price of homes in Elk River was roughly $150,000 through May 2012 (see Table FS-1). The income required to afford a home at this price would be about $42,875 to $50,000, based on the standard of 3.0 to 3.5 times the median income (and assuming these households do not have a high level of debt). In 2012, 71% (5,765 households) of Elk River's non-senior households had incomes greater than $42,875. MAXFIELD RESEARCH INC. 14