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CHALLENGES AND OPPORTUNITIES
<br />Challenges and Opportunities
<br />Table CR-2 identified and recommended housing types that would satisfy the
<br />Elk River over the next ten years. The following were identifie
<br />opportunities for developing the recommended housing types (in nrder-
<br />alphabetically).
<br />
<br />Affordability. Based on current home prices, about 75% of Elk River householder
<br />afford to purchase an entry-level home given todays pricing (see table on the following
<br />page). Likewise, most householders (85%) can also afford the average market rate rent at a
<br />one-bedroom rental project in Elk River. Because of this condition,
<br />would not consider purchasing may do so earlier since the cost t-level home
<br />is on-par with rental housing costs. The following chart compares the costs of
<br />homeownership to rentals given todays housing costs based on a
<br />to housing. We do note, however, that not all householders will
<br />down payment that would qualify them to purchase for-sale housing.
<br />
<br />TABLE HA-4
<br />ELK RIVER MARKET AREA HOUSING AFFORDABILITY - BASED ON HOUSEHOL
<br />For-Sale
<br /> (Assumes 10% down payment and good credit)
<br />Single-FamilyTownhome/Twinhome
<br />Entry-LevelMove-UpExecutiveEntry-LevelMove-UpExecutive
<br />Price of House$175,000$250,000$300,000$150,000$225,000$300,000
<br />Pct. Down Payment10.0%10.0%10.0%10.0%10.0%10.0%
<br />Total Down Payment Amt.$17,500$25,000$30,000$15,000$22,500$30,000
<br />Estimated Closing Costs (rolled into mortgage)$5,250$7,500$9,000$4,500$6,750$9,000
<br />Cost of Loan$162,750$232,500$279,000$139,500$209,250$279,000
<br />Interest Rate4.000%4.000%4.000%4.000%4.000%4.000%
<br />Number of Pmts.360360360360360360
<br />Monthly Payment (P & I)-$777-$1,110-$1,332-$666-$999-$1,332
<br />(plus) Prop. Tax-$219-$313-$375-$188-$281-$375
<br />(plus) HO Insurance/Assoc. Fee for TH-$58-$83-$100-$100-$100-$100
<br />(plus) PMI/MIP (less than 20%)-$71-$101-$121-$60-$91-$121
<br />Subtotal monthly costs-$1,125-$1,607-$1,928-$1,014-$1,471-$1,928
<br />Housing Costs as % of Income30%30%30%30%30%30%
<br />Minimum Income Required$44,984$64,263$77,116$40,558$58,837$77,116
<br />Pct. of ALL Elk River HHDS who can afford175.9%60.8%52.0%79.8%65.9%52.0%
<br />No. of Elk River HHDS who can afford16,0924,8864,1766,4135,2954,176
<br />Pct. of Elk River owner HHDs who can afford281.4%65.9%55.8%84.0%71.9%55.8%
<br />No. of Elk River owner HHDs who can afford25,0764,1113,4785,2404,4833,478
<br />No. of Elk River owner HHDS who cannot afford21,1602,1252,7589961,7532,758
<br />Rental (Market Rate)
<br />Existing Rental New Rental
<br />1BR2BR3BR1BR2BR3BR
<br />Monthly Rent$850$950$1,300$950$1,200$1,350
<br />Annual Rent$10,200$11,400$15,600$11,400$14,400$16,200
<br />Housing Costs as % of Income30%30%30%30%30%30%
<br />Minimum Income Required$34,000$38,000$52,000$38,000$48,000$54,000
<br />Pct. of ALL Elk River HHDS who can afford184.8%80.5%70.3%80.5%73.4%68.8%
<br />No. of Elk River HHDS who can afford16,8126,4645,6456,4645,8925,528
<br />Pct. of Elk River renter HHDs who can afford259.3%50.9%74.4%50.9%38.3%32.1%
<br />No. of Elk River renter HHDs who can afford21,0669141,336914688576
<br />No. of Elk River renter HHDS who cannot afford27308824608821,1081,220
<br />1
<br />Based on 2015 household income for ALL households
<br />2
<br /> Based on 2013 ACS household income by tenure (i.e. owner and re
<br />Source: Maxfield Research & Consulting, LLC
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<br />MAXFIELD RESEARCH & CONSULTING, LLC
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