2. HRSR 02-01-2016 - Laserfiche WebLink

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EXECUTIVE SUMMARY • The City of Elk River issued permits for the construction of 2,704 new residential units from 2000 to 2010. That equates to 246 units annually. However, 91.5%of development occurred from 2000 to 2006. New residential construction declined significantly from 2006 through 2012. Permits have increased since the recession but not near the levels they were in the early 2000s. • Approximately 81%of Elk River homeowners have a mortgage. About 24%of homeowners with mortgages also have a second mortgage or home equity loan. Comparatively, about 66%of homeowners in the United States have a mortgage. Rental Housing Market Analysis • In order to assess the current market conditions for rental housing in Elk River, Maxfield Research and Consulting LLC conducted an inventory of subsidized (i.e. housing that is income-restricted to households earning at or below 30%of the Area Median Income), affordable (i.e. housing that is income-restricted between 30%and 80% of the Area Median Income) and market rate (i.e. housing that is not income-restricted) projects located in the City. • In total, Maxfield Research inventoried 931 general occupancy market rate rental units in the City of Elk River spread across 22 multifamily developments (16 units and larger). At the time of the survey, there 49 vacant units (5.3%). Of which 28 vacancies were located in Elk Park Estates that recently underwent a change in management. Excluding Elk Park Estates, the market rate vacancy rate totals 2.3%. Typically, a healthy rental market maintains a vacancy rate of roughly 5%, which promotes competitive rates, ensures adequate consumer choice, and allows for unit turnover. • Elk River has a total of 54 subsidized units within two buildings and 244 affordable units across five developments. The buildings feature a variety of unit types that cater to a wide- spectrum of household types. There were four units vacant at the time of the survey for a rate of 1.3%. A healthy income based rental market typically maintains roughly a 3.0% vacancy rate. • Coachman Ridge (Tax-Credit) recently opened in November of 2015 with 52 units. All of the units were leased prior to opening. • Low vacancy rates in all general occupancy rental products indicate pent-up demand for additional rental housing in Elk River. MAXFIELD RESEARCH&CONSULTING,LLC. 2