2. HRSR 02-01-2016 - Laserfiche WebLink

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DEMOGRAPHIC ANALYSIS Household Income The estimated distribution of household incomes in Elk River for 2015 and 2020 is shown in the following graphs. The data in Tables D-3 and D-4 was estimated by ESRI, Inc. The data helps in ascertaining the demand for different housing products based on the size of the market at specific cost levels. The Department of Housing and Urban Development defines affordable housing costs for families as 30%of a household's adjusted gross income. Maxfield Research and Consulting LLC uses a figure of 25%to 30%for younger households and 40%or more for seniors, since seniors generally have 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 2015 was estimated to be about$78,305. Elk River has a higher median income compared to the Twin Cities Metro Area at$67,795 Overall, incomes are expected to increase by about 10% between 2015 and 2020, or about 2.0%annually. This will result in the median income in Elk River increasing from $78,305 in 2015 to about $86,198 in 2020. • Between 2015 and 2020, the number of households will increase in all but two age groups in Elk River. The largest numerical gain will be in the 65 to 74 age group, with a projected increase of 228 households. Non-Senior Households • In 2015, roughly 4%of the non-senior households (15 to 64 years of age) in Elk River had incomes under$15,000 (248 households). All of these households would be eligible for subsidized rental housing. Another 4%of Elk River's non-senior households had incomes between $15,000 and $25,000 (271 households). Many of these households would qualify for subsidized housing, but some 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$862 (shown in Table R-1 in the Rental Housing Analysis section). MAXFIELD RESEARCH&CONSULTING,LLC. 11