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HOUSING DEMAND ANALYSIS <br />outside Elk River. This demand will consist primarily of parents of adult children living in Elk <br />River, individuals who live just outside of Elk River and have an orientation to the area, as well <br />as former residents who desire to return. Together, the demand from Elk River seniors and <br />demand from seniors who would relocate to Elk River results in a total long -term demand for <br />159 active adult units in 2015. <br />Independent demand in Elk River is split into housing that offers ownership housing and rental <br />housing. Based on the current product available in Elk River, we project that 40% of Elk River's <br />demand will be for adult ownership housing (63 units) and 60% will be for rental housing (95 <br />units). <br />TABLE HD -3 <br />MARKET RATE ADULT /FEW SERVICES HOUSING DEMAND <br />ELK RIVER <br />2015 & 2020 <br /># of Households w/ Incomes of >$35,0001 <br /># of Households w/ Incomes of $24,999 to $34,9991 + <br />(times) Homeownership Rate x <br />(equals) Total Potential Market Base = <br />(times) Potential Capture Rate <br />(equals) Demand Potential <br />Potential Demand from Market Area Residents <br />(plus Demand from Outside Market Area (25 %)2 <br />(equals) Total Demand Potential <br />(times) % by Product Type <br />(equals) Demand Potential by Product Type <br />(minus) Existing and Pending MR Active Adult Units3 <br />(equals) Excess Demand for MR Active Adult Units <br />Age of Householder <br />55 -64 <br />65 -74 <br />75+ <br />1,213 <br />732 <br />430 <br />73 <br />77 <br />88 <br />87% <br />84% <br />63% <br />1,277 796 485 <br />x 0.5% <br />5.0% <br />15.0% <br />= 6 <br />40 <br />73 <br />= <br />119 <br />15.0% <br />+ <br />40 <br />129 <br />= <br />159 <br />Owner- <br />62 <br />Renter - <br />Occupied <br />248 <br />Occupied <br />x 40% <br />x <br />60% <br />= 63 <br />= <br />95 <br />Age of Householder <br />55 -64 <br />1,412 <br />+ 72 <br />K 87% <br />65 -74 <br />928 <br />79 <br />84% <br />75+ <br />789 <br />113 <br />63% <br />= 1,475 <br />994 <br />860 <br />x 0.5% <br />5.0% <br />15.0% <br />= 7 <br />50 <br />129 <br />= <br />186 <br />+ <br />62 <br />= <br />248 <br />Owner- <br />Renter - <br />Occupied <br />Occupied <br />x 40% <br />x <br />60% <br />= 99 <br />= <br />149 <br />- 111 - 72 11- 111 - 72 <br />0 = 23 0 = 77 <br />12020 calculations define income - qualified households as all households with incomes greater than $40,000 and homeowner households with incomes <br />between $30,000 and $39,999. <br />Z Based on project manager interviews and historical trends. We estimate that roughly 40% of demand will come from outside the markt area. <br />3 Existing and pending are deducted at market equilibrium (95% occupancy). <br />ISource: Maxfield Research & Consulting, LLC <br />Next, we subtract existing competitive market rate units (minus a vacancy factor of 5% to allow <br />for sufficient consumer choice and turnover) from the owner and rental demand. Subtracting <br />the existing competitive market rate units results in total demand potential for zero adult <br />owner - occupied units and 23 adult rental units in 2015. <br />MAXFIELD RESEARCH & CONSULTING, LLC 87 <br />