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RENTAL MARKET ANALYSIS Introduction Maxfield Research and Consulting LLC identified and surveyed larger rental properties of 16 or more units in the Elk River. In addition, interviews were conducted with real estate agents, developers, rental housing management firms, and others in the community familiar with Elk River's rental housing stock. For purposes of our analysis, we have classified rental projects into two groups, general occupancy and senior (age restricted). All senior projects are included in the Senior Rental Analysis section of this report. The general occupancy rental projects are divided into three groups, market rate (those without income restrictions), affordable, (those receiving tax credits in order to keep rents affordable), and subsidized (those with income restrictions based on 30% allocation of income to housing). General- Occupancy Rental Projects Our research of Elk River's general occupancy rental market included a survey of 22 apartment properties (16 units and larger) in October 2015. These projects represent a combined total of 931 units, including 633 market rate units and 298 affordable /subsidized units. At the time of our survey, 45 market rate units and one affordable /subsidized units were vacant, resulting in an overall vacancy rates of 7.1% for market rate units and 1.3% for affordable /subsidized. It is important to note however, that 28 of the 45 market rate vacancies are located within Elk Park Estates which has changed ownership and management. Excluding this property decreases the vacancy rate to 3.0 %. We were unable to gather complete information for the property of Elk Ridge Estates. The overall market rate vacancy rate of 5.3 %, excluding Elk Park Estates drops the vacancy rate to 2.4% which is lower than the industry standard of 5% vacancy for a stabilized rental market, which promotes competitive rates, ensures adequate choice, and allows for unit turnover. The pent -up market indicates a possible need of additional rental housing for all major sectors of the rental market: low- income, moderate - income, and market rate. Table RMA -1 summarizes information on general occupancy projects surveyed. The following are key points from our survey of these developments. Market Rate • Granite Shores, converted to rental in 2012, is the newest market rate general occupancy building built in nearly 20 years. Granite Shores contains a total of 67 units and was originally built as a for -sale condominium in 2006, but struggled to sell units and went into foreclosure. Granite Shores has the highest rents in Elk River, at $1,129 to $1,589 per month for one - bedroom units, $1,299 to $1,539 per month for one - bedroom plus Den units, and $1,429 per month for two - bedroom units. The monthly rents are about 40% to MAXFIELD RESEARCH & CONSULTING, LLC. 41