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<br /> <br /> <br /> <br />Hillside Heights Apartments, Elk River, Minnesota <br /> <br />Market Analyst Professionals, LLC 82 April 24, 2020 <br />Addendum: Market Study Analysis and Consideration: <br />Derivation of achievable HTC Rents <br />The most comparable projects to the proposal include general occupancy units operating under <br />income restriction guidelines within the same area as the proposal and offering similar units. Among <br />LIHTC projects those in closest proximity and considered the most comparable to the subject are <br />included—excluding more dated projects. Additionally, two market rate projects are included to gauge <br />hypothetical market rents for the subject. Detailed information on these projects is presented in the <br />following pages. The overall occupancy rate for the most comparable projects is 99.7 percent. <br /> <br /> The subject will offer one- to three-bedroom general occupancy units with comparable amenities <br />and unit sizes to comparable facilities. The development will be the newest project in the area, <br />commanding a premium relative to more dated competitive set projects. Among competitive set projects <br />Coachman limits rents to 50 percent AMI (for 60 percent AMI income restrictions) and these units are <br />shifted in the rent grid. Considering adjustments and projections to market entry the subject’s rents are <br />consistent with MAP’s estimated achievable LIHTC rents and are appropriately positioned relative to <br />hypothetical market. Competitive rents and strong demand for affordable housing in the area offer support <br />for the success of the proposal. <br /> <br />Market and Achievable Rent <br />Market and achievable rents for the subject are illustrated below. These rents were estimated based <br />on competitive positioning of the project in the area. An analysis utilizing both LIHTC and market rents is <br />presented on the following pages to help illustrate the competitive positioning of the subject and its <br />positioning as a hypothetical market rate project and in comparison to similar LIHTC projects. Rents are <br />adjusted based on appeal (including location, amenities and unit design), included utilities, unit size and <br />where applicable by maximum allowable gross and a minimum 10 percent market advantage when <br />evident within the market. Rents are projected to market entry based on 3.5 percent annual appreciation. <br />Site location, condition and appeal scores are relative to the subject (i.e., the subject is always rated as 5). <br />Based on these analyses proposed contract rents are consistent with estimated achievable LIHTC rent and <br />significantly discounted from hypothetical market rents.