7.2. HRSR 06-01-2020 - Laserfiche WebLink

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Hillside Heights Apartments, Elk River, Minnesota Market Analyst Professionals, LLC 83 April 24, 2020 Proposed AMI Target Proposed Subject Contract Rent # of Units # of Baths Average Sq. Footage Estimated Achievable Contract Rent Max Achievable LIHTC Rent Estimated Achievable Market Rent Market Advantage Summary 1 BR 1 BR-Apt 30% $722 4 1.0 680 $557 $520 $1,351 47% 1 BR-Apt 50% $908 3 1.0 680 $973 $908 $1,351 33% 1 BR-Apt 50% $722 4 1.0 680 $973 $908 $1,351 47% 1 BR-Apt 60% $1,102 2 1.0 680 $1,177 $1,102 $1,351 18% Summary 2 BR 2 BR-Apt 50% $1,083 14 1.0 980 $1,160 $1,083 $1,609 33% 2 BR-Apt 60% $1,316 14 1.0 980 $1,354 $1,316 $1,609 18% Summary 3 BR 3 BR-Apt 50% $1,246 7 2.0 1,280 $1,335 $1,246 $1,917 35% 3 BR-Apt 60% $1,515 7 2.0 1,280 $1,519 $1,515 $1,917 21% Demand Analysis Demand estimates for the proposal are based on qualified income ranges for the proposal. Income ranges are based on an affordability ratio of 35 percent for family and 40 percent of income to gross rent for seniors and maximum LIHTC rents and income for Sherburne County. Demand is based on age and income qualified renter households within the PMA. Two ratios are used to quantify potential demand for the proposal. These ratios include the capture rate which measures the ratio of units at the proposal to age- size- and income-qualified renter households within the PMA. The second measure is the penetration rate, which measures the number of units in the proposal plus comparable pipeline units relative to annual demand as outlined above. Demand for 30 percent AMI units is not presented as these units are over maximum allowable gross (consistent with the project based subsidy for these units), creating nonsensical results. Based on these estimates, the proposal’s demand estimates are within acceptable thresholds. Absorption Rate Reported absorption among competitive set projects has been robust. Maple Village reported one month absorption of 102 units, the Depot at Elk River Station reported 53 units in one month and Coachmen Elk River reported absorption of 53 units in one month. Considering these rates as well as absorption based on movership ratios and estimated capture rates among income qualified households, it is conservatively estimated the subject would be fully absorbed within 5-6 months of market entry.