7.2. HRSR 06-01-2020 - Laserfiche WebLink

Home Browse Search

Hillside Heights Apartments, Elk River, Minnesota Market Analyst Professionals, LLC 47 April 24, 2020 Local Rental Market Analysis MAP completed a survey of existing rental projects within the market area in April 2020. Leasing specialists of developments within or near the market area were contacted to identify rental housing trends as well as the most competitive projects within the area. Student, special needs and senior only projects are excluded from the survey. Lanesboro Heights Townhomes could not be reached for updated information, so information from a May 2019 survey is utilized. The area was also surveyed regarding current developments under construction; these pipeline projects are discussed below. A total of 19 projects responded to the survey; of these, 9 reported operating under LIHTC guidelines for all or a portion of units at an average occupancy of 99.8 percent. The survey encompassed 1,175 units with 433 LIHTC units. The overall occupancy rate for the area was 98.9 percent indicative of strong demand for rental housing throughout the area. The average build year for the surveyed facilities was 1994 while the average build year for LIHTC facilities was 2003. For those facilities providing information, the rental stock was weighted toward two-bedroom units which represent 47 percent of the total housing stock. Comparable Project Analysis The most comparable projects to the proposal include general occupancy units operating under income restriction guidelines within the same area as the proposal and offering similar units. Among LIHTC projects those in closest proximity and considered the most comparable to the subject are included—excluding more dated projects. Additionally, two market rate projects are included to gauge hypothetical market rents for the subject. Detailed information on these projects is presented in the following pages. The overall occupancy rate for the most comparable projects is 99.7 percent. The subject will offer one- to three-bedroom general occupancy units with comparable amenities and unit sizes to comparable facilities. The development will be the newest project in the area, commanding a premium relative to more dated competitive set projects. Among competitive set projects Coachman limits rents to 50 percent AMI (for 60 percent AMI income restrictions) and these units are shifted in the rent grid. Considering adjustments and projections to market entry the subject’s rents are consistent with MAP’s estimated achievable LIHTC rents and are appropriately positioned relative to