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<br /> <br /> <br /> <br />Hillside Heights Apartments, Elk River, Minnesota <br /> <br />Market Analyst Professionals, LLC 74 April 24, 2020 <br />Future Rental Market and Associated Risks <br />The development of affordable housing is appropriate based on demand within the area. Given <br />demographic growth throughout the area as well as obsolescence of existing units and the excess demand <br />evident for affordable housing evident in the market survey, additional rental housing is likely to be in <br />demand in coming years. The development of affordable housing is appropriate based on demand within <br />the area. Since MHFA determines the number of competitive projects that come online, risks from future <br />unsustainable development are limited. <br /> <br />Recommendations and Conclusions <br />Based on the analysis within this report, the proposal will be successful as is, no changes are <br />deemed necessary. The site is located in a mixed-use area but with LIHTC residential uses located a short <br />distance from the site. Amenities and employment opportunities are located in close proximity with easy <br />access to Minneapolis to the southeast. Household growth in the area is forecasted to increase through <br />2025 with the rate within the PMA exceeding the overall rate of the state and county. The Minneapolis <br />MSA has outperformed the state average in terms of the unemployment rate in recent years and <br />employment has increased annually each of the past nine years. Derived demand statistics for the subject <br />suggest sufficient demand to absorb the proposal. Finally, supply side data indicates rents for the subject <br />will be competitively positioned in the area and the subject will be well positioned in the market and <br />competitive with comparable projects which have reported very strong occupancy indicative of strong <br />demand in the area. As a result, the development of the proposal to more adequately serve the PMA’s <br />population is appropriate.