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Home My WebLink About03-11-19 City Commission Packet Materials - A4. Res 5024, Accepting the 2019 Community Housing Needs Assessment - SUPPLEMENTAL MATERIALS City of Bozeman Community Housing Needs Assessment March 11, 2019 Presented by: Wendy Sullivan - WSW Consulting, Inc. Christine Walker - Navigate, LLC N AV I G,-�T E WSW CONSULTING NDRKFORCE HOUSING SOL;jTICr:l., Purpose • Part one: Housing Assessment - Update of housing market and needs since 2012 Housing Assessment - Economic and housing trends - Employer input — employment and housing issues - Identifies housing needs for employees and residents - How much, what type, price, for whom • Part two: Action Plan process - Utilize Community Members on Working Group - Open Public and Working Group sessions - Website updates, notification, outreach - Schedule: TBD NAVIG,-,TE -' 4VSW CONSULTING Methodology • Employer Survey • Focus groups — Real estate agents and lenders — Developers — Housing end-users • Meetings and Interviews — Employers, stakeholders, property managers • Existing studies • Other Local and Secondary data NAVIG,-,TE --' WSW CONSULTING WORKFORCE HOUSING SOLUTIONS Area Median Income (AMI ) Standard Gallatin County Income Limits : 2018 . 4-person Level 30% $16,620 $18,990 $21,360 $23,730 50% $27,700 $31,650 $35,1600 $39,550 60% $33,240 $37,980 $42,,720 $47,.460 80% $44,1320 $50,640 $56,960 $63,280 100% $55,400 $63,300 $71,200 $79,100 120% $66.,480 $75,960 $85,440 $94,920 150% $83,100 $94,950 $106,800 $1181650 200% $110j800 $126,600 $142,400 $158,200 OP NAVIGAnTE 4ti S W C O N S U LTI N G WORKFORCE HOUSING SOLUTION What Prices Can Residents 30% of income for rent/mortgage AMI Household Income Max Max (2.0-persons) Rent Purchase Price 30% $ 18990 $475 $70,41 0 50% $31fi5O $790 $ 117355 "Community o 60 /o $371980 $950 $ 5 Housing" 80% $50fi4O 1 ,265 187,76 100% $63,300 $ 185 $234,705 120% $75,960 $ L900 $281fi45 150% $94950 $2,375 352,06 200% $ 12600 $3J65 $4'* 10 NAVIGr,TE WSW C O N S U LTI N G 'NORKf ORCE HOUSING SOLUTIONS Bozeman Housing Bridge Middle Income $63,300 Moderate Income $50,640 THE"INISSINGMIDIRE" Upper Middle Income fell $94,950 Low Income �c,�� . i•, • $37,980 �y0 Housing , Upper �o� • �qo Incomes ;4-� Over $94,950 +v _ Very Low Income - . - $18,990 Ne 0 NAVIGATE WSW CONSULTING HousingSpectrum : Current Average RENT $600 to$800/bedroom; $1,570/unit avg(listed) Median market condos: 100% $285,000 80% AMI Community Apartments AMI RENT: 120%AMI <60%AMI, $800/unit avg $1,250 to $1,900 947 units 60%AMI RENT: $1 0 N: to Student housingUp to $280 000 RENT: $1250 up to $2,400 Median market , <50%AMI OWN: townhomes:$334,500 RENT: $280,000 to $350,000 $500 to $950 150%AMI Special needs housing per month Market Rate nand shelters Over single family <30%AMI;homeless $350,000 over$400,000 HousingSpectrum : Needed Average RENT $600 to$800/bedroom; $1,570/unit avg(listed) Median market condos; 100% $285,000 80% AMI Community Apartments AMI RENT: 120%AMI <60%AMI;$800/unit avg $1,250 to $1,900 947 units 60%AMI RENT: OWN: $180,000 to RENT: Student housing Up to $280,000 up to $2,400 Median market <50%AMI $1,250 OWN: townhomes:$334,500 $280,000 to RENT: $350,000 $500 to $950 150%AMI Special needs housing per month Market Rate and shelters Over single family <30%AMI;homeless $350,000 over$400,000 Primary Resident and Employee Buyer Market Renter <80%AMI � � � Over S0% AMI Income Distribution: (61%) , (13%) KeyTrends — Problem Employer "'Do you feel that the availability of housing that the workforce can afford in the City of Bozeman is:" One of the 1 ''4 ,� Not a prob I&T o ro bI em d._. The most - One of the crime aI problem more s ri li s in the region problems 22% Key Trends - Problem Employer employment""Did anyone refuse a job offer or did anyone leave your % of Employers experiencing at least one of the below (60%): Found the cost of living in the area to be too high 42% Found a different job 3 2% Could not find/lacked adequate housing 25% Long commute/tired of commuting 11% Lacked day care 11% Lacked transportation 8% No response/not applicable 40% VV NAVI G,-,TE WSW CONSULTING Key Trends - Problem UnemploymentVery Low 7.0% 6.0% 6.0% °/ 5.0% 4.7% o 5.1% ° 4.1 /0 4.0% 3.8% as 4.0% E 4.1% 3 0 /o 0 0 E 2.0% —Montana 3.0% % 2.8% Z.070 1 0% —Gallatin County 0.0% 2012 2013 2014 2015 2016 2017 2018 Year NAVIG,-ATE WSW CONSULTING WOR UORCE HO i. KeyTren s Problem - Employergrow, . . • Recruiting employees 9% of jobs unfilled • Retaining employees (survey respondents) • Employee competition • Finding qualified employees "Candidates want to move here, but when they do, they find it extremely difficult to stay. I've had 4 employees move away because of housing costs." "1 lost a good employee to another competitor in Great Falls, where the employee could afford to own land rather than rent endlessly in Bozeman." "I've lost engineers (moved out of state)... Lack of affordable housing is the biggest factor in hiring right now. It is limiting my ability to grow my company" City employers NAVIG,-, E 4V S W C O n� S U LTI t\ G __ _ Commuting is less of an option ManhattanMedian Single Family Home Price Changes in Area Greater Greater Three City of Belgrade Forks Bozeman 2012 $192,500 $175,000 $155,000 $255,000 2018 $389,000 $320,000 $250,000 $427,500 change 102% 83% 61% 68% NAVIGfA-"xTE WSW CONSULTING q- KeyTren s - Problem Limited Availability of Housing: Not enough for existing residents, much less being able to house new employees filling jobs Rentals: • Vacancy rate ( Dec/Jan) : under 2% Ownership: • 2.3-month supply of housing units for sale... 1.8-months for units priced under $400,000 NAVIGATE W S 1•'1•' CONISU LTI N G vdCEKFOF.CE HOLUIr:G SOLJTICNS KeyTren s - Problem 3. Rising Housing Prices vs. Incomes/Wages Wages Rents Sale Prices % Increase 2.6%/year 5%/year 10%/year since 2012 (35-40%) (75% total) • Sales Available D - Median $385,000 Average rent $1,570 sale price Income to purchase $104,000 Income to rent $62,800 AM I level 164% AM I level 100% # of avg wages 2.3 # of avg wages 1.4 ($44,800 avg) W�, NAVIG,-,TE WSW CONSU LTI N G WGRKP+IRCL HOUSING SOLJ:ONS What Is Being/ Has Been Done % of responding employers Pay higher wages for the same/similar jobs 79% Assistance with housing search 16% Employer-owned units for employees 9% Rent assistance 9% Temporary/relocation housing S% Down payment/mortgage assistance 4% Employer-leased units rented to employees 4% Other assistance 10% "1 have had to raise wages to get employees so that they can afford to live here. The down side to that is that I have had to raise my rates and have lost customers that can no longer afford my services." City Employer Em to er NAVIG/AJE ri 1:51':'=oti�L_!TICN WSW CONSU LT I N G Housing Programs 947 Community Rentals (8% of rental stock) 26 permanent Community ownership units Collaborative social service organizations; programs • HRDC, Family Promise, Habitat for Humanity, REACH, Haven, WMMHC (Western Mt. Mental Health Center) • Domestic violence, very-low-income (VLI), developmental disabilities, mental health, homeless/near homeless • Housing development, ownership and renter assistance/subsidies, rehab/weatherization/repairs, education, counseling, in-home assistance NAVIG,-,TE -WSW CO NT S U LTI N G WORKFORCE HOUSING SGLJTIONS Housing Programs City: • Affordable housing fund • Affordable housing ordinance • Down payment assistance • Incentives Over 1,000 units in pipeline — most market rate VV N_AV 1 G,-,TE WSW CUNSULTIt\ G d,OR KFORCE HOUSING SCL:TION HousingNeeds Low High Catch-Up 1,460 1,460 Unfilled Jobs (9% of jobs) 728 728 Functional rental market (5% vacancy rate) 481 481 Balanced for-sale market (5-month inventory) 252 252 Keep-Up 3,945 4,880 New jobs (1.9% avg growth/year) 2,915 3,850 Retiring employees (12% of jobs) 11030 1,030 TOTAL through 2025 5,405 6,340 Below market (at least 60%) 3,210 3,765 Market-rate (no more than 40%) 2,195 2,575 Needsby •wn/Rent Through 2025 Units needed through 2025 5,405 61340 Ownership 21210 2,620 Rental 31195 3,720 NAVIG/TE WSW CONSULTING Housing Needs <30% AMI $18,990 16% 23% 30.1 to 60% $37,980 22 60.1 - 80% $50,640 8% 16% 80.1 - 100% $63,300 10% 11% 100.1 - 120% $75,960 10% 8% 120.1 - 150% $94,950 13 20 Over 150% Over $94,950 43% TOTAL Units - 21P210 - 2,620 31195 - 3,720 Needed ifflo.Y NAVIG_ ATE WSW COnSU LTl NG IpRKFORCE-HCi_i IP,G SOLLITICNS Next Steps There is not one source of the problem; There is no "silver bullet" solution Part 2 — Housing Action plan/program 1. Goals and objectives 2. Strategy identification and prioritization 3. Roles, responsibilities and timing NAVIG)kTE --'-'WSW CC) N S U LT I N G WORM OP,CE HOUSING SOLUTIONS Questions ? ThankYou Wendy Sullivan Christine Walker Wendy@wswconsult.com Christine@navigateih.com 303-579-6702 307-690-4487 VP NAV I G,-,TE W S 1••1' CO NSU LT I N G v+ORKFORCE EHOUS;NG SOL iUTIONS Converting to AMI : Income Distribution of Bozeman Households • - • - , $0 to $9,999 1,124 549 59 32 7 $10,000 to $19199 11253 548 212 63 10 $20,000 to $29,999 949 412 233 58 10 $30,000 to $39,999 568 171 118 - 1 $40,000 to $49,999 870 873 327 140 80 HUD Median Household Income: 2017 30% AMI 2017 5-year ACS HUD AMI equivalent for 2-Person . • • All households $49,217 80% AMI Owner-occupied $79,662 125% AMI Renter-occupied $35,012 55% AMI 6110 NAVIG,-JE W S 1•'1r CONSULTING WORKFORCE HOUSING SOLUTIONS