Housing Choice: An Accelerator of Regional Economic Competitiveness - PowerPoint PPT Presentation

Housing Choice: An Accelerator of Regional Economic Competitiveness Competitiveness Metropolitan Council and ULI Minnesota/Regional Council of Mayors June 6, 2013 Melina Duggal, AICP, Senior Principal

LOCATION, LOCATION, LOCATION  Most desirable locations will be: • Coastal smiley face y • Within and beyond the Favored Quarter • Close to jobs • Adjacent to local-serving retail • Convenient to regional retail and C i t t i l t il d entertainment • Walkable and transit-rich Walkable and transit rich Metropolitan 1 Council and ULI MN

Need to provide the types of Need to provide the types of places people want to live • Who? – Demographic Trends • Where? • Where? – Location Trends Location Trends • What? – Product Trends Metropolitan 2 Council and ULI MN

Council and ULI Metropolitan MN 3 Who

GEN Y AND BABY BOOMERS CURRENTLY THE LARGEST GENERATIONS 2010 2010 % Minn.-St. 2010 % Generation 2010 Age Pop. Pop. Paul Pop. US US US US MSA MSA MSA MSA Eisenhowers 65+ 40M 13% 350K 11% Baby Boomers 46 – 64 76M 25% 879K 27% Gen X Gen X 30 – 45 30 45 66M 66M 21% 21% 684K 684K 21% 21% Gen Y 11 – 29 80M 26% 912K 27% Gen Z (?) 0 – 10 46M 15% 452K 14% SOURCE: U.S. Census Bureau, Population Division, 2010 Demographic Analysis Metropolitan 4 Council and ULI MN

LIFE STAGE INFLUENCES HOUSING CHOICE GEN Y JUST STARTING TO IMPACT FOR-SALE Rent as Empty Single & Young Mature Retiree Student Couple / Nester Year Roommate Family Family Senior Housing g 1st Downsize Rental Rental Own Own Own Own Housing Housing Home Own Gen X Baby B Eisen 2010 Gen Y Gen Y Gen Y Baby B Gen Y Gen X Baby B y Baby B Eisen 2015 Gen Y Gen Y Gen Y Gen Y Gen X Gen X Baby B Gen X Gen X 2020 Gen Z Gen Y Gen Y Gen Y Baby B Gen Y Baby B Gen Z Gen Z Gen Y 2025 Gen Y Gen Y Gen X Baby B Gen X SOURCE: RCLCO Metropolitan 5 Council and ULI MN

YOUNG PEOPLE MOVE MORE THAN OLDER PEOPLE Percent of People that Moved in Last Year 32% 30% 19% 16% 11% 8% 6% Under 18 18 & 19 20 to 29 30 to 39 40 to 49 50 to 59 60 + SOURCE: 2009 ACS Metropolitan 6 Council and ULI MN

ACTIVE MARKET (HOUSEHOLDS IN TURNOVER) 50% 40% 30% 30% 20% 10% 0% Gen Y G Y G Gen X X B b B Baby Boomers Eisenhowers Ei h Owner Households Renter Households Total Distribution SOURCE: RCLCO Metropolitan 7 Council and ULI MN

Council and ULI Metropolitan MN 8 Where

NATIONAL PREFERENCES 30% 25% 20% 15% 10% 5% 0% City - City City City - Suburban Suburban Suburban Suburban Small Small Rural Rural Downtown Residential Mixed Ngh. HH Town Area Only Currently Live Currently Live Prefer to Live Prefer to Live SOURCE: NAR 2011 Community Preference Survey Metropolitan 9 Council and ULI MN

MINNESOTAN PREFERENCES 30% 25% 20% 15% 10% 5% 0% City - City City City - Suburban Suburban Suburban Suburban Small Small Rural Rural Downtown Residential Mixed Ngh. HH Town Area Only Currently Live Currently Live Prefer to Live Prefer to Live SOURCE: NAR 2011 Community Preference Survey Metropolitan 10 Council and ULI MN

MINNESOTA PRFERENCES OVERALL VERY SIMILAR TO USA Minnesota Minnesota USA USA 19% 19% 20% 20% 39% 40% 40% 41% SOURCE: NAR 2011 Community Preference Survey Metropolitan 11 Council and ULI MN

DISTRIBUTING THE ACTIVE FOR-SALE MARKET BY CURRENT RESIDENCE LOCATION 30% 25% 20% 15% 10% 5% 0% City - City - Suburban Suburban Small Rural Downtown Downtown Residential Residential Mixed Mixed Ngd HH Ngd- HH Town Town Area Only Gen Y Gen X Baby Boomers Eisenhowers SOURCE: NAR 2011 Community Preference Survey Metropolitan 12 Council and ULI MN

GENERATIONS: WHERE THEY WANT TO OWN 30% 25% 20% 15% 10% 5% 0% City - City - Suburban Suburban Small Rural Downtown Downtown Residential Residential Mixed Mixed Ngd HH Ngd- HH Town Town Area Only Gen Y Gen X Baby Boomers Eisenhowers Metropolitan 13 Council and ULI MN

ACTIVE RENTER MARKET: PREFERRED LOCATIONS IF THEY COULD CHOOSE 30% 25% 20% 15% 10% 5% 0% City - City - Suburban Suburban Small Rural Downtown Downtown Residential Residential Mixed Mixed Ngd HH Ngd- HH Town Town Area Only Gen Y Gen X Baby Boomers Eisenhowers SOURCE: NAR 2011 Community Preference Survey Metropolitan 14 Council and ULI MN

Council and ULI Metropolitan MN 15 What

PRODUCT PREFERENCES 90% 80% 70% 60% 50% 50% 40% 30% 20% 20% 10% 0% SFD SFA/TH Apt/Condo Mobile Home Other Currently Live Prefer to Live SOURCE: NAR 2011 Community Preference Survey Metropolitan 16 Council and ULI MN

HOW DOES PRODUCT PREFERENCE CHANGE BY GENERATION? 5% 4% 8% 8% 8% 8% 15% 3% 8% 8% 6% 84% 84% 83% 78% 74% 60+ 50-59 40-49 30-39 18-29 (Eisenhower) (BB) (BB & Gen X) (Gen X) (Gen Y) SFD SFA/TH Apt/Condo SOURCE: 2011 National Community Preference Survey, National Association of Realtors, March 2011 Metropolitan 17 Council and ULI MN

WHO IS IN THE FOR-SALE MARKET? • 2010 – 55% 1 st -time buyers • 2011 – 48% 1 st -time buyers y • 2012 – 46% 1 st -time buyers • Median income = $76,600 = $250K-$300K house o Image: digitalart / FreeDigitalPhotos.net Actual – $170K median price o • Median age = 40 years • 84% white Image: digitalart / FreeDigitalPhotos.net SOURCE: RCLCO, 2013 Investment and Vacation Home Buyers Survey - NAR Metropolitan 18 Council and ULI MN

PROSPECTIVE BUYERS • Those who say they are likely to buy in the next three years: Under 40 o Minority buyers o Renters o Those currently living in a city o Those with children under 18 in HH o • More likely to prioritize high quality schools and larger homes • Willing to stretch budget for neighborhood, slight preference for smart growth for smart growth SOURCE: NAR Metropolitan 19 Council and ULI MN

FAMILIES WITH KIDS • More likely to choose suburban areas • Kid friendly • Good Schools! • Neighborhoods with amenities (MPC) • Walkability Taylor Morrison • Larger Lots/Homes • Prioritize size of house f • Affordability • Trends • Trends—mix of uses, right size , new mix of uses “right size” new facades Lennar Metropolitan 20 Council and ULI MN

RETIREMENT-MINDED ADULTS • Prefer rural or small town communities • Important to stay within budget p y g • Downsize • Recreation opportunities • Enriching experiences • Walkable • Detached & attached & • Lifestyle more important than home • Trends • Trends— urban-lite locations, closer to “urban lite” locations closer to original home, smaller projects Metropolitan 21 Council and ULI MN

YOUNG SINGLES • More likely to prefer city living • Trade-off for location • Design over size • Affordability • Party and gathering spaces • Contemporary elevation styles • Pet friendly f • Low maintenance • Trends • Trends—tech savvy, single women, tech savvy single women return of attached for-sale product? SOURCE: NAR; Canin Associates; RCLCO Metropolitan 22 Council and ULI MN

MINORITY FAMILIES • Four in 10 planning to buy in near future • Prefer living in area with mix of housing and businesses • Schools S h l • Diversity especially important ( (African American HH) ) • Larger homes important (Hispanic HH) • Trends—cultural preferences (spice kitchen, multigenerational housing) SOURCE: NAR; RCLCO Metropolitan 23 Council and ULI MN

PROSPECTIVE RENTERS APARTMENTS NO LONGER JUST ABOUT “SHELTER” Different Product Broader Marketing Clever Programming Metropolitan 24 Council and ULI MN

EMPTY NESTER RENTALS The Concept • Lots of talk of empty nester condos, p y , why not for rent? The Rationale • Serves greater desire for “urban” lifestyle • Makes economic sense for the f customer • Provides a richer social experience Provides a richer social experience • Serves increasing call for no maintenance lifestyle Metropolitan 25 Council and ULI MN

EMPTY NESTER RENTALS MARKET MIGHT BE TWICE AS LARGE AS IT IS TODAY! Housing Intentions for Households 55-74, with Income $50,000+ April, 2012 N=1,135 8% 8% 26% 35% 57% 9% Current Owners, Not Likely to Move Current Renters, Not Likely to Move Owners Who Might Move Next Year, Stay Owners Owners Who Might Move Next Year, Consider Renting SOURCE: RCLCO Metropolitan 26 Council and ULI MN

SINGLE-FAMILY FOR-RENT The Concept • Professionalize the single-family rental g y business (including build new) The Rationale • Big market already, interest in single- family housing largely unchanged • Responds to growing ambivalence • Responds to growing ambivalence about ownership • Paper lot inventory in many markets still cheap (but not for long) Metropolitan 27 Council and ULI MN