Housing Choices Assessing Market Trends in the Rockies (and Glenwood Springs?) Community Development Academy Session 4 Clark Anderson, Sonoran Institute canderson@sonoraninstitute.org
Is the housing market shifting? • National Assn of Realtors • PriceWaterhouseCoopers • National Assn of Home Builders • Urban Land Institute • Robert Charles Lesser Co. • Harvard Center for Housing Policy
Is the housing market shifting? Growing Demand (nationally) for: • Walkable homes / neighborhoods • Convenience and access • “Sense of place” or “community” • Core areas - access to a range of amenities • People will “trade’ for these qualities
Is the housing market shifting? Growing Demand (nationally) for: • Walkable homes / neighborhoods • Convenience and access • “Sense of place” or “community” • Central locations; access to a broad range of amenities • Smaller lots & home sizes
Who is the future market? GEN Y MAKES UP THE LARGEST SHARE OF U.S. POPULATION, FOLLOWED BY BOOMERS, & GEN X Source: RCLCO
Who is the future market? Boomers Gen Y Seeking: lifestyle, convenience, health & Seeking: convenience, sense of community, activity, low-maintenance, staying engaged work-life balance, coolness … Safety and proximity medical services are 1/3 will pay more for housing walkable to also priorities shops, work, and entertainment Other attractors : amenities, entertainment, 2/3 say living in a walkable community is culture, and education very important to their location decision Source: RCLCO
Smaller Households Source: RCLCO
Shrinking Household Income U.S. Real Wages, 2000-2011 $56,000 $54,841 $54,489 $55,000 $54,000 $52,788 $53,000 $52,000 $51,000 $50,054 $50,000 Source: U.S. Census; Economic & Planning Systems $49,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 This affects a wide variety of housing decisions including tenure, size, and location
How are these trends unfolding in Rocky Mountain communities? Purpose and Approach Examine national trends in our region Examine six sub-markets • Assess Market Performance • Survey Consumer Preferences What will drive demand? How do communities and the private sector respond?
No single housing type “owns” the market…
Survey Background • Built on National Assn. of Realtors study • 327 returned out of 3000 sent (11%) • Distributed to different neighborhood types in six communities • Respondents fairly diverse
Which considerations are most important? Location: a home in preferred community / neighborhood Price: most affordable for preferred size; best value Size: more space / larger home Type: the type and design of the house Resource efficiency: a home that minimizes resource consumption
Which is more important, neighborhood or size of home? - 89 percent of respondents picked neighborhood over home size.
Similar to National Assn. of Realtors Single family product needs to evolve Preference for Housing Type 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Sonoran Institute 88% 7% (Overall) National Association 80% 7% of Realtors (2011) Source: Economic & Planning Systems Note [1]: Other includes townhomes, apartments, condominiums, mobile homes. Single-family detached Single-family attached Other [1]
100% Somewhat and Very Important Very Importan 90% 90% 80% 70% 66% 60% 57% 50% 54% 53% 40% 34% 30% 57% Asked to rank key 20% neighborhood qualities 24% 23% 10% 16% 14% 7% 0% Somewhat and Very Important Within an easy Living in a place Living in a place Within an easy Living in a place Living in a pl walk of other that's away from that's the center walk of other that's away from that's the center places / things in it all of it all places / things in it all of it all Very Important the community the community Sonoran NAR
70% 70% 60% 60% 50% 50% 40% 40% 62% 30% 30% 58% 42% 20% 38% 20% 10% 10% 0% 0% Houses farther apart; larger Houses closer together; Houses farther apart; larger Houses closer together on lots; drive to parks, smaller lots; easy walk to lots; drive to schools, stores, smaller lots; easy walk to playgrounds, and recreation parks, playgrounds, recreation restaurants schools, stores, restaurants
70% 60% 50% 40% 63% 30% 20% 37% 10% 0% Own or rent a detached single-family Own or rent an apartment , condo, or house; drive to get downtown. townhouse; easy walk to downtown
Asked about importance of various factors that influence choice in where to live? • 57 percent said proximity to transit is important (24% said very important) • 89 percent said living within a 30min commute was important
Asked: When you chose your home, how broad were your choices? • 25% had many options in the price range and neighborhood they wanted • 60% felt they had few or very few options • Growing demand on rental stock, lack of quality units likely adding to the challenge
How is compact walkable development faring in the market? • Analyzed premiums (MLS data) and market capture (building permits) • Looked at six different communities What is a Premium? • Amount people will pay above market average • coffee = $0.99; cappuccino = $2.75 What is Market Capture? • How much a given product makes up of a larger market • Number of veggie pizza’s out of all pizzas sold…
Smart Gr Average (Weighted) 16% Boise, ID 15% Teton Valley, ID 22% Bozeman, MT 13% Buena Vista, CO 11% Eagle, CO 40% Carbondale, CO 50% 0% 10% 20% 30% 40% 50% 60% Source: Local Building Departments; Economic & Planning Systems Developer and realtor interviews suggest demand is growing. In CO, most estimates between 25%.and 30%, but higher in certain markets.
People will pay more to live in walkable neighborhoods Pre-recession Premium Average = 18.5% Post-recession Premium Average = 12.5% (not shown)
Boise, ID Bozeman, MT
What does it mean for Glenwood? Are these trends are happening here? If so, what opportunities or challenges do they present? How should we respond?
So what does this all mean? Key themes and lessons 1. The market is shifting. People have different needs/wants. 2. Location, location, location… 3. People will make tradeoffs. 4. Walkablity commands a premium & occupies a growing niche in the market. 5. Choices limited… Much of today’s housing stock doesn’t match - up with tomorrow’s demands. This is an opportunity. 6. Change isn’t easy…
Responding to Market Opportunities 1. Prioritize pedestrian preferences… 2. Allow & encourage expanded housing options 3. Build better single- and multifamily housing 4. Elevate opportunities for infill 5. Set the table for desired development • Sound infrastructure investments • Invest in core areas and create new ones • Don’t cripple good projects, make it easier for them to pencil out!
Sense of Place
Set the table for desired development
Walkability Matters
…but it is a challenge
Amenities (Quality vs Quantity)
Evolution of the Single Family Home
Evolution of the Single Family Home
Building Better Attached Housing
Building Better Attached Housing
Building Better Attached Housing
Location: Core Assets
Location: Core Assets
Bringing Housing Downtown
Creating new “core” areas… Transforming potential core areas
Creating new “core” areas… Transforming potential core areas
Creating new “core” areas… Transforming potential core areas
The full package…
Current Conditions in Confluence Area Sonoran Institute – Community Builders Summit 56 56
Current Conditions in Confluence Area Sonoran Institute – Community Builders Summit 57 57
Confluence Area Development Concept
Reorienting the Wye Sonoran Institute – Community Builders Summit 59 59
8 th Street Connection Sonoran Institute – Community Builders Summit 60 60
9 th Street Extension Sonoran Institute – Community Builders Summit 61 61
School Land Swap Sonoran Institute – Community Builders Summit 62 62
7 th Street Extension and Defiance Ave Sonoran Institute – Community Builders Summit 63 63
Glenwood River Trail Downtown Connection Sonoran Institute – Community Builders Summit 64 64
Combined Infrastructure Elements Sonoran Institute – Community Builders Summit 65 65
Design Concepts from Community Charrette Sonoran Institute – Community Builders Summit 66 66
Development Program Sonoran Institute – Community Builders Summit 67 67
Development Program Sonoran Institute – Community Builders Summit 68 68
Sonoran Institute – Community Builders Summit 69 69
Confluence Vision from the Charrette
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