RECOVERY MODE -- MARKET AND ECONOMIC CONTEXT FOR THINKING ABOUT - PowerPoint PPT Presentation

RECOVERY MODE -- MARKET AND ECONOMIC CONTEXT FOR THINKING ABOUT LIVABLE COMMUNITIES COMMUNITY BUILDERS 2012 Adam Ducker | aducker@rclco.com | October 25, 2012

A FRAMEWORK FOR THINKING ABOUT GROWTH EMBRACING “ALTERNATIVES” IN WESTERN COLORADO • Work Environments • Energy Economies • Mixes of People • Regionalism • Place Character 1 Community Builders 2012

STRONG MIGRATION PATTERNS PRIMARILY FROM SUNBELT STATES 2002-2008 WESTERN COLORADO MIGRATION 45,000 40,000 35,000 30,000 Migrants 25,000 20,000 15,000 10,000 5,000 0 2002 2003 2004 2005 2006 2007 2008 WY In Migration Out Migration Net Migration MA CO OH NV IL UT OK CA NM AZ TX SOURCE: ACS PUMS, IRS FL 2 Community Builders 2012

HEALTHY DEMOGRAPHIC EVOLUTION AGING, BUT ALSO GROWING IN WEALTH AND WORKFORCE ANN. CHANGE IN HHs BY INCOME ANN. CHANGE IN HHs BY AGE 2000-2010 2000-2010 WESTERN COLORADO 7.0% WESTERN COLORADO 5.9% 5.5% 3.9% 4.2% 3.0% 2.6% 2.3% 2.0% 1.1% 0.4% 1.0% -0.5% -1.1% -1.3% Income Ranges Age of Householder ANN. CHANGE IN HHs BY INCOME ANN. CHANGE IN HHs BY AGE 2000-2010 2000-2010 WESTERN USA WESTERN USA 6.4% 5.6% 4.2% 3.1% 3.4% 4.8% 3.0% 2.3% 1.8% 1.1% 1.0% -1.5% -1.7% -0.4% -5.9% Income Ranges SOURCE: Esri Age of Householder 3 Community Builders 2012

TOURISM AS A SEED INDUSTRY 12% OF REGIONAL ECONOMY, BUT GATEWAY TO GROWTH Mountain Resort Totals ($Million) 2008 2009 2010 Total Direct Spending 3,015 2,640 2,857 Total Industry Earnings 929 860 860 Total Industry Employment (Ths) 30.1 28.0 27.9 Total Local Tax Revenues 104 90 97 Total State Tax Revenues 76 67 71 SOURCE: Dean Runyan Associates 4 Community Builders 2012

AGRIBUSINESS AND CLEAN ENERGY INDUSTRIES CHANGING THE CHARACTER OF GROWTH Pop Growth Region Jobs/Economy 2000-2010 45% public land and 17% tribal land; largely rural; 9. 15% telecommunications is a high priority Agribusiness: sweet corn and wine production in Montrose; "boutique" agriculture and ranching; tourism; retiree-related expenditures; 10. 16% clean/green energy segment is growing with many small solar hot water and photovoltaic installers Agribusiness in Moffat and Rio Blanco; mining (except Routt); manufacturing and business 11. 24% services in Mesa; tourism and the retiree market Tourism and accommodations; food service; retail; arts, entertainment, 12. 20% and recreation; second home construction SOURCE: Colorado Planning and Management 5 Community Builders 2012

ACKNOWLEDGING ECONOMIC DISTRESS W. COLORADO NOT IMMUNE FROM NATIONAL TRENDS • Natural gas prices are nearing all time lows, affecting many small Western Colorado towns in the Piceance Basin reliant on energy COLORADO 4Q 2011 TOP 10 FORECLOSURE RATES • Unemployment still above 7.8% statewide average in five 0.61% counties, including 10.1% in Montrose and 8.8% in Mesa. 0.56% 0.55% 0.54% • Migration rates slowing 2009-2010 0.46% 0.45% 0.43% 0.42% 0.41% 0.39% • Home foreclosures rising in Western Colorado (falling elsewhere) • 7 our of 10 of the top 10 Colorado counties with the highest foreclosure rates are in Western Colorado AUGUST 2012 1 YEAR AVG Gilpin Garfield San Miguel Grand Lincoln Summit Gunnison Archuleta Eagle Ouray UNEMPLOYMENT RATES 12% or higher 10.0%-11.9% 8.0%-9.9% 6.0%-7.9% 4.0%-5.9% 3.9% or lower Western Colorado Counties 6 Community Builders 2012

CENTRAL PLACE THEORY HOW CAN IT BE APPLIED TO A MOUNTAIN ENVIRONMENT?  There are different hierarchies of centers with different market areas  Centers are regularly spaced  Centers tend to form in a hexagonal pattern, the most efficient pattern for travel between centers 7 Community Builders 2012

ACTIVITY IN NON-CONSTRAINED LAND AREAS MOSTLY DEFINED BY THE INFRASTRUCTURE NETWORK Daytona Ocala Pierson Deland The economic crystalline Port Orange New Smyrna Deland structure of regions shows clearly in the distribution of Leesburg Umatilla Mt. Dora Sanford towns in places like Central Longwood Tavares Apopka Maitland Florida Orlando Groveland Clermont Bithlo Titusville Areas shown in purple are Celebration Taft ? Cocoa where new centers would Kiss/St Cloud ? Citrus Ridge ? be predicted, based on the Viera historical spatial pattern Haines Holopaw ? Melbourne Lakeland Winter Haven Bartow Mulberry Lake Wales Frostproof Destiny 8 Community Builders 2012

WESTERN COLORADO SETTLEMENT CLUSTERS DEFINED BY GEOGRAPHY. . .BUT STILL NEEDS HEIRARCHY 9 Community Builders 2012

WESTERN COLORADOS UNFORTUNATE REALITY SUBURBAN SPRAWL A LOT LIKE THE REST OF AMERICA Undifferentiated Low Density Suburban Zone Strong Urban Cores Well Preserved Natural/Ag Spaces 10 Community Builders 2012

CONTRONTING REALITIES OF SPRAWL REPAIR THREE GATEWAY QUESTIONS TO LIVEABLE COMMUNITIES  Does the market want it?  Who is going to pay for it?  Will Wall Street underwrite the deal?  11 Community Builders 2012

GETTING AROUND “WALL STREET” 12 Community Builders 2012

A CASE STUDY Existing stabilized asset To use the bank’s money to has a discernible value control and redevelop the asset, the underlying land value has to prove to be For this example: $10M more than $10M 13 Community Builders 2012

EMERGING MARKET REALITIES 1/3, 1/3, 1/3 SEGMENTATION 2010 2011 2007 2004 I would choose to live: I would choose to live: I would choose to live: I consider myself: (18-39 Yr Old) City 31% City Person 33% City 17% City 32% Close-in Close-in Suburban 42% Suburbanite 35% 36% 43% Suburb Suburb Small Town Farther Out Farther Out Small Town 11% 21% 18% 15% Person Suburb Suburb "Country" Rural Rural Rural Area 14% 11% 28% 9% Person Community Comm. Source: RCLCO Consumer Research, Fall 2007, ULI/Lachman Associates Survey, Summer 2010, 2011 National Community Preference Survey, National Association of Realtors, March 2011 , 2004 National Community Preference Survey, National Association of Realtors, October 2004 14 Community Builders 2012

HOW BIG IS THE MARKET FOR “LIVEABLE PLACES”? EMERGING DESIRE FOR HIGHER DENSITY SUBURBS 700,000 600,000 500,000 400,000 Gen Y Gen X Boomers 300,000 Eisenhowers 200,000 100,000 0 Prefer Downtown Prefer City, Prefer Small Town Prefer Rural Prefer Suburb, Prefer Suburb, Residential Mixed Use Residential Only 15 Community Builders 2012

RESPONDING TO NEW DEMOGRAPHICS > 85% GROWTH IN HOUSEHOLDS WITHOUT CHILDREN Absolute Change in Households, United States 1980 – 2005 Married with children, 1,376,788 Married, no children, 5,476,979 One-person households, Single male with 11,825,702 children, 2,165,939 Single female with children, 4,680,913 Nonfamily, Other Family, 3,416,246 1,758,377 SOURCE: U.S. Census 16 Community Builders 2012

DRIVING CHANGING HOUSING DEMAND BUILT-IN SHIFT TO HIGHER-DENSITY LIVING Projected Total Population Growth Rate by Age 2010–2020 20 - 24 -200,000 1,600,000 25 - 29 Apartments and Condos: Entry-Level and 2,600,000 30 - 34 First Move-Up Condos, TH First time SFD 1,000,000 35 - 39 40 - 44 -1,500,000 -1,900,000 45 - 49 -400,000 50 - 54 ` 55 - 59 3,500,000 Townhomes and condos Single family 60 - 64 5,000,000 TND and clustered, smaller lot 65 - 69 5,400,000 single family 4,100,000 70 - 74 Senior Living 75 - 79 1,500,009 170,000 80 - 84 1,300,000 85+ SOURCE: U.S. Census Bureau 17 Community Builders 2012

THE BAD NEWS WE ARE NOT REALLY GETTING DENSER. . . YET New Residential Building Permits Issued United States of America; 1980 to 2010 Source: U.S. Census Bureau 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1 Unit 2 to 4 Units 5 + Units 18 Community Builders 2012

BUT. . . LOT SIZES ARE GETTING SMALLER Median Lot Size of New Housing Delivered United States of America; 1999 to 2009 Source: American Housing Survey 1/2 4/9 2/5 Acres 1/3 2/7 1/4 1/5 1999 2001 2003 2005 2007 2009 New Construction (4 Yrs) Owner Occupied Renter Occupied 19 Community Builders 2012

AND CONSUMER PREFERENCE REALLY IS EVOLVING TOWARD SMALLER HOMES Preferred Home Size United States of America; 1994 to 2010 Source: Trulia-Harris Interactive Survey; July 2010 3,000 2,500 2,000 1,500 1,000 500 0 20 Community Builders 2012

BUT. . . “URBAN LITE,” OR REPAIRED SUBURBS ARE THEIR MOST PREFERRED DESTINATION Desired Residential Context in Next Move; Gen Y Renters United States of America Source: RCLCO Survey; 2007 Rural Suburban Not Moving 14 Urban Move within 45 Current Metro 41 Close-In (Urban-Lite) Move to Another Metro Where They Will Move 21 Community Builders 2012

GEN Y CONSUMER STILL LARGELY INTERESTED IN SINGLE-FAMILY HOUSING Gen Y Stated Product Type Preference United States of America Source: RCLCO Survey 2007; ULI/Lachman Survey 2010; NAR Consumer Preference Study 2011 Fall 2007 Summer 2010 March 2011 “Home Type Likely “Anticipated “Home Type to Choose” Housing in 2015” Preference” Apartment/Condo 12% 25% 15% Rowhouse/ 12% 6% 6% Townhome Single-Family 70% 64% 74% Other 5% 5% n/a 22 Community Builders 2012