Final project presentation

RUTLAND HOUSING MARKET STUDY AND NEEDS ASSESSMENT

6:00 Welcome and overview of the study

6:15 Presentation Recap of findings Discussion of recommendations

7:00 Questions and comments

AGENDA

Met with City staff and toured Rutland neighborhoods

Interviewed local housing market stakeholders (Realtors®, affordable housing providers, landlords)

Compiled, analyzed and mapped data about the Rutland housing market

Meeting One: public feedback and inputDeveloped strategic recommendations

PROJECT TASKS FOR THE HOUSING STUDY

Revitalizing neighborhoods (and addressing vacant/blighted properties)

Promoting homeownershipAff ordable housing needs

KEY TOPIC AREAS FOR TODAY

REVITALIZING NEIGHBORHOODS

The City of Rutland is losing population not just because of a regional economic decline, but also because it is not competing well against other towns when households decide where to live

Poverty and unemployment is concentrated in particular neighborhoods in Rutland

The housing “product” being off ered in parts of Rutland – especially older, small-multiunit stock – is not desired by the marketplace

Key areas of concern are located west of Route 7 and close to downtown

Locally Undesirable Land Uses (LULUs) may be contributing to some issues with vacant buildings

REVITALIZATION IN RUTLAND: KEY FINDINGS

The region is not competing strongly for households

County locations are outcompeting city locations for household choices about where to live

From 2000 to 2010, Rutland City households declined by 1%; Rutland County increased by 1%.

Areas west of Route 7 have declined the fastest

COMPETITION FOR HOUSEHOLDS

Population

18,436 18,230 17,292 16,495

58,34762,142 63,400 61,642

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1980 1990 2000 2010Year

Rutland City

Rutland County

Source: Vermont Housing Data (www.housingdata.org); US Census

Households

2000 2010 % change

Tract 9630 1,955 1,970 1%

Tract 9631 1,713 1,644 -4%

Tract 9632 1,400 1,356 -3%

Tract 9633 2,384 2,434 2%Source: US Census Bureau

Area Percent below poverty in 2010

Tract 9630 13%

Tract 9631 25%

Tract 9632 19%

Tract 9633 11%

Rutland City 16%

Rutland County 12%

Vermont 11%

CONCENTRATIONS OF POVERTY

Area Unemployment rate, 2010

Rutland City 8.8%

Rutland County 7.3%

Vermont 6.2%Source: American Community Survey 2010 5-year estimates

Median sale price of 2-4 unit properties during 2010-2012 was $75,000 (40% less than single-family)

Current value does not support home improvements or financing

A HOUSING PRODUCT IN NEED OF IMPROVEMENT

“LULUS” AND VACANT BUILDINGS

PROMOTING HOMEOWNERSH

IP

Area Homeownership Rate, 2010

Tract 9630 72%

Tract 9631 29%

Tract 9632 57%

Tract 9633 49%

Rutland City 52%

Rutland County 70%

Vermont 71%

Source: American Community Survey 2010 5-year estimates

Now is the time to buy (especially in Rutland)!A large pool of renter households exist that could

qualify to buy a homeHousing stock exists that could be converted from

investor ownership to owner-occupancyMortgage market issues are the major barrier

PROMOTING HOMEOWNERSHIP: KEY THEMES

Median home price in Rutland of about $112,000 (28 percent decline from 2006)

Aff ordable to households earning ~ $34,250 (56% of HAMFI)

Estimated 829 renters in Rutland County have income between $22,000 and $55,000 and savings and debt characteristics to buy

Another 600 renters in higher income tiers

NOW IS THE TIME TO BUY

Median Sales Price Residential Properties 6 acres or less

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

2000 2002 2004 2006 2008 2010 2012(through

4/30/2012)

Rutland City

Rutland County

Source: VT Property Transfer Tax data

CONVERTING STOCK TO HOMEOWNERSHIP

480 single-family homes and 334 two-family homes in Rutland are not owner-occupied

Rutland County: 2006 2010

Home purchase loan denial rate

19% 17%

Home improvement loan denial rate

30% 29%

Refinance denial rate 29% 23%

Purchase originations 844 246

Home improvement originations

286 101

Refinance originations 1,011 690

90+ day mortgage delinquency

0.8% 6.7%

90+ day credit card delinquency

9.2% 16.3%

MORTGAGE MARKET ISSUES

Source: 2010 HMDA data; New York Federal Reserve credit conditions data

Hickory Street apartments, Rutland Housing Authority

AFFORDABLE HOUSING

Real household incomes have declined while rents have risen

Housing cost burdens are much more common now than they were 10 years ago

Cost burdens are as much a product of incomes as of house prices or rents

Aff ordable rental stock is concentrated in the City of Rutland out of proportion to its share of households and jobs in the region

HOUSING AFFORDABILITY IN RUTLAND: KEY FINDINGS

Income Rental Households

Rental Units Considered Affordable*

Less than $5,000 155 16

$5,000 to $9,999 326 153

$10,000 to $14,999 473 209

$15,000 to $19,999 373 185

$20,000 to $24,999 384 452

$25,000 to $34,999 603 1,138

$35,000 to $49,999 603 1,202

$50,000 to $74,999 522 21

$75,000 to $99,999 125 29

$100,000 to $149,999 12 0

$150,000 or more 11 0

RENTAL STOCK PRICING VS. RENTER INCOMES

Source: American Community Survey 2010 5-year estimates

• Unavailability of affordable rental stock in Rutland is most pressing for very low-income renters

Rutland City: 2000 2010 % change

Median gross rent (2010 dollars) $634 $723 14%

Median income (2010 dollars) $39,317 $38,108 -3%

Percent of renters earning under $35,000 who are cost burdened

58% 69% 11 points

Percent of renters earning over $35,000 /who are cost burdened

3% 7% 4 points

Percent of homeowners earning under $35,000 who are cost burdened

54% 70% 16 points

Percent of homeowners earning over $35,000 /who are cost burdened

6% 24% 18 points

HOUSING COST BURDENS

Source: 2000 Census; American Community Survey 2010 5-year estimates

CONCENTRATION OF SUBSIDIZED RENTAL HOUSING

Jobs (as of May 2012)

Households (2010)

Subsidized Housing Units (2012)

Rutland City 8,000 7,404 801

Rutland County

31,550 25,984 1,309

% of City within the County

25% 28% 61%

Source: DoRAH; Vermont Department of Labor; 2010 Census

RECOMMENDATIONS

1. Implement revitalization initiatives in the neighborhoods surrounding downtown

2. Use a “Healthy Neighborhoods” approach3. Focus on a small area, building from strength rather

than weakness4. Neighborhood marketing5. Connect neighbors to drive revitalization work

REVITALIZATION RECOMMENDATIONS: SUMMARY

6. Incentivize and facilitate private market investment7. Set outcomes by property, including targeted

acquisition/rehab/resale8. Invest in downtown and in key assets and amenities

near the target area9. Support community development nonprofi ts to

develop a work focus on neighborhood revitalization10. Support “big picture” planning eff orts to change the

regional context

REVITALIZATION RECOMMENDATIONS: SUMMARY

A healthy neighborhood is: A place where it makes economic and emotional sense for

people to invest their time, money and energy A place where neighbors successfully manage neighborhood-

related issues and neighborhood change Outcome areas:

Image Market Physical conditions Neighborhood self-management

A healthy neighborhoods approach is oriented around increasing demand for the neighborhood. This is not the same type of activity as increasing housing supply, providing social services, or other activities that local governments and nonprofi ts are used to doing.

“HEALTHY NEIGHBORHOODS” ORIENTATION

A revitalization initiative will work best in a defined area (as small as 10-15 blocks)

Core of the work happens house by house, block by block

Need to pick this area based on strengths: Strong resident engagement Marketable assets (e.g. parks, schools, housing stock,

location) Emerging market segments or at least potential market

segments of desirable homebuyers that could be attracted to the neighborhood

TIGHT GEOGRAPHIC FOCUS, SELECTED BASED ON STRENGTHS

Name the neighborhoodNeighborhood ambassadorsRealtors® on retainerNeighborhood toursEmployer-based marketing

NEIGHBORHOOD MARKETING EXAMPLES

NEIGHBORHOOD MARKETING EXAMPLES

Beauty, History, Civic SpiritThe Corn Hill NeighborhoodCorn Hill, a historic treasure on the banks of the Genesee River next to Center City, offers the best of the old and new. It is a revitalized landmark community full of restored 19th century homes in a variety of modest and elaborate styles—that are blended well with 20th century townhouses and condominiums. In most cities, these kinds of neighborhoods are only accessible by the wealthy. Here in Rochester, people from all walks of life make Corn Hill their home….

Ice cream socials, dog walks, potlucks

Beautification projectsPurchasing cooperativesNeighborhood mini-grantsOne-on-one interviews,

“neighbor circles”

CONNECTING NEIGHBORS: EXAMPLES

Housing rehab loan fund, purchase / rehab loan packages

Tax stabilization or abatement for owner-occupants purchasing in the target neighborhood

Study regulatory reforms for landlords“Buy-hold” fund to intervene in key properties and

make sure they go to a good buyer

INCENTIVES FOR PRIVATE INVESTMENT

Examples: Market an exterior repair loan Give help to this owner to bring building up to code and

improve their rental management practices Get this homeowner better connected to their neighbors Get a strong homebuyer into this property that is for sale –

help the seller to market it, hold a “pick your neighbor” party

Acquire, convert this property from a 3-family back into a 1-family and sell it to a strong buyer

Properties are next to an acquisition-rehab project – help neighbors organize a beautification effort

SET OUTCOMES BY PROPERTY

Goal of revitalization needs to be to increase demand, not increase the supply of aff ordable units

Generally, priority should go towards encouraging more people to buy homes in the neighborhood, including converting small multifamily properties to more appropriate designs for owner-occupancy whenever practicable

Want to encourage private sector investment, including investment by responsible landlords

That said: aff ordable rental development financing tools provide a unique resource to address existing, problem multifamily properties and rehabilitate them to a very high standard.

AFFORDABLE RENTAL DEVELOPMENT?

Downtown location for high-end rental development, cultural attractions

Farmer’s market, other quality-of-life investmentsWaterways (East Creek, Otter Creek) / greenways /

green space

INVEST IN DOWNTOWN, KEY AMENITIES

Community building and organizingNeighborhood marketingLoan programs Targeted redevelopment Property management assistance for small landlords

POTENTIAL ROLES FOR COMMUNITY DEVELOPMENT NONPROFITS

Regional planning around: Economic and workforce development Land use planning Arts and culture Environmental preservation Food systems Recreation Education Public health Regional collaborations between local governments

“BIG PICTURE” PLANNING EFFORTS

COST IMPLICATIONS

TRIAGE APPROACH FOR VACANT /

BLIGHTED HOUSING

Let the market create

the solution

Historic rehab project

Acquisition-rehab-resale

project; or rental project if part of a cluster

of multi-unit properties

Located in strong neighbor-

hood?

Historic or arch. signifi-cance?

In target revitaliza-

tionarea?

Moderate rehab cost?

Feasible to

mitigate?

Demolish and

create buffer

Incen-tives for

purchase-rehab

Rehab appraisal

gap < demo +

infill cost?

Market-able with

incen-tives?

Demolish and

create green

space or build infill

LULU impacts?

yes

no

yes yes yes yes yes

no no no

no

no noRehab

appraisal gap < demo cost?

Incen-tives for

purchase-rehab

Acquisi-tion /

rehab / resale

Demo and land

bank

yes yes no

noyes

Distressed Property Intervention Decision Tree

TACKLING REGIONAL AFFORDABLE

HOUSING CHALLENGES

Future aff ordable housing creation needs to focus on households at income levels under $20,000

Future aff ordable housing creation needs to improve fair housing choice for these low-income populations – more should not be created in existing high-poverty Census Tracts in Rutland

Given overall economic and population trends, aff ordable housing creation should avoid adding significant net new units to the stock, when possible

Initiatives to boost employment and earnings are critically important for working-age households facing aff ordability challenges

KEY ACTION IMPLICATIONS OF STUDY FINDINGS FOR AFFORDABLE

HOUSING