1A.1, TCAAP Market Analysis and Comprehensive Plan Discussion

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DRAFT EXECUTIVE SUMMARY Housing Market Analysis • The total number of residential units permitted declined steadily from 2005 to 2009 after reaching a peak of 2,469 units in the PMA in 2004. Detached single-family homes have been the most common housing type developed in the PMA since 2000, representing 51.4% of all units permitted. Multifamily units represented 27.7%of all residential construction activity while townhomes represented 20.9%of all units permitted. • The equilibrium vacancy rate for rental housing is considered to be 5.0%. This allows for normal turnover and an adequate supply of alternatives for prospective renters. During the 3rd Quarter 2012, the vacancy rate was 2.7%in the Twin Cities Metro Area. The Arden Hills/Shoreview submarket had a vacancy rate of 3.2%while the other PMA communities had a vacancy rate of 2.5%. In effect, the overall supply of rental housing in the Market Ar- ea is below the adequate level to meet demand. • We estimate that a general occupancy market rate rental development on the subject property could capture approximately 10%and 15%of the total demand in the Market Ar- ea. We anticipate that the subject property could support approximately 423 to 634 units of new market rate general occupancy rental housing between 2012 and 2017. • The 2012 median sale price across the PMA was$175,686, higher than Anoka County ($152,000), Ramsey County($141,100), and the Twin Cities ($167,900). Between 2007 and November 2012, the median price declined -24.5% in the PMA, compared to a -28.3%de- cline in Anoka County, -32.5%in Ramsey County, and -25.4%in the Twin Cities. It appears that pricing for single-family detached homes is recovering, as the 2012 median sales price is higher than the 2011 median in nearly every community comprising the PMA, although prices are still down significantly from 2007. Multifamily housing has not experienced the pricing recovery that is occurring in the single-family market as prices in several communi- ties continued to decline in 2012. • Due to the Site's desirability as a residential location, we estimate that the subject property could capture roughly 15%to 20%of the PMA demand and 10%of the demand from the SMA, equating to a total of 271 to 350 single-family units and 116 to 150 multifamily units supportable on the Site between 2012 and 2017. Senior Housin g Y Market Analysis • A growing older adult and senior population should maintain long-term demand for senior housing alternatives in the PMA, although pending growth in the supply of senior housing in the PMA will limit demand growth between 2012 and 2017. MAXFIELD RESEARCH INC. 3