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  • C O M P R E H E N S I V E H O U S I N G M A R K E T A N A L Y S I S

    Lansing-East Lansing, Michigan As of January 1, 2017U.S. Department of Housing and Urban Development Office of Policy Development and Research

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    Housing Market Area

    The Lansing-East Lansing Housing Mar- ket Area (HMA), coterminous with the Lansing-East-Lansing, MI Metropolitan Statistical Area, comprises Clinton, Eaton, and Ingham Counties in south-central Michigan and includes the principal cities of Lansing and East Lansing in Ingham County. The city of Lansing is the state capital of Michigan, and Michigan State University (MSU) is in the city of East Lansing. The State of Michigan and MSU are the two largest employers in the HMA and contribute to a stable economic base. Multiple museums, the state capitol, and the Class A Lansing Lugnuts baseball team helped attract 4.8 million visitors to the region, which generated an economic impact of over $600 million, during 2015 (Greater Lansing Convention and Visitors Bureau).

    Market Details Economic Conditions ..................................................................... 2

    Population and Households ........................................................... 5

    Housing Market Trends .................................................................. 7

    Data Profile ................................................................................... 12

    Summary Economy The economy of the Lansing-East Lansing HMA has improved each year since 2010, and nonfarm payrolls are at their highest annual average since 2004. During the 12 months ending December 2016, nonfarm pay rolls expanded by 4,400, or 2.0 per cent, compared with an increase of 3,400 jobs, or 1.5 percent, a year earlier. During the 3-year forecast period, nonfarm payroll increases are expected to slow slightly, with average annual growth of 3,400 jobs, or 1.5 percent.

    Sales Market Sales housing market conditions in the HMA were balanced as of January 1, 2017 compared with soft conditions in April 2010. The current sales vacancy rate is estimated at 1.6 percent, down from 2.5 percent in 2010. Demand for 2,775 new homes is expected during the next 3 years (Table 1). The 150 homes currently under construction and a portion of the estimated 6,175 other vacant housing units that may

    reenter the sales market will satisfy some of the demand during the forecast period.

    Rental Market Rental housing market conditions cur rently are balanced in the HMA. As of January 1, 2017, the rental vacancy rate was an estimated 6.0 percent, down from 9.0 percent in April 2010. During the forecast period, demand is estimated for 1,250 new market-rate rental units (Table 1). The 390 units currently under construction will meet a portion of the demand.

    Table 1. Housing Demand in the Lansing-East Lansing HMA During the Forecast Period

    Lansing-East Lansing HMA

    Sales Units

    Rental Units

    Total demand 2,775 1,250

    Under construction 150 390

    Notes: Total demand represents estimated production necessary to achieve a balanced market at the end of the forecast period. Units under construction as of January 1, 2017. A portion of the estimated 6,175 other vacant units in the HMA will likely satisfy some of the forecast demand. The forecast period is January 1, 2017, to January 1, 2020. Source: Estimates by analyst

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    2 Economic Conditions

    The city of Lansing is the state capital of Michigan, and the government sector is the largest em- ployment sector in the Lansing-East Lansing HMA, with more than twice the number of jobs than the second largest sector, education and health services (Figure 1). Since emerging from the recent recession during 2010, however, government payrolls have recorded no net job change, despite annual increases since 2013. The economic recovery has been led by the manufacturing sector, which has expanded by an average annual increase of 800 jobs, or 4.6 percent, since 2010. The resurgence in manu- facturing payrolls is largely attributed to transportation equipment manufac- turing, which in 2015 was more than three times as concentrated in the HMA, at 5.1 percent, as in the nation (Quarterly Census of Employment and Wages). The professional and business services and the transporta- tion and utilities sectors have also increased since 2010, adding 500 and 400 jobs annually, growth rates of 2.2 and 5.1 percent, respectively.

    From 2001 through 2010, the economy of the Lansing-East Lansing HMA recorded nonfarm payroll increases in only 3 of 10 years and, by 2010, was more than 9 percent below its 2000

    level. By contrast, nonfarm payrolls for the nation in 2010 were approxi- mately 1.3 percent below the 2000 level and rose during 5 of 10 years. In the state of Michigan, nonfarm payrolls during 2010 were more than 17 percent below the 2000 level, having declined each year of the decade. During the 10-year period from 2001 through 2010, approximately 55 percent of all nonfarm payroll jobs lost in the HMA were from the manufacturing sector.

    From 2001 through 2006, nonfarm payrolls in the HMA contracted by an average of 1,700 jobs annually, or 0.7 percent, despite slight increases in 2002 and 2006; manufacturing jobs contributed nearly 71 percent of the overall job loss. During 2004, the General Motors Company ended the Oldsmobile brand; founded in the city of Lansing in 1897, Oldsmobile was the oldest American automobile brand. During 2005 and 2006, three different General Motors plants in the Lansing-East Lansing HMA closed. From 2001 through 2006, several service-providing sectors expanded, including the education and health services sector, which added 800 jobs annually, or 2.9 percent, and the finan- cial activities sector, which gained 300 jobs annually, or 2.2 percent. From 2007 through 2008, job losses in the HMA slowed, averaging annual de clines of 1,000, or 0.4 percent. The worst year of the Great Recession was 2009, when nonfarm payrolls fell by 4.3 percent nationally, 7.0 percent in the state of Michigan and 5.1 per cent in the HMA. Manufacturing payrolls were down 25 percent, or 5,000 jobs. The education and health services sector in the HMA grew during 2009 by 500 jobs, or 1.7 percent, and state gov ern - ment added 1,100 jobs offsetting 900 jobs lost in local gov ern ments. Local

    Figure 1. Current Nonfarm Payroll Jobs in the Lansing-East Lansing HMA, by Sector

    Government 28.1%

    Leisure & hospitality 8.4%

    Other services 4.4%

    Education & health services 13.5% Professional & business services 9.8%

    Wholesale & retail trade 11.7%

    Manufacturing 9.0% Mining, logging, & construction 3.1%

    Information 1.3% Transportation & utilities 3.8%

    Financial activities 6.9%

    Note: Based on 12-month averages through December 2016. Source: U.S. Bureau of Labor Statistics

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    3

    governments are dependent on property taxes, which fell because of declining home sales prices. The economy in the Lansing-East Lansing HMA began to expand during 2010, while economic conditions in the nation and the state of Michigan continued to decline that year. During 2010, manufacturing employment in the HMA rose by 2,100 jobs, an increase of 14 percent, and remaining payroll sectors com- bined fell by 500 jobs. By contrast, manufacturing payrolls during 2010 fell 3 percent nationally and in creased 2 percent in the state of Michigan.

    During 2016, nonfarm payrolls in the HMA increased by 4,400 jobs, or 2.0 percent, from a year earlier to 229,700 jobs, the highest annual average since 2004 (Table 2). During the past year, the government sector recorded the largest increase, expanding 1,100 jobs, or 1.7 percent, because of 800 jobs added in the state government subsector, 200 in the local government sub sector, and 100 in the federal govern- ment subsector. Despite recent gains, government sector payrolls are at the 2009 level because of an average decline of 1,000 jobs, or 1.5 percent, annually from 2010 through 2012. The next largest payroll growth sector, and the fastest-growing sector during 2016, was the manufacturing sector, which expanded by 1,000 jobs, or 5.1 percent. At least four significant expansions in manufacturing sector payrolls since 2012 have added over 650 jobs, all producing automobile components. Since 2010, General Motors has invested more than $1.3 billion in its five facilities in the HMA. The second fastest-growing sector, transportation and utilities, expanded by 400 jobs, or 4.8 percent, and has averaged 400 jobs added annually since 2010, or 5.1-percent growth. Ac- tivity in this sector includes shipping and logistics companies suppor

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