housing study panel presentation 11.19.12

November 19, 2012

Panel Discussion: Key Findings and Draft

Recommendations

Team Introduction

John Bridger, Executive DirectorYuen Lee, Project leadSue KnappTim MorelandAleeta Zeller

City Housing Study Main Objectives

Characterize current and future housing demandCharacterize the housing supply within Chattanooga City limits / Hamilton CountyCreate a Framework for Action

Meeting Flow Agenda

Part I: Presentation of study findings on how the housing market is changingPanel Discussion followed by a few

questions from the audience

Part II: Presentation of draft recommendations across four focus areasPanel Discussion followed by a few

questions from the audience

Part III: Public Feedback: Break into stations

HOUSING SYSTEM PRIMERHOUSING SYSTEM PRIMER

Housing – Part of a Place that Supports a Lifestyle

The Housing Market Players

Key National Trends in Housing that will impact Chattanooga

Housing - Part of a Place that Supports a Lifestyle

Urban Places Residential,

Commercial, Civic, Industrial in close proximity Neighborhoods have a mix of housing types on small lots Grid street network that distributes traffic, supported by transit

Lifestyle Traits Live, Work, Shop, Play Live, Work, Shop, Play

in closein close

Diverse social environmentDiverse social environment

Walk, bike, transit, carWalk, bike, transit, car

Housing - Part of a Place that Supports a Lifestyle

Suburban Places Residential, Residential,

Commercial, Commercial, Civic, Industrial Civic, Industrial separatedseparated

Neighborhoods Neighborhoods defined by a defined by a single housing single housing typetype Limited street Limited street network network defined by defined by hierarchyhierarchy

Lifestyle Traits

Neighborhood Neighborhood seclusionseclusion

Predictable social Predictable social environmentenvironment

Drive to work, play, Drive to work, play, shopshop

Housing Market – The Players

CONSUMERCONSUMER

PUBLIC POLICY/CODESPUBLIC POLICY/CODESPUBLIC POLICY/CODESPUBLIC POLICY/CODES

CONNECTORCONNECTOR SUPPLIER

BUYER/RENTER REALTOR PUBLIC/

PRIVATE CAPITAL

PRIVATE BUILDER/DEVELOPER

RENTAL PROPERTY MANAGER

CHATTANOOGA HOUSING AUTHORITY

NON-PROFIT ORGANIZATION

Housing Primer

Key Questions:

How are our lifestyles changing?How is the housing market changing?What does this mean for housing in urban and suburban places?

Housing – Key National Lifestyle Trends

DRIVERS OF HOUSING DEMAND


GENERATION Y

largest generation in U.S. history, nearly ¼ of US population and will continue to grow with immigration

Ethnically more diverse, more likely to have grown up in metro area

Just starting to form households; household formation will accelerate over time


GENERATION Y – Lifestyle/Housing PreferenceULI Survey of 18 – 32 age group: 38% currently rent, 36% currently own, 26% currently live with family or in student housing *

2/3 favor living where they can experience shopping and social gathering places within walking distance of home *

Sources* Generation Y: America’s New Housing Wave, ULI Foundation, 2011** Generation Y in the Market Place, Robert Charles Lesser & Co, 2009

22% expect to walk, bike or use transit *

Will be looking for their first home, but not like their parents’ **


BABY BOOMERS & SENIORS

Baby Boomers, 46 - 64years old, 76 million strong, transitioning to 65+

65 + Population expected to grow 120% by 2050, reaching 1/5 of US Population

Sources* Housing an Aging Population, Are We Prepared?, Center for Housing Policy, April 2012** Housing in America, The Baby Boomers Turn 65, ULI Foundation, 2012


BABY BOOMERS & SENIORS: Lifestyle/Housing PreferenceHighest homeownership rate

(80%) among all generations and most likely to live in suburbs **

More than 80% want to stay in their home.. “Age in Place” desire to stay in their home as long as possible*

Sources* Housing an Aging Population, Are We Prepared?, Center for Housing Policy, April 2012** Housing in America, The Baby Boomers Turn 65, ULI Foundation, 2012

Challenge – adapting homes/communities to their changing needs *

Implications – home modification, multi-generational housing, senior assisted living, alternative transportation, greater demand for community facilities nearby **

Housing – Key Economic Trends

THE “NEW NORMAL” ECONOMY AND AFFORDABILITYHouseholds are more stressed financially, while housing costs continue to rise

Housing – Key Economic Trends

THE “NEW NORMAL” ECONOMY AND AFFORDABILITYThe Impact of affordability is even more severe for low to moderate income families

Trends in the Local Trends in the Local Chattanooga Housing Chattanooga Housing MarketMarket

Demographic Trends - Census

Market – Building Data

Surveys of Builders & Realtors

Focus Groups: residents, neighborhoods, non-profit housing group, LDO & Neighborhood Services

Demographic Trends

1970 2010

Families with ChildrenChattanooga

Married Couple

Single Father Families

Single Mother Families

Demographic Trends

Chattanooga

GEN

Y

BA

BY

BO

OM

ER

S

BA

BY

BO

OM

ER

S

MLS data – number of home sales

3183

4664

3550

Single Family Detached

MLS data – housing type

MLS data – sale price

Average Sale Price % changeTOTAL 38.3%

Condo 107.1%Townhouse 57.9%SF Detached 36.1%

$ 185,158

$ 213,086

$ 178,482 $ 176,333

$ 129,568

$ 117,269

$ 102,885

$129,036

Building Permits

Single Family Detached

Townhouse, Condo, Duplex, Apartment

Survey – Projected Demand

Realtors

Builders

Survey – Buyer Home Preferences

RealtorsBuilders

Survey – Neighborhood Amenities

Realtors

Builders

Survey – Community Amenities

Housing Choice

Gaps in Housing

“Build closer in to work, schools and shopping due to gas costs”

“Focus on age related communities - match with their needs- it's about lifestyle now, not just a house”“More condo/townhome living with amenities”

“More quality housing but smaller in size”

Finance

Gaps in Housing

“Credit and appraisals remain difficult”“Difficulty of obtaining funding sours some, causing them to continue renting”“lack of construction and mortgage financing”

Affordability

Gaps in Housing

“Demand for lower-priced new homes is increasing”

“Affordable ‘quality’ housing within the urban Chattanooga”“More affordable starter family homes in the Ooltewah area”“Affordable housing options aren’t zoned for the better rated schools”“Affordable housing options not very close to services”

Gaps in Housing

Regulations“Allow more mixed use in terms of housing type and commerce type”“Better zoning options for urban residential”

“Change zoning regulations to reflect change in demographics”“Allow smaller street widths and less stormwater issues”

Codes and Regulations

ENFORCEMENT“Exceed current building codes in construction, after all, codes are a minimum, and people want better”“Make owners of the abandoned homes to be accountable for either tearing them down or maintain them” “Enforcing people to maintain the exterior appeal of their home” “Consistency with requirements and enforcement”

Affordability

Affordability - RENTAL

Source: 2011 ACS 1-year Estimates www.aptindex.com

Chattanooga Median Household Income $32,791

Monthly Gross Income $2,733Income available for monthly gross housing cost (30%) $820Monthly utility cost $200Gross Income available for monthly rent $620

Chattanooga Median Gross Rent $685Chattanooga average rent for apartment $732

Housing Cost Burden $112 - $65# of household with income less than $35,000 37,033

http://www.aptindex.com/

Affordability - OWNERSHIP

Source: 2011 ACS 5-year Estimates, http://cgi.money.cnn.com , www.bankrate.com, www.century21.com, http://www.mlsarealistings.com http://www.nahb.org

Chattanooga Median Household Income $32,791

Monthly Gross Income $2,733Monthly Debts $500Expected Down Payment $10,000Interest Rate for 30- year Mortgage 3.8%Home Insurance $480Property Tax $1,100Annual Mortgage Insurance $600

All MLS Properties 1,098 MLS Properties $100,000 or less 325

Affordable Home Amount $90,000

MLS Properties $75,000 or less 220

Average Housing Cost per sq ft $110Affordable Housing Size 820

http://cgi.money.cnn.com/

http://www.bankrate.com/

http://www.century21.com/

http://www.mlsarealistings.com/

http://www.nahb.org/

Affordability – housing burden

Source: 2006-2010 American Community Survey 5-Year Estimates, B25106

All Owners Renters

Affordability

Source: 2006-2010 American Community Survey 5-Year Estimates, B25106

Owners Renters

Household Income Less than $20,000

Affordability

Housing Cost: 30% of a household income

Transportation Cost: 15% of household incomeTrue affordabilityHousing + Transportation Cost: 45% of household income

PANEL FEEDBACK/DISCUSSIONPANEL FEEDBACK/DISCUSSION

CHALLENGE – ADAPTING OUR PLACES TO OUR CHANGING

LIFESTYLES & NEW ECONOMIC REALITIESWHAT IS OUR SUBURBAN STRATEGY?

WHAT IS OUR URBAN STRATEGY?

HOW DO WE INCREASE THE SUPPLY OF AFFORDABLE HOUSING?

HOW DO WE ELIMINATE BARRIERS TO INFILL HOUSING

DEVELOPMENT?

Housing Study Housing Study RecommendationsRecommendationsSetting a Course for ACTION

Feel free update as you see fit. Feel free update as you see fit.

Setting a Course for Action…

Key Principles:Key Principles:Strategies should be place-based and informed by anticipated changing lifestyle needs in those places

Strategies should reflect the connection between housing, schools, transportation, employment, public health, recreation that shape our quality of life

Strategies should address the needs of the entire housing spectrum (incomes and housing types)

Strategies should take into consideration the entire housing delivery system in meeting those needs

Strategies should target private, public and public-private opportunities to achieve housing objectives

Benchmarks should be established to track progress in meeting housing strategy objectives


Action Focus Areas:Action Focus Areas:SUBURBAN STRATEGY

URBAN STRATEGY

AFFORDABLE HOUSING STRATEGY

ALIGN CODES/POLICIES TO PROMOTE URBAN INFILL AND AFFORDABILITY


SUBURBAN STRATEGYSUBURBAN STRATEGY

SUBURBAN STRATEGYSUBURBAN STRATEGY

City’s Suburban Areas - limited remaining large vacant developable sites for housing development

While the current suburban development pattern continues to be focused on separation of housing types, our lifestyles are changing

Higher density infill development proposals within established suburban neighborhoods have been more controversial and challenging to implement

Key ObservationsKey Observations

SUBURBAN STRATEGY - Ideas for ActionSUBURBAN STRATEGY - Ideas for Action

Modify City codes to accommodate multi-generational housing through accessory apartment units


Tool In Focus Tool In Focus – Santa Cruz, CA ADU Ordinance/Program– Santa Cruz, CA ADU Ordinance/Program

Property owner Property owner must live at the must live at the same addresssame address as the ADU and as the ADU and only one ADU per single-familyonly one ADU per single-family lot is allowed.lot is allowed.Minimum Lot size: 5,000 square feetMinimum Lot size: 5,000 square feet

Development fees are waived for Development fees are waived for ADUs made available for low- and ADUs made available for low- and very-low-income householdsvery-low-income households

Offers discounted loans for Offers discounted loans for conversion to ADU in return for conversion to ADU in return for affordability covenantsaffordability covenants

KEY ELEMENTSKEY ELEMENTS


Provides guidance on the location and design of accessory apartment units to promote neighborhood compatibility

Tool In Focus Tool In Focus – Santa Cruz, CA ADU Ordinance/Program– Santa Cruz, CA ADU Ordinance/Program

SUBURBAN STRATEGY - Ideas for ActionSUBURBAN STRATEGY - Ideas for Action Identify areas for moderate/high density Identify areas for moderate/high density

development development in close proximity to major activity centers and connected to existing transit service

Consider establishing a land bank a land bank for blighted/vacant strip centers

Develop an appropriate basket of density bonuses, basket of density bonuses, tax incentives, development fee reductionstax incentives, development fee reductions, public infrastructure improvements

SUBURBAN STRATEGY - Ideas for ActionSUBURBAN STRATEGY - Ideas for ActionTool In Focus Tool In Focus – Columbia Pike Form-Based Code, Arlington Co, VA– Columbia Pike Form-Based Code, Arlington Co, VA

1986 – residents and business owners formed Columbia Pike Revitalization Organization (CPRO) in response to disinvestment in the area2002 – developed a redevelopment plan for the area

2003 – following year, codified the plan recommendations into a special district that used form-based code approach2003 – code was voluntary, but the government offered expedited review and tax increment financing for projects that used the code


The incentives:

1) Expedited approval process 30-60 days

2) 30 day by-right approval (no public hearings) for projects under 30,000 sq ft

3) Eligible for Tax Increment Public

Infrastructure Fund (TIPIF) – had to be an anchor development

a Rehabilitation Tax Exemption, and

Technology Zone: technology businesses get 50% reduction in business license tax for up to 10 years

Since program’s inception, area has seen Since program’s inception, area has seen $500 million in $500 million in development development including townhomes, several mixed use including townhomes, several mixed use

developments and a new grocery store developments and a new grocery store


Create a guide for developing moderate density Create a guide for developing moderate density projects projects in established suburban neighborhoods.


Develop an appropriate public review process Develop an appropriate public review process for for moderate density infill rezoning requestsmoderate density infill rezoning requests

KEY ELEMENTS

Meet with Residents prior to application submittal

Site context analysis

Elevation drawings


URBAN STRATEGYURBAN STRATEGY

URBAN STRATEGY - Key ObservationsURBAN STRATEGY - Key Observations

Urban areas have the potential to offer the urban lifestyle sought by Gen Y and some aging boomers

The addition of more high density housing, particularly in/near downtown is a critical component to attracting more retail and other attractions to the downtown area

Urban areas generally have better access to support services than suburban areas, better connected with public transportation, making them more suitable for affordable housing

OpportunitiesOpportunities

URBAN STRATEGY - Key ObservationsURBAN STRATEGY - Key Observations

Urban areas have a number of vacant properties but they tend to be scattered, encumbered by tend to be scattered, encumbered by brownfield challengesbrownfield challenges

There are limited locations limited locations in Chattanooga’s urban areas that have healthy marketsthat have healthy markets to entice private investment

Perceptions about crime and under-performing Perceptions about crime and under-performing schools schools can be significant deterrents to forming healthy housing markets

Not all urban neighborhoods are the same; each neighborhood has a unique mix of housing types. Some neighborhoods have struggled with Some neighborhoods have struggled with proliferation of duplexesproliferation of duplexes, which has fostered a resistance to moderate density

ChallengesChallenges

URBAN STRATEGY - Ideas for ActionURBAN STRATEGY - Ideas for Action

Establish a policy for urban neighborhoods that defines the desired mix of housing typesdefines the desired mix of housing types as a guide to inform future housing development


Seek an opportunity to partner with Hamilton County schools to identify more targeted urban urban school improvement projectsschool improvement projects Continue to support the City’s Gang Task force City’s Gang Task force initiative

Implement a targeted neighborhood revitalization targeted neighborhood revitalization strategystrategy that engages public, private and philanthropic sector

Strengthen Urban NeighborhoodsStrengthen Urban Neighborhoods


Partner with the Realtor community to develop a develop a marketing/ communications toolmarketing/ communications tool

Recruit major urban employers to provide Recruit major urban employers to provide incentivesincentives for their employees to live in nearby neighborhoods

Connecting buyers/renters with urban housingConnecting buyers/renters with urban housing


Reduce number of highly visible blighted structures: allocate more resources to allocate more resources to Neighborhood Services for blight removalNeighborhood Services for blight removal

2007 Residential Property 2007 Residential Property Survey Survey

Of 11,965 residential buildings Of 11,965 residential buildings surveyed in 18 urban City surveyed in 18 urban City neighborhoods:neighborhoods: 8,084 are in need of 8,084 are in need of minor or major repairsminor or major repairs135 dilapidated buildings 135 dilapidated buildings appearing to be unfit for appearing to be unfit for human habitation.human habitation.

Cleaning up blightCleaning up blight


Formalize an urban land banking and redevelopment program that assembles distressed properties, and incorporates financial incentives for their redevelopment Target locations for higher density, mixed income housing along established key transit corridors, and in close proximity to downtown

UTC SOUTH CAMPUSUTC SOUTH CAMPUS

SOUTHSIDE/COWART PLACESOUTHSIDE/COWART PLACE

Targeted redevelopment – informed by a building-form Targeted redevelopment – informed by a building-form revitalization plan, specific housing outcomes, implemented revitalization plan, specific housing outcomes, implemented through public-private partnershipsthrough public-private partnerships


AFFORDABLE HOUSINGAFFORDABLE HOUSINGSTRATEGYSTRATEGY

AFFORDABLE HOUSING STRATEGYAFFORDABLE HOUSING STRATEGY

There is a growing need for affordable housing among low and moderate income households

Gen Y, the largest demographic will need both affordable rentals and reasonably priced first time homes

Some development requirements and fees (permitting, sewer tap, infrastructure repairs) contribute to the added cost of housing

Key ObservationsKey Observations

There is a resistance to affordable housing, particularly for low-income households, in established neighborhoods

There are a significant number of existing homes in urban areas that are low priced, but need substantial rehab

There are very few locally based affordable rental housing builders/managers, particularly at any large scale

AFFORDABLE HOUSING STRATEGY - Ideas for ActionAFFORDABLE HOUSING STRATEGY - Ideas for Action

Establish a baseline and set specific targets

Propose definition of “affordable and livable housing”

Adopt a City Policy that supports affordable housing throughout the City and endorses a mixed-income approach

AFFORDABLE HOUSING STRATEGY - Ideas for ActionAFFORDABLE HOUSING STRATEGY - Ideas for Action Establish an Establish an

Affordable Housing Affordable Housing TrustTrust

Establish a home rehab Establish a home rehab fundfund for first time homebuyers


Tool In Focus Tool In Focus – Affordable Housing Trust of Columbus/Franklin County, OH– Affordable Housing Trust of Columbus/Franklin County, OH

not-for-profit housing finance corporation formed in 2001 by the City of Columbus and Franklin County

provides technical help and pre-development research to mitigate financial risk

makes a variety of loans to private and non-profit developers to finance acquisition, construction and bridge loans

MISSIONMISSION: to focus on the : to focus on the facilitation, production, facilitation, production, rehabilitation and preservation rehabilitation and preservation of workforce and low income of workforce and low income housing.housing.


Tool In Focus Tool In Focus – Affordable Housing Trust of Columbus/Franklin County, OH– Affordable Housing Trust of Columbus/Franklin County, OH

IMPACIMPACTT Since inception, facilitated the creation or preservation of over over 6,000 housing units 6,000 housing units in Columbus and Franklin County. In 2011, made new loan commitments totaling over 6.75 over 6.75 million dollarsmillion dollars, which will help to finance more than 523 new or more than 523 new or rehabilitated housing unitsrehabilitated housing units In 2012, provided $1 million provided $1 million construction loan for 100-construction loan for 100-unit permanent supportive unit permanent supportive housing initiative housing initiative targeted for formerly homeless individuals and low income individuals


Introduce a portfolio of incentives such as fee Introduce a portfolio of incentives such as fee reductions and density bonuses reductions and density bonuses for housing developments that include affordable units

Projects over a certain size that do not incorporate affordable housing would pay a fee pay a fee into a housing trust fund into a housing trust fund that would support affordable housing efforts

Develop local public and non-profit capacity to build and manage affordable rental housing

Public PolicyPublic Policy


ALIGNING CODES/POLICIESALIGNING CODES/POLICIESSTRATEGYSTRATEGY

ALIGN CODES/POLICIES STRATEGY - Key ObservationsALIGN CODES/POLICIES STRATEGY - Key Observations

Most of the remaining Most of the remaining undeveloped sites in undeveloped sites in Chattanooga are small Chattanooga are small and have environmental and have environmental constraintsconstraints

Current zoning Current zoning standards/code standards/code requirements limit the requirements limit the ability of developers to ability of developers to mix housing types and mix housing types and build more compactlybuild more compactly

ALIGN CODES/POLICIES STRATEGY - Ideas for ActionALIGN CODES/POLICIES STRATEGY - Ideas for Action Offer reduced/eliminated feesOffer reduced/eliminated fees, streamlined review,

density bonuses for projects that incorporate affordable housing in targeted policy areas

Review subdivision code and street standards to eliminate site engineering requirements that unnecessarily impact cost of housing and the “footprint” of disturbed site area (street widths, turn-around design, grading, minimum lot size, swales vs. curb)

ALIGN CODES/POLICIES STRATEGY - Ideas for ActionALIGN CODES/POLICIES STRATEGY - Ideas for Action

Update zoning codes to allow more diversityUpdate zoning codes to allow more diversity in range of housing types and lot sizes

Live-Work Housing UnitsLive-Work Housing UnitsCo-HousingCo-Housing

Set up a vacant lot “clearinghouse” databasevacant lot “clearinghouse” database

For targeted areas, develop an infill development infill development loan fund/public capital institutionloan fund/public capital institution

WRAP-UP KEY POINTSWRAP-UP KEY POINTS

Combination of design controlsCombination of design controls and financial financial incentives incentives are key to successful outcomesare key to successful outcomes

Implement strategies based on place AND based on place AND neighborhood context, preferably in the context neighborhood context, preferably in the context of a specific revitalization planof a specific revitalization plan

Clearly define the desired housing outcomes Clearly define the desired housing outcomes and how they will be measured

Codes/standards should accommodate accommodate more diversity of housing and street types more diversity of housing and street types to provide more flexibility in meeting to provide more flexibility in meeting changing demandchanging demand

PANEL FEEDBACK/DISCUSSIONPANEL FEEDBACK/DISCUSSION

http://www.chcrpa.org/housingst

udy.htm

THANK YOU.

housing study panel presentation 11.19.12

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