Overall Housing Assessment of the Staples, MN Area44315AD6-8633-4D56-A3F9... · Overall Housing Assessment of the Staples, MN Area Prepared for: Staples EDA April 2016 Prepared by:

Overall Housing

Assessment of the

Staples, MN Area

Prepared for:

Staples EDA

April 2016

Prepared by:

1808 34th St N

Sartell, MN 56377

(320) 251-1300

HOUSING ASSESSMENT OF THE CITY OF STAPLES, MN

Prepared for

Staples Economic Development Authority

April 2016

by

ADMARK RESOURCES 1808 34th St N

Sartell, MN 56377 Phone (320) 251-1300 FAX (320) 230-7688

STAPLES, MN APRIL 2016

TABLE OF CONTENTS 2

TABLE OF CONTENTS

Page SECTION 1 EXECUTIVE SUMMARY 3 SECTION 2 LOCATION AND MARKET AREA DEFINITION 4

SECTION 3 POPULATIONS AND HOUSEHOLDS 6 SECTION 4 EMPLOYMENT AND ECONOMY 14 SECTION 5 SINGLE FAMILY HOME MARKET 23 SECTION 6 EXISTING RENTAL HOUSING STOCK 30 SECTION 7 HOUSING DEMAND 48 SECTION 8 ANALYSIS AND RECOMMENDATIONS 67 SECTION 9 STATEMENT OF QUALIFICATIONS 73


EXECUTIVE SUMMARY 3

EXECUTIVE SUMMARY

AdMark Resources was hired by the Staples EDA to conduct a housing needs and conditions assessment of the City of Staples. Following is an executive summary of those findings. Population and Household Data Between 2010 and 2015 the population of the Study Area decreased by 2.2% and is projected to decrease slightly 0.6% by 2020. At the same time households decreased at a rate of 1.7% (38hh) between 2010 and 2015 and are projected to decrease another 0.2% (5hh) by 2020. Average household income is projected to grow from $37,962 in 2000 to $58,291 by 2020 and there were 345 substandard and temporary housing units within the Study Area in 2014. Employment Area employment remains strong with projected steady growth. The largest employer within the Study Area is the Lakewood Health System with 850 employees and a survey of the larger employers in Staples indicates 43% of the surveyed businesses expect to grow over the next two years. The 2014 unemployment rate for Todd County was 4.2%, with Wadena County having a 6.1% unemployment rate. These are the lowest rates over the past ten years for both counties while the number of employed individuals are at the highest level and the number of unemployed are at the lowest levels. Rental Housing Market There is a mixed variety of apartment facilities in the Staples area, with half of the units being over 40 years old. The newest buildings are 12 and 13 years old. Of the buildings surveyed, only three had any vacancies with a total of 6 vacancies. Five of the vacancies were in senior-housing-with-services buildings, the other was in a low income unit. Overall, the six vacancies only represent a 2.1% vacancy rate. A healthy rental market should have a 5% vacancy rate which allows residents a choice in amenities, location, rent, etc. As such, the Staples rental market is underserved. Demand At the present time, unmet housing demand appears to be in the area of quality market rate apartments, senior rental options, three-bedroom apartments and newer properties. Independent senior housing with services and assisted living needs are met by the Lakewood properties. However, an addition of memory care units to the Pines would be a welcomed addition. In the single family market there is a need for affordable lots, patio homes and/or townhomes and home fix-up funds.


LOCATION AND MARKET AREA DEFINITION 4

LOCATION AND MARKET AREA DEFINITION

STUDY AREA DEFINITION The Primary Study Area consists of the area covered by the U.S. postal zip codes of 56479 and 56434. More specifically, the Study Area includes the city of Staples with areas lying in both Todd and Wadena Counties, all or portions of the townships of Staples, Villard, Moran, Fawn Lake, Germania and Bartlett in Todd County and the city and township of Aldrich in Wadena County as well as portions of Poplar, Bullard, Byron, Lyons, Ansel and Thomastown Townhips in Wadena County. This draw area is based on retail, health care, and school districts. It also takes into account other standalone communities which are capable of supporting housing such as Motley, Pillager, Brainerd, Wadena, Randall and Little Falls. Staples should draw residents and workers from this area, but could potentially draw approximately 20% of its growth in population from outside this Study Area. Refer to the map of the Study Area on the following page. Staples is a mature and stable city located on the border of Todd and Wadena Counties in central Minnesota, 30 miles west of Brainerd. The city is positioned at the junction of U.S. Highway 10 and Minnesota Highway 210. Staples offers full city services including retail, financial, medical, and educational facilities. Staples and nearby Motley comprise the Staples-Motley School District #2170. The district office, an elementary school and high school are located in Staples. Sacred Heart School is a private school that offers a Catholic Christian Education for students pre-school through fifth grade. Higher education opportunities are also available in the area through the Central Lakes College; a community and technical college with campuses in Brainerd and Staples. Lakewood Health System, the area’s largest employer, provides medical services for the area. The Staples Economic Development Authority works to attract new businesses by showcasing the various services and benefits the city has to offer. For instance, Staples offers an industrial park and a growing city airport. To aid in future economic growth, city officials are willing to offer special incentives to developing businesses.


LOCATION AND MARKET AREA DEFINITION 5


EMPLOYMENT AND ECONOMY 6

POPULATION AND HOUSEHOLDS POPULATION DATA Population figures used throughout this report are gathered from several sources. These sources include the 2010 Census and estimates and projections from Claritas for 2015 and 2020 and the 2010-2014 American Community Survey 5 Year Ave. Claritas uses several sources in estimating and projecting demographic data. The following sources are included to determine Claritas’ estimates. Χ City and regional planning agencies Χ First Data Solutions (formerly Donnelley Marketing) Χ Equifax Χ ADVO (residential mail delivery) Χ WEFA (an economic forecasting firm) Χ National Association of Realtors Χ National Center for Health Statistics Χ Defense Manpower Data Center Χ U.S. Bureau of the Census Χ U.S. Bureau of Labor Statistics Χ U.S. Bureau of Economic Analysis Χ U.S. Postal Service Table 3-1 indicates the population changes in the Study Area since 2010. Population has decreased, losing 2.2% from 2010 to 2015 with a projected decrease of another 0.6% by the year 2020.

TABLE 3-1

Population Growth Staples Study Area 2010-2020

Cohort

2010

Number

2015

Estimate

2010-15 %

Change

2020

Projection

2015-20%

Change

Total Population 5,683 5,559 -2.2% 5,525 -0.6%

Claritas, March 2016



According to Table 3-2, the largest number and percentage of the population are in the age cohorts of 45 to 54 in 2010 and 55 to 64 in 2015 and 2020. This shows a gradually aging community.

TABLE 3-2 Staples Study Area

2010 - 2020 Population by Age Group

Age 2010 No. 2010 % 2015 No. 2015% 2020 No. 2020 % Total 5,683 5,559 5,525

0 to 4 373 6.56% 370 6.66% 374 6.77%

5 to 9 390 6.86% 365 6.57% 362 6.55% 10 to 14 395 6.95% 377 6.78% 360 6.52%

15 to 17 261 4.59% 229 4.12% 232 4.20%

18 to 20 231 4.06% 211 3.80% 217 3.93%

21 to 24 241 4.24% 271 4.87% 289 5.23% 25 to 34 646 11.37% 629 11.31% 623 11.28%

35 to 44 597 10.51% 605 10.88% 601 10.88%

45 to 54 791 13.92% 660 11.87% 582 10.53%

55 to 64 725 12.76% 746 13.42% 710 12.85% 65 to 74 495 8.71% 557 10.02% 626 11.33%

75 to 84 348 6.12% 343 6.17% 348 6.30%

85+ 190 3.34% 196 3.53% 201 3.64%

Median 40.1 40.4 40.1 Claritas, March 2016



HOUSEHOLD DATA According to Table 3-3, the number of households in the Staples Study Area has decreased by 1.7% between 2010 and 2015, a lesser pace than the population. This would indicate an aging population where one member of an elderly household dies and where grown children move away from home and start their own household. It is projected that the number of households will continue to slowly decrease by 0.2% between 2015 and 2020. At the same time, the household size has continued to decrease, further showing the decline in population.


2010-2020 Household Information

Households

2010 Actual

2015

Estimated

2010-15 % Chg.

2020

Projection

2015-20 % Chg.

Total Households 2,252 2,214 -1.7% 2,209 -0.2%

Ave. Household Size 2.52 2.51 -0.4% 2.50 -0.4%

Claritas, March 2016 HOUSEHOLDS BY OWNER/RENTER Figures compiled from the 2010 Census in Table 3-4 show that 74.6% of the occupied housing units in the Staples Study Area were owner-occupied, while 25.4% were rented. Estimates and projections of households by tenure are not made available for years 2015 and 2020, so the 2015 estimates and 2020 projections are extrapolated using the 2014 owner and renter occupancy rates from the 2014 American Community Survey. This showed a slightly higher home ownership rate at 75.3%.



TABLE 3-4

Staples Study Area Households by Tenure

Year

Total Households

Owner Occupied*

Percent

Renter Occupied*

Percent

2010 2,252 1,680 74.6% 572 25.4%

2014 2,156 1,623 75.3% 533 24.7%

2015 (Est.) 2,214 1,667 75.3% 547 24.7%

2020(Proj.) 2,209 1,663 75.3% 546 24.7% Claritas, March 2016

*2015 and 2020 owner-occupied and renter-occupied estimates are based on the 2010-2014 American Community Survey 5-Year Estimates for the Staples Study Area. The greatest percentage of households is in the Age 45 to 54 segments of the population in 2010 with the greatest cohort in 2015 and 2020 being the Age 55-64 cohort.


2010 - 2020 Households by Age of Householder

Age 2010 No. 2010 % 2015 No. 2015% 2020 No. 2020 % Total 2,252 2,214 2,209

Under 25 116 5.15% 105 4.74% 111 5.02%

25 to 34 325 14.43% 319 14.41% 315 14.26% 35 to 44 328 14.56% 330 14.91% 332 15.03%

45 to 54 443 19.67% 368 16.62% 328 14.85%

55 to 64 437 19.40% 453 20.46% 431 19.51%

65 to 74 295 13.10% 330 14.91% 375 16.98% 75 to 84 203 9.01% 200 9.03% 204 9.23%

85 & over 105 4.66% 109 4.92% 113 5.12%

Median 53.1 54.6 55.4 Claritas, March 2016



According to Table 3-6, the greatest percentage of ownership householders in 2014 within the Staples Study Area was in the Age 45-54 segment of the population, followed closely by the Age 65-75 grouping. The greatest percentage of renters was in the Age 15-25 age group.

TABLE 3-6

City of Staples 2010-14 Tenure by Age of Householder

Owner Occupied

Percent

Renter Occupied

Percent

Age 15 to 24 54 3.3% 117 22.0%

Age 25 to 34 146 9.0% 95 17.8%

Age 35 to 44 216 13.3% 50 9.4%

Age 45 to 54 351 21.6% 54 10.1%

Age 55 to 59 199 12.3% 42 7.9%

Age 60 to 64 158 9.7% 14 2.6%

Age 65 to 74 341 21.0% 79 14.8%

Age 75 to 84 122 7.5% 18 3.4%

Age 85 and over 36 2.2% 64 12.0%

Total 1,623 533 2010-2014, American Community Survey 5-year Average

Table 3-7 shows that in Census year 2010, within the City of Staples, 2-bedroom units were the most common renter-occupied units with 1-bedroom units second. Owner occupied households found 3-bedroom units as the largest percentage followed by 4-bedroom units.



TABLE 3-7 2010 Bedroom Size by Tenure

City of Staples

Occupied Units

Percent

Owner Occupied

Percent

Renter Occupied

Percent

0-Bedroom 26 1.2% 0 0.0% 26 4.9%

1-Bedroom 197 9.1% 58 3.6% 139 26.1%

2-Bedroom 563 26.1% 387 23.8% 176 33.0%

3-Bedroom 753 34.9% 622 38.3% 131 24.6%

4-Bedroom 440 20.4% 415 25.6% 25 4.7%

5+ Bedrooms 177 8.2% 141 8.7% 36 6.8%

Total 2,156 1,623 533 2010-2014, American Community Survey 5-year Average

Table 3-8 provides a breakdown of households by tenure based on the 2010-2014, American Community Survey 5-year Average for the City of Staples. Most renter-occupied households were one-person households, followed by two-person households whereas owner-occupied households had the greatest percentage of two-person households. This again indicates an aging community.

TABLE 3-8 2010-14 Households by Household Size Average

City of Staples

Occupied Units Percent

Owner Occupied Percent

Renter Occupied

Percent

1-Person 659 30.6% 387 23.8% 272 51.0%

2-Persons 827 38.4% 713 43.9% 114 21.4%

3-Persons 266 12.3% 221 13.6% 45 8.4%

4-Persons 186 8.6% 110 6.8% 76 14.3%

5 Persons 149 6.9% 130 8.0% 19 3.6%

6 Persons 48 2.2% 41 2.5% 7 1.3%

7+ Persons 21 1.0% 21 1.3% 0 0.0%

Total 2,156 1,623 533 2010-2014, American Community Survey 5-year Average



HOUSEHOLDS BY INCOME GROUP Table 3-9 provides a breakdown of household incomes for the Staples Study Area from 2000 to 2020. Of all the income brackets, the greatest percentage found in 2000 was households with incomes below $15,000 and in 2015 and 2020 households with incomes in the $50,000 to $74,999 category.


Household Income Distribution

2000 2015 2020

Household Income No. % No. % No. %

Total 2,202 2,214 2,209

Less than $15,000 508 23.07% 405 18.29% 371 16.79%

$15,000 to $24,999 407 18.48% 347 15.67% 307 13.90%

$25,000 to $34,999 341 15.49% 253 11.43% 253 11.45%

$35,000 to $49,999 392 17.80% 313 14.14% 301 13.63%

$50,000 to $74,999 357 16.21% 417 18.83% 386 17.47%

$75,000 to $99,999 111 5.04% 210 9.49% 248 11.23%

$100,00 0 to $124,999 37 1.68% 110 4.97% 133 6.02%

$125,000 to $149,999 20 0.91% 70 3.16% 81 3.67%

$150,000 to $199,999 24 1.09% 56 2.53% 76 3.44%

$200,000 to $249,999 2 0.09% 24 1.08% 32 1.45%

$250,000 to $499,999 2 0.09% 9 0.41% 19 0.86%

$500,000 and more 1 0.05% 0 0.00% 2 0.09%

Average Household Income $37,962 $52,138 $58,291

Median Household Income $30,455 $39,888 $43,646 Claritas, March 2016

Table 3-10 on the following page identifies that the greatest percentage of owner-occupied households had incomes in the range of $50,000 to $74,999, with the greatest percentage of renters being in the $35,000 to $49,999 income bracket.




2013 Household Income by Tenure

Owner Occupied

Percent

Renter Occupied

Percent

Less than $5,000 17 1.0% 51 9.6%

$5,000 to $9,999 42 2.6% 58 10.9%

$10,000 to $14,999 64 3.9% 67 12.6%

$15,000 to $19,999 110 6.7% 88 16.5%

$20,000 to $24,999 94 5.8% 28 5.3%

$25,000 to $34,999 204 12.6% 68 12.8%

$35,000 to $49,999 290 17.9% 94 17.6%

$50,000 to $74,999 337 20.8% 58 10.9%

$75,000 to $99,999 198 12.2% 6 1.1%

$100,000 to $149,999 200 12.3% 15 2.8%

$150,000 or more 66 4.1% 0 0.0%

Total 1,623 533 2010-2014, American Community Survey 5-year Average

The Federal Government classifies 20% of any housing units constructed prior to 1939, those with incomplete plumbing and those with more than one person per room as substandard housing which should be replaced. Additionally, mobile homes are considered temporary housing. Table 3-11 identifies 248 owner-occupied and 97 renter occupied housing units as substandard and temporary housing units.

Table 3-11 City of Staples

2010-2014 Substandard Housing Units by Tenure

20% Built prior to 1939

Incomplete Plumbing

More than One Occupant

Per Room

Mobile Home or Trailer Total

Owner 82 31 27 108 248

Renter 16 9 14 58 97 2010-2014, American Community Survey 5-year Average



EMPLOYMENT AND ECONOMY The Staples area has a number of sizable employers with some expecting significant growth over the next few years. The largest employer is the Lakewood Health System followed by Trident Seafood in Motley, Central Lakes College and the Staples-Motley School District, all employing 200 or more employees. Specific employment data on the City of Staples, Staples Study Area, Todd County, Region 5 EDR and the Northwest Planning Region can be found in the ensuing tables. Economic Data as supplied by the Minnesota Department of Employment and Economic Development (DEED), provides a variety of employment data segregated by a number of geographic groupings. Such segmentation includes the Region 5 Economic Development Region of North Central Minnesota which is comprised of Cass, Crow Wing, Morrison, Todd and Wadena Counties. This planning region is part of a larger Economic Development Region representing all of Northwestern Minnesota represented by the counties of Becker, Beltrami, Cass, Clay, Clearwater, Crow Wing, Douglas, Grant, Hubbard, Kittson, Lake of the Woods, Mahnomen, Marshall, Morrison, Norman, Otter Tail, Pennington, Polk, Pope, Red Lake, Roseau, Stevens, Todd, Traverse, Wadena and Wilkin. The following map identifies the Northwest Region location as well as the Economic Development Regions of which Todd County is represented in Region 5.

Planning Areas Economic Development Regions



2014 EMPLOYMENT DATA Table 4-1 shows the number of employed individuals by occupation in the Staples Study Area in 2014. The major occupation is Educational, health care and social assistance at 33.4% followed by Manufacturing at 14.8%. This is also supported by the make-up of the largest area employers.


2010-14 Employment Data Persons 16 Years and Over

Employed by Occupation No. %

Agriculture, forestry, fishing & mining 82 3.6%

Construction 217 9.6%

Manufacturing 337 14.8%

Wholesale trade 37 1.6%

Retail trade 229 10.1%

Transportation and warehousing 131 5.8%

Information 27 1.2%

Finance, insurance and real estate 59 2.6%

Professional, scientific, management and administration 92 4.1%

Educational, health care and social assistance 758 33.4%

Arts, entertainment, recreation, lodging and food service 139 6.1%

Other services 111 4.9%

Public administration 52 2.9%

2010-2014, American Community Survey 5-year Average



Table 4-2 indicates that between 2010 and 2014 approximately 44% of the work force traveled less than 15 minutes to work indicating 56% of the Study Area population left the area for employment most likely in the Wadena, Little Falls, Brainerd/Baxter and St. Cloud Areas. Several also work in Motley which is only 7 miles away and would be included in the travel time under 15 minutes, showing that not all persons who travel less than 15 minutes work only in Staples.


2010-14 Employment Travel

Transport. to Work

No.

%

Travel time to Work

No.

%

Household Vehicles

No.

%

Drive alone 1,814 81.4 under 15 mins. 940 44.1 0 available 75 3.4

Car pool 231 10.4 15-29 mins. 493 23.1 1 available 353 15.8

Pub Trans 23 1.0 30-44 mins. 412 19.3 2 available 808 36.2

All other 161 7.2 45+ mins. 2871 13.5 3+ available 993 44.5 2010-2014, American Community Survey 5-year Average

MAJOR EMPLOYMENT DATA The labor force across Todd County has been growing and several Staples businesses are in growth mode. In an effort to get an accurate picture of how the local businesses are doing, we contacted 9 of the largest employers in Staples and the two largest employers in Motley. Nine of the 11 were willing to provide a view of their growth and wages. We also spoke to some of the smaller employers that are experiencing growth and a total of fourteen shared their business information. Of the survey participants, 25% said they have grown over the past two years with the remaining businesses indicating they have remained the same size. Fortunately none have downsized. When addressing growth in the future, 43% indicated they expect to grow over the next two years with the other 57% expecting to stay the same. Once again, none indicated that they expect to downsize. When looking at the economic climate of the area, 7% feel the economic climate was excellent, 36% feel the economic climate is good, 50% feel it is fair and 7% feel it is poor. The previous information is similar to that gathered through various discussions with other community leaders. It appears that most of the jobs generate an annual income in the range of $27,000 to $33,000 ($13-$16 per hour), with the average from the nine that provided wage information being $16.88.



TABLE 4-3 Area Major Employers

Table 4-4, details the projected Central Minnesota Regional Occupational Outlook between the years 2010 and 2020. According to this table, the occupation with the greatest projected growth in numbers and percentage is Personal Care and Service with 2,687 and 20.2%.

Company Industry Employees Lakewood Health System Healthcare 850

Central Lakes College Education 287

Staples-Motley Schools Education 200

National Joint Powers Alliance Contract Purchasing 100

Stern Rubber Rubber Coating 85

3M Parts Fabrication Services 62

First International Bank & Trust Financial Services 35

MVC Tooling & Engineering Plastic Injection Molding 24

Twin City Optical Eyewear Manufacturer 19

Morey’s Fish Food Processing 140 Trident Seafood Food Processing 350



Table 4-4 Northwest Minnesota Area Employment Projections by Occupation 2012-2022

Industry 2012 Estimated

Employment 2022 Projected

Employment 2012-2022

Numeric Change 2012-2022

Percent Change

Total, All Occupations 254,122 269,121 14,999 5.9 Management 22,891 23,080 189 0.8 Business and Financial 7,949 8,703 754 9.5

Computer and Mathematical 2,384 2,569 185 7.8

Architecture and Engineering 3,402 3,622 220 6.5 Life, Physical, and Social Science 1,888 1,979 91 4.8 Community and Social Services 6,116 6,788 672 11 Legal 1,278 1,335 57 4.5 Education, Training, and Library 15,853 15,751 -102 -0.6 Arts, Design, Entertainment, Sports, and Media 3,987 4,155 168 4.2 Healthcare Practitioners and Technical 12,866 14,615 1,749 13.6 Healthcare Support 9,763 10,929 1,166 11.9 Protective Service 4,629 4,863 234 5.1 Food Preparation and Serving Related 20,801 21,092 291 1.4 Building & Grounds Cleaning & Maintenance 10,925 11,771 846 7.7 Personal Care and Service 13,284 15,971 2,687 20.2 Sales and Related 23,356 24,787 1,431 6.1 Office and Administrative Support 31,454 31,939 485 1.5 Farming, Fishing, and Forestry 3,422 3,530 108 3.2 Construction and Extraction 11,719 13,361 1,642 14 Installation, Maintenance, and Repair 9,619 10,256 637 6.6 Production 20,209 21,030 821 4.1 Transportation and Material Moving 16,327 16,995 668 4.1

Source: Minnesota Department of Employment and Economic Development March 2016



Below is a listing of wages for representative occupations in Economic Development Region for the first quarter of 2015 as supplied by the Minnesota Department of Employment and Economic Development. Region 5 consists of Cass, Crow Wing, Morrison, Todd and Wadena Counties.

Table 4-5 St. Cloud MSA Representative Median Wages

First Quarter 2015

Occupation or Job Title

Median Wage

Occupation or Job Title

Median Wage

Management $35.29 Protective Services $19.38

Life, Physical Science $25.55 Food Preparation $9.08

Computer $30.53 Building and Grounds $11.69

Architecture & Engineering

$29.18 Personal Care $9.72

Business & Financial $26.39 Sales $10.37

Community and Social Services

$19.43 Office and Administrative Support

$14.56

Legal $27.49 Farming & Forestry $11.27

Education $22.04 Construction $17.97

Arts, Design, Entertain. $17.46 Production $14.61

Healthcare Practitioner $26.57 Transportation $13.58 Source: Minnesota Department of Employment and Economic Development

February 2016



EMPLOYMENT AND UNEMPLOYMENT DATA The State of Minnesota only tracks employment and unemployment data for the larger cities across the region and state. Since Staples does not fall into that category, Table 4-6 shows employment and unemployment data for all of Todd County with Table 4-7 showing Wadena County. Following a peak in 2009, Todd County’s average unemployment rate has been on a steady decline dropping from 8.9% to the 2015 rate of 4.2%. The number of employed has fluctuated over the years but has been on a steady increase since 2008, and the number of unemployed is at the lowest level since 2005. The unemployment rate of Todd County has consistently been slightly higher than the State of Minnesota rate but about two percent lower than the US rate. While higher than Todd County, Wadena County is also at its lowest level since 2009, with the highest number employed since 2006 and the lowest number of unemployed since 2006

TABLE 4-6 Employment and Unemployment Data

Todd County 2005-2015

Year

Todd County

State of MN % Unemp.

U.S. % Unemp.

Number Employed

Number Unemployed

Percent Unemployed

2015 13,111 578 4.2 3.7 5.3

2014 12,324 588 4.6 4.1 6.2

2013 12,199 683 5.3 5.1 7.4

2012 12,315 755 5.8 5.2 7.5

2011 12,386 902 6.8 6.5 8.9

2010 12,471 1,048 7.8 7.3 9.6

2009 11,471 1,117 8.9 8.1 9.3

2008 11,396 798 6.5 5.4 5.8

2007 11,565 663 5.4 4.6 4.6

2006 11,713 638 5.2 4.0 4.6

2005 11,819 629 5.1 4.2 5.1 Source: Minnesota Department of Employment and Economic Development

February 2016



TABLE 4-7 Employment and Unemployment Data

Wadena County 2005-2015

Year

Wadena County

State of MN % Unemp.

U.S. % Unemp.

Number Employed

Number Unemployed

Percent Unemployed

2015 5,905 385 6.1 3.7 5.3

2014 5,781 377 6.1 4.1 6.2

2013 5,750 427 6.9 5.1 7.4

2012 5,762 483 7.7 5.2 7.5

2011 5,746 567 9.0 6.5 8.9

2010 5,822 661 10.2 7.3 9.6

2009 5,845 714 10.9 8.1 9.3

2008 5,975 531 8.2 5.4 5.8

2007 5,805 466 7.4 4.6 4.6

2006 5,865 428 6.8 4.0 4.6

2005 5,993 431 6.7 4.2 5.1 Source: Minnesota Department of Employment and Economic Development

March 2016 DISCUSSION OF ECONOMIC CONDITIONS Following discussions with community leaders, government officials, Realtors, business owners and apartment owners, the overall feeling is that the economy in Staples is very good with nearly half of the major employers expecting to grow over the next two years. The majority of larger local employers are service in nature with a few manufacturers and food processors. It was felt that people that live in Staples but travel out of town for employment tend to gravitate to Brainerd, Little Falls, Wadena and even the St. Cloud area. There are however two large employers located within 7 miles that also employ a number of people from Staples; Morey’s and Trident which both are large seafood processors. While it appears from discussions with the major employers that the lack of affordable housing has not been a hindrance to their hiring of quality employees, they did state they felt there was a need for newer townhomes and single family homes.



From an economic development perspective, the Staples Economic Development Authority works hard to attract new businesses and assist existing businesses with their expansion needs, utilizing various financing and incentive programs such as a business loan program, small cities development forgivable loan program, building incentives, commercial development sites available, industrial development sites available, manufacturing rental, entrepreneur technical assistance, tax increment financing and they have a great working relationship with DEED, to offer state financing and tax incentive programs. Stern Rubber was recently purchased by a Chinese company and is planning a 50,000 sf, phase 1 expansion after just completing a 12,000 sf expansion. They anticipate adding over 100 staff in the next few years. The National Joint Powers Alliance is just completing a $5 million expansion and is currently hiring up to 75 addition staff. Lakewood Health System is always expanding and adding new staff with plans for a $15 million clinic expansion followed by the hiring of 10 new practitioners and up to 80 support staff and both Morey’s and Trident are constantly looking for additional staff.


EXISTING RENTAL HOUSING STOCK 23

SINGLE FAMILY HOME MARKET For Todd and Wadena Counties, the Minnesota Housing Finance Agency has determined $258,600 to be the new and existing housing cost limit for MHFA Mortgage Loan Programs such as the Minnesota Mortgage Program (MMP), Minnesota City Participation Program (MCPP) or First Time Home Buyer Program. The median (middle) sale price of homes sold in 2015 in every community in Todd County was lower than the cost limits set by MHFA to qualify for their programs. In fact, in the Todd County portion of the city, in 2015, 23 homes were sold with a median price of $63,500. That is much lower than the median value of all home sales in the Staples zip code area as can be seen below. On a county-wide basis, Staples median home value fell pretty much in the middle of the pack. However, overall, Staples had the second highest number of home sales in all of the county.

Community

Median Home

Sale Value

Range

of Sales

Number

of Sales

Bertha $41,675 $11,850-$71,500 2

Browerville $55.400 $20,300-$184,000 8

Burtrum $23,047 $23,047 1

Clarissa $49,416 $20,000-$140,668 9

Eagle Bend $85,250 $48,000-$122,500 2

Grey Eagle $85,450 $34,000-$158,000 6

Hewitt $59,090 $56,300-$61,880 2

Long Prairie $82,421 $57,700-$179,725 34

Osakis $60,012 $36,500-$150,000 5

Staples $63,500 $20,900-$120,000 23

West Union $64,250 $64,250 1



The table below shows the home sales by number and median price across the Staples zip code area from 2009 to 2014 with the majority of sales being below $100,000 in value the past four years. The following table identifies the value of all homes in Staples in 2014. Based on the assessed valuation as prepared by the Todd and Wadena County Assessors, we have made the following approximations based on the property values as determined by site visits of the Assessor. Keep in mind that we did not undertake a windshield survey, so the conditions are assumed based only on the structure’s value. This information can be used to apply for Community Block Grants and Home Fix-up Funds. Centered solely on assessed valuation, it is assumed that all homes below $15,000 and mobile homes below $3,500 (72 or 6.8%) are dilapidated and should be replaced; homes valued between $15,000 and $25,000 and all remaining mobile homes (103 or 9.8%) require major repairs; homes between $25,000 and $55,000 (363 or 34.5%) require minor repairs and those valued over $55,000 (525 or 50.0%) are considered sound. Following is a breakdown of the housing values. As can be noted, the Wadena County portion of the city has the newer and more valuable homes in the community. This was also the latest area to be developed as most development moved north due to the lack of an above grade crossing of the railroad tracks until the last few years. In fact, 77.3% of homes located in the Wadena County area of the city have valuations greater than $95,000 where the Todd County portion only has 9.9% of their properties valued greater than $95,000. Additionally, the northern section had several homes valued in excess of $200,000 where the Todd County portion only had one.



05

101520253035404550

Dilapidated Major Repair Minor Repair Sound

TABLE 5-2 Mobile Home Valuation and Condition

Value City of Staples

Less than $1,000 9

$1,000-$2,499 9

$2,500-$3,499 16

$3,500-$5,999 6

$6,000-$9,999 3

$10,000-$11,999 4

Total 47



TABLE 5-3 Housing Valuation and Condition

Value City of Staples (Todd County)

City of Staples (Wadena County)

City of Staples Total

Less than $15,000 36 2 38

$15,000-$24,999 90 6 96

$25,000-$34,999 85 3 88

$35,000-$44,999 131 6 137

$45,000-$54,999 136 2 138

$55,000-$64,999 101 4 105

$65,000-$74,999 82 4 86

$75,000-$84,999 52 7 59

$85,000-$94,999 43 8 51

$95,000-$104,999 30 18 48

$105,000-$124,999 32 36 68

$125,000-149,999 14 34 48

$150,000 or more 5 55 60

Total 819 185 1,005 Local Perspective of the Housing Market

As of March 2016, there were 72 single family homes for sale in the Staples zip code area. The median price is approximately $119,000 with a range between $10,000 and $479,900. More precisely, there are 10 homes for sale below $50,000; 16 between $50,000 and $99,999; 20 between $100,000 and $149,999; 6 between $150,000 and $199,999; 5 between $200,000 and $249,999; 4 between $250,000 and $299,999; 7 between $300,000 and $399,999 and 1 over $400,000. It is estimated that sellers are receiving approximately 90% of their asking price with homes located within the city of Staples selling within approximately 200 days and the majority of buyers are repeat buyers rather than first-time buyers.



The majority of city lots are selling for $10,000 - $25,000 with fewer than a dozen available. As a result, there are few new homes being constructed in Staples and if they are built they are primarily in the range of $80,000 to $130,000. There are a few lots available in the Valley View Development and a few larger parcels available outside the city. Comments from business owners and Realtors indicated a need for townhomes and newer housing to attract employees. Unfortunately, with the very low housing valuation, it is difficult to build a new home and have it appraise for as much as it cost to build it. This not only makes it difficult to sell at a later date but also makes it difficult to obtain financing. The good news however is that Roach Development is planning to construct 32 townhomes north of the Freshwater Education building between 5th St and 8th St. If this is similar to other recent Roach townhome developments, they will be rental properties with two-bedroom units being 1000 sf with rents of $800 and three-bedroom units being 1300 sf with rents of $900. DEMAND FOR MARKET RATE SINGLE FAMILY HOMES TO PURCHASE If we look at growth of single family units from the 2010 Census and 2015 and 2020 Claritas household estimates and apply the 2014 American Community Survey 5-year Average owner-occupied rate to the estimates, we can estimate an annual growth rate. The owner-occupied rate for the Staples Study Area is applied to the estimated household growth to determine the number of additional owner-occupied households required. Based on these demographic projections and taking the projected growth as reported by area businesses, there is no need for additional housing to meet household growth.

TABLE 5-3 Market Rate Single Family Owner-Occupied Demand by Study Area

2010-2020

Study Area (Ownership rate)

2010 Owner-

occupied

Estimated 2015

Owner-occupied

2010-2015

Change

Projected 2020

Owner-occupied

Projected Demand

from 2015 to 2020

Staples Study Area (75.3%) 1,680 1,667 -13 1,663 -4 Source: Census of Population and Housing Claritas, March 2016 Single Family First Time Home Buyer Housing Demand Special notes pertaining to the following tables: Income ranges are based upon 95% of County Median Income which equates to the following:



Household Size

Todd/Wadena County Income Limit

1-2 persons $77,400

3+ persons $89,000 The maximum purchase price of the home can be $258,600. While some household’s income qualify for affordable housing, there are obstacles to affordability other than income. Some of these obstacles are: Lifestyle choice with accumulated debt Poor credit rating Lack of down payment Shortage of available units in price range The 1995 Housing Affordability Study by the U.S. Census found families who could not afford a modestly priced house, could not afford the house because: 33.0% of families had a cash problem only 14.5% of families had an income problem only 55.7% of families had both a cash and income problem Table 5-4 shows that in 2015 the Staples Study Area has 68 to 118 non-homeowner households that would income qualify to live in a moderate single family home depending on how many would meet lender requirements.

1-2 Person

3+ Person

Total

Income limit $77,400 $89,000

Households under income limit 669 525

Times Household mix 393 216 58.8% 41.2% 100.0%

Minus Staples ownership rate (78.0%) 275 148

Remaining eligible households 118 68

Assuming 50% meet lender requirements 59 34

Assuming 25% meet lender requirements 30 17



What we find relative to single family housing need is newer housing to attract new hires to the area as well as meet the needs of area residents wishing to move-up in the market place. We also found that there are a number of substandard and temporary housing units that should be replaced by new housing. Plus, with the low housing valuations, it is assumed that a strong program for home upgrades and repairs would be appropriate.



EXISTING RENTAL HOUSING STOCK BUILDING PERMITS Studying the number of building permits for a given area can help identify the current building trends for that area. Table 6-1 details the number of new construction building permits issued in the city of Staples during the years 2005-2014. The 2014 renter occupancy rate for the Staples Study Area was 75.3% and the multifamily construction rate within the city of Staples was 0.0% over the past eleven years as indicated below. The low rental property vacancy rate shows the need for additional rental units as the Study Area has been lagging behind. Additionally, with the old age of the rental market and a visual inspection of many of the buildings, the market is in need of upgraded rental properties.

TABLE 6-1 Building Permits 2005-2014

City of Staples

Source: City of Staples, March 2016 Censtat, US Census Bureau, March 2016

City of Staples

Year

Single Family Units

Multiple Family Units

Total Number of Units

2005 9 0 9

2006 6 0 6

2007 5 0 5

2008 2 0 2

2009 1 0 1

2010 1 0 1

2011 1 0 1

2012 2 0 2

2013 2 0 2

2014 2 0 2

2015 1 0 1

Total 32 0 32

An. Ave. 3 0 3



APARTMENTS There is a mixed variety of apartment facilities in the Staples area, with half of the units being over 40 years old. The newest buildings are 12 and 13 years old. Following is a detailed breakout of all current apartment rentals as well as demand tables for each form of rental housing. Of the buildings surveyed, only three had any vacancies with a total of 6 vacancies. Five of the vacancies were in senior-housing-with-services buildings, the other was in a low income unit. Overall, the six vacancies only represent a 2.1% vacancy rate. A healthy rental market should have a 5% vacancy rate which allows residents a choice in amenities, location, rent, etc. As such, the Staples rental market is underserved. Below is a table identifying the average rent by unit size. The highest rents are at Lakewood Pines and Lakewood Manor due to services being provided and 24 hour staffing. While three of the buildings are government subsidized, the rates listed below are based on market rents an individual would pay without the subsidy.

Name Average Studio rent

Average 1-bd rent

Average 2-bd rent

Average 3-bd rent

Average 4-bd rent

Lakewood Pines $600 $850 $1,000 --- ---

Lakewood Manor $600 $775 $1,000 --- ---

Pine Crest TH (TC) --- --- $665 $735 ---

Pine Ave. TH (HUD) --- --- $696 $740 ---

Staples Hi-Rise (HUD) --- $550 --- --- ---

Northside Apts. (RD) --- $465 $485 --- ---

Wirth Apts. --- $560 --- --- ---

Town Apts. --- --- $525 --- ---

Stapleton Apts. --- $450 $500 --- ---

Ramsey Apts. --- --- $500 --- ---

Student Housing --- --- $575 --- $700

Staples Square (TC) --- $650 $800 --- ---

TC – Tax Credit RD – Rural Development HUD - HUD



Aggregate Analysis of Apartments

Studio 1-bed 2-bed 3-bed 4-bed

Number of Units 5 131 84 10 11

Average Size (Sq. Ft.) 234 sf 602 sf 887 sf 1368 sf n/a

Average Rent per Month $600 $615 $675 $738 $700

Vacancies --- 5 1 --- ---

Waiting List --- 29 14 4 ---

LIHTC --- 7 3 --- ---

Rural Development/HUD --- 60 27 7 ---



TABLE 8-1 Apartments in Staples Study Area

Name

No. of units/

Bed mix

Rent

Vacancy/

Wait

Comments

SENIOR HOUSING Lakewood Pines 1702 Airport Road NW Independent and Assisted Living

11 - 1 bed (regular) 18 - 1 bed (deluxe)

4 - 1 bed w/ den 8 - 2 bed

$750 $800

$950-975 $1000

4 -vac.

Opened in 2000. Part of Lakewood Health System. All utilities included, elevator, 12 garages at $40/month, and additional costs for meals, medication reminders, laundry, and housekeeping. 14 units are assisted living.

Lakewood Manor 225 North 5th Street Independent and Assisted Living

5 - studio

8 - 1 bed (regular) 4 - 1 bed (deluxe)

4 – 2 bed

$680 $850

$1,025

1 vac.

Two buildings originally built in 1918, 1923m and now owned by Lakewood Health System. All utilities included, additional costs for meals, medication reminders, laundry, and housekeeping. 14 units are assisted living

TAX CREDIT

Staples Square Apts. 205 Airview Drive (elderly)

10 – 1 bed 2 – 2 bed

60% CMI $635 $800

1 vac

Built in 2004, units have dishwashers and the building has a community room, laundry room and an emergency response system. Garages are included.

Pine Crest Townhomes 1702 8th Street NE (general occupancy)

8 - 2 bed 2 - 3 bed

60% CMI

2 vac.

Built in 1999. Attached garage included, central A/C, washer/dryer hook-ups, playground.

SUBSIDIZED

Pine Avenue Townhomes 11 RR 2, Box 110 (general occupancy)

12 - 2 bed 1 - 2 bed 7 - 3 bed

30% of income

0 vac. W.L.- 17

names

Built in 1982. Wall A/C, HUD development, 10 garages. Market Rate Prices: $734, $769, $803

Staples Hi-Rise 615 4th Street NE (general occupancy)

60 - 1 bed

30% of income

0 vac. 20 on

waiting list

Built in 1970 and remodeled in 2014. Dining & community room, all uti1itles inc., 24 garages at $30/month. Market Rate $550

Staples Northside Apts. 930 & 936 6th Street NE (general occupancy)

2 - 1 bed 14 - 2 bed

30% of income

1 vac.

Built in late 1970s, Rural Development, laundry in each building, no a/c provided.

MARKET RATE

Wirth Apartments 603 Autumn NE & 1002 6th Street NE. (general occupancy)

8 - 1 bed

$560

+ elect.

0 vac.

Built in 2003, units have central A/C, a gas fireplace and an attached garage.



Name

No. of units/

Bed mix

Rent

Vacancy/

Wait

Comments Town Apartments 1020 4th Street NE

4 - 2 bed $525 + elect.

0 vac. Built in 1974. Garage included in rent, wall A/C.

Stapleton Apartments 825 4th Street NE

1 - 1 bed 23 - 2 bed

$450 $500

+ elect.

0 vac.

Built in early 1970's. Laundry first floor, wall A/C, 10 garages at $35/month.

Ramsey Apartments 919 5th Street NE

8 - 2 bed

$500

+ elect.

0 vac.

Built in 1975. Wall A/C, laundry room, 5 garages at $35/month

Staples Student Housing and Staples Housing 500 Warner Road

1 - 2 bed 11 - 4 bed

$575

$675-725 + elect.

0 vac.

Built in 1991. Wall A/C, laundry room, cable included in rent.

Following are detailed comparisons of each property with a photo, followed by a map of their locations. Below is a picture of one of Roach’s recent townhome rental developments that opened last year in Upsala to show what may be coming into the market. Rents are $800 for two-bedroom units and $900 for three-bedroom units.



Property 1

Name: Lakewood Pines

Address: 1702 Airport Road NW, Staples, MN 56479

Contact Person: Carrie Phone: 218-894-4460

Year Built: 2000

Development: Elderly Senior Housing with Services Serving Special Needs? Yes

Does the comparable receive any subsidies (rental or operating assistance)? No

If so, please describe:

Description of Development Amenities: Stove, refrigerator, air conditioning, laundry facility in each wing, indoor refuse removal, elevator, dining room, 12 garages with door opener at $40/month, city transportation 2-3 times a week, cost for meals/laundry services, medication reminders. Also has controlled access. All utilities are included in the rent. The building also has a small studio unit and a hotel unit which are furnished and rented on a nightly basis. Fourteen of the units are designated as assisted living units where private pay residents pay the base rent plus a $600 per month assisted living fee. Other services are available on an ala carte basis.

Vacancies: 3 – regular one-bedroom units and 1 deluxe one-bedroom unit

Wait list: small # of Bedrooms # of Units Size (Sq. Ft.) Rent per Month Utilities* Gross Rent Parking

1 br (small) 11 500 $750 Inc $750 $40

1 br (large) 18 610 $800 Inc $800 $40

1 br w/ den 4 720 $950 Inc $950 $40

2 br 8 810 $1000 Inc $1000 $40

Total 41



Property 2

Name: Lakewood Manor

Address: 222 5th St NE., Staples, MN 56479

Contact Person: Carrie Phone: 218-894-2124

Year Built: 1918 and 1923, adjoined in 1955 with an addition in1962

Development: Elderly Serving Special Needs? No



Description of Development Amenities: Individual units have refrigerators, ranges and central air conditioning. There is a community room, dining room, library, activity room, lounges, beauty/barber shop, elevator, emergency response system, guest room ($50/nt) and patios. An activity program, housekeeping, linen service, and transportation are also provided and meals are available for an additional charge. All utilities except cable are included in the rent. Fourteen of the units are designated as assisted living units where private pay residents pay the base rent plus a $600 per month assisted living fee. Other services are available on an ala carte basis.

Vacancies: 1 – one-bedroom deluxe unit

Wait list: short # of Bedrooms # of Units Size (Sq. Ft.) Rent per Month Utilities Gross Rent Parking

Studio 5 234 $600 inc $600 $40

1 16 518-579 $750-$800 inc $750-$800 $40

2 4 500 $1000 inc $1000 $40

Total 25



Property 3

Name: Pine Crest Townhomes

Address: 1708 8th St NE, Staples, MN 56479

Contact Person: Shiela Phone: 218-824-8403

Year Built: 1999

Development: General Occupancy Serving Special Needs? No

Does the comparable receive any subsidies (rental or operating assistance)? Yes

If so, please describe: 10 units are Section 42 LIHTC

Description of Development Amenities: Stove, refrigerator, dishwasher, central A/C, washer and dryer hook-ups, attached garage and a playground.

Vacancies: none

Wait list: 15 waiting

# of Bedrooms # of Units Size (Sq. Ft.) Rent per Month Utilities* Gross Rent Parking

2 bed 7 1,080 $665 $81 $746 inc 3 bed 3 1,368 $735 $99 $834 inc

Total

* Utility amounts are allowances.



Property 4

Name: Pine Ave. Townhomes

Address: 11 RR2, Box 110, Staples, MN 56479

Contact Person: Sandy Phone: 715-718-0449

Year Built: 1982



If so, please describe: HUD, rent based on 30% of income

Description of Development Amenities: Stove. Refrigerator, air conditioning, laundry and 10 garages,

Vacancies: none

Wait list: 12 waiting # of Bedrooms # of Units Size (Sq. Ft.) Rent per Month Utilities* Gross Rent Parking

2 bed 13 n/a $684-707 $117 $810 $20 & lot

3 bed 7 n/a $740 $154 $903 $20 & lot

Total 20

* Utility amounts are allowances and rents are market rate rents.



Property 5

Name: Staples Hi-Rise

Address: 614 4th Ave NW, Staples, MN 56479

Contact Person: Bobbie Phone: 218-894-2301

Year Built: 1970

Development: Family and Elderly/Disabled Serving Special Needs? No


If so, please describe: HUD

Description of Development Amenities: Stove, refrigerator, air conditioning, 3 laundry rooms, dining room, community room and 24 garages available for $30/month.

Vacancies: none

Wait list: 20 # of Bedrooms # of Units Size (Sq. Ft.) Rent per Month Utilities* Gross Rent Parking

1 bed 60 n/a $550 $50 $600 $30 & lot

Total

* Utility amounts are estimates and rents are market rate rents.



Property 6

Name: Staples Northside Apts.

Address: 930 & 936 6th St NE, Staples, MN 56479

Contact Person: David Simon Phone: 218-894-1194

Year Built: late 1970s



If so, please describe: USDA Rural Development

Description of Development Amenities: Stove, refrigerator, air conditioning, laundry room and plug-ins. The complex includes 2- 8 unit buildings.

Vacancies: 1 – two-bedroom

Wait list: none # of Bedrooms # of Units Size (Sq. Ft.) Rent per Month Utilities* Gross Rent Parking

1 bed 2 n/a $465 $60 $525 lot

2 bed 14 n/a $485 $80 $565 lot

Total 16




Property 7

Name: Wirth Apts.

Address: 603 Autumn NE and 1002 6th St NE, Staples, MN 56479

Contact Person: Scott Wirth Phone: 952-393-2069

Year Built: 2003




Description of Development Amenities: Stove, refrigerator, air conditioning, fire place, laundry and an attached garage

Vacancies: none


1 bed 8 n/a $560 $45 $605 inc

Total 8

* Utility amounts are estimates.



Property 8

Name: Town Apartments

Address: 1020 4th St NE, Staples, MN 56479

Contact Person: Owner Phone: 218-821-9211

Year Built: 1974




Description of Development Amenities: Stove. Refrigerator, air conditioning and garages

Vacancies: none


2 bed 4 900 $525 $50 $575 garage

Total




Property 9

Name: Stapleton Apartment

Address: 825 4th St, NE, Staples, MN 56479

Contact Person: Pete Phone: 218- 894-2508

Year Built: 1970s




Description of Development Amenities: Stove, refrigerator, air conditioning, balconies, laundry room, 10 garages for $35.

Vacancies: none


1 bed 1 600 $450 $35 $485 $35 & lot

2 bed 23 750 $500 $45 $545 $35 & lot

Total 24




Property 10

Name: Ramsey Apartments

Address: 919 5th St NE. Staples, MN 56479

Contact Person: Carroll Phone: 218-894-1532

Year Built: 1975




Description of Development Amenities: Stove, refrigerator, wall A/C, laundry room, plug-ins and 5 garages for $35/mo.

Vacancies: none


2 bed 8 n/a $500 $35 $535 $35 & lot

Total 8




Property 11

Name: Staples Student Housing

Address: 500 Warner Road, Staples, MN 56479

Contact Person: Richard Sobania Phone: 218-894-3108

Year Built: 1991




Description of Development Amenities: Stove, refrigerator, wall A/C, cable tv included in rent, laundry room. Two buildings- six family units, six student housing units. Vacancies:


2 bed 1 n/a $575 $45 $620 lot 4 bed 12 n/a $675-$725 $65 $740-$790 lot

Total 13




Property 12

Name: Staples Square Apartments

Address: 205 Airview Drive., Staples, MN 56479

Contact Person: Norm Phone: 952-935-0359

Year Built: 2004

Development: Elderly Serving Special Needs? No


If so, please describe: Section 42 and USDA Rural Development

Description of Development Amenities: Individual units have refrigerators, ranges, dishwashers and through wall air conditioners. Coin operated laundry facilities are also available and garages are included in the rent. There is also a community room.

Vacancies: 1 two-bedroom unit


1 bed 10 650 $740 $35 $540 inc

2 bed 2 800 $845 $40 $565 inc

Total 12





HOUSING DEMAND 48

HOUSING DEMAND A 5.0% rental vacancy rate is considered normal for a healthy rental market. The 2010-2014 American Community Survey identified a 8.1% rental vacancy rate in the city of Staples in 2014 while the rental vacancy rate for Todd County was 5.8%. The vacancy rate of all surveyed properties in our study was only 2.1% upon surveying the market. The vacancies reported in 2014 could very well be in substandard housing units due to the large number of substandard and temporary housing units identified within the Study Area. Movership is another factor to consider when looking at potential demand for a project. According to the American Housing Survey for the United States: 2009 conducted by the U.S. Census Bureau, 15.0% of all households moved in the previous year. Rental Housing Demand The following section depicts the housing demand for the following housing types: Fair Market Rents (Workforce Housing) General Occupancy Very Low-income Rental

Age 55+ Very Low-income Rental General Occupancy Low-income Rental

Age 55+ Low-income Rental General Occupancy Moderate Income Rental

Age 55+ Moderate Income Rental General Occupancy High End Rental Age 55+ High End Rental

Single Family First Time Home buyers Single Family Moderate Income

Congregate Housing Assisted Living Housing Memory Care Housing The different sections of housing demand is broken down by various income levels such as HUD identified Fair Market Rents; those with less than 30% of area median income, 30% to 60% of area median income, 60% to 80% of area median income, and over 80% of area median income. These ranges were chosen because they best reflect income ranges used by HUD and other state and federal funding programs. Not every program falls exactly within these income ranges but the demand tables are useful to give an educated guess as to what demand is for a particular income range. While these demand tables are a useful tool in analyzing housing demand for an area, recommendations are not based solely on the demand table results. Other factors such as recent building trends, vacancy rates, unit conditions and amenities, housing voids and employment are all analyzed to determine what can be supported in terms of housing. Bedroom mix is based on the 2010 Census. Housing demand is given for the Year 2015. We are utilizing the City of Staples average rental rate in the following demand tables.


HOUSING DEMAND 49

The first demand section is based on Fair Market Rents or those identified by the National Low Income Housing Coalition as the “Housing Wage”. This is the amount a worker needs to earn in order to be able to afford an apartment at the Fair Housing Market Rent level by bedroom mix. Identified rents range from $492 to $902 per month for Todd County in 2015. As a reminder the average income from Staples Employers was in the range of $16.88 per hour ($35,000) or $2,916 per month. If a household spends no more than 30% of their income for housing as is suggested by the federal government, this would equate to $875 being available for rent.

MULTI-FAMILY RENTAL HOUSING DEMAND

TABLE 7-1 Staples Study Area 2015 General Occupancy Fair Market Rental Housing Demand

One Bedroom

Two Bedroom

Three Bedroom

Four Bedroom

Total Todd/Wadena Co. Fair Mkt Rents $492 $658 $817 $902

Required minimum income $19,680 $26,320 $32,680 $36,080

Households over the income limit 1,647 1,429 1,268 1,186

Times rental bedroom mix 26.1% 33.0% 24.6% 4.7%

430 472 312 56 1,270

Staples rental rate (24.7%) 106 117 77 14 314

Minus existing rental units under rent level 210 85 109 45 449

Total demand 0 32 0 0 32

What the previous tables identifies is that there is a shortage of affordable, fair market two-bedroom rental housing units across the Study Area while demand for other sized units has been met. General Occupancy Very Low Income Rental Housing: Special notes pertaining to the following tables: Very Low income is based on 30% of County Median Income or less. Income ranges are based upon 1.5 persons per bedroom using HUD Income Guidelines. Income necessary to afford rent is based on 30% of household income.


HOUSING DEMAND 50

The bedroom mix is applied to the number of income eligible households in each Study Area Each Study Area’s rental rate is then applied to the number of income eligible households. The 30% of median income limits are as follows for Todd and Wadena Counties:

1-Bedroom 2-Bedroom 3-Bedroom 4-Bedroom

$14,820 $17,790 $20,535 $22,920 Table 7-2 helps illustrate the very low subsidized housing demand.

TABLE 7-2 Staples Study Area General Occupancy Very-Low Income Rental Housing Demand

One Bedroom

Two Bedroom

Three Bedroom

Four Bedroom

Total

30% of county median income rent $370 $444 $513 $573

30% of county median income $14,820 $17,790 $20,535 $22,920

Households under income limit 400 497 592 675

Times bedroom mix 26.1% 33.0% 24.6% 4.7% 104 164 146 32 446


Minus existing housing units under rent level

72 27 7 0 106

Total demand 0 14 29 8 51 According to Table 7-2, the Staples Study Area has 106 rental units with rents low enough to cover those households with incomes at or below 30% of the Todd County median income depending on household size. With the high number of lower valued homes and mobile homes in the community it is safe to assume that a number of those are also rented out at rents that may fall below these numbers.


HOUSING DEMAND 51

In fact, according to the 2014 American Housing Survey, the Study Area had 137 households that paid rent below $370 with another 46 paying rents between $370 and $444 for a total of 183. That number of households alone would cover all the identified demand for very-low income rental units. We also found another 93 households that paid between $444 and $573 for rent. Therefore we can assume that the number of very-low income units are already being supplied to the market. Unfortunately while we have access to the rents paid within the Study Area, we do not know the type of rental units by bedroom mix that are associated with those rents. Age 55+ Very-Low Income Rental Housing: Special notes pertaining to the following tables: Very Low income is based on 30% of County Median Income or less. Income ranges are based upon 1.5 persons per bedroom using HUD Income Guidelines. Income necessary to afford rent is based on 30% of household income. Income eligible households are Age 55+ households with incomes at or below 30% of the

County Median Income. The bedroom mix is applied to the number of income eligible households in each Study Area.

49.3% of all households are over age 55. The Study Area’s rental rate is then applied to the number of income eligible households.

Finally, the existing elderly subsidized units and those apartments with lower rents are subtracted from the subtotal demand.

Once again we will be utilizing Todd County’s HUD income limits for this estimate. The 30% of median income limits are as follows for Todd and Wadena Counties:


$14,820 $17,790 $20,535 $22,920


HOUSING DEMAND 52

Table 7-3 helps illustrate the very low subsidized housing demand.

TABLE 7-3 Staples Study Area Age 55+ Very Low-Income Rental Housing Demand

One Bedroom

Two Bedroom

Three Bedroom

Four Bedroom

Total

30% of county median income rent $370 $444 $513 $573


Households under income limit 220 275 329 376

Times bedroom mix 26.1% 33.0% 24.6% 4.7% 57 91 81 18

Age 55+ rental rate (20.2%) 12 18 16 4 50

Minus existing housing units under rent level 10 2 0 0 12

Total demand 2 16 16 4 38 While Table 7-3 shows that the Staples Study Area has a shortage of 38 very low-income Age 55+ rental units since there are only 12 elderly designated USDA or HUD units in the market, we can once again assume the need is being met by the very low rents being paid in the market. It must be noted that these numbers represent the number of renter-occupied households that would qualify for subsidized housing and not necessarily the number of households that would move into such a facility. There are many factors that have a bearing on how these figures are analyzed. For instance, just because people are living in substandard housing, as defined by Rural Development, does not mean they will move out of it if new units are constructed. Another factor that must be considered is that substandard housing built before 1939 does not take into account the number of homes that have been remodeled since that time. Also, this formula takes into account the number of households with rent overburden, defined as paying more than 30% of their income for rent. However, due to high construction costs, more and more households are paying over 30% of their income for housing and are getting by. All of these factors must be taken into consideration when determining the number of units to be built.


HOUSING DEMAND 53

LOW INCOME HOUSING DEMAND General Occupancy Low Income Rental Housing Demand Special notes pertaining to the following tables: Low income is based on 30% to 50% of County Median Income.

Income ranges are based upon 1.5 persons per bedroom using HUD Income Guidelines.

Income necessary to afford rent is based on 30% of household income.

The bedroom mix is applied to the number of income eligible households in each Study Area

The Study Area’s rental rate is then applied to the number of income eligible households. The income limits are as follows for Todd and Wadena Counties:


30% CMI $14,820 $17,790 $20,535 $22,920

50% CMI $24,700 $29,650 $34,225 $38,200


HOUSING DEMAND 54

TABLE 7-4 Staples Study Area General Occupancy Low Income Rental Housing Demand

One Bedroom

Two Bedroom

Three Bedroom

Four Bedroom

Total

30% of county median income rent $370 $444 $513 $573 $370-$573

30% of county median income $14,820 $17,790 $20,535 $22,920 $14,820 - $22,920



Households within income levels ($14,820 - $38,200) 672

Multiplied by Staples rental rate (24.7%) 166

166 multiplied by bedroom mix 26.1% 33.0% 24.6% 4.7% 43 55 14 8 120

Minus existing units within rent level

151 165 208 178


Similar to the identified demand for very low rental units in Table 7-4 there are enough low income housing units available within the Study Area. This however does not address condition of those rental units. Age 55+ Low Income Rental Housing: Special notes pertaining to the following tables Low income is based on 30% to 60% of County Median Income. Income ranges are based upon 1.5 persons per bedroom using HUD Income Guidelines. Income necessary to afford rent is based on 30% of household income. Income eligible households are Age 55+ households with incomes between 30% and 60% of the

County Median Income. The bedroom mix is applied to the number of income eligible households in each Study Area.

The Study Area’s rental rate is then applied to the number of income eligible households.


HOUSING DEMAND 55

Finally, the existing elderly subsidized units are subtracted from the subtotal demand. 42.6% of all renters are over age 55. Once again we will be utilizing Todd and Wadena Counties’ HUD income limits for this estimate. The income limits are as follows for Todd and Wadena Counties:


30% CMI $16,500 $20,090 $26,330 $32,570

50% CMI $27,475 $32,950 $38,075 $42,500

TABLE 7-5 Staples Study Area Age 55+ Low Income Rental Housing Demand

One Bedroom

Two Bedroom

Three Bedroom

Four Bedroom

Total





Households Age 55+ within income levels ($14,820 - $38,200) 366

Multiplied by Study Area Age 55+ rental rate (20.2%) 74


Minus existing units within rent level

64 70 89 76


Once again, due to the low rents in the Study Area, the demand for age 55+ low income housing units is also being met in units with lower rents.


HOUSING DEMAND 56

MODERATE INCOME RENTAL HOUSING DEMAND

General Occupancy Moderate Income Rental Housing Demand Special notes pertaining to the following tables: Moderate income is defined as those incomes ranging from 50% to 80% of the County median

income. Income ranges are based upon 1.5 persons per bedroom using HUD Income Guidelines. Income necessary to afford rent is based on 30% of household income. Rental only households are based upon the rental rate times all income eligible households. It should be noted, that as we approach rent levels over $700, with the current low mortgage rates, combined with low housing values, many households are doing whatever they can to purchase their own home rather than rent. The following table identifies a shortage of moderate rental apartments in all unit sizes.


HOUSING DEMAND 57

TABLE 7-6 Staples Study Area General Occupancy Moderate Income Rental Housing Demand

One Bedroom

Two Bedroom

Three Bedroom

Four Bedroom

Total



80% of county median income rent $958 $1,149 $1,328 $1,481 $958-$1,481


Households within income levels ($24,700 - $59,250) 1,079

Multiplied by Staples rental rate (24.7%) 267


Minus existing units within rent levels

165 122 58 28


As can be seen in Table 7-6 above and Table 7-7 on the following page, the number of moderate income rental housing units is being met. This does not mean the available units are what renters are seeking especially with the age of most of the units in the Study Area. As rents increase, renters seek more building amenities and there are few special amenities in the rental units currently available within the Study Area. When looking at just the 12 major apartment complexes located in Staples, other than the senior-housing-with-services buildings at Lakewood Pines and Lakewood Manor, none of the other buildings charge rents that fall into these categories. The households paying those rents are most likely renting single family homes or mobile homes.


HOUSING DEMAND 58

TABLE 7-7 Staples Study Area Age 55+ Moderate Income Rental Housing Demand

One Bedroom

Two Bedroom

Three Bedroom

Four Bedroom

Total



80% of county median income rent $958 $1,149 $1,328 $1,481 $958-$1,481


Households Age 55+ within income levels ($24,700 - $59,250) 563

Multiplied by Study Area Age 55+ rental rate (20.2%) 114


Minus existing units within rent levels

70 52 25 12



HOUSING DEMAND 59

Tables 7-8 and 7-9 illustrate that there currently are no high end rental housing units in the Staples Study Area even though there may be a demand for those types of units.

TABLE 7-8 Staples Study Area General Occupancy High End Rental Housing Demand

One Bedroom

Two Bedroom

Three Bedroom

Four Bedroom Total

80% of county median income rent $958 $1,149 $1,328 $1,481


Households over income limit 1,140 980 844 742



Minus existing housing units over rent level 0 0 0 0 0



HOUSING DEMAND 60

TABLE 7-9 Staples Study Area Age 55+ High End Rental Housing Demand

One Bedroom

Two Bedroom

Three Bedroom

Four Bedroom Total

80% of county median income rent $958 $1,149 $1,328 $1,481


Households over income limit 510 428 416 315


Age 55+ rental rate (20.2%) 27 29 21 3 80

Minus existing housing units over rent level

0 0 0 0 0


Keep in mind that with the low valuation of single family homes in the market, as rents increase, many renters may seek ownership unless they have other issues keeping them from obtaining lending. With median housing sales at $63,500 last year, with 10% down and a 30 year mortgage, monthly payments are only $340 per month at 4%. A 15 year mortgage would find rents of $488 per month. However, some people are unable to purchase due to a poor credit history, or they may prefer a maintenance-free lifestyle found in an apartment or townhome.


HOUSING DEMAND 61

CONGREGATE PENETRATION RATE DEMAND MODELS 1. Historically, we’ve found that 1.5% of persons between the ages of 65 and 75 with annual incomes in excess of $20,000 live in senior housing. We also found that 9% of persons over age 75 with incomes in excess of $20,000 live in senior housing. Senior housing is defined as housing for older adults only and does not include nursing homes or other institutional settings.

2. In addition, it has been identified that a senior must have an annual income in excess of $20,000 to be able to afford to live in market rate congregate housing with rents starting at $600 per month as found and Lakewood Pines and Manor. The 2020 rate will be $23,000. This assumes that the housing covers 35% of their living expense which includes all utilities except cable and telephone, activities, socialization, transportation and 24-hour supervision. Taking these assumptions into consideration, we find the following:

Independent/Congregate Demand

Staples Study Area

2015 2020 Households Age 65-74 330 375 Income Eligible1 262 308 Utilization (1.5%)2 4 5 Households Age 75+ 309 317

Income Eligible1 184 192

Utilization (9.0%)2 17 17 Subtotal 21 22

Move into area (40%) 14 15 Subtotal 35 37 Minus 95% of existing units3 36 36

TOTAL 0 1


HOUSING DEMAND 62

Table Qualifiers 1 Income Qualified Households at $20,000 ($23,000) or greater plus home ownership rates of 83.6% with incomes between $15,000 and $20,000 ($18,000 and $23,000)

2 Senior Housing Study by the Wilder Foundation 3 Existing and planned congregate units at a 5% vacancy rate.

The previous table indicates the market demand is currently being met by the Lakewood Pines and Manor buildings. ESTIMATED ASSISTED LIVING DEMAND Assisted living can be categorized as either a care service package or a type of housing facility and is normally directed toward persons with three or more daily living limitations. An actual assisted living facility varies from most congregate housing buildings in that often times the actual living quarters are smaller in the form of efficiency style units or one-bedroom apartments. The service package also varies in that typically two or three meals are provided as part of the rent and the building is staffed 24-hours per day, 7 days a week. Health care services are provided by the on-site staff. In estimating demand for assisted living, this report will deal with a penetration rate model approach based on the number of persons with one to six ADLs. (ADLs are defined as Activities of Daily Living and include assistance with such things as bathing, dressing, grooming, eating, bed mobility, transferring, toileting, and walking.) Based upon our experience we have formulated a model based upon several factors including nursing home utilization rates, percentage of population over age 75 requiring assistance with daily living tasks and income guidelines. Utilizing the results of the analysis, some estimates of demand for this type of project can be developed. The following assumptions are utilized:

1. The population projections, as presented earlier are assumed to be accurate for the purpose of this estimate. 2. The proportion of persons over age 75 in the Staples Study Area continues to grow. 3. We have determined that overall, 28.0% of the population over age 75 has limitations with daily living tasks that would qualify them for assisted living housing. 4. Income eligibility was determined to be households with annual incomes greater than $25,000. It is assumed that this income level would be required to rent a unit starting at $1,200 with rent covering 60% of a resident’s needs. The 2020 rate will be $30,000.

5. A conservative estimate is that 30% of the eligible candidates for assisted living will select an assisted living environment for their home.


HOUSING DEMAND 63

6. Due to the nature of the area, another 30% of the total demand will come from persons outside the market area. 7. 82.1% of the households with incomes between $15,000 and $25,000 in 2015 and $20,000 to $30,000 in 2020, who own homes and require care (28%), would also be candidates to live in this facility.

The following estimates, made utilizing the above assumptions, estimate demand only for supervised assisted living units for individuals. It does not estimate the demand for certain types of amenities and services to be offered if such a complex is constructed.

ASSISTED LIVING DEMAND ANALYSIS MODEL

Staples

Study Area

2015

2020

Individuals over age 75. 539 549 Incomes of $25,000 ($30,000) or greater or have an income between $15,000 ($20,000) and $25,000 ($30,000) and own a home. (62.8%) (53.0%) 338 291 28.0% of population over age 75 with mobility or care limitations.1 95 81 Percent living alone (50%)2. 48 40 Percent of additional demand from couples (12%)3. 11 10 Subtotal 59 50 40% penetration utilization rate - 40% of the eligible candidates requiring care will choose an assisted living environment for their home. 24 20 Additional 30% will move in from outside the market area. 10 9 Subtotal 34 29

Additional 30% subsidized residents, veterans and those with insurance. 15 12

Total 49 41 Minus 95% of existing units.4 27 27 Total number of units necessary to meet demand. 22 14

The previous table indicates the market can support up to 14 additional assisted living units.


HOUSING DEMAND 64

Table Qualifiers

1 U. S. Census Bureau, Americans with Disabilities: 2002

2 A Profile of Older Americans: 2009, Administration on Aging - U.S. Department of Health and Human Services

3 The 2009 Overview of Assisted Living

4 Existing and planned assisted living units at a 5% vacancy rate.

ALZHEIMER DEMAND ESTIMATE In most instances there is a mix of semi-private and private rooms. In addition to the sleeping rooms, each residential living complex incorporates a kitchen/dining area and a living room/lounge area. A mix of health care providers usually performs staffing, but the heaviest load is borne by certified nursing assistants or universal workers, with an RN utilized on an as-needed basis. Residents receive three meals each day plus snacks as well as linen and laundry service. The facility is staffed 24 hours each day. Market conditions have placed increasing demand toward a greater number of private rooms. With the changing demographics of potential clients, it August be wise to construct all private rooms in order to meet future needs.


HOUSING DEMAND 65

Alzheimer Demand Analysis Model Staples Study Area

2015

2020

Individuals Age 65 to 74 274 307 Percentage with Alzheimer’s (1.5%)1 4 5 Income qualified at $45,000 (49.1%) $50,000 (46.7%)2 2 2 Penetration rate of 35%3 1 1 Individuals Age 75 to 84 166 171 Percentage with Alzheimer’s (19%)1 32 33 Income qualified at $45,000 (32.5%) $50,000 (27.0%)2 10 9 Penetration rate of 35%3 4 3 Individuals Age 85+ 54 57 Percentage with Alzheimer’s (47%)1 25 27 Income qualified at $45,000 (22.0%) $50,000 (19.5%)2 6 5 Penetration rate of 35%3 2 2 Subtotal 7 6 Additional 30% from outside the area 3 3 Subtotal 10 9 Additional 20% subsidized and those with insurance 3 2 Total 13 11 Minus number of existing and planned units4 16 16 Grand Total 0 0


HOUSING DEMAND 66

Table Qualifiers

1 Alzheimer Association: 2011 Alzheimer’s Disease Facts and Figures

2 Income Qualified Households at $45,000 in 2015 and $50,000 in 2020 or greater plus 91.4% (ownership rate) of households with incomes between $35,000 and $45,000 in 2015 and $40,000 and $50,000 in 2020.

3 Percentage of people with Alzheimer’s disease that reside within a healthcare environment. 4 Existing and planned memory care units at a 5% vacancy rate.

The previous table identifies a need for no additional memory care units. Senior-Housing-with-Services Findings and Recommendations The study has identified a need for no additional independent units, up to 14 additional assisted living units and no additional memory care units. However, with the only available memory care units being located within the nursing home, private pay rates must be the same as subsidized rents so rates are approximately $8,600 per month. This is a much higher rate than even senior housing facilities in the Twin Cities area charge for memory care. In order to attract additional private pay memory care residents, Lakewood may wish to add memory care units to Lakewood Pines where they could charge thousands of dollars a month less for memory care housing. When addressing competing facilities, we find that the only competing senior housing facilities located within the Study Area are the 68 units at Lakewood Pines and Lakewood Manor and the 16 memory care beds at the Nursing Home. Of the 68 total units, 40 are designated as Independent units and 28 are designated as Assisted Living units.


STATEMENT OF QUALIFICATIONS 67

ANALYSIS AND RECOMMENDATIONS The Staples Study Area is indicating slight population and household decline between 2015 and 2020 after experiencing a greater decline between 2010 and 2015. Household are declining at a lesser rate than the population, thereby indicating an aging community. We need to take that into consideration when addressing housing needs. Additionally, while single family home sales have been steady, new construction has been minimal. Therefore, rather than address housing needs based solely on growth, we need to address the current housing voids within the market. With employment steady and Lakewood Health System, National Joint Powers Alliance and Stern Rubber indicating strong growth over the next few years, it is safe to assume that some of those new employees will require housing. If proper housing were constructed, more of the workers employed in Staples may elect to live in Staples. Additionally, with adequate housing and a school district with a strong reputation for quality education and superior athletics, more people may elect to make Staples their bedroom community while they work outside the city. Single Family Home Market At the present time there are limited buildable lots within the borders of Staples. The city may wish to provide incentives to private developers to create new development areas within the city. These incentives could range from tax abatement to a reduction in city fees such as sewer and water accessibility charges, park dedication fees, or any other city fees. During the heart of the most recent recession this would have been unheard of, but with an improving and strong local economy, if the city wants to retain current residents and attract others, there needs to be new housing introduced into the market. Median home values of houses sold fall in the middle of the pack when compared to all cities within Todd County. When compared to other Todd County communities, you are comparable to Hewitt, Osakis and West Union, higher than Bertha, Browerville, Bertram and Clarissa and lower than Eagle Bend, Grey Eagle and Long Prairie. According to local Realtors, home sales within the city are improving but the quality of homes on the market are not of the highest standards. Higher-end homes are being constructed along bodies of water; both rivers and lakes as well as in the country. In an effort to attract new housing into the community you may wish to consider pursuing a down payment assistance program and/or first time homebuyer program to help individuals qualify to purchase those homes. In an effort to improve the existing housing market and to increase property values, the city should also pursue home fix-up funds and create training workshops so local residents know how to access those funds. There is also a lack of patio homes, apartments, twin homes and town homes for empty-nesters and senior households. The new townhomes proposed in the Roach development will help fill that void, even if they are rental properties.



Single Family Recommendation With 70 homes classified as dilapidated, 97 requiring major repair and 352 requiring minor repair, the best solution to improving housing may be to seek rehabilitation funding. This is usually targeted toward a specific neighborhood in order to eliminate blight, but if there is a grouping of homes in need of major repair, it might be possible to receive some funding. The primary funding source for concentrated neighborhood rehabilitation programs is the Small Cities Development Program (SCDP), administered by the MN Department of Employment and Economic Development (DEED). For homes requiring less rehabilitation, a home fix-up fund may be the option for providing home owners with low interest loans. The best place to start would be discussions with the Todd County HRA and the Minnesota Housing Finance Agency. These resources should be aware of any potential programs you or your residents will be able to access. As for attracting new housing stock into the market, you should concentrate your efforts toward attracting starter homes and moderately priced mid-range housing. The higher end market will most likely gravitate toward waterfront property outside the city limits or building sites with acreage. Here again, you may have to work with developers through incentives to make lots more affordable than the market currently has available. You need to target completed homes including the lot near the $100,000-$150,000 range. The era of the HRA or any other entity coming into town and building speculative housing went away with the last recession when agencies got stuck with unsold inventory. In addition to reduced pricing for lots, the City may seek out buyer assistance in the form of loans/deferred loans through the Greater Minnesota Housing Fund (GMHF). With the aging of the population, anything you can do to keep your current residents in the community is important. While there will be discussion in the next section relative to rental patio homes, it is also essential that you work to attract a developer to build affordable patio homes, twin homes or townhomes for empty nesters and seniors. If this does not occur, you will be losing your elderly housing segment to other communities. Twin homes and town houses generally represent a cost advantage in land, construction and infrastructure costs compared to detached houses. A second advantage of attached single family housing is lifestyle-related. A growing number of empty-nesters and younger seniors want age-appropriate housing that provides amenities for older adult buyers, and offers a “no maintenance” option of ownership. This type of housing is often created with a homeowners association where mowing, snow removal and garbage services are part of a monthly or annual homeowner association fee. Following are descriptions of single family home programs available through the Minnesota Housing Finance Agency that you may wish to pursue.



MHFA Single Family Program Descriptions Homeownership Programs Start Up First-time Homebuyer Loan Start Up loans for first-time homebuyers offer affordable interest rates and down payment and closing cost assistance for eligible borrowers. The loans are originated by participating first mortgage lenders throughout the state. Mortgage Credit Certificate (MCC) The Mortgage Credit Certificate makes owning more affordable by allowing first-time homebuyers to claim 35% of the mortgage interest they pay each year as a federal income tax credit, reducing their taxes by up to $2,000 per year. The program also provides access to an affordable, fixed-rate home mortgage and the Minnesota Housing Monthly Payment Loan for down payment/closing costs. Step Up Repeat & Refinance Homebuyer Loan Step Up loans help existing homeowners refinance or purchase a new home. It offers affordable interest rates through a statewide network of approved lenders. Monthly Payment Loan The Monthly Payment Loan provides a loan of up to 5% of the purchase price or $5,000 (whichever is greater) to cover down payment and/or closing costs. The loan has a ten-year term with low monthly payments. The loan is available to borrowers accessing the Start Up, MCC or Step Up programs. Deferred Payment Loan The Deferred Payment Loan provides a loan of up to a $4,500 loan to cover down payment and/or closing costs. There are no monthly payments and repayment is required at the time of sale or refinance. Income limits and other eligibility requirements apply. This option is only available through the Start Up program. HOME Homeowner Entry Loan Program (HOME HELP) HOME HELP is interest-free deferred funding to assist eligible homebuyers with down payment and closing costs. Assistance is available to first-time buyers under Minnesota Housing’s Start Up program. Home Improvement Programs Fix Up Loan Program (Fix Up) The Fix Up Loan Program finances below-market interest rate, fully-amortizing home improvement loans to low- and moderate-income homeowners to improve the livability and energy efficiency of their homes.



Rehabilitation Loan Program The Rehabilitation Loan Program provides deferred loans at no interest to low-income homeowners to fund repairs directly affecting the safety, habitability, energy efficiency or accessibility of their homes. The program is administered by local agencies. Community Development Programs Community Homeownership Impact Fund (Impact Fund) The Community Homeownership Impact Fund (formerly known as the Community Revitalization Fund or CRV) provides funding for developers and administrators of single-family, owner-occupied affordable housing activity throughout the state. Resources can be accessed through a competitive “Request for Proposal” process described on the Minnesota Housing website. The Impact Fund is offered once a year in the spring. Emergency Homeowners' Loan Program (EHLP) The EHLP is a federal program which provides funds for counseling and mortgage payment relief for up to 24 months to eligible homeowners. As of the end of 2011, all eligibility determinations had been made. In accordance with federal law, the program is no longer accepting new applications. Habitat for Humanity Initiatives Minnesota Housing has provided funding to Habitat for Humanity to help provide loans at no interest to qualifying low-income homebuyers through Habitat affiliates in the state. Homeownership Education, Counseling, and Training (HECAT) HECAT provides financial support to eligible nonprofit organizations or public agencies offering pre-purchase education and counseling, foreclosure counseling and reverse mortgage counseling. Foreclosure counseling services are also federally funded through the National Foreclosure Mitigation Counseling program and the Making Home Affordable Outreach and Intake Project. Neighborhood Stabilization Program (NSP) The U.S. Department of Housing and Urban Development’s Neighborhood Stabilization Program (NSP) provides funds to states and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight. Minnesota Housing, as the HUD State Grantee, awarded its NSP1 and NSP3 funds to Minnesota cities and counties. Minnesota Department of Employment and Economic Development (DEED) Workforce Housing Development Program Overview The Workforce Housing Development Program targets communities in Greater Minnesota where a shortage of housing makes it difficult for businesses to attract the workers they need.



This competitive grant program offers financial assistance to build market-rate residential rental properties for workers. Units of local government, nonprofits or the benefiting businesses must contribute $1 for every $2 provided by the program. Program grants provide up to 25 percent of the total project costs of a rental housing development. Eligibility Cities located outside of the metro area with a population exceeding 500 residents or communities with a combined population of 1,500 residents located within 15 miles of a city or an area served by a joint county-city economic development authority (defined as Laws 1988, Chapter 516, section 1) are eligible to apply. Additional eligibility requirements include:

o A vacancy rate of 5 percent or lower for at least the prior two years o One or more businesses located in the project area (or within 25 miles of the area)

that employ 20 full time equivalent employees o A statement from participating businesses that a lack of housing makes it difficult

to recruit and hire workers o The development must serve employees of the businesses in the project area

Projects are selected on the basis of need, statewide economic impact, project financial plan and project readiness. Preference is given to areas with fewer than 18,000 people.

Rental Housing Market A number of rental voids have been identified as well as issues with some of the current rental properties. Half of the rental properties are 40 years old and in need of upgrades; there are no properties newer than 12 years old, minimal senior-only rental properties, over-priced private pay memory care options and buildings offering very few amenities allowing for choice. Despite all of this, almost all apartment buildings are full with waiting lists. The addition of the Roach townhomes will help fill some of these voids. You may also wish to partner with the Todd County Housing and Redevelopment Authority in Browerville or the Central Minnesota Housing Partnership in St. Cloud. Over the years, they have both ventured into partnerships in surrounding communities. There currently are no existing apartments that are designed to attract young professionals, senior households or young families in need of a temporary housing option while they pursue purchasing or building a home, due to a shortage of three-bedroom units. There also are no newer apartments designed to meet the changing demographics and built with amenities to attract people to the community. The existing apartments are more of a fallback option to provide an affordable housing option for people who need to live in Staples.



As for senior housing-with-services, you are very fortunate to have such a quality senior-housing-with-services option in your community as Lakewood affords the local residents. The rents they charge for independent senior apartments and assisted living units are about half the cost of similar housing options in other communities. Rental Housing Recommendations: With two tax credit properties and three government subsidized buildings meeting the needs of low income seniors and families, and the number of lower priced rental units in basements, mobile homes and over commercial properties, the city needs to turn their attention to market rate apartments. If we looked solely at projected household growth we would recommend no additional rental units in Staples. However, due to the age and condition of most market rate units, current low vacancy rates, voids of certain types of rental units, comments from employers and the projected growth of area businesses, the city of Staples needs additional rental units. At a minimum the city should work to attract a 12-16 unit market rate rental property with a mix of one, two and three bedroom units. Rents should be in the range of $600 for a one-bedroom unit, $700 for a two-bedroom unit and $800 for a three-bedroom unit but may need to be higher to provide the amenities necessary to attract renters to Staples. Additionally, I would encourage the Lakewood Health System to consider adding 8-10 memory care beds to the Lakewood Pines facility in order to meet the needs of private paying memory care residents. The exact number should be based on staffing requirements. At the same time you should pursue contacting developers from neighboring communities as well as local housing agencies. The proposed project from Roach Development is a great starting point. The rehabilitation of older units can be one of the most cost-effective ways to maintain a supply of decent, safe and sanitary affordable housing. In addition to the SCDP-funded activities, other resources have recently become available for rental rehab. In 2011, the Minnesota Housing Finance Agency (MHFA) announced a new rental rehabilitation program for use in Greater Minnesota.



STATEMENT OF QUALIFICATIONS AdMark Resources is a housing market research firm located in Sartell, MN. Since 1986, we have been involved in the analysis of well over 400 communities across the United States. Cities, Counties, HRAs, nursing homes, hospitals, EDAs and private developers have benefited from the professional services offered by our organization. All of our studies have been accepted by lending institutions and governmental agencies as evidence of need for mortgage purposes. This includes such financing options as conventional financing, tax exempt mortgages, general obligation bonds, industrial revenue bonds, essential function bonds, Section 42 Tax Credits, USDA Rural Development financing and HUD financing as funneled through sixteen different states. In addition to the numerous individual housing studies we have conducted, we prepared a 15 city, 3 county analyses of housing issues across northwestern Wisconsin, a 14 county analysis of Central Minnesota for the Central Minnesota Initiative Fund, and we served as consultants for a state-wide housing study for the Blandin Foundation. Specific staff that was involved in this analysis includes:

Mike Schoenecker is president and founder of AdMark Resources. He has been

involved in the preparation of over 400 housing studies in the past twenty-nine years. In addition, he has been involved with the marketing and management of over 80 senior housing projects. He has spoken on housing market research to such groups as the Minnesota Chapter of the National Association of Housing and Redevelopment Officials, the Minnesota Association of Homes for The Aging, the Minnesota Multi-Housing Association, the Wisconsin Assisted Living Association the Northern Lakes Health Care Consortium and at the Minnesota Department of Trade and Economic Development Conference. He has also been a presenter in three private state-wide housing presentations to hospital and nursing home administrators across Iowa as well as a recent regional housing conference conducted by Congressman Colin Peterson.

Mike recently served on the Central Minnesota Regional Housing Advisory Board for the Minnesota Housing Finance Agency, is past board chair of the Good Shepherd Nursing Home Foundation and is a past executive board member of the Minnesota Board on Aging and a member of the Central Minnesota Affordable Housing Task Force.

The conclusions reached in this analysis are based upon our present knowledge of the housing industry, results of our research and the conditions at the time of the study. It assumes that information and numbers supplied to us are accurate and represent the true situation in the market study area. The estimated results are based upon competent and efficient management and effective marketing and presume no significant change in the competitive position of the housing industry in the immediate area. This study does not include the possible impact of governmental restrictions, zoning, environmental regulations, licensing requirements, financing interest rates or other such matters except as disclosed in this report. This report has been prepared primarily for your use and guidance in determining the feasibility of the project in relation to its costs and for possible use in securing mortgage financing.

© 2016 AdMark Resource

1808 34th Street North • Sartell, MN 56377 (320) 251-1300 • Fax: (320) 230-7688

Documents

Overall Housing Assessment of the Staples, MN Area44315AD6-8633-4D56-A3F9... · Overall Housing Assessment of the Staples, MN Area Prepared for: Staples EDA April 2016 Prepared by: