Housing Needs And Preferences Implications for the Multi-family Development Community

1. Housing Needs And PreferencesImplications for the Multi-family Development Community 2014 Multi-family Housing Conference New Hampshire Housing Finance Authority

2. 2002 • George W. Bush - President • ‘N Sync, Enrique Iglesias, LeAnn Rimes Topped the Charts • Microsoft X-Box, Sharp 50”HD Plasma TV, XM and Sirius Radio Available in Cars • Housing Market • New Construction = Large SF Homes • Median PP = $260K and on its way to $312K in ’06 • 6,400 SF permits and 2,000 MF permits

3. Conceptual Housing Progression Down Sizing The Family Home New Family Buys or Kids Off to College Permanent Affordable Housing Assisted Living Kids Get Jobs Nursing Home

4. NH Transportation Perspective Down Sizing The Family Home Drive Yourself Don’t want to Drive Yourself Very Far or Permanent Affordable Housing Assisted Living Can’t Drive Yourself Don’t want to Drive Yourself (There’s a MiniBus) Not Going Anywhere Nursing Home

5. 2012 • Barack Obama - President • Katy Perry, Justin Timberlake, Pink, and Miley Cyrus Topped the Charts • Tablets, LED HD TV’s, E-Cigarettes and Google Glass working with Ray Ban Design • Housing Market • New Construction • Median PP = $300K • 2,100 SF permits and 680 MF permits

6. What’s More Likely The Family Home and Kids Off to College Assisted Living UNEMPLOYMENT or UNDER EMPLOYMENT

7. What’s More Likely “Down Sizing” The Family Home or Remain in the Rental Market Longer SC NC VA TX Delaying Homeownership Assisted Living New Family Buys

8. What’s More Likely “What I would really like to do is stay in my current residence as long as possible.” AARP Survey The Family Home Aging Renters Age-In-Place Remain in the Rental Market Longer Permanent Affordable Housing Assisted Living Assisted Living Nursing Home

9. What’s More Likely Aging Renters Services Age-In-Place • Personal Services • Visiting Nurse • Rehab Therapy • Counseling • Accessibility Modifications • Bathrooms • Stairways • Kitchens • Entrances But… Assisted Living Over than 30% of the rental stock is more than 70 Years Old Older renters will be better served in newer units.

10. Housing Needs In New Hampshire • Production Need • Based On: Population and Job Projections • By County • By Tenure • Housing Need • Based on Housing Cost Burden • Mainly Rental Costs

11. Housing Needs In New Hampshire • Economic Environment • Perceived Market Changes • Demographic Changes • How Housing is Perceived • Younger Households • Likely Impact of an Aging Population • Production and Housing Need

12. Housing Needs In New Hampshire New Hampshire Center for Public Policy Studies – Dennis Delay Applied Economic Research – Russ Thibeault • Added Focus Groups • Homebuilders • Mortgage bankers and brokers • Realtors • Regional Planning Commissions • Senior Housing Experts • Workforce Housing • Young Professionals Part 1 - Big Houses, Small Households: Perceptions, Preferences and Assessment Part 2 - Senior Housing Perspectives Part 3 - The Evolving Environment and Housing's Future

13. Housing Needs and Preferences What the Study Found – NH’s Housing Environment is Changing • New Hampshire’s population growth is slowing down, with fewer new migrants • Job growth is slow and job quality is poor • Recent trend away from ownership and towards rental housing • Young home buyers are challenged by slower economic growth, stricter lending standards and high student debt • The high rate of foreclosures forced more than 20,000 households out of ownership since the beginning of the recession • Renter households are on average younger and move more often

14. Housing Needs and Preferences What the Study Found – NH’s Housing Environment is Changing • Going forward, elders will be an larger share of owners and renters • Seniors want to age in place • With increasing age comes a higher proportion of households with a disability • The rental housing stock is on average older and new production has not kept pace • There is a mismatch between household size and the current housing stock • Affordability, especially for low income renter households is a problem. • Dichotomy of NH growth means different regions have different problems

15. New Hampshire's population growth has slowed, with fewer new migrants The past 6 years has seen the slowest population growth in more than 30 years.

16. New Hampshire Job Growth Has Also Slowed Annual job growth in New Hampshire has been less than 1% each year since the end of the recession.

17. And , the Quality of New Hampshire Employment Has Changed Average annual employment in Manufacturing declined by 35% between 2000 and 2013, while employment in Education and Health Services increased by 28% and Leisure and Hospitality increased by 11%.

18. The large number of foreclosures continues to put pressure on the rental housing market Since 2008 there have been over 21,000 foreclosed properties in New Hampshire. Many of these households must seek housing in the rental market.

19. The recent trend is away from ownership and toward rental housing In 2005, after more than a decade of economic growth the home ownership rate in New Hampshire reached a peak of 73%, with renter households making up the remaining 27%. Since then the ownership rate has declined slightly, shifting growth to renter households. But, overall growth in households has been limited.

20. The result is an increase in the number of renter households The shift in renter households in New Hampshire has been significant in recent years, increasing by nearly 13% since 2005, after declining by 5% between 2000 and 2005.

21. But multi-family housing production has not kept pace with demand over the past 20 years

22. And, New Hampshire’s rental housing stock is aging We have experienced more than 20 years of below average rental housing production, and now over 30% is more than 70 years old.

23. The increasing number of renter households keeps vacancy rates low

24. 16% increase As a result, the median rent continues to increase Median gross rent has risen about 16% over the past 10 years, and at $1,076 the stateside 2-bedroom median gross rent remains above the $1,000 mark for the eighth year in a row.

25. But, renter household incomes have not kept pace

26. So the cost burden on renter households has gotten worse

27. The overpayment problem is not limited to one age group

28. Overpayment is the most severe for low income renter households

29. Renter households are on average a younger demographic Of New Hampshire’s renter households 23% are 25 to 34 years old and another 20% are 35 to 44 years old.

30. Renter households are far more mobile than owner households More than 50% of renter households have moved within the past three years, and nearly 90% within the past 13 years.

31. Recent increase in renter households not limited to one age group Between 2005 and 2012 there has been an increase in renter households in each age group between 25 and 74. However, the increases in the age groups over 45 years are mostly attributable to the aging baby boom generation.

32. The recent increase in renter households is expected to continue Between 2010 and 2025 renter households are projected to increase by nearly 16,000.

33. But the future change will be primarily in the older age groups Between 2010 and 2025, age 65 and older renter households show the greatest increase; but, they remain a minority of all renter households. This shift is due primarily to existing renter households aging in place.

34. Most seniors want to age in place Source: AARP, 2010

35. And, most seniors do age in place

36. And those older age groups are primarily owners Ownership predominates for New Hampshire households well into old age. Seventy-seven percent of households 75 to 84 years old are owners, and even for those households 85 years and over the percent of ownership remains above 60%.

37. A significant roadblock to aging in place is the increase in disabilities as we age

38. Is the current housing stock designed for, or adaptable to households with significant disabilities? Needs for Aging in Place: • Low Maintenance • Smaller, Efficient Units • One Level Living • No Step Entry • Wider Entry and Bathroom Doors • Adapted Bathrooms and Kitchens • Higher Electrical Outlets • Levers, not Knobs • Access to Public Transportation

39. Housing Production Estimate If the proportion of owners and renters remains the same, the projected need for rental housing production will be low Preferences and demographics suggest that there may be more demand for rental housing production than currently projected.

40. And the near future production needs varies dramatically by County

41. Demand for nursing home and assisted living capacity will rise sharply The more likely result is an increase in demand for in-home health services. Is the current housing stock in locations where these services can be efficiently delivered?

42. Millennial Generation Delaying Ownership Former Owners Competing for Rentals Some Down-Sizing to Rental, Slow Economic Growth, High Student Debt, Hesitancy About Ownership, Foreclosures Delayed HH Formation, Tighter Underwriting, Competition for Small Units from Owners Down-Sizing Aging-In-Place Rental Market Demand Need for Services and Rehab or Newer Affordable Units Implications for the Multi-family Development Community

43. Opportunity , but… • As the market responds will we see more resistance at the local level (Following a period of little development pressure)? • Mission driven developers will find it harder to serve the very low income population. (Lower resources & incomes) • Unless the economy improves substantially, it will continue to be difficult to construct workforce housing units. Rental Market Demand Unknowns… • Second Homes – Retirement or Year-round occupancy? • HH formation no longer delayed? • Will retirees be replaced with systems or workers? • Will there be a new tech revolution? • Immigration Policy?

44. www.nhhfa.org Bill Ray, Managing Director, Policy, Planning & Communications – bray@nhhfa.org Dan Smith, Director of Housing Research – dsmith@nhhfa.org