2014 Windom Housing Market Analysis

Viewpoint Consulting Group, Inc.9104 Barrington TerraceBrooklyn Park, MN 55443763-273-4303www.viewpointconsult.com

Prepared for: EDA of Windom / Windom HRAPrepared by: Viewpoint Consulting Group, Inc.Date: May 20, 2014

Purpose: To project housing demand in Windom through 2020 and provide recommendations on the amount and type of housing that could be built to satisfy unmet needs.

Windom’s Primary Market Area

Demographic Highlights• Windom grew by 3.5% last decade and is projected to continue growing this decade,

reaching a population of 4,850 in 2020.

• Incomes in Windom are modest ($34,614 median household income in 2013 compared to $56,704 statewide).

• Windom has a high percentage of single households (36%), but renters with 3+ persons is growing fast (84 HH in 2000 and 145 HH in 2010).

• Older adults and seniors are experiencing the greatest growth, but younger persons are growing as well.

Population Added, Windom

1970s 1980s 1990s 2000sProjected

2010sPopulation +714 -383 +207 +156 +204

Demographic Highlights

Population, Windom

1980 1990 2000 2010 2020 2030

Population 4,666 4,283 4,490 4,646 4,850 4,950

Pct. Age 65+

18.3% 22.5% 21.7% 21.2% 23.8% 27.0%

Owner & Renter Households, Windom

2000 2010

Owner Households 1,444 1,415

Renter Households 466 579

Homeownership Rate 76% 71%MN Homeownership Rate 75% 73%

Demographic Highlights

• 52% of Windom’s households with incomes under $35,000 were cost burdened (spent 30%+ of gross income on housing)

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< $25K $25K - $34K $35K - $49K $50K - $74K $75K+

Num

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Household Income

Renters

Owners

Distribution of Windom’s Households by Income & Tenure

Employment Highlights

Source: US Census Bureau – Local Employment Dynamics

1,159

916

2,227

Employed Persons

Live and Work in Windom

Live in Windom, WorkElsewhere

Work in Windom, LiveElsewhere

Employment Highlights

• In 2011, 65% of Windom’s jobs were filled by people living outside the community.

• Manufacturing is the largest employment sector in Windom (Toro and PM Beef).

• There is a need for more housing in Windom for local employees. Representatives of major employers state that Windom has a shortage of housing – particularly rentals and mid-priced homes to purchase ($75,000 to $150,000).

• Quality of existing rentals in Windom available to local workers was an issue raise by some major employers.

Age of Windom’s Housing Stock

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Owned Rented

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Year Housing Built

2000+

80s & 90s

60s & 70s

<1960

Windom Owner-OccupiedHousing Trends

• Windom’s for-sale housing market is stable (Avg. resale price of about $97,000 for four straight years).

• About 50 homes were built in Windom last decade, only one twinhome (2 units) has been built this decade.

• Windom has a very limited supply of available lots for new construction homes.

June Court

Windom High School

River Bluff Estates

Windom Owner-OccupiedHousing Trends

Source: Cottonwood County Assessor’s Office

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

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<1940 1940s 1950s 1960s 1970s 1980s 1990s 2000+Year Home Built

Average Sale Price by Year Built (2012 & 2013)

Windom Rental Housing Trends

• River Bluff Townhomes is “affordable,” but is the market leader. It has monthly rents of $615/2BR and $665/3BR.

• River Bluff Townhomes were built in 2001. Windom’s other market rate housing is older than 35 years.

• Older market rate properties have average monthly rents of $475/2BR and $550/3BR.

• About half of Windom’s renters live in single-family homes & duplexes.

RiverviewApartments

River BluffTownhomes

Windom Rental Housing Trends

• 60% of Windom’s non-senior apartment units are subsidized (residents pay 30% of AGI for rent).

• Windom had a 3.7% vacancy rate among its non-senior rental housing supply.

• Windom has three senior housing with services buildings – Pineview AL, Mikkelsen Manor, and Remick Ridge Estates.

• Four Housing Choice Vouchers are being used in Windom – 15 names from Windom are on a waiting list.

Good Samaritan Society Campus

Windom Housing Demand2014 - 2020

Housing Units

Household Growth 85

Demand from outside Windom 22

Replacement Need 15

Pent-up Rental Demand 8

Total 130

Rental/Senior Housing 95 - 100 75%

Owner Housing 30 - 35 25%

Demand Sources: Household Growth – to accommodate the projected increase in population Demand from outside Windom – capturing a small percentage of commuters Replacement Need – to replace functionally obsolete units that should be demolished Pent-up Rental Demand – units needed for the rental market to achieve stabilized occupancy (95%)

Windom Housing Demand

-29 (-2.0%)

+113 (24.2%)

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Owners Renters

Change in Tenure, 2000 to 2010

2000

2010

• 60% of Windom’s demand for new single-family homes is for entry-level prices ($155,000 - $185,000).

• 60% of Windom’s demand for new rental units is from employees with household incomes of $30,000+.

• A greater share of demand is for rental/senior housing than for owner-occupied housing.

Windom Housing Demand2014 - 2020

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Windom Housing RecommendationsNew Construction, 2014 - 2020

Housing TypeNumber of

Units Price/Rent Range

Affordable Rental Townhomes 28 - 30 $585/2BR / $660/3BR

Market Rate Apartments 16 - 18 $510/1BR, $635/2BR

Market Rate Rental Townhomes 12 - 14 $735/2BR, $815/3BR

Independent/Assisted Living 24 - 26 $1,600/1BR, $1,900/2BR

Memory Care Assisted Living 12 - 12 $4,800/Stu, $5,200/1BR

Single-family homes (entry-level) 12 - 14 $155,000 - $185,000

Single-family homes (move-up) 8 - 10 $200,000+

Townhomes 10 - 12 $145,000 - $160,000

Windom Housing Recommendations2014 - 2020

1. Bring new subdivisions for single-family homes and townhomes on-line by 2015

2. Add a mix of rental housing (including re-use of Homes for Creative Living building)

3. Flood Insurance Rate Map Redrawing4. Dilapidated Housing Demolition Program5. Rental Registration Program6. Continue housing rehabilitation programs7. Promote use of Housing Choice Vouchers8. Termite Mitigation