the future of tax credit rental housing in indiana robert vogt september 14, 2005
TRANSCRIPT
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The Future of Tax Credit Rental Housing in Indiana
Robert VogtSeptember 14, 2005
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Where Are We Headed in Indiana?
• Interest rates are rising discouraging the flood of first time homebuyers
• Job opportunities are increasing• Rentals are becoming an
acceptable permanent housing alternative
• Occupancies are on the way up
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Where Are the Opportunities?
• Where do we stand now?
• Where is the growth?
• Where is the supply?
• Where is the future
opportunity?
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Penetration Rate Calculation
• Comparison of existing Tax Credit units with the number of income-qualified renter households
• Provides macro view of Tax Credit market
• Higher the penetration rate, less likely area can support additional Tax Credit product (saturation)
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Penetration Rate Calculation
• Analysis ignores Tax Credit
government subsidized projects
(preservation deals)
• Analysis ignores family versus senior
units
• Project to 2010 to identify
opportunities
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Estimating Future Demand• Estimate change in income-qualified
renter households• Source of data: HISTA (Household Income Size
Tenure Age)– Cross tabulation of multiple variables– Current year estimates and 5-year projections
• 2005 - 2010– Finer income bands designed for use in low-income projects
• $10,000 ranges up to $60,000– More reliable demand estimates than traditional techniques
• Evident in analysis of elderly where most households are less than 3-person
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Estimating Current Supply• State lists (IHCDA web site)
– Units in existing LIHTC properties– Government subsidized Tax Credit
properties are lumped in with conventional Tax Credit
• Thorough field analysis needed to obtain exact supply numbers and verify LIHTC program participation
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Qualified Income Range for Renter Households
Methodology• Qualified Income Range
– 2005 Income Limits– Max Income (60% 4-person max allowable
income)– Min Income (50% 1-bedroom maximum rent)– 35% Rent-to-Income Ratio
• For 2010, income range projections were adjusted to reflect increase in household income
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Approximate Current Penetration Rates
• Higher estimated rates clustered in eastern/central Indiana
• Lower estimated rates in northwestern and southwestern Indiana
• Currently an estimated 10 Counties (10.9%) below 8.0% penetration
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Approximate Current
Penetration Rates
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Highest/Lowest Penetration Rates
Highest• Franklin (49.1%)• Blackford (47.2%)• Ohio (47.2%)• Rush (44.2%)• Dekalb (42.3%)
Lowest• White (0.0%)• Brown (0.0%)• Spencer (0.0%)• Daviess (2.3%)• LaPorte (2.8%)
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Renter Occupied
Households Estimated
Change (2005-2010)
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Renter Occupied Households Estimated Change (2005-2010)
Top 5 Counties• Hamilton (20.1%)• Hendricks (17.6%)• Johnson (10.4%)• Boone (10.3%) • Hancock (10.2%)
Bottom 5 Counties• Fayette (-5.5%)• Martin (-3.7%)• Wabash (-3.6%)• Perry (-3.4%)• Rush (-3.1%)
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Renter Income Qualified
Households Estimated
Change (2005-2010)
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Renter Income Qualified Households Estimated Change
(2005-2010)
Top 5• Hamilton (20.8%)• Hendricks (14.8%)• Boone (10.9%)• Whitley (8.8%)• Johnson (8.0%)
Bottom 5• Vermillion (-
13.5%)• Warren (-11.2%)• Fountain (-
10.6%)• Perry (-10.0%)• Fayette (-8.1%)
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3+ Person Renter
Households Estimated
Change (2005-2010)
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3+ Person Renter Households Estimated Change (2005-2010)
Top 5 Counties• Hendricks (21.1%)• Hamilton (17.8%)• Boone (12.0%)• Johnson (10.1%) • Hancock (10.1%)
Bottom 5 Counties• Martin (-8.7%)• Union (-6.5%)• Floyd (-6.4%)• Fayette (-6.3%)• Newton (-6.2%)
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Renter Households Age 55+ Estimated Change (2005-
2010)
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Renter Households Age 55+ Estimated Change (2005-2010)
Top 5 Counties• Hamilton (39.5%)• Hendricks (32.4%)• Brown (24.8%)• Porter (24.0%) • Crawford (23.9%)
Bottom 5 Counties• Perry (-2.8%)• Fayette (0.8%)• Benton (3.0%)• Jay (4.0%)• Martin (4.5%)
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Approximate Future Penetration Rates (2010)
• Assumes no additional supply• Assesses effect of income qualified
household growth on current product supply levels
• Indicates potential for additional product
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Approximate Future
Penetration Rates (2010)
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Approximate Future Penetration Rates (2010)
Highest Penetration• Franklin (51.6%)• Blackford (50.1%)• Ohio (49.1%)• Rush (47.4%)• Dekalb (42.9%)
Lowest Penetration• Brown (0.0%)• White (0.0%)• Spencer (0.0%)• Daviess (2.3%)• LaPorte (2.8%)
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Issues• Does not differentiate between
senior and family projects• Does not evaluate quality of
existing rental housing• Does not consider affordability of
other housing choices (including rental)
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Issues• Does not analyze site specific
market areas• Does not consider current
occupancy rates• Does not account for government
subsidized Tax Credit units• Does not evaluate impact of HCVs
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For Additional Information
Robert VogtVogt Williams & Bowen, LLC
869 W. Goodale Blvd.Columbus, OH 43212
www.vwbresearch.com
614.225.9500