Loading...
HomeMy WebLinkAbout03-21-18 Residential Neighborhoods \P CE % X OFFICE OF THE CITY CLERK KAREEMAH N. FOWLER, CITY CLERK RESIDENTIAL NEIGHBORHOODS MARCH 21, 2018 5:30 P.M. Committee Members Present: Karen White, Jo M. Broden Committee Members Absent: Regina Williams-Preston, Sharon L. McBride Other Council Present: Tim Scott Other Council Absent: Gavin Ferlic, Dr. David Varner, John Voorde, Oliver Davis Others Present: Kareemah Fowler, Graham Sparks, Bob Palmer Presenters: Pam Meyer, Laurie Volk Agenda: Housing Market Study Update- Ms. Volk and Pam Meyer Committee Chair Karen White called to order the Residential Neighborhoods Committee meeting at 5:30 p.m. She introduced members of the Committee and stated, There are also two (2) additional meetings being held at this time. Councilmember Oliver Davis is attending a meeting that provides an update on the City Cemetery. The other meeting is in regard to the homelessness issue our City is facing and Councilmember Sharon McBride is in attendance. Committee Chair White then proceeded to give the floor to the presenters. Housing Market Study Update-Ms. Volk and Pam Meyer Pam Meyer, Director of Neighborhood Development with offices on the 14th floor of the County- City Building, stated, Thank you, Councilmembers and, specifically, Committee Chair White, for holding this meeting. We felt it important to provide feedback on the market analysis that we had talked about in the latter part of 2017 when resources were allocated to retain the firm of Zimmerman/Volk. We have with us today, Laurie Volk,who is going to present her findings and, as indicated, there will be another public meeting tomorrow evening in the Humphreys Room at the St. Joseph County Public Library at 5:30 p.m. Laurie Volk,Zimmerman/Volk Associates with offices at 24 E. Main Street, Clinton,New Jersey, stated, Thank you very much for having us and I am delighted to be back. I have good news and we spent a lot of time and effort doing this study.It is filled with a lot of numbers.This presentation (available in the City Clerk's Office) torsi overviews our findings and highlights the key findings. Certainly, at some point in the near future,the entire study will be made available online and anyone curious enough to go through the hundreds of pages of our study, they will be welcomed to download it. I am the co-Managing Director of Zimmerman/Volk Associates and we were formed as a company in 1988. We have been doing these kinds of studies for thirty (30) INTEGRITY1 SERVICE1 ACCESSIBILITY JENNIFER M.COFFMAN BIANCA L.`I H ADO JOSEPH R MOLNAR CHIEF DEPUTY/DIRECrOR OF OPERATIONS DEPUTY'DIREcroR OF PoLICY ORDINANCE VIOLATION CLERK EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1227 W.Jefferson Blvd.I South Bend,Indiana 466011 p 574.235.92211 f 574.235.9173 1 www.southbendin.gov CITY OF SOUTH BEND I OFFICE OF THE CLERK years.We've done more than five-hundred(500)of them in forty-seven(47) states and we've done more than eighty-five (85) downtown studies. Of which, one (1) of them was here in South Bend in 2013.A year later,we were on a team to do an analysis of the Westside Corridors which included Western Avenue and Lincolnway. This was the third study we undertook here in the City. This time we are focusing on, what we call, the in-town neighborhoods. It is very important that cities build on strength. You want to strengthen your core and then you move out from that core. It is a much more successful policy than doing scatter-site in-fill development. She continued, We have a very different approach to market-analysis. We look at market potential as opposed to market demand. Now typically, a residential market analysis will look at what the projection is in the City for number of households over the next five (5) years. If a city has historically been losing households, those projections will be negative. That means it is going to be very hard to delineate what the market should be and what should be built. If there hasn't been any new construction in the City, it is even more challenging. So,many years ago in the early 90s, we decided, since most of our work was going to be in cities,to develop a methodology that could get at what market could be in a city that had been losing households.We thought the best approach would be to look at market potential. That is a very simple theory based on the fact that even in cities that are losing population, people are still moving. If you can understand who is moving, what their housing preferences are, what their financial capabilities are, you can construct a program of new housing that will actually correspond to those capabilities and preferences. That leads to a very successful rebuilding of a City. She went on, That is what we have done here. We have looked at both the City as a whole and in three(3)different study areas. The study answers our primary questions and these questions are of particular interest to developers because they need to fill out pro-formas to see if their project is going to work.A lot of the information in the study will do that and will help them decided whether they have a feasible project or not. First,we took a look at what the City is as a whole. As of 2017, there were about 101,500 people who lived here in about 40,100 households. The interesting thing about South Bend and every other city we have worked in is that even though we always talk about the United States being a nation of families, we are actually becoming a nation of one (1) and two (2)person households. That is primarily because the two (2)largest generations in America today are mostly one (1) and two (2) person households and they are dominating the housing market. They are the Baby Boomers and the Millennials. So, South Bend is not unusual in the fact that sixty-three percent(63%) of all your households contain just one(1) or two (2)persons. The other mismatch we see is that seventy-three percent (73%) of your housing units are single-family detached houses. A lot of them were built during the era when America was predominately family households. So what we have here is a mismatch between the market and the kind of housing stock you have right now. We have always told cities that have this mismatch that it is even more important for them to create new housing units that can correspond to the housing preferences of the current market. She continued, Looking at the South Bend households by life stage, we see that thirty-seven percent(37%)of all the households could be characterized as empty-nesters and retirees,these are mostly Baby Boomers. Another thirty-five percent (35%) are family households, both traditional and non-traditional. The third segment accounts for younger singles and couples at twenty-eight percent (28%). That's a very nice balance for the Midwest. We've been working in a number of cities in Indiana where the percentage of empty-nesters and retirees is exceeding sixty percent (60%). That means they really need to do something very soon to try and attract younger people EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1 227 W.Jefferson Bvld I South Bend,Indiana 466011 p 574.235.9221 If 574.235.9173!TTD 574.235.5567 Imm.southbendin.gov 2 CITY OF SOUTH BEND I OFFICE OF THE CLERK because that is the future of the City. Now, what we looked at was not just market-rate housing units or just affordable housing units, we looked across the spectrum. In order to understand and break-down the incomes, we used the HUD definitions of the different levels of income at thirty, fifty and eighty percent(30%, 50%, 80%) of the AMI. The AMI here in South Bend,which stands for the Area Median Income for a family of four(4)is$61,500. Then,HUD comes up with income levels that correspond to those percentages. As you can see (referencing the presentation), a one (1)person household at thirty percent(30%)of the AMI is making just under$13,000 a year. That same household, if they are making eighty percent (80%) of the AMI is at about $34,000 a year. That range, between thirty percent(30%) and eighty (80%) of the AMI is what we are calling the affordable workforce housing percentages. Above eighty percent (80%) AMI is what we are calling market-rate, which are households that can afford market-rate new or existing dwelling units. It goes up as the number of people in the household increases so that when you are at a five (5)person household at eighty percent (80%) AMI,the income is just over$52,700 a year. She went on, The way our methodology works is we first try to understand where the potential market is for new and existing housing in the City is currently living. We used a lot of data sources to get that information. We didn't just make it up. The American Community Survey conducted by the Census Bureau every one (1), three (3) and five (5) years does a very detailed analysis of every City and location in the United States. One (1)of the datasets they include is the mobility of the resident population. So, we can get down to the block-group of what the mobility really is. That means how many households, families or people are moving within that given area. We first looked at the mobility rate in the City of South Bend. That gave us the average number of households that would move, in a given year, over the next five (5) years. Then we also found from the American Community Survey the listing of how many people are moving from the balance of St. Joseph County into the City. We then applied that percentage to the households in St. Joseph County and came up with that number. The regional draw area surrounding the County comes from the Internal Revenue Service. As we know if you move in a given year, you have to report it on your tax return and the IRS assembles all that data and is available for free online. That is where we get the number of households that would be moving into the City of South Bend from the region and the rest of the County. She continued, So when you look at those numbers and add them up together, what we get is approximately 7,500 households, on average,per year, over the next five (5) years, moving to the City or within the City. That is your annual market potential. That is everybody. There is no exclusion of income. So the next thing we want to look at is who they are. We need to know where they are in their life stage and what their financial capabilities are.About forty-four percent(44%) of these folks are the younger singles and couples, or, Millenials. A lot of Millenials are now choosing to live in cities rather than suburbs and we are finding that all across the country, regardless of region. Traditional and non-traditional families represent the next largest segment at thirty-six percent(36%). Finally, empty-nesters and retirees represent about twenty percent(20%) of the annual potential market. This is partially due to the fact that young people tend to move more frequently than older people. That has been a fact of our lives for quite some time now. So when we look at their housing preferences, about half of them would be in the market for rental units. About seven percent (7%) would prefer to purchase a condominium. About eleven percent (11%) would prefer to purchase a row-house or townhouse. And thirty-one percent (31%) would prefer to purchase a single-family detached house. Those are broad categories and what I want to emphasize is we weren't looking at a big builder coming in to take down three (3) blocks of a EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1227 W.Jefferson BVIdI South Bend,Indiana 466011p574.235.9221If574.235.9173 TM574.235.55671www.southbendin.gov 3 SCITY OF SOUTH BEND I OFFICE OF THE CLERK neighborhood and building a subdivision. What we are talking about is small-scale,neighborhood in-fill development. She went on, This (referencing a picture in the presentation) is a trans-sect of different housing types that was put together by a planning firm in California. On the far left of the diagram is the least dense housing type which is a single-family detached house. It then moves in increasing density to the right of the diagram with mid and high-rise apartments that typically appear in a downtown. The space in between the single-family detached house and the mid-rise in the downtown is called the `missing middle housing.' Clearly, although South Bend has more than just single-family detached housing,the single-family detached house is what primarily dominates the region here. We also know that the missing middle housing does exist here in South Bend. She then showed examples with pictures in the presentation. She continued,We aren't talking about introducing alien housing,we are talking about introducing more of what you have because the market is moving to more of the missing middle housing types. The next question is how fast those target households will be rented or bought by the mixed- income families. What we look at is not just absorption,rather,we look at getting an annual capture of that potential market by housing type. So, if we suggest that you could capture ten to twelve percent (10% - 12%) of the multi-family housing types like the rentals and condominiums, and five to seven and a half percent(5%-7.5%) of the single-family attached and detached units,what you wind up with is a market potential capture of nearly six hundred (600)to over seven hundred and sixty-five (765) mixed-income units, per year, over the next five (5) years. That is City-wide and would break out to the three hundred and eighty-one (381) to four hundred and fifty-seven (457) rentals, fifty-six (56) to sixty-eight (68) condominiums, forty-three (43) to sixty-four (64) townhouses, and one hundred and seventeen(117)to one hundred and seventy-six(176) detached houses. That is all new and rehabbed so it is not all new construction. It all encompasses both affordable and market-rate homes. Of those numbers, fifty-one percent (51%) are affordable rentals, forty-three percent(43%) are the condominiums, forty-five(45%) are the townhouses and forty-four percent (44%) are the urban houses. I just want to reiterate we were not looking solely at market-rate; we were looking at both market-rate and affordable. She went on,We had three(3) study areas that are what we call the in-town neighborhoods which are the next set of neighborhoods after the downtown. Study Area A is comprised of Census tracts six(6),nineteen(19)and twenty(20). We designated census tracts but it doesn't meant that is only where new development can happen. We used the census tracts because it is the most reliable way to download data about any given area. Study Area B is comprised of Census tracts seventeen (17),twenty-nine(29)and thirty(30). That actually encompasses a good part of downtown.Again, what we would be focusing on is the area more southeast of downtown. We have already focused on downtown and a lot is already happening there. Study Area C is comprised of Census tracts twenty-two (22), twenty-seven (27), twenty-eight (28) and thirty-four (34). Again, these sections are not to be taken literally in that if you have a potential lot and wanted to build something that was a block outside these lines, you could assume that would still be part of the study area. This (referencing the presentation) is an overview of those three (3) study areas. She continued,As you can see, Study Area C has the largest number of households and population. But you will also see that the composition of households are very different. In Study Area C there are forty-nine (49%) of one (1) and two (2) person households, while there is sixty-six percent (66%) in Study Area B and sixty-one percent (61%) in Study Area A. I thought that was very EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building i 227W Jefferson Bvld I South Bend,Indiana 466011 p 574.235.9221 If 574.235.9173 TTD 574.235.5567 i vwwvsouthbendin.gov 4 ®CITY OF SOUTH BEND I OFFICE OF THE CLERK interesting. There are also differences in the owner occupations from Study Area to Study Area as well as the percentages of the single-family detached houses. Eighty-five percent (85%) of the dwelling units in Study Area C are single-family, so they do need to diversify their housing stock. Study Area A and Study Area B are already fairly diverse and I think the need is more to introduce more new housing as well as rehab. By life-stage, this (referencing a slide in the presentation) is how the three(3) Study Areas breakdown.Again,you will see there are far more families in Study Area C than there are in Study Areas A and B. And there are far more young people in Study Area A as opposed to Study Areas B and C.A lot of that is driven by the housing stock.The more single- family houses you have, the more families you tend to have living in them because most single persons find a single-family house a little large for just one(1)person.When you look at the annual market potential for each of those three (3) Study Areas, we went through the same processes we did for the City as a whole. The bottom line was just under nine hundred (900) households represent the annual potential market for Study Area A, about eight hundred and fifty (850) households represent the annual potential market for Study Area B, and about 1,250 households represent the annual potential market for Study Area C. She went on, One may ask why there are so many more in Study Area C. That is partly because there are more households living there in the first place and they also have a much higher mobility rate than Study Areas A and B. People tend to move there more frequently than the other two (2) Study Areas. So the next question is who those potential renters and buyers are. This (referencing a slide in the presentation) shows you the mix by life-stage. You will see in Study Area A, fifty- three percent (53%) of the market is young people. In Study Area C, forty-five percent (45%) of the market are traditional and non-traditional families. The interesting point for me was that Study Area B was the highest in terms of having the empty-nester and retiree market. Study Area C was second highest at twenty-six percent (26%). When we are looking at capturing the same percentages, ten to twelve percent (10% - 12%) of the multifamily and five to seven and a half percent(5% -7.5%)of the for sale single-family attached and detached,you could then capture up to fifty-six to seventy(56—70)mixed-income units,per year,over the next five(5)years in Study Area A,fifty-nine to sixty-nine(59—69)mixed-income units,per year,over the next five(5)years in Study Area B, and seventy-one to ninety-three(71 —93)mixed-income units,per year, over the next five (5) years in Study Area C. The share of households with incomes between thirty and eighty percent (30% - 80%) AMI for those total mixed-income units in Study Area A would be forty percent (40%) rental, thirty-nine percent (39%) in B and forty-seven percent (47%) in C. Following down the columns (on the slide of the presentation), you can see that it varies by Study Area based on the composition of who those households are in that particular market potential for that Study Area. She continued, So the findings and takeaway is that there is market potential, not demand, but potential, in all three (3) Study Areas. That includes both affordable, approximately forty percent (40%), and market-rate units, approximately sixty percent (60%), and both ownership and rental at about fifty-fifty(50—50)balance between the two(2).It is based on smaller-scale neighborhood development.Not wholesale demolition of blocks. But, infilling lots and infilling sites,rehabbing houses and maybe converting a super large single-family house into four (4) condominiums. It means greater housing diversity, greater income diversity, stronger neighborhoods and all in hope to get a stronger City. Committee Chair White then opened the floor to questions and comments from Committee and Council members. EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 227 W.Jefferson BvldI South Bend,Indiana 466011p574.235.9221If574.235.9173;TTD574.235.5567jwww.southbendin.gov 5 ®CITY OF SOUTH BEND I OFFICE OF THE CLERK Committeemember Jo M. Broden asked, Looking at page eight (8), how did you determine those areas? Is it a distance from downtown? Ms. Volk replied, Basically what I did was look at the next neighborhoods going out from the downtown. It was also important to note and support the rehab already done in these study areas. We didn't include the northeast sector because there is already a presence of homebuilding there. The next step, from this,would be even the next ring of neighborhoods. Committeemember Broden followed up, These areas are relative to downtown but what is important, from your work in other areas, aside from housing? What are the other takeaways? Ms. Volk replied, Well, other cities we work in don't have a University or other industries for employment. Housing is economic development. Sometimes, it is far more difficult to get commercial uses into a neighborhood, particularly you don't want them embedded in the neighborhood. That is harder to achieve than, say, a multi-family building where you may be able to put retail on the ground floor. Councilmember Tim Scott stated, This is really interesting and thank you for the data. You and I had talked one (1) on one (1). You had done work out in Colorado and you had done well with that covering all different income levels. That was interesting. So you are talking maybe about one hundred and fifty-three (153) new units per year over the next five (5) years in mixed income and mixed variety. I'm looking at the potential of new ones and also looking at the ones we have now. I wonder if you have too much of a housing stock already that is not the right housing stock. Ms. Volk stated, Yes and unfortunately today's market is totally divergent from the norm. It is more young people, more old couples and very few families. And we've talked about that and what to do with the existing housing stock. Well, some of it, if it has any kind of architectural character at all,if you add in-fill new construction at higher values,all of the sudden those existing dwelling units accrue higher value as well.It will actually make some of those units more attractive to buy who would not have considered it before. When Baby Boomers were young, we would go into a City and buy a cheap house and fix it up. Millenials don't want to do that. They would rather live in a five hundred(500) square foot cool apartment downtown. Although there is a percentage of young couples who are just starting out and would like to buy something.If there is good quality construction and some architectural detail,you don't have to worry because it will be bought. It is the housing stock that was built as primarily worker housing that is really hard to deal with in the 21St century. Baltimore and Philadelphia and thousands of row-houses, block after block they are empty. Councilmember Scott followed up, I grew up in St. Louis and that is the same there. There is also the potential of people moving away from existing single detached houses because maybe that is too large for them. I was talking with DCI and Councilmember White earlier about repair. But you're saying there could be some of those two (2)-family or four (4)-family flats mixed in with some of the single-family in the right area, right? Ms. Volk replied, We would recommend not doing rentals mid-block. There are plenty of streets that have, at the intersections, vacant corner lots and that is where you could do a rental duplex. Within the block, we should focus on ownership housing. That means, also, rehabbing all the EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1 227 W.Jefferson Bvld I South Bend,Indiana 466011 p 574.235.9221 If 574.235.9173 1 TTD574.235.5567 I www.southbendin.gov 6 ®CITY OF SOUTH BEND I OFFICE OF THE CLERK houses that are there now. It is a challenge with some of the housing and what the market wants today. Councilmember Scott followed up,And the other thing is right-sizing to that person. The question becomes if a detached sized house for a single person be better than what we have existing. That makes me think of the tiny home idea as well. Ms.Volk stated,Yes and we talked about that as well. Our recommendations start at three hundred and fifty(350) square feet for a tiny house and go up to 1,500 square feet for a single-family house. Councilmember Scott followed up, My wife right out of college lived in a great little neighborhood. She lived in the middle of her block in a four (4)-plex. There were stores on both ends of the block and as it moved into the middle of the block, there were eventually residential homes.People have lived there for almost sixty(60)years. So you had her,a young student,mixed into a neighborhood with older people and a little bit of business. The diversity was great and it was a great socioeconomic mix. I would love to see some of that in South Bend. Ms. Volk replied, Well for young people, a two (2) unit building, if they could get mortgage to pay for it, actually renting out the other unit would help pay for that mortgage. Committee Chair White then opened the floor to members of the public to give comment to or ask questions about the presentation. Lynn Collier, 4916 W. Washington Street, stated, I am a life-long resident and this is a very interesting report.Thank you very much.A lot of the information is vital because many of us know bits and pieces of what we are seeing because of the neighborhoods we live in. We know there is room for change through revitalization and rehab. This fits right in, is just depends on who you are talking to and what is on the agenda. The one (1) question I have is when you did the Study Area A, did you say exactly where it went from? Ms. Volk referenced the slide of the presentation depicting the exact boundaries of Study Area A. Marty Wolfson, 808 Park Avenue, stated, I think it is a very intriguing study. The Study Areas chosen were interesting too. You talked about potential as opposed to demand. So I am wondering what the next step with that is? How do you envision this housing getting built and the people buying it? Ms. Volk replied, When I was here the first time, I met with developers, real estate agents, the foundations, non-profits and bankers. Obviously, we are going to need bankers for financing and there was receptivity on the part of the banks I spoke to. They said they will look at this. It is always a challenge because banks tend to be conservative of where they put their money.Typically what happens is it takes some brave person to do a project that is successful, and then the banks realize the new area to invest in. I see a growing interest and excitement here about bringing the neighborhoods back to life. I think in five (5) years, we will be working on the next ring of neighborhoods. Linda Wolfson, 808 Park Avenue, stated, I look forward to reading the full report. Something in the presentation, however, caught my attention. It was consistent with the discussions we have EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1 227 W.Jefferson Bvld I South Bend,Indiana 46601 p574.235.9221 f574.235.9173I TTD574.235.5567 www.southbendin.gov 7 CITY OF SOUTH BEND I OFFICE OF THE CLERK had. In the past, we have looked at the use of anchor institutions. I think this plan will have a profound effect on the surrounding areas and I look to read more about it. Joseph Adams, 3465 High Street, stated, This is a good report. I am wondering if this report could be used by the business industry to justify a maintenance program that would help keep up the existing housing stock? Ms. Volk replied, When we were doing a study in Washington D.C., one (1) of the goals of the study was to create jobs. They had a training program for the young people in the neighborhood to learn the skills necessary to maintain the houses. It was beneficial and something like you are talking about could definitely spring out of this. With no further business, Committee Chair White adjourned the Residential Neighborhoods Committee meeting at 6:27 p.m. Respectfully Submitted, Karen White, Chairperson EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building',227W Jefferson Bvld I South Bend,Indiana 466011 p 574.235.9221 if 574.235.9173 I TTD 574.235.5567 www.southbendin.gov 8