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Agenda 03/26/2019 Item # 9A9.A 03/26/2019 EXECUTIVE SUMMARY Recommendation to approve by Resolution the single Petition within the 2018 Cycle One of Growth Management Plan Amendments for an Amendment specifically Proposed to the Future Land Use Element to Establish the Livingston Road/Veterans Memorial Boulevard East Residential Subdistrict for Transmittal to the Florida Department of Economic Opportunity for Review and Comments Response. (Transmittal Hearing) (PL20170004419/CP-2018-1) OBJECTIVE: For the Board of County Commissioners (Board) to approve the single petition in the 2018 Cycle One of amendments to the Collier County Growth Management Plan (GMP) for transmittal to the Florida Department of Economic Opportunity and other statutorily required review agencies. CONSIDERATIONS: • Chapter 163, F.S., provides for an amendment process for a local government's adopted Comprehensive Plan. • Collier County Resolution No. 12-234 provides for a public petition process to amend the GMP. • The Collier County Planning Commission (CCPC), sitting as the "local planning agency" under Chapter 163.3174, F.S., held their Transmittal hearing for the 2018 Cycle 1 petition on January 17, 2019 (continued from December 6, 2018) and February 7, 2019 (one petition only, PL20170004419/CP-2018-1). • This Transmittal hearing for the 2018 Cycle 1 petition considers an amendment to the Future Land Use Element (FLUE). The GMP amendment requested is specific to a non -corner 35.57 -acre property, fronting approximately 660 feet on the east side of Livingston Road and 660 feet on the south side of Veterans Memorial Boulevard, in Section 13, Township 48 South, Range 25 East (North Naples Planning Community). The northerly portion of the property is zoned A, Rural Agricultural, and is undeveloped. The southerly portion of the property is zoned RPUD, Della Rosa Residential Planned Unit Development, approved for 107 DUs (7 DU/A), and is undeveloped. An f8.5 -acre portion of the property is also designated ST, Special Treatment Overlay. This petition seeks to amend the GMP, adopted by Ordinance No. 89-05, as amended, specifically amending the FLUE by adding a new Subdistrict in the Urban — Mixed Use District, revising the Future Land Use Map to depict the new Subdistrict, and adding a new Future Land Use Map Series inset map that depicts the new Subdistrict. The new residential subdistrict will: allow a maximum residential density up to 8.55 dwelling units per acre (DU/A) yielding 304 DUs; require the property to be rezoned to a Residential Planned Unit Development (RPUD); limit allowable uses to multi -family rental dwelling units of market rate housing; and, utilize Transportation Demand Management (TDM) strategies. In Summary, the new Subdistrict derives its residential density using the Density Rating System as follows: Base Density of 4 DU/A + Transportation Concurrency Management Area (TCMA) Bonus of 3 DU/A = 7 DU/A. The Density Rating System states that density bonuses are discretionary, not entitlements, and are dependent upon meeting the criteria for each respective density bonus - in this case, utilizing Transportation Demand Management (TDM) strategies [to satisfy FLUE Policy 6.1 that states, in part: "that will ensure an adequate level of mobility... and further the achievement of... important state planning goals and policies... promoting public transit, bicycling, walking..."]. These 7 DU/A applied to the subject site's 35.57 acres allows up to 249 DUs. The additional density of 1.55 DU/A is derived not from the FLUE's Density Rating System, but from the ask within the amendment itself. Subdistrict provisions require TDM strategies to be written into Packet Pg. 49 9.A 03/26/2019 PUD Developer Commitments. The Subdistrict limits project development to 7 DU/A until the facilities and interconnections associated with the TDM strategies are completed (such as, providing an on-site Collier Area Transit shelter and interconnection(s) to abutting commercial development). In preparation for the December 6, 2018 CCPC hearing, the staff based their analysis of this petition on the originally -requested 420 dwelling units. The initial Subdistrict proposal allowed a maximum residential density up to 12 dwelling units per acre (DU/A), yielding 420 DUs, required the property to be rezoned to a Residential Planned Unit Development (RPUD), limited allowable uses to multi -family rental dwellings, and required utilization of two TDM strategies. Based on the review of this petition, including the supporting data and analysis, staff made the following findings and conclusions: • The subject site is undeveloped, partly zoned A, Rural Agricultural and partly zoned Della Rosa Residential PUD. An f8.5 -acre portion of the property is also designated ST, Special Treatment Overlay. The entire site is designated Urban Residential Subdistrict on the FLUM and lies within the Northwest Transportation Concurrency Management Area (TCMA), an area where the Plan encourages compact urban development and utilizes transportation demand management strategies to reduce traffic impacts. • Analysis indicates that projected population growth provides sufficient demand for market-based apartments. • At the macro level at which a GMP amendment is reviewed, staff is of the opinion that the proposed GMP amendment is appropriate for the site. The rezone petition to implement the proposed Subdistrict will need to address specific compatibility measures. • No issues or concerns regarding impacts upon potable water, wastewater collection and treatment or solid waste collection and disposal services have been identified. • The proposed GMP amendment has no effect on the requirements of the Conservation and Coastal Management Element (CCME). • The Barron Collier and Gulf Coast High Schools have a combined Florida Inventory of School Houses (FISH) capacity of 3,606 students, and a 2016/2017 peak enrollment of 3,888 students, and a projected 2021/2022 enrollment of 4,000 students (111% capacity). Enrollment at Gulf Coast High School is being monitored and temporary alternatives to address overcrowding may be implemented prior to permanent relief with the opening of a new high school in 2023. • People attending the Neighborhood Information Meeting expressed a strong consensus that developing the property was not opposed, but the proposed intensity and density of this project, and this specific development is opposed. Prior to the December 6 CCPC meeting, the applicant explained that changes they made in November 2018 to their companion PUD application materials included reducing intensity from 420 to 350 DUs. Additional time was needed to meet with neighbors and properly prepare for similar changes in GMPA materials, and the applicant requested to continue this hearing until the CCPC meeting of January 17, 2019. No public testimony was heard, and the CCPC continued this hearing to January 17, 2019. At the January 17, 2019 CCPC meeting, changes presented by the applicant would limit the maximum residential density to 9.8 DU/A, yielding 350 DUs. Numerous speakers presented extensive public testimony, expressing concerns related to intensity, density, compatibility and traffic congestion. Transportation Planners reported further that the reduced number of dwelling units [to 350] affects their findings differently, and commented: • According to the 2018 Annual Update and Inventory Report (AUIR), Livingston Road is currently and projected to operate at an acceptable level -of -service. • Additional improvements within and near the TCMA will assist in maintaining the acceptable level - Packet Pg. 50 9.A 03/26/2019 of- service on a link specific basis as well as areawide. These improvements include: Veteran's Memorial Boulevard is slated to be constructed between Livingston Road; Old 41 Project Development and Environmental study from US 41 to the Lee County line to determine future improvements; and, Logan Boulevard improvements will soon be completed from Immokalee Road to Bonita Beach Road — another parallel north -south connection that will provide relief. Due to the project's location within the TCMA, if the project were to impact a deficient or projected deficient roadway, the project would be eligible to seek an exemption from link by link concurrency. Though the applicant does not need to seek an exemption for link -specific concurrency (as there is sufficient capacity on links identified and the link that does have a projected deficiency would have a de minimis impact [I% or less of the adopted peak hour service volume at the adopted level of service (LOS)]) at this time for transportation consistency purposes, the applicant has committed to executing at least two transportation demand strategies to gain an additional 3 DU/A density. A second exit -only access on Livingston Road is proposed [by the companion PUD] which does not meet access management distance separation requirements. The Access Management Policy (Resolution 13-257) represents desirable requirements; however, the ultimate goal is to exceed these standards. Transportation Planning staff does not recommend approval of the second access point as it is not consistent with the Access Management Policy. Transportation Planning staff finds that the proposed development can be found consistent with the Access Management Policy if the second access point on Livingston Road is removed from the companion PUD master plan. The CCPC continued this hearing to February 7. At the February 7, 2019 CCPC meeting, the applicant proposed to provide 10% of the dwelling units as affordable housing at 80 to 120% of median income. Numerous speakers presented continuing public testimony with the same concerns as previously as well as concerns about affordable housing units. Changes presented by the CCPC recommended limiting the maximum residential density to 8.55 DU/A, yielding 304 DUs, and limiting the units to market rate only. The proposed Subdistrict text, as recommended by the CCPC, is depicted in Resolution Exhibit "A". FISCAL IMPACT: No fiscal impacts to Collier County result from this amendment, as this approval is for the transmittal of this proposed amendment. Petition fees account for staff review time and materials, and for the cost of associated legal advertising/public notice for the public hearings. GROWTH MANAGEMENT IMPACT: Approval of the proposed amendment by the Board for transmittal and its submission to the Florida Department of Economic Opportunity and other statutorily required review agencies will commence the Department's thirty (30) day review process and ultimately return the amendment to the CCPC and the Board for its Adoption hearing tentatively to be held in late Spring of 2019. LEGAL CONSIDERATIONS: This Growth Management Plan (GMP) amendment is authorized by, and subject to the procedures established in, Chapter 163, Part II, Florida Statutes, The Community Planning Act, and by Collier County Resolution No. 12-234, as amended. The Board should consider the following criteria in making its decision: "plan amendments shall be based on relevant and appropriate data and an analysis by the local government that may include but not be limited to, surveys, studies, community goals and vision, and other data available at the time of adoption of the plan amendment. To be based on data means to react to it in an appropriate way and to the extent necessary indicated by the data available on that particular subject at the time of adoption of the plan or plan amendment at issue." Section 163.3177(1)(f), F.S. In addition, Section 163.3177(6)(a)2, F.S., provides that FLUE plan amendments shall be based on surveys, studies and data regarding the area, as applicable including: a. The amount of land required to accommodate anticipated growth. b. The projected permanent and seasonal population of the area. Packet Pg. 51 03/26/2019 c. The character of undeveloped land. d. The availability of water supplies, public facilities, and services. e. The need for redevelopment, including the renewal of blighted areas and the elimination of non- conforming uses which are inconsistent with the character of the community. £ The compatibility of uses on lands adjacent to or closely proximate to military installations. g. The compatibility of uses on lands adjacent to an airport as defined in s. 330.35 and consistent with s. 333.02. h. The need to modify land uses and development patterns with antiquated subdivisions. i. The discouragement of urban sprawl. j. The need for job creation, capital investment and economic development that will strengthen and diversify the community's economy. And FLUE map amendments shall also be based upon the following analysis per Section 163.3177(6)(a)8.: a. An analysis of the availability of facilities and services. b. An analysis of the suitability of the plan amendment for its proposed use considering the character of the undeveloped land, soils, topography, natural resources, and historic resources on site. c. An analysis of the minimum amount of land needed to achieve the goals and requirements of this section. This item is approved as to form and legality. It requires a majority vote for approval because this is a Transmittal hearing. [SAS] STAFF RECOMMENDATION TO THE COLLIER COUNTY PLANNING COMMISSION: That the CCPC forward petition PL20170004419/CP-2018-1 to the Board, with the maximum residential density up to 9.8 dwelling units per acre (DU/A) yielding 350 dwelling units; as heard at the January 17, and February 7, 2019 meetings, and to transmit to the Florida Department of Economic Opportunity and other statutorily required review agencies. COLLIER COUNTY PLANNING COMMISSION (CCPC) RECOMMENDATION: The CCPC heard this petition at their January 17, and February 7, 2019 meetings, and voted [4/2] to forward the subject petition to the Board, with the maximum residential density up to 8.55 dwelling units per acre (DU/A) yielding 304 dwelling units; with a recommendation to transmit to the Florida Department of Economic Opportunity and other statutorily required review agencies. There is public opposition to the petition and therefore it cannot be placed on the Board's Summary Agenda. RECOMMENDATIONS;. To approve the Resolution and transmit petition PL20170004419/CP-2018-1 to the Florida Department of Economic Opportunity and other statutorily required review agencies, as recommended by the CCPC. Prepared by: Corby Schmidt, AICP, Principal Planner, and David Weeks, AICP, Growth Management Manager, Comprehensive Planning Section, Zoning Division ATTACHMENT(S) 1. CCPC Transmittal Staff Report_Rev FNL (PDF) 2. [Linked] Petition -Application _PL20170004419-CP-18-1(PDF) 3. [Linked] Emails & Petitions Against ALLURA Apts. (PDF) 4. Transmittal Resolution - 021419(PDF) 5. ND -2238985 Ad as Posted 3.6.19 (DOCX) 6. Mediterra Community Association -Correspondence (PDF) 9.A Packet Pg. 52 9.A 03/26/2019 COLLIER COUNTY Board of County Commissioners Item Number: 9.A Doe ID: 8036 Item Summary: ***This item to be heard no sooner than 1:00 p.m.*** Recommendation to approve by Resolution the single Petition within the 2018 Cycle One of Growth Management Plan Amendments for an Amendment specifically Proposed to the Future Land Use Element to Establish the Livingston Road/Veterans Memorial Boulevard East Residential Subdistrict for Transmittal to the Florida Department of Economic Opportunity for Review and Comments Response. (Transmittal Hearing) (PL20170004419/CP-2018-1) Meeting Date: 03/26/2019 Prepared by: Title: Planner, Senior — Zoning Name: Marcia R Kendall 02/19/2019 8:44 AM Submitted by: Title: Division Director - Planning and Zoning — Zoning Name: Michael Bosi 02/19/2019 8:44 AM Approved By: Review: Growth Management Department Growth Management Department Zoning Growth Management Department County Attorney's Office Growth Management Department County Attorney's Office Office of Management and Budget Budget and Management Office County Manager's Office Board of County Commissioners David Weeks Additional Reviewer Judy Puig Level 1 Reviewer Michael Bosi Additional Reviewer James C French Deputy Department Head Review Scott Stone Level 2 Attorney Review Thaddeus Cohen Department Head Review Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Valerie Fleming Level 3 OMB Gatekeeper Review Mark Isackson Additional Reviewer Nick Casalanguida Level 4 County Manager Review MaryJo Brock Meeting Pending Completed 02/19/2019 10:01 AM Completed 02/19/2019 4:57 PM Completed 02/21/2019 9:06 AM Completed 02/22/2019 5:44 PM Completed 02/26/2019 8:50 AM Completed 02/28/2019 11:02 AM Completed 02/28/2019 11:24 AM Completed 03/08/2019 2:50 PM Completed 03/11/2019 9:50 AM Completed 03/17/2019 6:22 PM 03/26/2019 9:00 AM Packet Pg. 53 Agenda Item 9.A.3 Co*e-r C:�C!0-94 4ty REVISED STAFF REPORT COLLIER COUNTY PLANNING COMMISSION TO: COLLIER COUNTY PLANNING COMMISSION FROM: GROWTH MANAGEMENT DEPARTMENT, ZONING DIVISION, COMPREHENSIVE PLANNING SECTION HEARING DATE: JANUARY 17, 2019 - CONTINUED FROM DECEMBER 6, 2018 SUBJECT. PETITION PL20170004419 / CP -2018-1, 2018 CYCLE ONE GROWTH MANAGEMENT PLAN AMENDMENT [TRANSMITTAL HEARING] ELEMENT: FUTURE LAND USE (FLUE) APPLICANT/AGENTS: Applicant: Keith Gelder, President SD Livingston, LLC 2639 Professional Circle, no. 101 Naples, FL 34119 Agents: Robert J. Mulhere, FAICP Hole Montes, Inc. 950 Encore Way Naples, FL 34110 GEOGRAPHIC LOCATION: The subject property comprises 35.57 acres and is located in the southeast quadrant of the Livingston Road and Veterans Memorial Boulevard intersection. The non -corner property fronts approximately 660 feet on east side of Livingston Road and 660 ft. on the south side of Veterans Memorial Boulevard. The property lies within the North Naples Planning Community, in Section 13, Township 48 South, Range 25 East. Richard D. Yovanovich, Esq. Coleman, Yovanovich & Koester, P.A. 4001 Tamiami Trail North, Suite 300 Naples, FL 34103 - 1 - PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban - Mixed Use District in FLUE 9.A.a Packet Pg. 54 Agenda Item 9.A.3 REQUESTED ACTION: This petition seeks to establish a new Subdistrict in the Future Land Use Element (FLUE) text, and Future Land Use Map and Map Series of the Growth Management Plan (GMP) by amending: 1) Policy 1.5 of the Urban - Mixed Use District to add the Livingston Road/Veterans Memorial Boulevard East Residential Subdistrict; 2) the Urban — Mixed Use District to establish the new Subdistrict provisions; 3) the Future Land Use Map Series listing to add the title of the new Subdistrict map; and, 4) the Future Land Use Map to depict the new Subdistrict and adding a new Future Land Use Map Series inset map that depicts the new Subdistrict. The Subdistrict language proposed by this amendment is found in Resolution Exhibit "A." PURPOSE/DESCRIPTION OF PROJECT: The petition proposes the new Livingston Road/Veterans Memorial Boulevard East Residential Subdistrict in the Urban — Mixed Use District that: allows residential density up to 12 dwelling units per acre (DU/A) yielding 420 DUs; requires the property to be rezoned to a Residential Planned Unit Development (RPUD); limits allowable uses to multi -family rental dwellings; and, requires utilization of two Transportation Demand Management (TDM) strategies. SURROUNDING FUTURE LAND USE MAP DESIGNATIONS. ZONING AND LAND USES: Subject Property: The entire subject property, which comprises 35.57 acres, is designated Urban — Mixed Use District, Urban Residential Subdistrict, which generally provides for higher [land use] densities in an area with fewer natural resource constraints and where existing and planned public facilities are concentrated. The entire subject property lies within the Northwest Transportation Concurrency Management Area (TCMA), an area where traffic management strategies are employed to reduce traffic impacts. This TCMA is bounded by the Collier -Lee County Line on the north side; 1-75 right-of-way on the east side; Pine Ridge Road on the south side; and, the Gulf of Mexico on the west side. From the Livingston Road and Veterans Memorial Boulevard intersection, Livingston Road (CR 881) extends north beyond the Collier -Lee County Line and continues northerly in Lee County; Livingston extends south, approximately 10 miles, to terminate at its intersection with Davis Boulevard; Veterans Memorial Boulevard extends east approximately 4,400 ft. (.80 mi.), to terminate at entrances to residential developments on the west side of 1-75. Veterans Memorial extends west approximately 2,390 ft. (.45 mi.), to terminate at an entrance to a residential development. The 2040 Long Range Transportation Plans (LRTP), both Financially Feasible and Needs Projects, depict this road extending west to US 41. The approximate northerly 660 ft. portion of the property (17.25 ac.) is zoned A, Rural Agriculture, and is undeveloped. The southerly portion of the property is zoned RPUD, Della Rosa Residential Planned Unit Development, and is undeveloped. See the complete analysis of this PUD under the Background and Analysis section below. A ±8.5 -acre portion of the property is also designated ST, Special Treatment Overlay. —2— PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE 9.A.a Packet Pg. 55 Agenda Item 9.A.3 Surroundina Lands: North: The Future Land Use Map designates land immediately north (and east) of the subject property Urban — Mixed Use District, Urban Residential Subdistrict. It is zoned RPUD, Brandon Residential Planned Unit Development, and is developed/developing with single-family dwellings. Land further to the north (and northeast) of the subject property, across Veterans Memorial Boulevard, is also designated Urban Residential Subdistrict, is zoned PUD, Mediterra, and is developed/developing with single-family dwellings. East: The Future Land Use Map designates land located immediately east of the subject property Urban Residential Subdistrict. It is zoned RPUD, Brandon, and is developed/developing with single-family dwellings. The Future Land Use Map designates land lying further east and northeast Urban Residential Subdistrict. This area is zoned A, Rural Agricultural, and is undeveloped. South: The Future Land Use Map designates land lying immediately south (and southeast and southwest) of the subject property Urban Residential Subdistrict. It is zoned RPUD, Brandon, and is developed/developing with single-family dwellings. Land lying further to the southeast is zoned Royal Palm International Academy PUD and developed with a private school and residentially. A small property lying immediately south is zoned A, Rural Agricultural, and is undeveloped. Another small property lying to the southwest (on Livingston Rd.) is zoned A, Rural Agricultural, with a Conditional Use for a fire station; it is developed with the North Collier District 48 Fire Station. West: The Future Land Use Map designates a small property lying immediately west of the subject property Urban Residential Subdistrict. It is zoned A, Rural Agricultural, and is undeveloped. Adjacently north of this parcel, located at the southeast corner of Livingston Road and Veterans Memorial Boulevard, is another small property, designated Livingston Road/Veterans Memorial Boulevard Commercial Infill Subdistrict; it is zoned C-1, Commercial Professional and General Office, and is undeveloped. Land to the west (and northwest and southwest) of the subject property, across Livingston Road, is designated Urban Residential Subdistrict. These lands are zoned A, Rural Agricultural, and undeveloped - except for the entrance road to Veterans Memorial Elementary School, and zoned RMC -Enclave RPUD, and undeveloped. Further to the west, along the south side of Veterans Memorial Boulevard, lies the North Naples Middle School, zoned A, Rural Agricultural, then the Sandlewood RPUD, developed residentially. Further to the southwest, across Livingston Road, lies Veterans Memorial Elementary School, zoned A, Rural Agricultural. Land to the northwest of the subject property, across Livingston Road and Veterans Memorial Boulevard, is zoned PUD, Mediterra, and is developed with a residential/golf course community. In summary, the existing and planned land uses, and zoning, in the area surrounding the subject property are primarily urban residences or residential lots in all directions, with public services and schools located nearby, and one small commercial parcel. Criteria for GMP Amendments in Florida Statutes Data and analysis requirements for comprehensive plans and plan amendments are noted in Chapter 163, F.S., specifically as listed below. —3— PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE 9.A.a Packet Pg. 56 Agenda Item 9.A.3 Section 163.3177(1)(f), Florida Statutes: (f) All mandatory and optional elements of the comprehensive plan and plan amendments shall be based upon relevant and appropriate data and an analysis by the local government that may include, but not be limited to, surveys, studies, community goals and vision, and other data available at the time of adoption of the comprehensive plan or plan amendment. To be based on data means to react to it in an appropriate way and to the extent, necessary indicated by the data available on that particular subject at the time of adoption of the plan or plan amendment at issue. 1. Surveys, studies, and data utilized in the preparation of the comprehensive plan may not be deemed a part of the comprehensive plan unless adopted as a part of it. Copies of such studies, surveys, data, and supporting documents for proposed plans and plan amendments shall be made available for public inspection, and copies of such plans shall be made available to the public upon payment of reasonable charges for reproduction. Support data or summaries are not subject to the compliance review process, but the comprehensive plan must be clearly based on appropriate data. Support data or summaries may be used to aid in the determination of compliance and consistency. 2. Data must be taken from professionally accepted sources. The application of a methodology utilized in data collection or whether a particular methodology is professionally accepted may be evaluated. However, the evaluation may not include whether one accepted methodology is better than another. Original data collection by local governments is not required. However, local governments may use original data so long as methodologies are professionally accepted. 3. The comprehensive plan shall be based upon permanent and seasonal population estimates and projections, which shall either be those published by the Office of Economic and Demographic Research or generated by the local government based upon a professionally acceptable methodology. The plan must be based on at least the minimum amount of land required to accommodate the medium projections as published by the Office of Economic and Demographic Research for at least a 10 -year planning period unless otherwise limited under s. 380.05, including related rules of the Administration Commission. Absent physical limitations on population growth, population projections for each municipality, and the unincorporated area within a county must, at a minimum, be reflective of each area's proportional share of the total county population and the total county population growth. Section 163.3177(6)(a)2.: 2. The future land use plan and plan amendments shall be based upon surveys, studies, and data regarding the area, as applicable, including: a. The amount of land required to accommodate anticipated growth. b. The projected permanent and seasonal population of the area. c. The character of undeveloped land. d. The availability of water supplies, public facilities, and services. —4— PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE 9.A.a Packet Pg. 57 9.A.a Agenda Item 9.A.3 e. The need for redevelopment, including the renewal of blighted areas and the elimination of nonconforming uses which are inconsistent with the character of the community. f. The compatibility of uses on lands adjacent to or closely proximate to military installations. g. The compatibility of uses on lands adjacent to an airport as defined in s. 330.35 and consistent with s. 333.02. h. The discouragement of urban sprawl. i. The need for job creation, capital investment, and economic development that will strengthen and diversify the community's economy. j. The need to modify land uses and development patterns within antiquated subdivisions. Section 163.3177(6)(a)8., Florida Statutes: (a) A future land use plan element designating proposed future general distribution, location, and extent of the uses of land for residential uses, commercial uses, industry, agriculture, recreation, conservation, education, public facilities, and other categories of the public and private uses of land. The approximate acreage and the general range of density or intensity of use shall be provided for the gross land area included in each existing land use category. The element shall establish the long-term end toward which land use programs and activities are ultimately directed. 8. Future land use map amendments shall be based upon the following analyses: a. An analysis of the availability of facilities and services. b. An analysis of the suitability of the plan amendment for its proposed use considering the character of the undeveloped land, soils, topography, natural resources, and historic resources on site. c. An analysis of the minimum amount of land needed to achieve the goals and requirements of this section. Also, the state land planning agency has historically recognized the consideration of community desires (e.g., if the community has an articulated vision for an area as to the type of development desired, such as within a Community Redevelopment Area), and existing incompatibilities (e.g. presently allowed uses would be incompatible with surrounding uses and conditions). It is incumbent upon the petitioner to provide appropriate and relevant data and analysis to address the statutory requirements for a Plan amendment, then present and defend, as necessary, that data and analysis. BACKGROUND AND ANALYSIS: Residential development in the Urban - Mixed Use District is regulated by the FLUE's Density Rating System. A portion of the underlying property - 15.38 acres of the 35.57 -acre subject property - is zoned Della Rosa RPUD and approved for 107 DUs (7 DU/A). This density was derived using the Density Rating System as follows: Base Density of 4 DU/A + Residential In -fill Density Bonus = 7 DU/A. One Residential In -fill criterion is that the project must be twenty (20) acres or less in size. Because the —5— PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE Packet Pg. 58 Agenda Item 9.A.3 entire subject site exceeds twenty acres, it is no longer eligible for the Residential In -fill bonus. Because market -rate housing is proposed, the site is not eligible for the Affordable Housing density bonus. The only density bonus the site may be eligible for if the criteria are met, is the TCMA density bonus of 3 DU/A. This petition requests 420 DUs; the net effect of this amendment is depicted below, with and without meeting the TCMA density bonus criteria. (Note: The Density Rating System states that density bonuses are discretionary, not entitlements, and are dependent upon meeting the criteria for each respective density bonus.) Density with TCMA Bonus GMP Amendment Increase 7 DU/A x 35.57 acres = 249 DUs 420 DUs requested — 249 DUs eligible = 171 DUs via GMPA Density without TCMA Bonus GMP Amendment Increase 4 DU/A x 35.57 acres = 142 DUs 420 DUs requested — 142 DUs eligible = 278 DUs via GMPA Appropriateness of the Site and the Change: The Meyers Research Rental Apartment Needs Analysis (June 2018), is part of the supporting data & analysis submitted with GMPA application materials (Exhibit V.D.1.). The Meyers Research analyzes the [specific] need for market -rate rental apartments, revealing that a healthy apartment market is evidenced by rental rates for market-based apartments that steadily increased from the beginning of 2011, by several projects at lease -up stage, and by market -rate rental apartments historically hovering near full occupancy rates. The Analysis indicates that the projected population growth provides sufficient demand for market-based apartments, with the ability to absorb from 14,900 (2020) to 16,700 residents. At the macro level at which a GMP amendment is reviewed, staff is of the opinion that the proposed GMP amendment is appropriate for the site. The rezone petition to implement the proposed subdistrict will need to address specific compatibility measures. These could include maximum building height; landscape buffers, preserve area location, and open space; building locations and minimum setbacks; building massing and orientation. Traffic Capacity/Traffic Circulation Impact Analysis, Including Transportation Element Consistency Determination: The subject property lies within Northwest Transportation Concurrency Management Area (TCMA), an area where intensive development exists, or such development is planned, bounded by the Collier -Lee County Line on the north side; the west side of the 1-75 right-of-way on the east side; Pine Ridge Road on the south side; and, the Gulf of Mexico on the west side. In addition to Comprehensive Planning staff's review of applicable FLUE Policies, Collier County Transportation Planning staff reviewed this petition and contributed the following analysis and findings: —6— PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE 9.A.a Packet Pg. 59 Agenda Item 9.A.3 FLUE Policy 2.3 states: "Deficiencies or potential deficiencies... [require] a developer to construct the needed facilities or defer development until improvements can be made or the level of service is amended to ensure available capacity." Transportation Planning Staff finding: The applicant's April 12, 2018, Traffic Impact Statement (TIS) indicates that it will impact Immokalee Road from Airport Road to Livingston Road which has been projected to exceed the adopted level of service in 2023. Based on this information, the developer shall either construct the needed facilities or defer development until improvements can be made. The 2017 Annual Update and Inventory Report and associated Capital Improvement Element proposes the construction of a parallel facility, Veterans Memorial Boulevard from Livingston Road to Old 41. Therefore, in order to be found consistent with this provision of the Comprehensive Plan, the applicant shall either construct the Veterans Memorial Boulevard or defer development until the roadway is complete. FLUE Policy 6.1 states: "Development within a TCMA shall occur in a manner that... [ensures] an adequate level of mobility, [discourages] the proliferation of urban sprawl, [protects] natural resources' [and] historic resources, [maximizes] the efficient use of existing public facilities, and [promotes] public transit, bicycling, walking and other alternatives to the single occupant automobile. Transportation Element (TE) Policy 5.6, especially as it pertains to "requirements for utilizing Transportation Demand Management (TDM) strategies" and its parallel FLUE Policy 6.5 state, "[i]n order to be exempt from link specific concurrency, new residential development or redevelopment within [TCMAs] shall utilize at least two of the following Transportation Demand Management (TDM) strategies, as may be applicable: a) Including neighborhood commercial uses within a residential project. b) Providing transit shelters within the development (must be coordinated with Collier County Transit). c) Providing bicycle and pedestrian facilities, with connections to abutting commercial properties. d) Providing vehicular access to abutting commercial properties." The Transportation Concurrency Management Area (TCMA) Bonus is available to residential redevelopment or infill development that meets the criteria established in Policies 6.1 through 6.7 of the Future Land Use Element, and... may add three (3) residential units per gross acre. Staff previously suggested utilizing additional TDM strategies if the new Subdistrict was to allow residential density greater than the three (3) residential units [seven (7) DU/A total density] allowed by the TCMA Bonus. The Density Rating System does not provide for any additional density if more than the minimum required two criteria are met; staff was suggesting the petition go "above and beyond" and offer something extra to benefit the larger community rather than simply asking for additional density. Application materials do not offer any additional commitments, ratherjust request the greater density via this GMPA. —7— PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE 9.A.a Packet Pg. 60 Agenda Item 9.A.3 It is Transportation Planning staff's opinion that the first two TDM strategies do not apply for the proposed development. The applicant has not proposed a commercial use within the development. The development is located outside of the Collier Area Transit (CAT) service area (no service expansion is identified in the adopted Transit Development Plan or the 2040 Long Range Transportation Cost Feasible Plan). Therefore, to meet the two required TDM strategies both c) and d) must be provided. Staff will be requiring a developer commitment for both of these TDM strategies and require that the adjacent commercial development be constructed before this development reaches 30 percent occupancy as part of the companion RPUD petition for this development. A Transportation Impact Statement (TIS), dated April 12, 2018, prepared by TR Transportation Consultants, Inc., was submitted with this petition (Exhibit W.E.3"). (A revised TIS, dated November 16, 2018, was submitted for the companion PUD rezone petition [which is not under formal consideration with this GMPA Transmittal hearing] which reduces the number of dwelling units to 350 for studying alternative transportation impacts.) It should be noted that a reduction in units could change staff's findings of this petition as thresholds may not be exceeded that would trigger additional requirements. However, since the GMPA was not revised to reduce units, staff has continued its review based on the original request of 420 units. TRANSPORTATION ELEMENT: In evaluating this project, Transportation Planning staff reviewed the applicant's April 12, 2018, TIS for consistency with Policy 5.1 of the Transportation Element of the Growth Management Plan (GMP) using the then applicable 2017 Annual Update and Inventory Report (AUIR). Policy 5.1 of the Transportation Element of the GMP states: "The County Commission shall review all rezone petitions, SRA designation applications, conditional use petitions, and proposed amendments to the Future Land Use Element (FLUE) affecting the overall countywide density or intensity of permissible development, with consideration of their impact on the overall County transportation system, and shall not approve any petition or application that would directly access a deficient roadway segment as identified in the current AUIR or if it impacts an adjacent roadway segment that is deficient as identified in the current AUIR, or which significantly impacts a roadway segment or adjacent roadway segment that is currently operating and/or is projected to operate below an adopted Level of Service Standard within the five year AU1R planning period, unless specific mitigating stipulations are also approved. A petition or application has significant impacts if the traffic impact statement reveals that any of the following occur. - a. For links (roadway segments) directly accessed by the project where project traffic is equal to or exceeds 2% of the adopted LOS standard service volume; b. For links adjacent to links directly accessed by the project where project traffic is equal to or exceeds 2% of the adopted LOS standard service volume; and c. For all other links the project traffic is considered to be significant up to the point where it is equal to or exceeds 3% of the adopted LOS standard service volume. Mitigating stipulations shall be based upon a mitigation plan prepared by the applicant and submitted as part of the traffic impact statement that addresses the project's significant impacts on all roadways. " —8— PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE 9.A.a Packet Pg. 61 9.A.a Agenda Item 9.A.3 Staff finding: According to the TIS provided with this petition the proposed rezoning to allow a maximum 420 multi -family residential units (residential condo/townhouse) will generate a projected ±176 PM peak hour, two-way trips on the immediately adjacent roadway link, Veterans Memorial Boulevard, and Livingston Road. Veterans Memorial Boulevard is a two-lane facility and is not currently tracked for capacity in the AUIR. Following is a table that provides information related to the current operations of the impacted roadway network: Link Link From/To P.M. Peak 2017 P.M. Remaining Level of Petition ID # Hour Peak Peak Capacity Service has Direction Hour (LOS) significant Service Peak impacts? Volume Direction Volume 51.0 Livingston Imperial 3,000/North 1,279 1,721 B Yes Road Street to Immokalee Road 42.1 Immokalee Airport 3,100/West 2,795 305 D No Road Roadto Livingston Road 42.2 Immokalee Livingston 3,500/East 2,489 1,011 C No Road Roadto 1-75 Link ID 42.1 (Immokalee Road from Airport Road to Livingston Road) is projected to become deficient by 2023. While the petition will impact Link ID 42.1, it will be a de minimis impact to the link as defined in Policy 5.2 of the Transportation Element of the GMP. Therefore, the subject petition may be found consistent with this section of the GMP. However, the petition is subject to further evaluation as it relates to the applicable Transportation Concurrency Management policies. Policy 5.2 of the Transportation Element of the GMP states: "Project traffic that is 1 % or less of the adopted peak hour service volume represents a de minimis impact. Authorization of development with a de minimis impact shall be pursuant to Section 163.3180(6) Florida Statutes." Staff finding: The petition is projected to impact Link ID 42.1, a projected deficiency, however, it is anticipated to be a de minimis. However, the petition is subject to further evaluation as it relates to the applicable Transportation Concurrency Management policies. —9— PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE Packet Pg. 62 Agenda Item 9.A.3 Transportation Concurrency Management Areas (TCMA): Policy 5.6 of the Transportation Element of the GMP states: "...In order to be exempt from link -specific concurrency, developments within the TCMA must provide documentation to the Transportation Planning Section that at least two (2) Transporation Demand Management (TDM) strategies utilized meet the criteria of the LDC..." Staff finding: The applicant is not required to seek an exemption for link -specific concurrency as the there is sufficient capacity on links identified and the link that does have a projected deficiency, the petition would have a de minimis impact. Therefore, TDM strategies are not required by this policy. This does not negate that TDM strategies may be required to fulfill other requirements of the GMP such as density bonuses. Policy 5.7 of the Transportation Element of the GMP states: "Each TCMA shall maintain 85% of its lane miles at or above the LOS standards described in Policies 1.3 and 1.4 of this Element. If any Traffic Impact Statement (TIS) for a proposed development indicates that fewer than 85% of the lane miles in a TCMA are achieving the LOS standards indicated above, the proposed development shall not be permitted where such condition occurs unless modification of the development is made sufficient to maintain the LOS standard for the TCMA, or the facilities required to maintain the TCMA LOS standard are committed utilizing the standards for committed improvements in Policy 5.3 of the Capital Improvement Element of the Plan." Staff finding: Per the 2017 Annual Update and Inventory Report, the Northwest TCMA current has 98.9% of the lane miles operating at an acceptable LOS. Policy 5.8 of the Transportation Element of the GMP states: "Should the TIS for a proposed development reflect that it will impact either a constrained roadway line and/or a deficient roadway link within a TCMA as determined in the most current Annual Update and Inventory Report (AUIR), by more than a de minimis amount (more than 1% of the maximum service volume at the adopted LOS), yet continue to maintain the established percentage of lane miles indicated in Policy 5.7 of this Element, a proportionate share congestion mitigation payment shall be required as follows: a. Congestion mitigation payments shall be calculated using the formula established in Section 163.3180(5)(h), Florida Statutes. The facility cost for a constrained roadway link shall be established using a typical lane -mile cost, as determined by the Collier County Transportation Administrator, of adding lanes to a similar area/facility type as the constrained facility. b. Congestion mitigation payments shall be utilized by7 Collier County to add trip capacity within the impacted TCMA, road segment(s) and/or to enhance mass transit, or other non - automotive transportation alternatives, which adds trip capacity within the impact fee district or adjoining impact fee district. c. Congestion mitigation payments under this Policy shall be determined subsequent to a finding of concurrency for a proposed project within a TCMA and shall not influence the concurrency determination process. -10- PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE 9.A.a Packet Pg. 63 Agenda Item 9.A.3 d. No impact will be de minimis if it exceeds the adopted LOD standard of any affected designed hurricane evacuation routes within a TCMA. Hurricane routes in Collier County are shown on Map TR7. Any impact to a hurricane evacuation route within a TCMA shall require a proportionate share congestion mitigation payment provided the remaining LOS requirements of the TCMA are maintained." Staff finding: The proposed development's area of significant impact does extend to link 42.1, Immokalee Road from Airport -Pulling to Livingston Road. This is an identified hurricane evacuation route. Transportation Planning staff will be requiring a developer commitment for the proportionate share congestion mitigation payment consistent with Policy 5.8.d above as part of the companion RPUD petition for this development. Based on this condition, the proposed development can be found consistent with these policies. Policy 7.1 of the Transportation Element of the GMP states: "Collier County shall apply the standards and criteria of the Access Management Policy as adopted by Resolution and as may be amended to ensure the protection of the arterial and collector system's capacity and integrity." Staff finding: While the GMPA application does not provide the level of specificity to review this provision, the applicant has submitted for concurrent reviews of both the Planned Unit Development and associated Site Development Plan. The development proposes a main access on Veterans Memorial Boulevard which is a `Class 7' facility. This access is approximately 600 feet from the intersection of Livingston Road and meets access management minimum standards of 125 feet. This access will require a right turn lane and compensating ROW. A second exit - only access on Livingston Road is also proposed which does not meet access management distance separation requirements. The Access Management Resolution 13-257 represents desirable requirements; however, the ultimate goal is to exceed these standards. Transportation Planning staff does not recommend approval of the second access point as it is not consistent with the Access Management Resolution 13-257. Transportation Planning staff finds that the proposed development can be found consistent with this Policy if second access point on Livingston Road is removed from the plan. Policy 7.3 of the Transportation Element of the GMP states: "The County shall implement, through its Land Development Code and Code of Laws and Ordinances, the provision of safe and convenient onsite traffic flow and need for adequate parking for both motorized and non -motorized vehicles as a primary objective in the review of Planned Unit Developments, Site Development Plan, and other appropriate stages of review in the land development application review process. Coordination shall occur with County Engineering staff where traffic circulation is outside the limits of the public ROW." Staff finding: The roadway infrastructure is sufficient to serve the proposed project as noted above. Operational impacts will be addressed at time of first development order (SDP or Plat), at which time a new TIS will be required. This TIS will be required to analyze major intersections that are part of the significantly impacted roadways, major intersections that are within 1,320 feet of the site access, and all site -access intersections. Finally, the project's development must comply with all other applicable concurrency management regulations and Transportation — 11 — PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE 9.A.a Packet Pg. 64 Agenda Item 9.A.3 Concurrency Management Area requirements when development approvals, including but not limited to any plats and or site development plans, are sought. Policy 9.3 of the Transportation Element of the GMP states: "The County shall require, wherever feasible, the interconnection of local streets between developments to facilitate convenient movement throughout the road network. The LDC shall identify the circumstances and conditions that would require the interconnection of neighboring developments and shall also develop standards and criteria for the safe interconnection of such local streets." Staff finding: While the GMPA application does not provide the level of specificity to review this provision, the applicant has submitted for concurrent reviews of both the Planned Unit Development and associated Site Development Plan. The proposed developments master plan and subsequent site development plans must provide for potential -future interconnection to an adjacent undeveloped commercial (C-1) parcel to the west. Transportation Planning staff finds that the proposed development can be found consistent with this Policy and notes that the interconnection is tied to the TDM strategies related to the density bonus. Policy 9.5 of the Transportation Element of the GMP states: "The County shall encourage projects which provide local resident, pedestrian, bicyclist and motorist movement between and among developments on neighborhood streets in a deliberate balance with its efforts to route cut -through traffic away from neighborhoods and to the arterials and collectors designated in the Transportation Element of the Collier County Growth Management Plan." Staff finding: As noted above in Policy 9.3, while the GMPA application does not provide the level of specificity to review this provision, the applicant has submitted for concurrent reviews of both the Planned Unit Development and associated Site Development Plan. The proposed developments master plan and subsequent site development plans must provide for potential - future interconnection to an adjacent undeveloped commercial (C-1) parcel to the west. The specific design of the neighborhood street will be addressed in the companion PUD document. Transportation Planning staff finds that the proposed development can be found consistent with this Policy and notes that the interconnection is tied to the TDM strategies related to the density bonus. Transportation Planning Staff Recommendation: Transportation Planning staff finds this petition consistent with the GMP with the noted development commitments staff will recommend as part of the companion Allura RPUD PL2017-4385, and further recommends that the Collier County Planning Commission (CCPC) forward Petition PL2017-4419 to the Board of County Commissioners (BCC) with a recommendation of approval for transmittal. [Michael Sawyer, Principal Planner, Transportation Planning Section Trinity Scott, Planning Manager, Transportation Planning Section, and Amy Patterson, Director, Capital Project Planning, Impact Fees and Program Management] —12— PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE 9.A.a Packet Pg. 65 Agenda Item 9.A.3 Public Facilities Impacts: A Public Facilities Report, dated July 13, 2018 (Exhibit V.E.1), and a Public Service Facilities Map, dated July 11, 2018 (Exhibit V.E.2), were submitted with this petition. • Potable Water System: The subject project lies in the County's Water Service Area, and development will be served by Collier County potable water treatment services. The anticipated average daily demand for potable water for the residential project is 147,000 gallons per day (gpd) [198,450 gpd "Peak"]. Collier County has sufficient capacity to provide water services. • Wastewater Collection and Treatment System: The subject project lies in the North County Wastewater Service Area, and development will be served by Collier County wastewater collection and treatment services. The anticipated average daily demand for wastewater collection and treatment for the residential project is estimated at 105,000 gallons per day (gpd) [141,750 gpd "Peak"]. Collier County has sufficient capacity to provide wastewater services. • Solid Waste Collection and Disposal: The solid waste disposal service provider is Collier County Solid Waste Management. The 2018 AUIR notes that the County projects more than 50 years of remaining landfill capacity. • Stormwater Management System: The 2018 AUIR does not identify any stormwater management improvement projects in the vicinity of the subject property. Future development will comply with the SFWMD and/or Collier County rules and regulations that assure controlled accommodation of stormwater events by both on-site and off-site improvements. • Park and Recreational Facilities: The availability of community and regional park facilities is sufficient to meet the demand generated by proposed residential development. • Schools: The subject site is within the E8, Northwest Area 2 CSA for elementary schools, the M4 Northwest Area CSA for middle schools, and the H4 Northwest Area CSA for high schools. The E8 CSA includes two elementary schools, Laurel Oak and Veterans Memorial. They have a combined FISH capacity of 1,793 students, a 2016/2017 peak enrollment of 1,739 students, and a projected 2021/2022 enrollment of 1,789 students (100% capacity). According to the Collier County Public Schools Capital Improvement Plan (CIP) for fiscal years 2018 through 2037, the opening of a new charter school in the 2017-2018 school year is anticipated to affect enrollment in this CSA. The enrollment at Laurel Oak is being monitored. Long-term re -locatable classroom capacity was added to the permanent capacity in 2010. The H4/M4 CSA includes Barron Collier and Gulf Coast High Schools, and North Naples, Oakridge, and Pine Ridge Middle Schools. The high schools have a combined FISH capacity of 3,606 students, and a 2016/2017 peak enrollment of 3,888 students, and a projected 2021/2022 enrollment of 4,000 students (111% capacity). The middle schools have a combined capacity of 3,361 students, a peak enrollment in 2016/2017 of 3,015 students, and a projected 2021/2022 enrollment of 2,977 students (89% capacity). According to the CIP, enrollment at Gulf Coast HS is being monitored, and temporary alternatives to address overcrowding may be implemented prior to permanent relief with the opening of a new high school in 2023. • Emergency Medical (EMS) and Fire Rescue Services: The subject property is located within the North Naples Fire & Rescue District, with collocated services at District Station 48, located at -13- PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE 9.A.a Packet Pg. 66 Agenda Item 9.A.3 16280 Livingston Rd., which is located along Livingston Rd., adjacent to the southwestern portion of the property. Collier County Public Utilities Department, Planning and Project Management Division staff reviewed this petition and identified no issues or concerns regarding impacts upon potable water, wastewater collection and treatment or solid waste collection and disposal services. [Eric Fey, PE, Senior Project Manager, Public Utilities Engineering Department] Environmental Impacts: A Vegetation Map, Soils Map, and Listed Species Table, dated July 2018, prepared by DexBender Environmental Consulting, were submitted with this petition (Exhibits V.C, V.C.1, and V.C.2). Environmental review specialists with County Development Review Division, Environmental Planning Section, reviewed these documents and provided the following comments: The subject property is 35.57 acres. The acreage of native vegetation on site has been field verified by staff during review the Planned Unit Development (PUD) for the project. The existing ST Overlay located on the property will be removed as part of the PUD approval process. The proposed GMP amendment has no effect on the requirements of the Conservation and Coastal Management Element (CCME) of the GMP. Native vegetation on site will be retained in accordance with the requirements of CCME Policy 6.1.1 and Section 3.05.07 of the LDC. [Craig Brown, Senior Environmental Specialist Environmental Planning Section Development Review Division] 1=1lei: 1*Q0:[ C011L4UM:1LTA /_AI[0]►ILY, 14:111L1106" '1►[6]�y6? The application team held a Neighborhood Information Meeting (NIM) in the Sugden Theater of the Collier County Public Library Headquarters, located at 2385 Orange Blossom Drive, Naples on September 6, 2018, at 5:30 p.m. as required by Section 10.03.05 F. of the LDC. This NIM was advertised, noticed and held jointly for this GMP amendment petition and companion PUD rezone petition [which is not under formal consideration with the transmittal hearing]. Approximately 60-80 members of the public attended the NIM, in addition to the applicant's team and County staff. The agent (Bob Mulhere) representing the applicant (Gelder) gave a presentation and responded to questions and comments. Mr. Mulhere pointed out location near Livingston Rd./Veterans Memorial Blvd. intersection. The location of the project's main access point is onto Veterans Memorial Blvd., with a point of egress only onto Livingston Road. He explained landscape buffer types (referencing a display panel); project development, with six buildings, with freestanding garages (referencing a display panel). Several members of the public spoke, asking questions/seeking more information, expressing concerns, and expressing opposition for the proposed project. Many of them identified themselves as being residents of the neighboring communities of Mediterra, Barrington Cove, Tallis Park or Sequoia Reserve (near the school, west across the intersection). Their comments and concerns included: —14— PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE 9.A.a Packet Pg. 67 Agenda Item 9.A.3 • Traffic congestion; inc. the age and validity of the traffic counts used in the proposal's studies, and the additional traffic placed on the road system by the Seed to Table commercial location opening soon; the agent explained the County's requirements and standards for Transportation Impact Studies, and how County personnel account for each new development as it's proposed. • School population & student counts generated from this rental project; the agent answered that School District representatives review these proposals for the impacts on schools and have addressed these concerns. • Proposed 4 -story building heights, and the resulting loss of privacy imposed on neighboring properties; the agent addressed the project is designed with garage locations & setbacks designed to minimize this possibility. • Project characteristics, apartment unit sizes and the percentage of each, proposed; the agent described an upscale project, with about 35% one bdrm. and 55% two bdrm. apartment styles. Concerns regarding the general transient nature of tenancy, problems with management companies and the vetting of potential renters [shared personal worst-case scenarios], and lower standards rental properties; the agent and applicant addressed these concerns, with examples of their existing projects, general nature of their expected tenants, and their management offices. • The incompatibility of this high-density project with the established surrounding low-density residential area (single-family, coach homes), as now planned and expected by previous homebuyers and neighbors; the agent pointed out how the County's Plan, along with incentives within the TCMA's work to encourage such development. • Asked if the developers are prepared [or should be] with alternate plans to the high density/intensity of current proposal? • Impacts on the neighborhood taxes? The agent explained how affects are minimized, as Impact Fees paid by the developer absorb the costs of new or additional services required by the development. • Emergency services and the conflicts of introducing new traffic onto Livingston Road are where problems already apparent; agent answered that Fire District representatives review these proposals for the impacts on their ability to provide services and are addressing these concerns. The strong consensus was expressed that developing the property was not opposed, but the proposed intensity and density of this project and this specific development is opposed. The information meeting was ended at approximately 6:40 p.m. This synopsis provides the annotated NIM proceedings. An audio and a video recording of the entire Neighborhood Information Meeting are available on the County's "I" drive, at I:/GMD/Comprehensive Planning/NIM Recordings & PREAPP Notes. [Synopsis prepared by C. Schmidt, AICP, Principal Planner] —15— PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE 9.A.a Packet Pg. 68 Agenda Item 9.A.3 FINDINGS AND CONCLUSIONS: • The subject site is undeveloped, partly zoned A, Rural Agricultural. The southerly portion of the property is zoned Della Rosa Residential PUD. A ±8.5 -acre portion of the property is also designated ST, Special Treatment Overlay. The entire site is designated Urban Residential Subdistrict on the FLUM and lies within the Northwest TCMA, an area where traffic management strategies are employed to reduce traffic impacts. • Analysis indicates that projected population growth provides sufficient demand for market-based apartments. • At the macro level at which a GMP amendment is reviewed, staff is of the opinion that the proposed GMP amendment is appropriate for the site. The rezone petition to implement the proposed subdistrict will need to address specific compatibility measures. • No issues or concerns regarding impacts upon potable water, wastewater collection and treatment or solid waste collection and disposal services have been identified. • The proposed GMP amendment has no effect on the requirements of the Conservation and Coastal Management Element (CCME). • The Barron Collier and Gulf Coast High Schools have a combined FISH capacity of 3,606 students, and a 2016/2017 peak enrollment of 3,888 students, and a projected 2021/2022 enrollment of 4,000 students (111 % capacity). Enrollment at Gulf Coast High School is being monitored, and temporary alternatives to address overcrowding may be implemented prior to permanent relief with the opening of a new high school in 2023. • The only density bonus the site may be eligible for if the criteria are met, is the TCMA density bonus of 3 DU/A. This petition requests 420 DUs; the net effect of this amendment is to request an increase of 171 DUs or 278 DUs, with and without meeting the TCMA density bonus criteria, respectively. (Note: The Density Rating System states that density bonuses are discretionary, not entitlements, and are dependent upon meeting the criteria for each respective density bonus.) • People attending the Neighborhood Information Meeting expressed a strong consensus that developing the property was not opposed, but the proposed intensity and density of this project and this specific development is opposed. LEGAL CONSIDERATIONS: This Staff Report was reviewed by the County Attorney's Office. The criteria for GMP amendments to the Future Land Use Element and map series are in Sections 163.3177(1)(f) and 163.3177(6)(a)2 and 163.3177(6)(a)8, Florida Statutes. [SAS] —16— PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE 9.A.a Packet Pg. 69 Agenda Item 9.A.3 STAFF RECOMMENDATION TO THE COLLIER COUNTY PLANNING COMMISSION: Based on the analyses provided within this report, staff recommends that the Collier County Planning Commission forward Petition PL20170004419/CP-2018-1 to the Board of County Commissioners with a recommendation to approve for transmittal to the Florida Department of Economic Opportunity, subject to the following revisions to the proposed subdistrict, mostly for proper format, use of code language, succinctness, and clarity. (Note: single underline text is added, as proposed by petitioner; double underline text is added, and double text is deleted, as proposed by staff.) Livingston Road/Veterans Memorial Boulevard East Residential Subdistrict The Livingston Road/Veterans Memorial Boulevard East Residential Subdistrict consists of +35.57$ acres and is located in the southeast quadrant of the intersection of Livingston Road and Veterans Memorial Boulevard and is within a Transportation Concurrency Management Area (TCMAI. The purpose of this Subdistrict is to allow for a multi -family development at a density of up to 12 units per acre and to fulfill the intent of the TCMA, as stated in FLUE Policy 6.1. Development in this Subdistrict shall be subiect to the followina: a. The Subdistrict site shall be rezoned to Residential Planned Unit Development (RPUD). b. Allowable uses are limited to multi -family rental dwellings and shall not exceed 420 units. c. The RPUD shall demonstrate consistency with FLUE Policy 6.5 by providing two or more of following: A transit shelter within the RPUD in a location and design approved by Collier County Public Transit & Neiahborhood Enhancement (PTNE) Division: Bicycle and pedestrian facilities, with connection to the abutting commercial property to the west; and, iii. Vehicular interconnection to the abuttina commercial property to the west. Occupancy of multi -family dwelling units shall not exceed thirty percent (305 of the total number allowed until after these bicycle, pedestrian and vehicular facilities are constructed and the functioning connections and interconnections are provided. d. The RPUD shall include development standards and buffers to insure compatibility with surrounding land uses. e. The RPUD shall demonstrate consistency with FLUE Policy 2.3 by either constructing Veterans Memorial Boulevard or deferring development until the roadway is complete. f. The RPUD shall demonstrate consistency with Policy 5.8 of the Transportation Element by providing a Congestion Mitigation Payment at the time of the first development order app —17— PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE 9.A.a Packet Pg. 70 Agenda Item 9.A.3 Staff provides the following reminder: This GMP amendment follows the Expedited State Review process. Chapter 163.3184 (3)(c)1, Florida Statutes, provides that the County Board (local governing body) shall hold its Adoption (second public) hearing within 180 days after receipt of agency comments, unless extended by agreement with notice to the DEO (state land planning agency) and any affected person that provided comments on the amendment. This notification, review and comment process period is approximately 7.5 months (225 days) from the time the County Board holds its Transmittal (initial public) hearing. [Remainder of page intentionally left blank] —18— PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban — Mixed Use District in FLUE 9.A.a Packet Pg. 71 Agenda Item 9.A.3 Agenda Item 9. PREPARED BY: r - �r CORBY SCHMIDT, AICD, PRINCIPAL PLANNER COMPREHENSIVE PLANNING SECTION, ZONING DIVISION REVIEWED BY DATE:. -'b DAVID 1N EKS,_ AICP, GROWTH MANAGEMENT MANAGER COMPREHENSIVE PLANNING SECTION, ZONING DIVISION REV1EWED BY: MIKE= HOSI, AICP, DIRECTOR, ZONING DIVISION APPROVED BY: JAMES FRENCH, DEPUTY DEPARTMENT HEAD GROWTH MANAGEMENT DEPARTMENT PETITION No PL201700044191CP-2018-1 Staff Report for the December 8, 2018, COP rnaetin9, DATE: 1( - I s- I DATE- %/— /-')—IF NOTE: This petition has been scheduled for the February 12, 2019, BGC meeting. G:l{DESNan inl 5er,Jrks,Conpre "1'u?Karp 5'lann]ne W DAiA%C,ana Plan Aneninpntsl2D1A Cycles & cle 5nalh%2019 Cy1 - iub%0-19-1 Llvirkptn r'n-1 S ubd'kc r KC ,is,3 CCPc str; rp-t-FrlL _1,_ -13— PL20170004419 / CP -2018-1 For a Residentia subdistrict in :he Urban - Ai Ked Use Distr c, in �LUC -19- PL20170004419 / CP -2018-1 For a Residential Subdistrict in the Urban - Mixed Use District in FLUE 9.A.a Packet Pg. 72 RESOLUTION NO. 19 - A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS PROPOSING AMENDMENT TO THE COLLIER COUNTY GROWTH MANAGEMENT PLAN, ORDINANCE 89-05, AS AMENDED, SPECIFICALLY AMENDING THE FUTURE LAND USE ELEMENT AND MAP SERIES TO ADD THE LIVINGSTON ROAD/VETERANS MEMORIAL BOULEVARD EAST RESIDENTIAL SUBDISTRICT TO THE URBAN MIXED-USE DISTRICT, TO ALLOW UP TO 304 MULTI FAMILY DWELLING UNITS, AND FURTHERMORE DIRECTING TRANSMITTAL OF THE AMENDMENT TO THE FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY. THE SUBJECT PROPERTY IS LOCATED ON THE SOUTH SIDE OF VETERANS - MEMORIAL BOULEVARD, JUST EAST OF LIVINGSTON ROAD, IN SECTION 13, TOWNSHIP 48 SOUTH, RANGE 25 EAST, COLLIER COUNTY, FLORIDA, CONSISTING OF 35.57± ACRES. [PL20170004419] WHEREAS, Collier County, pursuant to Section 163.3161, et. sea., Florida Statutes, the Florida Local Government Comprehensive Planning and Land Development Regulation Act, was required to prepare and adopt a comprehensive plan; and WHEREAS, the Collier County Board of County Commissioners adopted the Collier County Growth Management Plan on January 10, 1989; and WHEREAS, the Community Planning Act of 2011 provides authority for local governments to amend their respective comprehensive plans and outlines certain procedures to amend adopted comprehensive plans; and WHEREAS, SD Livingston, LLC, requested an amendment to the Future Land Use Element and Future Land Use Map and Map Series to add the Livingston Road/Veterans Memorial Boulevard East Residential Subdistrict to the Urban Mixed -Use District; and WHEREAS, on January 17, 2019 and February 7, 2019, the Collier County Planning Commission considered the proposed amendment to the Growth Management Plan pursuant to the authority granted to it by Section 163.3174, F.S., and has recommended approval of said amendment to the Board of County Commissioners; and WHEREAS, on March 26, 2019, the Board of County Commissioners at a public hearing approved the transmittal of the proposed amendment to the state land planning agency in accordance with Section 163.3184, F.S.; and WHEREAS, upon receipt of Collier County's proposed Growth Management Plan Amendment, various State agencies and the Department of Economic Opportunity (DEO) have thirty (30) days to review the proposed amendment and DEO must transmit, in writing, to Collier County its comments within said thirty (30) days pursuant to Section 163.3184, F.S.; and [I 8 -CMP -0 1000/1459700/1 ]97 2/14/19 Page 1 of 2 9.A.d 7 Packet Pg. 73 WHEREAS, Collier County, upon receipt of the written comments from DEO must adopt, adopt with changes or not adopt the proposed Growth Management Plan Amendment within one hundred and eighty (180) days of such receipt pursuant to Section 163.3184, F. S.; and WHEREAS, the DEO, within five (5) days of receipt of Collier County's adopted Growth Management Plan Amendment, must notify the County of any deficiencies of the Plan Amendment pursuant to Section 163.3184(3), F.S. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA that: The Board of County Commissioners hereby approves the proposed Growth Management Plan Amendment, attached hereto as Exhibit "A" and incorporated by reference herein, for the purpose of transmittal to the Department of Economic Opportunity and other reviewing agencies thereby initiating the required State evaluation of the Growth Management Plan Amendment prior to final adoption. THIS RESOLUTION ADOPTED after motion, second and majority vote this day of , 2019. ATTEST: BOARD OF COUNTY COMMISSIONERS CRYSTAL K. KINZEL, CLERK COLLIER COUNTY, FLORIDA BY: Deputy Clerk W.L. McDANIEL, Jr., Chairman Approved as to form and legality: Scott A. Stone Assistant County Attorney dQ11 4 Attachment: Exhibit A — Proposed Text Amendment & Map Amendment [I 8 -CMP -0 1000/1459700/1197 2/14/19 Page 2 of 2 9.A.d Packet Pg. 74 Transmittal Exhibit EXHIBIT A FUTURE LAND USE ELEMENT II. IMPLEMENTATION STRATEGY 9.A.d PL20170004419/CP-2018-1 *** *** *** *** text break *** *** *** *** Policy 1.5 The URBAN Future Land Use Designation shall include Future Land Use Districts and Subdistricts for: A. URBAN — MIXED USE DISTRICT [Page 9] *** *** *** *** text break *** *** *** *** 18. Vincentian Mixed Use Subdistrict 19. [RESERVED] 20. Goodlette/Pine Ridge Mixed Use Subdistrict 21. Livingston Road/Veterans Memorial Boulevard East Residential Subdistrict *** *** *** *** text break *** *** *** *** FUTURE LAND USE DESIGNATION DESCRIPTION SECTION *** *** *** *** text break *** *** *** *** I. URBAN DESIGNATION *** *** *** *** A. Urban Mixed Use District text break *** *** *** *** *** *** *** *** text break *** *** *** *** 21. Livinqston Road/Veterans Memorial Boulevard East Residential Subdistrict [Page 49] The Livingston Road/Veterans Memorial Boulevard East Residential Subdistrict consists of ±35.57 acres and is located in the southeast quadrant of the intersection of Livingston Road and Veterans Memorial Boulevard and is within a Transportation Concurrency Management Area (TCMA). The purpose of this Subdistrict is to allow for a multi -family development at a density of up to 8.55 units per acre and to fulfill the intent of the TCMA, as stated in FLUE Policy 6.1. Development in this Subdistrict shall be subject to the following: a. The Subdistrict site shall be rezoned to Residential Planned Unit Development (RPUD). b. Allowable uses are limited to multi -family rental dwellings and shall not exceed 304 units of market rate housing. c. The RPUD shall demonstrate consistency with FLUE Policy 6.1 by providing two or more of the following: i. A transit shelter within the RPUD in a location and design approved by Collier County Public Transit & Neighborhood Enhancement (PTNE) Division; Words underlined are added; words struck -through are deleted. F Packet Pg. 75 Transmittal Exhibit PL20170004419/C P-2018-1 9•A.d ii. Bicycle and pedestrian facilities, with connection to the abutting commercial property to the west; and, iii. Vehicular interconnection to the abutting commercial property to the west. Certificates of occupancy shall not be approved for more than 249 multi -family units (a density of 7.0 units per acre) until the applicable facilities and/or interconnections, as described above and approved as Development Commitments in the RPUD, have been completed. d. The RPUD shall include development standards and buffers to insure compatibility with surrounding land uses. As an alternate to all of the above, this Subdistrict may be developed in accordance with the Urban Residential Subdistrict. *** *** *** *** text break FUTURE LAND USE MAP SERIES [Page 147] *** *** *** *** text break *** *** *** *** Logan Boulevard/Immokalee Road Commercial Infill Subdistrict Map Mini Triangle Mixed Use Subdistrict Map East Tamiami Trail Commercial Infill Subdistrict Map Livingston Road/Veterans Memorial Boulevard East Residential Subdistrict Map 2 Packet Pg. 76 Words underlined are added; words struck -through are deleted. ;sea IeiJouaaw s,ueaa;an uo;s6uini-1 :908) MM - uoi;njosaM je;;ivasueal :I uauayae;;�y a go @ w w� wa > . w„ wa �a w co o a a f �8E M. ou Oz g:^uryosw o o<o Z 3 o a o a c zc�o^wEw oEo ^ '�� zob oo`wEz ozE LLo oo °9WO Wo zo °E zo`i 3 w owo °wE w�OE w9 wdw zbz_z s = a 3 r ee' s F o z °z3 zEzV °zSz zSwE z �" i i Lu A'�,Gtl LU � n W -x � a c � W W H gn e ill 124011011/ H = '; Do®® Aa�� 1111 � 1 � u.111111 �FFf€r�, s T W L W a K t x a .fes' W � N W N W Q K EXHIBIT A PL20170004419/CP-2 LIVINGSTON ROAD / VETERANS MEMORIAL BOULEVARD O� EAST RESIDENTIAL SUBDISTRICT COLLIER COUNTY, FLORIDA i 1s\ c 0 icita�-d*. P0fni ri Veterans Memorial BLVD E� VE PROPOSED SUBDISTRICT .r Q ADOPTED - XXXX, XXXX LEGEND (Ord. No. XXXX-X) 0250 500 1,000 Feett EM PROPOSED SUBDISTRICT moi - --iF Packet Pg. 78 1 22A II WEDNESDAY—MARCH o, 2419 1 NAPLES DAILYNEWS NOTICE OF PUBLIC HEARING :V❑1ir.� iti ' e F. by given ?hat tie Collier County gaard of Caunty Ca mmissionef's wil cold a puulic hearirD DP. March 26, 2019 commencing at 9;40 a.m.- in the Boamc cf C;rn,nly c;c: r�rits�a 7ers Chamber, Thi d Four, [',cflf County Government Center, 3299 E- Tamiam' Trail. Naples, FI -he piirpnse n1 ille hearirg istoconsider- A RESOLUTION OF THE UQART] OF COUNTY COMMISSIONERS PROPOSING AMENDMENT TO THE COLLIER COUNTY GROWTH MANAGEMENT PLAN, ORDINANCE 89-45, AS AMENDED, SPECIFICALLY AMENDING THE FUTURE LAUE) USE ELEMENT AID MAP SERIES TO ADD THE LIVINGSTON ROAD/VETERANS MEMORIAL BOULEVARD EAST RE131DENTIAL SURDISTRICT TO THE URBAN MMED-USE DISTRICT, TO ALLOW UP TO 304 MULTI FAMILY DWELLING UNITS, AND FURTHERMORE DIRECTING TRANSMITTAL OF THE AMENDMENT TO THE FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY- THE SUBJECT PROPERTY IS LOCATED ON THE SOUTH SIDE OF VETERANS -MEMORIAL SOUL€YARD, JUST FASTOF LIVINGSTON ROAC, tN SECTION 13, TOWNSHIP 43 SOUTH, RANGE 25 EAST, COLLIER COUNTY, FLORIDA, CDN915TING OF 35.57± ACRES. [PL20170004419] +1 teran3 MAnw al BLVD C al PROJECT I r.ocarror� Al. interested partes are invited to appaar and be heard. Copies Df t`ie prnpGsod RESOLUTION wall be made available for inspsctun at the GMD Department, ening Ditiision, Crimpreher•sive Pin nnin.�p See!ion. 2806 N. Horseshoe Dr., Maples, hetvr88n -he hours of 8-00 A.M. and 5:00 P.M., M7P.day 711hnugh Friday. FL-rthermgre, the materials M -II bp made ava!l;i le for inspection at the Coalier Gouny C'e'k's Off ;, --e. Feuer Floor, Co:lier Co-.inty ';wernmert Gentc-T. 3299 East TarniMr Tiai , suite 4C1 Naples, one week prior to the schedu cu I-cs'igg. Any questions pertainirg to the documents sl-.ould be d noted to the Com preher4,.F I:I�_nr.uig Seeiion u the GIv1D Degarrre-rt, Zon ng Divis'on. Writer arm r.ile-lts filed wi-h too Clr-r< to the Boarc's Office prier to March 28, 2019 will be read and cons dered at th19 Pub lie heanrp. any person wlia decides to appea' any decision of the (;oltipr (ounty Board of County Commissioners ,01 need a record of tie Froceecings portaining thereto and therefore, may need to �,sure that a verbatim record of the prccePdings is T,}ade, wtuct7 record includes the estimorhy 8rid Evidence upon wliieF the appaal Is based. If you azB a person wth a disability who needs arty nocornmobation in order to pa-t-c:pate in this aroce�d�r�y, you are onti-led. at no cost to you, to the prevision cif certa;n assistance. Please contact the Collier Ccvity Facilities Management Division, laaFLted at T13b Tamiarni Trail East, Suito 101, Naples, FL 3411x-5:356, (239) 252-8380, at least two days prior to the meehn[y. Asserted listening dovicev for'.he hearino impairp-d are available in the Board of County C:ommis5ioner5 Ofh e- L,7ARD OF GOUNTYCOM MISNONtHS C0' COUNTY, FLORIDA W. L. VC; DAN IFI,,IH CHAIRMAN C;HYSTA;. K. KIN IZEL, C_ERK0F 1HEOIROU ITCOURT &COMPTROLLER f3}" Teresa Cannon, deputy Clerk (SrAI-}--....5 9.A.e Packet Pg. 79 9.A.f MORRIS F__1 2914 Cleveland Avenue I Fort Myers, Florida 33901 DEPEW - Phone (239) 337-3993 1 Toll Free (866) 337-7341 www.morris-depew.com ENGINEERS • PLANNERS • SURVEYORS LANDSCAPE ARCHITECTS Analysis: SD Livingston, LLC- Allura PL20170004419/CP-2018-1 Collier County Board of Commissioners' Transmittal Hearing Date: March 26, 2019 Introduction and Background The requested GMPA would add the Livingston Road/Veterans Memorial Boulevard Residential Subdistrict category to the Future Land Use Element of the CGMP. The request has been amended several times, and currently contains conditions that would limit the total allowable density to 304 units or 8.55 units per gross acre. (A companion rezoning request would change the zoning from the A, Rural Agricultural and Residential Planned Unit Development (Della Rosa) zoning districts to Residential Planned Unit Development (RPUD) to develop a multi- family residential project of 3041 dwelling units, a clubhouse and accessory uses on the ±35.57 - acre site.) The GMPA request, however, would allow up to a maximum density of 12 dwelling units per acre. The subject site is located on the east side of Livingston Road, and south side of Veterans Memorial Boulevard, in Section 13, Township 48 South, Range 25 East. According to the documents accompanying the Site Development Plan request, the maximum building height would be 50', zoned, and 60', actual. Buildings would be four stories in height, and buffers would range from a 10' Type A up to a 20' Type C. There would be 15' Type B buffer adjacent to approved single-family residential uses to the east of the subject property. Approximately 42% of the site qualifies as wetlands of varying quality. The subject property is currently designated Urban -Mixed Use District, Urban Residential Subdistrict, as identified on Future Land Use Map of the Growth Management Plan (GMP). Relevant to this petition, the Urban Residential Subdistrict provisions allow a maximum density of four (4) dwelling units per acre (DU/A) as a base density. The subject property is located within a Transportation Concurrency Management Area, and TCMA and Affordable Housing bonuses could potentially increase that number to a total of 15 dwelling units per acre without an amendment to the CGMP. The applicant, however, is not requesting bonus density, but rather a GMPA that would increase the total allowable density per acre up to 8.55 dwelling units. The proposed amendment states: "The Livingston Road/Veterans Memorial Boulevard East Residential Subdistrict consists of 35.57± acres and is located in the southeast quadrant of the intersection 1 Documents for the accompanying submittals variously describe the subject property as between 35.57 acres up to 35.91 acres, and the final development plan between 336 up to 368 multi -family units. At the CCPC meeting on January 16, 2019 the applicant verbally agreed to reduce the total number of dwelling units to 304. The boundary survey lists the total acreage as 35.566 acres. As noted above, the GMPA, if approved, would allow up to 8.55 units per acre. Packet Pg. 80 Analysis: sD Livingston, LLC- Allura PL20170004419/CP-2018-1 CCBOCC Hearing Date: March 26, 2019 Page 1 2 of Livingston Road and Veterans Memorial Boulevard. The purpose of this Subdistrict is to allow for a multi -family development at a density of up to 304 total dwelling units and to fulfill the intent of the TCMA, as stated in FLUE Policy 6.1. Development in this Subdistrict shall be subject to the following: a. The Subdistrict site shall be rezoned to Residential Planned Unit Development (RPUD). b. Allowable uses are limited to multi -family rental dwellings and shall not exceed 350 units. c. The RPUD shall demonstrate consistency with FLUE Policy 6.3 by providing two or more of the following: A transit shelter within the RPUD in a location and design approved by Collier County Public Transit & Neighborhood Enhancement (PTNE) Division; ii. Bicycle and pedestrian facilities, with connection to the abutting commercial property to the west: and, iii. Vehicular interconnection to the abutting commercial property to the west. Certificates of occupancy shall not be approved for more than 249 multi -family units (a density of 7.0 units per acre) until the applicable facilities and/or interconnections, as described above and approved as Development Commitments in the RPUD, have been completed. d. The RPUD shall include development standards and buffers to insure compatibility with surrounding land uses." Figure 1: Subject with Surrounding Development 9.A.f Packet Pg. 81 9.A.f Analysis: SD Livingston, LLC- Allura PL20170004419/CP-2018-1 CCBOCC Hearing Date: March 26, 2019 Page 1 3 Surrounding land uses include the Brandon Residential Planned Unit Development to the east and south, Royal Palm Academy to the southeast, The Enclave Residential Planned Unit Development to the southwest, undeveloped C-1 zoning to the west, Agriculture zoned property to the west, and the Mediterra Planned Unit Development to the northwest, north, and north east. The C-1 parcel located to the west of the subject property is designated as the Livingston Road/Veterans Memorial Blvd. Commercial Infill Subdistrict. Discussion and Analysis Objective 5 of the Future Land Use Element indicates that the County will promote sound planning that ensures, among other things, the compatibility of land uses. Policy 5.6 of the Future Land Use Element states, "New developments shall be compatible with, and complementary to, the surrounding land uses, as set forth in the Land Development Code." Development Acres Units Units per Acre FLUM Category Mediterra 1,168 750 0.64 Urban Residential Brandon 51.1 204 3.99 Urban Residential The Enclave Royal Palm Academy 28.38 162.7 114 550 4.02 3.38 Urban Residential Urban Residential Table 1: Surrounding Development Summary Based upon the surrounding land uses, the requested density of 8.55 units per acre represents an increase ranging between 2.13 times up to 13.36 times the existing densities. The plan amendment does not provide for any incentives for density beyond those that would normally be available for the additional 3 units per acre available for proposed TCMA improvements. Under the existing designation, there would normally be a requirement for provision of affordable housing, but the current request eliminates that necessity, and the proposal is for 'market rate' rental housing. The property lies within the Northwest Transportation Concurrency Management Area (TCMA) which potentially makes it eligible for a 3 DU/A density bonus, potentially increasing the total density for 4 units per acre to 7 units per acre, without a change in land use designation. Policy 5.6 of the Transportation Element indicates that a TCMA will be designated to encourage compact urban development where an integrated and connected network of roads is in place that provide multiple, viable alternative travel paths or modes for common trips. In order for a development to be exempt from link -specific concurrency requirements, developments within the TCMA must provide not less than 2 Transportation Demand Management (TDM) strategies as detailed in the Land Development Code (LDC). According to LDC Section 6.02.02(L) states, "In order to be exempt from link specific concurrency, new residential development or redevelopment within Collier County's designated Transportation Concurrency Management Areas (TCMAs) shall utilize at least 2 of the following Transportation Demand Management (TDM) strategies, as may be applicable: a. Including neighborhood commercials uses within a residential project. b. Providing transit shelters within the Packet Pg. 82 9.A.f Analysis: SD Livingston, LLC- Allura PL20170004419/CP-2018-1 CCBOCC Hearing Date: March 26, 2019 Page 14 development (must be coordinated with Collier County Transit). c. Providing bicycle and pedestrian facilities, with connections to adjacent commercial properties. d. Including affordable housing (minimum of 25% of the units) within the development. e. Vehicular access to adjacent commercial properties." This language echoes that found in FLUE Policy 6.5. The applicant has indicated an intention to provide a transit shelter and connection to the adjoining commercial development, once that development is undertaken. The latter commitment is dependent upon the ultimate design of the commercial property and may be outside the applicant's ability to guarantee. The applicant has not committed to any of the other TDM strategies. The applicant has submitted studies regarding demand for the proposed development as a rental community. The first study, by Axiometrics, indicates that the property would consist of 320 units - 144 one -bedroom units (45%), 144 two-bedroom units (45%) and 32 three-bedroom units (10%). This is 106 dwelling units less than that which would be allowed under the proposed GMPA. Further, this study indicates that the proposed development should have luxurious interior amenities to be competitive within the market and command higher rental rates. The proposed analysis is not targeting affordable or workforce housing. Additionally, an analysis by Myers Research was provided discussing demand and supply of new market based rental property. That study concluded that net demand by 2022 would reach 2,672 units, with supply amounting to 2,732 units (including the proposed Allura development). The Myers study includes rental units with monthly rates up to $2,500; this is clearly not affordable/workforce housing, and there is no discussion regarding the socioeconomic status of the proposed renters for the subject property. Further, the increase in demand for renter occupied housing units projected between 2018 and 2023 is only 645 units for the County. There appears to be little support for the need to increase overall density on the subject property to a level between 2.13 times up to over 13 times the properties in the area. The Myers Research report does note that the employment centers are located to the west and south of the subject property. A review of the Traffic Impact Statement (TIS) accompanying the request suggests that traffic on Immokalee Road, west of the intersection with Livingston, is problematic. Since that is the direction of the majority of employment and support services, it is clear that increased traffic resulting from the approval of the proposal will impact that situation. The TIS also indicates that the improvements to Veterans Memorial Blvd. will not be undertaken until 2022, an does not indicate when those improvements will be completed. Chapter 163.3177(6)(a)2, FS indicates that plan amendments must be based upon data and analysis including the amount of land necessary to accommodate anticipated growth, the projected seasonal and permanent population, and the character of the undeveloped land. The request for a GMPA adds 53 dwelling units to the subject property that it could not achieve without provision of affordable housing. At 7 units per acre, the density with the proposed TDM strategies met on site, the total number of units to be permitted would be 249. No GMPA Packet Pg. 83 9.A.f Analysis: SD Livingston, LLC- Allura PL20170004419/CP-2018-1 CCBOCC Hearing Date: March 26, 2019 Page 15 would be required, and there has been no indication that the existing land use designation is somehow burdensome to the land owner. There are economically viable development options for the subject property as shown both by the market studies provided as well as by the existing development patterns in the area. There is no compelling necessity to provide for such a significant increase in development density on the subject property. Further, there has been no data and analysis provided that would suggest a compelling reason for waiving the requirement of providing affordable/workforce housing as an incentive for added density. There are no data provided suggesting that the proposed amendment addresses an unmet need which exists at this location in the County. In fact, the Collier County Community Housing Plan (October 24, 2017) indicates, "The county is expected to add 58,000 households over the next 23 years. If the local issue of cost burden is not addressed, then — at a minimum - 11,000 more households will experience severe cost burden (above 50 percent) than do households today." Further, "There is a Jobs -Housing imbalance in Collier County resulting in at least 17.4% of the workforce (approximately 40,000 people) commuting daily from outside of Collier County." As of September 2017, the Community Housing Plan estimates that housing demand for extremely low, very low, and low-income housing would be ±1,618 dwelling units per year. The applicants have not provided any basis for a waiver or elimination of the existing policy which provides for bonus density when providing for this type of housing. Without adequate data and analysis to support the modification of the currently applicable future land use designation to the proposed designation, the amendment does not comply with Chapter 163.3177(6)(a)2, FS. Additionally, the lack of data and analysis is contrary to the requirements of 163.3177(1)(f) and creates internal inconsistency within the plan as a result of such a waiver or elimination of the affordable housing requirement. The introduction to the GMP's Housing Element states, "The development of private housing in Collier County is driven by an expensive housing stock; effectively excluding low-income and working class families from the housing market. Thus, there is a need for the County to find ways to encourage the provision of affordable -workforce housing for these families." Objective 1 of the Housing Element indicates that Collier County will, "Provide new affordable housing units in order to meet the current and future housing needs of legal residents with very -low, low, moderate and affordable workforce incomes, including households with special needs such as rural and farmworker housing in rural Collier County." Policy 1.10 of the GMP's Housing Element states, "The County shall create or preserve affordable housing to minimize the need for additional local services and avoid the concentration of affordable housing units only in specific areas of the jurisdiction. Programs and strategies to encourage affordable -workforce housing development may include, but are not limited to, density by right within the Immokalee Urban area and other density bonus provisions, impact fee deferrals, expedited permitting (fast tracking), public-private partnerships, providing technical assistance and intergovernmental coordination." Policy 2.9 of the Housing Element states, "The County shall review its Affordable -workforce Housing Density Bonus Ordinance every three years or sooner, as necessary, and revise the Ordinance, as necessary, to reflect changing community needs and market conditions. (The purpose of the Affordable -workforce Housing Density Bonus Ordinance Packet Pg. 84 9.A.f Analysis: SD Livingston, LLC- Allura PL20170004419/CP-2018-1 CCBOCC Hearing Date: March 26, 2019 Page 1 6 shall be to encourage the blending of affordable housing density bonus units into market rate developments as well as to support developments exclusively providing affordable housing.)" Based upon the existing CGMP Goals, Objectives and Policies, approval of the requested amendment is contrary to Chapter 163.3177(2), FS. This provision of the Statute provides that coordination among elements shall be a major objective of the planning process and that the various elements must be consistent. Additionally, 163.3177(6)(f) requires that the housing element of a comprehensive plan provides housing for all current and future residents of the jurisdiction, including provision of housing for very low, low, and moderate -income families. The current amendment is not based upon the best available data and analysis — as demonstrated in the Collier County Community Housing Plan — and is contrary to that requirement. Further, as demonstrated in the Housing Plan, the data and analysis reflects a significant need for extremely low, very low and low income housing, yet the amendment proposes to eliminate any component of the bonus associated with provision of that need contrary to the provisions of chapter 163.3177(6)(f)2, and 163.3177(6)(f)3, FS, further compounding the internal inconsistency that would be created should the amendment be approved. Staff indicates that at a macro level, the proposed GMPA may well be compatible with the area in which it is located. The Staff Report goes on to note that the rezoning petition must by analyzed with regards to specific compatibility measures. The proposed Site Development Plan shows buffers of 15' between existing single-family residences and the development. The proposed rezoning allows heights of up to 50' (zoned) and 60' (actual), for a series of massive, four-story buildings, all of which are necessary to place the 304 dwelling units on a property with significant wetlands that encompass over 40% of the site. Further, the applicant has indicated that it has the ability to construct the Della Rosa development at its current density and with its current configuration, creating larger, more massive buildings located closer to the perimeter of the subject property. The applicant fails to note, however, that the SFWMD has already denied the permits for the prior development plan; the denial was issued by the SFWMD on May 14, 2009. Conclusion The GMPA requested is unnecessary and fails to demonstrate any kind of deficiency which it is intended to address. The subject property has an economically viable and reasonable use, the applicant can achieve a reasonable density through the utilization of existing provisions of the Growth Management Plan, and the documents submitted for the companion requests demonstrate that compatibility with adjoining and proximate development will not be achieved based upon the current development plans. Although the traffic analysis has not identified any specific problems associated with the development, it is noted that the employment centers and commercial development servicing the subject property are located primarily south and west of the subject property. The additional traffic proposed by the development will certainly add to congestion of the roadways in the area, and the east -west improvements to Veterans Packet Pg. 85 Analysis: SD Livingston, LLC- Allura PL20170004419/CP-2018-1 CCBOCC Hearing Date: March 26, 2019 Page 17 are not scheduled to commence until FY 2022. Approval of the proposed amendment is contrary to the requirements of Chapter 163.3177, FS as noted above. It is not based upon proper data and analysis, creates internal inconsistencies in the CGMP, and violates specific Goals, Objectives and Policies in the CGMP. Further the failure to comply with the specific requirements of chapter 163.3177, FS means that the amendment is not "in compliance" as that term is defined in Chapter 163.3184, FS. It is my professional opinion that the Collier County Board of Commissioners should decline transmittal of the proposed amendment based upon its failure to conform to the requirements of the Statute and the lack of a necessity to provide the development options being requested by the applicant. David W. Depew, PhD, AICP, LEED AP Principal & Co Founder Morris-Depew Associates, Inc. 9.A.f Packet Pg. 86 A ULI Advisory Services Panel ReportA ULI Advisory Services Panel ReportCollier County Florida January 29–February 3, 2017 Collier_Cover.indd 2 5/17/17 11:17 AM Collier County Florida Expanding Housing Affordability January 29–February 3, 2017 A ULI Advisory Services Panel Report A ULI Advisory Services Panel Report2 About the Urban Land Institute THE URBAN LAND INSTITUTE is a global, member- driven organization comprising more than 40,000 real estate and urban development professionals dedicated to advancing the Institute’s mission of providing leadership in the responsible use of land and creating and sustaining thriving communities worldwide. ULI’s interdisciplinary membership represents all aspects of the industry, including developers, property owners, investors, architects, urban planners, public officials, real estate brokers, appraisers, attorneys, engineers, finan- ciers, and academics. Established in 1936, the Institute has a presence in the Americas, Europe, and Asia Pacific regions, with members in 76 countries. The extraordinary impact that ULI makes on land use deci- sion making is based on its members sharing expertise on a variety of factors affecting the built environment, includ- ing urbanization, demographic and population changes, new economic drivers, technology advancements, and environmental concerns. Peer-to-peer learning is achieved through the knowledge shared by members at thousands of convenings each year that reinforce ULI’s position as a global authority on land use and real estate. In 2016 alone, more than 3,200 events were held in 340 cities around the world. Drawing on the work of its members, the Institute recog- nizes and shares best practices in urban design and devel- opment for the benefit of communities around the globe. More information is available at uli.org. Follow ULI on Twit- ter, Facebook, LinkedIn, and Instagram. Cover photos: Wilhelm Rosenkranz (top); Beth Silverman (bottom). © 2017 by the Urban Land Institute 2001 L Street, NW Suite 200 Washington, DC 20036-4948 All rights reserved. Reproduction or use of the whole or any part of the contents without written permission of the copy- right holder is prohibited. Collier County, Florida, January 29–February 3, 2017 3 About ULI Advisory Services THE GOAL OF THE ULI ADVISORY SERVICES pro- gram is to bring the finest expertise in the real estate field to bear on complex land use planning and development projects, programs, and policies. Since 1947, this program has assembled well over 600 ULI-member teams to help sponsors find creative, practical solutions for issues such as downtown redevelopment, land management strate- gies, evaluation of development potential, growth manage- ment, community revitalization, brownfield redevelopment, military base reuse, provision of low-cost and affordable housing, and asset management strategies, among other matters. A wide variety of public, private, and nonprofit or- ganizations have contracted for ULI’s advisory services. Each panel team is composed of highly qualified profes- sionals who volunteer their time to ULI. They are chosen for their knowledge of the panel topic and are screened to ensure their objectivity. ULI’s interdisciplinary panel teams provide a holistic look at development problems. A respected ULI member who has previous panel experience chairs each panel. The agenda for a five-day panel assignment is intensive. It includes an in-depth briefing day composed of a tour of the site and meetings with sponsor representatives, a day of hour-long interviews of typically 50 to 100 key community representatives, and two days of formulating recommendations. Long nights of discussion precede the panel’s conclusions. On the final day on site, the panel makes an oral presentation of its findings and conclusions to the sponsor. A written report is prepared and published. Because the sponsoring entities are responsible for significant preparation before the panel’s visit, including sending extensive briefing materials to each member and arranging for the panel to meet with key local community members and stakeholders in the project under consider- ation, participants in ULI’s five-day panel assignments are able to make accurate assessments of a sponsor’s issues and to provide recommendations in a compressed amount of time. A major strength of the program is ULI’s unique ability to draw on the knowledge and expertise of its members, including land developers and owners, public officials, academics, representatives of financial institutions, and others. In fulfillment of the mission of the Urban Land Institute, this Advisory Services panel report is intended to provide objective advice that will promote the responsible use of land to enhance the environment. ULI Program Staff Thomas W. Eitler Senior Vice President, Advisory Services Beth Silverman Senior Director, Advisory Services Paul Angelone Director, Advisory Services Steven Gu Associate, Advisory Services James A. Mulligan Senior Editor David James Rose Editor/Manager Sara Proehl, Publications Professionals LLC Manuscript Editor Betsy Van Buskirk Creative Director Deanna Pineda, Muse Advertising Design Graphic Designer Craig Chapman Senior Director, Publishing Operations A ULI Advisory Services Panel Report4 Acknowledgments ON BEHALF OF THE URBAN LAND INSTITUTE, the panel would like to thank our sponsors, the Board of Coun- ty Commissioners of Collier County—Penny Taylor, Donna Fiala, Andy Solis, Burt L. Saunders, and William L. McDan- iel Jr. The panel would also like to thank the city of Naples, the city of Marco Island, Everglades City, the Collier County Affordable Housing Advisory Committee, and the Commu- nity Housing Plan Stakeholders Committee for inviting the panel to examine housing affordability challenges in the county, and it thanks the community at large for being so warm and welcoming. Special appreciation goes to Kimberly Grant, director of Community and Housing Services; Cormac Giblin, Grants and Housing Development manager; Steve Carnell, head of Public Services; County Manager Leo Ochs; and the rest of the county staff members for the time and effort they have devoted to the project. In addition, the panel expresses its appreciation to Steve Hruby, Nick Kouloheras, and the other members of the affordable housing committee for their assistance and support throughout the engagement. The panel also thanks ULI Southwest Florida, which will continue to be a local resource for Collier County moving forward. Finally, the panel would like to thank the approximately 90 residents, business and community leaders, and repre- sentatives from the Greater Collier County community who shared their perspectives and insights during the panel’s stakeholder interviews. Collier County, Florida, January 29–February 3, 2017 5 Contents ULI Panel and Project Staff ...............................................................................................................................6 Background and the Panel’s Assignment ..........................................................................................................7 Study Area and Surrounding Context .................................................................................................................9 Current Conditions ........................................................................................................................................11 Vision: What Do You Want to Be When You Grow Up? .....................................................................................17 Implementation ..............................................................................................................................................20 Conclusion ....................................................................................................................................................37 Appendix A: Implementation Schedule ............................................................................................................38 Appendix B: Examples of County Housing Initiatives .........................................................................................39 Appendix C: City of Austin, 2014 Robert C. Larson Policy Leadership Award Winner .........................................40 About the Panel .............................................................................................................................................43 A ULI Advisory Services Panel Report6 ULI Panel and Project Staff Panel Chair Philip Payne Principal and Chief Executive Officer Ginkgo Residential Charlotte, North Carolina Panel Members Hilary Chapman Housing Program Manager Metropolitan Washington Council of Governments Washington, D.C. Ian Colgan Assistant Executive Director Oklahoma City Housing Authority Oklahoma City, Oklahoma Joanne Fiebe Florida Center for Community Design and Research School of Architecture and Community Design, University of South Florida Tampa, Florida Lacy McManus Director of Program Development Greater New Orleans Inc. New Orleans, Louisiana John Orfield Principal BOKA Powell Dallas, Texas Cassie Wright Project Manager Urban Ventures LLC Denver, Colorado ULI Project Staff Beth Silverman Senior Director, Advisory Services Steven Gu Associate, Advisory Services Collier County, Florida, January 29–February 3, 2017 7 COLLIER COUNTY HAS BEEN DESCRIBED as “unique” and “one of the most beautiful places in the world.” Although the community is unique, the issue of housing affordability is not. In fact, virtually every commu- nity in the nation is, to some degree, struggling with this issue. It is especially true in retirement and resort commu- nities, which have significant numbers of service workers and high real estate values. The issue of housing affordability is not new. The panel is impressed with the time, the effort, and the quality of work that has been invested in this subject by the commission- ers and Collier County staff. Many of the panel’s recom- mendations mirror and ratify the work that has already been done. From the panel’s perspective, the real need in Collier County is for action and implementation. This implementa- tion will require political will and leadership. In addition, the community at large will need to prepare for and adapt to the growth that is certain to occur in the county. Not all of the panel’s recommendations will be popular within the community at large, but the panel believes such recom- mendations are essential to the long-term viability and sustainability of Collier County. An integral part of this strategic vision will be developing a plan that ensures that affordable housing will be available to all of the county’s citizens. The Panel’s Assignment There is no question that Collier County has a housing affordability problem. The highly desirable area is home to millionaires and billionaires from around the world. The county also has a sizable second-home retirement com- munity. Like many affluent resort communities across the United States, those influences have created a develop- ment pattern that caters to select segments of the com- munity. The local economy is focused on retail, hospitality, services, and agriculture; however, high housing costs have priced out much of the workforce needed for the county to function. As a result, large numbers of employ- ees are commuting long distances to and from work, and employers are having an increasingly difficult time recruit- ing and retaining workers. Community leaders are seeking strategic recommendations on how to address the issues surrounding housing affordability in Collier County. In March 2015 and again in March 2016, the Board of County Commissioners (BCC) held an affordable housing workshop. The BCC has also received several recommen- dations for programs and incentives to address housing affordability in Collier County, including establishing an affordable housing trust fund, providing even greater density incentives to support affordable housing develop- ment, and providing inclusionary zoning with pay-in-lieu-of options. The larger Collier County community has come Background and the Panel’s Assignment Although Collier County is the site of multimillion-dollar homes, it faces a significant housing affordability problem. Part of the challenge stems from a significant lack of supply in terms of housing type and level of affordability throughout the county. BETH SILVERMAN/ULIBETH SILVERMAN/ULIMARIAMICHELLE A ULI Advisory Services Panel Report8 Collier County circa 1930–1945.BOSTON PUBLIC LIBRARY together around this issue. In October 2015, the United Way sponsored a community-wide forum about affordable housing. The Greater Naples Chamber of Commerce’s Board of Directors has also established a work group to address this issue. Collier County has invited the ULI Advisory Services panel to help the county develop a community-wide approach to address housing affordability issues. Collier County has asked the panel to focus on the follow- ing key questions: ■■Why is it important for the county to have a balanced supply of housing, in terms of type, tenure, attainability, access, and distribution? ■■According to key stakeholders, including residents, what are the major obstacles to producing and sustaining affordable housing and workforce housing in Collier County? What can be done to mitigate those obstacles? ■■What are the stakeholders’ perceptions of affordable and workforce housing and of the existing tools and programs in place to support it? What are stakeholders’ recommendations for change? ■■How can public policy encourage the redevelopment of underused areas of the developed coastal area that includes affordable and workforce housing while ensur- ing that such housing will also be a component of new development in the urban and rural fringe areas. ■■What policies, strategies, and best practices have worked in places similar to Collier County that the panel would recommend that the county implement as it produces affordable housing units in the county’s urban and rural areas? Summary of the Panel’s Recommendations It was evident to the panel during its interviews with com- munity stakeholders; its review of comments compiled from a countywide, online, public survey; and its multiple study tours throughout Collier County that much work has already been done to address housing affordability chal- lenges. The panel hopes this report not only will serve as a blueprint for implementation, but also will help solidify an ongoing strategy to meet the county’s spectrum of housing affordability needs. With such goals in mind, the panel’s primary recommendations include the following: ■■Create a vision for the future of the community. ■■Recognize that housing affordability affects all segments of the community. ■■Increase the county’s supply of affordable housing (in- cluding rental housing) by adding to the current supply and by maintaining existing affordable units. ■■Adopt a smart code that distinguishes between the urban and rural parts of the county. ■■Reactivate the Affordable Housing Trust Fund—and use it. ■■Recognize that transportation is part of the housing affordability solution. Develop solutions that link housing with access to transportation options. ■■Establish transportation corridors to target mixed- income, multifamily housing development. ■■Consider establishing an enhanced minimum-wage ordinance. ■■Raise public awareness, educate, and communicate with the community about housing affordability. Collier County, Florida, January 29–February 3, 2017 9 Located in southwest Florida, Collier County is the largest county by land area in the state. The panel’s study area encompasses the entire county. However, key focus areas within the study include the city of Naples, the urban area, the rural lands, the Estates area, and the Immokalee area.ULI COLLIER COUNTY LOCATED IN THE SOUTHWEST END of the Florida peninsula, Collier County is the largest county by land area in the state. The county contains a variety of differ- ent communities including the city of Naples, inland Im- mokalee, and Marco Island, as well as four large nationally protected environmental areas. According to the 2010 census, the population breaks down to 65.7 percent non- Hispanic whites, 25.9 percent Latino, 6.6 percent African American, and 1.1 percent Asian. This diverse community, both geographically and ethnically, makes Collier County unique when compared with similar tourist destinations. However, this diversity has also led to housing issues throughout the county. Key Focus Areas Although the county was examined at large, the panel was asked to focus on the following key areas: ■■The city of Naples is an incorporated municipality bordering the Gulf of Mexico on the west and the unincorporated Collier County urban area on the east. Naples measures just 14 square miles and has some of the highest housing costs in the country. The limited number of commercial areas consists primarily of retail centers and financial institutions. ■■The urban area is located between the city of Naples and the rural lands (which run from the coast to about ten miles inland). Most of the housing, commercial, re- tail, and other services are located and permitted in this area. The urban area is characterized by large, planned, gated communities and by strip-mall developments. ■■The rural lands and the Estates area are located between the urban area and the more environmentally sensitive areas to the east. The Estates area is largely composed of platted, subdivided lots that range from Study Area and Surrounding Context 1 1 1 1 17 17 19 19219A 27 27 27 301 301 41 41 41 441 441 92 98 98 98 TollTol l 275 4 75 75 95 95 Biscayne NP Everglades NP Big CypressN PRES L. Istokpoga L. Kissimmee L. Okeechobee Ki s s i m m e e R .Peace R.St J o h n s R . FLORIDA BAY GULF OF MEXICO ATLANTIC OCEAN Charlotte Harbor Whitewater Bay BREVARD BROWARD CHARLOTTE COLLIER DADE DE SOTO GLADES HARDEE HENDRY HIGHLANDS HILLSBOROUGH INDIAN RIVER LEE MANATEE MARTIN MONROE OKEECHOBEE PALM BEACH PINELLAS POLK ST. LUCIE SARASOTA OSCEOLA Boynton BeachCape Coral Fort Myers Fort Pierce Margate Port Charlotte SarasotaBayshore Gardens Belle Glade Englewood Homestead Immokalee Key West Naples Port St. LucieSarasota Springs Tamiami Venice Fort Lauderdale Hollywood West Palm Beach Miami Immokalee area Collier County Florida Gulf o f Mex ico Urban area City of Naples Rural lands/Estates area A ULI Advisory Services Panel Report10 about one acre to more than 20 acres. During the Florida Land Grab of the 1950s, land parcels were divided and sold, creating the largest subdivision in the world with tens of thousands of home sites. Designated as privately owned, single-family lots, the Estates area’s commercial and retail opportunities are limited. West of the Estates are the rural lands, which are primarily farmland and environmentally sensitive areas that are designated for future cities and towns. The first town to be built in this area is Ave Maria. Once the project is built out, it will have up to 11,000 residences and 1.7 million square feet of retail, office, and business park uses spread across its 4,000 acres. Ave Maria is located at the intersection of Oil Well Road and Camp Keals Road in eastern Collier County. The main entrance—on Oil Well just west of Camp Keals—leads to the town center. ■■The Immokalee area is an agricultural center of the county. It is located in the northeast section of the county and is characterized by residential, commercial, and industrial development. A significant percentage of the affordable housing units available in Collier County are located in the Immokalee area. Habitat for Humanity development projects, such as Carson Lakes and Faith Landing, are built here, as are other affordable housing developments, including Hatcher’s Preserve. Collier County, Florida, January 29–February 3, 2017 11 Current Conditions AFFORDABLE HOUSING HAS MANY definitions and perceptions. Oftentimes, the multitude of definitions and opinions creates confusion when people are attempting to both study and solve issues of housing affordability in any given community or geography. Many definitions of afford- able housing refer to a percentage of area median income (AMI) as defined by the U.S. Department of Housing and Urban Development (HUD). Other definitions are careful to delineate between “affordable” and “workforce” housing— often defined as above or below 80 percent of AMI. Regard- less of the definition used in the affordable housing industry, for most people what represents “affordable” is more of a gut feeling that is influenced by their daily context. Throughout the study process, the panel consistently heard about Collier County’s housing affordability problem. However, the panel also perceived that there is a lack of clarity and agreement about the definition of affordable housing, which is causing poor communication, misunder- standings, and misaligned goals relative to the topic. Ac- cordingly, the panel recommends reframing the terminology of housing affordability around the concept of cost burden. Reframing the Idea of Housing Affordability HUD defines “cost burdened” as the following: Families who pay more than 30 percent of their gross income on housing costs, which includes mortgage principal and interest, property tax, and homeowners insurance payments. Other definitions add other housing costs, such as utilities, condominium or homeowners association fees, and ongo- ing maintenance or repairs, but the overall concept is that if a household is paying more than 30 percent of its gross income toward housing, then that is a concern, and from a policy standpoint, such cost may need to be addressed. The advantage of using the cost-burden terminology is that it does not put the focus on income alone; instead, it examines income as compared to housing cost. Therefore, it has a localized outcome that recognizes the different housing markets that exist nationally, regionally, and even within a single city or county. The 30 percent cost-burden threshold has been around for several decades. The idea was originally established by the 1937 National Housing Act, which also created the public housing program. At that time, eligibility to live in public housing was based on income limits, rather than maximum rents; a tenant’s income could not exceed five to six times the rent. Since the late 1930s, the 30 percent income limit for rental housing has been reevaluated and The Center for Urban Pedagogy, a New York City nonprofit organization dedicated to using the power of design and art to increase meaningful civic engagement, created the guidebook What Is Affordable Housing? with pictures and diagrams to help explain affordable housing issues in New York City.THE CENTER FOR URBAN PEDAGOGY 12 A ULI Advisory Services Panel Report Glossary of Housing Affordability Terms Affordable housing: Generally, a home or apartment occupied by a household that pays 30 percent or less of its gross income toward its mortgage or rent. The term is also widely used to refer to housing that is subsidized or rent-regulated and that is occupied by a household that is “low-income” (see later). The term used in this manner can be limiting—there are growing numbers of households that are within a range of incomes, that live in unsubsidized or unregulated market-rate housing, and that have a problem with “housing affordability” (see later). Area median income (AMI): The median household income of each metropolitan statistical area (MSA) adjusted for family size. The U.S. Department of Housing and Urban Development (HUD) publishes AMIs annually. AMI is used to determine the eligibility of applicants for most housing assistance programs. Extremely low-income housing: Per federal regulations, a household whose income does not exceed the higher of the federal poverty level or 30 percent of AMI (see earlier). Housing affordability: Refers to the ability or the lack thereof of a household to meet its housing expenses with a reasonable and sustainable share of its income, generally spending no more than 30 percent of gross income on housing costs, without regard to the household’s income or whether the household lives in subsidized, rent-regulated, or market-rate housing. Housing cost burden: Per the federal government, refers to a household having to pay more than 30 percent of its income for housing and possibly having difficulty affording other necessities such as food, clothing, transportation, and medical care. A housing cost burden is “severe” if housing costs consume more than 50 percent of a household’s income. Low-income housing: Per federal regulations, a household whose income does not exceed 80 percent of AMI (see earlier), adjusted for family size. Mixed-income housing: “Mixed-income” has a twofold meaning. In accordance with federal housing policy, HUD defines a mixed-income building as “comprised of housing units with differing levels of affordability, typically with some market-rate housing and some housing that is available to low-income occupants below market-rate.” In accordance with widely held housing industry practice, a mixed-income neighborhood consists of a variety of household incomes and opportunities for meaningful interaction, including parks, schools, and shopping. Moderate-income housing: Per federal regulations, households whose incomes are between 81 percent and 95 percent of AMI. The government may establish income ceilings higher or lower than 95 percent of AMI on the basis of an analysis of prevailing levels of construction costs, fair market rents, or unusually high or low family incomes. Naturally occurring affordable housing: Generally, housing that is “affordable” to “low-income” and “moderate-income” (see earlier) households that is not currently federally subsidized or rent-regulated. Preservation: Generally, providing the necessary physical improvements and financial capital to enable a currently occupied rental property to remain “affordable” (see earlier) and in decent condition for a sustained period of time. Preservation programs can also target owner-occupied housing, thereby providing assistance to homeowners that allows them to make improvements to their homes and to remain in them. Public housing: Rental housing owned and operated by local housing authorities that primarily serves “extremely low-income” (see earlier) households. Roughly 2.6 million people live in the nation’s 1.1 million public housing units. Very few public housing units have been built in recent years. Supportive housing: Generally, “affordable housing” (see earlier) combined with social services to assist vulnerable populations, such as the homeless, the disabled, the addicted, and the elderly. Very low-income housing: Per federal regulations, a household whose income does not exceed 50 percent of AMI (see earlier), adjusted for family size. Workforce housing: Generally, housing that is “affordable” (see earlier) to households earning between 60 and 120 percent of AMI (see earlier). In high-cost areas, incomes may be as high as 150 percent of AMI. Some definitions exclude owner-occupied housing. Source: ULI Terwilliger Center for Housing. Collier County, Florida, January 29–February 3, 2017 13 Table 1: Cost Burden in Collier County Burden for Three-Person Household Earning 30 to 150 Percent of Area Median Income Annual household income Percentage of area median income Percentage of income needed to afford median rent* Percentage of income needed to afford median-price home** Percentage of income needed to afford median-price condo*** $20,160 30 61 149 101 $29,600 50 41 101 69 $47,300 80 26 63 43 $59,125 100 21 51 35 $65,038 110 19 46 31 $70,950 120 17 42 29 $88,688 150 14 34 23 Sources: U.S. Department of Housing and Urban Development; The 2016 Collier County Economic, Demographic & Community Profile; the American Community Survey. *Median gross rent is $1,020 per month, as defined by the Shimberg Center in 2015. **Median sales price is $405,000, including mortgage and interest at a 20 percent downpayment for 30 years, plus estimated homeowner’s insurance, property taxes, and flood insurance. ***Median sales price for condominiums and townhouses is $257,000, including mortgage and interest at 20 percent downpayment for 30 years, plus estimated homeowner’s insurance, property taxes, and flood insurance. adjusted several times, ranging from 20 to 30 percent at any given time. In 1981, the housing burden rate for rentals was rees- tablished at 30 percent of gross annual income. Gradu- ally, this limit was extended to homeownership. In the mid-1990s, Fannie Mae and Freddie Mac would purchase mortgages only if their principal, interest, tax, and insur- ance (PITI) payments were 28 percent or less of the borrower’s gross income for a conventional loan and 29 percent for a loan insured by the Federal Housing Admin- istration. Since that time, almost all cost-burden limits for housing have been around 30 percent of a household’s gross income (https://www.census.gov/housing/census/ publications/who-can-afford.pdf). Used in conjunction with the 30 percent cost-burden threshold is severe cost burden, which includes house- holds that pay more than 50 percent of gross income toward housing costs. Those households are the most at risk—regardless of locality. Defining the Cost-Burden Problem In 2015, Collier County had a population of 343,802 and 140,131 households. The Shimberg Center at the Univer- sity of Florida estimates that of the 140,131 households, 58,685 (40 percent) were cost burdened in 2015—mean- ing they spent more than 30 percent of their gross income on housing. Of those 58,685 households, 29,342 were considered severely cost burdened —meaning they spent more than 50 percent of their gross income on housing. This finding means that two out of every five households in Collier County are cost burdened, with one in five severely cost burdened. During the study tour, the panel observed that in several communities multiple cars were parked in front of each home, thus supporting the theory that people are living together in order to afford the high cost of housing in the county.BETH SILVERMAN/ULI A ULI Advisory Services Panel Report14 However, the issue of cost burden may be larger than the numbers indicate. Not all of the households counted in the census are year-round residents, and most of those part- time households have incomes that support their residence in the county, which is a second residence. Therefore, it is likely that the actual percentages of cost burden are substantially higher among residents who live in the county year-round. To better understand the meaning of “cost burdened” in Collier County, the panel analyzed the correlation between household income and housing prices or rental rates. In 2016, the estimated AMI for Collier County was $65,700, and the average household size was 2.47. For a snapshot of the cost-burden issue, see table 1. Who Is Cost Burdened in Collier County? The people who are cost burdened in Collier County are crucial to the local economy. They provide key public safety, education, and health care services to the com- munity’s residents. In addition, they are responsible for the high-quality lifestyle that makes Collier County such a special place. Examples of workers in the cost-burdened category include the following: ■■Health care: Nurses, medical assistants, senior service providers ■■Education: Teachers and other school employees ■■Public safety: Police officers, firefighters ■■Service industry workers: Wait staff, hotel staff, retail and trade salespeople, golf course employees, land- scape maintenance workers ■■Entry-level or nonprofit professionals: Bank tellers, social workers, office managers, government employees Not every person in those fields will have difficulty finding housing that is affordable. For example, dual-income households have increased purchasing power. However, people receiving entry-level and median income rates in health care, public safety, and professional sectors are more likely to experience a cost burden than are the people holding executive, management, and supervisory positions. Also, single-income households, which can include one- to four-person households, are more likely to experience a cost burden or even a severe cost burden when living in Collier County. Table 2 provides a representative sample of employment positions in Collier County and what people in such posi- tions can afford in the local market. Across the board, the ability to afford houses priced at the median sales price from 2015 was low. The ability to afford rental units at the median gross rent (plus utilities) was more reasonable, with affordability attainable for some of the people holding professional positions. During the panel process, the panel heard many stories regarding how difficult it is to recruit service industry work- ers, particularly those who work at the resorts and hotels, including housekeepers, front-desk staff members, and golf course attendants. The panel’s analysis of cost burden for those jobs indicates that there is substantial cost burden for such workers unless they share living space or commute long distances. One critical challenge for Collier County businesses is the ability to recruit entry-level professionals. Mid- and upper-level professionals in public safety, education, government, and health care can afford a wider range of housing. However, such is not the case for entry-level professionals, who often end up living far away from their source of employment (particularly in Lee County). Having employees who reside outside of Collier County and who commute long distances for work often means a high level of attrition for businesses. Furthermore, when people who work in the county are commuting to adjoining municipali- ties to live, the county bears the costs of the roads without the benefit of receiving the tax revenue. Collectively, the employment sectors that are the most at risk to incur a significant cost burden represent more than 50 percent of the local labor force. But beyond that, the sectors represent the core of county, public safety, Collier County, Florida, January 29–February 3, 2017 15 and education services, and those services support the background of the lifestyle, health, and overall vitality of the county. Other important groups of residents with substantial needs include low- to moderate-income seniors, both those who live independently and those who require services; residents who require mental health treatment and various other services; and very low-wage earners. Those resi- dents face virtually no supply of housing or no continuity in being provided social and health services. Most experience long wait lists at the few available housing sites, and many have to be relocated outside of the county to areas with a greater concentration of housing and services. Going Beyond the Root of the Problem If one is to understand the full spectrum of housing afford- ability, it is critical to examine the aspects of the challenge that go beyond housing costs. Those additional crucial factors include added housing costs, housing supply and availability, transportation costs, and future growth implications for the county, and such factors are examined in further detail in the following sections. Added Housing Costs In Collier County, housing affordability for homeowners (and especially first-time homeowners) means more than Table 2: Estimated Cost Burden for Households Headed by Selected Wage Earners Profession Annual wage range (entry to median) Housing cost as percentage of gross income Median gross rent 2015 median home sale price Health care Registered nurse $47,000–$65,000 24%38% Medical assistant $30,000–$35,000 41%68% Emergency technician $28,000–$36,000 42%68% Education Teacher $44,000–$59,000 28%50% Teaching assistant $22,000–$24,000 45%101% Public safety Firefighter $39,000–$57,000 29%43% Patrol officer $47,000–$59,000 26%41% Service workers Maid and housekeeping $18,000–$22,000 66%109% Massage therapist $26,000–$55,000 37%44% Concierge $25,000–$31,000 48%78% Entry-level/midtier professional Human resources specialist $35,000–$55,000 31%45% Dental assistant $33,000–$43,000 36%57% Administrative assistant $22,000–$33,000 49%73% Housing cost accounts for less than 30 percent of gross income (not cost burdened) Housing cost accounts for 30 to 50 percent of gross income (cost burdened) Housing cost accounts for 50 percent or more of gross income (severely cost burdened) Sources: U.S. Department of Housing and Urban Development; The 2016 Collier County Economic, Demographic & Community Profile; the American Community Survey. A ULI Advisory Services Panel Report16 just taking into consideration PITI. Utilities and home- ownership association fees also come into play when determining housing affordability and cost burden. After interviewing several area stakeholders, the panel believes that the percentage of cost-burdened Collier County households is even higher than outlined in the earlier section. One reason the percentage is higher is that many households cannot afford a 20 percent downpayment, which means they must pay private mortgage insurance, thus reducing the amount of home they can afford. In addition, almost all areas of Collier County require flood insurance, which adds a substantial monthly cost on top of all the costs just described. Moreover, Collier County has one of the highest homeowner insurance rates in Florida. Availability When one considers cost burden and affordability, one must also consider availability and quality. Housing units at the bottom of the cost spectrum often are made up of a high percentage of units with quality and maintenance concerns. If one considers the total number of units existing at differ- ent rental and sale prices, availability of those units at any given time can significantly constrain access to housing that is affordable. The panel took a “snapshot” of units available on the market using readily accessible, publicly available portals to find housing (Zillow.com, Trulia.com, Apartments.com). Using the income bands of 25 different employment categories, the panel looked to see how many units were available below the cost-burden threshold of 30 percent (table 3). The analysis provided several interesting results. Although a reasonable number of condominiums were available (but no additional homeowners association fees were considered in the analysis, which may have resulted in fewer options), very few single-family homes were for sale, and there were very limited rental options, which indicated a particularly constrained rental market. For any worker or single-income household with income between 80 and 100 percent of AMI, options were extremely limited, to say nothing of those households making less than 80 percent, which represent a substantial percentage of workers who are cost burdened. Transportation Crucial to the cost-burden conversation is the combination of housing cost and transportation cost. According to data from the Center for Neighborhood Technology, households at 90 to 100 percent of area median income can incur housing and transportation costs of 75 percent of their gross income. That figure is 61 percent for households between 100 and 120 percent of AMI. Furthermore, de- pending on the distance from employment and other activity centers, transportation costs for Collier County households can fluctuate wildly. In some cases, households may incur 5 to 10 percent more in transportation costs if they are located farther away from employment and other services. Growth Implications In a county expected to grow significantly in population by 2040, what does that finding mean for the future? The county is expected to add 58,000 households over the next 23 years. If the local issue of cost burden is not addressed, then—at a minimum—11,000 more households will experience severe cost burden (above 50 percent) than do households today. Given ever-rising real estate values and a seemingly bottomless demand for higher-end homes and rentals, the likelihood of both the number and percentage of cost-burdened households increasing is high. Table 3: Collier County Housing Market Snapshot Units Affordable for Households Earning Less Than 100 Percent of Area Median Income Housing type Number of units Single-family, for-sale homes 125* Condominiums 65–250** Single-family rentals 0 Multifamily rentals 23 Sources: Zillow.com; Apartments.com. *3.8 percent of inventory on multiple listing services **Priced at $120,000 to $175,000 Collier County, Florida, January 29–February 3, 2017 17 THE PANEL TOURED KEY AREAS of Collier to get a comprehensive look at the county. The panel also inter- viewed more than 90 stakeholders during this process, reaching out to residents, elected and appointed officials, business leaders, real estate developers, and nonprofit leaders. From the study tours and interviews, the panel did not hear a strong consensus regarding the path forward for Collier County. However, several common themes and community values were frequently raised. Those traits are both existing and aspirational: some have already been im- plemented across the county (such as the Blue Zone and the commitment to beautification), while others are indica- tive of recent concerns and current shortcomings (such as economic development and traffic). The common themes and community values include the following: ■■Maintaining Collier County’s reputation as a premiere tourist destination ■■Growing and maintaining a strong real estate base and retaining steady values ■■Retaining a safe and healthy community ■■Enhancing and sustaining a visually attractive and aes- thetically pleasing community with character ■■Ensuring an efficient transportation system ■■Diversifying the local economy What the Future of Collier County Looks Like Collier County’s current debate on housing affordability is not a new one. The panel heard repeatedly about the community’s reservations regarding another discussion on housing affordability—the topic has been widely discussed for many years—with the Great Recession and housing downturn halting past efforts. These on-again, off-again discussions reflect the cyclical nature of this issue and the related concern it raises. Today, with new interests and partners realigning around the housing issue, a variety of pathways and solutions can be explored. Considering the overall values raised by community members, the panel believes two key scenarios Vision: What Do You Want to Be When You Grow Up? Collier County is home to pristine beaches and enviable weather; it also boasts a mix of urban, suburban, and rural land use patterns. Nonetheless, the panel believes that Collier County does not have a vision for what it wants to be in the future. (Left to right: Ave Maria, Naples’s iconic beaches, and the panel’s public reception.)BETH SILVERMAN/ULIBETH SILVERMAN/ULIBETH SILVERMAN/ULI A ULI Advisory Services Panel Report18 face Collier County: a future with action and a future with- out action. A wide range of options and interventions exists within this dichotomy and will produce varying outputs and results. The scenarios presented next are intended to illustrate specific certainties that the panel believes will be inevitable under current conditions. The Future of Collier County without Action on Housing If county leaders choose not to respond to the current housing needs, it is likely that the current market condi- tions and trends will continue to advance and evolve. Local employers will continue to have difficulty hiring and retaining key employees in the county, which will create a “brain drain” out of the community and into neighboring jurisdictions, such as Lee County. Not only does this market condition place a strain on employers’ ability to hire and retain high-quality talent, but also it means more workers and middle-class laborers will be commuting greater distances, thereby increasing transportation con- gestion and mitigating quality of life and civic engagement. In addition, Collier County’s local economy will lose tax revenue as incomes earned in the county leave to neigh- boring jurisdictions because out-of-county employees tend to spend a greater portion of their income by going to gro- cery stores, restaurants, and dry cleaners in their residen- tial communities. Therefore, Collier County will continue to sustain the burden of influx infrastructure strain, while receiving no tax revenue from it. Those conditions create an intensified landscape of competition between counties, instead of mutual collaboration for the betterment of the region. With no action on housing, Collier County will be forced to create reactionary policy and will have more dif- ficulty when guiding future growth of the county. The Future of Collier County with Action on Housing Conversely, if the county takes appropriate action and intervenes, the aforementioned trends could be redirected in a more financially and economically sustainable direc- tion for the county. Although the panel report will identify the specific strategies for all residents of Collier County, having a proactive policy right now will redirect the current housing and demographic trends and will create positive benefits for the county. The local economy will benefit by retaining a self- sustaining employment base in which people can work in Collier County’s Sheriff’s Department, public schools, hotels, and restaurants and can live in the county. The benefits include an increase in tax revenue generated by the in-county residents, a lesser strain on existing transportation infrastructure, and an increase in the qual- ity of life for this vital segment of the community. Also, employers will have a better chance of attracting and retaining talented and skilled workers in the county, which will improve the overall quality of life in the county and will build a stronger middle class. With the growing aging demographic, a proactive policy will make the county a more hospitable place for longtime residents to age in place and to receive health care. Also, keeping this older demographic in the county will generate county tax revenue from the group’s use of local pharma- cies, grocery stores, and specialized medical services. By taking a proactive approach toward addressing housing, Collier County can develop a vision that expands on and enhances the existing unique qualities of the county. Why a Vision Is Important The panel believes that the overall priorities of the county lack a collective vision; without such a vision, aligning and prioritizing government processes and policies will be challenging. Collier County is still facing near-certain changes—with or without a unifying vision—particularly regarding the incoming population and real estate growth. If one considers the expectations around building growth and residential influx, the problems facing the county today will be amplified in the coming years, thus exacerbating the current pain points (traffic, workforce, costs). In short, the status quo in Collier County will work only for a limited number of people and for a limited amount of time. The Collier County, Florida, January 29–February 3, 2017 19 As part of the study, the panel met with community stakeholders, including residents, business and community leaders, and other representatives from the larger Collier County community.BETH SILVERMAN/ULIpanel feels strongly that without proactive management, the anticipated growth will erode the very qualities that attracted people to the county in the first place. The panel recommends that the creation of a vision for Collier County should come from the county itself, as a self-directed exercise, and should be inclusive of all stake- holders. However, to ensure the exercise and the results have the desired effect, the panel provides the following elements that the county should include in its vision: ■■Provide key considerations around quality of life for all residents, as well as how to improve and maintain it. ■■Provide a range of housing options that are accessible to the full spectrum of consumers. Housing options should be economically and geographically diverse throughout the county, as well as having a range in sizes and types such as single-family homes and rental apartments. Additional key factors to consider when providing hous- ing options include the reasonable proximity to jobs, schools, amenities, and transportation choices. There should also be an inclusive mix of income levels in dif- ferent neighborhoods. ■■Grow and sustain a thriving economy that includes qualities such as livable wages, job opportunities that provide pathways to wealth creation and upward mobil- ity, diversified industries, and a diversified workforce. ■■Provide accessible, multimodal transportation options that safely and efficiently connect all residents to jobs, amenities, and services. In addition, provide clear directives to governing entities to help align policies and processes with the envisioned future for the county. A ULI Advisory Services Panel Report20 THE PANEL IS IMPRESSED WITH the planning and study that has already been completed regarding housing affordability in Collier County. The panel’s recommenda- tions reflect and endorse much of the work that has al- ready been completed. However, what is abundantly clear to the panel is that action and implementation are crucial to creating sustainable solutions. Implementation of the panel’s recommendations will require sincere action, tremendous political will, and strong leadership. For addi- tional reference, the panel has created a proposed imple- mentation schedule to provide a blueprint for how to move forward on the recommendations described throughout this section in the short, medium, and long term. (See ap- pendix A.) The panel’s major recommendations are organized around the following six core strategies to address housing afford- ability: ■■Increase supply; ■■Maintain supply; ■■Regulate and govern; ■■Enhance transportation options; ■■Enhance wages; and ■■Engage, market, and educate. Increase Supply How can Collier County meet its current and future hous- ing needs? One approach to achieving the goals is by adding housing that is affordable to households with a wide range of income levels. There is good news to share: several strategies include simply making improvements to existing procedures and vehicles rather than creating new programs entirely. There is no need to reinvent the wheel when existing structures already support the development of more affordable housing. The Housing Trust Fund The housing trust fund (HTF) is an example of a national best practice that Collier County currently has at its disposal but does not use. More than 700 HTFs exist nationwide, and they are often a critical element of a jurisdiction’s overall housing policy. Collier County’s HTF should be sustainable and predict- able, given the long planning process involved in housing development. The county should keep in mind that what can make an HTF challenging is finding viable revenue sources. Other jurisdictions have funded their trust funds through sales taxes, real estate transfer taxes, linkage fees as part of the zoning ordinance, inclusionary zoning in-lieu fees, condominium conversion fees or demolition fees, and hotel and motel taxes. The best and most common revenue source for a county HTF is a document record- ing fee, which is a fee paid upon filing various types of official documents with a state or local government. This fee is one of the few revenue sources that most counties can commit to, and the panel recommends Collier County consider this approach. Development Incentives The county’s existing developer incentives have clearly failed to transform existing development patterns and allow for greater production of housing that is affordable to a broad range of low- to moderate-income households. Any developer incentives need to be reasonable, be flex- ible, and allow for creative partnerships to produce new, affordable homes. The panel strongly recommends that the county put increased emphasis on multifamily rental Implementation Collier County, Florida, January 29–February 3, 2017 21 housing as a means of addressing its affordability housing situation. Multifamily rental housing is the most cost- effective way to provide housing that is affordable to the average working person. The panel recommends that existing density bonuses be reassessed to allow for and provide incentives for more mixed-use development and greater efficiency of land use throughout the county. This recommendation will be dis- cussed in greater detail later in this report, but the current density bonus program needs revision to allow for higher densities to ensure that additional mixed-income, mixed- tenure (rental as well as homeownership) developments are financially feasible. Examples of this type of increased den- sity include Bayfront and Naples Square, at more than 20 to 30 units per acre rather than the average 2.5 units per acre in other residential communities. The density can also be flexible to allow for complementary adjacent uses and to reflect different preferences in the urban and rural areas. Impact fees are an often-cited source of frustration to those creating both market rate and affordable housing products. Not only are high impact fees an impediment to new construction of affordable housing, but also they can be erratic and can be an ineffective way to raise revenue. During periods of high growth, they can produce lots of cash, but during slow periods of growth, the revenue provided by such fees falls, sometimes precipitously. County Housing Trust Fund Dedicated Revenue Sources Revenue Source County Trust Funds Document recording fee Arlington County, Virginia; 9 New Jersey counties; 54 Pennsylvania counties; 39 Washington counties Property tax Kalamazoo County, Michigan; King County, Washington Inclusionary zoning in-lieu fees Sonoma County, California Tax increment funds Alameda County, California Delinquent property tax penalties and interest (land bank) Toledo/Lucas County, Ohio Real estate transfer tax Columbus/Franklin County, Ohio Hotel/motel tax Columbus/Franklin County, Ohio Developer impact fees/proffers Fairfax County, Virginia Food and beverage tax Dade County, Florida Sale of foreclosed properties Traverse City, Michigan (now expired) Sales/use tax Summit County, Colorado General funds North Valley/Chico, Alameda County, Los Angeles County, Santa Barbara County, Sonoma County, and San Luis Obispo County, California; Tompkins County, New York (with Ithaca and Cornell University); Arlington County, Virginia; 24 counties in Iowa Source: Housing Trust Fund Project, Center for Community Change, 2016. An example of existing density that allows for a mix of uses in downtown Naples along Fifth Avenue.CHARLIE ANZMAN A ULI Advisory Services Panel Report22 Inclusive Housing Strategy: Tysons Corner, Virginia A sprawling edge city begins to remake itself as a more walkable, sustainable place, with transit-accessible, mixed- income housing at its core. Fairfax County, Virginia, home to 1.1 million residents, is the most populous county in the Washington, D.C., region and is one of the most prosperous in the nation, with a median household income of nearly $113,000. The county’s development since the 1960s and its image today have been shaped by the growth of Tysons Corner, a roughly 1,700-acre area originally marked by the intersection of state Routes 7 and 123. For a half century, “Tysons” has epitomized the commercially successful suburban employment center and retail destination, which is dominated by large office buildings occupied by white-collar companies and high-end shopping malls. Tyson’s enormous economic success—it was the nation’s 12th- largest central business district as recently as 2014—came over time with substantial costs in the form of traffic congestion and sprawling development. The number of homes and apartments fell far behind the number of jobs; investment fell short of needs in cultural amenities, green space, and schools; and transit options were limited. Tysons’s very economic model came into question. For local business leaders and elected officials, the future of Tysons depends on whether it can reinvent itself as a more complete community. Under the rubric of a “Transforming Tysons” plan, Fairfax County has established goals to be met by 2050: increase the number of Tysons residents to 100,000 (from 19,000 today), double the number of jobs to 200,000, and ensure that at least three-quarters of the new growth is within a half-mile of Metro stations (four stations opened in the Tysons area in 2014). Fairfax County also intends Tysons to be a mixed-income residential community—a place where construction and service workers, teachers, and others in need of more affordable housing can afford to live. To achieve that goal, the county has ambitiously expanded a longstanding county policy that has been a national model for promoting inclusionary housing development. Equity Strategies, Results, and Challenges Since 1990, the county has generally required residential development projects (excluding high rises) to set aside a share of units (generally 5 to 12.5 percent) for households earning 50 to 70 percent of the Washington metro area median income. Developments receive a density bonus— permission to increase the size of the project—to help mitigate the economic cost of delivering the below-market units. This affordable dwelling unit (ADU) program has generated more than 2,500 affordable units to date, with about an equal mix of rental and for-sale housing. Research indicates that Fairfax County ADU homes and apartments are overwhelmingly located in low-poverty neighborhoods and in areas with schools comparable to those in places without ADUs. Research also indicates that the program has not deterred developers from delivering profitable projects in the county. By state law, the ADU program does not apply to high-rise buildings— precisely the type of development the county wants to see near transit in the Tysons transformation plan. Recognizing that this exemption would undermine the opportunity to provide a wider range of housing choice in Tysons, the county expanded its inclusionary policy so it could be applied more effectively in the area. As a result, 20 percent of all high-rise units in Tysons must meet affordability requirements, albeit at higher income levels than the ADU program. Though low- and mid-rise buildings are still covered by the ADU program, their developers are encouraged to meet the higher standard as well. As of June 2016, 356 affordable units had been delivered in Tysons. Future development up to allowed densities could result in the creation of as many as 4,200 units in the area. Tysons will also generate funding to support affordable housing through payments that office, retail, and hotel development projects must make in return for receiving county approval to build at greater densities—generally either a one-time contribution of $3 per square foot or annual payment of $0.25 per square foot for 16 years. As of 2014, this policy was projected to generate more than $64 million for investment in affordable housing in Tysons through a trust fund. The capacity of Tysons to become a more equitable community is interlinked with its evolution into a denser, more walkable area and with its careful use of inclusionary development practices and incentives as that evolution occurs. Researcher Christopher Leinberger, whose work has suggested that more-walkable urban places can advance an array of social-equity outcomes as well as deliver superior economic returns, has noted of Tysons: “Many of the neighborhood associations surrounding [Tysons] became supporters of increased density because of the promised walkable urban future. NIMBYs (not in my backyard) became YIMBYs (yes in my backyard).” The Tysons inclusionary housing policy is not perfect. In exchange for requiring a higher percentage of inclusionary units than under the existing ADU program, the county raised the income levels of eligible families, reflecting the realities of development feasibility. To serve families with very low incomes, the county will need to offer development subsidies through the trust fund and other sources. And while the Tysons policy appears to be working well for rental apartment buildings, it has proven more problematic for for-sale projects. In November 2016, the Washington Post reported: “County leaders are considering relaxing the 20 percent expectation for high-rise condominium projects, after developers complained that it will make it harder to secure financing for their typically smaller buildings.” The county worked with the development community to revise the policy to reflect market conditions that had changed since it was put in place, and the first condominium project was recently approved. Collier County, Florida, January 29–February 3, 2017 23 Case Study: Palm Beach County Workforce Housing Program Palm Beach County’s Workforce Housing Program requires all new developments of more than ten units to provide units for households earning 60 to 120 percent of AMI in exchange for additional density allowances on a sliding scale. Developers have the flexibility to meet the affordable housing requirements by paying an in-lieu fee, building units off site, or purchasing and deed restricting market-rate units. To date, more than 1,400 affordable or workforce units have been approved as part of 36 developments. In addition, nearly $900,000 of in-lieu fees have been collected from three developments. The program was established in 2004 but gained traction in the market only after 2009, when the county made substantial revisions as a result of recommendations by the real estate industry, including homebuilders and realtors. An evaluation of the program found that the county’s incentives fully offset the cost or lost profit incurred by developers in providing the affordable and workforce units. The high fee structure, however, reflects the limited sources available to Collier County to support develop- ment of all types. The panel recommends a review of the impact fee structure to consider how to better incentivize developers to build a spectrum of housing types and sizes. Further, the panel recommends that the current impact fee deferral program cover all types of income-restricted hous- ing, regardless of whether it is single-family, multifamily, senior, or special needs housing. National Best Practices In addition to enhancing existing tools to create affordable housing, the panel recommends tailoring several national best practices to Collier County’s unique characteristics to supplement the county’s ability to meet current and future housing needs. Inclusionary zoning (IZ) is an approach to add to the supply of affordable housing options by linking the zones to the creation of market-rate housing. IZ programs have been used across the country since 1972 and vary greatly in terms of their structure and requirements. Given the under- use of the existing density bonus program, the county needs to consider a more proactive approach to increase the supply of housing options for all of its residents. Although IZ programs may not produce a high volume of units, such programs have the unique ability to provide the choice to residents to live in communities with better access to transit, jobs, and schools. IZ programs can be flexible in implementation to fit the needs of the county and to fit different project types. For example, the county may want to allow for the provision of inclusionary units to be produced off site; the payment for units through a fee-in-lieu arrangement to the HTF; or the creation of partnerships between for-profit and nonprofit developers so the units best fit the respective business models and expertise. Mitigating the cost of land—something that is fixed, limited, and a significant challenge to all developers in Collier County—can be addressed through vehicles such as a community land trust (CLT) and through a program to designate public land for public goods, such as affordable housing. CLTs are nonprofit, community-based organiza- tions whose mission is to provide affordable housing in perpetuity by owning land and leasing it to those who live in houses built on that land. Although CLTs may have a broad mission, their primary role is providing successful homeownership opportunities for generations of lower- income families. A related approach to the CLT is to consider a ground lease structure. This approach both dramatically reduces the cost of the land to the developer and helps ensure long-term affordability for the housing built on that site. The city of Naples has used this approach in at least two instances at the Jasmine Cay and Carver Apartments. The panel also recommends that the county immediately undertake a review of the current land inventory to identify parcels that may be available for housing development A ULI Advisory Services Panel Report24 opportunities. This review can be accomplished using a cross-agency strategy, and the county should find ways to engage with community stakeholders to identify possible sites and building intensities. A related part of using public land for public good is to colocate affordable housing with the renovation or creation of new public facilities. One suc- cessful example includes building affordable housing for seniors adjacent to a new public library at a development called the Bonifant in Silver Spring, Maryland. It is not the sole responsibility of either the government or the private sector to provide for the housing needs of all residents in Collier County. The best way to produce housing effectively that meets a broad, rather than narrow, range of housing needs is through effective public/private partnerships. Elements of effective public/private partner- ships include creating a shared vision, clear roles and responsibilities, consistent and coordinated leadership, and frequent communication. Repurposing Vacant and Underused Retail Space Another unique opportunity for Collier County to add to its supply of affordable housing is to take advantage of existing vacant and underused retail sites along major transportation corridors through a conversion to multi- family residential buildings. This effort would accomplish several goals simultaneously, including these: ■■Returning underperforming buildings to the tax rolls and generating revenue for the county, and ■■Providing an option for rental apartments along existing transportation corridors without the need to create new infrastructure. The county’s regular rental housing surveys have found va- cancy rates in multifamily rental buildings to be extremely low, at 1 to 2 percent, thus indicating a significant unmet demand for rental housing options. Maintain Supply One of the most cost-effective and efficient means of providing affordable housing is to maintain the existing supply. The National Housing Trust finds that renovating an existing property can be one-third to one-half as expensive as new construction. Renovating older properties does not require new land for development, takes advantage of existing infrastructure, and reduces construction waste. Collier County has an existing renovation code available to developers looking to refurbish existing properties, and the county should encourage its use through incentives mentioned previously, such as through expedited permit- ting and inspections and by reducing or deferring the associated fees. The county can identify opportunities proactively by track- ing properties with expiring affordability covenants (using resources such as the National Housing Preservation database) to ensure that existing rental properties remain affordable for the long term. The county should also explore implementing a right of first refusal to purchase The Bonifant in downtown Silver Spring, Maryland, is a transit- oriented development for lower-income seniors that is adjacent to the new Silver Spring library and within walking distance of transit and bus lines. The panel strongly recommends that the county take an inventory of vacant and underused commercial parcels that might be available for housing development. DAN REEDBETH SILVERMAN/ULI Collier County, Florida, January 29–February 3, 2017 25 (either by the county or by a nonprofit partner) expiring use properties so the county can prevent the loss of any housing that is affordable to low- and moderate-income residents and that might result in displacement. Regulate and Govern After a review of existing regulations, interviews with stakeholders, and an understanding of current market conditions, the panel determined that the county faces inherent difficulties, unnecessary costs, and a lack of predictability to developing affordable housing projects. Al- though internal and external market forces play a large role in the success of the projects, the county could reduce approval times and costs while increasing predictability in the review process in three steps: ■■Update regulations to encourage affordable housing development in desired areas. ■■Permit higher densities in urban areas for projects with affordable housing by-right. ■■Revise the governance structure, and streamline the process. Review and Revise the Land Development Code Good codes are the foundation on which great communi- ties are built. When done well, codes make it easier for a community to implement its vision. However, the current Land Development Code (LDC) does not consistently sup- port and encourage growth in already existing urbanized areas of the county (those areas generally west of Collier Parkway). Many of the LDC’s ordinances are geared toward large-scale, planned-unit developments (PUDs) on greenfield sites. Conversely, smaller-scale redevelopment and infill sites in already developed areas of the county are challeng- ing to consolidate, may need to address adjacent uses and neighborhood concerns, and often require additional Inclusive Housing Strategies: Pasadena, California Pasadena (population 140,000), a southern California city renowned for its high quality of life, faces formidable challenges in providing affordable housing in an expensive market with high land costs and a limited amount of developable property. Sustained price appreciation has made housing unaffordable—even for households earning more than $100,000 annually. Through an array of incentive-based programs, including an inclusionary housing ordinance (IHO) and a density bonus, the city has supported development of more than 5,000 transit- oriented housing units since 2001, including 1,370 units of affordable and workforce housing. The Housing Incentives Fee Program, adopted by the city council in 2004, incentivizes production of affordable housing by providing developers with significant reductions in impact fees, building permit fees, construction taxes, and transportation fees. The city adopted its density bonus ordinance in 2006, which provides developers of housing projects that include affordable units with a bonus in the number of units that may be constructed on a site. Pasadena has emphasized links to transit by clustering mixed-use projects near light-rail stations, major corridors, and employment areas. Because of efforts to encourage transit-oriented development, the majority of residential and mixed-use projects built during the 2000s were located within a half mile of a transit stop or employment center. More than 50 percent of the affordable units produced under the IHO were developed along such major corridors. Two large IHO projects have been developed close to Gold Line light-rail stations, and a third project (totaling 212 units) is forthcoming. In addition, Pasadena’s efforts to promote affordable housing have extended beyond simple subsidies to encompass community outreach. According to William Huang, the city’s housing director, “The success of affordable housing is rarely only financial. Even if funding is secured, gaining public acceptance is a prerequisite.” A ULI Advisory Services Panel Report26 The Bayfront Naples development is an example of successful and appropriate density and mixed-use development in Collier County. SUE ELIAS density to make them financially feasible. Because of the way that current codes are written, PUDs generally have been more predictable to entitle and have fewer barriers to obtaining funding. Although difficult to develop, projects in the urban areas of the county can yield great benefits by placing residents near existing transit, employment, shopping, and other daily needs and by reducing strain on existing infrastructure. Even though Collier County routinely amends portions of its LDC, consideration should be given to initiating an effort to overhaul the code by implementing a Smart Code, also known as a Unified Development Code (https:// transect.org/codes.html) to encourage the development of affordable and mixed-income housing. Smart Codes are designed to differentiate between more urban and rural conditions that reflect the different characteristics and priorities found across the county. Unique standards for the different tiers of density encourage a more diverse development pattern while encouraging affordable housing in a mixed-use, pedestrian-scaled environment. In a Smart Code framework, all regulatory standards are combined into one streamlined document to prioritize environmental protection, high-quality design, and compatibility with existing patterns of development. The focus of the urban tier should be to stimulate and accommodate infill growth while encouraging affordable housing. This focus can be accomplished through residential density bonuses, mixed-use height bonuses, reductions from parking requirements, modifications to buffer and landscape requirements, and other incentive- based measures. In addition to the county’s creating a Smart Code, several LDC revisions could make it easier to develop affordable dwelling units in urban portions of the county: ■■Reduce parking standards: Consider establishing standard percentage reductions in minimum parking requirements for urban portions of the county where there are more transit services, where opportunities exist to walk to shopping and employment, and where shared parking opportunities exist to promote efficient site design and reduce development costs. Typical parking standards for multifamily housing in more urban areas range from 1 to 1.5 spaces per unit. ■■Create well-defined compatibility, building mass- ing, and buffer standards: The panel heard about several recent development applications in which com- patibility with adjacent existing communities has fueled distrust between existing neighborhoods and developers. The conflicts are in part due to a lack of clear expecta- tions as to what is required by the LDC. For infill develop- ment projects that include affordable housing, this lack of certainty causes an unnecessary burden on developers while at the same time residents have concerns about property values and existing views. As an example, Okla- homa City created a development guide (http://planokc. org/wpcontent/uploads/2016/06/planokc_Chap2_ DevelopmentGuide.pdf; page 71) that focuses on urban design solutions for compatibility related to building scale and site design. It provides clear expectations to both the existing neighborhoods and developers as to what should be expected when designing the site and massing of buildings. Those types of standards can also help set community expectations if it is determined that redevel- opment of nonfunctioning golf courses is appropriate. ■■Permit guest houses as accessory dwelling rental units: There are a number of existing guest homes, pre- dominantly in the eastern portions of the county and the Estates, that—if permitted to be used as rentals—could have an immediate effect on the supply of affordable Collier County, Florida, January 29–February 3, 2017 27 rental housing. Additional rental income could also have a positive effect for families who own the units. Although effects on transportation, schools, and other facilities should be considered, these units have already been constructed, are occupied, or have been occupied in the past. Making them legal to lease allows code enforce- ment to better regulate the units while limiting exploita- tion of renters. ■■Encourage smart-site infrastructure: According to a number of interviewees, the panel heard that several onerous land development requirements add unneces- sary expense to overall project costs. The requirements further exacerbate challenges to providing affordable units in projects. Examples include requiring sidewalks on both sides of the street, right-of-way commitments, utility spacing, and other requirements that are more burdensome to on-site development than are the neigh- boring Lee County standards. Target Certain Activity Centers for Significantly Higher Density with the Provision of Mixed- Income Housing Collier County currently has high concentrations of housing in particularly low-density areas of the county. A healthy mixed-income community has higher densities to promote a walkable environment but not high concentrations of low-income housing in one place. Mixed-income com- munities are a market-based approach and include diverse housing for people with a range of income levels. Mixed- income communities are healthier than homogenous, low-income neighborhoods because they prevent blight, support upward mobility, and help retain property values. The panel recommends the following two approaches to achieve these goals: ■■Strengthen the Affordable Housing Density Bonus (AHDB) Program: The current maximum residential densities permitted in Collier County are generally 16 units per acre within specified activity centers of the county when affordable housing is provided (excluding transfer of development rights opportunities). Although maximum buildout of density is frequently not achieved in large PUDs, smaller infill sites in the western urban portions of the county need additional density to be financially viable. This need was confirmed during the panel’s interviews where developers consistently stated that to provide affordable housing on site, the number of residential units allowed per acre should be significantly increased. For example, 30 units per acre may be a more realistic maximum density to properly incentivize market-rate developers to provide affordable housing. In addition, to properly capitalize on infrastructure, mini- mum densities should be provided for residential units per acre. Bonus density is even more important given the approximately 9 percent of unentitled land. Finally, the AHDB program is logistically challenging for market-rate builders to administer. ■■Identify strategic opportunity sites: As illustrated in the map above, the panel also recommends that the county consider further density increases in limited urban areas of the county such as the Bayshore Gateway Triangle CRA where high-quality transit facilities along transportation corridors are provided. Streamline the Project Approval Process when Affordable Housing Is Provided Land use decisions are largely decided by the five-member Board of County Commissioners (BoCC) by a super- majority rule. According to developers, land use attorneys, planners, and other land development professionals, a great deal of uncertainty exists in knowing whether or not a zoning application will be approved because it takes only two board members to veto a project. For projects that in- clude affordable housing, this lack of certainty is a key im- pediment to project viability. In addition, although all board members are charged at looking at the county, no at-large board members are specifically charged with overseeing regional and countywide issues. The panel recommends considering adding two at-large board members, making the new BoCC a seven-member board, and reducing the super-majority to a five-out-of-seven approval process. If adding new BoCC members is not feasible, the panel recommends reducing the super-majority requirement to a A ULI Advisory Services Panel Report28 simple-majority, which will provide greater certainty. For ex- ample, Hillsborough County, Florida, has a seven-member board with three at-large board members. Although there is an expedited construction permit review process, the panel recommends this process be expanded to include comprehensive plan amendments and zon- ing approvals. Comprehensive plan amendments could also be reviewed concurrently with a zoning change for projects that include affordable housing. This change to the project approval process could also be extended to include a concurrent processing of a zoning application and site plan. Consideration should be given to increasing the number of administrative approvals that do not require BoCC approval that will streamline the process and provide greater certainty. Although not strictly related to incentivizing affordable housing, Fairfax County, Virginia, provides concurrent processing (see www.fcrevit.org/publications/download/ DevelopmentInCRD_CRA.pdf) for comprehensive plan amendments and zoning applications as an incentive for redevelopment of older areas of the county. Enhance Transportation Options Collier County, the Collier Metropolitan Planning Organiza- tion (MPO), and the city of Naples have done extensive public outreach and planning for alternative mobility op- tions in the county. From the Collier County Master Mobility Plan (2012) and MPO’s Comprehensive Pathways Plan (2012), there are clear strategies and recommendations for enhancing transportation access across the county. In ad- dition, there are policy frameworks—such as the complete streets, the existing community movements including the Naples Pathways Coalition, the community Blue Zone, and the various committees and task forces that are informing a range of government entities. Those efforts have created an exemplary foundation of outreach and data to inform and to guide the implementation of a thorough alternative transportation system. Such assets and engagements are critical in the context of housing affordability, because transportation costs and convenient, efficient access to jobs seriously affect the attainability of housing and the overall viability of a community. For instance, even if housing is affordable, the costs of transportation can outweigh the financial benefits of those price points. In addition, the very workforce that most directly benefits from accessible and efficient transportation systems serves as the backbone of the Collier County economy: thus, it relegates this workforce to commutes of several hours or to life-threatening conditions (via bike and pedes- trian commutes), and it inhibits this group’s productivity and employment access. Whether it is a bank teller driving to work in Naples, a landscaper riding his bike to a gated community, a waiter taking a bus to a local restaurant, or a teacher walking to a neighborhood school, the workforce of Collier County needs a range of transportation options that align with and support a range of housing choices in a variety of areas. By enacting and implementing many of the recommenda- tions that the plans call for, not only will Collier County be a more accessible community, but also it will be a healthier and more fiscally conservative area. As the aspirations and The panel created a conceptual framework to help identify activity centers and transportation corridors with a higher density of mixed-income housing development. Activity centers are denoted by red squares and transportation corridors by purple lines.JOHN ORFIELD/ULI Pine Ridge Road Ta m i a m i T r a i l Collier County, Florida, January 29–February 3, 2017 29 To enhance transportation, the panel recommends the adoption of many of the strategies and recommendations from the Collier County Master Mobility Plan (2012) and the Collier Metropolitan Planning Organization Comprehensive Pathways Plan (2012).COLLIER COUNTY COLLIER COUNTY tenants of the Blue Zone Project espouse, active lifestyles are the key to healthy living. Providing a more integrated network of mobility not only provides workforce access but also provides access to healthier lifestyles. In addition, with estimated road costs averaging $4.6 million per lane mile, identifying proactive approaches that will reduce congestion and stress on roadways will save the county significant funds in the future. For all of those reasons, creating greater synergies between housing and transportation decision making and investments is vital for Collier County. Although the panel applauds the efforts of past plans and initiatives, it strongly recommends leveraging the engagement and resources already in place to create a robust multimodal transporta- tion system that better connects labor, jobs, services, and amenities to housing. It is time to act on the work of the past several years and to implement. In keeping with the plans and efforts mentioned previously, the panel recommends that Collier County specifically pursue and prioritize the following recommendations in an implementation phase. Integrate Bus Routes with Affordable Housing Locations Currently, the average headway (the average interval of time between buses pausing at a given stop on a route) in Collier County is 1.5 hours, with the shortest headway at 45 minutes. For transit riders dependent on a bus service to get to work or to other services and the MPO’s ameni- ties, the infrequency of the service can make transporta- tion and access an increased difficulty. For riders who might have multiple stops or transfers, those headways can change what would be a short car ride into an all- morning or all-evening commute. If directed effectively, however, the transit service can be an extraordinary asset for the Collier County work- force, potentially reducing the group’s commute and car ownership costs. According to the Federal Highway Administration (FHWA), the average American family spends 19 percent of its household budget on transporta- tion. For families that are in transit-efficient locations, this cost decreases to 9 percent; for those in auto-dependent communities, it increases to 25 percent. Thus, transporta- tion costs can directly add or subtract substantial funds from families’ household budgets, thereby increasing cost burdens or providing more flexibility in household budgets. In light of the budget realities, the panel recommends implementing the recommendations of past planning efforts and aligning affordable housing investments and bus routes to the greatest extent possible, specifically considering and including the following: ■■Identify transportation corridors for multifamily development: In keeping with best practices from com- A ULI Advisory Services Panel Report30 munities such as Charlotte, North Carolina, Collier County should identify specific corridors that connect to major job centers and that incentivize specific zones for further multifamily development. By linking residential growth to the transit system, the county will relieve stress on the transportation system by encouraging transit ridership and by creating more effective commutes for the work- force in affordable locations. ■■Implement park-and-ride systems: Park-and-ride is a term that describes a traffic management practice where drivers leave their cars in parking lots of identified commercial centers (typically on the outskirts of urban areas) and travel to the job or employment centers on public transportation. Given the significant footprint of development across the county, as well as the potential for additional neighborhoods such as Ave Maria develop- ing in the rural lands area, working with commercial centers to create a park-and-ride system would take congestion pressure off the internal traffic corridors and would provide workers living in outlying areas with simpler commutes to job centers. Already, circulator routes provided by the Collier Area Transit System (CATS) provide circulator services to and from major commercial centers, like the Super Walmart. The panel recommends consideration be given to enhancing, modifying, and marketing those routes as park-and-ride opportunities. In addition, the Florida Department of Transportation (FDOT) already operates many park-and-ride facilities across the state, thus facilitating vanpool and carpool options. ■■Explore bus rapid transit and express service lines: Recognizing that there are specific areas of greater tran- sit ridership, CATS should explore the creation of either bus rapid transit or express routes to link specific areas to job centers via an express, limited-stop route. This approach is in keeping with the effective best practices that CATS has already established around many of its bus lines. The opportunity now is to enhance what is in place and to create demand-driven transportation lines serving workers. Las Vegas, another tourism dependent economy with a wide geographic footprint, has imple- mented bus rapid transit and express service lines across the region to directly connect tourism workers to key areas of the city, including downtown and the Strip. Not only is the service successful, but also it is widely used by the workforce to access jobs and housing. Enhance Bike Lane and Pedestrian Systems According to the Collier County MPO’s 2014 Pedestrian and Bicycle Safety Study —a complementary report to the 2012 Comprehensive Pathways Plan —a survey of 478 respondents resulted in 62 percent reporting that they had felt “threatened for personal safety during bicycling or walking trips.” For Collier County to reduce transporta- tion road costs, effectively move the workforce across the community, and create healthy avenues for residents to engage in civic activities, this number must be mitigated and the recommendations of both studies should be advanced. Steps toward this goal include the following: ■■Implement the Comprehensive Pathways Plan for the county: Advancing the thorough recommendations of past studies is a meaningful next step in this process, but specific prioritization should be given to the “crash corridors” and “crash clusters” identified in the safety analysis. Case Study: Arlington County, Virginia In Virginia, Arlington County’s Special Affordable Housing Protection District (SAHPD) identifies neighborhoods with existing affordable housing within the county’s metro corridors. The goal of the SAHPD is to retain affordable housing opportunities (through preservation or replacement) in the county’s high-cost transit corridors. In instances where redevelopment is proposed within those districts, developers can achieve higher densities if they include one-for-one replacement of existing affordable housing as part of their project. (One-for-one replacement has been interpreted as replacing the number of bedrooms or the gross floor area on a one-for-one basis.) Replacement can occur either on site or at a similar location off site. Collier County, Florida, January 29–February 3, 2017 31 ■■Enhance safety for transit mobility: The recommen- dations of the 2014 “Safety Study” should be prioritized and funding should be allocated for the full implementa- tion of key safety issues, including continuing educa- tion for traffic engineers and law enforcement officers, application of the FHWA’s bike and pedestrian best practices, and continued integration of best practices in engineering design. In addition, the panel recommends addressing lighting, street signage, and public awareness for bicyclists and pedestrians. ■■Hire a bike and pedestrian coordinator for the county and leverage expertise at FDOT: To take full advantage of the recommendations and work already completed, a specialized coordinator should be hired at the county level to advance bicycle and pedestrian priori- ties, including reviewing future roadway projects for bike and pedestrian enhancements and safety considerations. In New Orleans, a bike and pedestrian coordinator was able to advance the implementation of more than 100 miles of on- and off-road bike lanes after the project was embedded in the local Department of Public Works through a grant from the local utility company and sup- port from the Louisiana Public Health Institute. Establish Sustainable, Secure Revenue for Transit and Alternative Mobility CATS is serving an increasingly vital need in the county as workforce demands intensify and traffic concerns grow. However, if the service is going to be able to keep up with the demands already placed on it, a critical element is that the service has a sustainable source of revenue it can leverage and depend on. Given the expenses of highways ($4.6 million per lane mile), prioritizing proactive invest- ments in transit today could save the county significant funds in the future. In addition, given the growing bike and pedestrian needs of the county and the multitude of com- munity benefits that those amenities provide, a revenue source should also be identified and provided for such additional capacity. Create Ride-Sharing Option With smartphone apps and online connectivity, fantastic and successful tools for ride sharing are available that can be conveniently and affordably accessed. The county should explore promoting such resources and working with nonprofits to promote convenient ride-sharing options for populations living in more suburban or remote areas, like the Estates, Ave Maria, or Immokalee. The New Orleans Regional Planning Commission sponsors one such ride- share platform, the New Orleans GreenRide, which uses a social media platform to connect riders and carpoolers. Enhance Wages For several decades, middle- and lower-middle-class wages across the United States essentially have been stagnant while housing costs have risen significantly. This trend has resulted in increased pressure on affordability of housing. One effective option to address this issue is to increase wages. The panel has identified two possible options for Collier County. An example of the successful and well-used bike lane infrastructure along 15th Street, a major downtown corridor in Washington, D.C.ELVERT BARNES A ULI Advisory Services Panel Report32 Metro New Orleans GreenRide links commuters with carpool matches in the New Orleans metropolitan region. REGIONAL PLANNING COMMISSION OF NEW ORLEANSFirst, government employees are one of the largest groups affected by housing affordability issues in Collier County. On the basis of cost burden for this group, the panel rec- ommends the county consider enhancing wages for county employees. Even modest increases in salary for this group can have a profound impact on its ability to afford housing within the community. Second, the panel recommends instituting enhanced minimum wage ordinances. Several U.S. cities including Albuquerque, New Mexico; Flagstaff, Arizona; Malibu, California; Miami Beach, Florida; Portland, Maine; and Washington, D.C., have attempted to address the issue of housing affordability this way and are seeing positive results. In virtually all cases, the ordinances call for a mod- est immediate increase in the minimum wage followed by a series of incremental steps spread over a period of three to five years that ultimately lead to a mandated minimum wage of $13 to $15 per hour. Engage, Market, and Educate Beyond moving ideas into action, education and com- munication also are critical pieces of a comprehensive and successful strategy for implementing housing affordability. If one is to combat the often false and confusing myths regarding what affordable housing is, what it might look like, and what unintended consequences it might create, it is crucial to educate the entire community about the full range of benefits that a balanced supply of housing brings, Denver Transit-Oriented Development Fund The Denver Transit-Oriented Development Fund was established in 2010 with $13.5 million in debt capital to create and preserve affordable housing along current and future transit corridors in the city and county of Denver. In 2014, the fund was expanded to serve the surrounding seven-county region and is now capitalized at $24 million. Borrowers may use funds to purchase, hold (for up to five years), and develop sites within a half mile of fixed-rail transit stations or a quarter mile of high-frequency bus stops. The fund has closed 11 transactions totaling nearly $16 million, with a pipeline of more than 900 permanently affordable units and more than 150,000 square feet of commercial and community space. Returns to capital providers (public agencies, foundations, financial institutions, and community development financial institutions) are generally 2 to 6 percent. DANIEL TOBIAS Denver’s new Regional Transportation District rail system has eight rail lines servicing 53 stations along the north, east, southeast, southwest, and west rail corridors. Collier County, Florida, January 29–February 3, 2017 33 The Center for Urban Pedagogy created an online map to help educate users on the many facets of affordable housing and to allow them to explore the income demographics of any New York City neighborhood.CENTER FOR URBAN PEDAGOGYto raise awareness, and to make affordable housing a vis- ible problem to everyone. Bolster Existing Programs and Processes The county government has already developed an afford- able housing database that tracks for-sale and rental units throughout the county. However, the panel recommends enhancing this database to include and track new units coming online and to include their sunset dates so that the county has a clear understanding of the supply of afford- able units in real time. This information should include comprehensive details, including addresses, bedroom sizes, square footage, rental rates, for-sale rates, and neighborhood location. An en- hanced database will also help ensure that the community has a credible source of real-time information that shows that affordability is spread throughout the county and not concentrated in any one district. By improving existing housing information online, the county will create a robust information portal for exist- ing and prospective residents to learn about the county’s housing programs and any workshops or events related to housing in the county, ensuring that residents have the right information to make housing decisions. The panel also recommends that existing housing applica- tions are streamlined for residents and handled directly by the county instead of by individual developers. During the panel’s review, it heard from the development community that developers are responsible for accepting income veri- fication applications, which they are simply not qualified to manage. This process should be administered either by the county or an administrator managed by the county, such as a private or nonprofit lender. Raise Awareness and Communicate with the Entire Community Although the links between housing affordability and communications may not be immediately obvious, public awareness, communication, and an overall education cam- paign can help ensure that ongoing efforts around housing affordability succeed. The panel has seen a tremendous number of plans and technical recommendations, but un- less they are being communicated to the public at large in a clear and concise manner that is understandable by all, such efforts will go nowhere. To start, the panel recommends that the county develop a comprehensive marketing and communications plan that appeals to a wide variety of audiences: the current and potential residents, the business community, the local community organizations, and the proven donors within the community. The plan needs to appeal to people who are seeking housing, to people who support housing afford- ability, and to those who are skeptics. The message should be tailored around those three key audiences and the lan- guage used should be culturally sensitive, age appropriate, and multilingual. Ideally, the strategies will include written, verbal, and visual approaches. The key to the program’s success is the hiring of a cre- ative, community outreach specialist. This person should be a full-time county employee and engaged in public A ULI Advisory Services Panel Report34 One of the many community workshops conducted in the Park View and Pleasant Plains neighborhoods in Washington, D.C., as part of the community engagement video project SEE/ CHANGE DC.SEE/CHANGE meetings, neighborhood events, and other aspects of countywide community engagement. The key to com- munity outreach is for it to occur where people already are. People will not go out of their way to go to those types of meetings; the meetings must be brought to them. For example, the outreach specialist should hold the same workshop on three different dates and times to ensure those with atypical work schedules can still participate and be engaged. Create a Residential Toolkit The county should create a residential toolkit to address three constituencies: seekers of affordable housing, supporters of affordable housing, and skeptics of affordable housing. Seekers of affordable housing. Building on an enhanced online inventory discussed earlier, the panel also recom- mends the county create an affordable housing directory for those residents seeking housing. The directory will list both rental and for-sale opportunities and will draw from the county’s live online database. However, because not everyone is comfortable with (or has access to) the internet, the panel recommends two options for this database: ■■ A web-based platform, and ■■ A printed document that is updated periodically (e.g., quarterly). The panel understands that a housing resources guide is already in place, but it recommends including a resource guide that is for first-time homebuyers and that includes information about housing assistance for downpayment programs, information about renters’ assistance, and information about other community resources available to the public. The purpose is not only to provide information about how someone can afford housing, but also to provide information in a way that allows people to become engaged in the community and connected with their community. In addition, the panel strongly recommends the county employ a housing counselor or expand existing housing counselors’ current responsibilities. The housing coun- The panel recommends that Collier County think creatively about community engagement, marketing, and education strategies. Volunteer programs such as planting projects related to new housing developments and YIMBY (yes in my backyard) campaigns are great ways to raise awareness of and to engage the larger community in housing affordability issues.PERRY ROSEDENVER HOUSING AUTHORITY Collier County, Florida, January 29–February 3, 2017 35 Case Study: SEE/CHANGE DC Though not specifically about housing, SEE/CHANGE DC is an example of a successful, creative, community engagement project to encourage community building and foster dialogue about rapid neighborhood change. Something similar in Collier County could help create discussion about housing and community and could give greater visibility to housing affordability challenges. What it is: The video art project puts a human face on how population change and revitalization are affecting two Washington, D.C., neighborhoods: Park View and Pleasant Plains. When: During fall 2016, video portraits of community members were projected in storefronts and on street corners along a main corridor— Georgia Avenue, N.W., in the Park View and Pleasant Plains neighborhoods. Who: SEE/CHANGE DC was imagined and produced by the Pink Line Project + Citizen Innovation Lab, created by Composite Co. and BellVisuals, and funded by the D.C. Office of Planning (OP) and the Kresge Foundation. How: SEE/CHANGE DC is part of OP’s comprehensive creative placemaking initiative: “Crossing the Street: Building DC’s Inclusive Future through Creative Placemaking” grant from the Kresge Foundation. The grant is intended to “promote community-building in neighborhoods that are experiencing rapid demographic and social change, to engage residents in conversations about the future of the District as OP embarks on an update of D.C.’s Comprehensive Plan, and to demonstrate or test select placemaking recommendations articulated in OP’s neighborhood plans and District Department of Transportation transit corridor studies and livability studies.” In December 2015, OP released a request for applications seeking qualified curators and project managers to work with OP and other District and community stakeholders to define and implement temporary creative placemaking projects. Curators were selected in early 2016 and projects, such as SEE/CHANGE DC, were implemented during 2016. For further information, see www.seechangedc.com. SEE/CHANGE DC is a creative video project that uses community engagement as it inspires community building and fosters conversation about neighborhood change.SEE/CHANGE SEE/CHANGE SEE/CHANGE selor should collaborate with the community engagement specialist and other relevant county employees to create a robust educational program around what cost burden means. Also, it is essential for the housing counselor to develop programs and resources around household bud- geting and wealth creation that will help residents improve their financial management. Supporters of affordable housing. Collier County is privileged to have an engaged and effective philanthropic community. But the county needs to figure out how to get the group involved in affordable housing issues. The panel recommends partnering with the philanthropic community around specific fundraising campaigns, such as spe- cific housing development projects or facade or exterior improvement programs. In addition, the county should A ULI Advisory Services Panel Report36 partner with the philanthropic community to develop fun and creative community volunteer projects and programs to raise awareness and bring the community together. Examples include planting projects related to new housing developments, public art initiatives, “welcome wagon” programs, and “yes in my backyard” (YIMBY) campaigns. Those types of programs can go a long way toward bring- ing the community together. Skeptics of affordable housing. Do not leave out the skeptics of affordable housing. The panel recommends creating a “myths and facts” brochure (available in a printed format and on the county’s housing website) to help debunk myths and perceptions related to negative implications that are often falsely associated with afford- able housing (e.g., increased traffic, crime and density, de- pressed property values). In addition, creating a workhouse media campaign could be another valuable approach to community-wide education about housing affordability and whom it affects. Collier County, Florida, January 29–February 3, 2017 37 IT IS THE OPINION OF THE PANEL that Collier Coun- ty absolutely has a housing affordability problem. It is not a crisis yet, but if housing is not addressed, the panel be- lieves that it will become a crisis. Given the growth projec- tions for the county, the panel believes this problem will occur far sooner than expected. All of the panel’s recommendations are intended to help the city and the county provide housing that is affordable for the full range of incomes found within the community. First and foremost, the panel believes the county needs to immediately come to a consensus and establish a clear vision for the county about how to move forward. Does the county want to remain a community that primarily relies on tourism and retirement, or does it want to diversify its economy? Does the county want to limit growth, or does it want to embrace it? Regardless of the answers, it is—in the panel’s opinion—essential that the county address the issue of housing affordability. This approach needs to be a priority. Housing affordability is essential to creating and maintaining a vibrant, sustainable community. Although the county may well have some time to imple- ment the panel’s recommendations, time is of the essence. Failure to act now will put at risk the very things that make Collier County so special. Maintaining paradise is both a privilege and an obligation. Conclusion A ULI Advisory Services Panel Report38 Appendix A: Implementation Schedule Implementation Schedule Added Supply Regulation and Governance Communication and Education Strategies Short Term 0 to 3 years Review existing land inventory for possible affordable housing development sites, including commercial sites for conversion. Develop a cross-agency strategy to consider other public facilities. Identify and vet funding sources to reinstate Housing Trust Fund (HTF). Draft additions to the Land Develop- ment Code (LDC) and the Growth Management Plan to include inclu- sionary zoning and expand expedited permit review process for all affordable projects. Permit guest houses as rental units. Revise the LDC to include a smart code that makes it easier to create mixed- income developments. Identify strategic opportunity sites for density increases such as the Bayshore Gateway Triangle Community Development Area. Create an expedited and/or concurrent comprehensive zoning plan approval process. Offer administrative approvals for certain applications. Develop inventory of affordable housing units and update regularly. Develop a marketing and communications plan. Employ a housing counselor. Expand and enhance educational programs to ■■Explain housing affordability ■■Explain cost burden ■■Assist residents (renters and homeowners) in household budgeting. Medium Term 3 to 5 years Implement an inclusionary zoning program. Implement an expanded fee waiver/ deferral program. Fund HTF to take advantage of other financing vehicles (LIHTC, AHP, etc.) to support affordable housing development. Develop a process for commercial-to- residential conversions. Plan for additional increased density in certain activity centers with the provi- sion of mixed-income housing. Add at-large Board of County Commis- sioners members and/or reduce the super-majority rule. Continue to refine and update affordable housing inventory. Update and refresh the marketing and communications plan as needed. Update and refresh educational tools and programming as needed. Review and refine resources and tools available to the housing counselor. Long Term 5 to 10+ years Conduct an annual review of HTF levels and report on fund expenditures. Adjust the inclusionary zoning program to balance the needs of residents with those of developers and the current market. Continuously review and monitor inclusion- ary zoning program, expanded fee waiver/ deferral program, and commercial-to- residential conversions process to ensure that the goal of increasing the availibility of affordable housing is being met. Continuously review and monitor the LDC and revisions, strategic opportu- nity sites, and updated comprehensive zoning plan approval process to ensure that the desired goal of increasing the availability of affordable housing is being met. Continuously review and monitor affordable housing inventory, marketing and com- munications plan, and educational tools and programming, as well as resources and tools available to the housing counselor, to ensure that the goal of increasing the availability of affordable housing is being met. Collier County, Florida, January 29–February 3, 2017 39 Private funding for housing development and services: Santa Clara County, California (www.housingtrustsv.org/) Mobilizing owners and resources to preserve existing affordable units: Cook County, Illinois (www.preservation- compact.org/) Utilizing publicly controlled real estate to support mixed- income development: Arlington County, Virginia (https:// projects.arlingtonva.us/plans-studies/land-use/public- land/) Helping low-income families access opportunity neighbor- hoods: King County, Washington (https://www.kcha.org/ about/education/) Inclusionary zoning: Palm Beach County, Florida (https:// uli.org/larson-policy-awards/robert-c-larson-award- finalists-palm-beach-county-florida/) Appendix B: Examples of County Housing Initiatives A ULI Advisory Services Panel Report40 Appendix C: City of Austin, 2014 Robert C. Larson Policy Leadership Award Winner City of Austin ORGANIZATION City of Austin, Texas YEAR OF IMPLEMENTATION 2000 AFFORDABILITY 100 percent of units affordable to households at or below 80 percent of median family income (MFI), with 12 percent serving house- holds at 30–50 percent of MFI NUMBER OF UNITS PRODUCED 18,406 WEBSITE http://housingworksaustin.org/ www.austintexas.gov/department/ imagineaustin 2 0 1 4 W I N N E R Austin, Texas, has adopted a multifaceted approach to address the challenges of providing affordable housing in the vibrant and steadily growing city. Outstanding programs include a voter-approved bond program and a city ordinance to incentivize the development of affordable housing. These efforts have yielded 18,406 units since 2000. Austin (pop. 885,000), the capital of Texas, is a national leader in job creation, education, and research, and offers residents a high quality of life with an array of recreational and cultural amenities. Over the past two decades, in the face of rapid and steady population growth attracted to the city, Austin has also encountered corresponding increases in residential rents and home prices. To overcome the resulting squeeze on affordable housing for low-income households, Austin has pursued a multifaceted package of housing programs. These tools include the Housing Trust Fund, the Housing Bond Program, developer incentives, public/private partnerships, and impact statements. • Housing Trust Fund (2000). Since 2000, the Austin City Council has directed $8.8 million in local funds to the Housing Trust Fund (HTF). The city dedicates to the fund 40 percent of incremental tax revenues derived from private sector developments built on designated city- owned property. Collier County, Florida, January 29–February 3, 2017 41 • Housing Bond Program (2006). When 63 percent of voters approved an allocation of $55 million, Austin for the first time in its history used general obligation bond funding for affordable housing. Through May 2012, the Housing Bond Program had created or retained 3,055 housing units, of which 73 percent are affordable to households earning 30 to 50 percent of MFI. DEVELOPER INCENTIVES • S.M.A.R.T. Housing™ (2000). S.M.A.R.T. Housing is an incentive program designed to encourage accessible, mixed-income development by providing development fee waivers and an expedited review process for developers who set aside 10 percent of housing units as affordable (S.M.A.R.T. stands for Safe, Mixed-income, Accessible, Reasonably priced, and Transit oriented.) Units must also meet the Austin Energy Green Building Program minimum energy efficiency rating. The program has produced 15,351 units affordable to households earning 80 percent of MFI or less. • Vertical Mixed Use (2007). Commercial design standards provide a density bonus and parking standards exemptions in exchange for 10 percent of housing units in mixed-use developments being designated as affordable. These units must be maintained as affordable for 40 years for rental, and 99 years for ownership. The program has produced 41 units to date. • University Neighborhood Overlay (2004). A density bonus and entitlements are provided to developers who set aside housing as affordable in the University of Texas at Austin campus area. Two tiers of affordability are required—10 percent of units for households earning at or below 80 percent of MFI, and 10 percent of units for households at or below 65 percent of MFI. To date, 117 units have been constructed at 50 percent of MFI, ten at 65 percent of MFI, and 357 units at 80 percent of MFI. • The Downtown Density Bonus Program (2013) and the East Riverside Corridor Program (2013). Height-density bonus programs encourage production of affordable “Because of GO Bond funding, the City of Austin has reaped direct and indirect benefits including increased income (through wages), increased local taxes (both property and sales), and increased local jobs.” Betsy Spencer Director, City of Austin Neighborhood Housing and Community Development A ULI Advisory Services Panel Report42 housing in downtown Austin and in a neighborhood recommended for a future high-capacity transit route. • Transit-Oriented Development (2009). Affordable housing goals have been established through individual station-area plans for areas within a half mile of the Capital Metro commuter rail stations. The overall goal is for 25 percent of all new housing units in the transit-oriented development areas to be occupied by households earning at or below 80 percent of MFI for homeownership or at or below 60 percent of MFI for rental. PUBLIC/PRIVATE PARTNERSHIPS • Robert Mueller Municipal Airport Redevelopment (1996–present). In a key public/private partnership for the city, the Mueller development when complete will have about 1,200 housing units affordable for households earning at or below 80 percent of Austin’s MFI for ownership and 60 percent of MFI for rental. • Private Developer Agreements—Case by Case. The city continues to negotiate the inclusion of affordable housing in development agreements with market-rate developers to bring affordability into developments that otherwise would be unaffordable to low- and moderate- income households. These units must remain affordable through 2020. IMPACT STATEMENTS • Affordability Impact Statements (2000). Required by Austin’s S.M.A.R.T. Housing™ ordinance, an affordability impact statement (AIS) is prepared by a city staff member for all proposed city code amendments, ordinances, and other proposed changes to identify any potential impacts on housing affordability. To date, Austin has issued more than 150 affordability impact statements. Austin’s multifaceted approach to meeting the city’s need for affordable housing—from zoning to streamlining development approvals, transit, and green construction—provides an effective way to consider housing needs in a variety of contexts. While individual programs have an impact, it is the combination of tools that is most powerful, reflecting commit- ted leadership from the city as well as the willingness of Austin residents to step up and vote for bonds for affordable housing. “Austin’s commitment to providing affordable housing is strong, and our citizens expect the City of Austin to take action on this critical issue. I believe Austin’s affordable housing bond votes were successful in 2006 and 2013 because Austinites wanted to see affordable housing in all parts of our city and believe we all benefit from providing affordable housing for low income families.” Mandy DeMayo HousingWorks Austin Austin, Texas For more information about the Terwilliger Center Awards,see www.uli.org/terwilligeraward. Collier County, Florida, January 29–February 3, 2017 43 Philip Payne Panel Chair Charlotte, North Carolina For more than 25 years, Payne’s primary focus has been the development, acquisition, rehabilitation, and manage- ment of middle market (workforce) multifamily housing. During his career, Payne has been involved in more than $4 billion in multifamily related transactions. Payne is currently the chief executive officer of Ginkgo Residential, which was formed in July 2010. Ginkgo provides property management services for multifamily properties in the southeastern United States and is actively involved in the acquisition and substantial rehabilitation of middle market multifamily properties. He is a principal in Ginkgo Investment Company, which was formed in July 2013 and which invests in multifamily properties in the southeastern United States. From 2007 to 2010, Payne served as the CEO of Babcock & Brown Residential. Before joining Babcock & Brown Residential, he was the chair of BNP Residential Properties Trust, a publicly traded real estate investment trust that was acquired by Babcock & Brown Ltd.—a publicly traded Australian investment bank—in February 2007. In addition to his duties at Ginkgo, Payne is a member of the board of directors of Ashford Hospitality Trust, a New York Stock Exchange–listed real estate investment trust that is focused on the hospitality industry. Payne is a trustee and governor of the ULI. He is a mem- ber of ULI’s Responsible Property Investing Council (found- ing chair); is a former cochair of the Institute’s Climate, Land Use, and Energy Committee; and currently serves as a member of the advisory board for ULI’s Center for Sustainability. He is a member of the National Multifamily Housing Council. Payne received a BS and a JD degree from the College of William & Mary in Virginia. He has written for various pub- lications and spoken at numerous conferences on a variety of topics including real estate investment trusts, securi- ties regulations, finance, workforce housing, responsible property investing, sustainability, and resilience. Hilary Chapman Washington, D.C. Chapman is the housing program manager for the Met- ropolitan Washington Council of Governments (COG). At COG, Chapman collaborates with regional leaders to solve the challenges of homelessness and affordable housing and provides research and analysis to support local hous- ing policy and practice using a regional solutions-based framework. As the lead staff person for two technical committees on housing and homelessness, Chapman collaborates with COG’s other departments to integrate housing consider- ations into related fields of health, transportation, and the environment. In her role as lead staff person for the Home- less Services Committee, she helps coordinate the annual regional homeless enumeration that takes place during the last week of January each year, and she is the principal author of the committee’s findings, “Homelessness in Metropolitan Washington.” Chapman collaborates with COG’s housing and planning partners, serving as an advisory board member for the Northern Virginia Affordable Housing Alliance, a participant and convener of the Greater Washington Housing Leaders Group, and a planning member for the Housing Association About the Panel A ULI Advisory Services Panel Report44 of Nonprofit Developers’ annual meeting. She participated in the ULI Washington’s Regional Land Use Leadership Institute and is active in ULI’s Housing Initiative Council. She also volunteers weekly at a program site in the District of Columbia with the Homeless Children’s Playtime Project. Before joining COG, Chapman spent nearly a decade as an affordable housing developer, working with public housing authorities nationally primarily through the U.S. Department of Housing and Urban Development’s HOPE VI program to redevelop its most distressed housing units. She had direct responsibility for the construction of more than 250 afford- able housing units and the planning and financing of more than 1,000 more. She also served the government of the District of Columbia as a Capital City Fellow. Chapman holds a master’s degree in city planning from the Massachusetts Institute of Technology and an under- graduate degree in sociology from the College of William and Mary in Virginia. Ian Colgan Oklahoma City, Oklahoma Colgan is the assistant executive director of the Oklahoma City Housing Authority, one of the largest public housing authorities in the country with 3,100 public housing units and more than 4,000 housing choice vouchers. Colgan leads all real estate development, planning, and policy initiatives for the authority. He was previously the assistant planning director for Oklahoma City, where he spearheaded the production of the city’s Comprehensive Plan, Downtown Planning Framework, and several commercial district plans, as well as the creation of two new tax increment finance districts. Colgan was also formerly principal with Development Concepts Inc., a redevelopment consulting firm that is based in Indianapolis, Indiana, where he prepared market- based studies and redevelopment plans for communities throughout the Midwest and Southeast. Colgan holds a master’s degree in urban planning from the University of Washington, a master’s degree in business administration from Anderson University, and a bachelor’s degree from Kalamazoo College. He has been a member of ULI since 2012 and participates on the Urban Revitaliza- tion Product Council. JoAnne Fiebe Tampa, Florida Fiebe is a research faculty member and adjunct instruc- tor at the Florida Center for Community Design and Research—a statewide research center at the University of South Florida’s School of Architecture and Community Design. Through her work at the Florida Center, Fiebe provides design expertise, performs applied research, and manages community engagement programs to address urban challenges related to the built environment. Fiebe has 13 years of experience in both the public and private sectors while managing a range of urban design and planning projects. Before coming to the Florida Center, she worked for the Fairfax County Office of Community Revitalization on long-range planning, economic develop- ment, and policy for transit-oriented development districts in the Washington, D.C., metro area. Her previous experi- ence included managing entitlements for large residential and mixed-use projects at several development firms. For the past seven years, she has served on the board of a nonprofit urban design collaborative, the Urban Char- rette, which cultivates knowledge of leading urban design practices to build vibrant cities. She also teaches graduate courses at the University of South Florida about city plan- ning and sustainable urban development. Fiebe earned her degrees in architecture from the Uni- versity of Miami and a master’s of urban and community design from the University of South Florida, where she also worked at the Center for Urban Transportation Research and coauthored a study on transit and bicycle lanes. She has been published in the Transportation Research Board and in the National Civic Review, and her research was cited in the NACTO Urban Street Design Guide. In her career, Fiebe has led more than 20 public planning projects including over a dozen community engagement Collier County, Florida, January 29–February 3, 2017 45 charrettes. She participated in ULI’s Regional Land Use and Leadership Institute and was a resource team member for two Mayor’s Institute for City Design programs. She is a member of the American Planning Association and the Urban Land Institute, is LEED accredited, and is a certified charrette planner. Lacy McManus New Orleans, Louisiana As the director of program development for Greater New Orleans (GNO) Inc.—the economic development alli- ance for the ten-parish New Orleans region—McManus is responsible for relationships and for the coordination between product and business development. McManus has positioned the organization’s workforce and environ- mental and resilience initiatives as catalysts for wealth generation in southeast Louisiana. In this role, she acts as a liaison between GNO Inc. and private philanthropies, business community stakeholders, government agencies, and nonprofit partners to ensure that GNO Inc.’s programs create a thriving regional economy. Specifically, McManus oversees GNO Inc.’s Coalition for Coastal Resilience and Economy, a business-led advocacy campaign for holistic coastal restoration in south Louisi- ana. She also coordinates GNO’s workforce development programs, including an award-winning outreach series to local educators, as well as ongoing engagements with regional higher-education institutions. In 2015, she worked with the state of Louisiana and New Orleans to bring in more than $233 million in resilience funds to the region through the U.S. Department of Housing and Urban De- velopment’s National Disaster Resilience Competition. On the federal front, McManus serves on GNO’s policy team advancing reauthorization of the National Flood Insur- ance Program through the Coalition for Sustainable Flood Insurance. She also represents GNO on the Housing NOLA Leadership Team and CONNECT Coalition. Before joining the GNO staff, McManus was the special initiatives manager with the nonprofit organization the Center for Planning Excellence, where she oversaw an innovative transportation, land use, and housing policy and advocacy campaign. She has branding and communica- tions experience from several years living and working abroad in both Auroville, India, and in Paris, France. She is an active member of the Junior League of New Orleans, a board member of the public transit advocacy organiza- tion RIDE New Orleans, an alumna of the 2016 Emerging Philanthropist of New Orleans class, and a lead mentor to entrepreneurs in the Propeller small business incubator. McManus holds a bachelor’s degree from the University of Georgia’s Grady School of Journalism, a master’s degree in global communications from the American University of Paris, and a master’s degree in business administration from Tulane University. John Orfield Dallas, Texas Orfield is both the product and a proponent of the collaborative style that BOKA Powell exemplifies. The 40-year-old planning and design firm, which is based in Dallas, specializes in corporate and commercial office, higher education, hospitality, urban living, and senior living. A LEED-accredited professional, Orfield is an expert in urban planning and sustainability. His 35 years of design experience includes landmark workplace, academic, luxury hotel, and residential projects across the United States and Mexico. Growing up in an artistically inclined family, Orfield devel- oped an interest in exploring the kinship between archi- tecture, film, and dance—art forms he sees as related in their portrayal of human experience moving through space and time. He has sought out collaborative environments or created them on the spot in design firms and universi- ties from New York to Indianapolis to Mexico City. Orfield considers every project a partnership, not only between the architect and the client, but also with the site itself. He sees this contextual approach as one reason there is no recognizable BOKA Powell “style”—only spaces that A ULI Advisory Services Panel Report46 benefit their surroundings as the result of a very intentional design process. Orfield’s recent projects include major projects for South- west Airlines, including the carrier’s corporate headquar- ters master plan, the 1.1 million-square-foot “Wings” Office Building, the Flight Training Center and Garage, and the 500,000-square-foot Training and Operations Support Center at Dallas’s Love Field. Other projects include the Texas A&M West Campus student housing complex, which is designed to accommodate 4,000 students in College Station, Texas; the Venue at the Ballpark, which is a 241- unit apartment complex overlooking the Birmingham Bar- ons ballpark; the Hotel Ajax, which is a boutique hotel and condominium project in Telluride, Colorado; and multiple corporate and commercial office projects for Hillwood and Cawley Partners in North Texas. Orfield’s higher education portfolio includes more than 5.5 million square feet of university architecture, including student housing and academic buildings. He has designed corporate headquarters campuses for Accor, Daimler Chrysler, Mercedes-Benz, and Computer Associates. While a vice-president at Browning Day Mullins Dierdorf Inc., he completed the iconic 400,000-square-foot Eli Lilly Corporate Center in downtown Indianapolis. In 1996, Orfield joined Dallas-based architecture and plan- ning firm HaldemanPowell+Partners. Now known as BOKA Powell, he became a partner and owner in the practice in 1999. Earlier, Orfield was a vice president at Indianapolis- based Browning Day Mullins Dierdorf Inc. from 1988 to 1994. He worked in numerous architectural intern positions in Houston, Texas; New Haven, Connecticut; and New York City, including an undergraduate internship with Mitchell Giurgola. He earned a master’s degree in archi- tecture and building design from Columbia University in 1987. He earned his first bachelor’s degree in architecture in 1980 and a second bachelor’s of architecture in 1982 from Rice University in Houston. A lifelong educator, Orfield was a member of the fac- ulty of the University of Houston College of Architecture from 1984 to 1986, where he earned the Excellence in Teaching award. He also held an appointment as a visiting professor at the Universidad de las Americas in Puebla, Mexico, from 1994 to 1995. Cassie Wright Denver, Colorado Wright is the project manager for Urban Ventures LLC, a real estate company that is dedicated to creating healthy, sustainable communities. In her position, Wright works on all aspects of real estate development: from land acquisi- tion to project construction. She tests the financial feasibil- ity of projects, actively participates in the site planning and design processes, develops marketing and sales related materials, and closely interacts with project partners. In addition, Wright consults on real estate projects that focus on the relationship between the built environment and healthy living. In this role, she researches and implements best practices and health-based programming to foster community development that promotes social cohesion and positive wellbeing. Currently, Wright is involved with the land development of Aria Denver, a 17.5-acre, mixed-use, mixed-income project that will include more than 450 units and a commercial component. Upon completion, Aria Denver will promote healthy living with community gardens, production farms, a food-producing greenhouse, pocket parks, outdoor fitness equipment, and pathways integrated into the site. Aria Denver is part of Cultivate Health, a partnership among neighboring Regis University, the surrounding neighbor- hoods, and more than a dozen nonprofit organizations. Funded in large part by the Colorado Health Foundation, Cultivate Health is providing infrastructure enhancements and programming that promote an active lifestyle, increase access to healthy food, and offer integrated health services. Wright is co-manager of the Colorado Health Foundation grant and is managing the implementation of three major infrastructure projects (i.e., production farms, improved bicycle facilities, and neighborhood wellness loop) that are included in the Cultivate Health initiative. Collier County, Florida, January 29–February 3, 2017 47 Wright is also actively working on the Aria Cohousing proj- ect. Cohousing communities are intentional, collaborative neighborhoods that combine private homes and shared spaces. In cohousing, residents actively participate in the design and operation of their neighborhoods while sharing common facilities and good connections with neighbors. Aria Cohousing is the redevelopment of a 35,000-square- foot convent into 28 condominium units and shared community spaces including a community dining room, kitchen, multipurpose room, guest room, and sunroom. Finally, Wright is project manager for STEAM on the Platte, a 3.2-acre, mixed-use project in Denver’s abandoned, industrial corridor along the Platte River. In its first phase, STEAM will feature the conversion of an existing 65,000-square-foot industrial warehouse into office space and the creation of a courtyard and promenade that con- nects to the river’s edge. Wright holds a master’s degree in city planning from the University of Pennsylvania and a bachelor’s degree in soci- ology and anthropology from St. Olaf College in Northfield, Minnesota. She serves on the nonprofit board for Soul Spring, as well as on the Mile High Connects Advisory Council. A ULI Advisory Services Panel ReportA ULI Advisory Services Panel Report♼ Printed on recycled paper. 2001 L Street, NW Washington, DC 20036 www.uli.org Collier_Cover.indd 1 5/17/17 11:17 AM U.S. Apartment Demand – A Forward Look Prepared by: Hoyt Advisory Services, Dinn Focused Marketing, Inc. and Whitegate Real Estate Advisors, LLC May 2017 2 Estimating the Total U.S. Demand for Rental Housing Table of Contents Page Executive Summary 3 U.S. Rental Demand 5 Estimating U.S. Population 5 Estimating U.S. Households 8 Total Housing Demand 14 Home Ownership Rates and Rental Demand 19 U.S. Rental Housing Demand 24 Rental Demand for Institutional Investment 26 Other Rental Property Types 28 Scenario Analyses 30 National Trends Worth Watching 32 Conclusions on U.S. Rental Housing Demand 38 State Key Issues and Trends 39 Metro Market Key Issues and Trends 44 Appendix 1: Institutional Ownership of Single Family Rentals 52 Appendix 2: Owner vs. Renter Demographics 53 Appendix 3: State and Metro Market Tables 55 Appendix 4: Metro Market Overviews 61 Appendix 5: Methodology 162 3 Estimating the Total U.S. Demand for Rental Housing Executive Summary The housing bubble fallout of 2007-2010 resulted in a paradigm shift in the U.S. among many households. Disillusioned by the bursting of the house price bubble that destroyed equity, many former home owners continue to rent today. Younger households, seeking more mobility and often saddled with student loans, postpone home ownership or choose to have the flexibility of renting. Demographic shifts also affect home ownership and the result has been a declining home ownership rate and corresponding increase in the percentage of households that rent. Some of this shift came about in the same housing units, as owned units became part of the rental inventory and today some one-third of all rental units are single-family units. Tighter underwriting standards by lenders have resulted in a tighter supply of both multifamily and single-family housing with prices and rents exceeding the growth in income for the past decade. Housing affordability, especially on coastal markets, remains low. Housing supply is adequate in most markets but there are many exceptions especially along the Northeast and Western U.S. coasts at certain price segments. Affordable market-based housing is only achievable with greater density and smaller sized units, yet land-use policies and political approval processes have moved in the opposite direction adding greater regulation and restrictions. The internet and social media have facilitated quick mobilization for groups that feel threatened by new housing developments that will add traffic and parking congestion in their neighborhood. Demographic shifts, student debts and tighter underwriting continue to suggest substantial rental demand in the future. Among the major drivers of metro and state level household growth are in-migration policies and trends. As a whole, the U.S. depends on immigration to fuel the labor market. Any declines in immigration rates will severely curtail both the growth of the U.S. economy and future housing demand. In recent years, several metropolitan areas would have had zero or negative population growth were it not for international in-migration. Their natural population increases have been more than offset by domestic out migration and yet international migration has significantly supplemented the population. These metros include1 Chicago, Detroit, Milwaukee, Philadelphia, St. Louis and New York. Among the metro markets studied, migration rates are a key telltale sign of the local economy’s direction. Those metros with strong economies also have significant population growth rates often derived from in-migration from both domestic and international sources. Examples include Houston, Charlotte, Austin and Tampa-St. Petersburg. Markets such as Washington D.C. and San Diego have strong international in-migration but experience domestic out-migration. Uncertain in our housing outlook is the longevity of the current rental stock. This study assumes a base rate of economic obsolescence of 0.5% or 720,000 units per year on average through 2030. If the economic life of a housing unit is reduced to 100 years (1.0% per year), on average, then we need 1.4 million housing units per year just to replace the lost housing units. The type of housing needed in the future is also shifting towards units that accommodate older households. 1 April 2010 to July 2016 4 Given the maturity of the current economic cycle, the forecast assumes that the U.S. economy could go through two recessions by the end of the forecast period in 2030. Even under this scenario, all 50 states and the 50 metropolitan markets in this study will need new multifamily housing going forward to meet a growing population base. The Southern states driven by economic growth, low costs and diversified demographic growth continue to lead demand forecasts with metropolitan markets in Texas and Florida ranked in 5 of the top 6 places. Phoenix, Atlanta, Raleigh and Las Vegas also rank in the top 10. Slower growth markets are more likely to experience new demand growth in specific neighborhoods. Developers and investors should evaluate these markets carefully for new growth as well as revitalization of existing neighborhoods. These markets are frequently located in the Midwest and Old South and include markets such as Cleveland, Milwaukee, Birmingham, Pittsburgh and New Orleans. Growth drivers also vary greatly by metro market and will shape the format of new construction going forward. A few markets will continue to attract new renters of all ages, while many will experience an increasing proportion of demand from 35+ aged cohorts. The 65+ aged cohort will account for a large part of demand in some low growth markets, particularly those experiencing net out-migration trends. Income and ethnicity trends also vary significantly by market. While some markets embrace growth, others are restricted either geographically and / or by policy. Supply-restricted markets tend to have higher rental costs and lower affordability. Markets with both high rental and high for-sale housing costs risk losing population bases to lower cost areas. The middle class, including necessary professions for a healthy economy such as teachers, police and fire-fighters, cannot afford average rents in these markets. States with healthy balance sheets and educated workforces continue to be primed to attract individuals and firms from these markets. Several ‘known unkowns’ could occur going forward that would significantly change the forecast. At the national level, 75% of the variance in the U.S. home ownership rate since 1971 can be explained by policy changes such as those that impact capital and banking markets. It is unknown whether policy changes will be put into effect which could impact the applicability of the mortgage tax deductions, particularly for middle income families. Changes in these policies can affect the ‘own vs. rent’ decision and thus the amount of demand for multifamily properties going forward 2. The second large ‘known unkown’ at the national level at the time of writing this report is the impact of policy changes on immigration rates. As the U.S. population ages, growth is slowing and becoming increasingly dependent on immigrants who have a higher tendency to rent. As a base case, population growth is expected to slow from 0.9% per year on average from 2000 to 2010 to 0.7% on average from 2016 through 2030. Under this scenario, immigration begins to outpace natural growth (births minus deaths) by 2023. Without immigration, population growth is expected to slow to 0.4% per year through 2030, less than half the pace of the past decade. At the local level, some markets could surprise on the upside. For example, large tech campuses continue to expand in Seattle. A growing hub of large tech firms could attract more than expected small tech firms as well as individuals looking to escape the high costs of Silicon Valley. Detroit is at the other end of the growth spectrum but has been increasingly attracting a few investors who are aggregating large tracts of land. 2 For example, doubling the standard deduction would eliminate the benefits of mortgage interest and property tax deductions for many households and thus, at the margin, provide less incentives to own housing. 5 U.S. Rental Demand At the national level, we first estimate total rental demand based upon total population, household size projections, and the portion of the market that desires and can afford ownership given the regulatory environment, interest rates and ease of credit access. The result is the net rental demand in households. We provide some notes on trends worth watching that might affect rental housing demand. We also provide some supply side discussion bringing in the impact of those marginal single- family units that might be rentals or owner occupied. In brief, the national housing rental demand model is essentially the following: 1. Estimate total population growth considering births, deaths and net immigration. 2. Divide this by household size considering probable recessions and demographic trends 3. Equals total households (with a qualifier on homelessness) 4. Add to this the equilibrium vacant housing from market friction, normal vacancy and second+ home demand 5. Add to this the housing units lost to real depreciation and obsolescence including normal attrition for changes in use, public improvements, etc. 6. Equals total housing unit demand 7. Estimate the owner-occupied portion of this to derive renter demand, considering credit access, housing policies, existing household debt including student loans and credit debt, housing investment appeal and general affordability. 8. Allocate renter demand for new multifamily rentals of 5 units or more per building as defined by the NMHC. 1. Estimating U.S. Population The U.S. Population is approximately 325 million persons 3 as of the end of 2016, growing at approximately 2,229,000 per year which equates to 4 net new people per minute, 6,107 per day. These estimates are based on the three most important metrics of population: births, deaths and net international migration. Of these three parameters, net immigration is the least predictable but most important for forecasting future population. The reason is that as the U.S. population continues to age our domestic death rates will slowly approach our birth rates. We will continue to add net population at the rate of about 1.35 million for 2017 (births less deaths) but the net immigration figure for 2017 will run 0.88 million. By 2023 and beyond the rate of expected population growth from net migration exceeds that of births less deaths.4 By 2030, net immigration is expected to run 1.33 million compared to an internal net population increase of 840 thousand. 3 Official estimates from the U.S. Census. 4 This is from the U.S. Census as well as Pew Research and others. See for example: “Immigration projected to drive growth in U.S. working-age population through at least 2035” PewResearchCenter.org By Jeffrey S. Passel and D’Vera Cohn, published on: April 17, 2017 http://www.pewhispanic.org/2015/09/28/chapter-2-immigrations- impact-on-past-and-future-u-s-population-change and http://www.calculatedriskblog.com/2017/04/lawler- updated-population-projections.html and http://ucanr.edu/blogs/blogcore/postdetail.cfm?postnum=23839. 6 Historically, immigration is highly dependent on the state of the U.S. economy, slowing down during recessions and accelerating during better economic times. For example, while Mexico remains the largest source of persons who obtain lawful permanent resident status in the U.S.5, net immigration is balanced by persons leaving the U.S. for Mexico. Over time, immigration from Mexico has been one of the largest from any single country bringing 400,000 people per year from 2001-2005. From 2006 through 2010 the number slowed to a trickle, only 200,000 total over 5 years or a tenth the previous rate.6 Since 2010 the net immigration from Mexico has declined to a very small number, and was negative from 2009-2014. Factors for this slow down include a stricter immigration policy on the U.S. side with increased deportation of undocumented immigrants, less demand for unskilled labor, except for agriculture 7, and positive economic growth in Mexico after the 2009 recession. Asian immigration rates are simultaneously increasing and are now surpassing the combined totals from Mexico and all other Hispanics as the largest single entering ethnic group. Immigrants from Asia tend to be highly educated and have job skills making it easier to integrate into the U.S. economy over a broader range of jobs. For example, 57% of Asian immigrants in 2015 had completed college compared to 13% from Mexico and 28% from Central and South America.8 As immigration is approaching half the annual net U.S. population growth rate, it is becoming a critical factor in population forecasts (see Exhibit 1 and Figure 1). What is unknown is whether the U.S. policy towards immigration will be broadly more challenging or more specifically challenging towards single countries or certain group profiles. The Obama administration was characterized by severe, if not extreme, vetting of immigrants. As a base case, we use Census forecasts as shown below, presuming that new immigration policies will sound dramatically more extreme, but should be modest in terms of real impact.9 The impact of more restricting policies is explored in the Scenario Analyses at the end of this section. 5 Department of Homeland Security, 2015 Yearbook; Mexico accounted for 157,227 of 1,051,031 total persons who obtained lawful permanent residence in 2015, followed by China (70,977), India (61,380), Philippines (54,307) and Cuba (54,178). 6 See MPI reports at http://www.migrationpolicy.org/article/mexican-immigrants-united-states. 7 California is especially dependent on Mexican labor for agriculture and would be devastated if temporary work permits were not facilitated. 8 PEW Research Center report on “Future Immigration will change the face of America” 2015. 9 There are some countries that might be more severely impacted by a Trump administration including Syrian refugees, and those from other Islamic countries but it remains to be seen how new policies will play out. 7 Exhibit 1: Population Projections Year Population Numeric Change Percent Change Natural Increase Net International Migration 2015 322,632 3,073 0.94% 1,386 1,119 2016 325,107 2,107 0.65% 1,367 1,097 2017 327,336 2,229 0.69% 1,353 876 2018 329,534 2,199 0.67% 1,368 831 2019 331,700 2,166 0.66% 1,362 804 2020 333,849 2,148 0.65% 1,338 810 2021 336,045 2,196 0.66% 1,188 1,008 2022 338,442 2,398 0.71% 1,212 1,185 2023 340,867 2,424 0.72% 1,203 1,221 2024 343,278 2,412 0.71% 1,166 1,246 2025 345,665 2,386 0.70% 1,127 1,259 2026 348,009 2,344 0.68% 1,079 1,265 2027 350,305 2,297 0.66% 1,023 1,274 2028 352,560 2,255 0.64% 963 1,292 2029 354,777 2,217 0.63% 903 1,314 2030 356,949 2,173 0.61% 840 1,333 Figure 1: Population Projections Plot 0 500 1,000 1,500 2,000 2,500 197019731976197919821985198819911994199720002003200620092012201520182021202420272030U.S. Natural Internal Population Increase vs Immigration (000's) Net International Migration Natural Increase forecast 8 The impact of immigration on population growth estimates varies widely. While border states first come to mind as areas that could be heavily reliant on immigration for population growth, we find that many of these areas also attract a large U.S. migration making immigration a small part of total growth, e.g. immigration accounted for only 5.0% of population growth in Texas and Arizona in the 2010-2014 period. To the contrary, we find that immigration is more important to slow-growth states, accounting for virtually all population growth from 2010 to 2014 in states such as Maine, Michigan, Rhode Island and West Virginia, and more than 30% of growth in Connecticut, New Jersey, New York, Ohio, Pennsylvania and Vermont. See the state and metropolitan area reviews of this report for further discussion. 2. Estimating U.S. Households Moving from population estimates to household estimates is simply a function of household size. Household size has declined steadily since 1965, but the rate of decline has flattened in recent years. See Figure 2 below which shows the peak of household size at 3.7 for families and 3.35 for all households in the 1960’s. When the population is adjusted for non-households; e.g., those living in group quarters, the average household size is about 2.54 overall and 3.15 for families as of the 2015 Census. If we divide 325 million by 2.54 we get 127.9 million households as of the end of 2016, but this exceeds the benchmark estimates of 118.2 million per the most current U.S. Census survey. Thus, we used the most complete and current surveys of population and households from different Census surveys 10 and other sources to estimate household size and total households. Figures used in this survey are shown in Figure 7. Several factors are causing a decrease in household size. Single persons living alone doubled from 13% of households in 1960 to nearly 27% in 2010 (Figure 3). This is a result of influences on both ends of the population spectrum. The median age at first marriage increased from 23.5 for men and 21.1 for women in 1975 to 29.5 and 27.4 respectively in 2016.11 10 U.S. Census B25127 2015 ACS (1-year) table, Moody’s Analytics and Hoyt Advisory Services. 11 U.S. Census Bureau, Families and Living Arrangements, Table MS-2. 9 Figure 2: Household Size Over Time Figure 3: The Rise of the Single Person Household 2.00 2.20 2.40 2.60 2.80 3.00 3.20 3.40 3.60 3.80 4.00 1950 1960 1970 1980 1990 2000 2010 2020 2030 Changes in Household Size Source: U.S. Census All Households Families 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 1960 1970 1980 1990 2000 2010 2020 2030 U.S. Single Households and Forecast Source: U.S. Census and Forecast 10 Not only are the single households rising as a percent of the population but the size of households overall continues to decline as shown in Figure 4. Households of three or more people declined from 59% of households in 1960 to 43% in 1990 and 38% in 201612. Figure 4: Large Households a Declining Share of Total Household size by age of householder increases on average until age 40 as young people form families and then begins to decline after age 4013. See Figure 5 below. Average household size is three people or larger for households where the head of household is aged 30 to 49. Conversely, household size drops precipitously to slightly over 1.6 people when the head of household is 75+ years. As the U.S. population ages, older (and smaller) households are becoming a larger share of the market. See Figure 6 below. Notably, we estimate that the 45-54 aged household segment will decline from 21% of households in 2010 to 16% in 2030 while the Baby Boomers, born circa 1946 to 1964, are entering traditional retirement age. The 65-74 aged segment is projected to increase from 11% of households in 2010 to 17% in 2030 while the 75+ aged segment increases from 10% to 15% of households during the same time period. 12 Source: U.S. Census Bureau, Families and Living Arrangements. 13 Source: U.S. Census Bureau, Current Population Survey 2015. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1960 1970 1980 1990 2000 2010 2016% of Total HouseholdsNumber of People in Household Households by Size One Two Three Four Five Six Seven or more 11 Figure 5: Household Sizes Are Smaller for Older Households Figure 6: Older Households an Increasing Share of Total Households 2.442.563.033.383.263.042.712.362.081.901.640.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 20-24 years 25-29 years 30-34 years 35-39 years 40-44 years 45-49 years 50-54 years 55-59 years 60-64 years 65-74 years 75+ yearsMean Household SizeAge of Householder Household Size by Age of Householder 0% 5% 10% 15% 20% 25% 1960 1970 1980 1990 2000 2010 2016 2020 2030Percent of Total HouseholdsHouseholds by Age of Householder Under 25 25 to 29 years 30 to 34 years 35 to 44 years 45 to 54 years 55 to 64 years 65 to 74 years 75 years and older 12 Another significant trend impacting household size is the increasing share of population growth attributed to international in-migration to the U.S. See Figure 1 above. Notably, households of Hispanic origin14accounted for an estimated 20% of U.S. population growth in 2015 and 43% of net in-migration. By 2030, the U.S. Census Bureau estimates that people of Hispanic origin will account for 24% of U.S. population growth and 41% of net in-migration. This is significant to household size estimates because households of Hispanic origin are significantly larger, averaging 3.25 people per household as compared to 2.42 people per household for non-Hispanics.15 However, similar to overall U.S. household size data, Hispanic households are also declining in size, down from 3.56 people per household in 2001. The implications of the household size and population trends are projected below in Figure 7. The U.S. is expected to have approximately 141 million households by 2030. From the end of 2016 through the end of 2030 the population should grow in total by 9.8% but the household growth rate over than same period is 12.8%, as the household size declines. This is an annual compounded growth rate, in our base case, of 0.7% in population increase and 0.9% in household increases. Note that this is a slower pace than recent historical trends when population increased by 1.2% annually on average from 1990 to 2000 and by 0.9% from 2000 to 2010. Without any net in-migration from other countries, the U.S. population is expected to grow by only 0.4% annually through 2030. Household growth stayed a little more stable over time as household size shrank, averaging 1.2% per year in both 1990-2000 and 2000-2010 and dropping slightly to 1.1% since 2010. While the timing and severity of economic recessions are difficult to predict, the U.S. has experienced a recession every four to ten years during the past fifty years. Thus, we broadly estimate two recessions slowing down household formation rates in the forecast horizon, the first estimated around 2019 lingering until 2020 and the second and larger recession in 2030, possibly starting in 2029 and lingering through 2031. The first recession is forecast to be mild and is based upon the normal economic cycle.16 A second mild recession could occur in 2026 but will depend more on a global economy and is not factored into any of our models. The third recession is estimated to be quite severe and is based upon entitlements (Social Security and Medicare) running out of funding resulting in the need for massive tax increases and some budget cuts.17 The population growth rate in the graph below is shown in lighter gray with the darker column showing households. Normally the household growth rate exceeds that of the overall population, but here we note the effects of the slower household growth rates during projected recession years which is further impeded by lower than historic population growth. The number of households actually shrinks slightly in 2030 as more people double or triple up during a significant recession. 14 Note that origin is separate from race, and thus Hispanic households may be of any race in U.S. Census data. 15 Source: U.S. Census Bureau, Current Population Survey 2016. 16 A variety of sources were used to suggest a recession in late 2019 and during part of 2020. The most convincing of these came from Intensity, an economic forecasting firm headed by Dr. Alan Timmermann. See http://intensity.com/forecasts. Another economist consulted for longer term economic crisis is Dr. Alan Beaulieu. https://www.itreconomics.com/content/alan-beaulieu. 17 See the very convincing analysis of Alan Beaulieu, http://www.financialsense.com/contributors/dr-alan- beaulieu/us-recession-2019-depression-2030 where he makes the case that the U.S. politicians kick the can down the road until it reaches a crisis point, that being the inability to fund Social Security, Medicaid and other entitlements, along with a maxed out Federal debt creating unsustainable borrowing capacity. The timing estimate here is very much driven by the aging Baby Boomers who will no longer be working and demanding vast increases of medical care in the last years of life. 13 Figure 7: Base Case of the U.S. Household Growth Rate U.S. Projected Base Case Households by Year as Used in Figure 4 in 000’s Year Population Household Size 18 Households 2015 323,000 2.53 123,778 2016 325,107 2.52 125,094 2017 327,336 2.51 126,501 2018 329,534 2.50 127,915 2019 331,700 2.51 128,043 2020 333,849 2.51 128,979 2021 336,045 2.47 131,848 2022 338,442 2.46 133,295 2023 340,867 2.45 134,746 2024 343,278 2.45 135,688 2025 345,665 2.45 137,131 2026 348,009 2.45 138,048 2027 350,305 2.44 139,474 2028 352,560 2.44 140,363 2029 354,777 2.43 141,768 2030 356,949 2.45 141,092 18 Assumes 3.0% of population is in group quarters. 1,200 1,250 1,300 1,350 1,400 1,450 1,500 3,000 3,100 3,200 3,300 3,400 3,500 3,600 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Base Case Projected U.S. Population (left) and Household Growth Rates (right) in 100,000's Population Households 14 3. Total Housing Demand While total housing demand parallels the number of households as projected above, the actual housing stock demanded will also be affected by the following factors: • the number of homeless households, • the number of excess or vacant units available to fill new demand, if located in areas where demand exists, • the demand for second and third homes, and last, • the atrophy of physical housing units which will leave the housing market. Later, we will divide the housing demand into owner and renter shares, and when doing so, noting the impact of units that might be part of either stock. a. Homeless Population and Households Homelessness exists in the U.S. at the rate of about 17 to 18 persons per 100,000 population, about half of whom are considered chronic. Thus, on a single night in 2015, more than 560,000 people were without housing and sleeping outside, in an emergency shelter or a transitional housing program.19 The highest rate in any metropolitan market is Washington D.C. at 111 per 100,000 population.20 More expensive large cities tend to have higher homeless rates. Single persons make up about half the homeless household count. From an analysis of long term trends, economic cycles affect homelessness but there is no relative trend based on household income dispersion. During 2016 for example, homeless rates were lower in about two-thirds of the U.S. States and higher in the other third. For 2016 the impact of homeless households requires an adjustment from 125,094,000 down to 124,820,000 households, a reduction of 2/10ths of 1.0%. At the national level this is not very significant, but in some metro markets such as Washington D.C., it requires a modeling adjustment for household demand. b. Normally Vacant Units The U.S. Census Bureau surveyed nearly 134.8 million housing units in 2015, some 118.2 million occupied and 16.6 million of them as vacant representing 12.3% of the stock.21 HAS adjustments that correlate the decennial Census with their current ACS survey provide for 134.7 million housing units in 2015, 120.4 million occupied and 14.3 million vacancies or 10.6%.22 The real question is what is the total demand and growth rate, but part of the demand is a function of normally vacant units. We can break the vacant housing statistic into three parts: There is the normal equilibrium vacancy rate in each market where rents tend to go up when the vacancy rate is below a certain level.23 Residential rentals have the lowest average natural vacancy 19 See http://www.endhomelessness.org/library/entry/SOH2016 “End Homelessness in America” 2016. 20 See http://www.endhomelessness.org. 21 U.S. Census American Community Survey (ACS) 1-year estimates. 22 HAS and associates adjustments are based on Census metrics only. 23 Source: “REVISITING THE DERIVATION OF AN EQUILIBRIUM VACANCY RATE” by Richard Parli and Norm Miller, Journal of Real Estate Portfolio Management, Vol. 20, Issue 3, 2014. 15 rate compared to office, industrial and retail property. At the national level, we estimate this at about 5.0% to 6.0%, although in some local supply constrained markets it normally runs even lower and in some elastic supply markets, it runs higher. As of the end of 2015 the rental vacancy rate for all residential was 6.8%. Note that 6.8% of the rental stock would represent about 2.6% of the total housing stock. There are also vacant homes within the owner-occupied market simply because of imperfect timing, or time needed to repair homes prior to occupancy, or from units vacated after buying a new home. This tends to add 1.5% to 2.0% vacancy to the entire stock of housing. c. Demand for Second and Third Homes The third source of vacant homes is from second and third, and in some cases fourth-plus homes, owned but rarely occupied by wealthier households. These are particularly important in tourist markets, but even at the national level the counts are significant. Nationally this surplus housing figure runs about 6.0% to 8.0% of the housing stock, and it has been growing slowly on a long-term basis.24 Add together vacant rental units at 2.6% of the total housing stock, plus 1.75% for unoccupied owner units, plus 7.0% for unoccupied surplus homes and we get a total vacant estimate of 11.35%, which is in the range of the Census-based HAS adjusted estimates above. For 2016 this suggests a total housing demand of approximately 125.125 million households times (1-.1135) equals 141.1 million housing units. This is similar, but slightly higher than our HAS adjusted estimates above.26 See Figure 8 below where we project total housing units required through 2030. Note this does not equal total housing demand, nor can it be used to derive net units demanded per year until we make further adjustments. We must consider the obsolescence, real deterioration and demolition of existing housing stock based on a variety of causes and also include housing units lost to the process of eminent domain for public improvements, schools, roads, and infrastructure. Fires, tornadoes, and hurricanes also take their toll, yet we seldom see eliminated housing units brought into forecast models of demand. This will be considered next. 24 Some of these units may be rented but unreported. Others might be reported as rentals but generally left vacant, so solid and reliable statistics on second homes is a challenge. 25 The U.S. Census Bureau publishes at least five different estimates of the number of households. Each source yields a somewhat different figure. Most of the differences can be explained because of differing methodologies, dates, and whether undercount adjustments have been applied to the series. This study uses a base household estimate as provided by Moody’s Analytics which is based on Decennial Census, Current Population Survey basic monthly files, and annual Census Population Estimates. 26 There is also some possibility that U.S. households or individuals are living outside the U.S., including those in the military, and yet at the same time foreigners are living in the U.S. No adjustments are made for such ex-pat type housing demand. 16 Figure 8: U.S. Housing Units Projected Through 2030 Prior to Adjustment for Lost Units d. Annual Loss of Physical Housing Units The rate of loss of existing housing stock varies according to age and location. A recent study by Bokhari and Geltner suggested depreciation rates on new multi-family dwellings of 4.0% per year.27 The depreciation tended to slow down as properties aged until they approached the end of their economic life. They found an average real depreciation rates of about 1.44% per year over the entire economic life. Quantifying the impact of real depreciation and units lost to natural causes (fires, tornadoes, hurricanes) and demolished for re-purposed property or moved or changed in use is the discussion provided in CINCH reports by HUD. CINCH stands for Components of Inventory Change.28 CINCH data is not consistent nor annual and the last major report covered 2011-2013. During that time 1.567 million units of housing were lost to various causes, or 522,333 per year. This represented about 0.4%29 of the housing stock per year. However, if we used 0.4% of the housing stock each year, that would suggest an economic life of 250 years, well beyond anything statistically supportable. This seems extreme, especially considering the average age of all U.S. housing is currently around 39 years in age, and few homes are over 200 years in age in the U.S. Figure 9 shows the age of the U.S. housing stock broken down by owned vs. rented and year the units were built 30, including a category for all mobile homes and 27 See “Characteristics of Depreciation in Commercial and Multi-Family Property: An Investment Perspective” https://mitcre.mit.edu/wp-content/uploads/2014/03/Characteristics-of-Depreciation-in-Commercial-and-Multi- Family-Property_0317.pdf. 28 See https://www.huduser.gov/portal/datasets/cinch.html. See also https://www.huduser.gov/portal/datasets/cinch/cinch13/Rental-Dynamics-Report.pdf. 29 Note that loss rates vary by property, tenure and occupier characteristics with renter occupied properties experience loss rates that are about 52% higher than this figure. 30 Source: U.S. Census, American Community Survey, 2015. 141,110 142,697 144,292 144,437 145,492 148,729 150,361 151,998 153,060 154,688 155,723 157,331 158,334 159,919 159,156 130,000 135,000 140,000 145,000 150,000 155,000 160,000 165,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 U.S. Housing Units Required With No Lost Units (000's) 17 other property types. Note that there are significant differences in age of housing stock by property type. For example, 30%-40% of single units, either owned (O:1 in the graph below) or rented (R:1 in the graph below) were built before 1960. Conversely, almost none of the mobile home stock was built before 1960, with a large part of the current inventory built between 1980 and 1999. Rental properties that are 5 units or larger (R:5+), a segment frequently tracked by institutional owners, is more evenly distributed with 21% built before 1960, 61% built between 1960 and 1999 and 13% built in the 2000’s. Note that this segment has the largest percent of inventory built since 2010, at 5.1%. Figure 9: Age of U.S. Housing Stock Using the general number of 1.44% based on the average of Bokhari and Geltner estimates results in an economic life of about 70 years for multifamily properties, which seems very reasonable, assuming owners keep them maintained. One lesson of the Bokhari and Geltner study is that major capital improvements are required to periodically update multifamily properties, or for that matter any building, and without such capital expenditures the wear and tear and loss of real value (gross depreciation) would be much higher. We should also note that the type of buildings we observe which are 250 years-old and still standing have two attributes. They are built of very strong materials, stone or brick and very long lasting roofs. They are also continuously occupied in strong demand areas and well maintained. Today, we tend to use materials that are much less durable. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% O: 1 O: 2-4 O: 5+O: M / OTH R: 1 R: 2-4 R: 5+R: M / OTH Housing Stock Composition by Age and Type of Property B1939 1940-59 1960-79 1980-99 2000s 2010+ 18 A recent study by Jiro Yoshida found that the depreciation rate for single family residences was about 1% per year but the rate varies considerably by location and other property characteristics.31 This study used a rather limited sample of properties. To be conservative for the best case, we will use a 200-year life and a 0.5% loss rate, noting that at least two thirds of this loss will be due to natural causes. Even this very conservative estimate suggests we need at least 650,000 units of housing production in 2016 and growing with the stock rate simply to maintain what we have. We should not assume that housing, once built never disappears. We will add this 650,000 plus figure to the total U.S. required housing stock, growing in proportion to the total. Please note how sensitive this assumption is to our required housing stock. We are assuming that the existing stock will be here for a while since the average age is only 39 years and that is why a conservative replacement assumption makes sense for the next few decades. In Figure 10 below, we add in the estimate of lost units to derive the total U.S. housing stock required and in Figure 11 we show the net new housing required each year. The average over the entire period is 1.3 million new housing units each year. Some of the variation in required units is based on a slowdown in economic growth with probable modest economic recessions occurring around 2019-2020 and more severely in 2029-2030. Figure 10: Total U.S. Housing Units Required 31 “Economic Depreciation in Property Value: Cross-Sectional Variations and Their Implications on Investments” by Jiro Yoshida, Real Estate Research Institute Working Paper, April 1, 2017. Working papers can be found at http://www.reri.org/research/working.cfm. 141,760143,357144,962145,117146,182149,429151,071152,718153,790155,428156,473158,091159,104160,699159,946130,000 135,000 140,000 145,000 150,000 155,000 160,000 165,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Total U.S. Housing Units Required (000's) with 0.5% Attition Rate on Existing Stock 19 Figure 11: Total U.S. Housing Units Required by Year 4. Home Ownership Rates and Renter Portion of Housing Demand The characteristics of homeowners vary from those of renters. For example, 35% of renters are less than 35 years old with another 20% less than 44 years old. Only 36% of homeowners are less than 44 years old. Renters are more ethnically diverse with significantly more people of Hispanic origin and Black by race, and have a lower proportion of college-educated persons. Interestingly, tenants in rental properties are somewhat sticky with 59% of renters moving into their units in 2010 to 2014 with only 15% moving in 2015. See Appendix 2 for further details. Globally, home ownership rates vary widely from less than 50% of households to more than 95%32. According to data compiled by the European Mortgage Federation from Eurostat, supplemented by more recent data from Eurostat, the majority of European countries, the 28 countries in the European Union, have home ownership rates that exceed the U.S.33 While international comparisons are difficult to measure, countries with extremely high home ownership rates seem to have several factors in common. Many are former socialist countries which gave existing tenants the housing they occupied.34 Ever since the dissolution of the USSR and the transition to privatization, the high home ownership rates have been receding. Culture, the momentum of tax laws and other policies that 32 See http://www.pewresearch.org/fact-tank/2013/08/06/around-the-world-governments-promote-home- ownership. 33 See http://eyeonhousing.org/2015/06/a-cross-country-comparison-of-homeownership-rates. 34 For example, Romania, Czechoslovakia, and many others. 1,5971,6051551,0653,2471,6421,6471,0721,6381,0451,6181,0131,595-753-1000 -500 0 500 1000 1500 2000 2500 3000 3500 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Total U.S. New Housing Units Required By Year (000's) 20 encourage home ownership and economic stability certainly play a role.35 Developed countries like Germany and the U.K. have had relatively stable economies and inflationary environments and do not fear runaway inflation, thus the demand for real assets and inflation hedges are somewhat mitigated. Housing affordability across countries is additionally impacted by a number of factors including differences in tax burdens, housing stock characteristics and income equality 36. In the U.S., age is positively correlated with home ownership and the highest home ownership rates exist for those aged 65-74, as shown in Figure 13. We also observe a conversion to renting as people reach 75+, especially for those 80+. The Baby Boomers will be crossing these thresholds in significant numbers by 2025, which could affect overall home ownership rates. While it seems that there is no universal equilibrium home ownership rate, we have modeled home ownership rates over time as noted below. In the U.S., a high rate of housing ownership has been an overall economic policy goal, particularly during the past 50 years, after full employment and keeping inflation under control, but this goal seems to have been punctured by the last housing bust. As shown in Figure 12 below, U.S. home ownership rates have historically had little to do with capital market or economic trends. Figure 12: Home Ownership Rate National policies affecting credit availability, banking regulation and lending trends have a significant impact on home ownership rates. Changes in political environments and policies are difficult to forecast going forward, but have had a significant impact on home ownership in the past. In fact, we 35 Capital gains tax laws and exclusions for single and married households help to maintain the momentum of sticking with home ownership after an initial purchase, if significant appreciation has occurred. 36 See http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/international_rental_housing_carliner_marya.pdf. 59 60 61 62 63 64 65 66 67 68 69 -5% 0% 5% 10% 15% 20%1980198219841986198819901992199419961998200020022004200620082010201220142016Home ownership Rate %U.S. Home Ownership Rate 30 yr Mortgage Rate GDP Growth Home Ownership Rate 21 were able to model home ownership rates from 1971 to 2016 with a high degree of certainty 37 using three demographic and economic factors and five policy factors. The policy impacts alone explain approximately 75% of the variance in U.S. home ownership rates since 1971. Examples of significant policy changes include the 1977 Community Reinvestment Act which intended to encourage lenders to address the needs of all borrower segments of their communities including low and moderate-income neighborhoods, i.e. it intended to reduce discriminatory credit practices against low income neighborhoods, otherwise known as redlining. In 1992, The Housing and Community Development Act passed, requiring that 30% or more of Fannie's and Freddie's loan purchases be related to "affordable housing" (borrowers who were below normal lending standards). However, HUD was given the power to set future requirements, and HUD soon increased the mandates. The Gramm-Leach-Bliley Act also known as the Financial Services Modernization Act was passed in 1999. It repealed portions of Glass Steagall act, allowing depository and investment banks to merge. Critics often cite it as a cause of the subprime crisis, allowing mergers to create ‘too big to fail banks’ that did not have enough regulation regarding risk and reserve requirements. The Commodities Futures Modernization Act of 2000 further limited the regulation of financial derivatives. As a response to the subprime crisis, The Housing and Economic Recovery Act was passed in 2008 in an effort to assist homeowners and restore stability and confidence in Fannie Mae and Freddie Mac. Home ownership peaked in the U.S. in June of 2004. While 10-year Census data routinely reports lower home ownership rates than annual estimates, home ownership rates are estimated to have peaked near 68% in the first quarter of 2005 as a function of easy credit, subprime mortgage brokers peddling high loan to value mortgage options, reasonably low interest rates, appraisals that merely justified prices paid, and rising price expectations by buyers.38 Since the crash which followed in 2008 and beyond, credit standards have tightened significantly and underwriting remains tighter than prior to the crash.39 While many subprime mortgage lenders are no longer in business, most lenders still sell qualified mortgages to Fannie Mae and Freddie Mac and find appraisers who will justify the value, with little skin in the game. History may repeat itself with respect to a new housing bubble, but for now we observe that as of the end of 2016, nearly 10% of the mortgaged households remained underwater. The forecast model does not assume any policy changes going forward, although significant modifications to the tax code were under consideration as of the time this report was being written. Modifications for example that offset or impact the applicability of mortgage interest deductions in the tax code should be watched going forward for potential impacts on home ownership rates. The appetite and investment luster of housing is certainly much less than before 2008. Home ownership rates are notably lower for younger buyers as shown in Figure 13. This segment of the population has also shown the largest change in home ownership trends since the 2009 peak. While home ownership rates for the 65+ segment of the population fell by only 210 bp since the 2004 peak, rates for the under 35 and 35 to 44 segments fell by 840 bp and 1100 bp respectively. The challenge now is to figure out how much of this change is cyclical and how much is secular. Many of those who 37 Adjusted R square on the model of 0.847. 38 See https://www.bloomberg.com/news/articles/2016-07-28/homeownership-rate-in-the-u-s-tumbles-to-the- lowest-since-1965. 39 See https://www.bloomberg.com/news/articles/2016-07-28/homeownership-rate-in-the-u-s-tumbles-to-the- lowest-since-1965 with a note that minorities now find it harder to qualify for mortgage loans compared to pre- crisis. 22 bought near price peaks or had their credit affected are hesitant to jump back into housing ownership.40 Surveys of Millennials suggest that owning a home has less importance than to the prior generation. Others suggest that this reticence to jump into home ownership will change as the younger generation has children.41 Figure 13: Home Ownership Rate by Age Unemployment after the 2008 recession hit the younger population harder. Unemployment for 20-24 year-olds peaked at 17.2% in April of 2010, 10% higher than the average for people aged 35 or over, and double the typical difference between the two age groups. The span between the 20-24 year- old unemployment and the 35+ year-old unemployment did not come back in line until early 2016. Similarly, the 24-35 year-old unemployment peaked at 10.6% in May 2010, significantly higher than the average for the 35+ group. Young adults living at home in both the 18 to 24 year and 25 to 34 year groups increased by about 5.0% in the past decade to unprecedented levels since the data began in 1960 and remain at elevated levels through 2016 with more than half of 18-24 year-olds living with parents and about 15% of 25-34 year-olds living with parents. Additionally, household size increased from 2000 to 2010, particularly in very young households (less than 20 years old) and in the 50-59 aged group, reflecting adult children living at home. The good news for housing demand is that household size trends began to 40 See http://jchs.harvard.edu/sites/jchs.harvard.edu/files/hbtl-06.pdf a Harvard study on housing as a means to build wealth, 2013. 41 See http://rismedia.com/2016/07/25/home-ownership-still-desirable-for-millennials suggesting Millennials would like to own homes but are hampered by student debt and mobility concerns. 30 40 50 60 70 80 90 19941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016U.S. Home ownership Rate by Age Segment Under 35 35-44 45-54 55-64 65+ 23 reverse slightly in 2016, particularly for younger households that were again beginning to reduce in size, possibly indicating a reversal of the housing doubling up after the recession. In addition to getting married at an older age, young people are having their first child at an older age. In 2000, the mean age of a woman when she first gave birth was 24.9 years old. In 2014, that age had risen to 26.3 42. These trends are significant because the median age of first-time homebuyers is 32 43 – indicating pressure on young people to stay as renters longer. In fact, first-time homebuyers typically account for approximately 40% of home sales, although this figure dropped to a low of 32% as of 2015 (but rose to 35% of survey respondents in 2016). College admissions continued to grow through 2010, and with rising unemployment in the younger population, student debt became an increasing burden. Aside from the tighter credit standards and lower investment appeal of housing, we consider student debt a considerable factor in the home ownership rate over the next several years. As of late 2016 student debt in the U.S., incurred by 44 million borrowers, exceeded 1.3 trillion dollars. Student debt has grown by 500% since 2004. The delinquency rate stood at 11.1% and the average monthly payment was $351.44 Some 70% of the student debt borrowers owe more than $10,000 dollars. The average is now just over $30,000.45 Converting a payment of $351 a month into a mortgage at 4.5% with a 30-year term has the impact of borrowing nearly $70,000 less; or conversely, it is like adding a second mortgage to any home purchase decision. With an 80% loan to value mortgage, this means the average affordable home is constrained by $87,000 dollars. Another way to look at this is if we use 28% of income towards a home purchase, this equates to reducing income by $15,000 per year. The New York Fed has studied the issue of student debt and has provided the following statistic: in 2005 student debt stood at just over 310 billion dollars and the under 30 adult home ownership rate was about 34%. In 2015 the student debt reached $1.2 trillion and the under 30 home ownership rate declined to under 28%.46 The point is that the propensity and capability of buying is being significantly curtailed by student debt. John Burns Real Estate Consulting estimated the reduction in home buying as a result of student debt to be 103,000 homes per year, a reduction of 7.6%.47 Some economists have suggested that students who borrow student debt and graduate will get a positive net present value, but this depends very much on the quality of the selected program. Some students will see substantially increased earning power, such as those attending medical schools or business schools, but many of these 44 million borrowers will be negatively constrained and affected by the debt. This will affect the marginal propensity to buy versus rent. We expect the proportion of college graduates seeking to rent instead of buy for the next several years will be somewhere near 55% as they age and start families, and yet this figure could be high. The U.S. Census figure for home ownership by those aged 35 and below slumped from 34.7% as of December 2016 to 34.3% at the end of March, 2017. 42 Source: NCHS Data Brief, No. 232, January 2016. 43 National Association of Realtors, Profile of Homebuyers and Sellers Survey, November 11, 2016. 44 See https://studentloanhero.com/student-loan-debt-statistics. 45 See http://ticas.org/posd/map-state-data for state by state data. 46 See http://financeography.com/millennial-home-ownership-shrinks-as-student-debt-grows. 47 See “Student Debt’s Drag on Home ownership”, John Burns, April, 2017. 24 Household wealth also plays an important part in home ownership rates. Wealth is impacted by a number of factors including job growth, income levels, savings behavior and capital market trends. Home prices are a large contributor to wealth, and in turn support spending behavior and purchases of other goods in rising price environments.48 Home ownership rates also tend to rise in high inflationary environments in our model. The last major factor that will lower home ownership rates from 2016 through the next decade are demographics. One parent households, headed by fathers, are nine times as common today as in 1960 and four times as common for single mothers 49. The model also adjusts for factors such as age (previously discussed) and race/origin 50. For example, Hispanics represent a growing segment of our population. “According to the American Community Survey, only 45 percent of Hispanic households owned their homes in 2013 compared with 71 percent of White Only households. If one were to hold those rates constant as Hispanics become an increasing percentage of the pool of homebuyers, the home ownership rate would drop.”51 The home ownership rate of Hispanics is rising with each successive generation that integrates into American society, but the impact of a changing population mix and a lower percentage seeking home ownership must be addressed in any realistic model on the home ownership rate. Additionally, household size varies significantly by race. 5. U.S. Rental Housing Demand Based primarily on the lower appeal of for-sale housing for those households burned by the last housing bubble, the impact of student loans and the changing demographics, we expect a decline in the home ownership rate as shown in Figure 14. In the base case, interest rates are expected to continue to increase at a moderate rate, but higher or faster than expected interest rate increases could cause actual home ownership rates to be lower than those shown below.52 Figure 15 shows the total rental stock required to meet rental household demand, and Figure 16 shows the result by year. Note that while Figure 15 reveals a perfect and instant market response to anticipated demand, we do not expect the actual pattern to be so erratic. Rather, the time required to anticipate and get development approvals will require significant planning on the part of developers with no assurances of approvals in a timely manner. The actual number of rental units required, from all sources, averages 586,000 units per year from now until 2030. See Figure 16. In 2015 the U.S. added only 306,000 rental units, the most since 1989. At this rate, we are falling short by an average deficit of over 200,000 rental units. 48 See “How do house prices affect consumption? Evidence from micro data” by John Y. Campbella, João F. Coccob, Journal of Monetary Economics, Volume 54, Issue 3, April 2007, Pages 591–621 at https://doi.org/10.1016/j.jmoneco.2005.10.016. 49 U.S. Census Bureau 50 Wachter and Megbolugbe (1992) estimated that about 80 percent of the gap between White households and Black and Hispanic households can be explained by differences in endowment (including differences in income, education, age, gender, and family type). See https://www.huduser.gov/portal/periodicals/cityscpe/vol18num1/ch9.pdf. 51 See http://www.urban.org/urban-wire/why-low-hispanic-home-ownership-rate-matters. 52 Note that ten-year bond yields increased by over 70 basis points from early in November 2016 to December 2016. 25 Figure 14: Forecast of U.S. Home Ownership Rate Figure 15: Total Rental Stock Required by Year 62.2%62.0%61.8%61.6%61.4%61.4%61.2%61.1%61.0%60.9%60.9%60.8%60.7%60.6%60.5%55.00% 57.00% 59.00% 61.00% 63.00% 65.00% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Expected U.S. Home Ownership Rate 37,70138,31539,09039,40540,00840,93941,57842,21942,62343,25943,65044,27444,65045,34245,25720,000 25,000 30,000 35,000 40,000 45,000 50,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Total Rental Stock Needed in 000's 26 Figure 16: Rental Stock Required Per Year Based on Demand 6. Rental Demand for Institutional Investment We focused next on properties with 5 or more units which are generally of the investment size and quality needed for institutional investors and have provided a large proportion of the needed stock, some 43% or 16.2 million units as of 2016. See Figure 17 below. The 5+ unit segment of the rental market is the focus of the remainder of the report. The 5+ segment was further disaggregated to the state and metropolitan market level for all states and 50 select markets throughout the U.S. by a bottoms-up approach of collecting similar data at the state and metropolitan market level. This data aggregated both Census data and where available, data from private data providers such as CoStar® and CBRE® Econometrics. In some markets, particularly those that are characterized by significant institutional investment, the private data providers had significantly more robust data than the Census surveys. In other markets, the Census data was more robust. Thus, a combination of data sources was used to estimate total stock at the metro market and state level. This data was then summed at the state level to an estimate for the U.S. and was significantly larger than the Census sample, equal to 22.95 million units as of 2016. Even with the advent of a new and more permanent single house rental stock, discussed below, we will still need about 328,000 units of rental housing per year provided by larger properties through 2030. Note that as in the base scenario above, the model continues to assume a recession in 2029-2030 that will require no new 5+ rental housing units in 2030. See Figure 18. 614775315918931639641404636391624376692-85-100 0 100 200 300 400 500 600 700 800 900 1,000 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Net Rental Units Needed by Year (000s) 27 Figure 17: Detailed Breakdown of the Rental Housing Stock Figure 18: Rental Units of 5+ Units Per Year Single-family Detached 28% Single-family Attached 6% 2 Rental Units 8% 3-4 Rental Units 10% 5-9 Rental Units 12% 10-19 Units 11% 20-49 Rental Units 8% 50 or more Units 12% Mobile Home or Other 5% 2015 National Distribution of Occupied Rental Housing Stock by Type Source: U. S. Census Bureau, 2015 American Community Survey 5-year Estimate 373473191367568389389246386239379229420-52-100 0 100 200 300 400 500 600 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 5+ Unit Rental Stock Needed by Year (000's) 28 7. Other Rental Property Types Single-family Housing and Detached Units as a Source of Rental Supply After the housing crisis of 2008, many formerly owner occupied units became part of the rental stock. In fact, several investment funds were created to own and operate single-family housing units as part of the rental stock. The term for this trend is the “Institutionalization of Single-Family Rentals (SFR)”. Nearly 200,000 single-family homes are now owned as rental units by institutions. A list of the largest is included in Appendix 1, with the largest as of 2016 listed below: Institution SFR Units Blackstone (Invitation Homes) 47,342 American Homes 4 Rent 46,131 Colony Starwood Homes 32,272 Progress Residential 16,345 This SFR asset class would not have existed were it not for the low investment basis possible via a wave of distressed real estate sales with potential rents high enough to carry the units using modest leverage. Another key factor in the establishment of SFR as an asset class has been the ability to reach minimum concentration scale thresholds for the efficient management of units. Because of the need for scale, much of this asset class is clustered in markets hit hard by the housing crisis, where rents relative to acquisition cost were attractive.53 Despite institutional interest in SFR, the bulk, some 99%, of all rental SFR units are owned by individuals and private partnerships. In total, some 17 million single-family rentals compete today with the 2 to 4 unit and 5 or more unit rentals. As a percentage of the total rental stock, SFR units surged from 2010 through 2014 and now represent about a third of all rental stock. The result has been a surge in the distribution of small scale landlords as shown in Figure 19 below: 53 The largest concentrations of SFR units are in Dallas, Denver, San Antonio, Orlando, Nashville, Tampa, Atlanta, Charlotte, Phoenix, Miami, Riverside, Salt Lake City, Las Vegas, Indianapolis, Jacksonville, Cincinnati, Raleigh- Durham, Columbus (OH), and Chicago. See http://roofstock.com. 29 Figure 19: Small Scale Ownership of Rental Units While market share of small scale ownership has increased significantly, we have every reason to expect it to decline as market forces prompt a conversion back to the single-family owner occupant in select markets. 54 We expect that SFR will continue to be a viable rental stock alternative, especially for families choosing to rent and requiring a larger number of bedrooms, something lacking in the typical larger property multifamily stock. Over time, more 3 and 4 bedroom choices could be added to meet this demand, and new units will be added to the inventory. At the same time, some of the existing SFR units will be converted back to owner occupied housing as prices for the owner market rise relative to the rental market and landlords decide to cash out. Additionally, more rental demand is coming from smaller households. For this reason, we do not expect the SFR units to increase as a percentage of the rental stock and in fact, are more likely to decrease over the long run, until the next wave of distressed sales. 54 See Attom Realty’s report called LANDLORD LAND: A real estate dance party is being led by a new breed of rental property investors, March, 2017. http://www.attomdata.com/landlord-land/#. 1-2 units 79% 3-5 units 8% 6-10 units 4% 11-100 units 6% over 100 units 3% Distribution of Rental Units Owned 30 Scenarios Analysis At the national level, sensitivity analysis is probably less important in that it is easy to imagine a scenario where some parts of the country are growing more than expected while others are growing less than expected. In such a case, we might conclude that no change in the projected demand for new housing units is needed at the national level if the more positive growth areas exactly balance the less positive (or negative) growth areas. Nevertheless, we have laid out a few national level scenarios that might impact the aggregate rental demand. Lower Rentership Scenario: Here we assume that home ownership rates increase by nearly 170 bp by 2030, but remain about 400 bp lower than the previous peak, assuming that the subprime market was a contributor to home ownership rates reaching levels near 2004-05 that are in excess of long-term stabilized levels. See the below table for home ownership rates used in the various scenarios. We also assume a long-term slow-down in net immigration with more restrictive immigration policies keeping immigration to just over half the base case scenario. Household growth is slower, resulting in 1.7% fewer households by 2030 than in the base case. Higher Rentership Scenario: Here we maintain immigration at current rates in the near-term, rising to 1.6 million people per year by 2023 (29% higher than the base case), while we allow home ownership rates to continue to decline based on higher immigration rates, the aging population and continued delay in family formations by younger persons. The resulting total and annual rental unit demand is show in the following graphs. In the downside rental demand scenario, we require 153,000 units of new rental housing per year on average from here through 2029. If we include 2030 we require only 139,000 units on average per year, with a projected deep recession hitting around 2030. In the upside scenario, we require 525,000 rental units on average per year through 2029 and 517,000 on average through 2030. Of course, during recessions units will not be withdrawn from the market, so the averages through 2029 are relevant figures. Home ownership Rates Used in Scenario Analyses Year Base Low Rentals High Rentals 2016 62.2% 62.2% 62.2% 2017 62.0% 62.2% 61.8% 2018 61.8% 62.2% 61.4% 2019 61.6% 62.4% 61.2% 2020 61.4% 62.8% 61.1% 2021 61.4% 63.2% 60.8% 2022 61.2% 63.4% 60.6% 2023 61.1% 63.5% 60.4% 2024 61.0% 63.5% 60.3% 2025 60.9% 63.5% 60.2% 2026 60.9% 63.5% 59.9% 2027 60.8% 63.6% 59.8% 2028 60.7% 63.6% 59.6% 2029 60.6% 63.7% 59.5% 2030 60.5% 63.8% 59.2% 31 Figure 20: Total Multifamily Rental Stock Required by Year in Scenarios Figure 21: Annual New Rental Stock Required by Year in Scenarios 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Multifamily Rental 5+ Units Needed Base Case Lower Rentership Higher Rentership (200,000) - 200,000 400,000 600,000 800,000 1,000,000 20082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030New Rental Stock Required by Year Base Case Lower Rentership Higher Rentership 32 National Trends Worth Watching While the total units of housing required overall will not deviate with a number of other market trends, we feel it worth mentioning some observations influencing the types of units which will be demanded in the next decade or two. These include an upscale shift in rental households, changes in unit sizes, the impact of an aging population, the impact of demographics, better data sources, the impact of an increasingly privatized student housing market, the conversion of affordable units and uncertain future subsidies to housing, and the impact of short term rentals and reactionary regulations at the building level to neighbors to cities. Each will be discussed in turn. 1. Upscale Shift in Rental Households The housing downturn and recent surge in multifamily development have revealed a shift in rental households toward upscale tastes, greater buying power and corresponding demand for new rental product. National field studies using market segmentation modeling 55 have seen this rising share of renters to be 30%-45% of all rental households in most metro market sectors, a much greater share in the high-demand metros of San Francisco, Los Angeles and New York. Upscale renters will devote more gross monthly income to rent, expect a wider array of unit choice and amenities, and have found a 12-, even 24-month lease aligned with their mobility and career horizon. 2. Unit Types: Expansion at both ends of the size spectrum Family units: The housing crisis of 2008-2010 drove many foreclosed home owners to rental stock. This created a surge in demand for 3 and 4 bedroom units. Some households went into single- family units, as discussed above. Others went into larger rentals within traditional apartment complexes. See Figure 22 below. Here we can see that the proportion of 3+ bedroom units runs about 12% for multifamily properties and 63% for single-family units including detached and attached, creating a better fit for those moving from owned single-family housing, and thus fueling the surge in newly institutionalized single-family rental market after the 2008 downturn. The mobile home proportion of 3+ bedrooms is 44%. The vacancy rate on these 3+ bedroom units is lower than average and the turnover is much lower, suggesting such units add stability to rental streams, although household size for renters is generally smaller and thus a balance of unit size that reflects local demographics must be in place at each property.56 55 For example, Tapestry Segmentation by ESRI®. 56 Daryl Carter, founder and CEO of Avanath Capital Management suggested that family sized rental units were not a well-served market, yet they typically had half the turnover rates and lower vacancy rates than any other sized units. See http://www.avanath.com/about_management-team_daryl.php and Institutional Real Estate Investor interview where he suggested these units do not need amenities as much as space. 33 Figure 22: Proportion of Rental Housing with 3+ Bedrooms by Type 57 Micro-housing units: At the other end of the spectrum, what some households in the older housing of Russia or China would consider typical sized units, we call micro-units. We define micro-units as units which are typically 650 square feet or less, although in New York City a micro-unit might be 250 square feet and in Dallas it will be 500 square feet.58 The reason for increased demand of micro-units is twofold. First, to keep costs down to affordable levels in high cost markets, the units must be very small. Second, location tends to dominate the criteria for apartment selection and not size. Combine the two criteria and we see a large demand for urban well located micro-units. It is unlikely that too much of this type of housing can be supplied in that it is an affordable choice for typically single occupied households who want to live close to work and social amenities. The development of micro- units has been particularly strong in several markets where they have also been permitted.59 Unlike SRO, single room occupant housing where bathrooms and kitchens and common areas are generally shared, micro-units typically include modest kitchens and private bathrooms.60 Some cities have minimum size requirements. For example, the District of Columbia requires units of at least 220 square feet. Seattle and Portland have no minimum sizes and are more likely to see a variety of 57 See: http://www.jchs.harvard.edu/americas-rental-housing. 58 See the ULI report at http://uli.org/wp-content/uploads/ULI-Documents/MicroUnit_full_rev_2015.pdf. 59 See http://www.curbed.com/maps/microhousing-micro-dwelling-small-space-living-apartment. 60 See https://www.hudexchange.info/resources/documents/Understanding-SRO.pdf. Many micro-units under 350 square feet feature built-in storage units and flexible furniture systems (e.g., Murphy beds, hideaway kitchen modules, convertible tables, and so on) to make these smaller spaces work. To put the size of a micro unit into perspective, a 300-square-foot micro-unit studio apartment is slightly larger than a one-car garage but considerably smaller than a two-car garage. 63% 12% 44% 31% 0% 10% 20% 30% 40% 50% 60% 70% Single Family Multifamily Mobile Homes Overall Percent 3+ Bedroom Rental by Type As of 2011 Source: Joint Center for Housing Studies of Harvard University 34 combinations of SROs and micro-units with various common amenities.61 We expect to see substantial excess demand for micro-units that provide affordable housing without subsidies. The limits on this form of housing will likely be regulations and neighbors against smaller unit housing, claiming that it will drive up traffic congestion and parking problems.62 Should autonomous cars become prevalent they may negate the arguments about parking and reduce urban apartment construction costs by placing dedicated parking structures in less desirable areas. For example, close to noisy rail yards, airports and generally on the boundaries of urban areas. Parking requirements for most multifamily developments are a significant cost factor adding to the required rents and making units less affordable.63 3. Aging Households: propensity to own tails off when and if we live long enough In the United States, tax laws have been favorable to ownership for those in higher tax brackets, as property taxes and mortgage interest are deductible expenses and capital gains are generally excluded from taxation.64 These laws tend to add significant momentum to the ownership or rental decision. That is, once a household buys a home, they tend to remain as owners for most of the balance of their lives.65 Ownership tends to start to drop off around age 75. See Figure 23 below. For those above 80 years in age the drop off accelerates. This suggests that as Baby Boomers reach 75 years of age and beyond around the year 2025 we should expect some potential drop off in the home ownership rates, assuming our tax laws remain status quo. A lowering of capital gains tax rates could lower the propensity to continue to own after initial purchase, just as price declines pushed many households away from home ownership, now wary of counting on future home appreciation as a reason to buy. 61 ULI report http://uli.org/wp-content/uploads/ULI-Documents/MicroUnit_full_rev_2015.pdf. 62 These claims are fairly universal in fights against any new development. 63 See http://www.vtpi.org/park-hou.pdf. “Parking Requirement Impacts on Housing Affordability” August 24, 2016. Todd Litman, Victoria Transport Policy Institute. The abstract of this research is as follows: Most zoning codes and development practices require generous parking supply, forcing people who purchase or rent housing to pay for parking regardless of their demands. Generous parking requirements reduce housing affordability and impose various economic and environmental costs. Based on typical affordable housing development costs, one parking space per unit increases costs approximately 12.5%, and two parking spaces can increase costs by up to 25%. Since parking costs increase as a percentage of rent for lower priced housing, and low income households tend to own fewer vehicles, minimum parking requirements are regressive. 64 This is $250,000 for an individual and $500,000 for a couple as of 2016 as long as a new home is purchased within the required time period. See https://www.irs.gov/taxtopics/tc701.html. For those over 55 years in age, there is also a once in a lifetime exclusion of $125,000 single or $250,000 jointly on home gains. 65 See U.S. Census reports on housing at http://www.census.gov/housing/hvs/files/currenthvspress.pdf. 35 Figure 23: Age Versus Home Ownership 4. Demographic Trends Aside from the aging trend mentioned above, the changing mix of major ethnic groups will affect both household size and the propensity to own. Most relevant here and factored into our analysis are the increasing proportion of Hispanic households.66 In 2015 the Hispanic home ownership rate was 45.6% much lower than for whites, but still an increase from prior years. Over half of all new homeowners were Hispanic in 2012, and most analysts expect the home ownership rate for Hispanics to continue to rise. Still the propensity to own remains lower than for non-Hispanics and this may reduce the overall home ownership rate and thereby increase the demand for rental housing. In particular, the single housing rental units and larger apartment units will observe the most demand pressures from this demographic trend. With lower than average income, rental unit affordability stress suggests that low amenity larger units will be in very high demand for some time. 5. Better Data Sources Base Census data and estimates do not track rising renter circulation well, especially the previous upscale renters concentrated in revitalized urban cores. Alternative housing surveys such as the Social Compact Initiative have demonstrated over 12% urban household undercounts in even the more sedate Midwestern markets 67. Developer-provided rent rolls of new scaled developments consistently reflect more tenant buying power and younger professionals in growth employment 66 See http://www.housingwire.com/articles/36524-hispanic-home-ownership-on-the-rise. 67 Social Compact Initiative Cincinnati Neighborhood Market DrillDown June 2007. See https://www.uc.edu/cdc/urban_database/citywide_regional/cinti_drilldown_report.pdf. 35.258.469.174.981.078.00 10 20 30 40 50 60 70 80 90 100 <35 35-44 45-54 55-64 65-74 75+ Home Ownership Rate Versus Age Source: U.S. Census 36 sectors. On the supply side, several private data sources collect and categorize multifamily housing stock with greater depth, often including rentals from duplex, condominium and detached housing. Along with base Census data, two such sources were referenced for the HAS estimates throughout this review.68 6. Student Housing: Increasingly Privatized Student housing supply tends to be measured in beds, not units. This market has become increasingly privatized with universities providing less and less dormitory units. According to Axiometrics, nearly 220,000 beds were delivered in the four-year span of 2013-2016.69 Student housing units in the private market will have more amenities, especially fast Wi-Fi and common study rooms and social areas, and will not be that different from some of the larger apartment complexes located adjacent to campuses. Affinity for such private sector housing varies by campus. Florida and Texas universities are among the most dependent on such housing.70 7. Housing Affordability Employment growth is increasingly occurring in large urban centers. For example, more than 14% of jobs that were created in 2009 to 2016 were created in three metropolitan areas: New York, Los Angeles and San Francisco. With this has come significant housing affordability issues. Going forward, job growth is expected to continue in urban centers. Historically, rent control programs have proved to be ineffective in creating affordable housing for the overall market and in fact in some instances have done just the opposite.71 Thus, creating housing will be of utmost importance in growing markets. 8. Affordable Units Converting to Market Section 8 rental subsidies and low income tax credit housing programs have provided nearly 1.4 million units of U.S. rental housing. This is a significant percentage of the rental stock and there is a great deal of speculation that affordable low income tax credit housing units will be converted to the private sector over the next several years. Per rental agreements with 15 year minimums and some 30 year restrictions on such conversions to private market rents, we will observe significant units eligible to convert to the private market. The first wave of such units will hit around 2022 although most industry analysts suggest that these properties will need substantial capital improvements to be able to compete with other private sector market properties.72 What is more likely over the next Presidential term in 68 CoStar® and CBRE Econometrics®, with permission. 69 See http://pinecrestus.com/wp-content/uploads/2016/07/Q1-2016-Student-Housing-Market-Update-for- website.pdf. 70 See http://www.fanniemae.com/resources/file/research/emma/pdf/MF_Market_Commentary_062315.pdf. 71 Rent control encourages wasteful use of space. It discriminates in favor of those who already occupy houses or apartments in a particular city or region at the expense of those who find themselves on the outside. Permitting rents to rise to the market level allows all tenants or would-be tenants equal opportunity to bid for space. See Miller and Geltner, Real Estate Principles for the New Economy, 2005. 72 See https://www.huduser.gov/publications/pdf/what_happens_lihtc_v2.pdf and https://www.huduser.gov/portal/periodicals/em/summer13/highlight1.html. 37 2017-2020 is a cut back on public housing subsidies putting more pressure on communities to approve affordable market rate housing. The only way to do this is to approve more units with greater densities.73 9. Short Term Rentals The advent of the shared economy brought with it firms like AIRBnB, VRBO and Homeaway.com that matched home owners with empty rooms or houses or condos. As a percentage of the hotel industry the AIRBnB room count provides up to 20% of the short-term rentals in expensive markets like New York City and 12.5% in San Francisco but only 3.4% overall.74 In many communities a backlash against short term rentals of less than 30 days suggests that these types of operators are more likely to affect the hotel industry and not likely to have a significant impact on the longer-term rental housing market. 73 The challenge remains one of overcoming NIMBY’s that suggest traffic and parking will hurt their neighborhood, yet pushing housing further away simply adds to traffic congestion and air pollution. In California, some legislators have proposed a carbon tax on communities unwilling to approve more affordable private sector housing in their backyards. At the Federal level, see I-732’s proposal at https://www.wired.com/2016/11/washington-state-pass- nations-first-carbon-tax. 74 See https://skift.com/2016/02/03/measuring-airbnbs-real-threat-to-u-s-hotels-using-industry-metrics. 38 Conclusions on U.S. Rental Housing Demand There are a few very sensitive assumptions in our models that will affect future demand for housing of all types in the U.S. Among these are 1) the net immigration rate and future government policies that may affect an important source of long term household growth in the U.S., and 2) the longevity of the rental housing stock. Given the relatively young age of the U.S. housing stock, just around 40 years in age as of 2017, it is difficult to suggest that atrophy and replacement of existing units will be a major demand driver in the next few years. But, even at 0.5% of the stock per year, we are talking about 720,000 units per year on average through 2030 for all housing types. Changing this to 1.0% for a 100-year economic life doubles the 720,000 to 1.4 million per year. Eventually capital improvements will be required at much higher levels than today or else greater production will be required. Annual household formations in the U.S. will require net new housing increases of about 1.3 million units per year for the next 14 years. The figures would be higher were it not for two expected recessions where households will double and triple up, estimated first in late 2019 and 2020 and then again in 2029-2030. Of the net new housing demand, some 40% or so are expected to be renters despite the momentum of senior citizen owners to keep a home until reaching ages of 75+. In fact, the surge in much older citizens starting in 2025 will contribute to a slight reduction in household size and the home ownership rate. Housing starts are running close to the net new demand, as of late 2016, but there is a mismatch in that units added by price type and supply may not geographically match up with where it is most needed. That is, there is no national and fungible housing market. There are only local markets and segmented markets by size and price points. Thus, some markets will fall well short of housing demand, even though top line average vacancy rates may waver, often reflecting trends in new supply which tends to be oriented towards the highest price points in the market. The propensity to choose renting over buying could dramatically affect the rental demand suggested here. Our numbers are conservatively low on the dimension of choosing renting. To the extent that owned housing is considered a life style choice with less freedom and mobility, significant investment risks and often provided in a size larger than desired or in distant locations from the urban core, rental demand could be even higher than our base case shown here. Single-family rentals have helped to satisfy some of the rental unit demand but we do not expect that market share to continue to increase. Based on 43% of the total rental demand being satisfied with traditional 5+ multifamily units, we will need an average of 328,000 units per year from now through 2030 and cumulatively 4.6 million units of 5+ unit housing. New supply will also need to match requirements for all income levels, not just the top tier of the market. Anything short of this will simply drive up rents faster, far exceeding expected household income growth and requiring more doubling up and house sharing. 39 State Key Issues: • More than 100,000 new rental units will be needed by 2030 in states such as California, Georgia, Arizona, Florida, North Carolina, New York, Texas and Washington. • Less than 35% of the rental stock was built after 1980 in much of the Northeast indicating significant need for rehabilitation of existing stock. These markets have also tended to be less volatile over the past 20 years. • The Western U.S., as well as Texas, Florida and North Carolina are expected to have the greatest need for new rental housing through 2030, although all states will need more housing. The fastest economic and household growth will continue in low-cost, business friendly states, primarily in the southeast and mountain west. • The 65+ age cohort will account for a large part of population growth going forward across all states, especially Florida, Maine, W. Virginia, Vermont, Pennsylvania, Montana, Delaware and Hawaii. Longer term, Arizona and Nevada will also add more senior citizens than average. • International immigration is assumed to account for 51% of all new U.S. population growth over the period through 2030, declining over the 2017-2020 period and then accelerating again. Most affected by policy changes and international fears that the welcome mat might be curtailed in the future are slow-growth states in the Northeast where natural population increases are the slowest. • Renters are becoming increasingly diverse with larger families becoming a more permanent part of the rental demand. Hispanics account for more than 30% of renters in 11 states and their lower propensity to own has helped drive down the expected home ownership rate. • The propensity to rent is and has always been higher in high-growth and high cost states where housing affordability constrains ownership demand, e.g. California exemplifies this trend. • Generally, the home ownership rate increases with age but this trend reverses for those living long enough. The national forecast assumes slower household growth going forward because of the aging population, although this trend varies by state. • Renters over 35 years old are a significant component of rental demand, particularly in the Northeast where renters aged 55+ account for more than 30% of rental households. • In fact, the 55+ age cohort of renters is greater than the 15-34 year-old segment in Connecticut, Maine, Massachusetts, New Jersey, New York, Pennsylvania and Rhode Island. • The institutional segment (5+ units) of the apartment market is a larger part of the market in higher income states and less affordable housing states. • Affordability issues are exacerbated by high land costs which is the result of natural supply limits or severe political restrictions. Rents as a percent of income are over 44% in California, New Jersey and New York where housing supplies are limited. • Affordable housing is needed in both high cost states as well as in lower income states. Renters with household income below the poverty level account for more than 24% of renters in parts of the Midwest and South. 31% of all renters earn less than $20,000. This figure increases to over 30% in parts of the South and Midwest. Florida and Louisiana have lower housing costs but severe income constraints affecting affordability. 40 State Trends Similar methodology was applied at the state level to estimate rental demand through 2030 for each of the 50 states. See Appendix 3 for rankings and Appendix 5 for methodology. Not surprisingly, as shown in the map below, the fastest growth through 2030 is expected in many of the southern and mountain west states, including Florida, North Carolina, Arizona, Nevada and Colorado, followed by Texas, Georgia, South Carolina and Kansas. Forecast Growth Per Year in Multifamily 5+ Units. Some of the more interesting trends appear when looking at the underlying details. One of the policy risks identified in the model is the amount of international immigration that will occur during the next decade. As discussed earlier in this report, due to the aging U.S. population base, immigration is expected to exceed natural population growth within the next ten years. These trends will be more amplified within some states and metro areas. While border states have proximity to other countries, many of those states also have low business and housing costs, as well as young and growing population bases. Thus, states most at risk to U.S. immigration policies are those states that have slow growth, older population bases, and exposure to international trade and immigration (see below map). These states are predominately located in the Northeast as well as parts of the Midwest, with less exposure in border states such as California and Florida. Our expectation is that there are wider margins of error in the forecasts for these states because of the potential volatility in U.S. immigration policies going forward. See the Metro Market Overview section of this report for further information about demographics, in-migration and growth in the major markets in these states. Interestingly, the major markets do not always exemplify the state trends. For example, while international immigration accounts for a large part of population growth in Michigan, Detroit benefits mostly from natural growth (births minus deaths) and experiences net out-migration including international and domestic migration to other locations. 41 Percent of Population Growth Created by International Immigration slow growth states. Rental affordability is also a significant issue in the U.S. Affordability can be affected either because of low incomes or because of high housing costs. Exposure to these factors varies significantly by state. For example, 31% of U.S. renters earn less than $20,000 per year. As seen in the map below, renters below the poverty level account for more than 35% of renters in states such as Mississippi and West Virginia, signaling a significant need for affordable housing in these markets. Large Share of Renters are Below the Poverty Line in Some States. 42 In other areas, renters have significant incomes, but the high cost of housing creates affordability problems. In markets such as California, Hawaii, New York and New Jersey, more than 44% of renters are spending over 35% of their gross income on rent due to high housing costs. States such as Florida and Louisiana face a similar mismatch in incomes to rental costs, even though they have lower housing costs. We explore this topic in more detail in the Metro Market Overview appendix of this report. At the metro area level, many of these markets have either geographical and/or political restrictions on new supply that can cause housing costs to soar. Renters in some areas spend a significant share of income on rent. For example, a Redfin study found that only 17% of California homes for sale were affordable to an average teacher in 2016, down from 30% in 2012. Affordability is worse in major metro areas. With average incomes of just over $71,000 in the San Francisco Bay Area, teachers can afford rents that are 48% of average rents in San Francisco and about 67% of average rents in the East Bay. Percent Teacher Salary Needed for Average Rent San Francisco 48% Alameda 67% Contra Costa 69% For investors looking to rehabilitate and improve older properties, the proportion of buildings built before 1980 varies significantly by geographic area. As shown in the map below, in the northern states and California, more than 65% of the multifamily housing stock in properties with five or more units was built before 1980. In contrast, less than 35% of the southern markets are in older buildings. While it is unknown how many of these properties have already been improved or renovated, they create a significant market size. In total, 11.7 million units were built before 1980 in the U.S. These units may also serve mid to lower income households which are a significant proportion of the population base. 43 Renovation Opportunities? Markets with a High Proportion of Older Stock Second Tier Affordable Rentals (STAR) Another product type is of significant size and generally left out of the institutional rental market, although they are a critical and ongoing multifamily supply component. We call these units Second Tier Affordable Rentals or STAR units. STAR units are characterized as older and lower quality units. Using CoStar® ratings of 1 to 5 for sites of five units or more, STAR units are those with lower CoStar® ratings of 1 to 2. Costar® ratings are based on a number of criteria including building structure and systems, amenities, site and landscaping, and certifications such as LEED and Green Globes. Properties rated 2 have functional architectural design and systems, below average finishes and one to no additional amenities. They have minimal to no landscaping and exterior spaces, and are unlikely to hold green or energy efficient certifications. Properties rated 1 may require significant renovation and are possibly functionally obsolete. STAR facilities are likely to serve lower income populations which are a significant part of the population base in some metro areas, and may represent, in some areas, potential investment targets for upgrading to higher quality properties. States such as California, New York, Michigan and Ohio have a high proportion of STAR units. At the metro market level, the percent of multifamily rental properties with 5+ units characterized as STAR units for metro markets in this study ranges from 61% (Los Angeles) to 17% (Austin) with a metro market average of 36%. 44 Metro Market Key Issues: • New York and Dallas are each expected to need more than 250,000 new apartment units in dwellings that have five or more units over the next fourteen years, growth that is equivalent in size to more than the entire population of over half the metropolitan statistical areas in the U.S. • Raleigh, Orlando, Austin, and Charlotte are expected to be the fastest growing apartment markets through 2030, increasing in size by more than 2.5% per year on average. • In addition to new units driven by net new demand, a sizeable portion of the needed rental housing will be driven by the aging of the structures. More than 65% of the 5+ unit rental stock was built before 1980 in New York, Cleveland, Honolulu, Pittsburgh, Chicago, Boston, Los Angeles and San Francisco. • Second Tier Affordable Rentals (STAR) are also a significant part of the rental market. These lower quality properties generally fly below institutional radars, but represent more than half the 5+ unit rental market in San Diego, Pittsburgh, Detroit and Los Angeles. Some analysts call this NOAH for Naturally Occurring Affordable Housing. Our research suggests that NOAH units are often not tracked by traditional data bases and even the U.S. Census sometimes under- counts this lower quality housing stock. • U.S. metro markets will face different challenges during the next fourteen years. Some markets are facing serious affordability issues. Half or more of renters in Miami and Honolulu spend 35% or more of their income on rent with 45% or more of renters in Los Angeles, New Orleans, Orlando, San Diego, Sacramento and New York spending 35% or more of income on rent. • Some of the affordability issues can be traced to a lack of sufficient new supply and the high cost of entitlement which drives up housing costs, while other markets are affected more by low income levels and declining economic bases. New supply can be restricted by geographical topography as well as by governmental processes and rules. Markets that have high barriers to entry tend to have higher costs and lower ownership affordability rates and a positive, but lesser positive correlation to rental affordability. • Markets with low ownership affordability tend to have high renter rates. For example, San Jose, Los Angeles, San Francisco, and San Diego have the lowest ownership affordability rates by far of any metro markets in this survey. All four markets rank in the top 10 markets with the highest rentership rate. • Supply restrictions do not correlate as closely to the actual volume of new construction which is more closely tied to demographic and economic growth. For example, Seattle ranks as the fourth most restrictive construction environment and eighth least affordable market, but with total multifamily inventory increasing by 1.5% per year on average from 2010 to 2016, it ranked 10th of the 50 markets in terms of the highest new supply growth. Housing permits in highly restrictive markets may take 10 or 12 years to secure, but such efforts are underway continuously and with such long lags, one cannot use current supply volume as an indication of the restrictiveness of a local market. • High costs of housing are correlated with out migration to nearby areas or even cross-state locations for some areas. For example, Los Angeles which ranks at the bottom for both owned and rental affordability has experienced flat to negative migration patterns since 2000, with slightly better in-migration rates in the neighboring and more affordable Riverside-San Bernardino area as well as increasing out-of-state exits to Las Vegas. Thus, it is clear that housing costs do inhibit the economic growth of a region by inhibiting the ability to hire and retain employees. 45 • Similar to the state trends, southern metro areas rank highly for attracting residents from other areas. Austin, Orlando, Raleigh, Charleston and Houston had the highest in-migration rates since 2010. These markets have more reasonable housing costs and are relatively business friendly. • Regardless of future international in-migration, current ethnic composition is an important factor affecting rental demand. For example, more than half of the San Antonio rental population is Hispanic, as are at least a third of rental residents in Miami, Riverside, Albuquerque, Los Angeles and Houston. Ethnicity is correlated with variations in home ownership rates, household size and other factors that affect the propensity to rent, amenities desired, and unit sizes. • Renter income levels vary widely, with a large portion of the U.S. population falling below the high-end cohort of the market favored by multifamily developers. A third or more of the rental households in Cleveland, Birmingham, Pittsburgh, New Orleans, Albuquerque, Detroit, Memphis and Cincinnati earn less than $20,000 per year as of 2016. • Renter populations are also aging. The 35-54 age cohort is expected to account for more than half of new apartment demand in Baltimore, Cleveland and San Jose through 2030, while the 65+ age cohort is expected to be the primary growth generator through 2030 (outpacing all other age categories combined) in Pittsburgh, Detroit, Milwaukee, St. Louis, Chicago, Philadelphia, Albuquerque and Kansas City. 46 Metro Market Trends: Demand for multifamily properties with five or more units was further estimated for 50 metropolitan markets. See Appendix 3 for a list of markets. The forecasting methodology is similar to that used at the state level adjusting household growth for two modeled recessions through 2030 and adjusting for home ownership rates, age, immigration, homelessness, long-term vacancy levels, the age of stock and the 5+ rental unit percentage of the rental housing market. Methodology is further described in Appendix 5. Historical figures for the years 2007 to 2016 are based on estimates of existing multifamily 5+ total inventory as developed by the HAS team from several sources including the U.S. Census, CoStar® and CBRE® Econometrics. Forecasts represent the number of units needed in properties with five or more units to keep vacancy rates at long-term stable rates that are typical for that market. The model does not forecast supply, so if supply exceeds this pace, then vacancy could rise. The forecast also does not remove units that could fall outside of typical institutional investor portfolios. We call these units Second Tier Affordable Rentals or STAR units as they represent lower quality properties (see Appendix 5 for a further discussion description.) The metro market analyses included a review of supply restrictions occurring at the local level by reviewing two indices, the Wharton Residential Land Use Restrictions Index and the Lacroix Developable Land Index. The Wharton Residential Land Use Restrictions Index is based on data and a nationwide survey of local land use regulations including process and approvals, rules, and outcomes. The index includes eleven sub-indices measuring the stringency of the local regulatory environment, including local political pressure, local project approval, local assembly, supply restrictions, density restrictions, open space, exactions, and approval delay. The Lacroix index was developed by Sumner La Croix, Ph.D. at the Economic Research Organization at the University of Hawaii and measures the developable area within a 50-kilometer radii from a central city. Factors such as oceans, wetlands, lakes, rivers and other bodies of water as well as areas with a slope above 15% are defined as undevelopable. The Multifamily Supply Restrictions Index is the sum of each sub index for the metro market divided by the average for that sub index for all the metro markets in this study. A table ranking the 50 metro markets by the supply index is shown in Appendix 3. The index is also shown on each of the Metro Market Overview pages. Higher indices represent markets with more stringent regulatory environments in regards to new housing supply. Of the markets in this study, this index ranges from 19.5 for Honolulu which is the most supply restricted to -6.0 for New Orleans which is the least supply restricted of the 50 markets in the study. (The average index is 2.0 for all 50 markets.) While there are significant variations by market, we find that the supply restriction index loosely correlates to rental markets that are less affordable as measured by the percent of households that spend 35% or more of their gross income on rent, as seen in Figure 24 below. That is, markets that have more supply restrictions tend to be less affordable. Note that affordability is a measure of both income and housing costs. Thus, given the same rents, markets with higher incomes will spend less of their income on rent as compared to rental costs and move further to the left on the below graph. 47 Figure 24: Supply Restrictions and Affordability The higher costs associated with supply restrictions are driven in part by less supply in markets with high supply restrictions as shown in Figure 25 below. Note that new supply is also a factor of demographic growth and associated housing needs. Thus, some supply restricted markets do experience growth. In these markets, the result of higher supply restrictions may be longer approval and development time-lines which increase costs and development risks. Similarly, some low restriction markets may not experience inventory growth if they have weak economic and demographic trends. -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 30%35%40%45%50%55%Supply Restriction IndexPercent Households Spending 35%+ of Gross Income on Rent 48 Figure 25: Supply Restrictions and Inventory Growth Markets with high supply restriction indices also loosely correlate to lower vacancy volatility. That is, with less new supply, these markets are not as likely to experience over-supply conditions (see Figure 26 below which shows the volatility in vacancy rates from 1995 to 2016 as reported by CBRE® Econometrics). New supply tends to be oriented towards higher rent, class A product. Thus, we also frequently see a higher proportion of older buildings and particularly buildings that we classify as Second Tier Affordable Rentals (STAR) buildings in supply restricted markets. These are non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. See the Metro Market Overview section in Appendix 5 for classification methodology for this segment of the market. These buildings create affordable rental options and may create opportunities to upgrade the site to a higher use in good locations in growing markets. -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%Supply Restriction IndexAvg Annual Percent Growth in Total Stock 1995-2016 49 Figure 26: Supply Restrictions and Volatility The Metro Market Overviews as shown in Appendix 4 illustrate the significant and important variances in both tenant characteristics and the built environment that occur by metro market. For example, income levels for renters in San Francisco are among the highest of 50 metros studied, while renter income levels in Cleveland are more oriented towards lower incomes. San Francisco Cleveland While San Francisco boasts a large share of renters earning household income of more than $75,000 per year, more than half of renters earn less than $75,000 per year. In a market with high rental costs, this creates a severe affordability issue for middle class workers as described in the State Trends section of the report. Additionally, the market’s severe affordability issue for owned housing drives the rentership rate up and keeps higher income households as renters. While this at first may seem attractive for multifamily owners, when rental costs become too high, tenants begin to leave the market. San Francisco has been able to escape an exodus of tenants seeking lower costs in recent times -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 0.5%1.0%1.5%2.0%2.5%Supply Restriction IndexVacancy Volatility 1995-2016 109,822 70,076 62,865 85,273 123,596 93,599 115,265 125,911 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 82,457 51,275 41,322 44,869 45,888 18,939 11,186 5,289 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 50 due to the growing tech industry, although it did experience net out-migration in the 2000 to 2010 time period. The Los Angeles market which has low affordability in both the owned and rented markets shows more severity in migration trends. Although out-migration stopped in the 2010-2016 time period, it has yet to show any significant net in-migration trends despite recent job growth in its tech industry as well as other industry sectors. Los Angeles Furthermore, states with low costs and strong fiscal positions are able to draw both corporations (through tax incentives) and individuals from high cost areas. Indianapolis and Dallas are two examples as shown below. These markets gain new tenants through both natural increases (births minus deaths) as well as net in-migration to the area from other metro markets, states and countries. Indianapolis Dallas The demographics of local markets, and more particularly submarkets and neighborhoods, should also be carefully considered. We see large variations in renter growth by age group across metropolitan markets. In select high growth markets with good migration trends, e.g. Austin as shown below, we see new tenant demand coming from all age groups. -75 -50 -25 0 25 50 75 100 125 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) 0 2 4 6 8 10 12 14 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) 0 10 20 30 40 50 60 70 80 90 100 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) 51 Austin While the results vary widely, the Columbus, OH market as shown below is more typical in that we frequently see new tenant demand increasingly coming from older households. Columbus, OH In markets with little growth and particularly those with out-migration trends, we see a large part of incremental demand coming from the 65+ age cohort of the rental market. Detroit, as shown in the graph below, is an example of this type of market. Detroit 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 52 Appendix 1: Institutional Ownership of Single Family Rentals Estimated institutional holdings - single-family rental (SFR) properties Source: Amherst Insight Labs estimates based on CoreLogic County Record and Transaction Data as of Q1 2016 Institution Units Owned Total Managed Count Blackstone (Invitation Homes) 44,386 47,342 American Homes 4 Rent 39,043 46,131 Colony Starwood Homes 27,193 32,272 Progress Residential 14,321 16,345 Silver Bay Realty Trust 6,928 8,798 Main Street Renewal 5,694 6,754 Tricon American Homes 5,103 6,743 Cerberus Capital Management 3,428 5,912 Havenbrook Homes 3,917 4,061 Connorex-Lucinda 2,704 2,994 Altisource Residential 1,522 2,912 Golden Tree Insite Partners (GTIS) 2,182 2,911 Vinebrook Homes 998 1,973 Gorelick Brothers Capital 1,460 1,784 Camillo Properties 13 1,314 Haven Homes 1,253 1,294 Lafayette Real Estate 994 1,271 Transcendent Investment Mgmt 598 628 Reven Housing Reit 216 500 Broadtree Home Rentals 432 468 Prager Property Management 119 277 Pintar Investment Company 151 164 TOTAL 162,655 53 Appendix 2: Renter vs. Owner Demographics 0% 5% 10% 15% 20% 25% 30% 35% 40% <35 35-44 45-54 55-64 65-74 75-84 85+ Housing Tenure by Age Owned Rented 0% 5% 10% 15% 20% 25% 30% 35% 40% Less than high school graduate High school graduate (includes equivalency) Some college or associate's degree Bachelor's degree or higher Housing Tenure by Educational Attainment Owned Rented 54 Appendix 2: Renter vs. Owner Demographics, continued. 0% 10% 20% 30% 40% 50% 60% 70%2015+2010-20142000-20091990-19991980-1989<1980Year Householder Moved Into Unit Housing Tenure by Move Date Owned Rented 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Owned Rented Housing Tenure by Race White Black Asian Other 55 Appendix 3: State and Metro Market Tables Total Population Growth 2016-30 (000) State 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65+ Alaska -3 -16 -10 6 19 11 -4 -11 -6 73 Alabama -17 -18 26 49 48 11 -32 -52 -34 281 Arkansas -5 -12 5 18 25 11 -14 -23 -12 164 Arizona 72 97 167 185 173 116 80 58 103 812 California -244 -457 -116 352 555 237 -24 -77 213 2,993 Colorado 8 14 46 105 120 64 9 -36 -15 398 Connecticut -80 -43 -16 88 59 -11 -75 -88 -27 200 DC -19 -42 -50 -1 31 36 16 4 1 36 Delaware -1 -4 3 15 20 4 -10 -12 -2 70 Florida 142 11 163 350 468 296 104 171 401 2,946 Georgia 80 106 163 193 147 55 6 31 92 871 Hawaii 4 -16 -10 10 32 19 1 -9 -5 93 Iowa -39 -17 -4 31 14 5 -25 -55 -33 187 Idaho 18 13 12 10 21 20 10 -3 -1 131 Illinois 142 54 -147 -363 -183 -92 -163 -158 -21 979 Indiana -40 -9 21 68 37 -9 -57 -81 -36 449 Kansas -10 -5 1 38 36 32 -1 -31 -15 223 Kentucky 0 1 31 29 23 -7 -29 -43 -17 295 Louisiana -20 -73 -51 7 65 36 -27 -66 -32 316 Massachusetts -123 -69 -22 122 102 11 -89 -93 -2 481 Maryland -33 -30 -3 56 78 15 -57 -71 5 460 Maine -17 -5 4 10 2 -16 -31 -34 -18 99 Michigan -158 -98 35 110 35 -97 -170 -192 -88 671 Minnesota -20 -24 -31 38 66 48 -24 -72 -13 443 Missouri -35 -38 -12 44 63 29 -44 -85 -38 419 Mississippi -5 -7 6 15 5 -9 -24 -31 -11 177 Montana 0 -5 0 16 20 13 0 -17 -16 73 North Carolina 138 186 233 242 171 74 32 44 80 804 North Dakota -23 -13 6 29 21 11 -1 -12 -9 45 Nebraska -11 1 -2 26 21 23 -1 -22 -15 130 New Hampshire -27 -2 7 29 14 -9 -33 -36 -10 120 New Jersey 4 127 75 -97 -122 -157 -182 -147 6 674 New Mexico -6 -8 1 24 27 17 -8 -24 -17 132 Nevada 66 59 69 46 38 33 42 48 54 274 New York -259 -21 227 374 198 -154 -382 -419 -198 436 Ohio -89 -96 -6 34 67 -57 -157 -202 -91 783 Oklahoma 4 -14 0 42 57 41 -7 -38 -23 232 Oregon -8 -6 25 41 51 29 17 -18 -23 282 Pennsylvania -202 -166 -69 103 99 -71 -209 -256 -110 813 Rhode Island -27 -16 -4 20 11 -8 -20 -22 -6 73 South Carolina 34 31 66 89 80 22 -17 -23 4 392 South Dakota 9 4 10 15 16 11 6 -5 -5 26 Tennessee -16 -24 34 73 69 7 -31 -24 16 512 Texas 187 169 283 517 569 464 275 179 259 2,263 Utah 57 44 43 26 51 70 70 27 16 200 Virginia -42 -56 -28 83 105 39 -45 -54 24 666 Vermont -21 -5 2 18 3 -4 -12 -16 -8 55 Washington 21 -30 13 77 141 89 28 -24 3 618 Wisconsin -55 -18 0 64 39 2 -66 -106 -37 423 West Virginia 2 -4 -3 -6 -6 -14 -16 -31 -31 85 Wyoming 5 -2 -6 0 9 11 1 -11 -12 29 Source: Moody's Analytics Age Cohort 56 Appendix 3: State and Metro Market Tables, continued. Appendix 3: State and Metro Market Tables, continued. Apartment Demand by Metro Market Metro Market New Units Needed 2017-2030 Rank Avg Annual Growth %Rank Avg Rank Albuquerque, NM 8,897 44 0.9%31 39 Atlanta, GA 170,095 5 2.2%9 7 Austin, TX 114,076 10 2.9%3 6 Baltimore, MD 22,965 31 0.7%41 36 Birmingham, AL 5,283 47 0.6%43 48 Boston, MA 66,109 19 1.1%28 23 Charleston, SC 13,388 38 1.5%16 29 Charlotte, NC 71,523 17 2.6%4 10 Chicago, IL 47,826 22 0.5%47 34 Cincinnati, OH 15,312 34 0.7%40 38 Cleveland, OH 5,151 49 0.2%50 50 Columbus, OH 33,048 27 1.2%27 28 Dallas-Ft. Worth, TX 266,296 2 2.2%7 1 Denver, CO 55,801 20 1.4%19 20 Detroit, MI 15,467 33 0.4%48 41 Honolulu, HI 15,131 35 0.9%34 35 Houston, TX 214,176 3 2.2%10 4 Indianapolis, IN 30,901 29 1.2%26 30 Kansas City, KS 14,007 37 0.6%44 42 Las Vegas, NV 87,280 12 2.4%5 9 Little Rock, AR 5,827 46 0.8%35 43 Los Angeles, CA 164,201 6 0.9%32 17 Louisville, KY 9,295 43 0.7%39 44 Memphis, TN 11,719 41 0.8%37 40 Miami-Ft. Lauderdale, 185,414 4 2.2%8 3 Milwaukee, WI 5,251 48 0.3%49 49 Minneapolis, MN 70,783 18 1.6%15 15 Nashville, TN 29,942 30 1.5%17 24 New Orleans, LA 6,966 45 0.7%42 46 New York, NY 278,634 1 0.8%36 16 Oklahoma City, OK 12,915 39 0.9%33 37 Orlando, FL 130,177 8 3.3%2 2 Philadelphia, PA 38,407 25 0.7%38 31 Phoenix, AZ 150,302 7 2.3%6 5 Pittsburgh, PA 9,545 42 0.5%46 47 Portland. OR 46,788 23 1.3%22 21 Raleigh, NC 74,323 13 3.8%1 8 Richmond, VA 14,787 36 1.0%30 33 Riverside, CA 40,499 24 1.1%29 26 Sacramento, CA 31,914 28 1.2%25 27 Salt Lake City, UT 16,478 32 1.4%18 25 San Antonio, TX 53,890 21 1.8%11 14 San Diego, CA 72,775 15 1.3%24 18 San Francisco, CA 71,668 16 1.3%23 19 San Jose, CA 35,942 26 1.3%20 22 Seattle, WA 98,228 11 1.6%14 11 Sioux Falls, SD 4,661 50 1.7%13 32 St. Louis, MO 12,325 40 0.6%45 45 Tampa, FL 72,933 14 1.8%12 12 Washington DC 127,962 9 1.3%21 13 57 Appendix 3: State and Metro Market Tables, continued. Changes in Metro Market Population (000s) 2010-2016 2016-2030 Metro Market Natural Increase Net Migration Natural Increase Net Migration Albuquerque, NM 3.5 -1.0 2.0 4.1 Atlanta, GA 38.7 42.1 34.0 90.9 Austin, TX 16.9 36.8 19.7 45.6 Baltimore, MD 10.1 4.4 7.0 1.4 Birmingham, AL 3.0 0.0 0.8 3.9 Boston, MA 16.3 22.7 14.3 11.9 Charleston, SC 4.1 10.3 3.1 8.2 Charlotte, NC 12.3 27.7 9.9 56.6 Chicago, IL 50.8 -39.3 42.5 -30.2 Cincinnati, OH 8.4 0.0 5.5 4.2 Cleveland, OH 2.1 -5.6 0.2 -6.9 Columbus, OH 12.2 10.4 10.9 11.0 Dallas-Ft. Worth, TX 57.8 71.6 60.7 91.0 Denver, CO 18.3 32.0 15.6 20.2 Detroit, MI 9.8 -7.2 5.1 -5.1 Honolulu, HI 5.9 0.9 4.6 -0.3 Houston, TX 59.4 77.9 63.8 72.8 Indianapolis, IN 11.1 7.7 9.3 10.5 Kansas City, KS 11.0 2.4 8.1 -0.7 Las Vegas, NV 11.9 21.9 11.3 49.1 Little Rock, AR 3.5 2.2 2.4 2.7 Los Angeles, CA 88.5 0.6 84.4 -3.2 Louisville, KY 4.0 4.0 1.9 5.0 Memphis, TN 7.5 -3.2 5.0 3.2 Miami-Ft. Lauderdale, FL 19.2 65.8 12.0 102.0 Milwaukee, WI 6.7 -3.0 4.4 -1.5 Minneapolis, MN 23.6 11.1 20.8 18.5 Nashville, TN 9.8 21.7 8.3 16.8 New Orleans, LA 4.9 6.9 3.4 2.6 New York, NY 107.0 -3.2 98.9 -31.7 Oklahoma City, OK 7.8 9.7 6.5 4.0 Orlando, FL 11.6 39.5 11.4 71.8 Philadelphia, PA 18.3 -0.9 12.2 -1.6 Phoenix, AZ 29.2 44.0 28.0 91.1 Pittsburgh, PA -3.2 2.6 -4.8 4.7 Portland. OR 11.4 22.6 9.1 21.3 Raleigh, NC 8.8 18.4 8.9 46.7 Richmond, VA 4.8 6.2 3.7 5.3 Riverside, CA 33.1 10.5 32.7 2.6 Sacramento, CA 11.3 10.6 10.9 12.5 Salt Lake City, UT 12.6 3.7 11.6 3.6 San Antonio, TX 16.5 27.3 17.2 25.0 San Diego, CA 23.6 11.2 23.7 7.1 San Francisco, CA 22.6 35.0 22.4 20.8 San Jose, CA 14.4 10.4 14.3 4.5 Seattle, WA 22.2 36.6 20.5 33.5 Sioux Falls, SD 2.1 2.3 1.9 1.4 St. Louis, MO 8.3 -4.8 3.8 0.7 Tampa, FL 1.6 35.6 -3.3 56.1 Washington DC 47.8 30.8 44.6 12.2 58 Appendix 3: State and Metro Market Tables, continued. Supply Restriction Metrics Metro Market Land Area Undevelopable Rank Wharton Restriction Index Rank Supply Restriction Score Supply Restriction Rank Albuquerque, NM 11.6%34 0.37 32 3.00 29 Atlanta, GA 4.1%6 0.03 24 0.36 22 Austin, TX 3.8%5 (0.28) 16 (1.82) 16 Baltimore, MD 21.9%28 1.60 48 11.93 48 Birmingham, AL 14.4%24 (0.23) 17 (1.09) 19 Boston, MA 33.9%32 1.70 49 13.06 49 Charleston, SC 60.5%43 (0.81) 3 (3.47) 9 Charlotte, NC 4.7%7 (0.53) 9 (3.52) 8 Chicago, IL 40.0%36 0.02 23 1.58 24 Cincinnati, OH 10.3%15 (0.58) 8 (3.67) 6 Cleveland, OH 40.5%38 (0.16) 21 0.34 21 Columbus, OH 2.5%3 0.26 28 1.90 26 Dallas-Fort Worth, TX 9.2%12 (0.23) 17 (1.27) 18 Denver, CO 16.7%26 0.84 43 6.45 42 Detroit, MI 24.5%29 0.05 25 1.23 23 Honolulu, HI (urban)92.0%50 2.32 50 19.47 50 Houston, TX 8.4%10 (0.40) 13 (2.49) 13 Indianapolis, IN 1.4%1 (0.74) 5 (5.10) 4 Kansas City, MO-KS 5.8%8 (0.79) 4 (5.30) 3 Las Vegas, NV 32.1%31 (0.69) 7 (3.65) 7 Little Rock, AR 13.7%21 (0.85) 2 (5.43) 2 Los Angeles, CA 52.5%42 0.49 36 5.30 39 Louisville, KY-IN 12.7%19 (0.47) 11 (2.82) 11 Memphis, TN-MS-AR 12.2%18 1.18 47 8.66 46 Miami, FL 76.6%49 0.94 45 9.30 47 Milwaukee, WI 41.8%40 0.46 34 4.71 35 Minneapolis-St. Paul, MN-WI 19.2%27 0.38 33 3.34 31 Nashville, TN 12.8%20 (0.41) 12 (2.40) 14 New Orleans, LA 74.9%48 (1.24) 1 (5.95) 1 New York, NY-NJ-PA 40.4%37 0.65 41 5.98 41 Oklahoma City, OK 2.5%2 (0.37) 15 (2.49) 12 Orlando, FL 36.1%33 0.32 31 3.53 32 Philadelphia, PA-NJ-DE-MD 10.2%14 1.13 46 8.24 45 Phoenix, AZ 14.0%22 0.61 39 4.75 37 Pittsburgh, PA 30.0%30 0.10 26 1.78 25 Portland, OR-WA 37.5%34 0.27 29 3.23 30 Raleigh, NC 8.1%9 0.64 40 4.75 36 Richmond, VA 8.8%11 (0.38) 14 (2.33) 15 Riverside-San Bernardino, CA 37.9%35 0.53 38 5.06 38 Sacramento, CA 15.0%25 0.52 37 4.13 34 Salt Lake City, UT 72.0%46 (0.03) 22 2.38 27 San Antonio, TX 3.2%4 (0.21) 20 (1.35) 17 San Diego, CA 63.4%44 0.46 34 5.48 40 San Francisco, CA 73.1%47 0.72 42 7.65 43 San Jose, CA 63.8%45 0.21 27 3.76 33 Seattle, WA 43.6%41 0.92 44 7.98 44 Sioux Falls, SD 10.0%13 (0.50) 10 (3.12) 10 St. Louis, MO-IL 11.1%16 (0.73) 6 (4.69) 5 Tampa, FL 41.6%39 (0.22) 19 (0.04) 20 Washington, DC-VA-MD-WV 14.0%22 0.31 30 2.66 28 59 Appendix 3: State and Metro Market Tables, continued. Second Tier Affordable Rental (STAR) Units Metro Market STAR Share Rank Albuquerque, NM 36%27 Atlanta, GA 22%42 Austin, TX 17%50 Baltimore, MD 31%34 Birmingham, AL 32%31 Boston, MA 40%18 Charleston, SC 35%28 Charlotte, NC 18%49 Chicago, IL 39%21 Cincinnati, OH 48%6 Cleveland, OH 46%9 Columbus, OH 39%19 Dallas-Fort Worth, TX 19%46 Denver, CO 29%38 Detroit, MI 52%5 Honolulu, HI (urban)41%16 Houston, TX 22%43 Indianapolis, IN 25%39 Kansas City, MO-KS 35%29 Las Vegas, NV 21%44 Little Rock, AR 33%30 Los Angeles, CA 61%1 Louisville, KY-IN 42%15 Memphis, TN-MS-AR 38%22 Miami, FL 37%26 Milwaukee, WI 43%13 Minneapolis-St. Paul, MN-WI 44%11 Nashville, TN 29%36 New Orleans, LA 41%17 New York, NY-NJ-PA 48%7 Oklahoma City, OK 44%10 Orlando, FL 18%48 Philadelphia, PA-NJ-DE-MD 37%23 Phoenix, AZ 30%35 Pittsburgh, PA 54%4 Portland, OR-WA 37%24 Raleigh, NC 19%45 Richmond, VA 37%25 Riverside-San Bernardino, CA 48%8 Sacramento, CA 42%14 Salt Lake City, UT 29%37 San Antonio, TX 24%40 San Diego, CA 58%2 San Francisco, CA 54%3 San Jose, CA 43%12 Seattle, WA 32%33 Sioux Falls, SD 23%41 St. Louis, MO-IL 39%20 Tampa, FL 32%32 Washington, DC-VA-MD-WV 19%47 60 Appendix 3: State and Metro Market Tables, continued. Owner and Renter Housing Affordability Metro Market Rank Renters Spending over 35% Income on Rent Rank Albuquerque, NM 182 22 44%41 Atlanta, GA 192 18 40%28 Austin, TX 157 31 38%16 Baltimore, MD 199 17 41%31 Birmingham, AL 203 16 42%34 Boston, MA 141 38 40%25 Charleston, SC 147 35 40%27 Charlotte, NC 147 35 39%23 Chicago, IL 191 19 42%36 Cincinnati, OH 272 2 37%9 Cleveland, OH 291 1 39%18 Columbus, OH 231 9 37%11 Dallas-Ft. Worth, TX 174 27 38%12 Denver, CO 122 42 38%15 Detroit, MI 260 3 43%38 Honolulu, HI 71 48 50%49 Houston, TX 181 24 39%22 Indianapolis, IN 254 4 40%29 Kansas City, KS 234 8 34%2 Las Vegas, NV 146 37 42%37 Little Rock, AR 244 6 41%33 Los Angeles, CA 70 49 49%47 Louisville, KY 228 10 37%10 Memphis, TN 222 11 42%35 Miami-Ft. Lauderdale, FL 105 45 54%50 Milwaukee, WI 181 23 40%26 Minneapolis, MN 211 14 38%14 Nashville, TN 175 26 37%8 New Orleans, LA 180 25 47%46 New York, NY 122 43 45%42 Oklahoma City, OK 235 7 37%5 Orlando, FL 149 34 46%45 Philadelphia, PA 212 13 44%40 Phoenix, AZ 155 32 40%24 Pittsburgh, PA 204 15 37%7 Portland. OR 125 40 41%32 Raleigh, NC 183 21 35%3 Richmond, VA 188 20 41%30 Riverside, CA 113 44 50%48 Sacramento, CA 137 39 45%43 Salt Lake City, UT 153 33 36%4 San Antonio, TX 166 29 38%13 San Diego, CA 76 46 46%44 San Francisco, CA 72 47 39%19 San Jose, CA 69 50 39%20 Seattle, WA 124 41 37%6 Sioux Falls, SD 213 12 31%1 St. Louis, MO 252 5 39%21 Tampa, FL 174 28 43%39 Washington DC 159 30 38%17 SF Owned Housing Affordability Index 61 Appendix 4: Metro Market Overviews The following Metro Market Overviews provide key metrics on each of 50 select metropolitan rental markets that invite local market leadership response. METRO MULTIFAMILY DEMAND OVERVIEW ALBUQUERQUE Net migration prior to 2010 was strong, has since reversed to slightly neg- ative with more expected growth ahead. This remains a key component to rental household growth. Sluggish economic growth hampers new multi- family development and existing rent growth. Multifamily demand begins to ramp up after 2020. 54 56 58 60 62 64 66 68 70 72 74 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 1,646 4,052 19,980 14,339 2,581 686 - 5,000 10,000 15,000 20,000 25,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 39 182 3.0 36% 28,570 20,889 15,489 19,029 14,986 7,280 6,398 2,028 - 5,000 10,000 15,000 20,000 25,000 30,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 203,130 1,430 1,519 45,035 18,751 43,284 - 50,000 100,000 150,000 200,000 250,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 12,248 13,386 12,606 10,653 9,835 46,452 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 62 ALBUQUERQUE page 2 -5 0 5 10 15 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -5 0 5 10 15 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 46,59331,29715,32211,9924,9862,8631,6160 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 75,916 5,818 1,528 51,626 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner10,052 33,528 18,869 19,906 16,595 8,999 4,583 2,137 - 10,000 20,000 30,000 40,000 50,000 60,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 63 METRO MULTIFAMILY DEMAND OVERVIEW ATLANTA Strong in migrations exceed natural population increases. Solid economic growth expected across all sectors but mining, manufacturing and infor- mation. Positive new rental household growth across all age cohorts and consistent demand growth through 2030. Today’s rental householders are younger and 40% pay over 35% of household income on rent. - 100 200 300 400 500 600 700 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast 0.0 5.0 10.0 15.0 20.0 25.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 16,623 84,493 169,970 92,186 13,057 5,398 - 25,000 50,000 75,000 100,000 125,000 150,000 175,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 7 217 0.4 22% 137,719 110,507 101,255 125,546 145,065 75,096 61,522 23,269 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 1,176,646 7,798 33,530 304,920 67,379 381,727 - 250,000 500,000 750,000 1,000,000 1,250,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 87,504 104,056 101,452 85,112 61,118 296,413 - 50,000 100,000 150,000 200,000 250,000 300,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 64 ATLANTA page 2 -20 0 20 40 60 80 100 120 140 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 10 20 30 40 50 60 70 80 90 100 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 276,415198,531125,44592,78852,16318,97015,6670 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 335,036 361,293 33,231 85,857 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner59,344 222,882 200,992 134,260 86,224 43,595 20,477 12,205 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 65 METRO MULTIFAMILY DEMAND OVERVIEW AUSTIN Strong in migrations are double the natural population increases. Good economic growth ahead in most sectors. Growth in new rental households expected in all age cohorts with steady, significant rental demand growth through 2030. Some of the youngest multifamily housing stock seen in the nation, smaller STAR share of affordable rentals. - 50 100 150 200 250 300 350 400 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 21,854 46,226 73,266 34,579 3,004 876 - 20,000 40,000 60,000 80,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 6 157 -1.8 17% 40,593 35,962 39,400 54,198 60,477 34,206 27,105 15,504 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 380,009 5,524 6,730 79,727 37,632 179,805 - 100,000 200,000 300,000 400,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 35,484 38,318 41,559 36,784 28,281 111,896 - 20,000 40,000 60,000 80,000 100,000 120,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 66 AUSTIN page 2 -10 0 10 20 30 40 50 60 70 80 90 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 5 10 15 20 25 30 35 40 45 50 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 122,10590,35242,41131,08413,4724,4103,6110 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 227,868 31,227 16,888 97,119 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner35,602 105,630 66,523 44,391 30,664 13,636 7,731 3,268 - 25,000 50,000 75,000 100,000 125,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 67 METRO MULTIFAMILY DEMAND OVERVIEW BALTIMORE Fewer in migrations now and ahead leave natural population increases as to source household growth. Economic growth expected in most sectors. Rental household growth strongest in ages 35-44 and seniors over 65, while fairly diverse in range of incomes, ages and household size. Multi- family demand consistently increases after 2009. 190 200 210 220 230 240 250 260 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 11,208 16,909 62,526 52,592 15,046 16,234 - 20,000 40,000 60,000 80,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 36 199 11.9 31% 65,444 40,449 39,894 48,383 69,889 40,282 35,609 16,822 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 632,954 4,931 34,146 136,366 43,134 174,515 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 38,929 41,249 48,601 40,162 29,563 136,277 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 68 BALTIMORE page 2 -10 0 10 20 30 40 50 60 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 2 4 6 8 10 12 14 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 136,90894,70155,30735,76021,1298,1854,7820 50,000 100,000 150,000 200,000 250,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 163,378 160,704 17,102 21,910 - 100,000 200,000 300,000 400,000 500,000 600,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner22,126 94,933 70,209 64,131 48,834 29,938 16,090 10,511 - 25,000 50,000 75,000 100,000 125,000 150,000 175,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 69 METRO MULTIFAMILY DEMAND OVERVIEW BIRMINGHAM Though minor in the last six years, in migrations will source the greatest share of new renter households. Fair economic prospects with job growth in most sectors. Rental market is led by smaller households, varied ages and incomes up to $75,000. Nearly a third of multifamily units are seen in affordable STAR product. Modest increasing demand ahead. - 10 20 30 40 50 60 70 80 90 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 3,264 10,590 21,310 19,114 3,106 3,304 - 5,000 10,000 15,000 20,000 25,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 48 203 -1.1 32% 37,917 23,095 17,098 20,390 20,914 10,457 5,495 1,898 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 273,423 1,018 2,731 51,398 16,344 60,688 - 50,000 100,000 150,000 200,000 250,000 300,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 16,786 16,860 13,946 13,078 11,192 51,218 - 10,000 20,000 30,000 40,000 50,000 60,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 70 BIRMINGHAM page 2 -3 -1 1 3 5 7 9 11 13 15 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 1 2 3 4 5 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily demand 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land not yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos a nd publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 53,34539,20922,50513,3905,5842,2151,0160 20,000 40,000 60,000 80,000 100,000 120,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 67,948 62,550 1,574 5,282 - 50,000 100,000 150,000 200,000 250,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner11,133 38,006 27,422 22,999 18,691 11,620 4,932 2,461 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 71 METRO MULTIFAMILY DEMAND OVERVIEW BOSTON Strong economic growth prospects. Net in migration exceeds local popula- tion increases and is important to the metro economy. Supply restrictions are led by land use regulation that ranks Boston near the bottom of supply opportunities. Most rents are over 35% of income amid younger rental householders, good housing affordability and smaller household size. 250,000 300,000 350,000 400,000 450,000 500,000 2007200820092010201120122013201420152016201720182019202020212022202320242025202620272028202920305+ Unit Apartment Demand Forecast -10 -5 0 5 10 15 20 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 13,513 35,476 64,341 99,202 35,077 87,498 - 20,000 40,000 60,000 80,000 100,000 120,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 23 141 13.1 40% 135,188 78,753 73,349 84,690 114,066 69,162 81,030 55,514 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 878,128 117,772 78,002 95,266 256,685 335,107 - 200,000 400,000 600,000 800,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 78,189 81,309 85,601 76,632 71,428 261,807 - 50,000 100,000 150,000 200,000 250,000 300,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 72 BOSTON page 2 -40 -20 0 20 40 60 80 100 120 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -10 -5 0 5 10 15 20 25 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 269,145207,773105,55867,50627,4799,0265,2650 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 480,491 86,464 55,512 108,974 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner45,958 188,484 130,695 109,293 94,307 59,660 38,490 24,865 - 50,000 100,000 150,000 200,000 250,000 300,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 2 73 METRO MULTIFAMILY DEMAND OVERVIEW CHARLESTON Net in migration significantly exceeds local natural population increases and is important to the economy. New rental households will span all the age cohorts. Reasonable economic growth seen in all major job sectors. Rental housing stock is relatively new compared with other metros, yet over a third is seen in more affordable STAR units. - 10 20 30 40 50 60 70 80 90 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -0.5 0.0 0.5 1.0 1.5 2.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 4,109 7,733 13,071 9,385 1,109 837 - 2,500 5,000 7,500 10,000 12,500 15,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 29 163 -3.5 35% 17,641 11,761 11,613 15,910 17,622 9,150 7,595 3,275 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 152,873 1,439 4,304 33,979 14,575 36,244 - 25,000 50,000 75,000 100,000 125,000 150,000 175,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 10,051 13,127 11,966 10,450 6,262 34,880 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 74 CHARLESTON page 2 -2 0 2 4 6 8 10 12 14 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 1 2 3 4 5 6 7 8 9 10 11 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily demand 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land not yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos a nd publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 32,96529,06116,66210,9173,4331,2872420 10,000 20,000 30,000 40,000 50,000 60,000 70,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 55,681 33,695 627 4,977 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner7,060 30,867 19,873 13,634 11,543 6,584 2,940 2,066 - 10,000 20,000 30,000 40,000 50,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 75 METRO MULTIFAMILY DEMAND OVERVIEW CHARLOTTE Already significant, net in migrations become a larger source of new renter households ahead. Good economic prospects are led by professional ser- vices and trade. Rental stock is young and scaled. Like Raleigh, Orlando and Austin, more affordable STAR units account for less than a fifth of metro rentals. Well located metro with an excellent airport. - 50 100 150 200 250 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 13,033 28,485 66,146 22,153 3,270 2,737 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 10 182 -3.5 18% 61,195 49,987 45,504 52,830 54,062 28,153 18,981 9,585 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 534,144 3,209 10,835 130,297 30,450 135,824 - 100,000 200,000 300,000 400,000 500,000 600,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 38,706 41,677 39,042 36,171 24,080 117,221 - 20,000 40,000 60,000 80,000 100,000 120,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 76 CHARLOTTE page 2 -10 0 10 20 30 40 50 60 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 10 20 30 40 50 60 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 115,81389,12052,37634,29116,9248,0043,7690 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 220,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 173,494 116,924 10,247 35,871 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner30,444 87,423 73,179 53,975 38,780 22,322 9,224 4,950 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 77 METRO MULTIFAMILY DEMAND OVERVIEW CHICAGO Net in migrations have been and are expected to remain negative, relying upon natural population increases for renter household growth. Reason - able economic prospects with good job growth and a heavy dependence on Mexico and Canada. Nearly 40% of multifamily is in affordable STAR units. Single and two-person households dominate rental homes. 575 600 625 650 675 700 725 750 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 15,425 64,406 136,214 203,737 84,429 136,502 - 50,000 100,000 150,000 200,000 250,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 34 191 1.6 39% 254,867 191,394 150,124 186,064 213,151 121,050 101,346 57,848 - 50,000 100,000 150,000 200,000 250,000 300,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 1,828,023 135,068 207,617 295,201 330,970 640,713 - 500,000 1,000,000 1,500,000 2,000,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 142,340 155,260 154,116 136,362 105,315 499,878 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 78 CHICAGO page 2 -50 -25 0 25 50 75 100 125 150 175 200 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -50 -40 -30 -20 -10 0 10 20 30 40 50 60 70 80 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 483,384331,826186,048146,66074,81631,14621,9640 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 699,108 362,766 78,697 267,500 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner86,968 359,031 273,195 212,054 167,563 97,185 51,472 28,376 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 79 METRO MULTIFAMILY DEMAND OVERVIEW CINCINNATI Metro has relied on natural growth for rental household formations, though modest in migrations will contribute ahead. Economy is stable and growing, despite declines in key manufacturing sector. Rental stock is older with nearly half seen in more affordable STAR units. Annual multi- family demand is flat for next two years, then steadily increases to 2030. -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 3,558 11,142 39,699 48,195 11,930 14,205 - 10,000 20,000 30,000 40,000 50,000 60,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 38 272 -3.7 48% 69,756 45,873 42,269 41,275 46,933 21,988 13,536 6,688 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 502,371 8,668 15,752 96,160 56,730 128,729 - 100,000 200,000 300,000 400,000 500,000 600,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 43,246 37,914 35,085 29,191 24,267 100,257 - 20,000 40,000 60,000 80,000 100,000 120,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 80 CINCINNATI page 2 -10 -5 0 5 10 15 20 25 30 35 40 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -5 0 5 10 15 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 120,91876,63342,08527,65612,5154,4354,0760 50,000 100,000 150,000 200,000 250,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 201,430 70,963 6,349 9,958 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner29,567 76,974 52,614 50,860 38,786 20,246 10,505 8,766 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 81 METRO MULTIFAMILY DEMAND OVERVIEW CLEVELAND Growth likely to be concentrated in certain neighborhoods as overall net in -migration is negative with little natural growth. Renter household growth ahead primarily in the 65+ aged cohorts. Although forecast to decline, the manufacturing sector grew slightly in 2010-16; thus could surprise on the upside if it continues to grow. Older stock and nearly half in STAR units. 130 135 140 145 150 155 160 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 2,460 7,749 24,871 59,209 21,701 21,341 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 50 291 0.3 46% 82,457 51,275 41,322 44,869 45,888 18,939 11,186 5,289 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 516,311 13,845 11,552 106,905 55,384 137,331 - 100,000 200,000 300,000 400,000 500,000 600,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 38,524 36,838 35,845 32,075 26,465 107,115 - 20,000 40,000 60,000 80,000 100,000 120,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 82 CLEVELAND page 2 -20 -10 0 10 20 30 40 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -15 -10 -5 0 5 10 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily demand 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land not yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos a nd publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 137,65177,14340,57326,61810,1435,7863,3110 50,000 100,000 150,000 200,000 250,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 169,475 111,602 6,993 19,422 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner27,702 70,086 54,194 50,421 49,132 26,575 13,176 9,939 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 83 METRO MULTIFAMILY DEMAND OVERVIEW COLUMBUS Net in migrations account for half of the new household formations. Good renter depth in younger, single households with incomes up to $75,000. Older rental stock, with most units over 20 years old. Government and education sectors result in extremely stable economy. Rental vacancies are in balance with steady multifamily demand ahead. - 50 100 150 200 250 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 12,372 13,116 47,282 44,279 9,052 4,434 - 10,000 20,000 30,000 40,000 50,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 28 231 1.9 39% 63,339 45,022 42,794 45,525 56,257 27,424 18,267 6,385 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 438,813 7,802 7,866 103,439 64,284 130,535 - 100,000 200,000 300,000 400,000 500,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 39,342 43,418 39,560 34,730 24,266 108,218 - 20,000 40,000 60,000 80,000 100,000 120,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 84 COLUMBUS page 2 -10 0 10 20 30 40 50 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 2 4 6 8 10 12 14 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 116,14583,90547,59729,73617,5196,1873,9240 50,000 100,000 150,000 200,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 200,854 74,022 13,533 13,079 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner31,212 93,688 62,025 45,100 37,703 18,128 10,339 6,818 - 20,000 40,000 60,000 80,000 100,000 120,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 85 METRO MULTIFAMILY DEMAND OVERVIEW DALLAS Strong net in migrations now exceed strong natural population growth. Economic strength now and ahead led by professional services, trade and education. Good renter incomes up to $75,000, though 40% are paying more than 35% of income on rent. New rental households are expected from most age cohorts with strong, steady multifamily demand ahead. - 200 400 600 800 1,000 1,200 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast 0.0 5.0 10.0 15.0 20.0 25.0 30.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 45,626 98,636 253,878 146,229 16,260 7,441 - 50,000 100,000 150,000 200,000 250,000 300,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 1 174 -1.3 19% 152,654 140,536 138,109 167,138 196,584 103,394 71,579 40,133 - 50,000 100,000 150,000 200,000 250,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 1,383,073 8,312 18,308 311,245 105,690 568,070 - 250,000 500,000 750,000 1,000,000 1,250,000 1,500,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 118,054 133,957 139,586 114,661 89,858 363,228 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 86 DALLAS page 2 0 25 50 75 100 125 150 175 200 225 250 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 10 20 30 40 50 60 70 80 90 100 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 353,560257,476160,466125,91166,94629,46816,3000 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 615,698 259,915 55,197 254,193 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner95,946 299,007 230,084 169,857 111,518 57,512 28,442 17,761 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 87 METRO MULTIFAMILY DEMAND OVERVIEW DENVER Net in migrations exceed natural population growth and fuel new rental households from most age cohorts. Good renter incomes with diverse ages and household sizes. Strong economic growth prospects in all but a few sectors. Long term supply restrictions may impact multifamily growth as annual demand steadily increases ahead. - 50 100 150 200 250 300 350 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 17,038 37,378 78,503 80,942 14,598 10,396 - 25,000 50,000 75,000 100,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 20 122 6.5 29% 56,599 45,385 46,641 64,937 81,450 45,687 40,332 17,721 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 612,713 10,128 40,125 123,111 31,421 238,855 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 38,172 56,310 56,726 45,697 39,383 145,985 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 88 DENVER page 2 -10 0 10 20 30 40 50 60 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 5 10 15 20 25 30 35 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 152,811112,72156,23942,40019,4088,8096,3640 40,000 80,000 120,000 160,000 200,000 240,000 280,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 310,244 37,578 16,315 93,238 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner35,992 124,767 85,313 61,574 46,324 23,833 11,702 9,247 - 25,000 50,000 75,000 100,000 125,000 150,000 175,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 89 METRO MULTIFAMILY DEMAND OVERVIEW DETROIT Net in migration is negative and is expected to remain so with only modest natural population growth. City could surprise on the upside if recent manufacturing gains continue. Renter incomes are lower and 43% pay over 35% of income on rent. Rental stock is older and over half seen in STAR units. Multifamily demand ahead is positive but erratic. 260 270 280 290 300 310 320 330 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 4,487 17,900 70,113 96,142 25,714 17,625 - 25,000 50,000 75,000 100,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 41 260 1.2 52% 137,737 86,980 72,705 75,096 83,531 38,822 26,867 13,406 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 1,067,691 16,439 20,113 230,927 61,461 231,981 - 250,000 500,000 750,000 1,000,000 1,250,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 61,924 60,444 56,070 57,482 44,789 211,032 - 25,000 50,000 75,000 100,000 125,000 150,000 175,000 200,000 225,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 90 DETROIT page 2 -40 -20 0 20 40 60 80 100 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -40 -30 -20 -10 0 10 20 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 227,456137,62072,43355,74524,2819,5268,0830 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 284,977 211,639 20,306 22,423 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner37,160 128,722 103,983 95,786 82,181 46,668 23,418 17,226 - 50,000 100,000 150,000 200,000 250,000 300,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 91 METRO MULTIFAMILY DEMAND OVERVIEW HONOLULU Minor net in migration remains an important component of new house- hold growth. Economic prospects are positive in most sectors, albeit de- pendent upon tourism and the military. Extreme land constraints contrib- ute to overall housing shortages, while affordable housing is both smaller and lower quality. Nearly 60% of multifamily units were built 1960-1980. 105 110 115 120 125 130 135 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -2.0 -1.0 0.0 1.0 2.0 3.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 1,762 3,165 15,270 40,347 8,296 890 - 10,000 20,000 30,000 40,000 50,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 35 71 19.5 41% 16,512 13,343 12,080 21,433 31,570 17,638 19,731 10,626 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 122,554 5,988 35,894 58,874 13,968 69,730 - 50,000 100,000 150,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 12,384 13,485 14,248 14,329 12,439 66,688 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 92 HONOLULU page 2 -2 0 2 4 6 8 10 12 14 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -1 0 1 2 3 4 5 6 7 8 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 37,16845,01522,22218,4809,7585,2205,0700 10,000 20,000 30,000 40,000 50,000 60,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 53,781 6,815 44,817 17,473 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner12,143 39,380 27,557 22,436 18,243 12,473 5,730 4,971 - 10,000 20,000 30,000 40,000 50,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 93 METRO MULTIFAMILY DEMAND OVERVIEW HOUSTON Strong net in migrations and a diverse population drives new multifamily demand ahead. The economy is growing, becoming more diversified and less reliant on oil and gas. New rental households coming from most age cohorts. More new rental supply relative to demand than most metros with a smaller 22% share of multifamily today in STAR units. - 100 200 300 400 500 600 700 800 900 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast 0.0 5.0 10.0 15.0 20.0 25.0 30.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 46,461 112,857 182,551 183,324 21,994 5,021 - 25,000 50,000 75,000 100,000 125,000 150,000 175,000 200,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 4 181 -2.5 22% 160,831 137,864 125,976 150,004 163,854 89,947 75,539 43,683 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 1,250,012 5,144 21,787 277,554 77,643 552,208 - 250,000 500,000 750,000 1,000,000 1,250,000 1,500,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 119,002 121,049 116,491 102,213 78,990 349,569 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 94 HOUSTON page 2 -25 0 25 50 75 100 125 150 175 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 10 20 30 40 50 60 70 80 90 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 316,120244,571153,535121,88563,23128,21420,1420 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 554,361 246,157 55,866 332,397 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner76,174 292,426 225,356 157,467 108,842 55,217 22,474 9,742 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 95 METRO MULTIFAMILY DEMAND OVERVIEW INDIANAPOLIS Strong net in migrations will exceed natural population growth. New rent- al households source from most age cohorts except for the youngest. Their economic prospects are good led by professional services, trade and edu- cation. Rental households have good incomes up to $75,000, are older and primarily one or two occupants. Steady multifamily demand ahead. - 50 100 150 200 250 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -1.0 0.0 1.0 2.0 3.0 4.0 5.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 10,548 17,328 42,578 33,859 7,781 9,105 - 10,000 20,000 30,000 40,000 50,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 30 254 -5.1 25% 57,788 46,469 42,265 46,481 41,968 19,220 12,249 4,006 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 463,456 4,602 4,068 103,991 38,443 121,199 - 100,000 200,000 300,000 400,000 500,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 31,905 31,621 35,330 29,733 22,928 102,400 - 25,000 50,000 75,000 100,000 125,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 96 INDIANAPOLIS page 2 -10 -5 0 5 10 15 20 25 30 35 40 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 2 4 6 8 10 12 14 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 119,09268,34334,26626,62611,8036,8803,4360 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 179,924 72,296 7,011 19,750 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner27,238 74,117 52,299 45,451 34,803 18,858 9,529 8,151 - 25,000 50,000 75,000 100,000 125,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 97 METRO MULTIFAMILY DEMAND OVERVIEW KANSAS CITY Population growth is slowing with a modest share of net in migrations going negative ahead. New rental households will source from the older cohorts. Good rental incomes and smaller households. Modest economic growth ahead, led by professional services, education and hospitality. Increasing multifamily demand is steady though slight. - 20 40 60 80 100 120 140 160 180 200 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 6,899 15,573 41,385 36,039 8,684 8,245 - 10,000 20,000 30,000 40,000 50,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 42 234 -5.3 35% 57,030 39,065 37,267 47,520 53,271 26,155 16,073 6,456 - 10,000 20,000 30,000 40,000 50,000 60,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 514,046 2,246 4,439 117,693 44,245 116,825 - 100,000 200,000 300,000 400,000 500,000 600,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 40,285 40,405 38,996 34,574 21,449 91,348 - 25,000 50,000 75,000 100,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 98 KANSAS CITY page 2 -10 -5 0 5 10 15 20 25 30 35 40 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -2 0 2 4 6 8 10 12 14 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 120,91972,12941,41226,86113,2364,7013,5790 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 193,549 65,483 7,528 25,186 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner29,474 79,145 53,173 43,584 37,284 20,934 10,207 9,036 - 25,000 50,000 75,000 100,000 125,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 99 METRO MULTIFAMILY DEMAND OVERVIEW LAS VEGAS Net in migrations from all age cohorts dominate the sourcing of new rental households as natural population growth eases ahead. Rental households are smaller with good incomes up to $75,000. Economy is slowly diversify- ing away from dependency on tourism. Good multifamily demand has been consistent since the downturn and will increase through 2030. - 50 100 150 200 250 300 350 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 5,608 35,942 82,672 29,735 3,454 593 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 9 146 -3.7 21% 63,348 50,768 54,036 58,219 62,899 33,884 24,985 10,644 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 349,111 7,811 13,127 145,052 49,000 158,004 - 100,000 200,000 300,000 400,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 34,380 44,566 45,448 39,985 31,532 144,094 - 25,000 50,000 75,000 100,000 125,000 150,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 100 LAS VEGAS page 2 -10 10 30 50 70 90 110 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 10 20 30 40 50 60 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 121,53997,25956,32942,13724,9659,6536,9010 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 218,550 59,482 25,933 98,175 - 50,000 100,000 150,000 200,000 250,000 300,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner21,203 91,668 82,426 65,428 51,602 30,126 11,531 4,799 - 25,000 50,000 75,000 100,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 101 METRO MULTIFAMILY DEMAND OVERVIEW LITTLE ROCK Net in migrations will exceed modest natural population growth. Rental households are fairly diverse in ages, size and incomes. Reasonably good economic prospects led by professional services and education. A third of multifamily rental stock is in affordable STAR units. Annual multifamily demand will remain flat until 2021, then increase slightly through 2030. - 10 20 30 40 50 60 70 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -0.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 5,217 8,538 14,629 11,094 2,190 686 - 5,000 10,000 15,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 43 244 -5.4 33% 23,820 20,386 14,514 18,046 14,171 6,391 5,230 1,920 - 5,000 10,000 15,000 20,000 25,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 160,266 535 1,056 38,743 13,995 42,354 - 50,000 100,000 150,000 200,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 13,426 13,456 11,691 9,783 8,040 39,512 - 10,000 20,000 30,000 40,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 102 LITTLE ROCK page 2 -2 0 2 4 6 8 10 12 14 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 1 2 3 4 5 6 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 38,78330,06016,05111,5625,1001,7781,1440 10,000 20,000 30,000 40,000 50,000 60,000 70,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 61,455 37,337 2,066 4,546 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner12,931 30,513 22,136 14,631 10,368 7,321 3,635 2,943 - 10,000 20,000 30,000 40,000 50,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 103 METRO MULTIFAMILY DEMAND OVERVIEW LOS ANGELES In migrations in are now similar to out migrations with natural change driving household growth. Diverse rental households source from most ages with a range of sizes and incomes. Strong economic prospects in most sectors. Largest share of more affordable STAR units from the 50 metros studied. Steady increases in annual multifamily demand ahead. 300,000 500,000 700,000 900,000 1,100,000 1,300,000 1,500,000 2007200820092010201120122013201420152016201720182019202020212022202320242025202620272028202920305+ Unit Apartment Demand Forecast -20 -10 0 10 20 30 40 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 34,060 94,446 301,108 487,778 212,305 119,137 - 100,000 200,000 300,000 400,000 500,000 600,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 17 70 5.3 61% 362,190 288,768 257,276 332,467 384,802 245,334 233,337 146,105 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 1,833,596 43,689 132,254 649,361 324,932 1,248,834 - 500,000 1,000,000 1,500,000 2,000,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 187,587 217,623 247,117 234,938 213,866 1,041,584 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Metro includes Orange County Version 2 not adjusted for type of rental 104 LOS ANGELES page 2 -75 -50 -25 0 25 50 75 100 125 150 175 200 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -75 -50 -25 0 25 50 75 100 125 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 664,186585,707363,192308,812185,34482,08360,9550 100,000 200,000 300,000 400,000 500,000 600,000 700,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 1,217,645 228,015 310,820 915,895 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner108,751 535,120 523,970 459,397 317,355 171,004 91,246 43,436 - 100,000 200,000 300,000 400,000 500,000 600,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Metro includes Orange County Version 1 105 METRO MULTIFAMILY DEMAND OVERVIEW LOUISVILLE Net in migrations source most of the new rental households ahead as nat- ural population growth wanes. These households will be older, smaller with more modest incomes. Decent economic prospects ahead amid a retreat in manufacturing. Rental housing stock is older with 42% seen in affordable STAR units. Multifamily demand steadily increases to 2030. - 20 40 60 80 100 120 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 3,780 8,490 21,096 23,705 7,624 5,735 - 5,000 10,000 15,000 20,000 25,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 44 228 -2.8 42% 39,424 27,545 23,061 28,025 27,563 11,583 7,059 2,683 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 305,070 3,155 7,406 62,721 28,538 70,430 - 100,000 200,000 300,000 400,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 22,823 20,505 21,525 19,009 14,070 58,124 - 10,000 20,000 30,000 40,000 50,000 60,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 106 LOUISVILLE page 2 -5 0 5 10 15 20 25 30 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 1 2 3 4 5 6 7 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 68,88341,35727,21016,8427,2653,6101,7760 20,000 40,000 60,000 80,000 100,000 120,000 140,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 113,109 45,205 3,624 10,099 - 50,000 100,000 150,000 200,000 250,000 300,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner14,226 42,869 32,279 29,608 25,279 13,093 6,057 3,532 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 107 METRO MULTIFAMILY DEMAND OVERVIEW MEMPHIS Net out migrations from Memphis will reverse, though natural population growth continues to shrink. New rental households will be older with more modest incomes. Economic growth is positive but weaker than most other metros. Slightly increasing multifamily demand through 2030. - 20 40 60 80 100 120 140 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 3,470 12,931 24,415 18,464 8,807 3,131 - 5,000 10,000 15,000 20,000 25,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 40 222 8.7 38% 48,147 35,612 27,520 30,514 30,779 14,243 8,210 3,996 - 10,000 20,000 30,000 40,000 50,000 60,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 279,798 1,314 2,700 90,495 31,915 71,218 - 100,000 200,000 300,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 22,361 22,704 21,637 20,301 18,844 75,865 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 108 MEMPHIS page 2 -10 -5 0 5 10 15 20 25 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -4 -2 0 2 4 6 8 10 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily demand 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land not yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos a nd publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 73,81652,04529,86822,80212,1985,5352,7570 20,000 40,000 60,000 80,000 100,000 120,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 64,911 123,642 3,096 8,356 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner17,839 51,521 43,930 33,210 28,707 14,836 5,754 3,224 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 109 METRO MULTIFAMILY DEMAND OVERVIEW MIAMI Even with natural population growth in the last decade, net in migrations are three times stronger and soon to be five. New rental households will be smaller from most age cohorts. With strong incomes up to $75,000, most renters still pay over 35% of income on rent. Good economic growth ahead led by professional services and hospitality. - 100 200 300 400 500 600 700 800 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -5.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 21,619 64,240 165,142 166,430 43,912 10,798 - 25,000 50,000 75,000 100,000 125,000 150,000 175,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 3 105 9.3 37% 172,612 135,396 115,076 134,591 147,842 70,169 56,470 29,978 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 904,748 40,263 238,819 258,244 114,436 472,141 - 200,000 400,000 600,000 800,000 1,000,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 51,320 63,635 86,758 89,653 78,132 437,308 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 110 MIAMI page 2 -20 0 20 40 60 80 100 120 140 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 20 40 60 80 100 120 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily demand 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land not yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos a nd publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 278,747238,294152,908113,03250,61217,92510,6160 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 581,045 212,258 15,182 404,131 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner34,749 189,812 195,966 181,541 121,837 72,642 45,047 20,540 - 50,000 100,000 150,000 200,000 250,000 300,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 111 METRO MULTIFAMILY DEMAND OVERVIEW MILWAUKEE Growth continues to come solely from natural population growth which is slowing. New rental household growth relies upon householders over 35. Economic growth is positive but sluggish. Rental stock is older and over 40% seen in more affordable STAR units. Multifamily demand is flat for two years, then increases through 2029. 90 95 100 105 110 115 120 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 3,410 11,915 32,626 37,490 17,120 16,446 - 10,000 20,000 30,000 40,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 49 181 4.7 43% 56,254 44,098 33,209 42,445 44,408 19,708 14,048 4,133 - 10,000 20,000 30,000 40,000 50,000 60,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 331,916 19,689 15,249 53,596 85,060 119,007 - 100,000 200,000 300,000 400,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 30,984 32,934 32,304 28,364 21,001 97,893 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 112 MILWAUKEE page 2 -15 -10 -5 0 5 10 15 20 25 30 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -6 -4 -2 0 2 4 6 8 10 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily demand 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land not yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos a nd publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 110,40571,50236,08920,73211,0565,2143,3050 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 162,243 70,944 9,095 27,881 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner22,447 71,845 44,273 42,665 36,220 18,316 11,524 11,013 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 113 METRO MULTIFAMILY DEMAND OVERVIEW MINNEAPOLIS Net in migrations are a modest but growing portion of new renter house- hold growth, relying ahead on renters over 35. Renter incomes are strong up to $75,000. Economic prospects are solid with steady growth. Rental stock is older with 44% seen in more affordable STAR units. Demand is expected to steadily rise. - 50 100 150 200 250 300 350 400 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 12,823 31,093 72,363 97,694 18,835 26,457 - 20,000 40,000 60,000 80,000 100,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 15 211 3.3 44% 71,456 64,805 53,787 69,644 75,914 39,966 31,684 14,120 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 865,988 13,892 36,426 113,523 44,853 259,265 - 200,000 400,000 600,000 800,000 1,000,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 50,514 54,630 56,407 51,427 38,861 154,114 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 114 MINNEAPOLIS page 2 -20 0 20 40 60 80 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 5 10 15 20 25 30 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily demand 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land not yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos a nd publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 177,075116,62653,11337,86321,2008,7626,7370 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 293,310 73,675 26,490 30,856 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner39,097 125,355 81,041 60,202 48,883 28,656 18,929 19,213 - 25,000 50,000 75,000 100,000 125,000 150,000 175,000 200,000 225,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 115 METRO MULTIFAMILY DEMAND OVERVIEW NASHVILLE Net in migrations remain stronger than natural population growth for new rental households sourced from all age cohorts. Current rental households are smaller with a wider range of incomes. Economic prospects are strong led by professional services and education. The indices below portend a good supply response to a steadily increasing annual multifamily demand. - 20 40 60 80 100 120 140 160 180 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 9,048 18,822 41,065 34,607 6,750 1,560 - 10,000 20,000 30,000 40,000 50,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 24 175 -2.4 30% 45,564 33,832 32,979 39,307 43,176 19,540 13,596 7,537 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 413,117 7,075 8,546 76,522 35,329 111,852 - 100,000 200,000 300,000 400,000 500,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 29,200 31,959 28,743 29,232 20,760 82,037 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 116 NASHVILLE page 2 -10 0 10 20 30 40 50 60 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 5 10 15 20 25 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 82,68669,94635,45726,67912,9414,6473,1750 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 159,248 59,895 4,633 18,495 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner25,603 68,781 49,298 37,475 27,707 14,191 7,332 5,144 - 25,000 50,000 75,000 100,000 125,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 117 METRO MULTIFAMILY DEMAND OVERVIEW NEW ORLEANS Historic out migrations have halted and new net in migrations slightly exceed mild natural population growth. New rental households will source mostly from 35+ age cohorts but with lower incomes. Nearly half of renters pay more than 35% of income for rent. Future economic prospects are positive, led by trade. Multifamily demand slowly increases. - 10 20 30 40 50 60 70 80 90 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 3,859 8,985 19,873 21,062 4,653 4,789 - 5,000 10,000 15,000 20,000 25,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 46 180 -6.0 41% 50,999 31,522 26,030 27,910 25,826 15,735 9,551 4,328 - 10,000 20,000 30,000 40,000 50,000 60,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 263,658 8,363 5,714 64,873 58,569 63,221 - 50,000 100,000 150,000 200,000 250,000 300,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 18,937 20,972 19,548 15,640 16,430 81,892 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 118 NEW ORLEANS page 2 -15 -10 -5 0 5 10 15 20 25 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -35 -30 -25 -20 -15 -10 -5 0 5 10 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily demand 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land not yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos a nd publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 86,15649,24527,50416,5227,7142,3672,3930 20,000 40,000 60,000 80,000 100,000 120,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 94,410 87,854 2,984 19,621 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 220,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner10,536 57,083 41,712 31,892 28,117 13,689 6,067 2,805 - 20,000 40,000 60,000 80,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 119 METRO MULTIFAMILY DEMAND OVERVIEW NEW YORK Out migrations have slowed, but will drag on the significant natural popu- lation growth that fuels new rental households. These today are smaller across a range of ages and good incomes, though nearly half pay over 35% of income on rent. Economic prospects are strong. Rental stock is older and nearly half seen in STAR units. Demand ahead is consistently strong. - 500 1,000 1,500 2,000 2,500 3,000 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -30.0 -20.0 -10.0 0.0 10.0 20.0 30.0 40.0 50.0 60.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 57,775 153,873 248,857 511,784 484,539 745,022 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 16 122 6.0 48% 678,427 436,540 361,858 434,812 572,895 347,680 366,554 304,801 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 2,717,523 403,045 478,765 368,020 921,049 2,201,850 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 413,785 363,073 382,378 351,031 308,653 1,474,487 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Metro includes Orange County Version 2 not adjusted for type of rental 120 NEW YORK page 2 -100 -50 0 50 100 150 200 250 300 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -150 -100 -50 0 50 100 150 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 1,238,740943,078557,356417,601198,02685,34663,4200 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 1,733,926 811,812 335,750 1,055,087 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner127,072 801,087 744,233 667,658 534,096 336,341 188,129 104,951 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Metro includes Orange County Version 1 121 METRO MULTIFAMILY DEMAND OVERVIEW OKLAHOMA CITY Net in migrations have exceeded modest natural population growth and will subside. New rental households are smaller with good incomes, sourc- ing from the youngest and oldest cohorts. Economic prospects are good and from all sectors except manufacturing. Rental stock is older with 44% in more affordable STAR units. Demand ahead steadily grows to 2030. - 20 40 60 80 100 120 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 4,626 8,870 26,437 22,591 3,035 1,900 - 5,000 10,000 15,000 20,000 25,000 30,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 37 235 -2.5 44% 37,467 30,914 25,264 30,652 30,618 13,890 9,939 3,423 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 300,329 1,440 1,315 86,077 23,883 67,459 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 24,421 24,661 22,590 18,243 15,925 61,357 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 122 OKLAHOMA CITY page 2 -5 0 5 10 15 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 2 4 6 8 10 12 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 71,39248,67226,93719,8989,5303,7172,0210 20,000 40,000 60,000 80,000 100,000 120,000 140,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 119,938 35,663 5,629 19,783 - 50,000 100,000 150,000 200,000 250,000 300,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner23,391 51,809 34,586 27,457 22,864 11,518 5,121 5,421 - 20,000 40,000 60,000 80,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 123 METRO MULTIFAMILY DEMAND OVERVIEW ORLANDO Net in migrations fuel renter household growth, soon over 6 times the natural population growth. Renter households have strong incomes and a wide range of ages. Though rental stock is similar in age to other metros, the small 18% share of STAR units portends affordability issues. Strong economic prospects and annual increases in multifamily demand ahead. - 50 100 150 200 250 300 350 400 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 14,579 40,551 83,178 28,363 2,517 903 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 2 149 3.5 18% 54,196 53,506 53,745 58,745 63,945 29,106 17,917 10,331 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 442,612 6,936 14,000 123,959 35,828 170,091 - 100,000 200,000 300,000 400,000 500,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 26,327 30,009 46,219 38,068 32,513 150,217 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 124 ORLANDO page 2 -20 0 20 40 60 80 100 120 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 10 20 30 40 50 60 70 80 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 99,57499,30065,34944,15421,4507,6913,9730 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 234,897 70,924 6,850 111,564 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner28,027 99,510 84,277 57,641 36,908 20,508 9,583 5,037 - 20,000 40,000 60,000 80,000 100,000 120,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 125 METRO MULTIFAMILY DEMAND OVERVIEW PHILADELPHIA Net migrations are slight and negative, rental household growth depends upon natural population growth. New rental households will source from ages 35-54 and seniors over 65. Economy is strong with manufacturing the only drag. Rental stock is older and significant supply restrictions may hamper new product. Multifamily demand ahead is positive and rising. 300 310 320 330 340 350 360 370 380 390 400 410 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -10.0 -5.0 0.0 5.0 10.0 15.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 12,282 26,278 66,467 115,645 39,322 38,713 - 20,000 40,000 60,000 80,000 100,000 120,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 31 212 8.2 37% 157,736 100,973 89,353 106,153 118,019 69,661 58,647 32,644 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 1,412,031 21,371 45,315 273,705 153,925 298,707 - 500,000 1,000,000 1,500,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 85,839 80,418 84,314 73,021 62,571 299,731 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 126 PHILADELPHIA page 2 -40 -20 0 20 40 60 80 100 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -5 0 5 10 15 20 25 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 298,108204,008109,06369,58730,89012,3179,2130 100,000 200,000 300,000 400,000 500,000 600,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 401,779 234,117 41,461 86,169 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner43,549 195,545 142,744 120,856 99,614 63,590 40,636 26,652 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 127 METRO MULTIFAMILY DEMAND OVERVIEW PHOENIX Rental household growth very dependent on strong in migrations, soon over 3 times the natural population growth. New renters will source from all ages with strong incomes, though 40% now pay over 35% of income on rent. Strong economic prospects. Strong multifamily demand increases steadily, though supply restrictions may hamper new supply to match. - 100 200 300 400 500 600 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 14,153 52,587 128,080 66,882 10,256 1,047 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 5 155 4.8 30% 115,146 88,870 85,322 105,235 117,052 58,255 45,730 20,068 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 879,049 10,262 17,167 272,264 69,616 273,005 - 250,000 500,000 750,000 1,000,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 68,151 83,380 83,094 69,105 53,431 234,561 - 50,000 100,000 150,000 200,000 250,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 128 PHOENIX page 2 -20 0 20 40 60 80 100 120 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 20 40 60 80 100 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 210,991169,93391,27780,45345,68222,03815,3040 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 473,469 57,700 20,319 193,089 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner56,288 172,778 143,877 109,937 75,998 41,516 21,682 13,602 - 50,000 100,000 150,000 200,000 250,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 129 METRO MULTIFAMILY DEMAND OVERVIEW PITTSBURGH Net in migrations counter the slide in natural population growth to hold new households fairly constant. New renters will source from ages 35-54 and seniors over 65 with lower incomes reliant on affordability. Economic growth is modest. Most of multifamily is seen in STAR units, more than most metros. Demand ahead is flat for two years, rising steadily to 2029. 100 105 110 115 120 125 130 135 140 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 2,191 9,112 25,587 41,813 22,247 17,018 - 10,000 20,000 30,000 40,000 50,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 47 287 1.8 54% 77,692 53,518 40,126 42,046 46,994 23,336 15,202 6,274 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 643,817 9,133 8,806 114,536 63,380 117,968 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 47,812 38,180 34,405 32,385 24,462 103,324 - 20,000 40,000 60,000 80,000 100,000 120,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 130 PITTSBURGH page 2 -20 -10 0 10 20 30 40 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -6 -4 -2 0 2 4 6 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 151,10782,18236,15420,8558,9983,7492,1430 50,000 100,000 150,000 200,000 250,000 300,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 233,957 52,712 10,294 6,802 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner27,868 77,484 48,658 45,859 42,543 28,924 19,487 14,365 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 131 METRO MULTIFAMILY DEMAND OVERVIEW PORTLAND Substantial net in migrations fueled a surge in rental households and con- tinue to drive demand. Rental households bring strong incomes and a mix of ages. Economic trends are superlative. With relatively younger rental stock and 37% seen in STAR units, the overall supply is balanced today. Ahead is steady and consistent multifamily demand through 2030. - 50 100 150 200 250 300 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -2.0 0.0 2.0 4.0 6.0 8.0 10.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 9,199 27,700 64,077 49,594 10,068 14,193 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 21 125 3.2 37% 58,017 47,644 43,037 58,252 66,226 34,052 29,758 13,626 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 500,659 6,297 14,056 109,921 59,101 174,831 - 100,000 200,000 300,000 400,000 500,000 600,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 38,801 42,505 45,801 40,168 30,638 136,448 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 132 PORTLAND page 2 -10 0 10 20 30 40 50 60 70 80 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 5 10 15 20 25 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily demand 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land not yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos a nd publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 132,775106,03546,57337,33016,7417,1044,0540 50,000 100,000 150,000 200,000 250,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 284,312 16,214 17,405 44,751 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner25,497 99,210 75,169 57,541 43,070 24,047 13,456 12,622 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 133 METRO MULTIFAMILY DEMAND OVERVIEW RALEIGH Strong net in migrations are double the natural population growth and should increase 2.5 times more, fueling rental household growth across all ages. Renter household sizes are smaller and incomes notable. The econo- my is strong, led by professional services and trade. Rental stock is younger with fewer STAR units, in balance for strong increases in demand ahead. - 20 40 60 80 100 120 140 160 180 200 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 9,711 19,740 34,378 11,775 2,111 1,233 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 8 183 4.8 19% 25,285 23,097 22,765 27,428 31,597 17,736 12,919 5,815 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 280,245 1,024 4,111 58,085 19,009 78,948 - 50,000 100,000 150,000 200,000 250,000 300,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 19,837 26,015 19,137 22,039 16,331 55,895 - 10,000 20,000 30,000 40,000 50,000 60,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 134 RALEIGH page 2 -10 0 10 20 30 40 50 60 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 10 20 30 40 50 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 56,59648,76827,69618,5789,3313,4282,2450 20,000 40,000 60,000 80,000 100,000 120,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 97,651 51,734 7,278 18,880 - 50,000 100,000 150,000 200,000 250,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner16,257 47,564 35,010 29,981 19,635 10,226 5,355 2,614 - 20,000 40,000 60,000 80,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 135 METRO MULTIFAMILY DEMAND OVERVIEW RICHMOND Continued net in migrations exceed natural population growth, fueling new rental households. Renters have good incomes across a range of ages with growth ahead increasingly coming from ages 35 -44 and seniors over 65. The economy is solid, yet with declines in trade and financial services. Renter stock is older but balanced. Multifamily demand rises steadily. - 20 40 60 80 100 120 140 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 3,700 10,764 23,507 23,553 5,773 8,026 - 5,000 10,000 15,000 20,000 25,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 33 188 -2.3 37% 34,675 21,548 23,308 29,268 30,362 16,807 11,641 6,100 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 295,908 1,809 4,419 73,466 22,178 75,323 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 17,980 21,589 20,973 19,368 16,350 65,732 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 136 RICHMOND page 2 0 2 4 6 8 10 12 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily demand 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land not yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos a nd publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 69,56946,75625,39118,1627,7043,6702,4570 20,000 40,000 60,000 80,000 100,000 120,000 140,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 84,336 76,475 5,363 9,168 - 50,000 100,000 150,000 200,000 250,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner14,533 45,803 34,846 28,704 25,475 12,710 6,424 5,214 - 20,000 40,000 60,000 80,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 137 METRO MULTIFAMILY DEMAND OVERVIEW RIVERSIDE Though natural growth is constant, significant net in migrations have re- ceded. New renters will source from most ages but will rely on those 35-54 ahead. Economy is good with gains in most sectors, but trade will retreat. Rental stock is older with nearly half in more affordable STAR units amid heavy supply restrictions. Multifamily demand ahead is positive, steady. - 50 100 150 200 250 300 350 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 9,643 32,713 73,148 47,806 8,712 963 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 26 113 5.1 48% 93,592 80,187 71,010 77,688 94,124 50,905 41,389 17,499 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 736,164 6,820 6,946 260,071 64,028 172,985 - 200,000 400,000 600,000 800,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 38,820 48,613 59,862 58,869 45,737 247,168 - 50,000 100,000 150,000 200,000 250,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 138 RIVERSIDE page 2 -20 0 20 40 60 80 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 10 20 30 40 50 60 70 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 127,080122,85283,79484,23755,57629,96222,8930 50,000 100,000 150,000 200,000 250,000 300,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 319,537 65,188 25,299 241,477 - 100,000 200,000 300,000 400,000 500,000 600,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner33,290 130,878 129,747 99,012 68,158 38,605 17,219 9,485 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 139 METRO MULTIFAMILY DEMAND OVERVIEW SACRAMENTO Net in migrations and natural population growth fuel new rental house- holds. These will source mainly from 25-44 year olds and seniors over 65. Economic prospects are solid, led by education and government. Rental stock is older than most metros with 42% in more affordable STAR units. Multifamily demand ahead is steadily increasing. - 50 100 150 200 250 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 3,314 19,664 46,936 45,036 9,174 3,026 - 10,000 20,000 30,000 40,000 50,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 27 137 4.1 42% 64,512 47,896 42,062 43,936 61,548 34,424 27,255 13,506 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 447,876 3,804 4,630 152,287 49,358 127,150 - 100,000 200,000 300,000 400,000 500,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 30,256 37,439 40,164 36,535 27,644 143,222 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 140 SACRAMENTO page 2 -10 0 10 20 30 40 50 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 5 10 15 20 25 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily demand 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land not yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos a nd publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 108,66994,04950,42743,82620,59710,8646,7070 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 214,828 43,604 35,890 68,116 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner27,132 85,187 68,969 58,922 45,705 27,421 13,145 8,658 - 20,000 40,000 60,000 80,000 100,000 120,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 141 METRO MULTIFAMILY DEMAND OVERVIEW SALT LAKE CITY With only modest net in migrations, natural population growth is the driv- er for new rental households. Today’s renters are smaller, younger and with strong incomes up to $75,000. Economy is strong, led by professional services and education. Rental stock has less STAR units than other met- ros. Demand for multifamily steadily increases through 2030. - 10 20 30 40 50 60 70 80 90 100 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 5,377 10,930 26,665 16,541 2,268 4,415 - 5,000 10,000 15,000 20,000 25,000 30,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 25 153 2.4 29% 19,044 15,683 19,841 21,670 25,559 11,726 9,421 4,470 - 5,000 10,000 15,000 20,000 25,000 30,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 230,454 4,198 7,701 38,108 21,369 66,196 - 50,000 100,000 150,000 200,000 250,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 16,156 19,773 16,190 14,490 10,080 43,534 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 142 SALT LAKE CITY page 2 -5 0 5 10 15 20 25 30 35 40 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -2 0 2 4 6 8 10 12 14 16 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily demand 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land not yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos a nd publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 40,24036,70118,62515,6889,8203,9732,3670 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 97,872 4,241 6,215 26,155 - 50,000 100,000 150,000 200,000 250,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner14,721 42,290 25,525 17,829 12,879 7,889 3,758 2,523 - 10,000 20,000 30,000 40,000 50,000 60,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 143 METRO MULTIFAMILY DEMAND OVERVIEW SAN ANTONIO Net in migrations are 65% ahead of natural population growth, a strong driver for new rental households that will source from all ages. Renter ages and sizes are more diverse, likely tied to strong Hispanic share. Gains in all job sectors portend a strong economy. Rental stock is newer with a smaller share of STAR units. Multifamily demand is strong and increasing. - 50 100 150 200 250 300 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 17,031 33,963 56,912 27,936 6,206 2,568 - 10,000 20,000 30,000 40,000 50,000 60,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 14 166 -1.3 24% 52,907 45,926 43,764 50,672 59,339 27,403 20,712 9,314 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 441,999 2,671 3,462 115,835 36,808 144,616 - 100,000 200,000 300,000 400,000 500,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 40,171 37,544 44,106 34,428 22,832 109,495 - 20,000 40,000 60,000 80,000 100,000 120,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 144 SAN ANTONIO page 2 0 10 20 30 40 50 60 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 5 10 15 20 25 30 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 109,75679,09148,07237,18322,4938,9954,4470 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 242,241 35,871 8,753 164,646 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner29,012 89,600 72,823 51,205 35,017 19,695 8,215 4,470 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 145 METRO MULTIFAMILY DEMAND OVERVIEW SAN DIEGO Net in migrations are back, but a modest component of new rental house- holds after natural population growth. Economy is fairly strong ahead. Rental stock is older than most metros and 59% are STAR units, second only to L.A. Supply restrictions may hamper meeting strong multifamily demand ahead, steadily increasing through 2030. - 50 100 150 200 250 300 350 400 450 500 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 8,794 32,304 106,967 104,871 16,107 6,144 - 20,000 40,000 60,000 80,000 100,000 120,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 18 76 5.5 58% 72,182 63,673 55,261 76,978 106,924 64,382 59,738 35,007 - 20,000 40,000 60,000 80,000 100,000 120,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 495,828 11,671 41,115 180,111 68,536 275,187 - 100,000 200,000 300,000 400,000 500,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 40,154 52,814 61,728 65,572 52,635 236,358 - 50,000 100,000 150,000 200,000 250,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 146 SAN DIEGO page 2 -20 -10 0 10 20 30 40 50 60 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -5 0 5 10 15 20 25 30 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily demand 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land not yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos a nd publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 150,941151,55085,91075,56841,69616,77911,7010 50,000 100,000 150,000 200,000 250,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 382,385 39,899 52,029 173,420 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner38,236 156,123 122,893 91,185 63,490 33,937 17,863 10,418 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 147 METRO MULTIFAMILY DEMAND OVERVIEW SAN FRANCISCO Net in migrations continue to match consistent natural population growth, fueling new rental households. Strong renter incomes and diverse ages. Economic prospects are strong. Housing affordability is low amid steep supply restrictions. Rental stock is older with 54% seen in more affordable STAR units. Demand ahead is strong and steadily increasing through 2030. - 50 100 150 200 250 300 350 400 450 500 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -5.0 0.0 5.0 10.0 15.0 20.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 11,999 37,913 95,358 137,433 50,377 84,624 - 50,000 100,000 150,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 19 72 7.6 54% 109,822 70,076 62,865 85,273 123,596 93,599 115,265 125,911 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 786,645 41,568 60,044 222,346 141,991 417,704 - 200,000 400,000 600,000 800,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 100,391 98,779 101,843 93,276 64,633 293,029 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 148 SAN FRANCISCO page 2 -20 0 20 40 60 80 100 120 140 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -10 0 10 20 30 40 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily demand 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land not yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos a nd publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 263,920231,244121,38090,04345,72119,00115,0980 50,000 100,000 150,000 200,000 250,000 300,000 350,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 405,826 93,935 161,090 161,472 - 100,000 200,000 300,000 400,000 500,000 600,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner34,533 209,403 184,399 141,886 104,582 60,330 32,091 19,183 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 220,000 240,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 149 METRO MULTIFAMILY DEMAND OVERVIEW SAN JOSE Net in migrations recede against consistent natural population growth. Renters have strong incomes, a range of ages and will source from all ages ahead. Economy is strong, led by professional services and education. Rental stock is older, but with fewer affordable STAR units as nearby SF. Multifamily demand ahead is strong and steadily increasing through 2030. - 50 100 150 200 250 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 12,055 18,748 46,550 56,659 11,909 4,339 - 10,000 20,000 30,000 40,000 50,000 60,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 22 69 3.8 43% 28,813 20,542 22,383 28,393 41,712 34,262 47,857 61,073 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 325,953 5,877 17,767 90,800 41,049 150,260 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 37,867 36,694 36,301 32,829 22,973 106,680 - 20,000 40,000 60,000 80,000 100,000 120,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 150 SAN JOSE page 2 -30 -20 -10 0 10 20 30 40 50 60 70 80 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -10 -5 0 5 10 15 20 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 69,54980,58350,28748,75918,8759,2307,7520 20,000 40,000 60,000 80,000 100,000 120,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 137,865 10,354 88,053 81,564 - 50,000 100,000 150,000 200,000 250,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner16,086 77,680 75,742 49,799 33,223 17,058 8,838 6,609 - 20,000 40,000 60,000 80,000 100,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 151 METRO MULTIFAMILY DEMAND OVERVIEW SEATTLE Net in migrations continue to outpace natural population growth as source of new renters from younger, affluent and smaller households. Strong economy will see gains in professional services, education and trade. The rental stock is older, but less than a third in more affordable STAR units. Multifamily demand ahead is strong and increasing each year to 2030. - 100 200 300 400 500 600 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 25,034 55,165 116,991 86,981 19,825 23,311 - 25,000 50,000 75,000 100,000 125,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 11 124 8.0 32% 80,350 58,131 58,452 87,917 112,586 68,813 70,054 39,378 - 20,000 40,000 60,000 80,000 100,000 120,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 757,274 12,141 53,856 164,450 71,922 327,307 - 200,000 400,000 600,000 800,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 63,875 79,192 78,933 70,795 54,655 202,057 - 50,000 100,000 150,000 200,000 250,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 152 SEATTLE page 2 -20 -10 0 10 20 30 40 50 60 70 80 90 100 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 5 10 15 20 25 30 35 40 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 212,889175,39185,51355,31826,17312,5847,8130 50,000 100,000 150,000 200,000 250,000 300,000 350,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 393,093 50,839 63,492 62,497 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner50,011 177,270 121,543 89,063 66,520 33,191 22,443 15,640 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 220,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 153 METRO MULTIFAMILY DEMAND OVERVIEW SIOUX FALLS Mild growth is a combination of net in migrations and natural population growth. New renters will source from 35+ age cohort, particularly seniors over 65. Today’s renters have good incomes up to $75,000, smaller house- holds and a range of ages. Economic prospects are good. Rental stock is older, yet with fewer STAR units. Multifamily demand steadily increases. - 5 10 15 20 25 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -0.2 0.0 0.2 0.4 0.6 0.8 1.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 1,642 2,705 6,527 6,337 1,007 529 - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 32 213 -3.1 23% 6,541 5,132 4,938 6,448 5,191 1,824 1,175 548 - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 61,905 653 823 8,163 4,514 18,747 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 4,467 5,295 4,367 3,570 2,703 9,237 - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 154 SIOUX FALLS page 2 -2 -1 0 1 2 3 4 5 6 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 1 2 3 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily demand 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land not yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos a nd publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 15,2478,9463,2403,0367923601760 5,000 10,000 15,000 20,000 25,000 30,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 26,820 2,352 384 1,185 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner4,858 8,086 5,469 4,208 3,366 2,142 1,613 2,055 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 155 METRO MULTIFAMILY DEMAND OVERVIEW ST. LOUIS Net out migrations have countered natural population growth. Slight in migrations expected as overall growth slows. New rental households will source from 35-44 year olds and seniors over 65. Economic prospects are improving and good. Rental stock is older, yet with few supply restrictions. Multifamily demand will be flat for three years, then improve though 2029. 130 135 140 145 150 155 160 165 170 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 3,914 14,512 38,378 41,599 11,799 15,583 - 10,000 20,000 30,000 40,000 50,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 45 252 -4.7 39% 76,561 58,410 48,771 56,501 56,974 27,334 18,993 7,935 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 708,018 12,733 13,685 133,276 80,668 125,785 - 200,000 400,000 600,000 800,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 44,183 46,613 43,614 37,431 28,568 128,765 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 156 ST. LOUIS page 2 -10 0 10 20 30 40 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -6 -4 -2 0 2 4 6 8 10 12 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 144,48196,31052,53234,62915,2726,2552,0000 50,000 100,000 150,000 200,000 250,000 300,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 215,180 116,518 10,234 11,250 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner29,184 95,278 69,921 49,364 51,747 28,540 16,984 10,461 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 157 METRO MULTIFAMILY DEMAND OVERVIEW TAMPA Slight natural population growth will go negative, relying on the surge in net in migrations to fuel new rental households. Renters today enjoy strong incomes, a range of ages and household sizes. Economic prospects are great, with growth in most sectors. Rental stock is old, yet less than a third in STAR units. Demand ahead is strong and steadily increasing. - 50 100 150 200 250 300 350 400 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 11,472 36,158 78,492 53,674 8,574 2,586 - 20,000 40,000 60,000 80,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 12 174 0.0 32% 81,387 69,977 58,208 71,069 74,545 39,092 26,222 11,897 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 594,001 12,561 52,801 154,272 57,401 190,956 - 100,000 200,000 300,000 400,000 500,000 600,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 38,431 52,253 52,508 46,132 38,400 174,681 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 158 TAMPA page 2 -10 10 30 50 70 90 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 -10 0 10 20 30 40 50 60 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 166,059123,51667,82343,33518,8828,4594,3230 50,000 100,000 150,000 200,000 250,000 300,000 350,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 314,543 82,562 9,903 86,060 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner28,091 110,237 89,778 78,910 60,786 35,030 15,476 14,089 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 159 METRO MULTIFAMILY DEMAND OVERVIEW WASHINGTON, DC Consistent natural population growth is augmented by fewer net in migra- tions for new renter households. Renters have strong incomes and smaller households across a range of ages. Economic outlook is strong, led by professional services. Rental stock age is typically older, yet the small share of STAR units mimics younger metros. Demand is strong and rising. - 100 200 300 400 500 600 700 800 900 200720082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030Thousands5+ Unit Apartment Demand Forecast -5.0 0.0 5.0 10.0 15.0 20.0 201620172018201920202021202220232024202520262027202820292030ThousandsNew Rental Households by Age Cohort 15-24 25-34 35-44 45-54 55-64 65+ 33,032 74,664 145,029 175,009 72,687 29,603 - 50,000 100,000 150,000 200,000 since 2010 2000- 2010 1980- 2000 1960- 1980 1940- 1960 before 1940 5+ Unit Rental Stock by Year Built Definitions on back DEMAND RANKING STAR* SHARE AFFORD- ABILITY MF SUPPLY RESTRICTIONS 13 159 2.7 19% 94,748 63,402 73,991 108,449 156,097 112,591 124,933 85,767 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 under $15k $15- $25k $25- $35k $35- $50k $50- $75k $75- $100k $100- $150k over $150k Rental Households by Income 1,210,310 14,078 117,768 228,007 57,111 530,024 - 250,000 500,000 750,000 1,000,000 1,250,000 Owner Single Owner 2-4 units Owner 5+ units Renter Single Renter 2-4 units Renter 5+ units Housing Stock by Tenure & Type 85,414 98,750 117,684 100,392 78,635 300,227 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 under 15%15%-20%20%-25%25%-30%30%-35%over 35%Rental HouseholdsRent as a Percent of Household Income Version 1 not adjusted for type of rental 160 WASHINGTON, DC page 2 -10 10 30 50 70 90 110 130 150 Mining Construction Manufacturing Trade & Transport Information Svcs Financial Svcs Professional Svcs Education & Health Leisure & Hospitality Government Employment Growth by Sector ('000s) 2010-2016 2017-2030 0 10 20 30 40 50 60 2000-2010 Natural Increase Net Migration 2010-2016 Natural Increase Net Migration 2016-2030 Natural Increase Net Migration Avg Annual Population Change (000's) RANKING and DEFINITIONS: METRO RANKING is the relative rank among 50 multifamily Metro markets based upon the average of HAS forecasted total Metro multifamily dema nd 2017-2030 and its percent of current Metro rental households, ranging from 1 (Dallas-Fort Worth) to 50 (Cleveland). AFFORDABILITY INDEX is the ratio of median family income to the minimum income to qualify for purchase of a single -family home at the median existing home resale price under standard mortgage underwriting today, then multiplied by 100 to convert to a 100 point index (e.g., an index of 100 indicates that the median family income equals the qualifying income). This index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with a Metro average of 178.0 MF SUPPLY RESTRICTIONS is an HAS composite of the Wharton Residential Land Use Restrictions Index and the Lacroix percent of available Metro land no t yet developed. This index ranges from 19.5 (Honolulu) to –6.0 (New Orleans) with a Metro average of 2.0. STAR SHARE is that share of Metro rental housing stock with five or more units HAS qualified as *Second-Tier Affordable Rentals or those non-institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1-5 for sites of five units or more, STAR is the lower ratings of 1-2. This share ranges from 61% (Los Angeles) to 17% (Austin) with a Metro average of 36%. Multifamily Overview provided for NMHC/NAA by Hoyt Advisory Services (HAS) in collaboration with Dinn Focused Marketing and Whitegate Real Estate Advisors. All metrics are year-end 2016 data from the US Bureau of Census, CoStar®, CBRE Econometrics®, Moody’s Analytics®, ESRI® and other sources. Forecasts are modeled by the HAS team based upon the most current data available and are estimates subject to unforeseen changes in economic environment, capital markets, property markets and national or local policies and laws. All licenses, data, logos and publishing may only be used with permission. For more detailed analyses and multifamily market consulting, contact NMHC, NAA or the HAS team listed in the publication appendix. 296,116220,087124,17497,07344,67423,87213,9820 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 1 2 3 4 5 6 7+ Households by Occupants Renter Owner 389,642 278,071 63,067 129,379 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 White Alone Black Alone Asian Alone Hispanic Households by Ethnicity and Origin Renter Owner50,752 232,573 194,218 142,602 102,738 52,542 26,323 18,230 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Households by Age Cohort Renter Owner Version 1 161 162 Appendix 5: Methodology Metro Market Demand Methodology The metro market demand models begin with the forecast number of households from Moody’s Economy.com base-case forecast. Because the national model was based on an HAS derived household forecast, the metro market household forecasts are adjusted by the difference in the HAS and Moody’s Economy.com forecast each year. The HAS national forecast is similar to the Moody’s forecast through 2018 then grows slightly slower, representing the impact of expected slower household formations during recessions which are modeled to occur towards the end of each decade through 2030. The resulting HAS national household forecast is 2.8% lower than the Moody’s national forecast by 2030. Thus, metro markets are adjusted for the difference between the two national forecasts each year (e.g. -2.8% for 2030). Like the national model, the metro area model defines the renter households by adjusting the number of households by one minus the home ownership rate for each year and subtracts out the homeless rate. The metro market home ownership rate is specified by the equivalent metropolitan area home ownership rate as provided by the U.S. Census Bureau. The model uses the statewide homeless rate as similar data was not available at the metropolitan area level. While homeless rates surely vary by metropolitan area, this homeless adjustment is quite small, with a median rate of 0.12% of population. Actual data were collected for 2009 and 2011 to 2015. The forecast did not assume a change in the homeless rate from the 2015 figure. The U.S. Census Bureau provides a quarterly estimate of home ownership rates for select metropolitan areas. The survey’s methodology can result in wide swings in estimates of home ownership rates from quarter to quarter. Thus, an annual average of quarterly home ownership rates was used to observe the historic trend in home ownership for each metro area. Forecast metro market home ownership rates were estimated based on demographic trends. To estimate historical renter households, the rentership rate for each age cohort for each metro market was multiplied by the households for that age cohort. Renter households were derived by dividing the population growth by age cohort by the headship rate by age cohort. For forecast renter households, for each age cohort, the incremental annual population growth was divided by an estimate of population per household (headship rate) for that age cohort to get incremental households for that year. Households were then split into international in-migration households and domestic growth households by multiplying the incremental household by the average percent of growth from 2010 to 2015 created by international in-migration. International rental households were then estimated by multiplying the rentership rate for international in-migrants for that age cohort. Similarly, new domestic rental households were estimated by multiplying the rentership rate for each age cohort by the new domestic households for that age cohort. Total renter households for each year equal the previous year total renter households plus the incremental total international in-migrating renter households by age cohort plus the incremental total domestic households by age cohort for that year. The forecast home ownership rate for each year is estimated by dividing the rental households by the total households for that year. Home ownership rates from the metro model were slightly higher when aggregated than trends suggested by the national model. Thus, annual home ownership rates were adjusted downwards by 0.09% per year so that the metro area home ownership rate trends in aggregate were more like the national trend. Actual home ownership rates were used from 2005 to 2016. The 2017 home ownership rate was estimated by multiplying the 2016 actual rate by the modeled change from 2016 to 2017, and so on. Forecast rental households were then adjusted for three factors to forecast demand for the institutional rental market, or those properties with 5 or more units. First, an estimate of the amount of total rental stock attributed to properties with 5 or more units (5+) was estimated by reviewing several sources of data, including the U.S. Census, CoStar® and CBRE® Econometrics. This factor ranged from 33% to 65% with a median of 46%. Second, some markets have significantly older multifamily stock than other markets, indicating that those markets will need more new stock to offset obsolete aging 163 stock. However, it is difficult to tell how much of the stock has already been updated in each market. Thus, we made only a slight adjustment upward for markets with older stock. The amount of stock built after 1980 was calculated for each market and ranged from 21% to 81% with a median of 56%. An aging factor was developed by dividing the U.S. average percent of the market built after 1980 (49%) by the metro area average built after 1980. The national model assumed 0.5% of stock would need to be replaced each year due to obsolescence. For each metro market, this 0.5% was multiplied by the aging factor; i.e. markets with stock that is older than the U.S. are assumed to need slightly more stock per year to replace obsolete buildings. The model also assumes that enough demand will be needed in each market to keep vacancy at a similar rate as the long-term average for that market. As the total market inventory increases in size, the current vacant units will become a smaller amount of the total and thus vacancy would decline, excluding the impact of actual new supply. Thus, demand was also adjusted for a long-term vacancy factor. Because of unusual fluctuations occurring in the housing market from 2000-2016 due to the Great Financial Crisis, the average vacancy from 1990-1999 was used as the long-term vacancy factor. This figure was more representative of long- term trends for most markets. The model assumes that enough units will need to be produced each year to maintain vacancy rates at a similar level and thus the demand for each year is increased by this vacancy factor. Actual occupied units were used for 2007 to 2016 based on HAS estimates derived from multiple sources. The forecast applied the 2016-2017 growth rate from the modeled figures from 2017 to 2016 to the 2016 actual estimate to get the 2017 estimate and so on. State Demand Methodology The methodology to forecast multifamily demand for the states followed a similar methodology as the metropolitan areas. Demand for the states was further adjusted so that the state forecasts add up to the national forecast both historically and on a forecast basis. This was done by prorating the proportion of demand for each state as compared to the total forecast for all the states to the U.S. forecast demand. Metro Market Overviews Methodology 5+ Unit Apartment Demand Forecast is developed by the Hoyt Advisory Services (HAS) team and represents the number of rental apartment units in buildings with five or more units (defined as multifamily units throughout) and those multifamily units that will be needed to meet demand going forward. Historical figures for the years 2007 to 2016 are based on estimates of existing multifamily 5+ total inventory as developed by the HAS team from several sources including the U.S. Census, CoStar® and CBRE® Econometrics®. Forecasts are based on demographic, economic and capital market trends and consider aging and domestic and international immigration trends specific to that metropolitan area as well as housing affordability and ownership trends, among other factors. Actual units could be lower than this level in areas with geographic and political restrictions. In this case, upward pressure could develop on rental rates. Actual units could also be larger than forecast demand in markets where construction exceeds demand. 5+ Unit Rental Stock by Year Built tracks the number of units in buildings with five or more units by year built. Note that this graph is specific to only the 5+ unit sector of the rental market and thus will have lower numbers than other graphs such as the adjacent “Rent as a Percent of Household Income” graph which includes all sizes of rental units. The 5+ Unit share of the total rental stock can be seen in the graph above it titled “Housing Stock by Tenure and Type”. Affordability is the Housing Affordability Index as reported by Moody’s Economy.com for the fourth quarter of 2016. It provides a general indication of affordability of single-family owned housing in a metropolitan area. Higher ratios indicate that housing is more affordable and vice-versa. The index is the ratio of median family income to the minimum income to qualify for purchase of a single-family home at the median existing home resale price under standard mortgage underwriting as of the time of the index, then multiplied by 100 to convert to a 100-point index (e.g., an index of 100 indicates that the median family income equals the qualifying 164 income). Of the metropolitan areas in this report, this index ranges from 69.4 (San Jose) to 290.7 (Cleveland) with an average of 178.0. Demand Ranking is the relative rank among the 50 multifamily metro markets in this study of the HAS forecasted multifamily housing demand for rental stock with 5 or more units based two growth factors: 1) the average percentage growth in demand from 2017 to 2030 and 2) the absolute growth in demand from 2017 to 2030. The rankings range from 1 (Dallas-Ft. Worth) to 50 (Cleveland). Note that percentage growth rankings tend to favor smaller metropolitan markets while absolute growth rankings tend to favor larger metropolitan markets. Thus, the index ranks based on a blend of both percentage growth and absolute number of new renters. See the tables in Appendix 5 for separate rankings by percentage growth and total growth. Employment Growth by Sector graphs are based on employment projections for metropolitan statistical areas as provided by Moody’s Analytics® for major North American Industry Classification codes (NAICS). For example, the category “Information” includes a broad array of services including newspapers, software publishers, motion pictures, radio, TV, data processing, internet publishing and similar services. A description of NAICS codes can be found here: https://www.census.gov/cgi- bin/sssd/naics/naicsrch?chart=2012. The term “Education” as mentioned in the text boxes of the metropolitan overviews in this report refers to the Education & Health Services NAICS category and could be more health oriented than education oriented depending on the metro area. MF Supply Restrictions (Multifamily Supply Restrictions Index) is an HAS composite of methodology using the Wharton Residential Land Use Restrictions Index and the Lacroix developable land index. This index represents the difficulty of creating new supply which may vary from the amount of new supply delivered as high growth metro markets may also experience higher supply growth despite the difficulty of approving new projects. The result of higher supply restrictions may be longer approval and development time-lines adding to the development risks and higher construction costs which lead to less affordable rental markets. Of the markets in this study, this index ranges from 19.5 Honolulu to -6.0 (New Orleans) with an average of 2.0. Higher indices represent markets with more stringent regulatory environments in regards to new housing supply. The Wharton Residential Land Use Restrictions Index is based on data and a nationwide survey of local land use regulations including process and approvals, rules, and outcomes. The index includes eleven sub-indices measuring the stringency of the local regulatory environment, including local political pressure, local project approval, local assembly, supply restrictions, density restrictions, open space, exactions, and approval delay. The Lacroix index was developed by Sumner La Croix, Ph.D. at the Economic Research Organization at the University of Hawaii and measures the developable area within a 50-kilometer radii from a central city. Factors such as oceans, wetlands, lakes, rivers and other bodies of water as well as areas with a slope above 15% are defined as undevelopable. The Multifamily Supply Restrictions Index is the sum of each sub index for the metro market divided by the average for that sub index for all the metro markets in this study. STAR Share is that share of metro rental housing stock with five or more units HAS qualified as Second-Tier Affordable Rentals or those non- institutional sites of typically lower unit count, lower quality and greater age, a critical and ongoing multifamily supply component. Using CoStar® ratings of 1 to 5 for sites of five units or more, STAR units are those with lower CoStar® ratings of 1 to 2. Costar® ratings are based on several criteria including building structure and systems, amenities, site and landscaping, and certifications such as LEED and Green Globes. Properties rated 2 have functional architectural design and systems, below average finishes and one to no additional amenities. They have minimal to no landscaping and exterior spaces, and are unlikely to hold green or energy efficient certifications. Properties rated 1 may require significant renovation and are possibly functionally obsolete. STAR facilities are likely to serve lower income populations which are a significant part of the population base in some metro areas, and may represent, in some areas, potential investment targets for upgrading to higher quality properties. The STAR share ranges from 61% (Los Angeles) to 17% (Austin) with a metro market average of 36% for markets included in this study. 165 Sources Demographic data was drawn from several U.S. Census Bureau surveys, including the 2015 American Community Survey (ACS) which was the most recent ACS survey at the time of this report. Economic and demographic trend and forecast data was drawn from Moody’s Analytics® supplemented by other sources including U.S. Census Bureau, Federal Reserve and other forecast surveys such as the Wall Street Journal Economic Forecasting Survey and the Federal Reserve Bank of Philadelphia Survey of Professional Forecasters. Property market data was derived from several sources including the U.S. Census Bureau, CoStar® Realty Information, CBRE® Econometrics and ESRI®. 166 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * This report was prepared for the National Multifamily Housing Council and the National Apartment Association by Hoyt Advisory Services, Dinn Focused Marketing, Inc. and Whitegate Real Estate Advisors, LLC. Hoyt Advisory Services (HAS) is subsidiary of the Homer Hoyt Institute (HHI), an independent, non-profit research and educational foundation established in 1967 to improve the quality of public and private real estate decisions by expanding and disseminating the real estate body of knowledge, stimulating innovation in the discipline of real estate and land economics, building bridges among academia, industry, and government, and developing innovative approaches to the solution of real estate problems. Research supported by HHI must meet the highest standards of scholarship, and it must further the improvement of decision making in the real estate industry. That is, it must combine rigor with relevance. HAS is able to engage PhDs from leading universities along with practitioners with proven, appropriate real estate expertise for the project, in this case partnering with Dinn Focused Marketing, Inc. and Whitegate Real Estate Advisors. Dinn Focused Marketing, Inc. provides clients a detailed and directional picture of the underlying market place trends now and going forward for any national housing or mix-use real estate development challenge. Clientele are a select cadre of land developers, homebuilders, lending institutions, portfolio managers, municipal leadership and national housing organizations. Whitegate Real Estate Advisors, LLC provides real estate consulting services in the areas of investment analysis, portfolio structuring, capital formation strategies, market analysis, econometric modeling and forecasting, reporting and asset management. Authors for this paper each have more than 25 years of experience in the real estate industry, and are frequent speakers and publishers in both academic and practitioner journals and meetings: Dr. Miller is the Ernest Hahn Chair and Professor of Real Estate Finance at the University of San Diego. He was V.P. of Analytics for CoStar® 2009-2010 and consulted for many years on forecasting. He has worked on forecasting single-family housing for many years with Collateral Analytics, see www.collateralanalytics.com and he co-wrote a study for Fannie Mae on rating multifamily housing quality with Xudong An in 2013. He has worked extensively with various trade associations including NAIOP, CCIM, the Urban Land Institute, and has been a frequent speaker to groups such as the USGBC, ICSC, BOMA, AI, CORENET, CREW, MBA, SIOR, and NAHB and is a member of the national research committees for ICSC, PREA, and the ULI. As a Board and faculty member of the Homer Hoyt Land Use Institute Faculty, based in North Palm Beach Florida he is involved with some premier thought leaders among academics and industry professionals. He has received numerous industry awards and is a frequent speaker and publisher. His contact is nmiller@sandiego.edu. Dr. Norm Miller 167 Dr. Fisher is a Professor Emeritus at Indiana University, Visiting Professor at John Hopkins University, Partner at Pavonis Group LLC, Director at RealNex, LLC, President and Chair of the Board, Homer Hoyt Institute and Consultant to the National Council of Real Estate Investment Fiduciaries. He is a frequent speaker and publisher. He has served as a consultant to many real estate companies, including Real Capital Analytics and ARGUS, and served in leadership positions in many industry organizations including PREA, NCREIF, RERI and others. He is a frequent industry speaker and has published numerous textbooks and articles. Michael Dinn leads Dinn Focused Marketing, Inc. (DFM) Throughout his career, Michael has taken a market-centric stance in land acquisition, land brokerage, residential development, residential design and marketing campaigns. For over 16 years leading DFM, he has combined these experiences into a skill set that provides clients a detailed and directional picture of the underlying market place trends now and going forward for any national housing or mix-use real estate development challenge. His Clientele are a select cadre of land developers, homebuilders, lending institutions, portfolio managers, municipal leadership and national housing organizations, each with a unique market position, access or capacity to affect their residential market. The mix is public and private, lender and sponsor, landowner and sales management. His work provides scaled assessments of metro housing markets amid great change, targeting a mix of housing assets from failing master planned communities to select multifamily apartment portfolios. Paige Mueller is the CEO of Whitegate Real Estate Advisors, LLC a consulting firm focusing on econometric modeling, market analysis, investment and capital strategies, portfolio structuring, asset management and risk analysis. She has more than 25 years of experience analyzing real estate in multiple countries and property types. She previously was a Managing Director at RCLCO, leading the pension consulting practice group which provided portfolio strategy, manager selection, investment analysis and reporting services in multiple property types including residential sectors such as apartment, student housing, single-family land, and senior housing. At GIC Real Estate, she provided portfolio analysis, forecasting and investment analysis for a multi-billion dollar global real estate portfolio, including public and private, debt and equity instruments. There she frequently provided demand and market forecasts for multiple markets and property types for investment underwriting as well as market and portfolio analyses. She previously worked at LaSalle Investment Management, where she developed economic and demand models for multiple property types in the U.S. She graduated with an MBA in Finance from Indiana University, has served in leadership positions in many industry organizations, including ULI, PREA and the Real Estate Research Institute and is a frequent industry publisher and speaker. Dr. Jeffrey D. Fisher Michael J. Dinn, CRE® Paige Mueller, CRE® 168 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Reasonable efforts have been made to ensure that the data contained in this study reflect accurate and reliable information and are based on information that to our knowledge was current as of the date of this report. This study is based on estimates, assumptions, and other information developed from independent research efforts, models and general industry knowledge. No responsibility is assumed for inaccuracies in reporting by any data source used in preparing or presenting this study. This report represents a view of reasonable expectations as of the time the report was written, but such information, estimates, or opinions are not offered as predictions or assurances that particular results or events will occur. Actual results may vary from those described in this report, and the variations may be material. Therefore, no warranty or representation is made that any of the data, projected forecasts or results contained in this study will be achieved. From: Tim Diegel <timdiegel@me.com> Sent: Saturday, December 22, 2018 10:09 PM To: StrainMark <Mark.Strain@colliercountyfl.gov> Subject: Fwd: Stock development off Livingston and Veterans From: Tim Diegel <timdiegel@me.com> Subject: Stock development off Livingston and Veterans Date: December 22, 2018 at 9:59:03 PM EST To: markstrain@colliergov.net Dear Mr. Strain, Due to the cancellation of the Stock Development session on the afternoon before the December 6th meeting many of the neighborhood residents could not attend. Many took time off work of flew in for the meeting. We have over 1000 signatures on the petition to deny this development. We have contacted the Planning office unsuccessfully to see when the meeting has been rescheduled. I visited the Stock Lely “inspire” development off Rattlesnake Rd and toured inside and outside. It is a huge 4 story 5 buildings facility over many acres of land. I was surprised to discover that there are only 5 large buildings for 304 apartments. The Stock proposal at Livingston and Veterans is 20% larger! 350+ apartments and 6 buildings. It does not belong in the Livingston neighborhood of one story homes for many reasons. Please read over my 4 minute, 50 second talk I had planned to give on December 6th. Thank you for your consideration. Tim Diegel (Barrington Cove) timdiegel@mac.com GOOD MORNING. I’m Tim Diegel from Barrington Cove. The intersection at Livingston and Veterans Memorial is a very unusual intersection because Veterans is a dead end each way. It goes nowhere. Eventually it may extend West to 41 which will increase our traffic significantly. This type of intersection creates unique problems. All traffic on Livingston can’t leave the road to any exit to dissipate the traffic in a 4 mile stretch between Bonita Beach Road and Immokalee Road. Barrington Cove and the proposed development are about 1/2 way between these two roads. The congested Immokalee Road is also a Hurricane Evacuation Route. Each long established single family home development on Livingston will now be affected by the increase in traffic. That’s extended time to drive and more stress involved for the all residents. The addition of cars and motorcycles from this sub-district will enter only on to Livingston adding to the present congestion today and additional new noise pollution. Livingston is a 4 mile “race track” described by some, since even outside traffic of the neighborhood uses it as an alternative to 75 and 41, especially in the rush hours. There are only two stop lights on this 4 mile stretch & most travel at 50 to 60 miles per hour and rush the lights on yellow with some going through on red due to their speed. Last Wednesday at 8:10 in the morning the left turn lane was backed up almost to the Fire Station for about 1 & 1/2 blocks. The backup was close to the proposed new exit of the sub-district. Cars were overflowing into the active left fast lane. In the afternoons, cars can be backed up from Bonita Beach Road back to Talis Park & Mediterra limiting their resident’s egress on to Livingston. These are present problems we now deal with. When all the cars that exit from this highly dense development go on to Livingston in the mornings, probably half will go North toward Bonita and half will go South toward Naples. I’m not sure what the zoning is for cars per unit in Collier but in Jacksonville it is 1.75 cars per unit. For 330 to 400 units discussed here - that’s up to 700 cars. How many will exit during the peak hours? 700? 600? 500? The Traffic analysis supplied by the developer states the answer IS - 83. NOT surprising, there is no documentation for this subjective and arbitrary number but final conclusions in their analysis are made based this and other numbers. Their conclusion is that there will be NO new traffic issues at all. Hard to believe. I question the validity of this analysis and for many reasons. Part of this analysis may have mixed up from another unrelated analysis because at the top of each page 34 through 37 it states that the location studied was in Bonita Springs which is in Lee County with probable different guideline numbers that were used. Those cars that would egress daily from the new development going South will have to cross over quickly to make a left U-turn to go south on Livingston. This is a very dangerous maneuver. It is also dangerous to exit with the oncoming traffic from the South and then to turn in front of the oncoming traffic from the North to make the U-turn. Each way high speed is involved. Then consider distraction, texting, not seeing motorcycles, visual issues, impaired drivers and other additional factors. The National Highway Traffic Safety Administration states that a left turn causes 50% of all auto crashes across the United States. Other studies support this statistic. There is even a lawyer in Miami that calls himself a “left turn lawyer”. The 59 page traffic analysis supplied by the developer had errors of COmmission - a chart showing that ZERO U-turns will aoccur during the peak hours ( page 34) and Omissions - the intersection analysis was conducted AFTER the start of school (page 7). School starts at 8:25 when the peak traffic is tapering down. No mention of the left turn lane issue was ever reported. Any expert should agree that a significant increase in crashes will occur at this left turn. With such an increase in traffic on an already congested road, especially in the mornings and afternoons with parents driving their kids. There would be no surprise that an increase in crashes will happen. In addition, there is a risk for pedestrians and kids walking to school. There are 3 schools within a mile from the sub-district. There are nine lanes to cross at this intersection. One is a standby left turn lane. The “pedestrian hit” risk is directly related statistically to the number of lanes that have to be crossed. 9 is a lot.The State of Florida is number 1 in bicycle accidents. These will also increase. I feel that such a high density sub-district does not belong in this neighborhood for safety reasons and many other reasons you are hearing today. Thanks. COLLIER COUNTY Growth Management Department Zoning Division Comprehensive Planning Section March 12, 2019 To: Jeff Klatzkow, County Manager & Patricia Morgan, Director, Minutes & Records From: Marcia R. Kendall, Senior Planner Comprehensive Planning/Zoning Division RE: BCC Hearing Packets for March 26, 2019 PL20170004419/CP-2018-1 Livingston Veteran's Memorial East Subdistrict GMPA (Transmittal hearing) You previously received a complete CCPC hearing packet for their meeting that was held on January 17, 2019 and continued to February 7, 2019. Therefore, please find attached only the additional pages added to the packet for the BCC. 1) Executive Summary 2) Revised Resolution 3) BCC Affidavit & Advertisement If you have any questions pertaining to the above, please do not hesitate to contact me @252- 2387 or marcia.kendall(a,colliercountyfl.gov. Thank you! Cc: Michael Bosi, Director, Zoning Division David Weeks, GMP Manager CCPC/BCC Memo folder 2019 Zoning Division•2800 North Horseshoe Drive• Naples, FL 34104•239-252-2400 EXECUTIVE SUMMARY .►. Recommendation to approve by Resolution the single Petition within the 2018 Cycle One of Growth Management Plan Amendments for an Amendment specifically Proposed to the Future Land Use Element to Establish the Livingston Road/Veterans Memorial Boulevard East Residential Subdistrict for Transmittal to the Florida Department of Economic Opportunity for Review and Comments Response. (Transmittal Hearing) (PL20170004419/CP-2018-1) OBJECTIVE: For the Board of County Commissioners(Board)to approve the single petition in the 2018 Cycle One of amendments to the Collier County Growth Management Plan (GMP) for transmittal to the Florida Department of Economic Opportunity and other statutorily required review agencies. CONSIDERATIONS: • Chapter 163, F.S., provides for an amendment process for a local government's adopted Comprehensive Plan. • Collier County Resolution No. 12-234 provides for a public petition process to amend the GMP. • The Collier County Planning Commission (CCPC), sitting as the "local planning agency" under Chapter 163.3174, F.S., held their Transmittal hearing for the 2018 Cycle 1 petition on December 6, 2018, January 17, 2019 and February 7, 2019 (one petition only,PL20170004419/CP-2018-1). • This Transmittal hearing for the 2018 Cycle 1 petition considers an amendment to the Future Land Use Element (FLUE). The GMP amendment requested is specific to a non-corner 35.57-acre property, fronting approximately 660 feet on the east side of Livingston Road and 660 feet on the south side of Veterans Memorial Boulevard, in Section 13,Township 48 South, Range 25 East(North Naples Planning Community). The approximate northerly 660-feet portion of the property (17.25 ac.) is zoned A, Rural Agricultural, and is undeveloped. -^� The southerly portion of the property is zoned RPUD, Della Rosa Residential Planned Unit Development, approved for 107 DUs (7 DU/A), and is undeveloped. An +8.5-acre portion of the property is also designated ST, Special Treatment Overlay. This petition seeks to amend the GMP,adopted by Ordinance No.89-05,as amended,specifically amending the FLUE by adding a new Subdistrict in the Urban—Mixed Use District, revising the Future Land Use Map to depict the new Subdistrict, and adding a new Future Land Use Map Series inset map that depicts the new Subdistrict. The new residential subdistrict will: allow a maximum residential density up to 8.55 dwelling units per acre (DU/A) yielding 304 DUs; require the property to be rezoned to a Residential Planned Unit Development (RPUD); limit allowable uses to multi-family rental dwelling units of market rate housing; and,utilize Transportation Demand Management(TDM) strategies. In Summary,the new Subdistrict derives its residential density using the Density Rating System as follows: Base Density of 4 DU/A+Transportation Concurrency Management Area(TCMA)Bonus of 3 DU/A=7 DU/A. The Density Rating System states that density bonuses are discretionary, not entitlements, and are dependent upon meeting the criteria for each respective density bonus—in this case,utilizing Transportation Demand Management(TDM)strategies [to satisfy FLUE Policy 6.1 that states,in part: "that will ensure an adequate level of mobility... and further the achievement of...important state planning goals and policies... promoting public transit, bicycling, walking..."]. These 7 DU/A applied to the subject site's 35.57 acres allows up to 249 DUs. The additional density of 1.55 DU/A is derived not from the FLUE's Density Rating System,but from the ask within the amendment itself Subdistrict provisions require TDM strategies to be written into PUD Developer Commitments. The Subdistrict limits project development to 7 DU/A until the facilities and interconnections associated with the TDM strategies are completed (such as, providing an on-site Collier Area Transit shelter and interconnection(s)to abutting commercial development). - 1 - In preparation for the December 6,2018 CCPC hearing,the staff based their analysis of this petition on the originally-requested 420 dwelling units. The initial Subdistrict proposal allowed a maximum residential density up to 12 dwelling units per acre(DU/A), yielding 420 DUs, required the property to be rezoned to .� a Residential Planned Unit Development (RPUD), limited allowable uses to multi-family rental dwellings, and required utilization of two TDM strategies. Based on the review of this petition, including the supporting data and analysis, staff made the following findings and conclusions: • The subject site is undeveloped, partly zoned A, Rural Agricultural and partly zoned Della Rosa Residential PUD. An ±8.5-acre portion of the property is also designated ST, Special Treatment Overlay. The entire site is designated Urban Residential Subdistrict on the FLUM, and lies within the Northwest Transportation Concurrency Management Area(TCMA),an area where the Plan encourages compact urban development and utilizes transportation demand management strategies to reduce traffic impacts. • Analysis indicates that projected population growth provides sufficient demand for market-based apartments. • At the macro level at which a GMP amendment is reviewed, staff is of the opinion that the proposed GMP amendment is appropriate for the site. The rezone petition to implement the proposed Subdistrict will need to address specific compatibility measures. • No issues or concerns regarding impacts upon potable water, wastewater collection and treatment or solid waste collection and disposal services have been identified. • The proposed GMP amendment has no effect on the requirements of the Conservation and Coastal Management Element(CCME). • The Barron Collier and Gulf Coast High Schools have a combined Florida Inventory of School Houses (FISH)capacity of 3,606 students, and a 2016/2017 peak enrollment of 3,888 students, and a projected 2021/2022 enrollment of 4,000 students (111% capacity). Enrollment at Gulf Coast High School is being monitored and temporary alternatives to address overcrowding may be implemented prior to permanent relief with the opening of a new high school in 2023. • People attending the Neighborhood Information Meeting expressed a strong consensus that developing the property was not opposed, but the proposed intensity and density of this project, and this specific development is opposed. In this December 6 meeting, the applicant explained that changes they made in November 2018 to their companion PUD application materials included reducing intensity from 420 to 350 DUs. Additional time was needed to meet with neighbors and properly prepare for similar changes in GMPA materials, and the applicant requested to continue this hearing until the CCPC meeting of January 17, 2019. No public testimony was heard, and the CCPC continued this hearing to January 17, 2019. At the January 17, 2019 CCPC meeting, changes presented by the applicant would limit the maximum residential density to 9.8 DU/A, yielding 350 DUs. Numerous speakers presented extensive public testimony, expressing concerns related to intensity, density, compatibility and traffic congestion. Transportation Planners reported further that the reduced number of dwelling units [to 350] affects their findings differently, and commented: • According to the 2018 Annual Update and Inventory Report(AUIR), Livingston Road is currently and projected to operate at an acceptable level-of-service. • Additional improvements within and near the TCMA will assist in maintaining the acceptable level-of- service on a link specific basis as well as areawide. These improvements include: Veteran's Memorial Boulevard is slated to be constructed between Livingston Road; Old 41 Project Development and Environmental study from US 41 to the Lee County line to determine future improvements; and,Logan Boulevard improvements will soon be completed from Immokalee Road to Bonita Beach Road — another parallel north-south connection that will provide relief. • Due to the project's location within the TCMA, if the project were to impact a deficient or projected deficient roadway, the project would be eligible to seek an exemption from link by link concurrency. �. • Though the applicant does not need to seek an exemption for link-specific concurrency (as there is sufficient capacity on links identified and the link that does have a projected deficiency would have a -2 - de minimis impact[1%or less of the adopted peak hour service volume at the adopted level of service (LOS)]) at this time for transportation consistency purposes,the applicant has committed to executing at least two transportation demand strategies to gain an additional 3 DU/A density. • A second exit-only access on Livingston Road is proposed [by the companion PUD] which does not meet access management distance separation requirements. The Access Management Policy (Resolution 13-257) represents desirable requirements; however, the ultimate goal is to exceed these standards. Transportation Planning staff does not recommend approval of the second access point as it is not consistent with the Access Management Policy. Transportation Planning staff finds that the proposed development can be found consistent with the Access Management Policy if the second access point on Livingston Road is removed from the companion PUD master plan. The CCPC continued this hearing to February 7. At the February 7, 2019 CCPC meeting, the applicant proposed to provide 10% of the dwelling units as affordable housing at 80 to 120% of median income. Numerous speakers presented continuing public testimony with the same concerns as previously as well as concerns about affordable housing units. Changes presented by the CCPC recommended limiting the maximum residential density to 8.55 DU/A, yielding 304 DUs, and limiting the units to market rate only. The proposed Subdistrict text, as recommended by the CCPC, is depicted in Resolution Exhibit"A". FISCAL IMPACT: No fiscal impacts to Collier County result from this amendment, as this approval is for the transmittal of this proposed amendment. Petition fees account for staff review time and materials, and for the cost of associated legal advertising/public notice for the public hearings. GROWTH MANAGEMENT IMPACT: Approval of the proposed amendment by the Board for transmittal and its submission to the Florida Department of Economic Opportunity and other statutorily required review agencies will commence the Department's thirty (30) day review process and ultimately .-� return the amendment to the CCPC and the Board for its Adoption hearing tentatively to be held in late Spring of 2019. LEGAL CONSIDERATIONS: This Growth Management Plan(GMP)amendment is authorized by,and subject to the procedures established in, Chapter 163, Part II, Florida Statutes, The Community Planning Act, and by Collier County Resolution No. 12-234, as amended. The Board should consider the following criteria in making its decision: "plan amendments shall be based on relevant and appropriate data and an analysis by the local government that may include but not be limited to, surveys, studies, community goals and vision, and other data available at the time of adoption of the plan amendment. To be based on data means to react to it in an appropriate way and to the extent necessary indicated by the data available on that particular subject at the time of adoption of the plan or plan amendment at issue." Section 163.3177(1)(f), F.S. In addition, Section 163.3177(6)(a)2, F.S., provides that FLUE plan amendments shall be based on surveys, studies and data regarding the area, as applicable including: a. The amount of land required to accommodate anticipated growth. b. The projected permanent and seasonal population of the area. c. The character of undeveloped land. d. The availability of water supplies,public facilities, and services. e. The need for redevelopment, including the renewal of blighted areas and the elimination of non- conforming uses which are inconsistent with the character of the community. f. The compatibility of uses on lands adjacent to or closely proximate to military installations. g. The compatibility of uses on lands adjacent to an airport as defined in s. 330.35 and consistent with s. 333.02. h. The need to modify land uses and development patterns with antiquated subdivisions. i. The discouragement of urban sprawl. j. The need for job creation, capital investment and economic development that will strengthen and diversify the community's economy. And FLUE map amendments shall also be based upon the following analysis per Section 163.3177(6)(a)8.: a. An analysis of the availability of facilities and services. -3 - b. An analysis of the suitability of the plan amendment for its proposed use considering the character of the undeveloped land, soils, topography, natural resources, and historic resources on site. c. An analysis of the minimum amount of land needed to achieve the goals and requirements of this r1 section. This item is approved as to form and legality. It requires a majority vote for approval because this is a Transmittal hearing. [SAS] STAFF RECOMMENDATION TO THE COLLIER COUNTY PLANNING COMMISSION: That the CCPC forward petition PL20170004419/CP-2018-1 to the Board,with the maximum residential density up to 9.8 dwelling units per acre (DU/A) yielding 350 dwelling units; as heard at the January 17, and February 7, 2019 meetings, and to transmit to the Florida Department of Economic Opportunity and other statutorily required review agencies. COLLIER COUNTY PLANNING COMMISSION (CCPC) RECOMMENDATION: The CCPC heard this petition at their January 17,and February 7,2019 meetings,and voted[4/2]to forward the subject petition to the Board, with the maximum residential density up to 8.55 dwelling units per acre (DU/A) yielding 304 dwelling units; with a recommendation to transmit to the Florida Department of Economic Opportunity and other statutorily required review agencies. There is public opposition to the petition and therefore it cannot be placed on the Board's Summary Agenda. STAFF RECOMMENDATION TO THE BOARD OF COUNTY COMMISSIONERS: To approve the draft Resolution and transmit petition PL20170004419/CP-2018-1 to the Florida Department of Economic Opportunity and other statutorily required review agencies, as recommended by the CCPC. Prepared by: Corby Schmidt, AICP, Principal Planner, and David Weeks, AICP, Growth Management Manager, Comprehensive Planning Section, Zoning Division, Growth Management Department rte, -4 - r-1 RESOLUTION NO. 19 - A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS PROPOSING AMENDMENT TO THE COLLIER COUNTY GROWTH MANAGEMENT PLAN, ORDINANCE 89-05, AS AMENDED, SPECIFICALLY AMENDING THE FUTURE LAND USE ELEMENT AND MAP SERIES TO ADD THE LIVINGSTON ROAD/VETERANS MEMORIAL BOULEVARD EAST RESIDENTIAL SUBDISTRICT TO THE URBAN MIXED-USE DISTRICT, TO ALLOW UP TO 304 MULTI FAMILY DWELLING UNITS, AND FURTHERMORE DIRECTING TRANSMITTAL OF THE AMENDMENT TO THE FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY. THE SUBJECT PROPERTY IS LOCATED ON THE SOUTH SIDE OF VETERANS- MEMORIAL BOULEVARD, JUST EAST OF LIVINGSTON ROAD, IN SECTION 13, TOWNSHIP 48 SOUTH, RANGE 25 EAST, COLLIER COUNTY, FLORIDA, CONSISTING OF 35.57± ACRES. [PL20170004419] WHEREAS, Collier County, pursuant to Section 163.3161, et. seq., Florida Statutes, the Florida Local Government Comprehensive Planning and Land Development Regulation Act, was required to prepare and adopt a comprehensive plan; and WHEREAS, the Collier County Board of County Commissioners adopted the Collier County Growth Management Plan on January 10, 1989; and WHEREAS, the Community Planning Act of 2011 provides authority for local governments to amend their respective comprehensive plans and outlines certain procedures to amend adopted comprehensive plans; and WHEREAS, SD Livingston, LLC, requested an amendment to the Future Land Use Element and Future Land Use Map and Map Series to add the Livingston Road/Veterans Memorial Boulevard East Residential Subdistrict to the Urban Mixed-Use District; and WHEREAS, on January 17, 2019 and February 7, 2019, the Collier County Planning Commission considered the proposed amendment to the Growth Management Plan pursuant to the authority granted to it by Section 163.3174, F.S., and has recommended approval of said amendment to the Board of County Commissioners; and WHEREAS, on March 26, 2019, the Board of County Commissioners at a public hearing approved the transmittal of the proposed amendment to the state land planning agency in accordance with Section 163.3184, F.S.; and WHEREAS, upon receipt of Collier County's proposed Growth Management Plan Amendment, various State agencies and the Department of Economic Opportunity (DEO) have thirty (30) days to review the proposed amendment and DEO must transmit, in writing, to Collier County its comments within said thirty(30)days pursuant to Section 163.3184, F.S.; and [18-CMP-01000/1459700/1]97 2/14/19 Page 1 of 2 WHEREAS, Collier County, upon receipt of the written comments from DEO must adopt, adopt with changes or not adopt the proposed Growth Management Plan Amendment within one hundred and eighty(180) days of such receipt pursuant to Section 163.3184, F.S.; and WHEREAS, the DEO, within five (5) days of receipt of Collier County's adopted Growth Management Plan Amendment, must notify the County of any deficiencies of the Plan Amendment pursuant to Section 163.3184(3), F.S. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA that: The Board of County Commissioners hereby approves the proposed Growth Management Plan Amendment, attached hereto as Exhibit "A" and incorporated by reference herein, for the purpose of transmittal to the Department of Economic Opportunity and other reviewing agencies thereby initiating the required State evaluation of the Growth Management Plan Amendment prior to final adoption. THIS RESOLUTION ADOPTED after motion, second and majority vote this day of , 2019. ATTEST: BOARD OF COUNTY COMMISSIONERS CRYSTAL K. KINZEL, CLERK COLLIER COUNTY, FLORIDA BY: Deputy Clerk W.L. McDANIEL, Jr., Chairman Approved as to form and legality: Scott A. Stone Iia/'1/'s Assistant County Attorney Attachment: Exhibit A—Proposed Text Amendment & Map Amendment [18-CMP-01000/1459700/1197 2/14/19 Page 2 of 2 0 Transmittal Exhibit PL20170004419/CP-2018-1 EXHIBIT A FUTURE LAND USE ELEMENT II. IMPLEMENTATION STRATEGY *** *** *** *** text break *** *** *** *** Policy 1.5 The URBAN Future Land Use Designation shall include Future Land Use Districts and Subdistricts for: A. URBAN — MIXED USE DISTRICT [Page 9] *** *** *** *** text break *** *** *** *** 18. Vincentian Mixed Use Subdistrict 19. [RESERVED] 20. Goodlette/Pine Ridge Mixed Use Subdistrict 21. Livingston RoadNeterans Memorial Boulevard East Residential Subdistrict *** *** *** *** text break *** *** *** *** FUTURE LAND USE DESIGNATION DESCRIPTION SECTION *** *** *** *** text break *** *** *** *** I. URBAN DESIGNATION *** *** *** *** text break *** *** *** *** A. Urban Mixed Use District [Page 49] *** *** *** *** text break *** *** *** *** 21. Livingston RoadNeterans Memorial Boulevard East Residential Subdistrict The Livingston RoadNeterans Memorial Boulevard East Residential Subdistrict consists of ±35.57 acres and is located in the southeast quadrant of the intersection of Livingston Road and Veterans Memorial Boulevard and is within a Transportation Concurrency Management Area (TCMA). The purpose of this Subdistrict is to allow for a multi-family development at a density of up to 8.55 units per acre and to fulfill the intent of the TCMA, as stated in FLUE Policy 6.1. Development in this Subdistrict shall be subject to the following: a. The Subdistrict site shall be rezoned to Residential Planned Unit Development (RPUD). b. Allowable uses are limited to multi-family rental dwellings and shall not exceed 304 units of market rate housing. c. The RPUD shall demonstrate consistency with FLUE Policy 6.1 by providing two or more of the following: i. A transit shelter within the RPUD in a location and design approved by Collier County Public Transit & Neighborhood Enhancement (PTNE) Division; 1 0 Words underlined are added;words struck-through are deleted. Transmittal Exhibit PL20170004419/CP-2018-1 ii. Bicycle and pedestrian facilities, with connection to the abutting commercial property to the west; and, iii. Vehicular interconnection to the abutting commercial property to the west. Certificates of occupancy shall not be approved for more than 249 multi-family units (a density of 7.0 units per acre) until the applicable facilities and/or interconnections, as described above and approved as Development Commitments in the RPUD, have been completed. d. The RPUD shall include development standards and buffers to insure compatibility with surrounding land uses. As an alternate to all of the above, this Subdistrict may be developed in accordance with the Urban Residential Subdistrict. *** *** *** *** text break *** *** *** *** FUTURE LAND USE MAP SERIES [Page 147] *** *** *** *** text break *** *** *** *** Logan Boulevard/Immokalee Road Commercial Infill Subdistrict Map Mini Triangle Mixed Use Subdistrict Map East Tamiami Trail Commercial Infill Subdistrict Map Livingston Road/Veterans Memorial Boulevard East Residential Subdistrict Map 2 �7 Words underlined are added;words struck-through are deleted. 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' .,-,. u e `� N 1 I T46S 1 _ ___T47S I T48S i 749S __d____ TEAS I 751S I T82S I TSsS I 0444 EXHIBIT A PL20170004419/CP-2018-1 aligl LIVINGSTON ROAD/VETERANS MEMORIAL BOULEVARD OEAST RESIDENTIAL SUBDISTRICT COLLIER COUNTY,FLORIDA Felicity I T Cellini LN v .J 03 ,. L ` N c 'SO CO c Celebrita CT . 2 0 co a, Veterans Memorial BLVD c f,/ Barclay CT / / / /7'/ /44 / >- 5 PROPOSED L SUBDISTRICT // / z < Aberdeen; VE r- _ `., 1 ' ' Borelle CIR Learning LN__ Ravina WAY ADOPTED-XXXX, XXXX LEGEND (Ord. No.XXXX-X) 0 250 500 1,000 Feet PROPOSED SUBDISTRICT 1 I I I I I I I { Eza e, ), ?ars ' at NaplesNews.com Published Daily Naples,FL 34110 Affidavit of Publication State of Florida Counties of Collier and Lee Before the undersigned they serve as the authority, personally appeared Natalie Zollar who on oath says that she serves as Inside Sales Manager of the Naples Daily News,a daily newspaper published at Naples, in Collier County, Florida;distributed in Collier and Lee counties of Florida;that the attached copy of the advertising was published in said newspaper on dates listed.Affiant further says that the said Naples Daily News is a newspaper published at Na- ples,in said Collier County,Florida,and that the said newspaper has heretofore been continuously published in said Collier County, Florida; distributed in Collier and Lee counties of Florida,each day and has been entered as second class mail matter at the post office in Naples, in said Collier County, Florida,for a period of one year next preceding the first publication of the attached copy of advertisement; and affiant further says that he has neither paid nor promised any person, or corporation any discount, rebate, commission or refund for the purpose of securing this advertisement for publication in the said newspaper. Customer Ad Number Copyline P.O.# BCC/COMPREHENSIVE PLANNING DEV 2238985 PL20170004419/CP-201 4500190197 Pub Dates March 6,2019 l� PMa (Sig ture of affiant) • ; ' KAROL E KANGAS 4 e'•, NotaryPuWlc-State or Florida Sworn to and subscribed before me 1 CommissonKGG1 A , This March 07,2019 I `'?«t '° Mrcomm'E"pIre:iuI29 XV • 6ontledthnwghNatIonelybtaryAsvi aliWillomumnorraperwmineriwupft (Signature of affiant) 22A 1 WEDNESDAY.MARCH 6.2019 1 NAPLES DAILY NEWS Remembering the NOTICE OF PUBLIC HEARING NConcorde 50 years later h , ;that the , CommissionersmNil ld s The purpose of the hearing a to coraider.. Revolutionary plane A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS PROPOSING never fully caught on AMENDMENT TO THE COLLIER COUNTY GROWTH MANAGEMENT PLAN, ORDINANCE 89.06,AS AMENDED,SPECIFICALLY AMENDING THE FUTURE LAND 611:41 ASSOCIATED PRESS USE ELEMENT AND MAP SERIES TO ADD THE LIVINGSTON ROADNETERANS MEMORIAL BOULEVARD EAST RESIDENTIAL SUBDISTRICT TO THE URBAN Thea ed and elegant appearance of MIXED-USE DISTRICT,TO ALLOW UP TO 304 MULTI FAMILY DWELLING UNITS, Pe gaff ppe AND FURTHERMORE DIRECTING TRANSMITTAL OF THE AMENDMENT TO THE the Concorde inspired awe.Its ear-rat- FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY. THE SUBJECT PROPERTY tling sonic booms irritated people on the IS LOCATED ON THE SOUTH SIDE OF VETERANS-MEMORIAL BOULEVARD,JUST ground and led to restrictions on where EAST OF LIVINGSTON ROAD,IN SECTION 13,TOWNSHIP 48 SOUTH,RANGE 25 EAST. the Jet could fly. COWER COUNTY,FLORIDA,CONSISTING OF 35,51s ACRES.[PL20170004419] The Concorde's maiden flight was 50 years ago this month. Although the The Air France Concorde supersonic J I I — plane went out of service in 2003,its airliner touches down at Miami \�_'!i delta-wing design and drooping nose International Airport on June 14,1974, Yemeni. air BLVD still make it instantly recognizable even The flight from Boston's Logan Airport to people who have never seen one in took about 80 minutes.PHIL sANDUNAP _� person. S The Concorde was the world's first supersonic passenger plane.It was a seemed as if they were flying backward rm..' technological marvel and a source of - the Concorde was moving about LaaATlea pride in Britain and France,whose aero- 800 mph faster. r' space companies joined forces to pro- However,the Concorde never caught l'—� -{ duce the plane. on widely.The plane's economics were I J .'4' Its first flight occurred on March 2, challenging,and its sonic booms led it to s' 1969,in Toulouse,France.The test flight be banned on many overland routes. All Plteresletl patties are invaed:o tasted 28 minutes.British Airways and Only 20 were built 14 of which were appear and be heard.Copies of the proposed RESOLUTION Air France launched passenger flights in used for passenger service. wit be made eoallebb hn e0000rion at the GMD Department.Zoning D,vlebn.Compretlemive Planning Sactm.2800 N.Horseshoe Dr..Naples,between the hours of 8:00 AM.and 5:00 P.M., 1976. As time went on,flights were disrupt- Monday through Friday.Furthermore.Ms maleness will be made available for Inspection at the With four jet engines and afterburn- ed by mechanical breakdowns includ- collar County Clerk's Office.Fourth Floor Colder County Dovemment Center,3299 East Tamiami era,the plane could fly at twice the ing engine failures and a broken rudder. Traa,iota 401 Naples.one week poor to the scheduled(waning.Any questions pertaining to the speed of sound and cruised at close to Reviewers complained about the small documents should be dre ted to the Comprehensive Planning Set.of the GMO Department, 60,000 feet,far above other airliners.It cabin,noise,and vibrations that started Zonate Division.Written canments filed with the Clerk to the Board's Office prior to March 25, promised to revolutionize long-distance during takeoff and continued once air- 2019 wit be read and considered a!the public hearing. travel by cutting flying time from the home. U.B.East Coast to Europe from eight The plane's darkest day came on July Any Person who decides to appeal any demon of the Goner County Board of County hours to 3 K. 25,2000,when an Air France Concorde Cormmissbnas wnl need a record of the paceedinga parlalning thereto and lherelare,may need Depending on the layout,the plane crashed into a hotel and exploded short- to erwlre that a on ut,nitn record of the prdcame5e s made.whim record etc the 105100ary could seat up 20128 passengers,far few- ly after takeoff in Paris,killing all 109 and evlce upon which me aDPeal b based, I er than on many other planes flying the people on board and four on the ground. it you are a person 001 0 disabllty wino nods any accorenoUetion:,order to participate trans-Atlantic routes.The relative scar- Investigators determined that the in ma proceeding.you are entitled,al no cost to you,to the provision of certain assistance. city of seats and the plane's high oper- plane ran over a metal strip that had Please contact the Collier County Facilities Management Demon,located at 3335 Tarrsami ating costs made tickets expensive- fallen off another jet onto the runway, had East.Suite 101,Naples.FL 341124356,12391 252.8380,at least two days peer to the typically several thousand dollars-so it damaging a tire.A piece of the tire meeting.Assisted listening devices for the hearing impaired are available in the Board of County was mostly reserved for the wealthy crashed into the underside of the wing, Cotnrni. 0ff'00. and famous,and occasionally for royal- shockwaves caused a fuel tank to nip- BOARD tore,and the fuel ignited BOARD OF COUNTY COMMISSIONERS DA A Concorde captain raved that the The planes were grounded for expert- W.L.CLLIERANI1L.JR.CHAIRMAN W. MGDANIEL.JR.CHAIRMAN plane flew beautifully,and that the only sive modifications.After 18 months,BA indication of its speed came from look- and Air France both resumed flights,but CRYSTAL K.KINZEL. ung down at other lets far below that traffic never recovered. CLERK OF THE CIRCUIT COURT it COMPTROLLER �..� By Teresa Cannon.Deputy Clerk (SEAL) we.. I 1 1.41.j ! HlM)M\ rrt'`1 ._ 11('Ill lhl:I9i5 \) `�` Y 1)o you have \ � �.� = N'rhat lhev'1'E', �`J , �• 1 NAPLES PELICAN BAY ROTARY CLUB ..,u A��j��� \� presents looking for? 1 � 1-- A i Tn�,�, ..1 Mitand,let 4 Ill V Chalk Art I ,w. h . �_/ 1 t},_in 20019 .., mtiuum lr,,v flee Yews t,-3r. � SCHEDULE A COMPLIMENTARY _-` "STREET PAINTING EXTRAVAGANZA' AUCTION ESTIMATE �` ij ; Saturday.March 9th.2019 85O em Ave,,,S au,' 8 AM tC 4 PM Napes.Fin,1,110) 2eaAM MaM 5th Avenue South-Naples,Florida crP,.asNvas ,, resmmri nd,con ap. ArA,..s.nen Come and enjoy this free annual event,and watch the marry pieces of artwork being painted on the pavement rHE COLD of beautiful 5th Avenue South. r-7 �._7 CENTERVisitors are invited to join the celebration and vote for their The y til 0311'3 ? iS open! favorite canalkd art roundo .Live festive ve,music 710Wand fashion out this festive event. We will purchase your ,„ 100%of al proceedsbenefit the Pelican Bay Rotary precious metals and stones ' Scholarship Fund and Local Charities. ,O and refine onsite.Anything ter;;;�,,. Artists,register now to participate for FREE. from broken jewelry,flatware. �jjllf sponsors and Artists: dental gold to entire large For information,contact estates. Pete Rossi at prossleforgeeng.com 4i Authorized Purchaser of MAJOR SPONSORS: ,, United States Mint bullion ..1.: -'4, -s coins since 1990. " -�, Visit us today to browse our � �^c Daily rifle' consistingof beautiful estate r pieces 0 eg s unique collection of fine jewelry and new natural colored diamonds. 2400 Tamiami Trail North,Suite 101 Naples FL 112391920-8000 ., www.thegoldcenter.com ........ ?iapLrEi Battu rujG NaplesNews.com Published Daily Naples,FL 34110 Affidavit of Publication State of Florida Counties of Collier and Lee Before the undersigned they serve as the authority, personally appeared Natalie Zollar who on oath says that she serves as Inside Sales Manager of the Naples Daily News, a daily newspaper published at Naples, in Collier County, Florida; distributed in Collier and Lee counties of Florida;that the attached copy of the advertising was published in said newspaper on dates listed.Affiant further says that the said Naples Daily News is a newspaper published at Na- ples,in said Collier County,Florida,and that the said newspaper has heretofore been continuously published in said Collier County, Florida; distributed in Collier and Lee counties of Florida,each day and has been entered as second class mail matter at the post office in Naples, in said Collier County, Florida,for a period of one year next preceding the first publication of the attached copy of advertisement; and affiant further says that he has neither paid nor promised any person, or corporation any discount, rebate, commission or refund for the purpose of securing this advertisement for publication in the said newspaper. Customer Ad Number Copyline P.O.# BCC/COMPREHENSIVE PLANNING DEV 2238985 PL20170004419/CP-201 4500190197 Pub Dates March 6,2019 e tiaii C. 0 .1 e1,C4. (Sig 2 ure of affiant) 0 , ';„:' ,-, KAROL E KANGAS 4 Notary Pa -State of Florida Sworn to and subscribed before me i „. CommIssron 4G 126041126041 , This March 07, 2019 1 'NI.0F,/ k myComm.EaresJui29.m21 1 Bonded through Mag Notary Asa I 14. Wv4 g ,�(1 (Signature of affiant) 22A I WEDNESDAY,MARCH 8,2019 i NAPLES DAILY NEWS Remembering the NOTICE OF PUBLIC HEARING 11 Notice is hereby given that the Collier County Board of County Commissioners will hold a public _ Concorde 50 years later hearing on March 2S,2019 commencing at 990 a.m.,m the Board of County Commres...ere Chamber.Third Floor.Collier County Government Center,3299 E.Tamumi Trail.Naples,FL The purpose of the nearing b to consider: Revolutionary plane A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS PROPOSING never fully caught on AMENDMENT TO THE COLLIER COUNTY GROWTH MANAGEMENT PLAN, ORDINANCE 89-06.AS AMENDED,SPECIFICALLY AMENDING THE FUTURE LAND ASSOCIATED PRESS USE ELEMENT AND MAP SERIES TO ADD THE LIVINGSTON ROAD/VETERANS • MEMORIAL BOULEVARD EAST RESIDENTIAL SUBDISTRICT TO THE URBAN MIXED-USE DISTRICT,TO ALLOW UP TO 304 MULTI FAMILY DWELLING UNITS, The speed and elegant appearance of MD FURTHERMORE DIRECTING TRANSMITTAL OF THE AMENDMENT TO THE the Concorde inspired awe.Its ear-rat- FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY. THE SUBJECT PROPERTY Cling sonic booms irritated people on the is LOCATED ON THE SOUTH SIDE OF VETERANS-MEMORIAL BOULEVARD,JUST ground and led to restrictions on where EAST OF LIVINGSTON ROAD.IN SECTION 13,TOWNSHIP 48 SOUTH,RANGE 25 EAST. the jet could fly. COLLIER COUNTY,FLORIDA,CONSISTING OF 35.572 ACRES,IPL20170004419) The Concorde's maiden flight was 50 years ago this month. Although the The Alr France Concorde supersonic /----- I.� plane went out of service in 2003,its airliner touches down at Miami / - delta-wing design and drooping nose International Airport en June 14,1974. *ware MemMal SLOT still make it instantly recognizable even The flight from Boston's Logan Airport _. to people who have never seen one in took about 80 minutes.Pia SANULIH/AP iih.. ....„____,__ person. The Concorde was the world's first supersonic passenger plane.It was a seemed as if they were flying backward x mar KT ,9 technological marvel and a source of - the Concorde was moving about LocAltea pride in Britain and France,whose aero- 800 mph faster. space companies joined forces to pro- However,the Concorde never caught 'i --( duce the plane. on widely.The plane's economics were I J Its first flight occurred on March 2, challenging,and its sonic booms led it to `' — 1969,in Toulouse,France.The test flight be banned on many overland routes. All interested parties are Invited to appear and be heard.Copies of the procosed RESOLUTION lasted 26 minutes.British Airways and Only 20 were built;14 of which were will be made available for inspection at the GRAD Dapanmerit.Zoning Drviskon,coe Comprehensive Air France launched passenger flights in used for passenger service. Planning Section 2800 N.Horseshoe Dr.,Naples,between the hours of 8:00 A.M.and 5'.00 P.M.. 1976. As time went on,flights were disrupt- Monday through Friday.Furthermore.rho materials wlll be made available for inspection at the With four jet engines and afterbum- ed by mechanical breakdowns includ- Collier County Clerk's Office.Fourth Floor.Coker County Government Cante,3299 East Tamene ers,the plane could fly at twice the log engine failures and a broken rudder. Trail.sole 401 Naples,one week prior to the scheduled rearing.Any questions pertaining to the speed of sound and cruised at close to Reviewers complained about the small documents should be directed to the Comprehensive Planning section of the GMD Department 60,000 feet,far above other airliners.It cabin,noise,and vibrations that started Zoning Division.Written comments Ned with the Clerk to the Board's Office prior to Mitch 28, promised to revolutionize long-distance during takeoff and continued once air- 2019 win be read and considered at the pubis hearing. travel by cutting flying time from the home. Any person who decides to appeal any daemon of the Collier County Board of County U.B.East Coast to Europe from eight The plane's darkest day came on July Commissioners will need a record of the proceedings pertaining thereto and therefore,may need hours to 3 K. 25,2000,when an Art France Concorde to ensure mat a verbatim record of the proceddmgs'm made,which record mol des the testimony Depending on the layout,the plane crashed into a hotel and exploded short- could seat up to 128 passengers,far few- ly after takeoff in Paris,killing all 109 and evidence upon which me appeal is based. er than on many other planes flying the people on board and four on the ground. II you ore a person with a disabiity why needs soy accommodation r,ardor is panicqiato trans-Atlantic routes.The relative scar- Investigators determined that the in This proceeding,you are a ntllled,at no cost to you,to the provision of certain assistance. city of seats and the plane's high oper- plane ran over a metal strip that had Please contact the Collier County FacilObs Management Divsion,located at 3335 Tamumi ating costs made tickets expensive- fallen off another jet onto the runway, Trail East.Suite 101.Naples,FL 34112-5358.1239)252-8380.at Nast two days prior to the typically several thousand dollars-so it damaging a tire.A piece of the Lire meeting.Assisted listening devices for me hearing knpaied are available e,the Board of County was mostly reserved for the wealthy crashed into the underside of the wing, Commissiorore Office. and famous,and occasionally for royal- shockwaves caused a fuel tank to nip- ty. lure,and the fuel ignited. CBOARD OF COUNTY COMMISSIONERS A Concorde captain raved that the The planes were grounded for expert- W.L. IDDMER LTJ FLORIDA plane flew beautifully,and that the only sive modifications.After 18 months,BA W. MCOANIEL.JR.CHAIRMAN indication of its speed came from look- and Air France both resumed flights,but CRYSTAL K.KINZEL ing down at other jets far below that traffic never recovered. CLERK OF THE CIRCUIT COURT 8 COMPTROLLER /'\ By: Teresa Cannon.Deputy Clerk (SEAL) „pa„„ i j i ;siii IitNI)Ni 1\ i Ni i'I1(INEEtt, Do you have \ 1 ``. NAPLES PELICAN BAY ROTARY CLUB What,they're , \������ �� presents looking for? , ; i_`_����II Ch8,1k Art n h� �--, • m.w tLtie8us.a ,)ri 20018 4 ren 5d Jilarvan �� _ aucorm '..rte! Fr.l•nnn mJn.. SCHEDULE A COMPLIMENTARY "� `STREET PAINTING EXTRAVAGANZA" *POTIONESYISaOTE 'h o - - 1 Saturday.March 9th.2019 ewe,-.nee.0 he s,,,:n 8 AM to 4 PM NO..rMmOn 3atp, e0H0.4411 i 5th Avenue South-Naples,Florida ,ev,• shtoma.,.�o.-x..,e, ...vrsa,..... Come and enjoy this tree annual event.and watch the many pieces of artwork being painted on the pavement of beautiful 5th Avenue South. THF GOLD CENTER Visitors are invited to loin the celebration and vote for their The ( lo � is now open.' favorite chalkar am round.Live festive music and fashion round out this festive event. We Will purchase your * 100%of all proceeds benefit the Pelican Bay Rotary precious metals and stones Scholarship Fund and Local Charities. .0 and refine onsite.Anything .a Artists,register now to participate for FREE. from broken jewelry,flatware, 'r Sponsors and Artists: dental gold to entire large For information,contact estates.ized Purchaser Pete Rossi at prossl@forgaeng.com AuthorMAJOR SPONSORS: s 'Af •• United States Mint bulliof on t"e coins since 1990. — ' �� Visit us today to browse our �' � Naples DYy NeEn ? unique collection of fine jewelry - _ ,,,,,,,,,,,, consistingof beautiful estate 0 mg i? .ser . I pieces and new natural colored ' ,A.' diamonds. 2400 Tamiami Trail North,Suite 101,Naples FL I(239)920-8090 www.thegoldcenter.corn 22A Y 'WEDNESDAY,MARCH ti, 2019 I NAPLES DAILY NEWS NOTICE OF PUBLIC HEARING Notice is 'e'ebv i ven that tie Collier County Board of County Commissioners. I h old a public hearing or March 26,2019 commencing at 9;00 a.m..in the Bowra of County Cn:t rr;slo ters Chamber,Third F aor,C.oil e.County Government Center,3299 E.Tamiam'Tra.l.Naples,FI The purpose of the hearing is to consider: A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS PROPOSING AMENDMENT TO THE COLLIER COUNTY GROWTH MANAGEMENT PLAN, ORDINANCE 89-05,AS AMENDED,SPECIFICALLY AMENDING THE FUTURE LAND USE ELEMENT AND MAP SERIES TO ADD THE LIVINGSTON ROADIVETERANS MEMORIAL BOULEVARD EAST RESIDENTIAL SUBDISTRICT TO THE URBAN MIXED-USE DISTRICT. TO ALLOW UP TO 304 MULTI FAMILY DWELLING UNITS, AND FURTHERMORE DIRECTING TRANSMITTAL OF THE AMENDMENT TO THE FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY. THE SUBJECT PROPERTY IS LOCATED ON THE SOUTH SIDE OF VETERANS-MEMORIAL BOULEVARD, JUST EAST OF LIVINGSTON ROAD,IN SECTION 13,TOWNSHIP 48 SOUTH,RANGE 25 EAST, COLLIER COUNTY.FLORIDA,CONSISTING OF 35.57s ACRES. [PL20170004419] 1f efirtS Mernanal at PROJECT � + LOCATION .Al interested roar'=es are invitee to appear and be heard. Copies of the proposed RESOLUTION .li be made available for inspect on at the GMD Department,Zoning Division,Comprehensive Mannino Section.2800 N.Horseshoe Dr.,Naples,between the hours of 8:00 A.M.and 5:00 P.M„ Monday through Friday. Furthermore,the meter•als w II he made avalable for inspection at the Coalier County C'eric's Off ce,Fourth Floor,Collier County Government Center,3299 East Termer-it Trait,suite 401 Naples.one week prior to the scheduled hearing.Any Questions pertainFr;;to the documents should be d!rected to the Comprehensive Planning Section of the GMD Deaarme-it. ton=ng Division.Writter comma-its filed with the Cleric to the Board's Office prior to March 25. 2019 will be read and consfered at the public hearing Ary person who decides to appea any decision of the Collier County Board of County Commissioners wall need a record of tie proceedings pertaining thereto and therefore,may need to ensure that a verbatim record of the proceedings is roads,whei record includes the testimony and eviden;.e upon which the appeal s bases. If yuu are a person 'w th a disability who needs any accommodation in order to par c pate in this proceeding, you are entitled. at no cost to you, to the provis=nr cf certain assistance. Please contact the Collier County Facilities Management Division, located at 3333 Tamtiami Trail East, Suite `01, Naples, FL 34112-h356, 239)252.5383, at least two days prior to the meeting. Assisted listening devices for the hearing impaired are available in the Board of County Commissioners Office. BOARD OF COUNTY COt, MISSION1-RS COLLIER COUNTY,FLORIDA WL.MCDANIFI,.iH CHAIRMAN C'4YSCA. K.KINZEL, C'_ERK OF I HF CIRCUIT COURT&COMPTROLER By: Teresa Carper,Deputy Clerk (SFAL)