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HomeMy WebLinkAboutCMHTF Presentation 02-23-2024Carmel’s Strategic Position A Real Estate Study February 24, 2024 22 P urpose of the Study: ◆Identify national, regional, and local economic trends to better understand Carmel’s position within the region. ◆Explore strategies that continue economic growth and bolster competitiveness, while also enhancing the overall well-being for Carmel’s residents. Keeping Carmel Accessible 44 Carmel Grew At Same Rate (25%) as the Region 4 Population, Carmel, Hamilton County Urban Area, and Indianapolis MSA, 2007-2011 and 2017-2021 Source: 2017-2021 ACS 5-Year Estimates Subject Table B01001 55 Carmel’s Population Skews Older Age Distribution of Population, Carmel, Hamilton County Urban Area, and Indianapolis MSA, 2017-2021 Source: 2017-2021 ACS 5-Year Estimates Subject Table B01001 66 Different Ages Have Different Housing Needs 77 Carmel Has Predominantly Single-Family Detached Homes Total Housing Types in Carmel Source: ACS 1-year 2022 estimate 88 Single Family Homes Cost More Than Regional Peers Median Single Family and Townhome Sale Price by Carmel Comparable City (August 2022-July 2023) Source: Redfin 99 Though By Square Foot it is Closer Single Family and Townhome Sale Price PSF by Carmel Comparable City (August 2022-July 2023) Source: Redfin 1010 Rental Prices Have Climbed in Recent Years Multifamily Rents per Square Foot, Carmel and Comparable Cities, 2013 to 2023 YTD Source: CoStar 1111 It is Fairly Consistent Across Subareas Multifamily Rents by Carmel Sub Area, 2013 to 2023 YTD Source: CoStar $1.67 $1.71 $1.52 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 YTD US-31 Rangeline 96th Street 1212 It’s a Great Place to Sell a Single-Family Home $634,000 Median Single Family Home Sale Price (2023) $464,000 Median Townhome Sale Price (2023) $1,583 Average Rent per Multifamily Unit (2023) 1313 It’s not Easy to Purchase a Single-Family Home (MHI Would Need to be $158,000) 14 There is Some New Supply Multifamily Rental Unit Inventory in Carmel and Comparable Cities, 2023 YTD Source: CoStar City Permit Data (2018-2023): + 1,640 Single Family Homes + 528 Townhomes + 2,210 Multifamily Units 15 Housing 101: Housing Development Requires a lot of Debt Simple Capital Stack Debt (Lower Rate) Equity (Higher Rate) Pr i o r i t y Ri s k Higher Interest Rates = Higher Financing Cost = More Difficult to Build 16 There are Headwinds to Housing Construction •Rising Risks: Market demand shifts and increasing interest rates have heightened the risk, causing lenders to become cautious. •Lending Constraints: Banks have scaled back on lending amounts (e.g., from 60-85% to around 50%) or halted lending for riskier projects. •Construction and Permanent Loans: High-interest construction loans are facing conversion challenges to more favorable permanent loans due to market conditions. •Impact on Development: Existing financing challenges have created a backlog of projects and hesitance towards future investments. 1717 Missing Middle Housing is A Focus These Days “Middle housing” encompasses a range of housing types with multiple units that are more similar in scale to single-detached homes rather than apartment buildings 18 The Boomer General Has Different Retirement Goals Demographic Changes Are Driving New Types of Housing Needs and Preferences. §The country’s aging population is changing decisions around housing, with growing preferences for downsizing to compact units §Walkable, mixed-use communities are becoming more desirable compared with auto- oriented locations both for older and younger generations Homeownership Rates by Generational Cohort Source: Redfin Analysis; Current Population Surveys (ASEC) 1976-2022); IPUMS 1919 Smaller Homes May Allow More Movement Key Middle Housing Users: •Older adults seeking lower maintenance housing, Needs: Accessibility / Universal Design •Younger Households and First-time Homebuyers, Needs: Attainable pricing, homeownership supports •Single-Person and Single-Parent Households, Needs: Smaller units, rental and ownership options Targets households seeking smaller homes, lower cost housing in desirable areas, more environmentally sustainable housing, and multigenerational housing 2020 Missing Middle Housing Benefits §Smaller unit sizes §More housing choices §Blends with existing neighborhoods §Requires less land §More affordable homes §Greater socioeconomic integration §Multigenerational housing-age in place §Expand the tax base, relieve pressure on property taxes 2121 Keep Carmel an Accessible Community for Workers to Live In §Highlight and market new opportunities of federal funding for office to residential conversion §Support and remove barriers to tenant improvements Support Office-to- Residential Conversion §Consider expanding middle housing allowances in single family zones and near major corridors §Strategically upzone around mixed- use developments Allow for Middle Housing in Transition Areas with Development Potential 22 Break for Conversation §Questions?