CMHTF 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?