Housing Needs And Preferences
Implications for the Multi-family
Development Community
2014 Multi-family Housing Conference
New Hampshire Housing Finance Authority
2002
• George W. Bush - President
• ‘N Sync, Enrique Iglesias, LeAnn Rimes Topped
the Charts
• Microsoft X-Box, Sharp 50”HD Plasma TV, XM
and Sirius Radio Available in Cars
• Housing Market
– New Construction = Large SF Homes
• Median PP = $260K and on its way to $312K in ’06
• 6,400 SF permits and 2,000 MF permits
Conceptual Housing Progression
The Family Home
New Family Buys
or
Kids Off to College
Permanent Affordable Housing
Assisted Living
Kids Get Jobs
Nursing Home
NH Transportation Perspective
The Family Home
Drive Yourself
Don’t want to Drive
Yourself Very Far
or
Permanent Affordable Housing
Assisted Living
Can’t Drive Yourself
Not Going Anywhere
Nursing Home
Don’t want to Drive Yourself
(There’s a MiniBus)
2012
• Barack Obama - President
• Katy Perry, Justin Timberlake, Pink, and Miley
Cyrus Topped the Charts
• Tablets, LED HD TV’s, E-Cigarettes and Google
Glass working with Ray Ban Design
• Housing Market
– New Construction
• Median PP = $300K
• 2,100 SF permits and 680 MF permits
What’s More Likely
The Family Home
Kids Off to College
or
and
What’s More Likely
The Family Home
or
Remain in the Rental
Market Longer
Delaying
Homeownership
TX
SC
VA
New Family Buys
NC
What’s More Likely
The Family Home
“What I would really like to do is stay in my
current residence as long as possible.”
Aging Renters
AARP Survey
Age-In-Place
Remain in the Rental
Market Longer
Permanent Affordable Housing
Assisted Living
Nursing Home
What’s More Likely
Services
Aging Renters
Age-In-Place
Personal Services
• Visiting Nurse
• Rehab Therapy
• Counseling
Accessibility
Modifications
• Bathrooms
• Stairways
• Kitchens
• Entrances
But…
Over than 30% of the rental stock
is more than 70 Years Old
Older renters will be better served in newer units.
Housing Needs In New Hampshire
• Production Need
– Based On: Population and Job Projections
• By County
• By Tenure
• Housing Need
– Based on Housing Cost Burden
• Mainly Rental Costs
Housing Needs In New Hampshire
• Economic Environment
• Perceived Market Changes
• Demographic Changes
• How Housing is Perceived
– Younger Households
• Likely Impact of an Aging Population
• Production and Housing Need
Housing Needs In New Hampshire
New Hampshire Center for Public Policy Studies – Dennis Delay
Applied Economic Research – Russ Thibeault
• Added Focus Groups
–
–
–
–
–
–
–
Homebuilders
Mortgage bankers and brokers
Realtors
Regional Planning Commissions
Senior Housing Experts
Workforce Housing
Young Professionals
Part 1 - Big Houses, Small Households: Perceptions, Preferences and Assessment
Part 2 - Senior Housing Perspectives
Part 3 - The Evolving Environment and Housing's Future
Housing Needs and Preferences
What the Study Found – NH’s Housing Environment is Changing



New Hampshire’s population growth is slowing down, with fewer
new migrants
Job growth is slow and job quality is poor
Recent trend away from ownership and towards rental housing

Young home buyers are challenged by slower economic growth, stricter
lending standards and high student debt
 The high rate of foreclosures forced more than 20,000 households out of
ownership since the beginning of the recession

Renter households are on average younger and move more often
Housing Needs and Preferences
What the Study Found – NH’s Housing Environment is Changing







Going forward, elders will be an larger share of owners and
renters
Seniors want to age in place
With increasing age comes a higher proportion of households
with a disability
The rental housing stock is on average older and new production
has not kept pace
There is a mismatch between household size and the current
housing stock
Affordability, especially for low income renter households is a
problem.
Dichotomy of NH growth means different regions have different
problems
New Hampshire's population growth has slowed,
with fewer new migrants
The past 6 years has seen the slowest population growth in more than 30 years.
New Hampshire Job Growth Has Also Slowed
Annual job growth in New Hampshire has been less than 1% each year
since the end of the recession.
And , the Quality of New Hampshire Employment Has Changed
Average annual employment in Manufacturing declined by 35% between 2000
and 2013, while employment in Education and Health Services increased by
28% and Leisure and Hospitality increased by 11%.
The large number of foreclosures continues to put pressure on
the rental housing market
Since 2008 there have been over 21,000 foreclosed properties in New Hampshire.
Many of these households must seek housing in the rental market.
The recent trend is away from ownership and toward rental housing
In 2005, after more than a decade of economic growth the home ownership rate in
New Hampshire reached a peak of 73%, with renter households making up the
remaining 27%. Since then the ownership rate has declined slightly, shifting growth
to renter households. But, overall growth in households has been limited.
The result is an increase in the number of renter households
The shift in renter households in New Hampshire has been significant in
recent years, increasing by nearly 13% since 2005, after declining by 5%
between 2000 and 2005.
But multi-family housing production has not kept pace with demand
over the past 20 years
And, New Hampshire’s rental housing stock is aging
We have experienced more than 20 years of below average rental housing
production, and now over 30% is more than 70 years old.
The increasing number of renter households keeps vacancy rates low
As a result, the median rent continues to increase
16% increase
Median gross rent has risen about 16% over the past 10 years, and at $1,076
the stateside 2-bedroom median gross rent remains above the $1,000 mark
for the eighth year in a row.
But, renter household incomes have not kept pace
NH Median Household Income by Tenure
$90,000
$80,000
$70,000
Owner
Renter
17%
$78,025
$74,183
$66,840
$60,000
$50,000
$40,000
6%
$34,120
$35,693
$36,322
$30,000
$20,000
$10,000
$0
2005
2010
2012
So the cost burden on renter households has gotten worse
The overpayment problem is not limited to one age group
Overpayment is the most severe for low income renter households
Renter households are on average a younger demographic
Of New Hampshire’s renter households 23% are 25 to 34 years old and
another 20% are 35 to 44 years old.
Renter households are far more mobile than owner households
More than 50% of renter households have moved within the past three years,
and nearly 90% within the past 13 years.
Recent increase in renter households not limited to one age group
Between 2005 and 2012 there has been an increase in renter households in each
age group between 25 and 74. However, the increases in the age groups over 45
years are mostly attributable to the aging baby boom generation.
The recent increase in renter households is expected to continue
Between 2010 and 2025 renter households are projected to increase by
nearly 16,000.
But the future change will be primarily in the older age groups
Between 2010 and 2025, age 65 and older renter households show the greatest
increase; but, they remain a minority of all renter households. This shift is due
primarily to existing renter households aging in place.
Most seniors want to age in place
Source: AARP, 2010
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And, most seniors do age in place
Northeast US Annual Mobility by Age, 2012 to 2013
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
And those older age groups are primarily owners
Ownership predominates for New Hampshire households well into old age. Seventyseven percent of households 75 to 84 years old are owners, and even for those
households 85 years and over the percent of ownership remains above 60%.
A significant roadblock to aging in place is the increase in
disabilities as we age
Senior Households With At Least One Disability
% of Senior
Households Households
8.0%
3,570
Vision Difficulty
22.0%
9,818
Hearing Difficulty
25.5%
11,380
Physical Difficulty
10.0%
4,463
Cognitive Difficulty
7.4%
3,302
Self-Care Difficulty
15.7%
7,006
Independent Living Difficulty
With At Least One Disability
44,626
42.1%
106,000
Total Households Age 65+
Source: ACS, 2011 Cited in AARP State Housing Profiles, 2011
Is the current housing stock designed for, or adaptable to
households with significant disabilities?
Needs for Aging in Place:
•
•
•
•
•
•
•
•
•
Low Maintenance
Smaller, Efficient Units
One Level Living
No Step Entry
Wider Entry and
Bathroom Doors
Adapted Bathrooms
and Kitchens
Higher Electrical
Outlets
Levers, not Knobs
Access to Public
Transportation
Housing Production Estimate
If the proportion of owners and renters remains the same,
the projected need for rental housing production will be low
Preferences and demographics suggest that there may be more
demand for rental housing production than currently projected.
And the near future production needs varies dramatically by County
Demand for nursing home and assisted living capacity will rise sharply
Living Arrangements of NH Senior
Population
12,000
11,300
10,000
8,000
7,000
6,000
4,000
7,400
5,800
4,400
Assisted Living
3,700
Long Term Care
2,000
0
2000
2010
2025
The more likely result is an increase in demand for in-home health services. Is the
current housing stock in locations where these services can be efficiently
delivered?
Millennial Generation Delaying Ownership
Former Owners Competing for Rentals
Some Down-Sizing to Rental,
Foreclosures
Slow Economic Growth, High Student Debt,
Hesitancy About Ownership,
Delayed HH Formation,
Tighter Underwriting,
Competition for
Small Units
from Owners
Down-Sizing
Aging-In-Place
Rental Market
Demand
Implications for
the Multi-family
Development
Community
Need for Services and
Rehab or Newer
Affordable Units
Opportunity, but…
• As the market responds will we see more resistance at
the local level (Following a period of little
development pressure)?
• Mission driven developers will find it harder to serve
the very low income population. (Lower resources &
incomes)
Rental Market
• Unless the economy improves
Demand substantially, it will
continue to be difficult to construct workforce housing
units.
Unknowns…
• Second Homes – Retirement or Year-round occupancy?
• HH formation no longer delayed?
• Will retirees be replaced with systems or workers?
• Will there be a new tech revolution?
• Immigration Policy?
www.nhhfa.org
Bill Ray, Managing Director, Policy, Planning
& Communications – bray@nhhfa.org
Dan Smith, Director of Housing Research –
dsmith@nhhfa.org