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Florence North _Florence_

VIEWS: 4 PAGES: 82

									      Florence North Apartments

Florence (Florence County), South Carolina


              Prepared for

South Carolina State Housing Finance &
       Development Authority


           Market Study


                  Presented By

                Eugene F. Nolan
              Tremont Consultants
              4004 Penhurst Drive
                    Suite 100
             Marietta, Georgia 30062
                 (770) 578-4552
                  Florence North Apartments
           Florence (Florence County), South Carolina
                         Market Study
                        Table of Contents



PART I.            ANALYST CERTIFICATION
PART II.           PROJECT DESCRIPTION
PART III.          SITE DESCRIPTION/MARKET AREA/ECONOMY
                   A. Inspection Dates (page 1)
                   B. Site Evaluation (pages 1-7)
                   C. Primary Market Area (pages 7-8)
                   D. Market Area Economy (pages 7-12)

PART IV.           COMMUNITY DEMOGRAPHIC DATA
                   A. Population Trends (pages 1-3)
                   B. Household Trends (pages 3-8)
                   C. Housing Demographics (pages 8-12)
                      PMA Household Trend Report (Claritas, Inc.)

PART V.            DEMAND/SUPPLY ANALYSIS
                   A. Demand Analysis
                       (i) Demand from New Renter Households (pages 1-15)
                      (ii) Demand from Existing Households (pages 15-22)
                   B. Supply Analysis (Comparable Rental Developments)
                       (i) Overall PMA Multi-Family Market (pages 22-24)
             (ii) Comparable Properties in the PMA Multi-Family
                  Market (pages 24 -38)

PART VI.   EXHIBITS
           A. Summary of Interviews
           B. Market Analyst Recommendations
           C. Exhibit S-2 SCSHFDA Primary
              Market Area Analysis Summary
           D. Pre-Market Analysis Memorandums/
              SCSHFDA PMA Approval
                                                            Part I.   Analyst Certification




                       Part I.       Analyst Certification
                                       Eugene F. Nolan
                                     Tremont Consultants
                                     4004 Penhurst Drive
                                           Suite 100
                                    Marietta, Georgia 30062
                                        (770) 578-4552

April 8, 2006



Ms. Laura Nicholson
LIHTC Program Manager
South Carolina State Housing Finance &
Development Authority (SCSHFDA)
300-C Outlet Pointe Blvd.
Columbia, SC 29210

RE:    Market Study - Florence North Apartments
       Florence, (Florence County), South Carolina

Dear Ms. Nicholson:

Please find enclosed two (2) original copies of this Market Study.

This study has been completed in accordance with the requirements and guidelines contained in
SCSHFDA’s “Exhibit S-Market Study Requirements” and “Exhibit S-2 SCSHFDA Primary
Market Area Analyses Summary.” The data and analysis contained in this Market Study is
current, accurate, and presents a true assessment of the Primary Market Area’s (PMA) low-
income, “general population”, rental housing market. SCSHFDA can rely upon the accuracy,
objectiveness, and completeness of this study.

Furthermore, I affirm that I have made a physical inspection of the market and surrounding area
and that the information obtained in the field has been used to determine the need and demand
for LIHTC units. I understand that any misrepresentation of this statement may result in the
denial of further participation in the South Carolina State Housing Finance & Development
Authority’s programs. I also affirm that I have no financial interest in the project or current
business relationship with the ownership entity and my compensation is not contingent on this
project being funded. This report was written according to the SCSHFDA’s market study
requirements. The information included is accurate and can be relied upon by SCSHFDA to
present a true assessment of the low-income housing rental market.

Thank you for providing me the opportunity to prepare this study.

Sincerely,



Eugene F. Nolan
                                                1
2                           Part I.   Analyst Certification


Market Analyst Author




                        2
1                                                                           Part II. Project Description




                                Part II. Project Description

A.     Project Description

Florence North Apartments is a proposed, new construction development consisting of seventy-
two (72) garden style multi-family rental units. The site for Florence North Apartments is
located on the south side of Wilson Road, approximately 0.1 mile west of the intersection of
Wilson Road and North Oakland Avenue/E. McIver Road, Florence, SC.

The targeted renter market are “family” households (HH’s) earning #50% and #60% of the Area
Median Income (AMI). There will be no “market” or project-based rental assistance units in this
development. The total site acreage is 6.7 acres. There will be nine (9) two-story residential
buildings (no elevators). Property will have a separate one-story community building (1,658
SF). The site plan submitted by applicant states that the property will have one hundred forty-
four (144) parking spaces. Page 6 of this LIHTC Application also states that 144 parking spaces
are planned. The proposed unit mix (by bedrooms/bathrooms) gross square footage (SF),
contract rent, utility cost and estimated gross rent is as follows:

      Unit Type         Number     Square Feet   Estimated   Estimated      Estimated         AMI
                        of Units                 Contract    Utility Cost   Gross Rent     Income %
                                                   Rent                                      Target
2 BR/2 BA                  26          954         $395         $110           $505           #50%
(Garden)

2 BR/2 BA                  26          954         $425         $110           $535           #60%
(Garden)

3 BR/2 BA                  10         1,107        $440         $136           $576           #50%
(Garden)

3 BR/2 BA                  10         1,107        $480         $136           $616           #60%
(Garden)

The units will be all-electric with electricity, water and sewer being paid by tenant. Owner will
pay for trash collection services.

Property amenities will include community building (1,658 SF) with community room, lobby,
kitchen, porches, library/TV room, laundry facility, computer center, two (2) management and
leasing offices and restroom. Exterior property amenities will include playground area, gazebo,
picnic area and sidewalk access to parking spaces. Individual unit interior amenities will include
frost free refrigerator, range with exhaust vent, washer/dryer hookups, dishwasher, disposal,
extinguishing system over range, microwave oven, ceiling fan in living room with wall control
switch, as well as ceiling fans in all bedrooms, decks or patios, storage alcove, window
coverings, wall-to-wall carpet & vinyl flooring, pre-wired for cable TV and high-speed internet,
double sink, overhead light fixture in each bedroom and central HVAC with a 13 SEER unit.
2                                                                                    Part II. Project Description




Exterior building construction will be slab on grade, wood frame with brick veneer and hardi-
plank siding. The buildings will have trussed pitched roofs with architectural style roof shingles
(30 year warranty). Attic insulation material will be rated R-38. In summary, Applicant’s 2006
LIHTC Application, Tab 4, page one (1) states:

       The buildings will be constructed of hardi-plank and 40% brick veneer and all elements will comply with
       the mandatory design criteria as set forth in the 2006 tax credit manual.
1                                                          Part III. Site Description/Market Area/Economy




               Part III. Site Description/Market Area/Economy
A.        Inspection Dates

The site for Florence North Apartments and its surrounding neighborhood (residential and
commercial) was visited three (3) times during the period March 7th - 9th, 2006. All three (3) site
visits/inspections were made by Eugene F. Nolan, the market study author.

B.        Site Evaluation

Subject property is 6.7 acres in size. It is located on the south side of Wilson Road
approximately 0.1 mile west of the intersection of Wilson Road and N. Oakland Avenue/E.
McIver Road in the city of Florence, SC.

From the submitted site plan and this analyst’s review of county records/GIS aerial photographs,
the parcel is irregular in shape with an approximate street frontage of 312 feet on Wilson Road.
The property also has approximately 381 feet of frontage on the northwest side of N. Oakland
Avenue. Ingress/egress to the site is from Wilson Road. Subject property currently is densely
wooded, vacant and undeveloped. It has a flat topography.

Immediate land uses adjacent to the site are as follows:

East/Northeast -     Vacant land immediately west of Pat’s Superette store and large tracts of
                     vacant land on the east and northeast side of N. Oakland Avenue and E.
                     McIver Road;

North -              Single family homes on the north side of Wilson Road and a large tract of
                     vacant land located north of these homes;

South -              CP&L power line (120' R/W) and large tracts of vacant land south of the
                     power line, on both sides of N. Oakland Avenue;

West -           Single family homes from subject property westward to N. Irby Street. This
                     single family residential area is known as “Wilson Heights.”

(See aerial photographs and property photograph sheets in this section.)

Subject property’s immediate neighborhood is defined as an area which encompasses the
following locations: (1) East Old Marion Highway and Malloy Street to the east; (2) N. Irby
Street to the west, (3) the intersection of N. Oakland Avenue and Sopkin Avenue to the south;
and (4) the intersection E. Sam Harrell Road and N. Ward Circle to the north. This immediate
neighborhood is predominantly developed with single family homes as well as having large
tracts of vacant land to the north and east.

Excluding the presence of the CP & L power line located immediately south of the site, the
2                                                              Part III. Site Description/Market Area/Economy

property’s surrounding neighborhood appears to be void of any visible, negative environmental
concerns or factors which might affect the marketability of subject property as proposed.

The following table provides a listing of the community services that impact the proposed site:

      Facility/Service           Name/Description                Driving Distance From   Direction
                                                                          Site
      Grocery/Supermarket/       Oakland Grocery                 0.6 miles               S
      Shopping Centers           Pat’s Superette                 0.1 mile                E
                                 Food Lion                       3.5 miles               SW
                                 Florence Mall                   4.2 miles               SW
                                 Magnolia Mall                   4.5 miles               SW
                                 & Florence Commons
      Pharmacy                   Eckerd Drugs                    2.5 miles               SW
                                 Pharmacy Express                2.0 miles               S
                                 CVS                             3.1 miles               SW
      Major Highways             U.S. Hwy 76                     2.4 miles               S
                                 (E. & W. Palmetto Street)
                                 U.S. Hwy 301/52                 1.7 - 1.9 miles         SW
                                 (Irby & West Lucas Streets)
                                 I-20 & I-95                     3.8 - 4.6 miles         W & NW
                                                                                         (2 exits)
                                 North Irby Street               0.6 miles               W
      Police                     City of Florence PD             1.9 miles               SW
      Fire                       City of Florence Fire Dept.     1.5 miles               SW
      Recreational Facilities    Northwest Community Park        2.7 miles               SW
                                 Iola Jones Park                 0.8 miles               S
                                 Timrod Park                     3.0 miles               SW
                                 Freedom Florence
                                 Recreation Complex              4.9 miles               S
                                 Florence Civic Center           5.8 miles               SW
      Employment Centers/Major   Macleod Health                  1.8 miles               S
      Employers                  City of Florence                1.8 miles               SW
                                 Florence County                 1.8 miles               SW
                                 Palmetto Government
                                 Benefits Admin./TRACER          5.8 miles               SW
                                 Carolina Health/Hospital
                                 System                          4.9 miles               S
                                 Cashua Drive/Lucas Street
                                 Commercial Area                 3.0 to 4.5 miles        SW
3                                                               Part III. Site Description/Market Area/Economy



            Facility/Service            Name/Description             Driving Distance         Direction
                                                                        From Site

      Hospital/Medical Facilities   Macleod Health                1.8 miles               S
                                    (Regional Medical Center)
                                    Carolinas Health/Hospital     4.9 miles               S
                                    System
                                    Florence County Health        1.8 miles               S
                                    Dept.
      Schools*                      North Vista Elementary        1.5 miles               SW
      *Per Florence Public          Williams Middle School        1.4 miles               SW
      School District One’s Zone    Wilson High School            1.2 miles               E
      Assignment for Subject Site
      Banks                         1st Citizen Bank              1.8 miles               SW
                                    Wachovia                      2.0 miles               SW
      Post Office                   Main Branch-1901 West         3.9 miles               SW
                                    Evans Street, Florence
      Library                       City of Florence Public       2.1 miles               SW
                                    Library



There are several churches within a 0.6 to 3.0 mile driving distance from subject property -
Seventh Day Adventist Church, Monumental Missionary Baptist Church, House of God Church,
Bethel Apostic Church, Ebenezer Baptist Church, Greater Zion Tabernacle Church, First Baptist
Church, First Presbyterian Church and St. John’s Episcopal Church.

Discussions with city and county public works officials and state highway construction officials
all indicated that there are no planned, approved or funded street/highway/infrastructure projects
that would negatively impact the construction or marketability of a multifamily property located
on Wilson Road, E. McIver Road, Old Marion Highway and N. Oakland Avenue and/or its
immediate neighborhood.

Neighborhood Crime Statistics

Subject property is located within the city limits of Florence, SC. Public safety/police services
are provided by the City of Florence Police Department. Subject site is located in the
“Fox”District. The following is a summary of all “Part One Crimes” (nine categories) for the
entire City of Florence for the period 2002 - 2005:
4                                                                 Part III. Site Description/Market Area/Economy

                                        City of Florence
                                   Part One Crimes By Year

                                    2002             2003               2004         2005       % change-04
     Homicide                          3                6                 7           4             -43%
     Burglary                        542              597                675         599            -11%
     Robbery                         115              155                164         202            23%
     Assaults, Aggravated            256              272                274         282             3%
     Larceny                        2,535            2,851             2,159        1,930           -11%
     Motor Vehicle Theft             186              230                229         222            -3%
     Theft From Motor Vehicle        566              687                768         712            -7%
     Weapon Law Violations            65               59                 73          60            -18%
     Rape, Forcible                   19                21                19          20             5%


     Total                          4,287            4,878             4,368        4,031           -8%
                                 Source: Florence Police Department, 03/2006.


This table shows that six (6) of the nine (9) categories’ occurrences declined in 2005 when
comparted to 2004 data. Three (3) categories’ occurrences increased in 2005 as compared to
2004 data - Robbery (23%), Aggravated Assaults (3%) and Rape (5%). Overall crime (all nine
categories) citywide declined by 8% in 2005 when compared to 2004 data.

There are six (6) police districts within the city - “Adam,” “Baker,” “Charlie,” “Delta,” “Echo”
and “Fox.” Subject site is located in the “Fox” district.

The following table compares the number of occurrences of major crime categories in the “Fox”
district with the number of occurrences of the same crime categories for all of the city’s nine (9)
districts, inclusive of the “Fox” district. This data covers the period 01/01/05 - 12/31/05.
5                                                                  Part III. Site Description/Market Area/Economy

                                       Incident Type Count
                                         City of Florence
                                       (01/01/05 - 12/31/05)

              Incident            Fox District              All Nine (9)           Fox District’s Count
            Type/Category        (Subject Site)              Districts            as a % of Nine District
                                                                                          Total
         Homicide                       1                          4                       25%
         Rape                           9                         20                      45.0%
         Robbery                        65                       202                      32.2%
         Aggravated Assault            109                       282                      38.7%
         Burglary                      132                       599                      22.0%
         Motor Vehicle Theft            48                       222                      21.6%
         Theft From Motor              101                       712                      14.2%
         Vehicle
         Larceny                       295                      1,930                     15.3%
         Weapon Law                     15                         60                     25.0%
         Violations
         Total - All Incident          775                      4,031                     19.2%
         Types
                                 Source: City of Florence Police Dept., 03/2006


The above table shows that “Fox” District’s count for “All Incident Types” represented 19.2% of
the city’s total for “All Incident Types” for the year 2005. Within “Fox” District’s total incident
types, the following types/categories accounted for “Fox” District’s highest number of incident
counts:

                                                                                    As A %
                Incident Type                     Number                           Of Total

       Larceny                                       295                            38.1%
       Burglary                                      132                            17.0%
       Aggravated Assault                            109                            14.1%
       Theft from Motor Vehicle                      101                            13.0%
       Robbery                                        65                             8.4%
       Total                                          702                           90.6%

According to a discussion with the police department’s North Region Commander, subject
property’s Wilson Road location and its surrounding area is not considered as an area in which
there occurs a high incidence of crime. Subject property is located within the department’s
“North Region” geographic area.


From the submitted site plan, access and ingress/egress to the site will be from Wilson Road.
6                                                        Part III. Site Description/Market Area/Economy

The property also has approximately 320 feet of frontage on the northwest side of N. Oakland
Avenue but there will be no access from N. Oakland Avenue. With approximately 315 feet of
frontage on the south side of Wilson Road and being 0.1 mile west of the intersection of Wilson
Road and N. Oakland Avenue, subject property should have “very good” visibility from Wilson
Road and this intersection. In addition, as shown on the site plan, residential buildings (5) and
(6) should be visible from N. Oakland Avenue.

Other positive attributes about the site which relate to marketability would be (1) it has a flat
topography which is conducive to the economical construction of multifamily units; and (2) a
convenient location in terms of proximity to hospital/medical facilities, schools, major PMA
employers and a number of the PMA’s primary arterial roadways.

C.      Primary Market Area (PMA)

The PMA for this proposed development is defined by the following census tracts:

               Location                              Census Tracts

               Florence County, SC                   1; 2.01; 2.02; 3 through 14;
                                                     15.01; 15.02; and 16.01
                                                     (the property is located in CT 8.0)

               Darlington County, SC                 109; 113; 114; and 115

These census tracts are included in the Census Bureau’s geographical areas defined as follows:

(i)            “Florence, SC Urbanized Area”
(ii)           “Florence CCD, Florence County, SC”
(iii)          “Danwood CCD, Florence County, SC”

As part of this analyst’s work, various local contacts were interviewed whom I considered as
knowledgeable sources of information regarding employment concentrations, commuting
patterns of employed persons, multifamily rental market conditions, current renter households’
(HH’s) location preferences and the geographic “drawing power” of municipal, medical,
retail/commercial service facilities located within the greater Florence city area for renter HH’s.
Their comments were as follows:

$       On-site managers of LIHTC and “market rate” properties stated that approximately 75%
        to 90% of existing residents and “wait-lists” households (HH”s) come from the greater
        Florence area which includes those areas of unincorporated of Florence and Darlington
        counties that are contiguous to the Florence city limits. These areas correspond to the
        three (3) Census Bureau geographic areas identified as comprising the PMA.



        The concentration of medical/municipal/retail/commercial/industrial employers in the
        greater Florence city area draws renter households (i.e., current employees) from these
7                                                        Part III. Site Description/Market Area/Economy

       same geographic areas, many of whom have HH incomes that match the income
       limitations at LIHTC properties. Proximity to an employer is a major factor in this
       market as to where a renter HH decides to live.

       The comparable/competitive properties identified in this analyst’s Pre-Market Analysis
       memorandum (dated 03/17/06) have current occupancy rates between 92% - 100% and
       the on-site managers are these five (5) properties defined their realistic market area as the
       same area identified by this analyst as the PMA for Florence North Apartments.

$      City/county planning staff expressed the following points:

(i)           The primary, arterial road system in the greater Florence city area is comprised of
              I-20, I-95, US Highways 76, 301 and 52; State Roads 26, 51, 179 and 327. These
              primary roads traverse the PMA in all four directions. All twenty-two (22) census
              tracts that comprise the PMA benefit from this arterial system and residents in
              these tracts enjoy good highway and surface street access to the PMA’s
              concentrations of employment, medical, municipal, retail and commercial service
              facilities.

              As such, existing and potential renter HH’s do not perceive the PMA as being
              traffic-congested and would be amenable to living in another PMA neighborhood
              that had a new construction, affordable multifamily rental development.

(ii)          Major employers located within the city - McLeod Health, the city of Florence,
              Florence County, Carolinas Health System, Florence School District 1, and
              Palmetto Government Benefits Administrators/TRICARE - have a significant
              number of employees who commute to their jobs from areas of the PMA located
              outside of the city limits. Many of these HH’s have incomes @ #60% of the Area
              Median Family Income and currently reside in older rental units - single family
              homes or mobile homes. The current gross rent expenses for these type units
              often exceeds 30% to 35% plus of their monthly HH income. Development of
              new construction, affordable rental units located approximately two (2) miles
              from both the CBD and the concentration of employers located close to the
              intersection of E. Ashby Road and N. Irby Street would be considered attractive to
              a number of these HH’s, both in terms of better proximity to jobs and monthly,
              gross rental occupancy costs.

D.     Market Area Economy

This section will outline historic and current employment levels and trends for Florence County.
The following tables will show annual employment/unemployment statistics, changes in total
employment, employment by sector, capital investment/jobs creation data, contractions in the
workforce, major employers, PMA commuting patterns, and average annual wages. There also
is a map in the back of this section showing the sites/locations of major employment
concentrations.
8                                                                              Part III. Site Description/Market Area/Economy



                                   Civilian Labor Force/Employment Trends
                                          Florence County: 1998 - 2004

               Category                 1998         1999       2000           2001           2002       2003         2004
        Civilian Labor Force         62,398         63,072      63,215         62,442         63,370     64,651       64,470
        Employment                   59,725         59,926      60,487         58,821         59,095     59,134       58,790
        Unemployment                  2,673         3,146        2,728          3,621         4,275       5517        5,680
        Unemployment Rate             4.3%           5.0%        4.3%           5.8%          6.7%        8.5%         8.8%
                                   Source: South Carolina Employment Security Commission (SCESC)


In 2004, the most recent year for which annualized data is available, the Florence County labor
force was comprised of an estimated 64,470 persons, of which 58,790 were employed and 5,680
or 8.8%,
were unemployed.

Recent comparisons of Florence County unemployment statistics are as follows:

                                         Florence County - December - 2005

                          LABOR FORCE                         UNEMPLOYMENT                              % OF LABOR FORCE



Month           12/2005        11/2005     12/2004      12/2005        11/2005        12/2004     12/2005       11/2005      12/2004



FLORENCE        64,440         64,670      63,870       5,610          5,610          5,600       8.7           8.7          8.8



                                                     Source: SCESC, 01/24/2006.


On 03/30/2006, SCESC released February 2006 unemployment rates for the state and counties.
For Florence County, this data was:

                   Total Labor Force -                                   63,130
                   Unemployed Workers -                                   5,690
                   % of Labor Force -                                      9.0%

Based upon Florence County’s labor force and number of unemployed workers from December
2004 to December 2005 (see above table), the labor force grew by 570 workers while the number
of unemployed workers grew by 10 workers, yielding an increase of 560 employed workers.
Likewise, for year 2004, Florence County experienced job growth of approximately 500 new
jobs. Other recent employment data for Florence County is as follows:

$                  The average labor force from 2003 through 2005 was 64,047 workers;
$                  Average monthly employment was 58,531 for the period 2003-2004;
9                                         Part III. Site Description/Market Area/Economy

$   Average unemployed workers from 2003 through 2005 - 5,467 workers;
10                                                                            Part III. Site Description/Market Area/Economy



                    Florence County Capital Investment/Job Creation Data 2000-2004

 Year                     2000                   2001                2002                2003              2004               2005

 # New Firms                                 1                   0                   0                 2                  0                   2

 # Expanding Firms                          42                  32                  14                 2                  1                   0

 Total Firms                                43                 32                  14                  4                  1                   2

 $$ New Investment        $35,000,000                           $0                  $0 $15,700,000                       $0      $89,700,000

 $$ Exp. Investment       $85,561,711            $77,107,836         $36,915,531           $12,450,000 $30,500,000                           $0

 Total Investment         $120,561,711           $77,107,836         $36,915,531         $28,150,000       $25,000,000        $89,700,000

 # New Jobs                                200                   0                   0            610                     0                 418

 # Exp. Jobs                               767                 404                 325            115                    85                   0

 Total # Jobs                              967                 404                 325            725                    85                 418
                                         Source: South Carolina Department of Commerce (SCDC)


The above table shows that a total of $293,250,000 in capital investment has been made in
Florence County over the five (5) year period 2000-2004 which, in turn, has created a total of
2,506 jobs - either by expansion of existing firms or “new jobs” from investment by new firms.
In addition, for 2005, SCDC reports that two (2) firms (East Coast Erosion Blankets and QVC
Corporation) announced capital investments totaling $89,700,00 which will create an additional
418 jobs in the county . Consequently, approximately 3,000 “new” or expansion jobs will have
been created in the county since year 2000. The QVC Corp. facility will be 2.0 miles north of
subject site.

Similar to numerous other SC counties, Florence County has experienced “layoffs” and “plant
closures” in its industrial/manufacturing sector over the past 24 to 36 months.

                                                                                    Jobs Lost

         (1)          Delta Mills (Pamplico)                                             260
         (2)          Coleman Industries (Lake City)                                     200
         (3)          Dupont (Florence)                                                  100
         (4)          Maytag (Florence)                                                  250
                      Total                                                                       810

As shown in the prior “Capital Investment/Job Creation Data” table, the 1,228 new/expansion
jobs announced between 2003-2004 significantly offsets the above 810 lost jobs in the
industrial/manufacturing section.
11                                                              Part III. Site Description/Market Area/Economy




                                            Florence County
                                  Employment By Industry & Wages - 2004

                                                    Number            %          Average Annual Wage

       Total Employment                              62,616          100.0      $29,338 (private industry)
       Natural Resources & Mining                      284            .5                 $25,356
       Construction                                   2,756           4.4                $30,237
       Manufacturing                                  8,786          14.0                $37,815
       Wholesale Trade                                2,198           3.5                $36,319
       Retail Trade                                   8,271          13.2                $20,761
       Transportation/Utilities                       2,409           3.8                $25,091
       Information                                    1,013           1.6                $30,583
       Financial Activities                           6,149           9.8                $36,437
       Professional/Business Services                 3,927           6.3                $30,289
       Education/Health Services                     15,784          25.2                $35,605
       Leisure & Hospitality                          5,988           9.6                $14,680
       Other Services                                 1,610           2.6                $19,946
       Public Administration                          3,253           5.2                $32,087
       Unclassified                                    189            .3                 $28,202
                                                Source: SCESC

The above table shows that the county’s five (5) largest sector employees - Education/Health
Services, Manufacturing Retail Trade, Leisure & Hospitality and Financial Activities - account
for 71.8% of the county’s employment base. As such, Florence County’s economy exhibits a
diversity that is not dependent upon a one or two industry sectors. Major employers in Florence
County are:

                                   Major Employers - (Florence County)

                  Employer                    Industry Description           Approximate Number of
                                                                                  Employees

     Mcleod Regional Medical Ctr.                  Healthcare                         4,200
     Florence Sch. District 1                      Education                          2,200
     Carolinas Hospital System                     Healthcare                         1,800
     Honda of S.C.                              Transpt. Vehicles                     1,800
     Washington Mutual                         Mortgage Services                      1,400
12                                                                  Part III. Site Description/Market Area/Economy




                 Employer                        Industry Description         Approximate Number of
                                                                                   Employees

     Palmetto Govt. Benefits                      Insurance Services                    1,000
     Admis./TRICARE
     Nan Yan Plastics                               Manufacturing                        980
     Wellman Inc.                                   Manufacturing                        800
     Florence County                                 Government                          680
     ESAB Welding Products                          Manufacturing                        550
     GE Medical Systems                               Healthcare                         500
     Roche Carolina                                 Manufacturing                        290
     ADP                                           Business Service                      480
     Francis Marion Univ.                             Education                          425
     W. Lee Flowers & Co.                        Grocery Distribution                    250
                                           Source: SCESC; Morning News


The following table summarizes worker commuting patterns in Florence County (Census 2000):

                                       Commute to Work Patterns
                                  Florence County, South Carolina 2000
        County/Area            # Employees Out-Commuting      # Employees In-Commuting      Net to
                                   to Florence County            from Florence County  Florence County

 Chesterfield                             253                               133                      120
 Clarendon*                               684                               273                      411
 Darlington*                             7,853                             3,214                    4,639

 Dillon*                                 1,108                              380                      728
 Georgetown                               270                               213                       57
 Horry                                    386                               785                     (399)
 Lee*                                     500                               240                      260
 Marion*                                 1,611                              474                     1,137
 Marlboro*                                259                               156                      103
 Sumter*                                  731                               396                      335
 Williamsburg*                           1,653                             1,349                     304
 Other S.C. Counties                      951                               798                     (207)
 N.C. Counties                            310                               580                     (270)
        County/Area            # Employees Out-Commuting      # Employees In-Commuting      Net to
                                   to Florence County            from Florence County  Florence County
13                                                             Part III. Site Description/Market Area/Economy




 Totals                            16,209                              8,991                   7,218
 *Totals-Contiguous                14,399                              6,482                   7,917
 Counties
                                     Source: U.S. Census 2000, SCESC


Located in the northern quadrant of Florence County, the PMA has closest proximity to the
contiguous counties of Darlington, Dillon, Marion and Lee. These four (4) counties account for
85.4% (6,764 “net” employees commuting into Florence County) of the above 7,917 “net”
employees from all contiguous counties.

The PMA’s economy and employed labor force should continue to experience moderate, positive
growth. A point of concern is the county’s unemployment rate averaging 8.65% for the period
2003-2004 and now averaging 8.7% - 8.9% over the past six (6) months. Local economic
development officials state that (1) the residential housing market continues to exhibit solid
growth at a 5% - 7% annual rate; (2) the retail and lodging/hospitality sectors are expanding
rapidly; and (3) the PMA’s location at the juncture of I-20 and I-95 establish the greater Florence
city area as the economic hub for all of the counties which comprise the northeastern quadrant of
the state. Employees in the county’s expanding retail and lodging/hospitality sectors earn annual
wages averaging from $14,000 to the low $20,000's. HH’s earning incomes within this range
should provide a base of future demand for new “affordable” rental units.
                                                                                       1
                                                     Part IV. Community Demographic Data




                                        Part IV.           Community Demographic
 Data
As described in Part III, Site Description/Market Area/Economy, the Primary Market Area
(PMA) for this proposed development consists of the following census tracts:

              Location                              Census Tracts

              Florence County, SC                   1; 2.01; 2.02; 3 through 14;
                                                    15.01; 15.02; and 16.01
                                                    (the property is located in CT 8.0)

              Darlington County, SC                 109; 113; 114; and 115

These census tracts are included in the Census Bureau’s geographical areas defined as follows:

(i)                    “Florence, SC Urbanized Area”
(ii)                   “Florence CCD, Florence County, SC”
(iii)                  “Danwood CCD, Florence County, SC”

Demographic data/tables in this section will focus upon the PMA’s general population, age,
households (HH’s), income and housing demographics . Sources providing data and projections
in this section are: (1) U.S. Bureau of the Census; (2) South Carolina Budget & Control Board,
Office of Research and Statistics (State Data Center); (3) South Carolina Employment Security
Commission; (4) Greater Florence Chamber of Commerce; (5) Pee Dee Regional Council of
Governments; (6) Florence County Economic Development Partnership; and (7) Claritas, Inc.

A.      Population Trends

As of the 1990 Census, the PMA had 89,552 persons. According to the U.S. Census Bureau, the
PMA’s April 2000 population was 101,810 persons, a gain of 12,259 persons or a 13.7%
increase from the 1990 PMA population. As of the 2000 Census, the PMA’s population had the
following, basic characteristics.


                                          PMA - 2000


                                                  PMA                        As A %
                  Total Population:              101,810                     100%
            SEX
              Male                               47,650                       46.8
              Female                             54,160                       53.2
                                                                                           2
                                                         Part IV. Community Demographic Data



            AGE
              Under 5 years                          6,705                        6.6


                                                     PMA                         As A %

              5 to 19 years                         22,524                        22.1
              20 to 24 years                         6,925                        6.8
              25 to 44 years                        29,834                        29.3
              45 to 54 years                        14,813                        14.5
              55 to 59 years                         5,148                        5.1
              60 to 64 years                         4,127                        4.1
              65 to 74 years                         6,232                        6.1
              75 to 84 years                         4,033                        4.0
              85 years and over                      1,469                        1.4
             Median Age                              35.0                         (x)
                                  Source: U.S. Bureau of the Census


For the PMA, 2000 Census data showed the following age groups:

                                    PMA Population
                                  by Age Groups: 2000


                Age Group               Persons                % of Population
           19 and under                 29,229                         28.7%
           20 to 24                      6,925                         6.8%
           25 to 34                     14,181                         13.7%
           35 to 54                     30,466                         29.9%
           55 to 64                      9,275                         9.2%
           65 and over                  11,734                         11.5%
                                  Source: U.S. Bureau of The Census




According to the South Carolina Budget & Control Board, Office of Research and Statistics
(SCORS), Florence County has the following demographic patterns/trends:
                                                                                             3
                                                           Part IV. Community Demographic Data




                                     Florence County
                         Components of Population Change 1990-2000

                                                                   Components of Change 1990-2000

              1990          2000         1990-2000
  County
            Population    Population      Change
                                                                                       Natural         Net
                                                          Births       Deaths
                                                                                       Increase      Migration



 Florence      114,344       125,761         11,417        18,139          11,991          6,148           5,269



                                          Source: SCORS, 11/2005




For the period 2000-2004, SCORS estimates Florence County’s components of population
change as follows:

                                   Florence County
       Cumulative Estimates of the Components of Population Change (2000-2004)

                                   Natural Increase                                 Net Migration

              Total
  County    Population
             Change                                                                 Net
                                                                                                    Net Internal
                           Total        Births        Deaths       Total       International
                                                                                                     Migration
                                                                                Migration



 Florence        3,918       2,480        8,129         5,649       1,505                   372            1,133



                                          Source: SCORS, 11/2005


These SCORS’ estimates show that Florence County’s population grew by 3.1% over the period
2000-2004 with 38.4% of that growth (1,505 persons) attributable to “net migration’ into the
county.

Preliminary, future population projections compiled by SCORS for Florence County are:
                                        Florence County
                                                                                                    4
                                                                  Part IV. Community Demographic Data


                        Estimated Annual Population - 2000 Through 2030

               4/00       7/05         7/10          7/15         7/20       7/25      7/30


              125,761     130,080     134,450       138,810      143,170    147,530   151,880




                                                Source: SCORS, 11/2005


SCORS projects that the county’s population for year 2010 will be 134,450 persons and, for year
2015, the population is estimated to be 138,810 persons. Year 2015's estimated population of
138,810 persons represents an increase of 10.4% (13,049 persons) over the county’s Census
2000 population of 125,761 persons.

B.     Household Trends

In 2000, the PMA’s HH demographics were as follows:
              Total HH’s -                      38,552 HH’s

              Average HH Size -                                  2.55 persons/HH


                                    PMA Group Quarters Population

                                                       Persons               As A % of
                                                                           PMA Population
          In Group Quarters                             3,370                  3.3%
          Institutionalized Population                  1,780                  1.7%
          Noninstitutionalized Population               1,590                  1.6%
                                              Source: U.S. Census Bureau




On 03/16/2006, Tremont Consultants ordered a Claritas, Inc. Household Trend Report for the
PMA which includes the following data (Census 2000, 2005 Estimate and 2010 Projection):

!             Universe Totals (population, HH’s, families, housing units and group quarters
              population)

!             Average HH Size

!             Income Totals (aggregate HH income, per capita)

!             Total HH Income

!             Average HH Income
                                                                            5
                                          Part IV. Community Demographic Data



!              Median HH Income

!              Total Family HH Income

!              HH’s By HH Type and Size

These tables are as follows:
                                                                                                        6
                                                                      Part IV. Community Demographic Data


                                                          PMA

            Description               2000              2005            % Change      2010       % Change
                                     Census           Estimate          2000-2005   Projection   2005-2010

    Universe Totals
     Population                      101,810           106,011             4.13%     110,345      4.09%
     Households                      38,552             41,018             6.40%     43,303       5.57%
     Families                        27,148             28,740             5.86%     30,164       4.95%
     Housing Units                   42,459             45,155             6.35%     47,663       5.55%
     Group Quarters Population        3,370             3,402              0.95%      3,431       0.85%
    Average Household Size            2.55               2.50              -1.96%      2.47       -1.20%
    Income Totals
     Aggregate ($MM)
    Household Income                  1,884             2,287              21.39%     2,742       19.90%
     Per Capita                      18,872             21,905             16.07%    25,176       14.93%
                                             Source: Claritas, Inc. (03/16/2006)


The above PMA table shows the following estimates/projections for the period 2005-2010:

!                 PMA population is projected to increase by approximately 4,350 persons, averaging
                  870 persons per annum;

!                 PMA HH population is projected to increase by approximately 2,285 HH”s,
                  averaging 460 HH”s per annum;

!                 The PMA’s “Housing Units” will increase by approximately 2,510 units, averaging
                  500 units per annum;

!                 The PMA group quarters population essentially will remain unchanged;

!                 PMA average HH size will decline slightly over this period;
                                                                                                     7
                                                                   Part IV. Community Demographic Data


                                                       PMA
                                                      (HH’s)

           Description         2000 Census        Percent           2005        Percent     2010       Percent
                                                                  Estimate                Projection

Total Household Income           38,583                             41,018                 43,303
    Income Less than $15,000      7,233            18.75%            6,724      16.39%      6,321      14.60%
    Income $15,000-$24,999        6,179            16.01%            5,717      13.94%      5,193      11.99%
    Income $25,000-$34,999        5,322            13.79%            5,099      12.43%      5,001      11.55%
    Income $35,000-$49,999        6,794            17.61%            7,016      17.10%      6,953      16.06%
    Income $50,000-$74,999        6,708            17.39%            7,497      18.28%      8,081      18.66%
    Income $75,000-$99,999        3,229            8.37%             3,944      9.62%       4,626      10.68%
    Income $100,000-$149,999      1,904            4.93%             3,304      8.06%       4,604      10.63%
    Income $150,000-$249,999      853              2.21%             1,119      2.73%       1,668      3.85%
    Income $250,000-$499,999      249              0.65%              417       1.02%        574       1.33%
    Income $500,000 or more       112              0.29%              181       0.44%        282       0.65%
Average Household Income         $48,826                           $55,753                 $63,331
Median Household Income          $36,232                           $41,348                 $46,081
Total Family Household           27,542                             28,740                 30,164
Income
    Income Less than $15,000      3,371            12.24%            3,432      11.94%      3,147      10.43%
    Income $15,000-$24,999        3,704            13.45%            3,269      11.37%      2,905      9.63%
    Income $25,000-$34,999        3,571            12.97%            3,358      11.68%      3,165      10.49%
    Income $35,000-$49,999        5,120            18.59%            4,739      16.49%      4,497      14.91%
    Income $50,000-$74,999        5,963            21.65%            6,183      21.51%      6,292      20.86%
    Income $75,000-$99,999        3,005            10.91%            3,497      12.17%      3,994      13.24%
    Income $100,000-$149,999      1,692            6.14%             2,822      9.82%       4,018      13.32%
    Income $150,000-$249,999      781              2.84%              944       3.28%       1,434      4.75%
    Income $250,000-$499,999      223              0.81%              333       1.16%        471       1.56%
    Income $500,000 or more       112              0.41%              163       0.57%        241       0.80%
                                          Source: Claritas, Inc. (03/16/2006)




The above PMA table shows the following estimates/projections for the period 2005-2010.

!             HH’s earning $15,000 - $24,999 are projected to decline by approximately 524 HH’s
              (9.2%) averaging 105 HH”s per annum;
                                                                                                    8
                                                                  Part IV. Community Demographic Data


!              HH’s earning $25,000 - $34,999 also are projected to decline, from 5,099 HH’s in
               2005 to 5,001 HH’s in 2010, representing a 1.9% decline (98 HH’s) over these five
               (5) years;

!              HH’s earning $35,000 - $49,999 also are projected to decline, from 7,016 HH’s in
               2005 to 6,953 HH’s in 2010, representing a 0.9% decline (63) HH’s over these five
               (5) years;

!              The number of PMA “HH’s” and “Family HH’s” earning >$50,000 are projected to
               increase over this five (5) year period.

                                                      PMA
                                                     (HH’s)

             Description           2000          Percent           2005        Percent     2010       Percent
                                  Census                         Estimate                Projection

Households by Household Type
and Size
Nonfamily Households              11,404                           12,278                 13,139
    1-person household             9,754          85.53%           10,804      87.99%     11,686      88.94%
    2-person household             1,402          12.29%            1,240      10.10%      1,209      9.20%
    3-person household              172           1.51%              165       1.34%        177       1.35%
    4-person household              54            0.47%               46       0.37%        44        0.33%
    5-person household              15            0.13%               16       0.13%        16        0.12%
    6-person household               4            0.04%               4        0.03%         4        0.03%
    7 or more person household       3            0.03%               3        0.02%         3        0.02%
Family Households                 27,148                           28,740                 30,164
    2-person household            10,900          40.15%           11,905      41.42%     12,734      42.22%
    3-person household             7,147          26.33%            7,708      26.82%      8,155      27.04%
    4-person household             5,666          20.87%            5,795      20.16%      5,948      19.72%
    5-person household             2,246          8.27%             2,210      7.69%       2,236      7.41%
    6-person household              766           2.82%              764       2.66%        778       2.58%
    7 or more person household      423           1.56%              358       1.25%        313       1.04%
                                         Source: Claritas, Inc. (03/16/2006)


For “Family HH’s”, the above PMA table shows for the period 2005 - 2010 that:

         !     There will be an increase of 1,424 HH’s from 2005 to 2010;

         !     Two (2) to four (4) person HH’s will show the largest increases whereas the number
               of five (5) to six (6) person HH”s essentially will remain constant;
                                                                                                  9
                                                                Part IV. Community Demographic Data



(A copy of this Claritas, Inc. Household Trend Report can be found in the back of this section.)

C.        Housing Demographics


                                      PMA - 2000 Households by Tenure

                                                                          PMA
                    Total Occupied Units                                  38,552
                    Owner Occupied                                        27,771
                    % Owner Occupied                                      72.0%
                    Renter Occupied                                       10,781
                    % Renter Occupied                                     28.0%
                                             Source: U.S. Census Bureau




                                 PMA 2000 Tenure by Age of Householder

                                                    PMA                       As A Percentage
                        Owner occupied:              27,771 units                   100.0
                        15 to 24 years                        604                    2.2
                        25 to 34 years                       3,905                  14.1
                        35 to 44 years                       6,060                  21.8
                        45 to 54 years                       6,670                  24.0
                        55 to 64 years                       4,741                  17.1
                        65 to 74 years                       3,415                  12.3
                        75 years and over                    2,376                   8.6
                        Renter Occupied:                 10,781 units               100.0
                        15 to 24 years                       1,421                  13.2
                        25 to 34 years                       2,853                  26.5
                        35 to 44 years                       2,357                  21.9
                        45 to 54 years                       1,831                  17.0
                        55 to 64 years                        921                    8.5
                        65 to 74 years                        588                    5.5
                        75 years and over                     810                    7.5
Source: U.S. Census Bureau

Renter HH’s age 25 to 54 (7,041 HH’s) represented 65.3% of all renter HH’s in the PMA in
2000.
Renter HH’s age 25 to 44 years totaled 5,210 HH’s and represented 48.3% of the PMA’s renter
HH’s. Renter HH’s age 55 plus (2,319 HH’s) represented 21.5% of all renter HH’s in the PMA
in year 2000.

                             Year 2000 Average HH Size Per Occupied Housing
                                                                                             10
                                                            Part IV. Community Demographic Data


                                     Unit By Tenure - PMA

                              Tenure                                Persons Per Unit
                   Owner Occupied                                         2.71
                   Renter Occupied                                        2.48
                                       Source: U.S. Census Bureau



                             PMA Year 2000 Tenure by HH Size

                                                     PMA                    As A Percentage

              Owner Occupied:                    27,771 units                    100.0
              1 Person HH                            5,765                       20.8
              2 Person HH                            9,492                       34.2
              3 Person HH                            5,493                       19.8

              4 Person HH                            4,456                       16.0
              5 Person HH                            1,683                        6.1
              6 Person HH                             575                         2.1
              7+ Person HH                            307                         1.1
              Renter Occupied:                   10,781 units                    100.0
              1 Person HH                            3,989                       37.0
              2 Person HH                            2,810                       26.1
              3 Person HH                            1,826                       16.9
              4 Person HH                            1,264                       11.7
              5 Person HH                             578                         5.4
              6 Person HH                             195                         1.8
              7+ Person HH                            119                         1.1
                                       Source: U.S. Census Bureau


Renter HH’s with two to three persons (4,636 HH’s) represented 43.0% of all PMA renter HH’s.
Renter HH’s with 3 to 5 persons (3,668 HH’s) represented - 34.0% of all PMA renter HH’s.
                                                                                          11
                                                         Part IV. Community Demographic Data



                                    Gross Rent As a Percentage
                                      of HH Income in 1999


                      Renter Occupied Units                   10,770           100.0
         Less than 10 percent                                      893          8.3
         10 to 14 percent                                      1,332           12.4
         15 to 19 percent                                      1,601           14.9
         20 to 24 percent                                      1,150           10.7
         25 to 29 percent                                          879          8.2
         30 to 34 percent                                          783          7.3
         35 to 39 percent                                          605          5.6
         40 to 49 percent                                          652          6.1
         50 percent or more                                    1,902           17.7
         Not computed                                          1,186           11.0
         Median Percentage                                     25.9%            (X)
                                       Source: U.S. Census (SF3)



In 1999, the above table shows that 3,159 renter HH’s, representing 29.3% of all PMA renter
HH’s, were paying in excess of 35% of HH income for gross rent expenses.

In year 2000, PMA renter HH’s paid an average median contract (or “net”) rent of $308 per
month. Similarly, PMA renter HH’s paid an average median gross rent of $427 per month. Part
V., Demand/Supply Analysis will contain a detailed analysis of this rent data and how it relates to
the study’s rent affordability analyses.
                                                                                     12
                                                    Part IV. Community Demographic Data



                          PMA Tenure by HH Income in 1999


                                                       Number           Percent
    Owner-occupied housing units                        27,751           100.0
Less than $5,000                                          793             2.9
$5,000 to $9,999                                         1,371            4.9
$10,000 to $14,999                                       1,428            5.1
$15,000 to $19,999                                       1,972            7.1
$20,000 to $24,999                                       1,850            6.7
$25,000 to $34,999                                       3,723           13.4
$35,000 to $49,999                                       5,066           18.3
$50,000 to $74,999                                       5,690           20.5
$75,000 to $99,999                                       2,982           10.7

$100,000 to $149,999                                     1,762            6.3
$150,000 or more                                         1,112            4.0
Median (dollars)                                        $38,693           (X)


   Renter-occupied housing units                        10,826           100.0
Less than $5,000                                         1,160           10.7
$5,000 to $9,999                                         1,451           13.4
$10,000 to $14,999                                       1,105           10.2
$15,000 to $19,999                                       1,353           12.5
$20,000 to $24,999                                       1,041            9.6
$25,000 to $34,999                                       1,653           15.3
$35,000 to $49,999                                       1,664           15.4
$50,000 to $74,999                                        929             8.6
$75,000 to $99,999                                        285             2.6
$100,000 to $149,999                                      133             1.2
$150,000 or more                                          52              .5
Median (dollars)                                        $19,815           (X)
                               Source: U.S. Census Bureau (SF3)
                                                                                             13
                                                            Part IV. Community Demographic Data


Note that there is a median HH income difference of $11,882 between renter HH’s having a
median income of $18,255 and owner-occupied HH’s having a median income of $31,326. In
addition, in Year 2000, HUD’s Area Median Income (AMI) for Florence County was $43,100 (4
person household). A median renter household income of $19,815 in 1999 represented 46.0%
($19,815/$43,100 = .460) of this 4 person AMI. In Year 2000, a 4 person household earning
#$21,550 was categorized by HUD as being a “very low income” household.


                   New Privately-Owned Residential Building Permits
                           Florence County, North Carolina

          Year         Total Units         Single Family             Multi-Family   Multi-Family
                                               Units                  Buildings        Units
          2000            607                     512                    16             95
          2001             57                      51                     3              6
          2002            501                     467                     8             34
          2003             47                      47                     0              0
          2004            181                     179                     1              2
          2005            N/A                    N/A                     N/A            N/A
                                     Source: U.S. Bureau of the Census
1                                                                      Part V. Demand/Supply Analysis




                         Part V. Demand/Supply Analysis
A.     Demand Analysis

Florence North Apartments is a proposed, new construction development consisting of seventy-
two (72) garden style multi-family rental units. The targeted renter market are “family”
households (HH’s), earning #50% and #60% of the Area Median Income (AMI). The proposed
unit mix (by bedrooms/bathrooms) gross square footage (SF), contract rent, utility cost and
estimated gross rent is as follows:

      Unit Type         Number     Square Feet   Estimated   Estimated      Estimated       AMI
                        of Units                 Contract    Utility Cost   Gross Rent   Income %
                                                   Rent                                    Target
2 BR/2 BA                  26          954         $395         $110           $505         #50%
(Garden)

2 BR/2 BA                  26          954         $425         $110           $535         #60%
(Garden)

3 BR/2 BA                  10         1,107        $440         $136           $576         #50%
(Garden)

3 BR/2 BA                  10         1,107        $480         $136           $616         #60%
(Garden)

The units will be all-electric with electricity, water and sewer being paid by tenant. Owner will
pay for trash collection services.

Part III, Site Description/Market Area /Economy defines the Primary Market Area (PMA) for
Florence North Apartments. As of the 1990 Census, the PMA had 89,552 persons. The PMA’s
April 2000 population was 101,810 persons, a gain of 12,259 persons (13.7% ) from the 1990
PMA population.

The applicant intends to develop a property targeting residents earning #50% and #60% of the
PMA’s AMI. The first step, therefore, is to quantify the number of existing renter households
(HH’s) in the PMA with incomes at #50% and #60% of the Florence County, Area Median
Family Income (FC AMI). For year 2005, per SCSHFDA, the FC AMI is $49,000 (4 person
HH). HH’s earning 50% of the FC AMI will have a median income of $24,500 and HH’s earning
60% of the FC AMI will have a median income of $29,400.

HUD and the South Carolina State Housing Finance and Development Authority (SCSHFDA)
consider rental unit HH’s to have 1.5 persons per bedroom. Consequently,

       Efficiency = 1 person 1 BR = 1.5 persons              2 BR = 3 persons
                                   3 BR = 4.5 persons              4 BR = 5 persons
2                                                                                   Part V. Demand/Supply Analysis




The calculations utilized to determine income and gross rent limits are as follows:
As previously stated, the 2005 Median Family Income for Florence County is $49,000 (4 person
HH). This development is targeting “family” or “general population” residents earning #50% and
#60% of the FC AMI. There will be 2 BR and 3 BR units @ #50% AMI @ #60% AMI. It is
necessary to compute the income limits for the 3 BR (4.5 persons) units. As an example, the
income limit for a 3 BR unit @ 50% AMI is the mathematical average between a four person HH
($24,500) and a five person HH ($26,450) or $25,475 for a 4.5 person (3 BR) HH. The
computation for 2 BR (3 persons) unit does not require this additional averaging step. In short:

                                     Maximum Income Limits
                                      (as of February 2005)

          HH Size                   50% of FC AMI               60% of FC AMI
          3 Persons (2 BR)          $22,050                     $26,460
          4 Persons                 $24,500                     $29,400
          4.5 Persons (3 BR)        $25,475                     $30,570
          5 Persons                 $26,450                     $31,740
                               Note: FC AMI = Florence County Area Median Income


SCSHFDA’s maximum gross monthly rents by unit size are as follows:

                        Florence County’s Gross Rent Limit Calculation

          Unit Size                 50% of FC AMI               60% of FC AMI
          1 Bedroom                 $459                        $551
          2 Bedrooms                $551                        $661
          3 Bedrooms                $636                        $764
          4 Bedrooms                $710                        $852
                               Note: FC AMI = Florence County Area Median Income


Hence, the residents of subject property will have the following income limits:

                        Unit Size                 AMI Limit                        Maximum Income
                         2 BR                      #50%                                 $22,050
                         2 BR                      #60%                                 $26,460
                         3 BR                      #50%                                 $25,475
                         3 BR                      #60%                                 $30,570

The next step is to estimate the number of existing “general population” renter HH’s in the PMA
which realistically are income-qualified to reside in this proposed development.

(i) Demand From New Renter Households

Realistic demand is derived from an analysis which quantifies the number of PMA “family” or
“general population” HH’s that can afford to rent the proposed 2 BR and 3 BR units at subject
3                                                                   Part V. Demand/Supply Analysis


property. The next step is to estimate the number of PMA renter HH’s earning #50% and #60%
FC AMI. The 2 BR and 3 BR units are targeted to both AMI levels - #50% and #60%. At the
#50% level, subject property’s 2 BR units are projected to have a gross rent of $505/month.
Assuming that potential resident HH’s are able to pay no more than 35% of gross income
towards “total housing expenses’ then targeted HH’s (#50% AMI) occupying the 2 BR units at
subject property need to earn the following minimum income to avoid being classified as “rent-
overburdened”:

2 BR: $505 monthly rent x 12 months = $6,060 ) .35 =              $17,314

For the 2 BR units @ #60% AMI, the calculation is:

2 BR: $535 monthly rent x 12 months = $6,420) .35 =               $18,343

Likewise, subject property’s 3 BR units will target both #50% and #60% AMI HH’s. These AMI
HH’s will need to earn the following minimum income to avoid being classified as “rent-
overburdened”:

At #50% AMI:

3 BR: $576 monthly rent x 12 months = $6,192 ) .35 =              $19,749

At #60% AMI:

3 BR: $616 monthly rent x 12 months = $7,392 ) .35 =              $21,120

The following table summarizes the minimum/maximum incomes for subject property’s
proposed units:

    Unit Type      AMI Level      Gross Rent         Minimum       Maximum          Min./Max.
                                                      Income        Income        Income Range
      2 BR           #50%            $505            $17,314        $22,050           $4,736
                     #60%            $535            $18,343        $26,460           $8,117
      3 BR           #50%            $576            $19,749        $25,475           $5,726
                     #60%            $616            $21,120        $30,570           $9,450


Consequently, by combining the PMA’s #50% AMI and #60% AMI minimum/maximum income
limits, subject property’s targeted market will be HH’s earning between $17,314 and $30,570 per
annum. From Census 2000, PMA’s HH income cohorts were as follows:
4                                                                       Part V. Demand/Supply Analysis


                                       PMA HH Income in 1999

                Number
                            Total                      38,583          100.0
                Less than $10,000                       4,673           12.1
                $10,000 to $14,999                      2,560           6.6
                $15,000 to $19,999                      3,338           8.7
                $20,000 to $24,999                      2,841           7.4
                $25,000 to $29,999                      2,683           7.0
                $30,000 to $34,999                      2,639           6.8
                $35,000 to $39,999                      2,622           6.8
                $40,000 to $44,999                     2,211            5.7
                $45,000 to $49,999                     1,961            5.1
                $50,000 to $59,999                     3,299            8.6
                $60,000 to $74,999                     3,409            8.8
                $75,000 to $99,999                     3,229            8.4
                $100,000 to $124,999                   1,354            3.5
                $125,000 to $149,999                    550             1.4
                $150,000 to $199,999                    511             1.3
                $200,000 or more                        703             1.8
                Median HH Income
                                                      $36,232          N/A
                (dollars)
                                          Source: U.S. Census Bureau


The above table shows that 11,501 PMA HH’s earned between $15,000 to $34,999 per annum.
These 11,501 HH’s represent 29.8% of all PMA Year 2000 HH’s and are divided into four (4)
income cohorts - “$15,000 to $19,999,” “$20,000 to $24,999,” “$25,000 to $29,999" and
“$30,000 to $34,999.” Using a straight line, prorata assumption, these income cohorts can be
adjusted to reflect the number of HH’s earning ∃$17,314 to ∃$30,570. Specifically, for the
“$15,000 - $19,999" cohort, $2,685 ($19,999 minus $17,314 = $2,685) divided by this $5,000
income cohort yields a 53.7% “inclusion factor.” Applying this 53.7% factor times the 3,338
HH’s in the “$15,000 to $19,999" income cohort yields 1,793 HH’s (.537 x 3,338 = 1,793 HH’s)
that are assumed to be earning between $17,314 and $19,999 in year 2000. Likewise, the same
prorata assumption is applied to the ∃$30,000 to #$34,999 income cohort for those HH’s earning
between $30,000 to $30,570 (the 3 BR #60% AMI maximum income). That “inclusion factor” is
11.4% ($30,570 minus $30,000 = $570 ) $5,000 = .114) times the 2,639 HH’s in this income
cohort yields 301 HH’s earning ∃$30,000 to #$30,570. As of Year 2000, the estimated number
of income-qualifying HH’s is:
5                                                                               Part V. Demand/Supply Analysis


              Income Cohort                                         PMA HH’s

              $17,314 - $19,999                                       1,793
              $20,000 - $24,999                                       2,841
              $25,000 - $29,999                                       2,683
              $30,000 - $30,570                                         301
                                                                      7,618 HH’s

From page 8 of Part IV, the PMA’s Year 2000 HH’s by Tenure are as follows:

                                PMA - 2000 Households by Tenure

                                                                     PMA
              Total Occupied Units                                   38,552
              Owner Occupied                                         27,771
              % Owner Occupied                                       72.0%
              Renter Occupied                                        10,781
              % Renter Occupied                                      28.0%
                                       Source: U.S. Census Bureau


The above 7,618 HH’s (earning between $17,314 and $30,570) multiplied by the Year 2000
PMA renter percentage of 28.0% yields 2,133 “renter HH’s”.

Also from page 8 of Part IV is the table showing “Tenure By Age”:

                          PMA 2000 Tenure by Age of Householder

                                              PMA                        As A Percentage
                 Owner occupied:              27,771 units                         100.0
                 15 to 24 years                        604                           2.2
                 25 to 34 years                       3,905                         14.1
                 35 to 44 years                       6,060                         21.8
                 45 to 54 years                       6,670                         24.0
                 55 to 64 years                       4,741                         17.1
                 65 to 74 years                       3,415                         12.3
                 75 years and over                    2,376                          8.6
                 Renter Occupied:                  10,781 units                    100.0
                 15 to 24 years                       1,421                         13.2
                 25 to 34 years                       2,853                         26.5
                 35 to 44 years                       2,357                         21.9
                 45 to 54 years                       1,831                         17.0
                 55 to 64 years                        921                           8.5
                                                      PMA                     As A Percentage
6                                                                              Part V. Demand/Supply Analysis


                   65 to 74 years                              588                 5.5
                   75 years and over                           810                 7.5
                                            Source: U.S. Census Bureau

Renter HH’s age 25 to 54 (7,041 HH’s) represented 65.3% of all renter HH’s in the PMA in
2000.
Renter HH’s age 25 to 44 years totaled 5,210 HH’s and represented 48.3% of the PMA’s renter
HH’s. Renter HH’s generally are younger HH’s when compared to homeowner HH’s. In
addition, renter HH annual incomes generally are lower than homeowner HH incomes. From the
lower half of the “PMA Tenure By HH Income in 1999" table (page 11, Part IV):


                                                                     Number              Percent
       Renter-occupied housing units                                 10,826               100.0
    Less than $5,000                                                  1,160                10.7
    $5,000 to $9,999                                                  1,451                13.4
    $10,000 to $14,999                                                1,105                10.2
    $15,000 to $19,999                                                1,353                12.5
    $20,000 to $24,999                                                1,041                 9.6
    $25,000 to $34,999                                                1,653                15.3
    $35,000 to $49,999                                                1,664                15.4
    $50,000 to $74,999                                                   929               8.6
    $75,000 to $99,999                                                   285               2.6
    $100,000 to $149,999                                                 133               1.2
    $150,000 or more                                                     52                 .5
    Median (dollars)                                                 $19,815               (X)
                                       Source: U.S. Census Bureau (SF3)

This table shows that there are 4,047 renter HH’s earning between $15,000 to $34,999. Utilizing
the same “inclusion factor” computation described earlier in this section for the “$17,314 to
$19,999" and the above “$25,000 to $34,999" income cohorts, this 4,047 PMA renter HH group
is further refined to show PMA renter HH’s earning between $17,314 (minimum income for
subject property’s 2 BR units) and $30,570 (maximum income for subject property’s 3 BR units).
This refined estimate of Year 2000 income-qualified, PMA renter HH’s is as follows:
7                                                                     Part V. Demand/Supply Analysis


                                                                              PMA
                 Income Cohort                 Inclusion Factor             Renter HH’s

                 $17,314 - $19,999                     53.7%                    727
                 $20,000 - $24,999                     100%                   1,041
                 $25,000 - $34,999                     55.7%                    921
                                                       Total                  2,689 HH’s

Page 4 of this section shows that there are an estimated 7,618 total HH’s in the PMA earning
between $17,314 to $30,570. The above 2,689 estimated PMA renter HH’s represent 35.3% of
these 7,618 PMA “income-qualified” HH’s. Page 5 of this section shows that 28.0% of the
PMA’s occupied housing units are “renter occupied” units. However, the above analysis shows
that 35.3% of subject property’s income-qualifying HH’s are “renter” HH’s. In short, at lower
HH income levels, the percentage of renters that are income-qualifying for subject property’s
units exceeds the overall Census 2000 percentage of renter HH’s in the entire PMA (35.3%
versus 28.0%).

SCSHFDA’s 2006 Exhibit S - Market Requirements - Appendix A, section F(4)(a) “Demand
from New Renter Households” requires that the base year for new renter HH’s is year 2005 and
projected to year 2008.

The next step, therefore, of this demand analysis is to quantify the number of “new” PMA renter
HH’s from the base year 2005 and projecting to year 2008. Part IV, pages 4-8 contain
demographics tables from a Claritas, Inc. Household Trend Report for the PMA. These tables
include:

         (A)     Census 2000 data;

         (B)     2005 Estimates;

         (C)     2010 Projection

The following table is an abridged version of the Claritas, Inc. table found on page 6 of Part IV
regarding projected HH’s and HH income:

                                             PMA County
                                               (HH’s)

           Description         2000 Census   Percent     2005     Percent     2010        Percent
                                                       Estimate             Projection
Total Household Income             38,583               41,018                43,303
    Income Less than $15,000       7,233      18.75%     6,724    16.39%      6,321       14.60%
    Income $15,000-$24,999         6,179      16.01%     5,717    13.94%      5,193       11.99%
    Income $25,000-$34,999         5,322      13.79%     5,099    12.43%      5,001       11.55%
8                                                                                   Part V. Demand/Supply Analysis



    Income $35,000-$49,999       6,794            17.61%            7,016       17.10%      6,953           16.06%
           Description        2000 Census        Percent           2005         Percent     2010            Percent
                                                                 Estimate                 Projection
Average Household Income        $48,826                           $55,753                  $63,331
Median Household Income         $36,232                           $41,348                  $46,081
                                         Source: Claritas, Inc. (03/10/2006)


The Claritas’ HH Income Tables contain income cohorts of “less than $15,000", “$15,000 -
$24,999" and “$25,000 - $34,999" as compared to the Census 2000 cohorts of “less than
$10,000", “$10,000 to $14,999", “$15,000 to $19,999", “$20,000 to $24,999" “$25,000 to
$29,999" and “$30,000 to $34,999.”

This analysis will adjust and correlate the Claritas’ 2005 Estimate and 2010 Projection data to
reflect a “inclusion factor” computations similar to the “inclusion” percentages shown on page 4
of this section.

The above table shows that 6,179 HH’s earned between $15,000 - $24,999 in 2000. Per Census
2000, 3,338 of these HH’s (54.0%) earned between $15,000 to $19,999 and 2,841 HH’s (46.0%)
earned between $20,000 - $24,999. For 2005, Claritas estimates that there were 5,717 HH’s
earning between $15,000 to $24,999, or a decline of 462 HH’s within this income cohort over a
five (5) year period. Retaining the same percentages from the 2000 Census for the two (2)
income cohorts - 54.0% (“$15,000 to $19,999") and 46.0% (“$20,000 to $24,999") yields 3,087
HH’s @ $15,000 to $19,999 (.540 x 5,717 = 3,087) and 2,630 HH’s @ $20,000 to $24,999 (.460
x 5,717 = 2,630) in Year 2005. For the $15,000 to $19,999 cohort, there were 3,338 HH’s in
2000 and, by 2005, there are 3,087 HH’s, or a decline of 251 HH’s over the five year period
2000 through 2005. The average annual decline, therefore, is 50 HH’s per year.

The Claritas table shows that the PMA is estimated to have 5,717 HH’s earning between $15,000
to $24,999 in 2005 and declining further to 5,193 HH’s by 2010. Applying the same
percentages as above - 54.0% and 46.0% - to this income cohort’s projected 2010 HH
population, then 2,804 HH’s are projected to earn between “$15,000 to $19,999" (.540 x 5,193 =
2,804) and 2,389 HH’s are projected to earn between “$20,000 to $24,999" (.460 x 5,193 =
2,389). Consequently, the “$15,000 to $19,999" cohort declines by 283 HH’s [3,087 (in 2005)
minus 2,804 (in 2010) = 283] or at a rate of approximately 57 HH’s per year. Since 2008 is the
assumed year for subject property’s market entry, then 3/5's (2006, 2007 and 2008) or 60% of
this 283 HH decline will have occurred by the end of 2008. In short, the cohort $15,000 to
$19,999 will have declined by 170 HH’s (.60 x 283 = 170) during the 2005 - 2008 period.

                               2005                  2008                    2010
         Income Cohort        Estimate              Estimate               Projection               Total

         $15,000 to $19,999     3,087                 2,917         2,804                           (283)
                                                    (Years 2006, 2007
                                                     2008 = .6 x 283 = 170)
9                                                                                    Part V. Demand/Supply Analysis


Utilizing the same “inclusion factor” computations (see page 4 of this section) and the same
35.3% PMA renter HH percentage for lower income HH’s for years 2005 and 2008 (see pages 5-
7 of this section), the estimate of year 2005 and year 2008 income-qualified, PMA renter HH’s is
as follows:

                                 PMA Income-Qualifying Renter HH’s
                                         (2005 and 2008)

     Income Cohort     Year 2000       Year 2000               Year 2005            Year 2008       Gain (Loss)
                       Inclusion      Renter HH’s             Renter HH’s          Renter HH’s      2005-2008
                        Factor
$15,000-$19,999          53.7%              727                     585                553              (32)
$20,000-$24,999          100%              1,041                    928                877              (51)
$25,000-$34,999          55.7%              921                   1,003                991              (12)
Total                     N/A              2,689                  2,516               2,421             (95)
                                     Source: Claritas, Inc.; Tremont Consultants


The next step of this demand analysis is to quantify the number of Year 2008 PMA renter HH’s
which “income qualify” for each of subject property’s proposed unit types.

(1)       2 BR Units @ #50% FC AMI:

          Income Qualifying Range - ∃$17,314 to #$22,050 (see page 3 of this section)

          Total Year 2008 Renter HH’s in $17,314 - $19,999 Cohort -                          553

          Total Year 2008 Renter HH’s in $20,000 - $24,999 Cohort -                          877

          (A)     Total Year 2008 Renter HH’s in $17,314 - $19,999 cohort - 553 (see above table)

          (B)     Total Year 2008 Renter HH’s in $20,000 - $22,050 cohort: $20,000 Minus
                  $22,050 = 2,050/5,000 = .41 x 877 = 360

          Total of (A) and (B) = 553 + 360 = 913 HH’s

2)        2 BR Units @ #60% FC AMI:

          Income Qualifying Range - ∃$18,343 to #$26,460 (see page 3 of this section)

          Total Year 2008 Renter HH’s in $18,343 - $19,999 Cohort -                          183

          ($19,999 minus $18,343 = $1,656/$5,000 = 33.1%, .331 x 553 HH’s = 183 HH’s)

          Total Year 2008 Renter HH’s in $20,000 - $24,999 Cohort -                          877
10                                                                    Part V. Demand/Supply Analysis


       Total Year 2008 Renter HH’s in $25,000 - $34,999 Cohort -             991

       (A)       $18,343 to $19,999 = 183 HH’s (see above table)
       (B)       $20,000 to $24,999 = 877 HH’s (see above table)

       (C)       $25,000 to $26,460 = 1,460/10,000 = 14.6% x 991 = 145 HH’s

       Total of (A), (B), and (C) = 183 + 991 + 145 = 1,319 HH’s

Similar calculations (as described above) for the 3 BR units @ #50% and 60% FC AMI have
been made. To summarize these four (4) PMA income-qualifying renter households’estimates/
calculations for Year 2008:

             Unit Type in Proposed     Renter HH’s @ 50% AMI Renter HH’s @ 60%
             Development                                     AMI
             2 BR/2 BA                          913                  1,319
             3 BR/2 BA                          998                  1,232


Summary of Claritas’ Household Trend Report for the PMA and the analyses of this data show
the following:

(4)    The number of income-qualifying renter HH’s decreases for the period 2000 through
       2008 - 2,689 HH’s in Year 2000 versus 2,421 HH’s by Year 2008, or a loss of 268 HH’s
       (10.0%). (See table on page 9 of this section).

(5)    Claritas projects a decrease in the number of HH’s earning less than $35,000 between
       2000 and 2010. By 2010, Claritas projects that HH’s earning #$35,000 will have
       declined by 2,219 HH’s - 18,734 HH’s in 2000 versus 16,515 HH’s in 2010. (See
       abridged table on page 7 of this section).

This abridged table and the complete Claritas Inc. table (Part IV, page 6) show the following
PMA estimates/projections for the period 2005 - 2010:

Χ                HH’s earning $15,000 - $24,999 are projected to decline by approximately 524
                 HH’s (9.2%) averaging 105 HH”s per annum;

Χ                HH’s earning $25,000 - $34,999 also are projected to decline, from 5,099 HH’s in
                 2005 to 5,001 HH’s in 2010, representing a 1.9% decline (98 HH’s) over these
                 five (5) years;

Χ                HH’s earning $35,000 - $49,999 also are projected to decline, from 7,016 HH’s in
                 2005 to 6,953 HH’s in 2010, representing a 0.9% decline (63) HH’s over these
                 five (5) years;

Χ                The number of PMA “HH’s” and “Family HH’s” earning >$50,000 are projected
11                                                                    Part V. Demand/Supply Analysis


              to increase over this five (5) year period.

(3)    Claritas projects that the PMA had 41,018 HH’s in 2005 and will have 43,303 HH’s in
       2010, or a gain of 2,285 HH’s over this five (5) year period.

Given the conclusion (from Claritas data) that the PMA’s pool of income-qualified renter HH’s
actually will decline by 11.27% (257 HH’s) from the number of Year 2000 income qualified
HH’s, this analysis now will address other demographic data and projections from the South
Carolina Budget & Control Board, Office of Research & Statistics (SCORS - State Data Center)
as shown in Part IV. The purpose is to compare the Claritas data with SCORS data in an attempt
to project income-qualified HH demand from new renter HH formations within the PMA from
2005 through 2008.

As shown in Part IV, page 3, SCORS estimates Florence County’s population as follows:

                     April 2000 (Census) -           125,761
                     July 2005                              130,080
                     July 2010                              134,450

In April 2000, the PMA’s eighteen (18) Florence County census tracts had a population of
81,051 persons representing 64.4% of the above 125,761 person county population. The four (4)
Darlington County census tracts within the PMA had a population of 20,759 persons. The
PMA’s total population was 101,810 persons.

SCORS estimates that Florence County’s population will increase by 6.9% (8,689 persons) from
2000 through July 2010. Claritas Inc. estimates that the PMA’s population will increase by 8.4%
(8,535 persons) over the same period. SCORS estimates that Florence County’s population will
increase by 3.4% (4,370 persons) from July 2005 through July 2010. Claritas Inc. projects the
PMA’s population will increase by 4.09% (4,334 persons) over the same period. An analysis of
these projections (both absolute numbers and percentage rates for population growth) from these
two (2) demographic data sources show:

(3)    Population growth rate for 2000 to 2010 - SCORS @ 6.9%, Claritas @ 8.4%;

(4)    Total population increase for 2000 to 2010 - SCORS @ 8,689 persons (entire county),
       Claritas @ 8,535 persons (PMA);

(5)    Total population increase for 2005 to 2010 - SCORS @ 4,370 persons (entire county),
       Claritas @ 4,334 persons (PMA).

In short, the State Data Center (SCORS) population projections are more conservative than
Claritas’ population projections. As a result, any anlayses using SDC/SCORS data to calculate
2005-2008 “Demand From New Renter HH’s’ will yield a similar, declining pool of income-
qualified “new” renter HH’s during the 2005 to 2008 time frame. In short, the SDC/SCORS
population projections for 2005 and 2010 show that Claritas’ PMA population estimates (2005)
and projections (2010) are not understated or overly conservative.
12                                                                        Part V. Demand/Supply Analysis




In summary, the table on page 9 of this section entitled “PMA Income-Qualifying Renter HH’s
(2005 and 2008)” shows that the PMA will have no “Demand From New Renter HH’s” for the
period 2005 to 2008. There are, however, other PMA demographic factors that need to be
considered in determining if there will be new, income-qualified renter HH’s entering the market
between 2005 through 2008:

       (i)    Both Claritas, Inc. and SCORS do project positive population and HH growth for
              the period 2005 - 2010. Claritas estimates that the PMA will grow by 2,285 HH’s
              from 2005 to 2010, averaging 457 HH’s per year . SCORS estimates that the
              county’s population will grow by 4,370 persons over the same period. If the
              Claritas 2005 average HH size of 2.50 persons/HH’s applied to these 4,370
              persons, then approximately 1,750 new HH’s will enter Florence County’s HH
              population over this period, averaging 350 HH’s per annum. The average of these
              two (2) sources’ HH estimates for 2005 - 2008 is 1,210 HH’s:

Claritas @ 457 HH’s/year x 3 years =                   1,371 HH’s
SCORS @ 350 HH’s/year x 3 years =                      1,050 HH’s
                                                       2,421 HH’s ) 2 = 1,210 HH’s

       (ii)   Relevant HH income data is as follows:

              (i)        Per Census 2000, the median HH income for PMA renter HH’s was
                         $19,815. For Year 2000, four (4) person PMA HH’s @ 50% (“very low
                         income”) AMI had a median income of $21,550.00. In short, PMA renter
                         HH’s had a median income below HUD’s 50% AMI income threshold in
                         2000. (Part IV, page 12).

              (ii)       For Year 2004, Florence County’s insured employment and wage data
                         shows that the “average wage per employee” for “All Industries’ is
                         $29,338 ($564/week) which is 59.9% of the 2005 FC AMI of $49,000.
                         (Part III, page 9).

              (iii)      The National Low Income Housing Coalition’s (NLIHC) publication
                         entitled “Out of Reach 2005 - South Carolina” contains the following table
                         for Florence County:

                                             Florence County
                                          Renter HH Income (2005)

                        Estimated                     Income Needed to    Estimated Percent
                      Renter Median   Monthly Rent      Afford Two-       of Renters Unable
                        Household     Affordable at   Bedroom FMR as       to Afford Two-
                         Income       Renter Median   Percent of Renter    Bedroom FMR
                                                          Median
                         $24,759          $619              78%                 39%
13                                                                    Part V. Demand/Supply Analysis


                                             Source: NLIHC, 2005
It should be noted that subject property’s estimated gross rents ($505 & $535 for a 2 BR unit and
$576 & $616 for a 3 BR unit) are below (with the exception of the 3 BR @ $616) the above
$619/month “affordable monthly rent” for renter HH’s with incomes at the renter medial income
of $24,759.00. In addition, NLIHC’s Year 2005 estimated Florence County renter median HH
income of $24,759 represents 50.5% of SCSHFDA’s Year 2005 FC AMI $49,000.00.

It is this analyst’s opinion that the above-described population/HH estimates and income data
need to be included in any analysis which attempts to quantify PMA “new renter HH’s” for the
period 2005 to 2008. From (1) above, approximately 1,210 HH’s will enter the market from
2005 - 2008. From (2) above, the majority (75%) of these HH’s will be earning a median income
between $20,000 to $30,000 per annum. Using the 35.3% renter HH percentage for “income-
qualified” HH’s (see pages 6-7 of this section), then approximately 315 income-qualified, renter
HH’s will enter the market between 2005 to 2008. Specifically,

       2005 to 2008 “New” HH’s -                       1,210 HH’s
       Percentage Earning ∃$20,000 to #$30,000 - x. 75
       Estimated “New” HH’s Earning
       ∃$22,000 to #$30,000 -                            908 HH’s
       Percent Considered to be Renter HH’s             .353
       Estimated “New” Income-Qualified
       Renter HH’s -                                     320 HH’s

       @ #50% AMI -           240 HH’s (75%)
       @ #60% AMI -           320 HH’s (100%)

Of subject property’s proposed 72 units, twenty (20) will be 3 BR units representing 28% of all
units. From Part IV, page 9:

                              PMA Year 2000 Tenure by HH Size

                                                 PMA               As A Percentage

               Owner Occupied:                27,771 units              100.0
               1 Person HH                       5,765                  20.8
               2 Person HH                       9,492                  34.2
               3 Person HH                       5,493                  19.8

               4 Person HH                       4,456                  16.0
               5 Person HH                       1,683                   6.1
               6 Person HH                        575                    2.1
               7+ Person HH                       307                    1.1
               Renter Occupied:               10,781 units              100.0
               1 Person HH                       3,989                  37.0
               2 Person HH                       2,810                  26.1
14                         Part V. Demand/Supply Analysis



     3 Person HH   1,826     16.9
15                                                                      Part V. Demand/Supply Analysis




                                                   PMA               As A Percentage

              4 Person HH                          1,264                  11.7
              5 Person HH                           578                       5.4
              6 Person HH                           195                       1.8
              7+ Person HH                          119                       1.1
                                     Source: U.S. Census Bureau


Renter HH’s with four to six persons (2,037 HH’s) represented 18.7% of all PMA renter HH’s.
Year 2000 PMA “Tenure By Bedrooms” is as follows:

                              Year 2000 Tenure By Bedrooms

                                                  Number            Percent



               Owner Occupied                        27,751 Units        100.0



               No Bedrooms                                 137            .5



               1 Bedroom                                   517            1.9



               2 Bedrooms                                  4,487         16.2



               3 Bedrooms                                 17,093         61.6



               4 Bedroom                                   4,746         17.1



               5 or more Bedrooms                          771            2.8



               Renter Occupied:                      10,826 Units        100.0
16                                                                     Part V. Demand/Supply Analysis



                 No Bedrooms                                 383         3.5



                 1 Bedroom                                  1,855       17.1



                 2 Bedrooms                                 5,065       46.8



                 3 Bedrooms                                 3,031       28.0



                 4 Bedrooms                                   376        3.5



                 5 or more Bedrooms                          116         1.1



                                        Source: U.S. Census Bureau


From the above “Tenure By Bedrooms” table, 46.8% are 2 BR units, 28.0% are 3 BR units, and
4.6% are 4 or more bedrooms for renter occupied units. The above 28.0% (3 BR) and 4.6%+ (4
BR+) are relatively “normal” or ‘acceptable” percentages for these size units in a PMA rental
housing inventory of approximately 10,900 total rental units.

From interviews with on-site leasing managers/property managers, demand in the PMA’s
multifamily market for conventional or “market rate” units is considered to be in “positive”
equilibrium with current unit inventories essentially meeting current market demand. Demand
for 3 BR units at “market rate” properties has been consistently strong for the past several years.
Demand for 3 BR units comes from two (2) sources - family HH and, surprisingly, single or
roommate residents wanting to utilize the third bedroom as an office, study or sitting room.

Demand for 3 BR units at “assisted” multifamily properties also is in positive equilibrium. This
study’s LIHTC comparables Cambridge Court and Lakota Crossing currently have waiting lists
with six (6) to eight (8) applicants requesting 3 BR units. Another 3 BR demand factor comes
from those family HH’s currently renting single family/duplex properties or mobile homes
located in areas of the PMA that would be considered more rural than urban. Many of these
units are older with less amenities than a new construction, affordable rental unit located closer
to Florence’s Central Business District.

The PMA’s renter HH demographics and historic/current inventories of available, “for rent”
larger-sized units would appear to indicate an adequate-sized demand pool for subject property’s
proposed twenty (20) 3 BR units. Moreover, a review of the Claritas, Inc. table entitled
“Households by Household Type and Size” (see Part IV, page 7) shows that PMA 4 to 6 person
“Family HH’s” are projected to increase for the 2000-2010 period as follows:
17                                                                       Part V. Demand/Supply Analysis




                                2000           2005          2010        Gain/
       Family HH               Census Estimate      Projection    (Loss)

       4 Person -              5,666           5,795           5,948            282
       5 Person -              2,246           2,210           2,237             (10)
       6 Person -                766             764             778              12
       Totals                  8,678           8,769           8,962            284

LIHTC with Project-Based Rental Assistance

According to page five (5) of applicant’s 2006 LIHTC Application, dated 02/28/2006, subject
property will not be receiving project-based federal rental assistance.

(ii) Demand From Existing Households

The following table shows the PMA’s 1999 renter HH gross rent paid as a percentage of HH
income:

                                   Gross Rent As a Percentage
                                     of HH Income in 1999

                     Renter Occupied Units                    10,770             100.0
        Less than 10 percent                                       893            8.3
        10 to 14 percent                                       1,332              12.4
        15 to 19 percent                                       1,601              14.9
        20 to 24 percent                                       1,150              10.7
        25 to 29 percent                                           879            8.2
        30 to 34 percent                                           783            7.3
        35 to 39 percent                                           605            5.6
                     Renter Occupied Units
        40 to 49 percent                                           652            6.1
        50 percent or more                                     1,902              17.7
        Not computed                                           1,186              11.0
        Median Percentage                                      25.4%              (X)
                                       Source: U.S. Census (SF3)

In 1999, the above table shows that 3,159 renter HH’s, representing 29.4% (3,159/10,770) of all
PMA renter HH’s, were paying in excess of 35% of HH income for gross rent expenses. If the
1,186 “not computed” HH’s are subtracted from the 10,770 total renter HH’s, then the 3,159
HH’s @ ∃35% of HH income represented 33.0% of all renter HH’s (3,159/9,584). This 33.0% is
a percentage which indicates that the PMA has an “above average” number of renter HH’s
paying in excess of 35% of HH income for gross rent expenses. If the 783 HH’s paying ∃30% to
18                                                                                                             Part V. Demand/Supply Analysis



#34% are added to these 3,159 HH’s (and the 1,186 “not computed” HH’s are subtracted from
the 10,770 total renter HH’s), then the 3,942 HH’s (783 + 3,159) @ ∃30% of HH income
represented 41.1% of the “adjusted” PMA renter HH’s. Moreover, even by retaining the 10,770
PMA renter base number as the denominator and the 3,942 HH’s as the numerator, the
percentage of renter HH’s paying ∃30% of HH income is 36.6%. Both the 36.6% (10,770 PMA
HH renter base number) and 41.9% (9,584 PMA HH renter base number) are percentages which
indicate that the PMA has a “significantly high” number of renter HH’s classified as being “rent-
overburdened” in 1999.

Other data contained in NLIHC’s publication entitled “Out of Reach 2005 - South Carolina” is as
follows:

                                                                Family Income (2005)
                                          Area Median Income (AMI)1                    Maximum Affordable2 Monthly Housing Cost by % of
    Location                                                                                            Family AMI
                                 Annual           Monthly        30% of AMI3                30%                       50%                80%
    Florence County                  $47,450         $3,954              $14,235                        $356                $593               $949
1
  HUD, 2005
2
  "Affordable” rents represent the generally accepted standard of spending not more than 30% of income on housing costs.
3
  Annual income of 30% of AMI or less is the federal standard for Extremely Low Income households. Does not include HUD-specific
adjustments.




                                          Fair Market Rents (FMR)4 by Number of Bedrooms



                           Location                  Zero             One         Two            Three         Four



                           Florence County           $372             $418        $484           $581          $729


4
    HUD ,2005; final as of October 1


                                                                Income Needed to Afford

                                               Annual Income                                               Percent of Family AMI
                   Zero-           One-        Two-         Three-          Four-      Zero-       One-           Two-        Three-     Four-
    Location       Bedroom         Bedroom     Bedroom      Bedroom         Bedroom    Bedroom     Bedroom        Bedroom     Bedroom    Bedroom
                   FMR             FMR         FMR          FMR             FMR        FMR         FMR            FMR         FMR        FMR

    Florence           $14,880      $16,720      $19,360       $23,240       $29,160      31%            35%          41%          49%     61%
    County


In terms of correlating this NLIHC data with the PMA’s “rent overburdened” analysis, there are
several statistics in the above tables that need to be highlighted:

               (iii)      A renter family earning 50% of HUD’s 2005 FC AMI of $47,450 can afford a
                          maximum monthly housing cost of $593/month, assuming that family is not
19                                                                  Part V. Demand/Supply Analysis


              spending more than 30% of income on housing costs;

       (iv)   Utilizing HUD’s 2005 FMR’s for Florence County, a Florence County renter HH
              earning #60% of HUD’s 2005 AMI would need to spend the following
              percentages of this HH annual income for various unit sizes as follows:

                             Unit Size                            Percent of Family AMI

                             “0" BR                               31%
                              1 BR                                        35%
                              2 BR                                        41%
                              3 BR                                        49%

PMA HH’s occupying 2 BR and 3 BR units and paying the FMR for these unit types would be
considered as “rent-overburdened” according to NLIHC’s “affordable” (#30% of income) rental
criteria.

Renter HH’s earning #$14,999 per annum are considered to be eliminated from the potential
demand pool for subject property’s units. The table on page 6 of this section shows that 1,353
renter HH’s earned between $15,000 to $19,999. The prorata, “inclusion” computation (see page
4) for this income cohort assumes that 53.7% of the PMA HH’s earned the ∃ $17,314 minimum
income for subject property’s 2 BR unit @ #50% AMI. Conversely, 46.3% of the HH’s in this
cohort are assumed to be earning ∃$15,000 to #$17,314. Applying this 46.3% factor times the
1,353 total renter HH’s yields 626 renters assumed to be earning ∃$15,000 to #$17,314. These
626 renter HH’s represent 5.8% of all PMA renter HH’s. Consequently, this analysis will
assume that 5.8% of subject property’s “income-qualified” HH’s are “rent-overburdened.”

In regard to potential PMA renter HH’s currently residing in substandard housing, a conservative
approach will be adopted. From Year 2000 Census data:
20                                                                        Part V. Demand/Supply Analysis


                            PMA - Tenure By Plumbing Facilities

                                                                    PMA



              Total:                                                           38,577



                Owner occupied:                                                27,751



                 Complete plumbing facilities                                  27,675



                 Lacking complete plumbing facilities                              76



                Renter occupied:                                               10,826



                 Complete plumbing facilities                                  10,706



                 Lacking complete plumbing facilities                             120



                                         Source: US Census Bureau




This table shows that there were 38,577 occupied housing units in the PMA of which 27,751
units were owner occupied with 76 units (.3%) lacking plumbing facilities. There were 10,826
occupied renter housing units with 120 units (1.1%) lacking plumbing facilities. In regard to
PMA units having or lacking complete kitchen facilities:

                              PMA - Tenure By Kitchen Facilities

                                                              PMA



              Total:                                                38,577



               Owner occupied:                                      27,751
21                                                                                    Part V. Demand/Supply Analysis



                      Complete kitchen facilities                              27,710



                      Lacking complete kitchen facilities                       41



                     Renter occupied:                                          10,826



                      Complete kitchen facilities                              10,649



                      Lacking complete kitchen facilities                       177



                                             U.S. Census Bureau, Census 2000


The above table shows that 177 renter occupied units lacked complete kitchen facilities, or 1.6%
of all renter units. The average of the 120 units lacking complete plumbing and the 177 units
lacking complete kitchens is 149 renter units It is assumed that 20% (30 HH”s) of these 149
substandard “plumbing/kitchen” HH”s would be potential residents for subject property’s units.

From page 7 of this section, Claritas, Inc. estimates that the PMA’s HH population will grow by
4,751 HH’s during the period 2000 to 2010. As described on page 11 of this section, SCORS
estimates that the county’s population will increase by 8,689 persons from April 2000 through
July 2010. Utilizing the PMA‘s Census 2000 average HH size of 2.55 persons/HH, then
approximately 3,400 HH’s will have been added to the county’s HH population by 2010.
Claritas, Inc.’s 2005 “Estimate” and 2010 “Projection” show that the PMA will increase by 4,751
HH’s from 2000-2010. The average of Claritas’ 4,751 HH’s year 2010 projection and SCORS’
3,400 HH’s is 4,080 HH’s which, in turn, would equate to 400-410 new HH’s per annum. For
the eight (8) year period 2000-2008, new HH growth would approximate 3,240 HH’s (405 HH”s
x 8 years). These 3,240 new PMA HH’s when added to the PMA Year 2000 HH population of
38,552 HH’s generates an estimated July 2008 PMA HH population of 41,792.

The following table estimates Demand from Cost Burdened Renters for the income-qualifying
HH’s earning ∃$15,000 to #$30,570:
Table 1 - Demand from Cost Burdened Renters

Demand for Tax Credit Units from Income-Qualifying Cost Burdened Renters in Primary Market Area:

       2008 Households              times           % of Renters Per Census       equals       2008 Renter
                                                                                               Households

            41,792                                           28.0%                                   11,702


     2008 Renter                    times           % Earning <$30,570            equals       <$30,570 Income
     Households                                     (Census 2000 Data)                         Renter Households

            11,702                                            65%                                     7,606
22                                                                                  Part V. Demand/Supply Analysis




      <$30,570 Income            times        % of Renters who are              equals            Annual Demand
      Renter Households                       Cost Burdened                                       From Cost Burdened
                                              (See page 17)                                       Renters

             7,606                                     5..8%                                              441




      Annual Demand From         times                                          equals            Demand From
      Existing Renters                        % Earning >$15,000                                  Renters Earning
                                              and <$30,570                                        >$15,000 &
                                                                                                  <$30,570

              441                                       31%                                               137



Overall demand, therefore, from (1) new HH’s and (2) existing HH’s is summarized as follows:

                                                            @#50%                @#60%
                                                            FC AMI               FC AMI

(1)      2005-2008 PMA New Renter HH’s:                        240                   320
         (From page 13)

(2)      PMA “Rent Overburdened HH’s:                           96                       41
                                                            (.70 x 137)          (.30 x 137)

(3)      Demand From Substandard Units:                        30                    -0-

Total Income-Qualified HH Demand:                              366                  361

Estimated, Income-Qualifying Renter
HH’s “Annually in the Market”:                           366                       361
                                                      @ #50%                     @#60%
                                                      FC AMI                     FC AMI

Less: (1)            2005 PMA, LIHTC units
                     (UC, placed in Service
                     or Funded in 2005):                        -0-                      -0-


Total Estimated Net Demand: New &
Existing Income Qualified Renter HH’s -                     366                      361

Capture Rate                                                   9.8%                 10.0%
                                                      (36 Units/366 HH’s)   (36 units/361 HH’s)



Net Demand and Capture Rates By Bedroom Type

It is assumed that 65% of the above income qualified HH”s will occupy the property’s 2 BR
units and 35% of the HH’s will occupy the property’s 3 BR units. Hence,
23                                                                      Part V. Demand/Supply Analysis



       Total Demand By Bedroom Type #50% AMI:

                  2 BR -                    238 (65%)
                  3 BR -                    138 (35%)
                  Total                     366

(i)    @ #50% AMI:

Unit                                                                   Units Capture
Type              Total Demand              Supply1       Net Demand Proposed        Rate

2 BR                    238                     -0-          238         26            10.9%
3 BR                    128                     -0-          128         10             7.8%
       1
           2005 directly comparable LIHTC units - none.

       Total Demand By Bedroom Type #60% AMI:

                  2 BR -                    235 (65%)
                  3 BR -                    126 (35%)
                  Total                     361
24                                                                       Part V. Demand/Supply Analysis



(ii)   @#60% AMI

Unit                                                                   Units Capture
                                                     1
Type              Total Demand              Supply        Net Demand Proposed        Rate

2 BR                    235                    -0-           235          26             11.1%
3 BR                    126                    -0-           126          10              7.9%
       1
           2005 directly comparable LIHTC units - none.

The capture rates of 9.8% (for #50% AMI HH”s), and 10.0% (for #60% AMI) are considered
“positive” capture rates in terms of attracting income qualified renter HH’s “actively in the
market” during Year 2008's initial lease-up time period. These overall capture rates indicate that
adequate demand exists in the PMA to support the development of this seventy-two (72) unit
property as proposed by the applicant. Subject property’s four (4) capture rates by unit type and
AMI level also are considered to be “positive” capture rates that indicate sufficient demand
exists for the property’s proposed number of 2 BR and 3 BR units targeting #50% and #60%
AMI HH’s.

Absorption

A review of SCSHFDA’s LIHTC Florence County properties shows the following “family”
properties located within the greater Florence city area and are considered to be within subject
property’s PMA:

       (1)        Lakota Crossing (2002 Reservation) - new construction, 72 units, completed June
                  2004.

       (2)        Cambridge Court Apartments (2001 Reservation) - new construction, 64 units,
                  completed 2003.

       (3)        Wyndham Place Apartments (1998 Reservation) - rehabilitation property,
                  renovations completed 2000.

       (4)        Florence City Apartments (1993 Reservation) - rehabilitation property - 29 units
                  scattered in three (3) locations. Date of renovation completion not known. This
                  analyst’s physical inspection of two (2) locations - 108 to 114 Liberty Street and
                  417 South Church Street - showed that nearly all of these units are vacated and
                  exhibit significant signs of deferred maintenance.

Lakota Crossing (72 units) is located approximately 3.4 miles southwest of subject property. It
is 100% LIHTC assisted targeting HH’s earning #50% and #60% AMI. The property achieved
100% occupancy as of 12/01/2004, averaging a lease-up rate of 10-12 units per month over an
approximate 6-7 month period . Approximately 80%-85% of the residents came from this study’s
defined PMA.

Cambridge Court Apartments (64 units) is located approximately 2.0 miles west of subject
25                                                                      Part V. Demand/Supply Analysis



property. It is 100% LIHTC assisted targeting HH’s earning #50% and #60% AMI. The
property achieved 95% plus occupancy over an approximate 8 month period with a lease-up rate
averaging 8 units per month. Again, approximately 80%-85% of the residents came from this
study’s defined PMA.

Subject property, like Lakota Crossing and Cambridge Court Apartments, will be new
construction development with property and unit amenities similar to these existing LIHTC
developments. Consequently, subject property’s seventy-two (72) units should experience a
conservative lease-up rate of 8 to 10 units per month. Ninety-three (93%) percent stabilized
occupancy, therefore, should be attainable within seven (7) to nine (9) months.

B.     Supply Analysis

       (i)      Overall PMA Multi-Family Market

According to the 2000 Census, the PMA has 10,781 occupied rental housing units representing
28.0% of all PMA occupied housing units. Owner occupied housing units totaled 27,771 units
(72.0%). As of April 2000, the PMA’s vacant housing units were categorized as follows:

                                                PMA - 2000
                                               Vacancy Status

                                                                PMA                Percent



             Total:                                             3,881               100.0



              For rent                                          1,175               30.3



              For sale only                                     700                 18.0



              Rented or sold, not occupied                      521                 13.4



              For seasonal, recreational, or occasional use     564                 14.5



              For migrant workers                                45                  1.2
26                                                                       Part V. Demand/Supply Analysis



             Other vacant                                          876               22.6



                                      Source: U.S. Census Bureau


The vacancy of 564 “seasonal, recreational, or occasional use” reflects the time period when the
census data was gathered - Fall 1999 and first quarter 2000 (January - March 2000). The PMA’s
housing stock is characterized as follows:
27                                                                         Part V. Demand/Supply Analysis


                              PMA - Tenure By Units in Structure
                                       (Census 2000)

                                                                  Number        Percent

                Total Occupied Housing Units                      38,616         100.0
                Owner-occupied housing units                      27,790         100.0
                1, detached                                       20,528         73.9
                1, attached                                        255            0.9
                2                                                   14            0.1
                3 or 4                                             123            0.4
                5 or more                                          312            1.1
                Mobile home                                        6,519         23.5

                                                                  Number        Percent

                Boat, RV, van, etc                                    0           0.0


                Renter-occupied housing units                     10,826         100.0
                1, detached                                        3,648         33.7
                1, attached                                        303            2.8
                2                                                  917            8.5
                3 or 4                                             1,188         11.0
                5 to 9                                             1,357         12.5
                10 to 19                                           472            4.4
                20 to 49                                           337            3.1
                50 or more                                         613            5.7
                Mobile home                                        1,972         18.2
                Boat, RV, van, etc                                  19            0.2
                                       Source: US Census Bureau


As shown above, the second largest occupied unit type (both in terms of absolute number and
percent of all PMA units) are mobile home units. The PMA total is 8,491 mobile home units
(6,519 owner units and 1,972 renter units). Renter-occupied mobile homes represent 18.2% of
the PMA’s renter-occupied housing units.


Since 1990, the number of mobile homes in South Carolina has increased by 50.7 percent. In
Florence County, the number of mobile homes has increased by 41.2 percent since 1990:
28                                                                                  Part V. Demand/Supply Analysis




                                            Florence County
                                         Mobile Homes 1990-2000

                                         1990                                2000                 Percent
                                                                                                  Change
                                                                                                  1990-2000

                         Number            % of All            Number          % of All Housing
                                           Housing Units                       Units



       Florence County       8,386               19.4             11,843               22.8               41.2



                                                  Source: SCORS


At present, the PMA rental housing market is “positive” with nearly all subsidized and “market
rate” properties surveyed reporting physical occupancies of 93% - 100%. Average net rents in
the PMA have increased at an annual rate of 2.0% - 2.5% per annum since the 2000-2001. Net
rent ranges and average SF sizes at Class “C+” to “B+” conventional properties are as follows:

          Unit Type      Net Rent Range         Average Net Rent        SF Size Range         Average Size
       1 BR                $350 - $600                  $480               650 - 900              700
       2 BR                $450 - $710                  $535               720 - 1,025            960
       3 BR                $590 - $825                  $675            1,080 - 1,350             1,190


The above “net” monthly rental rates for apartment units generally include having landlord pay
for water/sewer/garbage collection.

(ii)      Comparable Properties in The PMA Multi-Family Market

In completing this market study, five (5) multi-family properties were identified as “true
comparables” in this PMA market. The five (5) comparable were chosen for the following
reasons:

(1)       All are “general population” or “family” properties located within the greater Florence
          city area which is the central point or “core” of the PMA.

(2)       Three (3) properties either are either 100% or partially assisted through HUD and LIHTC
          programs. The two (2) “market rate” properties are considered comparable in terms of
          rent schedule, unit type, renter HH income levels and property/unit amenities’ packages .
          “Market Rate” Comparable No. 4 (Bentree Apartments) was a 100% HUD assisted
29                                                                    Part V. Demand/Supply Analysis


        property until 2000 when it became “market rate.” A property/unit renovation program
        has been in progress since 2004.

(3)     The comparables’ driving distances from subject property range from 0.4 miles to 6.2
        miles. Potential renters for subject property would consider these five (5) comparables’
        locations as within the geographic market subject property would serve.

(4)     Comparables’ number of rental units:

                       No. 1 -         72 units (100% LIHTC)
                       No. 2 -         64 units (100% LIHTC)
                       No. 3 -        144 units (80% HUD Assisted/20% Market Rate)
                       No. 4 -        132 units “market rate”
                       No. 5 -               280 units “market rate”
                       Total                 692 units

The three (3) LIHTC assisted comparables’ average number of units is 138 units. Subject
property is a proposed seventy-two (72) unit development and is considered to be a large
development.

The following comparative charts summarize subject property’s exterior and unit amenities, unit
sizes, number of bathrooms, and net rents with the five (5) comparables.


      Unit Amenities      Subject    Lakota     Cambridge     Magnolia      Bentree     Sedgefield
                          Property   Crossing     Court        Trace         Apts.        Apts.



Refrigerator                 X           X           X            X            X            X



Range/Vent Hood              X           X           X            X            X            X



Garbage Disposal             X                       X            X                         X



W/D Hookups                  X           X           X                       (3 BR)     (2 BR & 3
                                                                                           BR)
30                                                                   Part V. Demand/Supply Analysis



W/W Carpet                  X           X           X            X            X            X



Washer/Dryer Provided



Central HVAC                X           X           X            X            X            X



Dishwasher                  X           X           X            X            X            X



Walk-In Closets             X           X           X                                    Some



Balcony/Patio               X           X           X                         X            X



Window Coverings*           B           B           B            B            B            B



Cable TV Hookups            X           X           X            X            X            X



 Storage Closet             X                                                              X



Ceiling Fan(s)              X           X                                                  X




*B = Mini-blinds
 D = Drapes


Subject property’s unit amenities are nearly identical to Lakota Crossing’s and Cambridge
Court’s unit amenities, with the exception that Lakota Crossing does not have garbage disposals
or interior storage closets. The next most comparable property providing unit amenities similar
to subject is Sedgefield Apartments. Unit amenities at Magnolia Trace and Bentree are
considered inferior to subject property’s unit amenities.
31                                                                          Part V. Demand/Supply Analysis



                           Subject      Lakota       Cambridge     Magnolia         Bentree     Sedgefield
     Property Amenities    Property     Crossing       Court        Trace            Apts.        Apts.
Community Room                    X          X                                        X             X
Building/Clubhouse
Swimming Pool                                                                         X             X
Laundry Facility                  X          X                          X             X             X
On-site Management                X          X             X            X             X             X
Playground(s)/Ballfield           X          X             X            X             X             X
Gazebo                                       X             X
Walking/Picnic Areas              X                        X
Tennis Court                                                                          X             X
Fitness Center/Room                          X


Subject property’s exterior/property amenities will be identical to Lakota Crossing’s property
amenities with the exception that Lakota Crossing has a fitness room. Subject property’s
amenities are considered superior to Magnolia Trace which does not have a community building.
The “market rate” Bentree and Sedgefield Apartments offer tennis court(s) and swimming
pool(s) in addition to the amenities found at subject property and Lakota Crossing.

A comparison of current occupancy rates is as follows:

 2 BR Comparison:         Total       Vacant       Occupancy   Number of Unit Size            Net Rent
     Property             Units        Units         Rate        Baths



Subject Property           52          N/A           N/A         Two          954      $395 (50% AMI)
                                                                                       $425 (/60% AMI)



Lakota Crossing            40           0            100%         One          N/A        $430(50% AMI)
                                                                                          $430 (60% AMI)



Cambridge Court            32           1            96.9%       Two          N/A         $452 (50% AMI)
                                                                                          $551 (60% AMI)
32                                      Part V. Demand/Supply Analysis



Magnolia Trace   68   6   91.2%   One    1,120      $425 (market)*



Bentree          72   8   88.9%   1.5     850       $510/$530/$550
33                                                                                            Part V. Demand/Supply Analysis




     2 BR Comparison:       Total           Vacant          Occupancy        Number of Unit Size                   Net Rent
         Property           Units            Units            Rate             Baths



Sedgefield                   152                5              96.7%              1-2            900 -             $535-$565
                                                                                                 1,125



                    *HUD “market rate” rental. Residents in assisted units pay up to 30% of their HH income/


 3 BR Comparison:           Total           Vacant          Occupancy        Number of Unit Size                   Net Rent
     Property               Units            Units            Rate             Baths
Subject Property              20              N/A               N/A               Two            1,170         $440 (50% AMI)
                                                                                                               $480 (60% AMI)
Lakota Crossing               28                0              100%               Two            Not            $530(50% & 60%
                                                                                                Known                AMI)
Cambridge Court               32                0              100%               Two            Not            $521 (50% AMI)
                                                                                                Known           $632 (60% AMI)
Magnolia Trace                52                3              94.2%              One            1,120           $495 (Market)*

Bentree                       24                0              100%               Two            1,100             $615/$640

Sedgefield                    56                0              100%               Two           1,086 -           $630 - $665
                                                                                                 1,350
                     * HUD market rate rental. Residents in assisted units pay up to 30% of their HH income.


The average occupancy rate for the five (5) comparables’ 2 BR units is 94.7%. The average
occupancy rate for the comparables’ 3 BR units is 98.8%. The overall average occupancy rate
for the five comparables (all units) is 96.5%.

The average vacancy rate for the five (5) comparables’ 2 BR units is 5.8%. The average vacancy
rate for the five (5) comparables’ 3 BR units is 1.2%. As discussed on page 21 of this section,
the LIHTC property “Florence City Apartments” is in a distressed condition. It is estimated that
its vacancy rate is 90% plus. The three LIHTC comparables and Florence City Apartments
represent all of the LIHTC projects in the PMA.

A rental rate comparison of subject property with these comparable properties detailed above is
as follows:

Base - Contract Rent - 2 BR Units

                                      2 BR                    Subject’s                               Subject’s
34                                                               Part V. Demand/Supply Analysis


       Property             Rental         2 BR Rental                 Difference

       Lakota Crossing      $430 (50%)     $395 (50%)                  ($35)
       (100% LIHTC)         $430 (60%)     $425 (60%)                  ($5)
                             2 BR            Subject’s                 Subject’s
       Property             Rental         2 BR Rental                 Difference

       Cambridge Court      $452 (50%)     $395 (50%)                  ($57)
       (100% LIHTC)         $551 (60%)     $425 (60%)                  ($126)

       Magnolia Trace       $445           $395 (50%)                  ($50)
       (Assisted and        $445           $425 (60%)                  ($20)
       “Market Rate”)

       Bentree              $510            $395 (50%)/$425 (60%)      ($115)/($85)
       (“Market Rate”)      $530            $395 (50%)/$425 (60%)      ($135)/($105)
                            $550            $395 (50%)/$425 (60%)      ($155)/$125)

       Sedgefield    $630            $395 (50%)/$425 (60%)     ($235)/($205)
       (“Market Rate”)      $665            $395 (50%)/$425 (60%)     ($270)/($240)

Subject property’s proposed 2 BR net rents of $395 (50% AMI) and $425 (60% AMI) are less
than all of the 2 BR contract rents at all five (5) comparables.

The 2 BR programmatic rents are:

(1)    Two “market rate” comparables -                          $525
       2 BR maximum LIHTC rent (50%) -                          $551
       2 BR maximum LIHTC rent (60%) -                          $661
       Subject property (50%) -                                 $395
       Subject property (60%) -                                 $425

(2)    LIHTC/HUD Assisted comparables -                  $446
       2 BR maximum LIHTC rent (50%) -                          $551
       2 BR maximum LIHTC rent (60%) -                          $661
       Subject property (50%) -                                 $395
       Subject property (60%) -                                 $425

Market Advantage Comparison - 2 BR Units:

Subject property @ $395 ) “market rate” @ $525 = 75.2%
Subject property @ $425 ) “market rate” @ $525 = 81.0%

Subject property’s 2 BR rent of $395 (@50% AMI) is 24.8% less than the “market rate”
35                                                            Part V. Demand/Supply Analysis


comparables’ rent of $525/month. Subject property’s 2 BR rent of $425 @ 60% AMI is 25.2%
less than the “market rate” comparables’ rent of $525/month.
36                                                                 Part V. Demand/Supply Analysis


Base-Contract Rent - 3 BR Units

                            3 BR            Subject’s            Subject’s
       Property             Rental        3 BR Rental            Difference

       Lakota Crossing      $530 (50%)    $440 (50%)             ($90)
       (100% LIHTC)         $530 (60%)    $480 (60%)             ($50)

       Cambridge Court      $521 (50%)    $440 (50%)             ($81)
       (100% LIHTC)         $632 (60%)    $480 (60%)             ($15)

       Magnolia Trace       $495 (Market) $440 (50%)              ($55)
       (Assisted and        $495 (Market) $480 (60%)              ($15)
        “Market Rate”)

       Bentree              $615          $440 (50%)             ($175)
       (“Market Rate”)      $640          $480 (60%)             ($160)

       Sedgefield           $630          $440 (50%)              ($190)
       (“Market Rate”)      $665          $480 (60%)              ($185)

Subject property’s proposed 3 BR net rents of $440 (50%) and $480 (60%) are less than all of
the five comparables’ 3 BR contract rents.

The 3 BR programmatic rents are:

(1)    Two “market rate” comparables -                    $625
       3 BR maximum LIHTC rent (50%) -                    $636
       3 BR maximum LIHTC rent (60%) -                    $764
       Subject property (50%) -                           $440
       Subject property (60%) -                           $480

(2)    LIHTC/HUD Assisted comparables -          $545
       3 BR maximum LIHTC rent (50%) -                    $636
       3 BR maximum LIHTC rent (60%) -                    $764
       Subject property (50%) -                           $440
       Subject property (70%) -                           $480

Market Advantage Comparison - 3 BR Units:

Subject property @ $440 ) “market rate” @ $625 = 70.4%
Subject property @ $480 ) ‘”market rate” @ $625 = 76.8%

Subject property’s 3 BR rent of $440 (@ 50%AMI) is 29.6% less than the “market rate”
comparables’ rent of $625/month. Subject property’s 3 BR rent of $480 (60% AMI) is 22.2%
less than the “market rate” comparables’ rent of $625/month.
37                                                                                                  Part V. Demand/Supply Analysis




Comparison of Unit Sizes

2 BR:

                                      2 BR           Subject                SF
           Property                   Size (SF)    Property (SF)        Difference
           Lakota Crossing              Not Known      954                 N/A
           Cambridge Court              Not Known      954                 N/A
           Magnolia Trace                 1,120        954                 (166)
           Bentree                        850          954                 104
           Sedgefield     900/975/1,025/1,125    954          54/(21)/(71/(171)

3 BR:

                                                    3 BR           Subject                           SF
           Property                                 Size (SF)      Property (SF)                         Difference
           Lakota Crossing                          Not Known         1,170                                   N/A
           Cambridge Court                          Not Known         1,170                                   N/A
           Magnolia Trcace                             1,255          1,170                                   (85)
           Bentree                                   1,100            1,170                                    70
           Sedgefield                      1,086/1,125/1,250/1,350    1,185                          84/45/(80)/(180)

Subject property’s 2 BR and 3 BR unit size are competitive with Bentree. Floor plans at
Magnolia Trace and Sedgefield generally are larger than subject’s proposed unit sizes.

Utilities included in contract rent:

        Unit Responsibility:                  Water                Sewer             Trash Coll.   Electric        Heat
             Property
     Subject Property                            No                   No                    Yes      No             No
     Lakota Crossing                            Yes                  Yes                    Yes      No             No
     Cambridge Court                             No                   No                    Yes      No             No
     Magnolia Trace                              Yes                 Yes                    Yes      No             No
     Bentree                                     No                   No                    Yes      No             No
     Sedgefield                                  No                   No                    Yes      No             No

*”Yes” indicates that utility is included in the rent, “No” indicates the utility is not.


Subject property, LIHTC Cambridge Court, “market rate” Bentree and Sedgefield only include
trash collection with the contract rent. LIHTC’s Lakota Crossing and Magnolia Trace provide
water/sewer/trash collection within the contract rent.

The Housing Authority of Florence (HAF) administers the Section 8 Housing Choice Voucher
38                                                                     Part V. Demand/Supply Analysis


program in the PMA. HAF’s Schedule of Allowances for Tenant-Furnished Utilities - Unit
Type: Apartments (dated 02/01/2006) shows the following utility allowances which pertain to
subject property’s appliances/heating/air conditioning/lighting, etc.:

                                                     2 BR                3 BR
           HVAC                                     $18.62               $22.57
           Cooking Electric                          $6.47               $7.77
           Other Electric/Lighting                  $22.79               $27.10
           Water Heating - Electric                 $24.43               $35.34
           Water                                    $14.95               $18.23
           Sewer                                    $22.53               $26.60
           Trash Collection                          N/A                  N/A
           Total                                    $109.79             $137.61


A copy of this HAF sheet is found in the back of this section. Applicant shows a $110 monthly
utility allowance for the 2 BR units and $136 monthly allowance for the 3 BR units.

Discussions with on-site leasing agents/property managers for the five (5) comparables as well as
interviews with other property owners/developers in the PMA reached one conclusion - that
affordability of the total housing expense is the most important factor for HH’s looking to rent in
this market. As shown on page 12 of this section, NLIHC estimates Florence County’s (2005)
renter median income to be $24,759. This $24,759 renter median income supports a “monthly
rent at renter median” of $619/month. Subject property’s estimated gross rents ($505/$535 for
the 2 BR unit and $576/$616 for the 3 BR unit) are below this $619/month “target” rent.
Moreover, subject property’s estimated gross rents include conservative and realistic estimated
tenant-paid utility costs. In short, subject property’s gross rents are targeting a large segment of
PMA HH’s that can afford rental housing costs under $620/month.

For PMA renter HH’s earning the above 2005 median HH income of $24,759, there is very
limited availability of affordable housing options, to include the purchase of single family
homes. NLIHC’s affordability tables (page 16 of this section) estimate that a Florence County
renter HH earning #60% AMI would need to spend 41% of HH income for a 2 BR unit and 49%
of HH income for a 3 BR unit when utilizing HUD’s 2005 Fair Market Rents for Florence
County.

Older single family homes are being marketed at prices of $110,000 - $150,000 (3 BR, 1.5 - 2
BA, 1,500 - 1,700 SF). Assuming an average price of $125,000, with a 95% LTV ($118,750
loan), with a 6.5% interest rate, the average monthly payment would approximate $750 per
month, plus utilities, taxes and insurance. In addition, many of these older single family homes
will require additional maintenance/repair expenditures shortly after the new purchaser moves
into the residence.

The City of Florence’s Community Services Department has begun construction of an affordable
39                                                                     Part V. Demand/Supply Analysis


development to be known as “Northpoint.” It is located on North Irby Street, close to Williams
Middle School. It will contain twenty-seven (27) detached, single family homeownership units
to be priced between $90,000 - $105,000. These units will be 1,200 SF with 3 BR/2 BA.
Financing will include a $10,000 “soft” second mortgage that will be forgivable after five (5)
years. There also is the possibility that an additional $5,000 in financing or grant funds may be
available through the CDBG program. Northpoint is the city’s first large scale affordable
homeownership development to be located on one tract of land. With the exception of this new
city-sponsored affordable housing development, PMA renter HH’s earning #50% or #60% of the
FC AMI have few affordable housing options/choices.

The current status of HAF’s Section 8 Housing Choice Voucher program is as follows:

       Total Vouchers:                        615

       Project-Based Certificates:            None administered by HAF

       Wait List Status:                      Closed with the exception of elderly and disabled
                                              applicants. Last opened in September 2004.

       HH’s on Waiting List:           55 (4 are elderly and 23 are disabled)

Types of Units Requested by Wait-List HH’s:

                      Unit Type                       Wait-List HH’s

                       1 BR                                  18
                       2 BR                                  17
                       3 BR                                  17
                       4 BR                                   3
                      Total                                  55

HAF’s Housing Choice Voucher Payment Standards (effective 04/01/2005)

                         1 BR - $406
                         2 BR - $465
                         3 BR - $560
                         4 BR - $772

It is this analyst’s opinion that the development of Florence North Apartments will not have an
adverse impact on the occupancies of other assisted housing projects in the PMA. This “Supply”
analysis identifies three (3) PMA comparable, LIHTC properties that have current occupancy
rates of 95.8% and 100%. The LIHTC property “Florence City Apartments” (1993
Rehabilitation Reservation - 29 units) is not a true comparable and it presently is in a distressed
condition with nearly all of its units being vacant.

Discussions with staff members at the city and county planning departments revealed that there
40                                                                    Part V. Demand/Supply Analysis


are no approved (or pending approval) new construction, “affordable” family rental
developments in the PMA.
The remainder of this section includes individual property sheets for these five (5) PMA
comparables. Each of these properties is detailed by number of units, bedroom type count,
monthly rent, rent per SF, age, amenities, vacancy rate, photographs, contact name and phone
number, date of contact, type of contact made, property unit amenities, and driving distance
from subject site.



Rental                                                      Map No.          1
Comparable:      Lakota Crossing                            Year Built:      Completed June 2004
Address: 1741 Lakota Drive                         Contact:           Cara S. Heather, Mgr.
                 Florence, SC 29504                                          843-664-9030
                                                            Date:            03/08/2006 (in person)
41                                                                              Part V. Demand/Supply Analysis




              Unit Type          # of Units         SF           Monthly Rent           Rent/SF
          1BR/1BA                    4          Not known       $325              Not Known
          2BR/1BA                   40          Not Known       $430              Not Known
          3BR/2BA                   28          Not Known       $530              Not Known
          TOTAL                     72


Amenities:                   Appliances                  Unit Features            Included in Rent
x Laundry Room               x Refrigerator              x W/W Carpet              x Water
x Fitness Room               x Range/Oven                x Patio/Balcony           x Sewer
x Clubhouse                  x Dishwasher                    Fireplace (some)      x Garbage
x Learning Center               Garbage Disposal             Furnished             x Cable (pre-wired)
x Gazebo                        Trash Compactor          x Air Conditioning           Electricity
x Playground                    Washer/Dryer             x Drapes/Blinds              Gas (heat)
   On Fus Route              x W/D Connection            x Ceiling Fan (LR)
                                                             Storage Closet
Remarks:
This is a 100% LIHTC “family”property (@ #50% and #60% AMI) located approximately 4.3 miles southwest of
subject property. Property reached 100% occupancy by 12/01/2004 - approximate 6 month lease-up period. Sixty-
seven (67) units are @ 50% AMI and five (5) units are @ 60% AMI (3-2 BR units, 2-3 BR units). Vacancy rates -
2.9% (06/30/05), 2.9% (12/31/05). Property currently is 100% occupied - wait list 36 HH’s - 21-1 BR; 9-2 BR; 6-3
BR. Eighteen (18) residents use Section 8 vouchers. No concessions offered, 12 month leases, one month security
deposit. Overall condition is “very good.”
42                                                           Part V. Demand/Supply Analysis


Rental                                            Map No.           2
Comparable:      Cambridge Court Apts.            Year Built:      2003
Address: 550 W. Darlington Street        Contact:           Elaine Bell, Mgr.
                 Florence, SC 29501                                843/413-0563
                                                  Date:            03/08/2006 (in person)
43                                                                              Part V. Demand/Supply Analysis




            Unit Type          # of Units           SF             Monthly Rent           Rent/SF
       2BR/2BA                    32           Not Known         $452/$551           Not Known
       3BR/2BA                    32           Not Known         $521/$632           Not Known
       TOTAL                      64

Amenities:                  Appliances                   Unit Features            Included in Rent
   Laundry Room             x Refrigerator               x W/W Carpet                 Water
   Tennis Court             x Range/Oven                 x Patio/Balcony              Sewer
   Swimming Pool            x Dishwasher                     Fireplace             x Garbage
   Clubhouse                x Garbage Disposal               Furnished             x Cable (pre-wired)
   Recreation Area             Trash Compactor               Air Conditioning         Electricity
   Community Room              Washer/Dryer              x Drapes/Blinds              Gas (heat)
x Playground                x W/D Connection             x Ceiling Fan
   On Bus Route                                              Storage Closet

Remarks:
This is a 100% LIHTC “family”property located 2.2 miles southwest of subject property. 32 units are @ 50% AMI
and 32 units are @ 60% AMI. Vacancy rates - 1.6% (06/30/05, 1.6% (12/31/05) and 1.6% March 2006 (1-2 BR @
50% AMI). Wait list - 9 HH’s requesting 3 BR units. Twenty (20) residents use Section 8 vouchers . No
concessions offered, 12 month lease, one month security deposit. Overall condition is “good.”
Rental                                                               Map No.             3
Comparable:       Magnolia Trace Apt. Homes                          Year Built:         1975
Address: 318 ½ E. Royal Street                              Contact:             Antoinette Mouzon, Mgr.
                  Florence, SC 29506                                                     843/669-5980
                                                                      Date:              03/08/2006 (in person)
44                                                                                  Part V. Demand/Supply Analysis




             Unit Type             # of Units            SF             Monthly Rent            Rent/SF
        1BR/1BA                        16               725         $385                     $.53
        2BR/1BA TH                     68               900         $445                     $.49
        3BR/1BA TH                     52              1,120        $495                     $.44
        4BR/2BA TH                      8              1,255        $525                     $.42
         TOTAL                          144
Amenities:                     Appliances                  Unit Features              Included in Rent
 x Laundry Room                 x Refrigerator             x W/W Carpet                x Water
      Tennis Court              x Range/Oven                   Patio/Balcony           x Sewer
      Swimming Pool             x Dishwasher                   Fireplace               x Garbage
      Clubhouse                 x Garbage Disposal             Furnished                    Cable (pre-wired)
      Recreation                    Trash Compactor        x Air Conditioning               Electricity
      Community Room                Washer/Dryer           x Drapes/Blinds                  Gas (heat)
 x Playground (3)                   W/D Connection             Ceiling Fan
      On Bus Route                                             Outside Storage
Remarks:
Magnolia Trace is an 20% “market rate” and 80% HUD Section 8, project-based subsidized property. This property
is located 0.4 miles south of subject property. Residents occupying the subsidized units pay up to 30% of their HH
income for gross rent expenses. Vacancy rates (all units) - 4.5% (6/30/05), 4.5% (12/30/05) and 4.0% March 2006
is (3-2 BR “market rate” and 3 - 3 BR “market rate” units). There are no concessions or promotions being offered.
Security deposit is one month’s rent, leases are for 12 months, pets not allowed. Approximately twenty (20)
residents occupying “market rate” units utilize Section 8 vouchers. There is a waiting list for 2 BR subsidized units.
Overall property condition is “fair.”
45                                                       Part V. Demand/Supply Analysis


Rental                                          Map No.        4
Comparable:       Bentree Apartments   Year Built:        1981
Address: 200 Bentree Lane              Contact:         Shannon Kale, Mgr.
                 Florence, SC 29501                           843/669-5399
                                                Date:         03/10/06 (in person)
46                                                                                Part V. Demand/Supply Analysis



             Unit Type             # of Units           SF          Monthly Rent            Rent/SF
        1BR/1BA                       36               650         $470/$480/$500      $.75 (Avg.)
        2BR/1.5BA                     72               850         $510/$530/$550      $.61 (Avg.)
        3BR/2BA                       24              1,100        $615/$640           $.57 (Avg.)
        TOTAL                         132

Amenities:                   Appliances                  Unit Features              Included in Rent
x  Laundry Room              x Refrigerator              x W/W Carpet                   Water
 x Tennis Court              x Range/Oven                x Patio/Balcony                Sewer
 x Swimming Pool             x Dishwasher                    Fireplace               x Garbage
 x Clubhouse                    Garbage Disposal             Furnished               x Cable (pre-wired)
   Recreation Area              Trash Compactor          x Air Conditioning             Electricity
 x Jacuzzi                      Washer/Dryer             x Drapes/Blinds                Gas (heat)
   Playground                x W/D Connection            x Ceiling Fan
   On Bus Route                 (Only 3 BR)                  Outside Storage

Remarks:
This is a 100% “market rate”property located 5.0 miles southwest of subject property. The above rent schedule
was effective 03/01/2006 with an average increase $15/unit. Property was 100% HUD project-based (221-D4)
assisted until June 2000. Renovation program commenced early 2004. Above rates per unit reflect various stages of
renovation progress - none, partial or total. Vacancy rates - 1.5% (06/30/05), 4.5% (12/31/05); 7% March 2006 (1-1
BR “none”, 4-2 BR “none’ and 4-2 BR “partial”). Current promotion is one month free on a 12 month lease.
Section 8 not accepted. Security deposit is $200, $40 application fee (per adult), $100 admin. fee. Overall property
condition is “good.”
Rental                                                                   Map No.           5
Comparable:         Sedgefield Apartments                        Year Built:          1972
Address: 1300 Valparaiso Drive                                  Contact:            Tami Baker, Asst. Mgr.
                   Florence, SC 29501                                                     843/667-6063
                                                                         Date:            03/09/06
47                                                                                Part V. Demand/Supply Analysis




             Unit Type             # of Units          SF           Monthly Rent            Rent/SF
        1BR/1BA                       72             650-900       $480-$505           $.62 (Avg.)
        2BR/1-2BA                     152           900-1,125      $535-$565           $.54 (Avg.)
        3BR/2BA                       56           1,086-1,350     $630-$665           $.53 (Avg.)
        TOTAL                         280

Amenities:                    Appliances                  Unit Features              Included in Rent
 x Laundry Room (2)           x Refrigerator              x W/W Carpet                    Water
 x Tennis Court               x Range/Oven                x Patio/Balcony                 Sewer
 x Swimming Pool (2)          x Dishwasher                     Fireplace              x Garbage
 x Clubhouse                  x Garbage Disposal               Furnished              x Cable (pre-wired)
     Recreation                   Trash Compactor         x Air Conditioning              Electricity
     Exterior Storage             Washer/Dryer            x Drapes/Blinds                 Gas (heat)
 x Playground (2)             x W/D Connection                 Ceiling Fan
     On Bus Route                 (2 BR & 3 BR)                Outside Storage
     Remarks:
This is a 100% “market rate”, property located 6.2 miles (driving distance) southwest of subject property. Property
has 3-1 BR , 4-2 BR and 3-3 BR floor plans - all garden units. Vacancy rates - 2.5% (06/30/05), 4.5% (12/31/05)
and 4.5% in March 2006 (7-1 BR w/650 SF; 5-2 BR “side by side” floor plan - 1,125 SF). There are no current
promotions. S/D is $100, admin. fee is $100 and $20/month premium for 6 to 11 month leases. Section 8 is not
accepted. Overall property condition is “good.”
              Part VI(b). Market Analyst Recommendations
It is this analyst’s recommendation that Florence North Apartments, as proposed, be awarded
an LIHTC reservation. The factors that led to this conclusion are as follows:

$     Excluding the presence of the CP& L power line located immediately south of the site,
      the property’s surrounding neighborhood appears to be void of any visible, environmental
      concerns or factors which might affect the marketability of subject property as proposed.

$     According to a discussion with the city police department’s North Region Commander,
      subject property’s Wilson Road location and its surrounding areas are not considered as
      an area in which there occurs a high incidence of crime.

$     There are no planned, approved or funded street/highway/infrastructure projects that
      would negatively impact the construction or marketability of a multi-family property
      located on Wilson Road, E. McIver Road, Old Marion Highway and N. Oakland Avenue
      and/or its immediate neighborhood.

$     Other positive attributes about the site which relate to marketability would be (1) it has a
      flat topography which is conducive to the economical construction of multifamily units;
      and (2) a convenient location in terms of proximity to hospital/medical facilities,
      schools, major PMA employers and a number of the PMA’s primary arterial roadways.

$     Subject property will have “very good” ingress/egress from Wilson Road as well as “very
      good” visibility from Wilson Road, the intersection of Wilson Road and N. Oakland
      Avenue (0.1 mile east) and from property’s frontage on Oakland Avenue.

$     The capture rates of 9.8% (for #50% AMI HH”s), and 10.0% (for #60% AMI) are
      considered “positive” capture rates in terms of attracting income qualified renter HH’s
      “actively in the market” during Year 2008's initial lease-up time period. These overall
      capture rates indicate that adequate demand exists in the PMA to support the
      development of this seventy-two (72) unit property as proposed by the applicant. Subject
      property’s four (4) capture rates by unit type and AMI level also are considered to be
      “positive” capture rates that indicate sufficient demand exists for the property’s proposed
      number of 2 BR and 3 BR units targeting #50% and #60% AMI HH’s.

$     Current PMA rental market conditions are positive. The overall average occupancy rate
      for this study’s five (5) comparable properties is 96.5%.

$     Subject property, like LIHTC comparables Lakota Crossing and Cambridge Court
      Apartments, will be new construction development with property and unit amenities
      similar to these existing LIHTC developments. Consequently, subject property’s
      seventy-two (72) units should experience a conservative lease-up rate of 8 to 10 units per
2                                                  Part VI (b). Market Analyst Recommendations


    month. Ninety-three (93%) percent stabilized occupancy, therefore, should be attainable
    within seven (7) to nine (9) months.

$   Discussions with on-site leasing agents/property managers for the five (5) comparables as
    well as interviews with other property owners/developers in the PMA reached one
    conclusion - that affordability of the total housing expense is the most important factor
    for HH’s looking to rent in this market. As shown in detail in Part V, the National Low
    Income Housing Coalition (NLIHC) estimates Florence County’s (2005) renter median
    income to be $24,759. This $24,759 renter median income supports a “monthly rent at
    renter median” of $619/month. Subject property’s estimated gross rents ($480/$540 for
    the 2 BR unit and $580/$610 for the 3 BR unit) are below this $619/month “target” rent.
    In short, subject property’s gross rents are targeting a large segment of PMA HH’s that
    can afford rental housing costs under $620/month.

$   With the exception of the recent commencement of construction of the city’s first “one-
    site” affordable homeownership development (Northpoint - 27 single family units), PMA
    renter HH’s earning #50% or #60% of the FC AMI have few affordable housing
    options/choices.

								
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