DEMOGRAPHIC CHARACTERISTICS AND TRENDS MONTGOMERY SUBMARKET #8
A. SUBMARKET DESCRIPTION
1. LOCATION The Montgomery Submarket is located in Montgomery County north of suburban Houston and is defined as all of Montgomery County. The Montgomery Submarket was determined through interviews with area leasing and real estate agents, government officials, economic development representatives, and the personal observations of our analysts. The personal observations of our analysts include physical and/or socioeconomic differences in the market and a demographic analysis of the area households and population. 2. COUNTY SEAT Conroe
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3. LOCAL GOVERNMENT The Woodlands, Conroe and Willis are the primary towns in this submarket. The city of Conroe operates under a home-rule charter that was adopted by the citizens of Conroe in 1965. The charter provides for the election of a city council consisting of a mayor and five council members. The Woodlands is a master-planned community with a local governmental agency created by the Texas Legislature. Nearly all of the community is located in the city of Houston's extraterritorial jurisdiction (ETJ) with a small portion in the corporate limits of Shenandoah. The city of Willis is a Class A General Law community subject to the Constitution of the State of Texas. The City Council and Mayor are currently working on an initial draft of a charter for the city which will be submitted to the voters of Willis. If the voters approve the charter, the City of Willis will then be a home-rule community. The vote on home-rule status us expected during 2006. 4. AREA Area: 922 square miles 2005 Population: 322,390 2005 Households: 114,409 5. COMMUNITY SERVICES AND INFRASTRUCTURE A map illustrating the location of community services is on the following page.
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Montgomery: Community Services
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6. DEMOGRAPHIC CHARACTERISTICS AND TRENDS a. POPULATION TRENDS The Montgomery Submarket population base has increased by 98,062 between 1990 and 2000. This represents a 59.5% increase from the 1990 total population, or an annual rate of 4.8%. The submarket population bases for 1990, 2000, 2005 (estimated), and 2010 (projected) are summarized as follows:
YEAR 1990 (CENSUS) 164,848 2000 (CENSUS) 262,910 98,062 59.5% 2005 2010 (ESTIMATED) (PROJECTED) 322,390 385,356 59,480 62,966 22.6% 19.5%
POPULATION POPULATION CHANGE PERCENT CHANGE
Source: 2000 Census; Claritas; Vogt Williams & Bowen, LLC
It is projected that the total population will increase by 62,966 people, or 19.5%, between 2005 and 2010. b. HOUSEHOLD TRENDS Within the Montgomery Submarket, the total number of households has increased by 35,191 (60.8%) between 1990 and 2000. Household trends within the Montgomery Submarket are summarized as follows:
YEAR 1990 (CENSUS) 57,871 2.8 2000 (CENSUS) 93,062 35,191 60.8% 2.8 2005 2010 (ESTIMATED) (PROJECTED) 114,409 136,974 21,347 22,565 22.9% 19.7% 2.8 2.8
HOUSEHOLDS HOUSEHOLD CHANGE PERCENT CHANGE HOUSEHOLD SIZE
Source: 2000 Census; Claritas; Vogt Williams & Bowen, LLC
Total household growth has been positive between 1990 and 2000, and is projected to continue to increase when there will be a total of 136,974 households in 2010. This is an increase of approximately 4,391 households annually.
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The submarket household bases by age are summarized as follows:
HOUSEHOLDS BY AGE UNDER 25 25 - 34 35 - 44 45 - 54 55 - 64 65 - 74 75 - 84 85 & HIGHER TOTAL 2005 (ESTIMATED) NUMBER PERCENT 5,855 5.1% 19,840 17.3% 25,034 21.9% 26,204 22.9% 18,658 16.3% 11,110 9.7% 6,165 5.4% 1,543 1.3% 114,409 100.0% 2010 (PROJECTED) NUMBER PERCENT 6,744 4.9% 22,514 16.4% 26,266 19.2% 30,636 22.4% 25,379 18.5% 15,322 11.2% 7,931 5.8% 2,184 1.6% 136,976 100.0% CHANGE 2005-2010 NUMBER PERCENT 889 15.2% 2,674 13.5% 1,232 4.9% 4,432 16.9% 6,721 36.0% 4,212 37.9% 1,766 28.6% 641 41.5% 22,567 19.7%
Source: 2000 Census; Claritas; Vogt Williams & Bowen, LLC
Between 2005 and 2010, the greatest growth among household age groups is expected to be among households aged 55 and higher. Households by tenure are distributed as follows:
TENURE OWNER-OCCUPIED RENTER-OCCUPIED TOTAL 2000 (CENSUS) HOUSEHOLDS PERCENT 71,571 76.9% 21,491 23.1% 93,062 100.0% 2005 (ESTIMATED) HOUSEHOLDS PERCENT 89,312 78.1% 25,097 21.9% 114,409 100.0%
Source: 2000 Census; Claritas; Vogt Williams & Bowen, LLC
Owner-occupied households, as evidenced by the fact that over threequarters of all occupied housing units are owner-occupied, dominate the market. The household size within the submarket, based on the 2000 Census, is distributed as follows:
PERSONS PER HOUSEHOLD 1 PERSON 2 PERSONS 3 PERSONS 4 PERSONS 5 PERSONS 6+ PERSONS TOTAL 2000 (CENSUS) HOUSEHOLDS PERCENT 17,530 18.8% 30,514 32.8% 16,784 18.0% 16,325 17.5% 7,599 8.2% 4,310 4.6% 93,062 100.0% 2005 (ESTIMATED) HOUSEHOLDS PERCENT 21,639 18.9% 37,342 32.6% 20,907 18.3% 19,914 17.4% 9,348 8.2% 5,259 4.6% 114,409 100.0% CHANGE 2000-2005 HOUSEHOLDS PERCENT 4,109 23.4% 6,828 22.4% 4,123 24.6% 3,589 22.0% 1,749 23.0% 949 22.0% 21,347 22.9%
Source: 2000 Census; Claritas; Vogt Williams & Bowen, LLC
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Based on the 2000 Census, the following is a distribution of housing units in the submarket by year of construction.
YEAR 1999 TO MARCH 2000 1995 TO 1998 1990 TO 1994 1980 TO 1989 1970 TO 1979 1960 TO 1969 1940 TO 1959 1939 OR EARLIER TOTAL OWNER 4,574 15,155 10,406 16,870 17,097 4,661 2,170 638 71,571 HOUSING UNITS PERCENT RENTER 6.4% 1,122 21.2% 2,761 14.5% 2,038 23.6% 6,651 23.9% 5,714 6.5% 1,887 3.0% 1,074 0.9% 244 100.0% 21,491 PERCENT 5.2% 12.8% 9.5% 30.9% 26.6% 8.8% 5.0% 1.1% 100.0%
Approximately 42.1% of the owner-occupied homes in the submarket were built since 1990. From 1995 through March 2000, the market absorbed 19,729 new owner-occupied homes, translating into nearly 313 homes per month over this period.
HOUSING UNIT BUILDING PERMITS FOR MONTGOMERY COUNTY, TX 1999 2000 2001 UNITS IN SINGLE-FAMILY STRUCTURES 4,493 4,067 3,997 UNITS IN 2-UNIT MULTIFAMILY STRUCTURES 30 78 0 UNITS IN 3- AND 4-UNIT MULTIFAMILY STRUCTURES 0 0 32 UNITS IN 5+ UNIT MULTIFAMILY STRUCTURES 396 52 88 UNITS IN ALL MULTIFAMILY STRUCTURES 426 130 120 TOTAL UNITS 4,919 4,197 4,117
Source: SOCDS
2002 4,497 0 52 484 536 5,033
2003 5,581 6 0 726 732 6,313
2004 6,023 2 0 952 954 6,977
TENURE OWNEROCCUPIED RENTEROCCUPIED TOTAL
TOTAL HOUSING UNITS 71,571 21,491 93,062
SUBSTANDARD UNITS 2000 CENSUS LACKING COMPLETE COMPLETE PLUMBING PLUMBING PERCENT FACILITIES FACILITIES 76.9% 23.1% 100.0% 71,260 21,245 92,505 311 246 557
PERCENT SUBSTANDARD 0.4% 1.1% 0.6%
Source: 2000 Census
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POVERTY STATUS 2000 CENSUS POPULATION NOT LIVING IN 237,671 POVERTY POPULATION LIVING IN 25,239 POVERTY TOTAL* 262,910
90.4% 9.6% 100.0%
Source: Summary File 3, Census of Population and Housing, U.S. Bureau of the Census, 2000 * Population for whom poverty status is determined
TURNOVER RATE HOUSTON MSA
64.4%
Source: 2003 IREM Income/Expense Analysis for Conventional Apartments
PERCENTAGE OF RENT-OVERBURDENED MONTGOMERY SUBMARKET 17.3%
Source: 2000 Census, Claritas
7. INCOME TRENDS The distribution of households by income within the Montgomery Submarket is summarized as follows:
HOUSEHOLD INCOME LESS THAN $10,000 $10,000 - $19,999 $20,000 - $29,999 $30,000 - $39,999 $40,000 - $49,999 $50,000 - $59,999 $60,000 - $74,999 $75,000 - $99,999 $100,000 & HIGHER TOTAL MEDIAN INCOME 2000 (CENSUS) 2005 (ESTIMATED) 2010 (PROJECTED) NUMBER PERCENT NUMBER PERCENT NUMBER PERCENT 6,669 7.2% 7,154 6.3% 7,599 5.5% 9,080 9.8% 9,331 8.2% 9,432 6.9% 9,994 10.7% 10,337 9.0% 10,657 7.8% 10,735 11.5% 11,172 9.8% 11,259 8.2% 9,377 10.1% 11,138 9.7% 12,133 8.9% 7,640 8.2% 9,227 8.1% 11,117 8.1% 10,306 11.1% 11,643 10.2% 13,467 9.8% 11,377 12.2% 14,859 13.0% 17,594 12.8% 17,884 19.2% 29,548 25.8% 43,716 31.9% 93,062 100.0% 114,409 100.0% 136,974 100.0% $50,884 $58,748 $67,006
Source: 2000 Census; Claritas; Vogt Williams & Bowen, LLC
In 2000, the median household income was $50,884. This increased 15.5% to $58,748 in 2005. By 2010, it is estimated the median household income will be $67,006, an increase of 14.1% over 2005. Between 2000 and 2005, most of the household growth was among households with incomes of $75,000 and higher.
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The following tables illustrate renter household income by household size for 2000, 2005 (estimated), 2006 (projected), 2007 (projected), 2008 (projected), and 2009 (projected) for the submarket:
RENTER HOUSEHOLDS $0 - $10,000 $10,000 - $20,000 $20,000 - $30,000 $30,000 - $40,000 $40,000 - $50,000 $50,000 - $60,000 $60,000+ TOTAL 1-PERSON 1,824 1,549 1,189 957 661 341 471 6,992 2-PERSON 533 828 961 788 792 549 1,277 5,727 2000 CENSUS 3-PERSON 4-PERSON 389 283 572 425 579 392 514 375 481 370 324 226 844 662 3,704 2,733 5+-PERSON 150 296 369 426 286 224 584 2,335 TOTAL 3,179 3,669 3,490 3,061 2,590 1,664 3,838 21,491
Source: Ribbon Demographics, Claritas
RENTER HOUSEHOLDS $0 - $10,000 $10,000 - $20,000 $20,000 - $30,000 $30,000 - $40,000 $40,000 - $50,000 $50,000 - $60,000 $60,000+ TOTAL
1-PERSON 2,189 1,730 1,375 1,149 847 485 763 8,537
2-PERSON 565 830 971 841 880 659 1,775 6,521
2005 ESTIMATED 3-PERSON 4-PERSON 414 303 585 395 561 388 574 420 494 408 420 292 1,187 902 4,235 3,108
5+-PERSON 151 280 359 482 301 297 826 2,696
TOTAL 3,622 3,821 3,654 3,465 2,930 2,152 5,453 25,097
Source: Ribbon Demographics, Claritas
RENTER HOUSEHOLDS $0 - $10,000 $10,000 - $20,000 $20,000 - $30,000 $30,000 - $40,000 $40,000 - $50,000 $50,000 - $60,000 $60,000+ TOTAL
1-PERSON 2,246 1,780 1,410 1,180 880 519 869 8,884
2-PERSON 560 823 968 838 894 681 1,920 6,685
2006 PROJECTED 3-PERSON 4-PERSON 412 300 586 392 557 382 573 412 509 418 435 304 1,297 980 4,369 3,187
5+-PERSON 150 277 355 482 312 304 908 2,788
TOTAL 3,668 3,858 3,671 3,484 3,013 2,243 5,974 25,913
Source: Ribbon Demographics, Claritas
RENTER HOUSEHOLDS $0 - $10,000 $10,000 - $20,000 $20,000 - $30,000 $30,000 - $40,000 $40,000 - $50,000 $50,000 - $60,000 $60,000+ TOTAL
1-PERSON 2,303 1,830 1,444 1,211 913 554 975 9,230
2-PERSON 555 816 965 834 908 703 2,066 6,849
2007 PROJECTED 3-PERSON 4-PERSON 411 297 587 389 552 376 571 405 524 428 450 316 1,408 1,057 4,503 3,267
5+-PERSON 149 274 350 482 323 312 990 2,880
TOTAL 3,715 3,896 3,687 3,504 3,096 2,334 6,496 26,728
Source: Ribbon Demographics, Claritas
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RENTER HOUSEHOLDS $0 - $10,000 $10,000 - $20,000 $20,000 - $30,000 $30,000 - $40,000 $40,000 - $50,000 $50,000 - $60,000 $60,000+ TOTAL
1-PERSON 2,360 1,879 1,479 1,242 946 588 1,081 9,577
2-PERSON 550 810 962 831 922 726 2,212 7,013
2008 PROJECTED 3-PERSON 4-PERSON 410 294 589 385 547 370 569 397 539 438 464 328 1,518 1,135 4,636 3,346
5+-PERSON 147 271 345 483 334 320 1,072 2,972
TOTAL 3,761 3,934 3,704 3,523 3,179 2,425 7,018 27,544
Source: Ribbon Demographics, Claritas
RENTER HOUSEHOLDS $0 - $10,000 $10,000 - $20,000 $20,000 - $30,000 $30,000 - $40,000 $40,000 - $50,000 $50,000 - $60,000 $60,000+ TOTAL
1-PERSON 2,417 1,929 1,514 1,274 978 623 1,187 9,924
2-PERSON 545 803 959 828 936 748 2,358 7,177
2009 PROJECTED 3-PERSON 4-PERSON 408 291 590 382 543 364 568 390 555 448 479 339 1,628 1,212 4,770 3,425
5+-PERSON 146 268 340 483 344 327 1,154 3,064
TOTAL 3,808 3,972 3,720 3,542 3,262 2,516 7,539 28,359
Source: Ribbon Demographics, Claritas
The following tables illustrate renter household income by household size (55+) for 2000, 2005 (estimated), 2006 (projected), 2007 (projected), 2008 (projected), and 2009 (projected) for the submarket:
RENTER HOUSEHOLDS 55+ $0 - $10,000 $10,000 - $20,000 $20,000 - $30,000 $30,000 - $40,000 $40,000 - $50,000 $50,000 - $60,000 $60,000+ TOTAL 1-PERSON 1,036 926 361 211 124 85 173 2,917 2-PERSON 173 180 171 127 112 102 250 1,115 2000 CENSUS 3-PERSON 4-PERSON 6 8 66 12 43 20 40 16 44 6 26 8 43 17 267 87 5+-PERSON 1 26 20 18 3 15 17 100 TOTAL 1,224 1,210 615 412 290 236 499 4,486
Source: Ribbon Demographics, Claritas
RENTER HOUSEHOLDS 55+ $0 - $10,000 $10,000 - $20,000 $20,000 - $30,000 $30,000 - $40,000 $40,000 - $50,000 $50,000 - $60,000 $60,000+ TOTAL
1-PERSON 1,244 1,076 468 258 199 100 290 3,636
2-PERSON 189 194 214 150 181 130 378 1,437
2005 ESTIMATED 3-PERSON 4-PERSON 8 14 80 14 54 26 43 5 58 34 44 13 82 25 371 131
5+-PERSON 2 27 23 16 6 20 25 119
TOTAL 1,457 1,391 786 473 479 306 801 5,693
Source: Ribbon Demographics, Claritas
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RENTER HOUSEHOLDS 55+ $0 - $10,000 $10,000 - $20,000 $20,000 - $30,000 $30,000 - $40,000 $40,000 - $50,000 $50,000 - $60,000 $60,000+ TOTAL
1-PERSON 1,280 1,114 494 273 217 112 335 3,826
2-PERSON 189 194 226 155 190 138 417 1,510
2006 PROJECTED 3-PERSON 4-PERSON 9 14 83 14 57 27 43 5 61 39 47 16 94 27 396 142
5+-PERSON 2 27 23 17 7 23 28 126
TOTAL 1,494 1,433 827 492 515 337 902 5,999
Source: Ribbon Demographics, Claritas
RENTER HOUSEHOLDS 55+ $0 - $10,000 $10,000 - $20,000 $20,000 - $30,000 $30,000 - $40,000 $40,000 - $50,000 $50,000 - $60,000 $60,000+ TOTAL
1-PERSON 1,317 1,152 520 287 236 125 380 4,016
2-PERSON 189 195 238 160 199 147 455 1,583
2007 PROJECTED 3-PERSON 4-PERSON 9 14 86 14 61 27 43 5 65 44 51 19 106 30 420 153
5+-PERSON 2 27 23 17 7 26 31 134
TOTAL 1,531 1,475 868 511 551 368 1,002 6,306
Source: Ribbon Demographics, Claritas
RENTER HOUSEHOLDS 55+ $0 - $10,000 $10,000 - $20,000 $20,000 - $30,000 $30,000 - $40,000 $40,000 - $50,000 $50,000 - $60,000 $60,000+ TOTAL
1-PERSON 1,353 1,191 545 301 254 137 424 4,206
2-PERSON 189 195 250 165 208 156 493 1,656
2008 PROJECTED 3-PERSON 4-PERSON 9 15 89 15 64 27 42 5 68 49 55 22 119 32 445 164
5+-PERSON 1 28 23 17 8 29 34 141
TOTAL 1,568 1,517 909 530 587 399 1,103 6,612
Source: Ribbon Demographics, Claritas
RENTER HOUSEHOLDS 55+ $0 - $10,000 $10,000 - $20,000 $20,000 - $30,000 $30,000 - $40,000 $40,000 - $50,000 $50,000 - $60,000 $60,000+ TOTAL
1-PERSON 1,390 1,229 571 315 273 149 469 4,396
2-PERSON 189 196 261 170 217 165 532 1,729
2009 PROJECTED 3-PERSON 4-PERSON 9 15 92 15 67 27 42 4 71 54 58 24 131 34 470 175
5+-PERSON 1 28 23 18 9 32 38 148
TOTAL 1,604 1,559 949 549 623 430 1,203 6,918
Source: Ribbon Demographics, Claritas
Data from the preceding tables is used in our demand estimates.
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8. LOCAL ECONOMIC PROFILE AND ANALYSIS a. LABOR FORCE PROFILE Services and Retail Trade comprise a little more than 59% of the Submarket labor force. Employment within the Montgomery Submarket as of 2005 is distributed as follows:
SIC GROUP ESTABLISHMENTS PERCENT AGRICULTURE & NATURAL RESOURCES 287 2.6% MINING 107 1.0% CONSTRUCTION 1,178 10.5% MANUFACTURING 541 4.8% TRANSPORTATION & UTILITIES 470 4.2% WHOLESALE TRADE 610 5.5% RETAIL TRADE 2,442 21.8% F.I.R.E. 1,089 9.7% SERVICES 4,133 37.0% GOVERNMENT 203 1.8% NON-CLASSIFIABLE 125 1.1% TOTAL 11,185 100.0% EMPLOYEES 2,026 5,899 8,675 12,070 5,498 4,820 30,167 8,227 45,283 3,947 869 127,481 PERCENT 1.6% 4.6% 6.8% 9.5% 4.3% 3.8% 23.7% 6.5% 35.5% 3.1% 0.7% 100.0%
Source: 2000 Census; Claritas; Vogt Williams & Bowen, LLC Note: Due to the fact that this survey is conducted of establishments and not of residents, some employees may not live within the Submarket. However, these employees are included in our labor force calculations because their places of employment are located within the Submarket.
The 10 largest employers within Montgomery County are summarized as follows:
INDUSTRY CONROE ISD CROWN STAFFING INC. HEWITT ASSOCIATES HEB GROCERY KROGER MAGNOLIA ISD MEDICAL CENTER HOSPITAL COUNTY OF MONTGOMERY NEW CANEY ISD WAL-MART ASSOCIATES, INC. BUSINESS TYPE EDUCATION EMPLOYMENT AGENCY CONSULTING GROCERY GROCERY EDUCATION HEALTH CARE GOVERNMENT EDUCATION RETAIL TOTAL TOTAL EMPLOYED NA NA NA NA NA NA NA NA NA NA NA
Note the number of employees per firm was not available.
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b. EMPLOYMENT TRENDS The employment base has increased by 15.9% over the past five years in Montgomery County, more than the Texas state average of 6.4%. Unemployment rates for Montgomery County and Texas are illustrated as follows:
YEAR 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 UNEMPLOYMENT RATE MONTGOMERY COUNTY TEXAS 4.1% 5.8% 3.9% 5.4% 3.4% 4.9% 3.4% 4.7% 3.7% 4.4% 3.9% 5.0% 4.9% 6.3% 5.4% 6.7% 5.1% 6.1% 4.8% 5.6%
The unemployment rate in Montgomery County has remained between 3.4% and 5.4%, well below the state average since 1996.
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RENTAL HOUSING ANALYSIS (SUPPLY) – MONTGOMERY SUBMARKET #8
A. OVERVIEW OF RENTAL HOUSING Vogt Williams & Bowen, LLC identified and personally surveyed a total of 12 Tax Credit developments, 11 market-rate developments, one governmentsubsidized development, one Tax Credit/market-rate development, two Tax Credit/market-rate/government-subsidized developments, and two Tax Credit/government-subsidized developments in the Montgomery Submarket. The surveyed Tax Credit developments have a combined occupancy rate of 79.1%. Note this includes three Tax Credit developments that were built in 2005 and are currently in lease-up. The surveyed market-rate developments have a combined occupancy rate of 91.2%; this includes one market-rate property that was built in 2005 and is currently in lease-up. The surveyed government-subsidized property has an occupancy rate of 100.0%; the surveyed market-rate Tax Credit property has an occupancy rate of 94.2%; the surveyed Tax Credit/market-rate/government-subsidized properties have a combined occupancy rate of 100.0%; and the surveyed Tax Credit/ government-subsidized properties have an occupancy rate of 96.6%. According to the on-line property inventory list of Tax Credit allocations provided by the Texas Department of Housing and Community Affairs (TDHCA), there is one additional Tax Credit property in the Montgomery Submarket. Despite repeated attempts, information was not available for Montgomery Trace Apartments. There are also three Tax Credit properties allocated and not yet built in this submarket (Tamarac Pines Apartments, Park at Woodline Townhomes and Copperwood Apartments). This survey was conducted to establish the overall strength of the rental submarket, establish and confirm vacancy and rent levels, and gather information on the current rental housing situation resulting from hurricanes Katrina and Rita.
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Following is the list of Tax Credit properties surveyed, both in person and by telephone:
MAP I.D. 1 2 3 4 5 6 7 8 9 12 14 15 16 17 18 21 25 TAX CREDIT PROJECT YEAR BUILT/ PROJECT NAME TYPE RENOVATED TIMBER MILL TAX 1994 HOLLOW CREEK MRT 1996 GARDEN GATE TAX 1999 PORTER SQUARE TGS 1979/1995 NEW CAREY OAKS II TGS 1992 PORTER PLAZA TAX 1994 PARK VILLAGE TAX 1997 MISSION WOODS TAX 1995 FOREST VIEW TAX 1993 CRICKET HOLLOW APTS. TAX 2005 FORD ROAD APTS. TAX 1976/1995 WILLIS SOUTH APTS. TMG 1978/1987 WILLIS RENTAL APTS. TMG 1978/1987 HAVENWOOD PLACE TAX 1997 MONTGOMERY PLACE TAX 2005 WILSHIRE APTS. TAX 1987 PARK AT PINEY WOOD TAX 2005 TOTAL UNITS 216 90 88 48 100 50 144 306 260 176 56 20 21 64 224 19 188 TARGET MARKET FAMILY FAMILY FAMILY FAMILY FAMILY FAMILY FAMILY FAMILY FAMILY FAMILY FAMILY FAMILY FAMILY FAMILY FAMILY FAMILY FAMILY
TAX-Tax Credit MRT-Market-rate & Tax Credit TGS-Tax Credit & Government-subsidized TMG-Tax Credit, Market-rate & Government-subsidized
Most of the Tax Credit developments in the Montgomery Submarket were built in the 1990s. However, there are three developments that were built in 2005 and are currently in lease-up. While there are no existing senior Tax Credit developments, two of the three planned Tax Credit apartments will be age-restricted.
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Following is the list of market-rate properties surveyed, both in person and by telephone:
MAP I.D. 2 10 11 15 16 19 20 22 23 24 26 27 28 29 MARKET-RATE YEAR BUILT/ TOTAL TARGET PROJECT NAME RENOVATED UNITS MARKET HOLLOW CREEK 1996 30 FAMILY PARK AT WOODLAND SPRINGS 2006 U/C FAMILY MONTGOMERY TRACE APTS. 2006 U/C FAMILY WILLIS SOUTH APTS. 1978/1987 2 FAMILY WILLIS RENTAL APTS. 1978/1987 1 FAMILY VILLAGE SQUARE 1980 270 FAMILY PARKSIDE APTS. 1984/1998 360 FAMILY PORTERWOOD APTS. 1983 136 FAMILY TIMBERS OF PINE HOLLOW 1977/2005 228 FAMILY SUN PARK APTS. 1985 168 FAMILY AUTUMN WOODS 1983 1983 FAMILY FALLS AT BOROUGH PARK 2003 200 FAMILY STERLING RIDGE ESTATES 2005 254 FAMILY GROGAN’S LANDING 1979/2005 384 FAMILY
Sterling Ridge Estates opened in March 2005 and is still in lease-up. Park at Woodland Springs (250 units) and Montgomery Trace Apartments (144 units) are both currently under construction. Following is the list of government-subsidized properties surveyed, both in person and by telephone:
MAP I.D. 13 GOVERNMENT-SUBSIDIZED PROJECT YEAR BUILT/ PROJECT NAME TYPE RENOVATED COPPERWOOD APTS. SEC. 8 1981 TOTAL UNITS 264 TARGET MARKET SENIOR
The following table summarizes the family Tax Credit (non-subsidized) rental market:
BEDROOMS UNITS ONE-BEDROOM 406 TWO-BEDROOM 912 THREE-BEDROOM 493 FOUR-BEDROOM 111 TOTAL 1,922 DISTRIBUTION 21.1% 47.5% 25.7% 5.8% 100.0% VACANT PERCENT 22 5.4% 170 18.6% 187 37.9% 2 1.8% 381 19.8% GROSS RENT RANGE $379-$702 $452-$836 $723-$943 $862-$977
The distribution of Tax Credit units by bedroom type is typical for an urban market like the Montgomery Submarket. Note the above chart includes the three Tax Credit developments that are currently in lease-up.
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The following table summarizes the overall market-rate rental market:
BEDROOMS UNITS ONE-BEDROOM 938 TWO-BEDROOM 1,110 THREE-BEDROOM 132 FOUR-BEDROOM 5 TOTAL 2,185 DISTRIBUTION 42.9% 50.8% 6.0% 0.2% 100.0% VACANT 87 93 11 0 191 PERCENT 9.3% 8.4% 8.3% 0.0% 8.7% GROSS RENT RANGE $530-$1,240 $533-$1,906 $938-$1,735 $1,012
Note the above chart includes market-rate units at market-rate properties and market-rate units at mixed-income properties (Tax Credit/market-rate). The distribution of market-rate units is heavily weighted towards one- and twobedroom units. Note the above chart includes the one market-rate property currently in lease-up. The following table summarizes the family government-subsidized rental market:
BEDROOMS ONE-BEDROOM TWO-BEDROOM THREE-BEDROOM TOTAL UNITS 188 216 12 416 DISTRIBUTION 45.2% 51.9% 2.9% 100.0% VACANT 3 2 0 5 PERCENT 1.6% 0.9% 0.0% 1.2%
The distribution of family government-subsidized units is also heavily weighted towards one- and two-bedroom units. Demand for larger unit types appears high with a 0% vacancy rate. We rated each property surveyed in person on a scale of A through E. All properties were rated based on quality and overall appearance (i.e., aesthetic appeal, building appearance, landscaping, and grounds appearance). Following is a distribution of market-rate properties by quality rating and units. Note 30 units were surveyed by telephone and were not given quality ratings.
QUALITY RATING A AB BNA TOTAL UNITS 454 360 957 384 30 PERCENT 20.8% 16.5% 43.8% 17.6% 1.4%
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Following is a distribution of Tax Credit properties by quality rating and units.
QUALITY RATING A B F N TOTAL UNITS 772 41 19 1,090 PERCENT 40.2% 2.1% 1.0% 56.7%
Following is a distribution of subsidized Tax Credit properties by quality rating and units.
QUALITY RATING B N TOTAL UNITS 48 100 PERCENT 32.4% 67.6%
Following is a distribution of government-subsidized properties by quality rating and units.
QUALITY RATING B N TOTAL UNITS 4 264 PERCENT 1.5% 98.5%
The following tables summarize the range and median size of the surveyed units by property type and bedroom type:
TAX CREDIT – NET SQUARE FEET UNIT TYPE MINIMUM MAXIMUM ONE-BEDROOM 475 826 TWO-BEDROOM 610 1,295 THREE-BEDROOM 1,044 1,352 FOUR-BEDROOM 1,315 1,400 MEDIAN 686 971 1,190 1,393
MARKET-RATE – NET SQUARE FEET UNIT TYPE MINIMUM MAXIMUM MEDIAN ONE-BEDROOM 561 1,024 690 TWO-BEDROOM 710 1,555 950 THREE-BEDROOM 1,150 1,348 1,300 FOUR-BEDROOM 1,393 1,393 1,393
GOVERNMENT-SUBSIDIZED – NET SQUARE FEET UNIT TYPE MINIMUM MAXIMUM MEDIAN ONE-BEDROOM 564 661 564 TWO-BEDROOM 710 819 727 THREE-BEDROOM 890 1,044 890
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The following tables summarize the distribution of appliances and unit amenities among all non-subsidized surveyed properties:
APPLIANCE RANGE REFRIGERATOR ICEMAKER DISHWASHER DISPOSAL MICROWAVE APPLIANCES PROJECTS PERCENT 28 100.0% 28 100.0% 6 21.4% 22 78.6% 23 82.1% 9 32.1% UNITS 4,107 4,107 1,388 3,988 4,029 1,900
AMENITY AC – CENTRAL FLOOR COVERING WASHER/DRYER WASHER/DRYER HOOK-UP PATIO/BALCONY CEILING FAN FIREPLACE SECURITY SYSTEM WINDOW TREATMENTS FURNISHED UNITS E-CALL BUTTON
UNIT AMENITIES PROJECTS PERCENT 28 100.0% 28 100.0% 4 14.3% 21 21 18 5 6 28 2 1 75.05 75.0% 64.3% 17.9% 21.4% 100.0% 7.1% 3.6%
UNITS 4,107 4,107 590 3,938 3,725 3,400 1,146 1,084 4,107 512 22
AMENITY POOL ON-SITE MANAGEMENT LAUNDRY CLUBHOUSE MEETING ROOM FITNESS CENTER JACUZZI/SAUNA PLAYGROUND TENNIS COURT SPORTS COURT STORAGE LAKE SECURITY GATE BUSINESS CENTER PICNIC AREA SOCIAL SERVICE PACKAGE
PROJECT AMENITIES PROJECTS PERCENT 21 75.0% 26 20 13 6 8 5 20 2 4 7 3 6 8 19 3 92.9% 71.4% 46.4% 21.4% 28.6% 17.9% 71.4% 7.1% 14.3% 25.0% 10.7% 21.4% 28.6% 67.9% 10.7%
UNITS 3,938 3,965 2,725 2,814 1,130 1,346 1,264 3,054 528 1,034 1,524 854 1,038 1,426 2,728 514
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B. PLANNED MULTIFAMILY DEVELOPMENT Based on the Texas Department of Housing and Community Affairs allocation list of affordable multifamily housing projects, there are four Tax Credit developments that have been allocated but not yet stabilized in the submarket (this includes two properties that are currently in lease-up). These projects have been included in our demand analysis. • • Cricket Hollow Apartments: Allocated in 2004, the project will offer 176 two- and three-bedroom units at 50% and 60% AMHI. Cricket Hollow Apartments opened in October 2005 and is currently 12.5% occupied. Tamarac Pines Apartments: Allocated in 2004, this property is an existing property that will use the Tax Credit funds to perform renovations. Despite repeated attempts, information was not available for this property. According to the TDHCA allocation list, this is a 300-unit elderly property. Park at Woodline Townhomes: Allocated in 2004, according to the TDHCA allocations list, this is a 250-unit property for general households. A projected opening date was not available. Copperwood Apartments: Allocated in 2005, this property targets seniors age 55 and older. The project will offer 300 one- and two-bedroom units at 30% and 60% AMHI. A projected opening date was not available.
• •
Montgomery County has neither zoning nor any department that tracks proposed multifamily properties. Permits for multifamily development in the unincorporated areas are listed as commercial properties and are rare. The county representative stated that they had no capacity to separate information on multifamily permits from the commercial properties, but he also stated that he does not recall any permits issues in the county recently (approximately the last 12 months). C. HOUSING CHOICE VOUCHER HOLDERS According to the Conroe Housing Authority, there are approximately 286 Housing Choice Vouchers issued in the area. Housing authority representatives stated that there are approximately 700 people currently on the waiting list for additional Vouchers. Monthly turnover of persons in the Voucher program averages five households per month. The payment standards for Montgomery County are the same as the Fair Market Rent.
PAYMENT STANDARDS STUDIO UNIT ONE-BEDROOM UNIT TWO-BEDROOM UNIT THREE-BEDROOM UNIT FOUR-BEDROOM UNIT $551 $612 $743 $990 $1,245
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D. HURRICANE IMPACT ON THE RENTAL HOUSING MARKET Sixteen of the 29 surveyed properties reported a total of approximately 258 hurricane evacuees as tenants. This represents 5.7% of the 4,523 rental housing units surveyed in the Montgomery Submarket. According to property managers, there are approximately 255 evacuees (12.1% of affordable units surveyed) currently being housed at the surveyed Tax Credit properties and about three evacuees currently being housed at the surveyed market-rate properties (0.1% of market-rate units surveyed). It appears the hurricanes have had minimal impact on the market-rate developments, but have had a significant impact on the affordable rental housing in the Montgomery Submarket. According to data provided by HISTA, there were approximately 25,097 renter households in this submarket in 2005. Applying 5.7% to the 25,097 renter households results in as many as 1,430 households living in the Montgomery Submarket potentially displaced by the hurricanes. A map indicating the location of apartments surveyed is on the following on page.
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Montgomery: Apartment Locations
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DEMAND ANALYSIS – MONTGOMERY SUBMARKET #8
A. DEMAND FOR TAX CREDIT HOUSING There are no clear or concise methodologies to forecast the need for Tax Credit housing. This is because housing markets are static with households often entering and exiting by tenure and economic profile. This position statement will discuss the potential pitfalls and limitations of various methodologies and present a recommended solution. There appear to be only two sources of demand for new Tax Credit housing. This is represented by a positive increase in income-qualified households and replacement of functionally obsolete product. The first source of demand is generally easily quantifiable but presents challenges to accurately forecast. This is especially true as we get further from the 2000 Census and development expands into previously undeveloped areas. The problem is further compounded by the fact that housing market analysts often fail to analyze income-appropriate household growth by household size. Projections based only on income often include estimates of smaller households even though they are over income-qualified due to their household size limitation (i.e. income analysis based on a five-person limit set at $46,000 will include two-person households with incomes above their maximum but below $46,000, thus overstating the number who are qualified). Therefore, caution should be exercised when considering income household growth alone. 1. Overstatement of demand A much larger challenge, and one that creates greater demand for Tax Credit housing, is replacement of functionally obsolete product. Unfortunately, measurement of this is very subjective and imprecise. However, in most inner-city locations or non-growth areas, this is the only need for Tax Credit units. The approval of Tax Credit units in these areas has created, in some instances, an overbuilt market that is characterized by high vacancy rates and low rents. However, this overbuilding only occurs when there is no corresponding decline in the existing housing stock. This decline could occur through demolition or replacement of functionally obsolete product.
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It is easy to illustrate how a market can be impacted if rental household growth is minimal. Hypothetically, consider a market that has 1,000 income-appropriate rental housing units (under Tax Credit guidelines) with a current vacancy rate of 4% (or 40 vacant units). Assume a 150unit Tax Credit property of new construction is approved and built. This market then goes from a 1,000-unit market to a 1,150-unit market. Without any corresponding increase in income-qualified households or reduction in the existing supply by demolitions, condominium conversions, or some other use, the area vacancy rate goes from 4% to 16.5% (40+150/1,150). This is a very simplistic example but does illustrate the ease at which a market can get out of balance if it does not experience positive household growth. In the current environment, this has been compounded by the fact that some income-qualified households have left the rental housing market in favor of home ownership, a decline in younger, first-time renters due to profound demographic shifts, and, in some markets, a “doubling-up” of households to save on housing costs. This is particularly true in some inner-city markets where there has been a decline in the Housing Choice Voucher supply. This illustration also assumes an isolated market. Households, particularly rental households, are constantly on the move in response to jobs, educational opportunities, crime, quality of life, families, church, and a whole host of other factors. Thus, in the previous market illustration, this new 150-unit project would likely attract new households from outside the market as well as households improving their current housing. This creates vacancies in units with the lowest quality or in units with the lowest perception of value (i.e. properties priced well above the market). If, however, this hypothetical market approved 150-units to either replace or renovate an existing project (or projects), the market would remain in balance. The problem for analysts is establishing the appropriate number of units that should be replaced or renovated. Projecting too many units yields high penetration rates (the aggregate number of Tax Credit units compared to the number of income-qualified households) and precludes reasonable absorption and occupancy levels. If too few affordable units are developed, the market remains stagnant and tenants remain underserved.
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2. Methodologies used to date A variety of methodologies have attempted to tackle this issue. Substandard units reported in the Census are one source. This is typically a very small number and does not accurately reflect functional obsolescence. The number of households who are rent overburdened is a second factor often considered. However, the Census makes no distinction for those households who have elected to be rent overburdened or those who are already housed in Tax Credit properties. Frankly, a sizeable share of tenants in Tax Credit properties are rent overburdened since the program does not specify the share of income used for rent. We have also reviewed methodologies that use turnover as a measure of demand. This methodology does nothing to address the issue of a balanced market. (Turnover is a good tool to forecast absorption of a project since it considers the number of renters in the market at one time considering a move). 3. Methodology based on replacement and growth It is our opinion that the only accurate macro approach to forecasting Tax Credit demand is to consider both new household growth of income-qualified households and replacement of functionally obsolete product. As discussed, household growth is generally easier to forecast than the number of functionally obsolete units. We propose to forecast functionally obsolete product by taking a share of the existing rental product over 35 years old (built in 1970 or older) and in need of replacement on an annual basis. Considering that the useful life of most residential product is 40 years, rental product built prior to 1970 can be considered as being functionally obsolete. The share of the product functionally obsolete is the issue. It is our opinion that approximately 2.5% (1/40) of the existing rental product that meets this criteria could be designated as functionally obsolete. This would essentially upgrade or replace 25% of this older housing stock over a decade, a reasonable time period. There are, like all methodologies, some obvious shortcomings. Without a complete field survey, it is impossible to establish whom this obsolete product is serving. Given its age, it is most likely serving tenants paying rents at the lowest third of the rent spectrum. This is likely at rent levels just below Tax Credit program rents. We argue that for practical reasons, all of these units would be appropriate to upgrade. Naturally, it is critical to preserve many of these older units with Rental Assistance.
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Another shortcoming is that this methodology generally precludes older areas from experiencing new product since household growth is minimal or nonexistent. We recommend that if a developer builds new product, there must be a demonstration that a similar number of rental units have been taken out of the rental base through demolition or conversion to another use. It is our opinion that there is no benefit to only allow rehabilitations in older, inner-city areas without a corresponding decrease in the rental stock. Current new designs are more energy efficient, are innovative, often incorporate more appropriate allocations of space, and the use of more desirable unit and project amenities. 4. Conclusions There have been a wide variety of methodologies employed to address the component of replacement support for slow or no-growth markets. Most of these methodologies have used Census data to approximate demand. Unfortunately, while the methodologies have generated support numbers that appear reasonable, in practice they have contributed to overbuilding. The methodology proposed here only uses two components of demand: new income-appropriate household growth and replacement or renovation of existing product. We believe this will provide a more accurate guideline for establishing demand. It is important to note that any estimate of demand must be verified with a market study. Further, a development that proposes replacement support, must demonstrate through the market study or other verification that there has been a corresponding decline in the existing rental base. There may be problems reconciling applications responding to new household growth and those that respond to replacement. Subsequent “tie-breaker” criteria could be considered to address this issue. B. DETERMINATION OF INCOME ELIGIBILITY To determine demand from income-eligible households, we must first establish the income range required to qualify for residency in Low-Income Housing Tax Credit (LIHTC) units for the Montgomery Submarket. 1. Maximum Income Limits Under the Low-Income Housing Tax Credit program, household eligibility is based on household income not exceeding the targeted percentage of Area Median Household Income (AMHI), depending upon household size.
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The Montgomery Submarket has a median household income of $61,000 for 2005 (Harris County). We have analyzed affordable housing demand for the following income cohorts: 0% to 30% AMHI, 31% to 40% AMHI, 41% to 50% AMHI, 51% to 60% AMHI, 61% to 80% AMHI, and 81% to 100% AMHI. The following table summarizes the maximum allowable income by household size for the Montgomery Submarket at 30%, 40%, 50%, 60%, 80%, and 100% of AMHI.
HOUSEHOLD SIZE TARGETED AMHI 30% 40% 50% 60% 80% 100% 30% 40% 50% 60% 80% 100% 30% 40% 50% 60% 80% 100% 30% 40% 50% 60% 80% 100% 30% 40% 50% 60% 80% 100% MAXIMUM ALLOWABLE INCOME $12,810 $17,080 $21,350 $25,620 $34,150 $42,700 $14,640 $19,520 $24,400 $29,280 $39,050 $48,800 $16,470 $21,960 $27,450 $32,940 $43,900 $54,900 $18,300 $24,400 $30,500 $36,600 $48,800 $61,000 $19,770 $26,360 $32,950 $39,540 $52,700 $65,900
ONE-PERSON
TWO-PERSON
THREE-PERSON
FOUR-PERSON
FIVE-PERSON
The calculations presented in the report are based on a five-person household for the general population (family) and a two-person household for seniors age 55 and older.
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2. Income-Appropriate Range Leasing industry standards typically require households to have rent to income ratios of 27% to 40%. Generally, market-rate properties require a lower rent to income ratio, while an acceptable rent to income ratio for low-income units is typically around 35%. However, to avoid overstating demand at any of the income levels, the minimum income is calculated as the maximum income of the previous band, with the exception of the 0% to 30% income band, which has a minimum income of $0. C. DEMAND CALCULATIONS The following tables summarize projected demand for affordable housing for all renter households from 2006 through 2009. Note the 2005 Baseline Total Renter Households includes all renter households, while the demand analysis only considers households earning up to 100% AMHI ($65,900). Therefore, the total Baseline Targeted Income-Qualified Renter Households for each income band will not total all renter households. For example, there were a total of 25,097 renter households in the Montgomery Submarket in 2005; out of this total, 17,664 were income-qualified renter households. This results in 7,433 renter households earning above $65,900.
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2005 BASELINE DEMAND – MONTGOMERY SUBMARKET BY GENERAL OCCUPANCY TARGETED AMHI APPROPRIATE INCOME RANGE BY TARGETED AMHI 0%-30% 31% - 40% 41% - 50% 51% - 60% 1-PERSON ($0-$12,810) ($12,810-$17,080) ($17,080-$21,350) ($21,350-$25,620) 2-PERSON ($0-$14,640) ($14,640-$19,520) ($19,520-$24,400) ($24,400-$29,280) 3-PERSON ($0-$16,470) ($16,470-$21,960) ($21,960-$27,450) ($27,450-$32,940) 4-PERSON ($0-$18,300) ($18,300-$24,400) ($24,400-$30,500) ($30,500-$36,600) 5+-PERSON ($0-$19,770) ($19,770-$26,360) ($26,360-$32,950) ($32,950-$39,540) BASELINE TOTAL RENTER HOUSEHOLDS (HISTA DATA) TARGETED INCOME-QUALIFIED RENTER HOUSEHOLDS 1-PERSON 2-PERSON 3-PERSON 4-PERSON 5+-PERSON = BASELINE TARGETED INCOME-QUALIFIED RENTER HOUSEHOLDS 25,097 2,675 950 792 631 425 5,473 25,097 739 405 316 238 235 1,933 25,097 691 467 308 238 273 1,977 25,097 587 474 312 256 318 1,947
61% - 80%
($25,620-$34,150) $29,280-$39,050) ($32,940-$43,900) ($36,600-$48,800) ($39,540-$52,700)
81% - 100%
($34,150-$42,700) ($39,050-$48,800) ($43,900-$54,900) ($48,000-$60,100) ($52,700-$65,900)
25,097 1,079 831 598 502 403 3,413
25,097 901 854 507 375 284 2,921
Based on the American Housing Survey, the estimated share of demand by bedroom type and household size in the Houston MSA is distributed as follows:
DEMAND BY BEDROOM AND HOUSEHOLD SIZE STUDIO / 1-BR. 2-BR. 3-BR. 67% 25% 8% 35% 46% 15% 16% 55% 22% 11% 45% 36% 10% 42% 31% 4-BR. 4% 7% 8% 17%
1-PERSON HH 2-PERSON HH 3-PERSON HH 4-PERSON HH 5+-PERSON HH
Source: American Housing Survey (Houston MSA, 1998) HH-Household
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These percentages, applied to the number of income-qualified renter households in this submarket, are as follows:
DEMAND BY BEDROOM TYPE AND HOUSEHOLD SIZE STUDIO / 1-BR. 2-BR. 3-BR. 4-BR. 0%-30% 1,792 669 214 0 31%-40% 495 185 59 0 1-PERSON 41%-50% 463 173 55 0 HOUSEHOLD 51%-60% 393 147 47 0 61%-80% 723 270 86 0 81%-100% 604 225 72 0 0%-30% 333 437 143 38 31%-40% 142 186 61 16 41%-50% 163 215 70 19 2-PERSON HOUSEHOLD 51%-60% 166 218 71 19 61%-80% 291 382 125 33 81%-100% 299 393 128 34 0%-30% 127 436 174 55 31%-40% 51 174 70 22 41%-50% 49 169 68 22 3-PERSON HOUSEHOLD 51%-60% 50 172 69 22 61%-80% 96 329 132 42 81%-100% 81 279 112 35 0%-30% 69 284 227 50 31%-40% 26 107 86 19 41%-50% 26 107 86 19 4-PERSON HOUSEHOLD 51%-60% 28 115 92 20 61%-80% 55 226 181 40 81%-100% 41 169 135 30 0%-30% 43 179 132 72 31%-40% 24 99 73 40 41%-50% 27 115 85 46 5+-PERSON HOUSEHOLD 51%-60% 32 134 99 54 61%-80% 40 169 125 69 81%-100% 28 119 88 48 0%-30% 2,364 (43%) 2,005 (37%) 890 (16%) 215 (4%) 31%-40% 738 (38%) 751 (39%) 349 (18%) 97 (5%) 41%-50% 728 (37%) 779 (39%) 364 (18%) 106 (5%) TOTAL (%) 51%-60% 669 (34%) 786 (40%) 378 (19%) 115 (6%) 61%-80% 1,205 (35%) 1,376 (40%) 649 (19%) 184 (5%) 81%-100% 1,053 (36%) 1,185 (41%) 535 (18%) 147 (5%) 6,757 6,882 3,165 864 OVERALL TOTALS *Due to rounding, some of the above percentages may not total 100%
TOTAL 2,675 739 691 587 1,079 901 951 405 467 474 831 854 792 317 308 313 599 507 630 238 238 255 502 375 426 236 273 319 403 283 5,474 1,935 1,977 1,948 3,414 2,920
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MONTGOMERY SUBMARKET 2006 DEMAND
I. GROWTH DEMAND HOUSEHOLD-BASED: 2005 TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS 2006 TOTAL ESTIMATED INCOME-QUALIFIED RENTER HOUSEHOLDS ESTIMATED ANNUAL INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (1YEAR) II. TOTAL UNITS NEEDED FOR BALANCED (95.0% OCCUPIED) MARKET 2005 INCOME-QUALIFIED RENTER HOUSEHOLDS (OCCUPIED UNITS) (+) NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (1 YEAR) (=) TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS IN 2006 TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET III. EXISTING RENTAL PRODUCT TOTAL OCCUPIED TARGETED RENTAL UNITS 2006 (+) ESTIMATED # OF VACANT UNITS (VACANCY %)* (+) PLANNED AND PROPOSED TARGETED UNITS DURING PROJECTION PERIOD** (=) NET EXISTING TARGETED RENTAL PRODUCT IV. TOTAL SUPPLY AND DEMAND TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET (-) TOTAL NET EXISTING TARGETED RENTAL PRODUCT (+) 2.5% OF EXISTING RENTAL PRODUCT BUILT PRIOR TO 1970*** (=) TOTAL TARGETED UNITS NEEDED OVER PROJECTION PERIOD (1 YEAR) STUDIO/1-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (1 YEAR)**** 2-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (1 YEAR)**** 3-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (1 YEAR)**** 4-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (1 YEAR)**** 0%-30% ($0-$20,100) 31% - 40% ($13,000-$26,700) 41% - 50% 51% - 60% 61% - 80% 81% - 100% ($17,300-$33,400) ($21,700-$40,100) ($26,000-$53,500) ($34,700-$66,900)
5,473 5,616 143 143 5,473 143 5,616 5,912 5,616 0 (0%) 31 5,647 5,912 5,647 39 303 131 111 49
1,933 1,974 41 41 1,933 41 1,974 2,078 1,974 0 (0%) 0 1,974 2,078 1,974 14 118 45 46 21
1,977 2,013 36 36 1,977 36 2,013 2,119 2,013 531 (26.4%) 0 2,544 2,119 2,544 14 -412 -152 -162 -76
1,947 1,977 30 30 1,947 30 1,977 2,081 1,977 296 (15%) 969 3,242 2,081 3,242 14 -1,148 -394 -463 -223
3,413 3,501 88 88 3,413 88 3,501 3,685 3,501 308 (8.8%) 0 3,809 3,685 3,809 0 -124 -43 -50 -24
2,921 2,976 55 55 2,921 55 2,976 3,133 2,976 262 (8.8%) 0 3,238 3,133 3,238 0 -105 -38 -43 -19
12 6 -22 -68 -7 -5 Note: 2005 income-qualified households based on 2005 income limits. 2006-2009 income limits projected based on historical increase (2000-2005). *Units at 0% to 30% and 31% to 40% are assumed to be 100% occupied. The appropriate Tax Credit vacancy rate is applied to units at 41% to 50% and 51% to 60%. The submarket market-rate vacancy rate is applied to units at 61% to 100%. **Based on information obtained from TDHCA and local planning officials. Some unit mixes may be estimated. Units under construction at the date of this report were included in the above table. Note specific information on 400 of the 969 units of the above planned and proposed were not available to the analyst. There were two properties with allocations of 250 and 150 units, respectively, in 2004. We have assumed all 400 units will be available at 60% AMHI. ***Estimated based on share of income-qualified renter households up to 60% AMHI. ****Based on share of demand by bedroom type calculated.
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MONTGOMERY SUBMARKET 2007 DEMAND
I. GROWTH DEMAND HOUSEHOLD-BASED: 2005 TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS 2007 TOTAL ESTIMATED INCOME-QUALIFIED RENTER HOUSEHOLDS ESTIMATED ANNUAL INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (2 YEARS) II. TOTAL UNITS NEEDED FOR BALANCED (95.0% OCCUPIED) MARKET 2005 INCOME-QUALIFIED RENTER HOUSEHOLDS (OCCUPIED UNITS) (+) NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (2 YEARS) (=) TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS IN 2007 TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET III. EXISTING RENTAL PRODUCT TOTAL OCCUPIED TARGETED RENTAL UNITS 2007 (+) ESTIMATED # OF VACANT UNITS (VACANCY %)* (+) PLANNED AND PROPOSED TARGETED UNITS DURING PROJECTION PERIOD** (=) NET EXISTING TARGETED RENTAL PRODUCT IV. TOTAL SUPPLY AND DEMAND TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET (-) TOTAL NET EXISTING TARGETED RENTAL PRODUCT (+) 2.5% OF EXISTING RENTAL PRODUCT BUILT PRIOR TO 1970*** (=) TOTAL TARGETED UNITS NEEDED OVER PROJECTION PERIOD (2 YEARS) STUDIO/1-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (2 YEARS)**** 2-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (2 YEARS)**** 3-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (2 YEARS)**** 4-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (2 YEARS)**** 0%-30% ($0-$20,400) 31% - 40% ($13,200-$27,100) 41% - 50% 51% - 60% 61% - 80% 81% - 100% ($17,600-$33,900) ($22,000-$40,700) ($26,400-$54,300) ($35,200-$67,900)
5,473 5,760 143 287 5,473 287 5,760 6,063 5,760 0 (0%) 31 5,791 6,063 5,791 77 349 150 128 57
1,933 2,015 41 82 1,933 82 2,015 2,121 2,015 0 (0%) 0 2,015 2,121 2,015 27 133 50 52 24
1,977 2,049 36 72 1,977 72 2,049 2,157 2,049 541 (26.4%) 0 2,590 2,157 2,590 28 -405 -148 -160 -75
1,947 2,006 30 59 1,947 59 2,006 2,112 2,006 301 (15.0%) 969 3,276 2,112 3,276 27 -1,137 -390 -459 -221
3,413 3,589 88 176 3,413 176 3,589 3,777 3,589 316 (8.8%) 0 3,904 3,777 3,904 0 -127 -45 -51 -24
2,921 3,032 55 111 2,921 111 3,032 3,191 3,032 267 (8.8%) 0 3,298 3,191 3,298 0 -107 -38 -44 -20
14 7 -22 -67 -7 -5 Note: 2005 income-qualified households based on 2005 income limits. 2006-2009 income limits projected based on historical increase (2000-2005). * Units at 0% to 30% and 31% to 40% are assumed to be 100% occupied. The appropriate Tax Credit vacancy rate is applied to units at 41% to 50% and 51% to 60%. The submarket market-rate vacancy rate is applied to units at 61% to 100%. **Based on information obtained from TDHCA and local planning officials. Some unit mixes may be estimated. Units under construction at the date of this report were included in the above table. ***Estimated based on share of income-qualified renter households up to 60% AMHI. ****Based on share of demand by bedroom type calculated.
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MONTGOMERY SUBMARKET 2008 DEMAND
I. GROWTH DEMAND HOUSEHOLD-BASED: 2005 TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS 2008 TOTAL ESTIMATED INCOME-QUALIFIED RENTER HOUSEHOLDS ESTIMATED ANNUAL INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (3 YEARS) II. TOTAL UNITS NEEDED FOR BALANCED (95.0% OCCUPIED) MARKET 2005 INCOME-QUALIFIED RENTER HOUSEHOLDS (OCCUPIED UNITS) (+) NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (3 YEARS) (=) TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS IN 2008 TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET III. EXISTING RENTAL PRODUCT TOTAL OCCUPIED TARGETED RENTAL UNITS 2008 (+) ESTIMATED # OF VACANT UNITS (VACANCY %)* (+) PLANNED AND PROPOSED TARGETED UNITS DURING PROJECTION PERIOD** (=) NET EXISTING TARGETED RENTAL PRODUCT IV. TOTAL SUPPLY AND DEMAND TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET (-) TOTAL NET EXISTING TARGETED RENTAL PRODUCT (+) 2.5% OF EXISTING RENTAL PRODUCT BUILT PRIOR TO 1970*** (=) TOTAL TARGETED UNITS NEEDED OVER PROJECTION PERIOD (3 YEARS) STUDIO/1-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (3 YEARS)**** 2-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (3 YEARS)**** 3-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (3 YEARS)**** 4-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (3 YEARS)**** 0%-30% ($0-$20,700) 31% - 40% ($13,400-$27,500) 41% - 50% 51% - 60% 61% - 80% 81% - 100% ($17,800-$34,400) ($22,300-$41,300) ($26,800-$55,100) ($35,700-$68,900)
5,473 5,903 143 430 5,473 430 5,903 6,213 5,903 0 (0%) 31 5,934 6,213 5,934 116 396 171 145 64
1,933 2,055 41 122 1,933 122 2,055 2,163 2,055 0 (0%) 0 2,055 2,163 2,055 41 149 57 58 27
1,977 2,085 36 108 1,977 108 2,085 2,195 2,085 550 (26.4%) 0 2,635 2,195 2,635 42 -399 -148 -157 -73
1,947 2,036 30 89 1,947 89 2,036 2,143 2,036 305 (15.0%) 969 3,310 2,143 3,310 41 -1,126 -388 -454 -218
3,413 3,676 88 263 3,413 263 3,676 3,870 3,676 324 (8.8%) 0 4,000 3,870 4,000 0 -130 -46 -52 -25
2,921 3,087 55 166 2,921 166 3,087 3,249 3,087 272 (8.8%) 0 3,358 3,249 3,358 0 -109 -40 -44 -20
16 7 -21 -66 -7 -5 Note: 2005 income-qualified households based on 2005 income limits. 2006-2009 income limits projected based on historical increase (2000-2005). * Units at 0% to 30% and 31% to 40% are assumed to be 100% occupied. The appropriate Tax Credit vacancy rate is applied to units at 41% to 50% and 51% to 60%. The submarket market-rate vacancy rate is applied to units at 61% to 100%. **Based on information obtained from TDHCA and local planning officials. Some unit mixes may be estimated. Units under construction at the date of this report were included in the above table. ***Estimated based on share of income-qualified renter households up to 60% AMHI. ****Based on share of demand by bedroom type calculated.
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MONTGOMERY SUBMARKET 2009 DEMAND
I. GROWTH DEMAND HOUSEHOLD-BASED: 2005 TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS 2009 TOTAL ESTIMATED INCOME-QUALIFIED RENTER HOUSEHOLDS ESTIMATED ANNUAL INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (4 YEARS) II. TOTAL UNITS NEEDED FOR BALANCED (95.0% OCCUPIED) MARKET 2005 INCOME-QUALIFIED RENTER HOUSEHOLDS (OCCUPIED UNITS) (+) NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (4 YEARS) (=) TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS IN 2009 TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET III. EXISTING RENTAL PRODUCT TOTAL OCCUPIED TARGETED RENTAL UNITS 2009 (+) ESTIMATED # OF VACANT UNITS (VACANCY %)* (+) PLANNED AND PROPOSED TARGETED UNITS DURING PROJECTION PERIOD** (=) NET EXISTING TARGETED RENTAL PRODUCT IV. TOTAL SUPPLY AND DEMAND TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET (-) TOTAL NET EXISTING TARGETED RENTAL PRODUCT (+) 2.5% OF EXISTING RENTAL PRODUCT BUILT PRIOR TO 1970*** (=) TOTAL TARGETED UNITS NEEDED OVER PROJECTION PERIOD (4 YEARS) STUDIO/1-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (4 YEARS)**** 2-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (4 YEARS)**** 3-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (4 YEARS)**** 4-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (4 YEARS)**** 0%-30% ($0-$21,000) 31% - 40% ($13,600-$27,900) 41% - 50% 51% - 60% 61% - 80% 81% - 100% ($18,100-$34,900) ($22,600-$41,900) ($27,200-$55,900) ($36,200-$69,900)
5,473 6,046 143 573 5,473 573 6,046 6,364 6,046 0 (0%) 31 6,077 6,364 6,077 155 442 191 162 72
1,933 2,096 41 163 1,933 163 2,096 2,206 2,096 0 (0%) 0 2,096 2,206 2,096 55 165 63 64 30
1,977 2,121 36 144 1,977 144 2,121 2,233 2,121 560 (26.4%) 0 2,681 2,233 2,681 56 -392 -144 -155 -72
1,947 2,065 30 118 1,947 118 2,065 2,174 2,065 310 (15%) 969 3,344 2,174 3,344 55 -1,115 -383 -450 -216
3,413 3,764 88 351 3,413 351 3,764 3,962 3,764 331 (8.8%) 0 4,095 3,962 4,095 0 -133 -47 -54 -25
2,921 3,142 55 221 2,921 221 3,142 3,307 3,142 276 (8.8%) 0 3,418 3,307 3,418 0 -111 -40 -45 -20
17 8 -21 -66 -7 -6 Note: 2005 income-qualified households based on 2005 income limits. 2006-2009 income limits projected based on historical increase (2000-2005). * Units at 0% to 30% and 31% to 40% are assumed to be 100% occupied. The appropriate Tax Credit vacancy rate is applied to units at 41% to 50% and 51% to 60%. The submarket market-rate vacancy rate is applied to units at 61% to 100%. **Based on information obtained from TDHCA and local planning officials. Some unit mixes may be estimated. Units under construction at the date of this report were included in the above table. ***Estimated based on share of income-qualified renter households up to 60% AMHI. ****Based on share of demand by bedroom type calculated.
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The following tables summarize projected demand for affordable housing for senior households (55+) from 2006 through 2009.
2005 BASELINE DEMAND – MONTGOMERY SUBMARKET BY SENIOR (55+) OCCUPANCY APPROPRIATE INCOME RANGE BY TARGETED AMHI 1-PERSON 2-PERSON BASELINE TOTAL RENTER HOUSEHOLDS (HISTA DATA) TARGETED INCOME-QUALIFIED RENTER HOUSEHOLDS 1-PERSON 2-PERSON = BASELINE TARGETED INCOME-QUALIFIED RENTER HOUSEHOLDS 0%-30%
($0-$12,810) ($0-$14,640)
31% - 40%
TARGETED AMHI 41% - 50% 51% - 60%
61% - 80%
81% - 100%
($12,810-$17,080) ($17,080-$21,350) ($21,350-$25,620) ($25,620-$34,150) ($34,150-$42,700) ($14,640-$19,520) ($19,520-$24,400) ($24,400-$29,280) ($29,280-$39,050) ($39,050-$48,800)
5,693 1,546 279 1,825
5,693 459 95 554
5,693 377 103 480
5,693 200 104 304
5,693 312 151 463
5,693 205 174 379
Based on the American Housing Survey, the estimated share of demand by bedroom type and household size in the Houston MSA is distributed as follows:
DEMAND BY BEDROOM AND HOUSEHOLD SIZE STUDIO / 1-BR. 2-BR. 1-PERSON HH 67% 25% 2-PERSON HH 35% 46%
Source: American Housing Survey (Houston MSA, 1998) HH-Households
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These percentages, as applied to the number of income-qualified renter households age 55+ in this submarket, are as follows:
DEMAND BY BEDROOM TYPE AND HOUSEHOLD SIZE STUDIO / 1-BR. 2-BR. TOTAL 0%-30% 1,036 387 1,423 31%-40% 308 115 423 41%-50% 253 94 347 1-PERSON HH 51%-60% 134 50 184 61%-80% 209 78 287 81%-100% 137 51 188 0%-30% 98 128 226 31%-40% 33 44 77 41%-50% 36 47 83 2-PERSON HH 51%-60% 36 48 84 61%-80% 53 69 122 81%-100% 61 80 141 0%-30% 1,134 (69%) 515 (31%) 1,649 31%-40% 341 (68%) 159 (32%) 500 41%-50% 289 (67%) 141 (33%) 430 TOTAL (%) 51%-60% 170 (63%) 98 (37%) 268 61%-80% 262 (64%) 147 (36%) 409 81%-100% 198 (60%) 131 (40%) 329 2,394 1,191 OVERALL TOTALS
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MONTGOMERY SUBMARKET 2006 DEMAND (55+)
I. GROWTH DEMAND HOUSEHOLD-BASED: 2005 TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS 2006 TOTAL ESTIMATED INCOME-QUALIFIED RENTER HOUSEHOLDS ESTIMATED ANNUAL INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (1YEAR) II. TOTAL UNITS NEEDED FOR BALANCED (95.0% OCCUPIED) MARKET 2005 INCOME-QUALIFIED RENTER HOUSEHOLDS (OCCUPIED UNITS) (+) NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (1 YEAR) (=) TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS IN 2006 TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET III. EXISTING RENTAL PRODUCT TOTAL OCCUPIED TARGETED RENTAL UNITS 2006 (+) ESTIMATED # OF VACANT UNITS (VACANCY %)* (+) PLANNED AND PROPOSED TARGETED UNITS DURING PROJECTION PERIOD** (=) NET EXISTING TARGETED RENTAL PRODUCT IV. TOTAL SUPPLY AND DEMAND TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET (-) TOTAL NET EXISTING TARGETED RENTAL PRODUCT (+) 2.5% OF EXISTING RENTAL PRODUCT BUILT PRIOR TO 1970*** (=) TOTAL TARGETED UNITS NEEDED OVER PROJECTION PERIOD (1 YEAR) STUDIO/1-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (1 YEAR)**** 2-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (1 YEAR)**** 0%-30% ($0-$14,900) 31% - 40% ($13,000-$19,800) 41% - 50% 51% - 60% 61% - 80% 81% - 100% ($17,300-$24,800) ($21,700-$29,700) ($26,000-$39,600) ($34,700-$49,500)
1,825 1,901 76 76 1,825 76 1,901 2,001 1,901 0 (0%) 31 1,932 2,001 1,932 10 79 54
554 580 26 26 554 26 580 611 580 0 (0%) 0 580 611 580 14 45 31
480 490 10 10 480 10 490 515 490 129 (26.4%) 0 619 515 619 12 -91 -61
304 325 21 21 304 21 325 342 325 49 (15.0%) 569 942 342 942 8 -593 -376
463 482 19 19 463 19 482 507 482 42 (8.8%) 0 524 507 524 0 -17 -11
379 404 25 25 379 25 404 425 404 36 (8.8%) 0 439 425 439 0 -14 -8
25 14 -30 -217 -6 -6 Note: 2005 income-qualified households based on 2005 income limits. 2006-2009 income limits projected based on historical increase (2000-2005). * Units at 0% to 30% and 31% to 40% are assumed to be 100% occupied. The appropriate Tax Credit vacancy rate is applied to units at 41% to 50% and 51% to 60%. The submarket market-rate vacancy rate is applied to units at 61% to 100%. **Based on information obtained from TDHCA and local planning officials. Some unit mixes may be estimated. Units under construction at the date of this report were included in the above table. ***Estimated based on share of income-qualified renter households up to 60% AMHI. Further estimated by percentage of renters 55+. ****Based on share of demand by bedroom type calculated.
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MONTGOMERY SUBMARKET 2007 DEMAND (55+)
I. GROWTH DEMAND HOUSEHOLD-BASED: 2005 TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS 2007 TOTAL ESTIMATED INCOME-QUALIFIED RENTER HOUSEHOLDS ESTIMATED ANNUAL INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (2 YEARS) II. TOTAL UNITS NEEDED FOR BALANCED (95.0% OCCUPIED) MARKET 2005 INCOME-QUALIFIED RENTER HOUSEHOLDS (OCCUPIED UNITS) (+) NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (2 YEARS) (=) TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS IN 2007 TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET III. EXISTING RENTAL PRODUCT TOTAL OCCUPIED TARGETED RENTAL UNITS 2007 (+) ESTIMATED # OF VACANT UNITS (VACANCY %)* (+) PLANNED AND PROPOSED TARGETED UNITS DURING PROJECTION PERIOD** (=) NET EXISTING TARGETED RENTAL PRODUCT IV. TOTAL SUPPLY AND DEMAND TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET (-) TOTAL NET EXISTING TARGETED RENTAL PRODUCT (+) 2.5% OF EXISTING RENTAL PRODUCT BUILT PRIOR TO 1970*** (=) TOTAL TARGETED UNITS NEEDED OVER PROJECTION PERIOD (2 YEARS) STUDIO/1-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (2 YEARS)**** 2-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (2 YEARS)**** 0%-30% ($0-$15,100) 31% - 40% ($13,200-$20,100) 41% - 50% 51% - 60% 61% - 80% 81% - 100% ($17,600-$25,100) ($22,000-$30,100) ($26,400-$40,200) ($35,200-$50,200)
1,825 1,977 76 152 1,825 152 1,977 2,081 1,977 0 (0%) 31 2,008 2,081 2,008 19 92 63
554 607 26 53 554 53 607 638 607 0 (0%) 0 607 638 607 28 60 41
480 499 10 19 480 19 499 525 499 132 (26.4%) 0 631 525 631 24 -81 -54
304 346 21 42 304 42 346 364 346 52 (15%) 569 966 364 966 15 -587 -372
463 501 19 38 463 38 501 527 501 44 (8.8%) 0 545 527 545 0 -18 -12
379 429 25 50 379 50 429 451 429 38 (8.8%) 0 466 451 466 0 -15 -9
29 19 -27 -215 -6 -6 Note: 2005 income-qualified households based on 2005 income limits. 2006-2009 income limits projected based on historical increase (2000-2005). * Units at 0% to 30% and 31% to 40% are assumed to be 100% occupied. The appropriate Tax Credit vacancy rate is applied to units at 41% to 50% and 51% to 60%. The submarket market-rate vacancy rate is applied to units at 61% to 100%. **Based on information obtained from TDHCA and local planning officials. Some unit mixes may be estimated. Units under construction at the date of this report were included in the above table. ***Estimated based on share of income-qualified renter households up to 60% AMHI. Further estimated by percentage of renters 55+. ****Based on share of demand by bedroom type calculated.
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MONTGOMERY SUBMARKET 2008 DEMAND (55+)
I. GROWTH DEMAND HOUSEHOLD-BASED: 2005 TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS 2008 TOTAL ESTIMATED INCOME-QUALIFIED RENTER HOUSEHOLDS ESTIMATED ANNUAL INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (3 YEARS) II. TOTAL UNITS NEEDED FOR BALANCED (95.0% OCCUPIED) MARKET 2005 INCOME-QUALIFIED RENTER HOUSEHOLDS (OCCUPIED UNITS) (+) NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (3 YEARS) (=) TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS IN 2008 TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET III. EXISTING RENTAL PRODUCT TOTAL OCCUPIED TARGETED RENTAL UNITS 2008 (+) ESTIMATED # OF VACANT UNITS (VACANCY %)* (+) PLANNED AND PROPOSED TARGETED UNITS DURING PROJECTION PERIOD** (=) NET EXISTING TARGETED RENTAL PRODUCT IV. TOTAL SUPPLY AND DEMAND TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET (-) TOTAL NET EXISTING TARGETED RENTAL PRODUCT (+) 2.5% OF EXISTING RENTAL PRODUCT BUILT PRIOR TO 1970*** (=) TOTAL TARGETED UNITS NEEDED OVER PROJECTION PERIOD (3 YEARS) STUDIO/1-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (3 YEARS)**** 2-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (3 YEARS)**** 0%-30% ($0-$15,300) 31% - 40% ($13,400-$20,400) 41% - 50% 51% - 60% 61% - 80% 81% - 100% ($17,800-$25,500) ($22,300-$30,600) ($26,800-$40,800) ($35,700-$51,000)
1,825 2,052 76 227 1,825 227 2,052 2,160 2,052 0 (0%) 31 2,083 2,160 2,083 29 106 73
554 633 26 79 554 79 633 666 633 0 (0%) 0 633 666 633 42 75 51
480 509 10 29 480 29 509 535 509 134 (26.4%) 0 643 535 643 36 -71 -48
304 366 21 62 304 62 366 386 366 55 (15.0%) 569 990 386 990 23 -582 -369
463 519 19 56 463 56 519 547 519 46 (8.8%) 0 565 547 565 0 -18 -11
379 453 25 74 379 74 453 477 453 40 (8.8%) 0 493 477 493 0 -16 -10
33 24 -23 -213 -7 -6 Note: 2005 income-qualified households based on 2005 income limits. 2006-2009 income limits projected based on historical increase (2000-2005). * Units at 0% to 30% and 31% to 40% are assumed to be 100% occupied. The appropriate Tax Credit vacancy rate is applied to units at 41% to 50% and 51% to 60%. The submarket market-rate vacancy rate is applied to units at 61% to 100%. **Based on information obtained from TDHCA and local planning officials. Some unit mixes may be estimated. Units under construction at the date of this report were included in the above table. ***Estimated based on share of income-qualified renter households up to 60% AMHI. Further estimated by percentage of renters 55+. ****Based on share of demand by bedroom type calculated.
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MONTGOMERY SUBMARKET 2009 DEMAND (55+)
I. GROWTH DEMAND HOUSEHOLD-BASED: 2005 TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS 2009 TOTAL ESTIMATED INCOME-QUALIFIED RENTER HOUSEHOLDS ESTIMATED ANNUAL INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (4 YEARS) II. TOTAL UNITS NEEDED FOR BALANCED (95.0% OCCUPIED) MARKET 2005 INCOME-QUALIFIED RENTER HOUSEHOLDS (OCCUPIED UNITS) (+) NEW INCOME-QUALIFIED RENTER HOUSEHOLD GROWTH OVER PROJECTION PERIOD (4 YEARS) (=) TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS IN 2009 TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET III. EXISTING RENTAL PRODUCT TOTAL OCCUPIED TARGETED RENTAL UNITS 2009 (+) ESTIMATED # OF VACANT UNITS (VACANCY %)* (+) PLANNED AND PROPOSED TARGETED UNITS DURING PROJECTION PERIOD** (=) NET EXISTING TARGETED RENTAL PRODUCT IV. TOTAL SUPPLY AND DEMAND TOTAL TARGETED RENTAL UNITS NEEDED FOR BALANCED (95% OCCUPIED) MARKET (-) TOTAL NET EXISTING TARGETED RENTAL PRODUCT (+) 2.5% OF EXISTING RENTAL PRODUCT BUILT PRIOR TO 1970*** (=) TOTAL TARGETED UNITS NEEDED OVER PROJECTION PERIOD (4 YEARS) STUDIO/1-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (4 YEARS)**** 2-BR. TARGETED UNITS NEEDED OVER PROJECTION PERIOD (4 YEARS)**** 0%-30% ($0-$15,500) 31% - 40% ($13,600-$20,700) 41% - 50% 51% - 60% 61% - 80% 81% - 100% ($18,100-$25,900) ($22,600-$31,000) ($27,200-$41,400) ($36,200-$51,700)
1,825 2,128 76 303 1,825 303 2,128 2,240 2,128 0 (0%) 31 2,159 2,240 2,159 39 120 83
554 659 26 105 554 105 659 694 659 0 (0%) 0 659 694 659 56 91 62
480 518 10 38 480 38 518 545 518 137 (26.4%) 0 655 545 655 49 -61 -41
304 387 21 83 304 83 387 407 387 58 (15.0%) 569 1,014 407 1,014 31 -576 -365
463 538 19 75 463 75 538 566 538 47 (8.8%) 0 585 566 585 0 -19 -12
379 478 25 99 379 99 478 503 478 42 (8.8%) 0 520 503 520 0 -17 -10
37 29 -20 -211 -7 -7 Note: 2005 income-qualified households based on 2005 income limits. 2006-2009 income limits projected based on historical increase (2000-2005). * Units at 0% to 30% and 31% to 40% are assumed to be 100% occupied. The appropriate Tax Credit vacancy rate is applied to units at 41% to 50% and 51% to 60%. The submarket market-rate vacancy rate is applied to units at 61% to 100%. **Based on information obtained from TDHCA and local planning officials. Some unit mixes may be estimated. Units under construction at the date of this report were included in the above table. ***Estimated based on share of income-qualified renter households up to 60% AMHI. Further estimated by percentage of renters 55+. ****Based on share of demand by bedroom type calculated.
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D. TAX CREDIT DEMAND SUMMARY The table below summarizes the preceding demand analysis. Note the net demand for senior units is included in the total net demand for all Tax Credit units.
TAX CREDIT (0%-60%) DEMAND SUMMARY MONTGOMERY SUBMARKET 2006-2009 2006 TOTAL NET DEMAND FOR TAX CREDIT UNITS 0%-40% AMHI 421 TOTAL NET DEMAND FOR TAX CREDIT UNITS 41%-60% AMHI (1,559) TOTAL NET DEMAND FOR TAX CREDIT UNITS AGE-RESTRICTED TO 55 AND OLDER (0%-40% AMHI) TOTAL NET DEMAND FOR TAX CREDIT UNITS AGE-RESTRICTED TO 55 AND OLDER (41%-60% AMHI)
2007 483 (1,542)
2008 545 (1,525)
2009 607 (1,508)
123 (684)
152 (668)
181 (653)
210 (637)
It is important to note that most of the allocated units are serving households at 50% and 60% AMHI. There continues to be a need in the submarket for affordable units targeting households at up to 40% AMHI. E. SPECIAL NEEDS HOUSEHOLDS Persons with special needs, as defined by HUD, include persons with disabilities, persons with HIV/AIDS, elderly persons, frail elderly persons, persons with alcohol and/or drug addictions, victims of domestic violence, and public housing residents. Demand from elderly households was described in the previous section. Information on persons with HIV/AIDS, alcohol and/or drug addictions, and victims of domestic violence is typically difficult to obtain. Census data is available to estimate the number of persons with other types of disabilities. Based on 2000 Census data, it is estimated those persons age 16+ with a sensory or physical disability within the Montgomery Submarket are as follows:
PERSONS WITH DISABILITIES MONTGOMERY SUBMARKET TOTAL CIVILIAN NONINSTITUTIONALIZED PERSONS 16 YEARS OR OLDER SENSORY DISABILITY (BLINDNESS, DEAFNESS, VISION OR HEARING) PHYSICAL DISABILITY TOTAL PERSONS WITH DISABILITIES
Source: 2000 Census; Claritas; Vogt Williams & Bowen, LLC
NUMBER 193,070 7,907 17,079 24,986
PERCENTAGE 100% 4% 9% 13%
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Note there may be some overlap in the above categories of disability, causing the total number to appear higher. We have not included mentally disabled residents since this group does not require a specific housing product. According to the 2000 Census, there are 24,986 persons aged 16 and older with either a sensory or physical disability. It is reasonable to assume caregivers and/or family members are providing services to these people and are therefore not in one-person households. According to Claritas, approximately 21.9% of all occupied housing units are renter-occupied. Applying this renter percentage to the number of persons with disabilities results in approximately 5,472 persons with disabilities living in renteroccupied households. Based on the above analysis, in 2005, approximately 70.4% of all renter households (17,664 income-qualified renter households / 25,097 total renter households) are income-qualified renter households. Applying 70.4% to the number of persons with disabilities living in renter households results in 3,852 income-qualified persons with a disability living in a renter-occupied household. This analysis is summarized below:
TOTAL PERSONS WITH DISABILITIES (X) RENTER PERCENTAGE (=) RENTER HOUSEHOLDS WITH DISABLED RESIDENT (X) BASELINE TARGETED INCOME-QUALIFIED RENTER HOUSEHOLDS (%) (=) TOTAL INCOME-QUALIFIED RENTER PERSONS WITH DISABILITIES APPROPRIATE INCOME RANGE BY TARGETED AMHI % BASELINE TARGETED INCOMEQUALIFIED RENTER HOUSEHOLDS X TOTAL INCOME-QUALIFIED RENTER HOUSEHOLDS WITH DISABLED RESIDENT 24,986 21.9% 5,472 70.4% 3,852
0%-30% 31% - 40% 41% - 50% 31.0% 3,852 1194 10.9% 3,852 422 11.2% 3,852 431
51% - 60% 11.0% 3,852 425
61% - 80% 19.3% 3,852 744
81% - 100% 16.5% 3,852 637
The above analysis assumes persons with disabilities have incomes reflective of the general population. In reality, it is more likely persons with disabilities will have lower incomes than the general population; therefore, the above analysis understates the housing required to serve this component at lower incomes. If units were developed to 100% of the above level, a large number of vacancies would occur in the market since so many people are cared for in conventional units. We recommend a development target no more than 2% of total demand for special needs households. Due to the limitations of accurate information available pertaining to special needs households, we strongly recommend any planned project conduct extensive interviews with appropriate local service providers, caregivers, medical facilities, etc., to help determine the demand of special needs households within that market and the type or characteristics of the housing required.
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At this time, the existing Tax Credit properties in the Montgomery Submarket contain a total of 156 units for the disabled. Note 2% of 3,852 equals to 77 units. F. HURRICANE IMPACT ON SUBMARKET HOUSING DEMAND One major factor impacting the Houston MSA rental housing market at this time is the evacuees from hurricanes Katrina and Rita. Based on interviews with local property managers, it appears the hurricanes have had minimal impact on the market-rate developments, but have had a significant impact on the affordable rental housing in the Montgomery Submarket. There are approximately 255 evacuees (12.1% of affordable units surveyed) currently being housed at the surveyed Tax Credit properties and about three evacuees currently being housed at the surveyed market-rate properties (0.1% of market-rate units surveyed). Information from apartment managers varied as to how many hurricane evacuees will be income-qualified after the FEMA Vouchers expire. Overall, approximately 198 hurricane Vouchers will be able to remain in the Tax Credit properties after the hurricane subsidy expires; this represents approximately 77% of the current hurricane evacuees.
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