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Nelson - This is Not Your Parents Housing Market ARC 6-6-12

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Nelson - This is Not Your Parents Housing Market ARC 6-6-12 Powered By Docstoc
					      THIS IS NOT YOUR
  PARENT’S HOUSING MARKET

  ATLANTA REGIONAL COMMISSION

       ARTHUR C. NELSON, PH.D., FAICP


University of Utah   Metropolitan Research Center
Drivers of Change
   Demographic
     Aging   + Minority Growth
   Economic
     Stagnating   real incomes; higher unemployment
   Financial
     Tighter   money for home loans
   Preference
     More    amenities, more options, better accessibility
U.S. Households are Changing

   Household Type                                     1970                 2000      2030
   HHs with Children    45%                                                    33%   29%
   HHs without Children 55%                                                    67%   71%
   Single-person HHs    18%                                                    27%   29%
 Source: Arthur C. Nelson, Metropolitan Research Center, University of Utah.
        Household Size Has Stabilized




Source: Census.
Rise of Multi-Generational Households Will
    Keep HH Sizes from Falling Further




Source: Census Current Population Reports; Pew.
    35-64 HH Demand as Share of New
       Demand 5-Years over 5-Years




Source: Arthur C. Nelson, Metropolitan Research Center, University of Utah
          Boomer Incomes Rose During
         Their Peak Demand for Housing

                    Peak housing period corresponding
                     to peak production of McMansions.




Source: Arthur C. Nelson, Metropolitan Research Center, University of Utah. Data from
Census in constant 2010$.
       U.S. Starter, Mature, Downsizing
        Household Trends, 2010-2030

Householder                                                                            Share of
    Age                   2010              2030           Change               Rate   Change
 Under 35
  (Starter)             25,361            27,757             2,396              9%      10%
   35-64
  (Mature)              66,442            69,530             3,088              5%      13%
    65+
(Downsizing)            25,142            43,169            18,027              72%     77%

    Total             116,946           140,456             23,510              20%
  Note: Figures in thousands.

  Source: Arthur C. Nelson, Metropolitan Research Center, University of Utah.
            US Share of Household Growth
               by HH Type, 2010-2030

                                                                                   Percent   Share of
Household Type                          2010             2030          Change      Change     Change

Total Households                    116,946          140,456            23,510       20%

HHs with Children                    39,479            41,867            2,388        6%        10%

HHs without Children                 77,467            98,589           21,122       27%        90%

Single Person HHs                    31,399            40,447            9,048       29%        43%
Note: Figures in thousands. Single-person HHs as subset of HHs without children.

Source: Arthur C. Nelson, Metropolitan Research Center, University of Utah.
    U.S. Share of HH Change by Race/
           Ethnicity, 2010-2030
                                                                                                  Share of
Race/Ethnicity                                 2010             2030        Change           Rate Change
White NH                                     82,950           88,731           5,781          7%            25%
Black NH                                     14,422           17,917           3,496        24%             15%
Native American NH                               744              947            203        27%             1%
Asian/Pacific Islander NH                     5,045             8,492          3,447        68%             15%
Hispanic                                     13,784           24,368         10,584         77%             45%
Minority                                     33,995           51,725         17,730         52%             75%
Total                                      116,945          140,456          23,511         20%
Note: Figures in thousands. NH means non-Hispanic.
Source: Arthur C. Nelson, Metropolitan Research Center, University of Utah, using data from Woods & Poole
Economics (2012).
Ownership Trends by Race/Ethnicity
                      Reading Gap
               Whites & Hispanics Age 17




NAEP-long term Black reading score gap. US Dept. of Education
                Home Ownership Rates
                    2010 & 2030
                                                Owner Rate               Owner Rate
                                                  2030 @                   2030 @
                             Owner               Constant                  95% of
Geography                   Rate 2010           2010 Rates               2010 Rates
United States                    66%                   63%                      60%
Notes:    Owner rates in 2030 by ethnicity in 2010 held constant to 2030 accounting for
          change in ethnic profile.
          Owner rates in 2030 @ 95% assumes underwriting comparable to 1980s and
          reduced role of GSEs.

Source:   Arthur C. Nelson, Metropolitan Research Center, University of Utah.
Home Ownership Rate 1960-2030

                         2005 69.2


                     2000 67.4
                                         2010 66.1

             1980 65.6

                                      2020 63.5 Nelson
                          1990-63.9   62.0-64.0 ULI
                                      63.1-64.2 Pendall et al
 1960 62.1                            2030 62.9 Nelson
                                      60.1-63.3 Pendall et al.
          Rental Share of Housing Growth
                   US 2010-2030


      US Ownership as % of 2010                                                 Rental Share 2010-30
 Rate by Race/Ethnicity in 2010 @ 100%                                     Renter Share of Growth = 50%
 Rate by Race/Ethnicity in 2010 @ 95%                                      Renter Share of Growth = 65%
 Rate by Race/Ethnicity in 2010 @ 90%                                      Renter Share of Growth = 80%
Source: Arthur C. Nelson, Presidential Professor & Director, Metropolitan Research Center, University of Utah.
          Rental Share of Housing Growth
             Atlanta Metro 2010-2030


 Atlanta Ownership as % of 2010                                                 Rental Share 2010-30
 Rate by Race/Ethnicity in 2010 @ 100%                                     Renter Share of Growth = 45%
 Rate by Race/Ethnicity in 2010 @ 95%                                      Renter Share of Growth = 60%
 Rate by Race/Ethnicity in 2010 @ 90%                                      Renter Share of Growth = 75%
Source: Arthur C. Nelson, Presidential Professor & Director, Metropolitan Research Center, University of Utah.
      Number of Seniors 1970-2040




Source: Arthur C. Nelson, Metropolitan Research Center, University of Utah
          Buy-Sell Rates by Age Cohort
                                                            AHS
 10.0

    9.0

    8.0

    7.0

    6.0

    5.0
                                    Buy Rate

    4.0

    3.0

    2.0
                                               Sell Rate
    1.0

    0.0
              20-      25-      30-      35-      40-      45-      50-      55-      60-      65-       70-      75-     80+
              24       29       34       39       44       49       54       59       64       69        74       79

Source: Dowell Myers & SungHo Ryu, “Aging Baby Boomers and the Generational Housing Bubble: Foresight and Mitigation of an Epic
Transition”, Journal of the American Planning Association 74(1): 1-17 (2007).
                                                                                                                                                                  0.00
                                                                                                                                                                         0.40
                                                                                                                                                                                0.80
                                                                                                                                                                                                      1.20
                                                                                                                                                                                                                          1.60




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Transition”, Journal of the American Planning Association 74(1): 1-17 (2007). Figures for net buying or selling rate age.




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Source: Dowell Myers & SungHo Ryu, “Aging Baby Boomers and the Generational Housing Bubble: Foresight and Mitigation of an Epic




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                                                                                                                                                                                  THE GREAT SENIOR SELL-OFF




                                                                                                                                                                                                                                 D H t tts
                                                                                                                                          M
                                                                                                                                          S
             Relocation Choices of Seniors


Housing Type                       Before Move                                        After Move
Apartment                             20%                                                59%


Source: Arthur C. Nelson based on analysis of American Housing Survey 2005, 2007, 2009. New movers means moved in
    past five years. Annual senior movers are about 3% of all senior households; 60%+ of all seniors will change
    housing type between ages 65 and 85.
        New Housing Market Realities

   Sub-prime mortgages are history.
   20% down-payments will become the new normal.
   Fannie Mae & Freddie Mac on the chopping block.
   Meaning
     Smaller homes  maybe more people per unit
     Smaller lots  more attached units

     More renters  including doubled-up renters
                     2002 actual through 2012 estimated




                                     R2=0.82
                                     9.7% average annual increase, compounded
                                     3+X faster than inflation
                                     2020 = $8+/gallon
                                     2030 = $20+/gallon



Source: Adapted from Energy Information Administration (2012).
Low-Moderate Income HHs Spend More
   on Transportation Than Housing




  Source: Reid Ewing, Metropolitan Research Center, University of Utah.
Metro Atlanta Value Change 2007-2011


- 30% Within Perimeter  Already recovering
- 40% Inner Tier outside Perimeter  Slow recovery
- 50% Outer Tier outside Perimeter  Never recover?
Source: Ziilow.com analysis by Arthur C. Nelson, Metropolitan Research Center, University of Utah.
   Submarket Change, Peak to 2011
                   Submarket                                    Change
                   Atlanta                                        -33%
                   DeKalb County                                  -29%
                   North Fulton County                            -18%
                   Cobb County                                    -28%
                   Inner Gwinnett County                          -19%
                   Outer Gwinnett County                          -33%
                   Henry County                                   -39%
                   Fayette County (w/o Peachtree City)            -32%
                      Peachtree City                              -15%
                   South Fulton County                            -52%
                   Paulding County                                -43%
                   Douglas County                                 -45%
                   Rockdale County                                -50%
                   Newton County                                  -55%
Source:   Zillow.com analysis by Arthur C. Nelson, Metropolitan Research Center,
          University of Utah.
Our former home in Dunwoody, Georgia, the most affluent neighborhood in suburban Atlanta.
3+-Family McMansion
                   (Accommodates 15)

                      Patio




 Source: Arthur C. Nelson, Presidential Professor & Director, Metropolitan Research Center, University of Utah.
                          Space v. Commute Time
  Community A: Houses are smaller on smaller lots, with
         shorter commute to work <20 minutes
Community B: Houses are larger on larger lots with , longer
             commute to work 40+ minutes




Source: National Association of Realtors 2011. Survey design assistance by Arthur C. Nelson, University of Utah.
                         Walkable Destinations
In deciding where to live, indicate how important it would be to you to have each of the following within
     an easy walk: very important, somewhat important, not very important, or not at all important.




Source: National Association of Realtors 2011.
                   Demand for Walkable, Mixed-Used
                    “Smart Growth” Neighborhoods
                                           Prefer Mixed-Use             Small Home with             Would Support a Want to Live in
                                           With Walkability              Short Commute               Smart Growth   a Smart Growth
                                             (PPIC 2004/                  (PPIC 2004/               Community (PN Community (PN
Demographic Group                             ASU 2007)                    ASU 2007)                 2003 & 2005)    2003 & 2005)
All                                               50%                           50%                        51%                        47%
Age
   18-34                                           55%                          49%                         55%                        51%
   35-54                                           49%                          55%                         48%                        45%
   55-69                                           46%                          66%                         52%                        47%
   70+                                             44%                          63%                         59%                        56%
Income
   <80% AMI                                        58%                          59%                         50%                        45%
   80%-120% AMI                                    48%                          56%                         45%                        41%
   >120% AMI                                       44%                          52%                         41%                        39%
Household Type
   Single Person HH*                               50%                          61%                         50%                        48%
   HH Without Children                             51%                          61%                         52%                        46%
   HH With Children                                50%                          50%                         52%                        46%
Source: Compiled by Metropolitan Research Center, University of Utah, using PPIC and ASU surveys, and by permission from Porter-Novelli.
Important to Walk/Bike to Work/Errands
                                                 Important/ Very        Important/Very
   Demographic Group                            Important  Work      Important  Errands
   All                                                     23%               22%
   Age
         18-34                                             24%               22%
         35-54                                             21%               20%
         55-69                                             23%               24%
         70+                                               24%               25%
   Income
         <80% AMI                                          28%               27%
         80%-120% AMI                                      19%               18%
         >120% AMI                                         16%               16%
   Household Type
         Single Person HH                                  28%               29%
         HH No Children                                    22%               21%
         HH With Children                                  20%               18%
  Source: Adapted by Nelson et al. from Porter-Novelli (2003; 2005)
    Supply & Demand Comparison


Mode and Destination                                           Supply           Demand
Walk or Bike to Work                                             4%              23%
Walk or Bike for Errands                                        10%              22%
Source: Supply from NHTS 2009 (2011); demand from Porter-Novelli (2003, 2005)
                       Observed Walk/Bike Share
                            Within 1-Mile

                                                   Walk/Bike to Work                 Walk/Bike to Errands
                  Year                              Less than 1 Mile                  Less than 1 Mile
                  1995                                          25%                         26%
                  2001                                          34%                         35%
                  2009                                          37%                         42%
       Change 1995-2009                                         45%                         59%
Source: National Household Travel Survey 2009 (2011), adapted by Arthur C. Nelson.
                                Walkability as Value




Source: Christopher Leinberger, NY Times, 5/27/12, using Zillow.com data
              Transit Accessibility Preference
                                                 Easy Walk to      Prefers Density if
                            Want Rail Transit    Rail Transit is   Transit Available
                              Accessible           Important         (PPIC 2004 &
Demographic Group             (NAR 2011)          (NAR 2011)          ASU 2007)         Average
All                                21%                23%                29%              24%
Age
      18-34                        31%                29%                34%              31%
      35-54                        24%                22%                25%              24%
      55-69                        24%                23%                32%              26%
      70+                          27%                26%                24%              26%
Income
      <80% AMI                     25%                23%                36%              28%
      80%-120% AMI                 24%                22%                26%              24%
      >120% AMI                    23%                20%                25%              23%
Household Type
      Single Person HH*            27%                26%                29%              27%
      HH Without Children          24%                21%                26%              24%
      HH With Children             24%                21%                31%              25%
*Imputed for PPIC/ASU

Source: NAR compiled by Shyam Kannan RCLCo, PPIC/ASU compiled by Metropolitan Research Center,
University of Utah.
Fixed Guideway Transit Deficit
Population 2010                    5,300,000
Population within ½ mile of TODs     160,000
Share                                     3%

Population 2030                    7,400,000
Share who want transit access           25%
Transit access demand              1,850,000
Share of growth 2010-2030               90%
Solutions
   Move future development to existing stations
   Expand MARTA to new locations  expensive
   Create new options such as bus rapid transit,
        streetcar and light rail to extend the reach of
        fixed guideway transit  Ballot Measure?
   Research shows fixed guideway transit:
        Increases residential property value
        Increases commercial property value
        Decreases regional VMT & GHG
        Attracts the “creative class”
        Improves global competitiveness
US Preference Demand vs. Supply

House Type                            Nelson             RCLCo*               NAR   AHS
Attached                               38%                34%                 39%   28%
Small Lot                              37%                35%                 37%   29%
Large Lot                              25%                31%                 24%   43%
*Owner demand only

Source: Nelson (2006), RCLCo (2008), NAR (2011), American Housing Survey (2010)
US Housing Supply/Demand 2009




Source: Arthur C. Nelson, Presidential Professor & Director, Metropolitan Research Center, University of Utah.
     The Opportunity




The New Promise Land?
                    Tear Up a Parking Lot,
                      Rebuild Paradise

           Large, flat and well drained
           Major infrastructure in place
   4+ lane highway frontage  “transit-ready”
       Committed to commercial/mixed use
          Can turn NIMBYs into YIMBYs
Slide title phrase adapted from Joni Mitchell, Big Yellow Taxi, refrain: “Pave over
    paradise, put up a parking lot.”
               Life-Span of Building Function
           200



           150
  Year s




           100



            50



             0
                      Retail                     W arehouse          Nonres.
                                         Of fice          Educat ion                                             Homes
Source: Arthur C. Nelson, Presidential Professor & Director, Metropolitan Research Center, University of Utah, based on DoE Commercial
Buildings Energy Consumption Survey.
Opportunity
150,000 acres of nonresidential land mostly on
      transit-ready corridors @ <0.25 FAR ripe for
      redevelopment by 2030.
Redevelopment @ 0.50 FAR can accommodate all
      new jobs and all new residential development
      from 2010 to ~2050.
Benefits include synergistic land uses creating more
      jobs, reducing VMT, and stabilizing fiscal
      resources.
      MARTA TOD Jobs & Housing Density

         Measure                                                     Per Gross Acre
         Jobs, 2009                                                       20.9
         Households, 2010                                                  4.5

Source: Data from Center for Transit Oriented Development compiled by Arthur C. Nelson, Metropolitan Research
            Center, University of Utah.
 Below the Tree-Line Density
50 du/ac    40 du/ac       50 du/ac




60 du/ac        40 du/ac      40 du/ac



     80 du/ac               50 du/ac
  Our Past is not our Children’s Future

That was us                                     This is them
40-year career                        Free agent/contractor
Uniform housing             Housing choices across life stages
Far away from job           Short commute; walk/bike/transit
Cheap gas                          Maximize mobility options
Transit is for other people              Where’s my transit?
All homes gain in value         Buy quality locations or rent
Love my isolated subdivision        Want an “urbane” place
     Where do we Grow from Here?

1 Little need for new SF homes on large conventional lots.
2 If all new residential development were in existing/
       planned TODs by 2030, demand might be met.
3 The market will pay a premium for walkable/mixed-use
       locations with mobility options.
4 Public-private partnerships are needed to make it easier
       to serve these markets.
5 Remove drive-to-qualify distortion: Home-ownership
       financing needs to include capitalization of location-
       based transportation cost savings.
Thank You

				
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