#1NORTH DAKOTA housing FINANCE AGENCY NDSU NORTH DAKOTA STATE UNIVERSITY 2022 NORTH DAKOTA STATEWIDE HOUSING NEEDS ASSESSMENT Nancy Hodur October 5, 2022 2022 Statewide Housing Forum Bismarck, ND#2ANALYSTS AND STUDY CO-AUTHORS Center for Social Research at NDSU "Karen Olson, Research Specialist "Chelsey Hukriede, Research Specialist "Kaeleigh Schroeder, Research Specialist "Jerry Dogbey-Gakpetor, Graduate Research Assistant Department of Agribusiness and Applied Economics at NDSU Dean Bangsund, CO-PI, Research Scientist Elvis Ndembe, Research Scientist#3ACKNOWLEDGEMENTS North Dakota Housing Finance Agency David Flohr, Executive Director Kayla Ver Helst, Public Affairs Director Jennifer Henderson, Planning and Housing Development Division Director Brandon Dettlaff, Homeownership Division Director North Dakota Housing Finance Agency Advisory Board Ninetta Wandler, Chairwoman * Lisa Rotvold, Vice Chairwoman * Jim Farnsworth, Member Joe Sheehan, Member * Kevin Hanson, Member * Larry Nygard, Member * * Stakeholders * * * North Dakota Department of Commerce * North Dakota Department of Human Services USDA Rural Development * North Dakota Department of Health * North Dakota Department of Public Instruction * North Dakota Office of the State Tax Commissioner * North Dakota Department of Corrections and Rehabilitation North Dakota State Hospital North Dakota League of Cities * North Dakota Association of Counties North Dakota Planning Association North Dakota Continuum of Care * North Dakota Association of REALTORS® * North Dakota Apartment Association * North Dakota Association of Home Builders AARP North Dakota North Dakota Long Term Care Association * Community Action Partnership of North Dakota * Greater North Dakota Chamber Bismarck-Mandan Board of REALTORS® * Badlands Board of REALTORS® * Jamestown Board of REALTORS® * * * * Minot Board of REALTORS® * Fargo-Moorhead Area Association of REALTORS® * Williston Board of REALTORS® * Grand Forks Area Association of REALTORS®#4MUCH MORE INFORMATION IN THE FULL REPORT Full Report Data and information on recent trends and current conditions on a wide range of demographic, socio-economic, and housing indicators Persons with disabilities Poverty ▪ Homelessness Housing profiles for counties, planning regions, 12 largest cities, and reservations Much, much more! This Presentation Key Demographic Trends Population and Housing Need Projections Market Conditions Housing Prices Rent and Income Restricted Multifamily Housing ⚫ Discussion and Conclusions#5GEOGRAPHIES 8 Planning Regions ⚫ 53 Counties ⚫ 12 Largest Cities ⚫ 4 Reservations Tri-County Region I Williams Williston - Divide Burke Renville Bottineau Towner Cavalier Pembina Turtle Mountain Mountrail Souris Basin Region II *Minot Rolette Pierce North Central Region III Walsh Ramsey Red River Devils Lake Region IV Benson Fort Berthold Ward McHenry Spirit Lake Grand Forks McKenzie Nelson Grand Forks McLean. Eddy Sheridan Wells Dunn Lewis & Clark Region Vit Foster Griggs Steele Traill Billings Mercer Golden Valley Oliver Burleigh Roosevelt-Custer Stark Dickinson Region VIII Kidder South Central Region VI Jamestown Barnes Cass Mandan Valley City West Fargo Fargo *Bismarck Stutsman Morton Slope Hettinger Logan LaMoure Grant Sioux Bowman Sargent Adams Emmons McIntosh Dickey Lake Agassiz Region V Ransom Wahpeton Richland Standing Rock Lake Traverse#6RECENT TRENDS AND CURRENT CONDITIONS Population and Economy#7STATE POPULATION, 2000-2010 AND 2025 PROJECTIONS 672,591 642,200 789,074 779,094 2000 2010 2020 2025 Source: U.S. Census Bureau (2021a) •After dramatic increase in population in the past decade, population growth is projected, but at a much more moderate rate. •Will talk more about population projections later.#8REGIONAL POPULATION CHANGE 2010 TO 2020 CENSUS 2010 2020 0 50,000 100,000 150,000 200,000 250,000 Region I Region II Region III Region IV Region V Region VI Region VII Region VIII Source: Center for Social Research (2022b) Population increased for most regions from 2010 to 2020 Exceptions were Regions III and VI that experienced slight declines#9STATE POPULATION BY AGE 230,000 210,000 190,000 170,000 150,000 130,000 110,000 90,000 70,000 50,000 2010 Source: U.S. Census Bureau (2021a) 0 to 17 18 to 24-25 to 44 45 to 64 65 plus 208,200 2012 2014 2016 2018 After 2010, children under 18, adults ages 25-44, and adults 65 and older grew to their largest sizes. . • Age groups 18-24 and 45-64 decreased in size since 2010 181,629 123,141 2020#10GROSS STATE PRODUCT IN NORTH DAKOTA Millions of Current Dollars $59,926 $35,676 $63,387 2010 2011 2012 Source: U.S. Bureau of Economic Analysis 2013 2014 2015 ⚫Like population, overall increase in GSP (measure of state's economy) was substantial from 2010 to 2020 •After two dips (2016 recession, 2020 COVID-19 pandemic lockdown and restrictions), GSP is at its highest point 2016 2017 2018 2019 2020 2021#11HOUSEHOLD INCOME IN NORTH DAKOTA North Dakota Households by Household Income Level, 2010, 2015, and 2020 53% 44% 38% Less than $50,000 Source: U.S. Census Bureau (2021c) 20% 19% 19% 19% 13% 14% 14% 14% 9% 10% 7% 8% $50,000 to $74,999 $75,000 to $99,999 $100,000 to $124,999 $125,000 or more 2010 2015 ■2020#12TAKEAWAY: RECENT TRENDS AND CURRENT CONDITIONS Population growth has moderated in the second half of the past decade. The most striking change in population growth is the continued increase in the baby boom cohort and that trend is consistent regionally across the state. A strong economy fueled an substantial increase in gross state product and household income, however that did not translate into an increase in household income across all income categories. ⚫Little change in middle income brackets.#13PROJECTIONS Population, household characteristics, and housing needs#14TOTAL STATE POPULATION BY AGE 2010-2020, 2025 PROJECTION AND PERCENT CHANGE FROM 2020 TO 2025 — 0 to 24 25 to 44 45 to 64 -65+ 300,000 250,000 200,000 150,000 100,000 50,000 0 2010 2015 Change: 2020 to 2025 24% -1% -1% 2020 2025 O to 24 25 to 44 -7% 45 to 64 65 plus Source: U.S. Census Bureau and the Center for Social Research (2022b)#1562,170 62,108 32,901 32,988 PROJECTED CHANGE IN HOUSEHOLDS BY INCOME Upper* Moderate ■2020 2025 Higher income households are expected to hold steady Lower income households are Lower Moderate 45,518 46,202 expected to increase by 2025 % Change Low 72,818 74,586 Household Income 2020-2025 Extremely Low (less than) $26,070) 6.4% Very Low Extremely Low 0 52,601 55,167 Very Low ($26,070-$43,450) 4.9% 56,545 Low ($43,451-$69,520) 2.4% 60,166 Lower Moderate ($69,521-99,935) 1.5% 20,000 40,000 60,000 80,000 Moderate ($99,936-$121,660) 0.3% Upper (greater than $121,661) -0.1% Source: Center for Social Research (2022b)#16HOUSING NEEDS MODEL ASSUMPTIONS Project population with a standard cohort model. • Apply historic distributions of various householder characteristics (age, income, tenure) to population projections to project characteristics of future householders. ⚫ Historic relationship between households (also referred to as occupied housing), and total number of housing units was used to project future housing needs. Assumptions: ⚫Historic trends will remain stable over the study period. • The current inventory of housing is adequate (neither surplus or shortage) and meets housing needs. Model does not take into consideration consumer preferences nor potential changes in population or housing needs based on potential changes in demographic or economic conditions.#172,593 2025 HOUSING PROJECTIONS Model 1: New housing units by 2025 if current Model 2: New housing needed by 2025 based building trends continue 372 323 151 on population projections Model 1 Model 2 8,527 1,137 196 6,570 -167 -23 3,612 3,040 451 -40 -675 -932 Region | Region Region III Region IV Region V Region VI Region Region VII VIII Population projections would suggest more moderate housing needs compared to recent building trends. Projected housing needs 9,285 housing units. 10,280 if you don't net out the negative numbers. The negative numbers in some regions suggest current inventory and housing needs fairly well aligned. Source: U.S. Census Bureau and the Center for Social Research (2022b)#18TAKEAWAY: PROJECTIONS Aging baby boomers will be a significant demographic driver of housing needs. Projections suggest an increase in the number of lower income households which suggests the need for affordable housing to meet needs of lower income households and seniors. ⚫Projections suggest more modest housing needs than recent building trend. •Projections suggest current inventory of housing and future housing needs are reasonably well aligned. . However, need to keep in mind how the model works. • Model is based on housing “need” based on population characteristic, projected changes in population and gross housing numbers The model does not take into consideration market conditions or characteristics of the existing housing inventory. ⚫ Future needs are based on historic relationships, and those relationships are assumed to be in equilibrium and constant. ⚫ Model is not scenario driven.#19MARKET CONDITIONS Multiple Listing Services of North Dakota Data#20MARKET CONDITIONS AVERAGE DAYS ON MARKET, 2021 ■12 largest cities ■Statewide (excluding 12 largest cities) Up to $150,000 $150,001 to $250,000 $250,001 to $350,000 $350,001 to $500,000 Over $500,000 82 58 90 65 96 72 87 96 121 115 • Rural residential homes spend more days on market, on average than urban area homes • Lower-mid-priced residential homes ($150,001 to $250,000) spend the least amount of time on market, even in rural markets Source: Multiple Listing Services of North Dakota (2022)#21160 140 120 100 80 60 40 DAYS ON MARKET - URBAN AREAS IN ND Average Number of Days on Market for Residential Homes Sold, 12 Largest Cities in North Dakota, 2017 to 2021 2017 2018 Source: Multiple Listing Services of North Dakota (2022) 2019 2020 2021 Up to $150,000 -$150,001 to $250,000 $250,001 to $350,000 --$350,001 to $500,000 Over $500,000#22160 140 120 100 80 60 40 DAYS ON MARKET – RURAL AREAS IN ND - Average Number of Days on Market for Residential Homes Sold in North Dakota, Excluding the 12 Largest Cities, 2017 to 2021 2017 2018 2019 2020 2021 Source: Multiple Listing Services of North Dakota (2022) Up to $150,000 $150,001 to $250,000 $250,001 to $350,000 -$350,001 to $500,000 Over $500,000#23MARKET CONDITIONS AVERAGE AGE AT LISTING, 2021 ■12 largest cities ■Statewide (excluding 12 largest cities) Up to $150,000 ~N 49 $150,001 to $250,000 46 28 $250,001 to $350,000 27 16 $350,001 to $500,000 17 14 15 Over $500,000 61 72 The lower the housing price, the higher the average age of homes sold. More pronounced in rural areas. Housing under $150,000 on average 10 years older in rural ND Source: Multiple Listing Service of North Dakota, 2022#24MARKET CONDITIONS AVERAGE PRICE PER SQUARE FOOT, NEW AND EXISTING HOUSING, 2021 ■■ $0 to $90/sq ft ■$211 to $270/sq ft ■$91 to $150/sq ft ■■Over $270/sq ft ■$151 to $210/sq ft 12 largest cities 10% 38% 19% 13% 21% Statewide (excluding 12 largest cities) 43% 27% 10% 6% 13% In rural areas, 70% of homes were sold for $150/sq ft or less In the urban areas, only 48 % of homes were sold for $150/sq ft or less 53% housing sold for more than $150/sq ft in urban cities compared to only 29% in rural areas Source: Multiple Listing Service of North Dakota, 2022#25Up to $150,000 MARKET CONDITIONS HOMES SOLD BY PRICE, 12 LARGEST CITIES $350,001 to $500,000 $150,001 to $250,000 ■Over $500,000 $250,001 to $350,000 In North Dakota's 12 largest cities, in 2% 3% 4% 4% 4% 5% 5% 5% 7% 10% 7% 8% 9% 9% 9% 9% 10% 11% 16% 13% 19% 23% 25% 25% 25% 26% 27% 27% 28% 41% 42% 43% 44% 44% 45% 44% 41% 40% 35% in 2021. 36% 29% 22% 18% 19% 17% 16% 17% 15% 13% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012, just 2% of homes sold for over $500,000 compared to 10% By contrast, 36% of homes sold for less than $150,000 in 2012 compared to 13% in 2021. Source: Multiple Listing Services of North Dakota (2022)#26MARKET CONDITIONS HOMES SOLD BY PRICE, RURAL NORTH DAKOTA ■Up to $150,000 $350,001 to $500,000 $150,001 to $250,000 ■Over $500,000 $250,001 to $350,000 1% 1% 1% 2% 3% 2% 3% 4% 6% 7% 7% 6% 10% 12% 8% 15% 16% 15% 13% 15% 19% 16% 27% In rural areas, 64% of homes sold for $150,000 or less in 2012, compared to 41% in 2021 33% 33% 33% 33% 33% Trends overall were 36% 33% 31% 28% similar in rural ND as 64% 54% 51% 45% 46% 45% 42% 41% 42% 41% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: Multiple Listing Services of North Dakota (2022) urban, although not as pronounced, especially for higher price sales.#27TAKEAWAYS: MARKET CONDITIONS Average number of days on market has declined in both rural and urban parts of the state. Home are on the market longer in rural ND than in urban cities across all price ranges. • The percentage of homes sold at higher prices is increasing as a percentage of total sales. ⚫The percentage of home sold at lower prices is decreasing as a percentage of total sales. • Will be interesting to see how interest rates impact these trends in 2022. • The housing inventory is old, especially lower priced housing which is much older than higher priced sales. •So much more that we can do with these data. Just scratched the surface.#28HOUSING PRICE ANALYSES Multiple Listing Services and Sales Ratio Study#29ANALYZING SALES THROUGHOUT THE STATE We heard complains in 2015 that the ACS data on housing prices are not accurate, too low. ⚫To address concerns, the 2016 housing study reported average verified prices of residential homes sales from the ND Office of State Tax Commissioner Sales Ratio Study. Also including average verified prices from the sales ratio study in this assessment. • Also in this study, with the cooperation of the state's Multiple Listing Services, we were able to analyze data from the Multiple Listing Services in North Dakota. • While both the MLS and SRS have some limitations, both are based on actual transactions and provide good estimates of average housing prices.#30AVERAGE PRICE OF RESIDENTIAL HOMES SOLD SALES RATIO DATA $153,700 $79,532 12 largest cities Statewide (excluding 12 largest cities) $271,101 $175,328 Since 2012 Average Verified Prices have: 2010 2011 Source: North Dakota Office of State Tax Commissioner (2022) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Increased by 56% in 12 largest cities Increased by 78% in rural ND#31AVERAGE PRICE OF RESIDENTIAL HOMES SOLD MLS DATA 12 largest cities Statewide (excluding 12 largest cities) $283,020 $198,266 $135,167 Since 2012 Average Prices have: Increased by 12% in $207,724 12 largest cities Increased by 54% in 2012 2013 2014 2015 Source: Multiple Listing Services of North Dakota (2022) 2016 2017 2018 2019 2020 2021 rural ND#32AVERAGE PRICE OF RESIDENTIAL HOMES SOLD SALES RATIO DATA AND MLS COMPARISON - FOR 12 LARGEST CITIES $198,266 $173,759 MLS 12 City Average --SRS 12 City Average $283,020 Trends for city sales $271,101 data are very similar between SRS and 2012 2013 2014 2015 Source: North Dakota Office of State Tax Commissioner (2022) and Multiple Listing Services of North Dakota (2022) 2016 2017 2018 2019 2020 2021 MLS. In 2021, the difference between datasets was 4% for the 12 largest cities.#33AVERAGE PRICE OF RESIDENTIAL HOMES SOLD SALES RATIO DATA AND MLS COMPARISON - FOR RURAL AREAS $135,167 $98,794 MLS Rural --SRS Rural While MLS data $207,724 for rural areas $175,328 2012 2013 2014 2015 Source: North Dakota Office of State Tax Commissioner (2022) and Multiple Listing Services of North Dakota (2022) 2016 2017 2018 2019 2020 2021 are higher than SRS, the trends for are very similar between datasets. In 2021, the difference between datasets was 18% for the rural areas.#34TAKEAWAY: HOUSING PRICE ANALYSIS • The Sales Ratio data is a publicly available time series for housing prices in North Dakota. ⚫ It is the best available data on average prices for rural counties and small cities. Limitations include: • No data on property characteristics. Potential for year-to-year variability due to a few high- or low-priced transactions in a given year. ⚫ MLS is an excellent source of data statewide, for the 12 largest cities, and combined rural areas. • There were an insufficient number of transactions in the MLS data to compare rural sales by individual county or planning region. • ⚫ Far fewer sales in small communities and rural areas are listed on one of the Multiple Listing Services. ⚫ Not enough observations to have confidence in MLS data by county, by state planning region and in some cases smaller cities. • Overall, the two datasets track very well. They indicate similar trends and estimates of average prices, which provides a high degree of confidence in the accuracy of the data. Reported sale prices are similar between datasets for North Dakota statewide, most of the 12 largest cities, and aggregated rural areas. Think we finally have a good handle on housing prices. There is so much more we can do. We didn't look at medians, distributions, pulling out outliers, etc.#35HOUSING AFFORDABILITY Homeownership rates, rental trends, income- restricted housing, and unit availability#36HOME OWNERSHIP AFFORDABILITY BY HOUSEHOLD INCOME, 2020 Household Income Category Extremely Low Very Low Income Limits based on the 2020 MFI of $86,900 in North Dakota defined by HUD Less than $26,070 Maximum Home Sales that Met Affordable Purchase Affordability Limits based on Price Purchase Price $78,864 795 $26,070 $43,450 $131,440 2,128 Low $43,451 $69,520 $210,305 5,835 Lower Moderate - $69,521 $99,935 $302,313 8,325 Moderate $99,936 - $121,660 $368,033 8,977 Upper $121,661 or more $441,640 9,342 Lower (0-60% MFI) Less than $52,140 $157,729 3,179 Assumptions for the Maximum Affordable Purchase Price: 30-year loan fixed at 5%, property taxes at 1% of the loan, property insurance at 1% of the loan, 5% down, front-end debt-to-income ratio at no more than 28%, back-end ratio including all monthly debts at no higher than 36%#37AFFORDABLE HOUSING OPTIONS FOR RENTERS THAT WANT TO BUY • There are ~66,525 lower income households that rent (income of less than $52,140) Householders Assume 10% of lower income households want to buy: ~6,525 According to MLS data there were only 3,179 homes sold in 2020 that would have been affordable for lower income households. Household Income Total Households Approximation of Homes Sold Meeting Affordability that Rent Income Limits Extremely Low 56,545 35,013 795 Very Low 52,601 27,211 2,128 Low 72,818 28,710 5,835 Lower Moderate 45,518 12,263 8,325 Moderate 32,901 5,796 8,977 Upper 62,170 5,454 9,342 Lower 0-60% MFI 121,682 66,525 3,179#38AFFORDABILITY EXAMPLE: IMPACT OF HIGHER INTEREST RATES ON LOWER INCOME HOUSEHOLDS (EARNING LESS THAN $52,140) Maximum statewide affordable purchase price $200,000 $184,617 $171,220 $160,000 $120,000 $80,000 $40,000 $0 3.10% 4.00% -Owner-occupied homes meeting affordability limits 120,000 $157,729 $145,613 100,000 $117,611 80,000 60,000 40,000 20,000 0 5.00% Interest Rate 6.00% 6.00% Monthly debt projection of 10% Monthly debt projection of 15% Assumptions: 30-year loan fixed, property taxes at 1% of the loan, property insurance at 1% of the loan, front-end debt-to-income ratio at no more than 28%, back- end ratio including all monthly debts at no higher than 36% Note: Lower income households are defined as those households earning less than $52,140 in 2020 (i.e. up to 60% MFI)#39STATEWIDE CHANGE IN MEDIAN RENT Median Monthly Gross Rent in North Dakota $555 $709 $828 Median rent in North Dakota was less than $600 just 10 years ago - that's a 49% increase in 10 years. 2020 ACS Data Efficiency: $628 1-bedroom: $690 2010 Source: U.S. Census Bureau (2021C) 2-bedroom: $826 3-bedroom: $1,118 4-bedroom: $1,327 2015 2020#40RENTAL AFFORDABILITY BY HOUSEHOLD INCOME, 2020 Household Income Category Extremely Low Very Low Low Lower Moderate Moderate Upper Lower (0-60% MFI) Income Limits based on the 2020 MFI of $86,900 in North Dakota defined by HUD Less than $26,070 $26,070 $43,451 $43,450 $69,520 $69,521 $99,935 - $99,936 - $121,660 $121,661 or more Less than $52,140 Affordable Monthly Housing Costs $652 $1,086 $1,738 $2,498 $3,042 $3,650 $1,304 Affordable monthly housing costs: rental price a family can pay without spending more than 30% of income on housing Extremely Low income category can't afford median state rent ($828) as of 2020 Note: This is a median, not an average.#41HOUSING COST-BURDENED HOUSEHOLDS IN NORTH DAKOTA, BY AGE OF HOUSEHOLDER, 2020 ■Owner Renter 55% 49% 39% 32% 31% 22% 17% 14% 15% 11% Total Households 15 to 24 25 to 34 35 to 64 65 plus Cost Burdened defined: Householders spending at least 30% of household income toward housing costs The youngest and oldest renters are more burdened than middle-aged households About half of renters ages 15-24 and ages 65+ were burdened by housing costs in 2020 Source: U.S. Census Bureau (2021C)#42100% TREND IN HOME OWNERSHIP RATES BY INCOME Home Ownership Rates by Household Income in North Dakota 2010 2020 Household Income Less than $25,000 % Change 2010-2020 -12.5% 80% $25,000 to $34,999 -18.5% $35,000 to $49,999 -20.3% 60% $50,000 to $74,999 -23.1% 40% $75,000 to $99,999 -16.1% $100,000 to $149,999 -10.8% 20% $150,000 or more -2.2% 0% Less than $25,000 $25,000 to $34,999 $35,000 to $50,000 to $49,999 $74,999 $75,000 to $100,000 to $150,000 or $99,999 $149,999 more Source: U.S. Census Bureau (2021C)#43CHANGE IN HOUSING TENURE IN NORTH DAKOTA Housing Tenure in North Dakota, 2010 and 2020 ■Owner-Occupied 67% 33% ■Renter-Occupied 62% 2010 Source: U.S. Census Bureau (n.d., 2021 b, 2021C) and the Center for Social Research (2022a) 2020 38% With a decrease in homeownership, there is an increase in renter- occupied housing. The percent of renter occupied housing has increased by 5% since 2010.#44TAKEAWAY: HOUSING AFFORDABILITY Decrease in owner occupied housing and increase in rental occupied housing. Declining home ownership rates across income categories. Substantial increase in median rents over the past decade. While most North Dakotans can afford housing, lower income households are especially cost constrained. A substantial portion of renters are cost burdened, especially younger and senior householders which suggests we have an issues with rental affordability. While inventory numbers may suggest an adequate number of housing units at various levels of affordability, MLS data show that very few homes sold are affordable to low income households.#45RENT AND INCOME RESTRICTED MULTIFAMILY HOUSING PROGRAMS Public Housing Authorities, USDA Section 515, HIF, LIHTC, HUD PBCA/Mod Rehab#46UNDUPLICATED NUMBER OF RENT AND INCOME- RESTRICTED HOUSING UNITS Properties receive funding from multiple sources, so if you just sum them up you double-count the units. Properties that participate in multiple programs must adhere to the guidelines of the program with the most restrictive guidelines. So not only do you need to control for multiple programs, must control for multiple guidelines. Total Units: 15,564 Affordable Units: 14,677 Total Units with No Duplication: 13,219 Affordable Units with No Duplication: 12,361 Source: North Dakota Housing Finance Agency (2022) and USDA (2022a)#47INCOME RESTRICTED UNITS BY INCOME CATEGORY Income restrictions are concentrated in lower income ranges of household income between $43,451 and $69,520. Not many units at the low and high end of income restrictions. In reality, there are few units that are available to Extremely Low and Very Low Income households. Source: North Dakota Housing Finance Agency (2022) and USDA (2022a) Income Category HUD Income Limits Income- Restricted Housing Units Extremely Low Income O to 30% MFI Less than $26,070 31% to 50% MFI 951 Very Low Income 1,953 $26,070-$43,450 Low Income 51% to 80% MFI $43,451-$69,520 8,633 Lower Moderate and 81% to 140% 824 Moderate Income $69,521-$121,660 Total 12,361#48INCOME-RESTRICTED LOW INCOME HOUSING UNIT COUNT BY AGE 2.6% Placed in Service Income Restricted Percent Date Housing Units of Total 1960-1969 325 1970-1979 1,370 11.1% 1980-1989 1,406 11.4% 1990-1999 2,370 19.2% 2000-2009 2,107 17.0% 2010-2019 3,786 30.6% 2020 or newer 997 8.1% Total 12,361 100.0% Substantial building activity in the past decade to accommodate impacts of rapid population growth and housing shortages, especially in oil impacted counties. However, more than 40% of subsidized housing is at least 20 years old. 11% built in the 80's making them 40-50 years old. 14% of units were built in the 60s and 70s and are 50- 60 years old. Source: North Dakota Housing Finance Agency (2022) and USDA (2022a)#49TAKEAWAYS: RENT AND INCOME RESTRICTED MULTI-FAMILY HOUSING Careful when discussing how many income restricted low income housing units are in the state....It's complicated. ⚫ Careful when estimating the number of units available at various income restrictions....It's complicated. It is very easy to overestimate the number of units and difficult to sort out what the actual income restrictions are. Limited number of income restricted units for extremely low income households and those that have more moderate incomes. • With the exception of low income housing built since 2000, the inventory of income restricted low income housing is old.... Not complicated.#50WHERE DO WE GO FROM HERE? Summary, key findings, implications#51IMPLICATIONS ⚫2016 study was influenced by unprecedented population growth the state. The theme then was just keep building. •Housing needs based on historic relationships between population and household characteristics suggest that the state's inventory of housing is relatively aligned with projected future needs. Projections suggest the need for approximately 10,000 housing units. ⚫Current market conditions suggest that is not the case. Affordable housing that goes on the market, comes off quickly, except the oldest and least expensive housing. •Generally speaking affordable housing is older and may require renovations. Income restricted low income rental properties are also older and likely in need of renovation. With increasing prices and lack of affordable inventory, homeownership is declining and renter occupied housing is increasing. •This suggests a greater need to focus on housing needs based on household characteristics, market conditions and consumer preference, especially lower income households and seniors.#52WHAT NEXT We need to do a deeper dive into the MLS data to better describe market conditions. •Further examination of characteristics of housing inventory. We have good market data which will enable a more in depth examination of market conditions.....what is on the market, what is selling, characteristics of property, etc. This will help to further define consumer preferences and provide additional insight into characteristics of homes that meet those preferences to better define and refine housing needs. ⚫Are there other issues to be examined. For example, we are hearing a lot from smaller communities trying to attract developers. Small town have data limitations. •The plan going forward is to update this study on a regular basis and to create a digital resource that can be updated as new data become available. Exactly what Version 2.0 looks like to be determined.#53FINALLY ⚫What I presented today just scratched the surface of what is in this report. •The main document and supporting materials are a repository of data and information. - ⚫Our goal as researchers - and the Housing Finance Agency's goal is to gather all these data and information, understand the data, analyze them, and try to put them in a format that helps community leaders, non-profits, and state and local governments assess recent trends and current conditions to develop programs and policy ensuring safe and adequate housing in North Dakota. ⚫Throughout this process we have worked to try to boil down all of this information down to make it as useable and accessible as possible. Feedback on what is most useful or data that we could provide that we didn't is extremely helpful and appreciated. •Tell us what you need to know and we will try to figure it out.#54QUESTIONS? Contact Information Nancy Hodur, Director Center for Social Research at NDSU [email protected], 701-231-8621 Dean Bangsund, Research Scientist Department of Agribusiness and Applied Economics at NDSU [email protected], 701-7471#55NUMBER OF OBSERVATIONS SRS AND MLS DATA Residential Homes Sold in North Dakota, 2021 12,000 10,652 10,386 10,000 8,000 6,000 4,000 2,000 0 Statewide 8,232 7,164 3,488 2,154 12 Largest Cities Rural Areas Sales Ratio Study data ■MLS data Source: North Dakota Office of State Tax Commissioner (2022) and Multiple Listing Services of North Dakota (2022)#56MEDIAN HOUSING VALUE FOR OCCUPIED HOUSING IN NORTH DAKOTA, 2020 $199,900 $204,815 $181,375 North Dakota $125,658 $90,677 $182,101 $133,581 $233,913 $226,575 Region I Region II Region III Region IV Region V Region VI Region VII Region VIII Source: U.S. Census Bureau (2021C)#57AVERAGE SALES PRICE, STATE PLANNING REGIONS SALES RATIO STUDY ■Region I Region II Region III Region IV Region V Region VI Region VII Region VIII $300,000 $252,407 $250,000 $200,000 $150,000 $100,000 $50,000 $0 $179,281 Source: North Dakota Office of State Tax Commissioner (2022) $206,185 $191,113 $149,291 $149,209 $110,510 $109,357 2020