The URL can be used to link to this page

Home My WebLink About5.a. Rental Analysis EXECUTIVE SUMMARY Port Authority Meeting Date: December 21, 2021 AGENDA ITEM: Rental Analysis AGENDA SECTION: Discussion PREPARED BY: Eric Van Oss, Economic Development Coordinator AGENDA NO. 5.a. ATTACHMENTS: Rental Housing Chart and Workforce Housing Income Requirements APPROVED BY: LJM RECOMMENDED ACTION: Informational only. BACKGROUND The past year has seen increased conversation and interest in multifamily development in Rosemount. Multifamily rentals in suburban communities has been one of the fastest growing subsectors in the Twin Cities housing market. The City and Council have outlined creating diverse housing and attracting new housing developers as top goals to “Growing Rosemount.” Many of the City’s top priorities, such as employment growth, local business employee recruitment/retention, and continued commercial/retail development are directly linked to creating diverse and life cycle housing options. Given the interest and potential anxiety around multifamily development, staff believed it prudent to produce a local market analysis of Rosemount’s multifamily housing stock. This analysis is meant to provide a snap shot of the current state of the multifamily market in terms of demand, price points and age of housing. This analysis collected data on properties with 10 or more units per building that were enrolled in the City’s Rental License program. There were 17 total buildings within this category, representing a total of 878 rental units citywide. a. Affordable and Senior: 462 units were restricted by either income or age, representing about 53% of the total units citywide. i. Senior: 235 units were age restricted and reserved for seniors, representing about 28% of the total units citywide. ii. Other Income Restricted: 227 units were income restricted. These units have strict income thresholds at various family sizes. b. Market Rate: 416 units are considered market rate without age or income requirements. c. Age: 429 units were built after 2010, representing slightly less than 50% of total units. i. Affordable: 241 affordable or senior units were built after 2010. ii. Market Rate: 188 market rate units were built after 2010. d. Vacancy: The vacancy rate in Rosemount is extremely low with no building having more than 5% of units vacant. A healthy rental vacancy rate typically is between 7-8%. Within the metro, vacancy rates were at 4.1% during the third quarter. i. Affordable/Senior: Across all income and age restricted buildings in Rosemount there was 0% vacancy. In addition to there being currently no available afford/senior units to rent, these properties all have waiting lists. The majority of these properties have actually closed their waiting lists to new applicants. 2 ii. Market Rate: Units that are not income or age restricted are also in tight supply. Vacancy ranges from 0-4.5%. Two projects are currently in the leasing stage as they complete phased development. e. Price: For affordable units, rents are typically calculated as a percentage of a resident’s total income. Most often affordable units are pegged at 30% of a qualifying resident’s income. Market rate rentals range from roughly $1,000 dollars per month for studio/1-bedroom apartments in older buildings to $2,295 for 2-bedroom units in newer buildings. f. Location: Of the 17 sites analyzed, all but one, are located to the west of Biscayne. Rental units are relatively concentrated and not spread throughout the community. The majority of units are located in Downtown Rosemount. A second significant cluster of rental units is located in the triangular area between 145th and Dodd Blvd. g. The Morrison: The Morrison Development is a unique and singular multifamily project in Rosemount. While not yet completed, the Morrison accounts for 14% of the total units and about 30% of the total market rate units in Rosemount. It also represents 30% of the units built after 2010. In terms of price point, resident demographics, and amenities the Morrison differs quite substantially from other multifamily buildings. The socioeconomic demographics of the Morrison are similar to those of Rosemount homebuyers. Overall, Rosemount has a mix of affordable and market rate units that span a range of price points. The incredibly low vacancy rate indicates there is extremely high demand for all kinds of rental properties. The Dakota County Workforce Housing requirements are outlined at the end of this report. Many of the income requirements for workforce housing actually exceed the average earnings of jobs in the retail sector and the warehouse distribution sector. Retail hiring has been a continued point of concern for the past two years for local businesses and the retail sector is expected to dramatically expand with greenfield development along the County Road 42 corridor. The City is expected to add hundreds of warehouse distribution jobs within the next year. Currently there are not any significant undeveloped parcels guided for medium or high-density multifamily development in the traditional developed core of Rosemount. The Comprehensive Plan specifically calls for a diverse array of life cycle housing to be distributed across neighborhoods; however, most existing multifamily rentals and undeveloped land for multifamily are heavily concentrated and segregated in areas of Rosemount. Aside from potential Downtown redevelopment, all sites guided for multifamily are within the immediate vicinity of Akron Avenue and County Road 42. As of now, only the Morrison development falls within the fast-growing luxury rental submarket. CONCLUSION AND RECOMMENDATION This information is to provide a baseline understanding of the rental market in Rosemount in terms of demand and current inventory. Having a full picture of the multifamily rental landscape will help guide future land use decisions. The availability of life cycle housing is critical to achieve the City’s workforce and commercial development goals. This information pertains to multiple areas of the City’s legislative and entitlement process and can be shared with other boards and commissions as desired. Rosemount Multifamily Rentals with 10 or More Units 3 Address Units Affordable (Y/N) Year Built Price Range Vacancy 14550-14630 Shannon Parkway 96 No 1987 $1,195-1,325 3% 14595 Dodd Blvd. 11 No 1979 N/A 0% 2470 145th St. W 20 Yes 1982 % of income 0% 2951 132nd St. W 12 No 1960 $1,000-1,525 0% 14595 Cimarron Ave 23 No 1966 $1,010-1,502 0% 3762 145th Street W 28 Yes (Low-Income Housing Tax Credit) 1989 % of income 0% 13441 Carbury Way 32 Yes (Workforce) 2007 % of income 0% 14500 Cimarron Ave 36 Yes (Low-Income Housing Tax Credit) 1992 $844-1,161 0% 2900 145th Street 39 Yes (Section 8/Senior) 1982 % of income 0% 3101 Lower 147th Street W 44 Yes (Senior) 1997 % of income 0% 15850 Chippendale Ave 49 Yes 2020 % of income 0% 14736 Cambrian Ave W 60 Yes (Senior) 2015 % of income 0% 2930 146th St W 108 22 Affordable 2008 $1,450-2,607 0% 14344 Cameo Ave 92 Senior/Assisted 2015 N/A 0% Prestwick Place Townhomes 40 Yes 2018 % of income 0% 2810-2820 145th St. W 64 No 2019 $1,275-1,525 4.5% 14589 S Robert Trail S (The Morrison) 124 No 2021 $1,245-2,295 Leasing Dakota County Income Requirements for Workforce Housing Household Size Preferred Income Maximum Income 1 $36,750 $44,100 2 $42,000 $50,400 3 $47,250 $56,700 4 $52,450 $62,940 5 $56,650 $67,980 6 $60,850 $73,020