Virginia Beach Housing: Needs and Market Analysis Re-investment - PowerPoint PPT Presentation

Virginia Beach Housing: Needs and Market Analysis Re-investment Strategy Virginia Center for Housing Research, Virginia Tech: Mel Jones, Spencer Shanholtz czb, LLC: Charles Buki, Karen Beck-Pooley

Agenda • Presentation (15-20 min) • Study overview • Preliminary findings & analysis • Questions • Facilitated Discussion (40-45 min) • Your experience • Your ideas

Components of the Study • Housing Needs and Market Analysis • Housing supply: age, type, value/rent/affordability, size and location. • Housing needs and demand: income, family type, number of household members, households with children, seniors, millennials, people with disabilities, etc. • Market dynamics: building trends and absorption, home sales, vacancy rates, and demand projections. • Housing Re-investment Study • Neighborhood-level analysis of housing conditions and markets. • Analysis of information from key informants : City staff, realtors, developers, property managers, etc. • Analysis of plans, policies, practices and regulations . • Strategy development and recommendations.

Data • Local data • Sales data • Real-estate assessment data • Building permit data • Publicly available data • U.S. Census, American Community Survey data • U.S. Census, Survey of Construction data • U.S. Bureau of Labor Statistics workforce data • Focus group, interview and survey data • Case-studies

Stakeholder Engagement • City Staff • Virginia Beach Residents • Housing & Neighborhood Preservation • Public Meeting Focus Groups • Planning • Survey • Code Enforcement • Town Council • Management Services • Local Experts • Realtors • Property Managers • Builders/developers • BEACH Governing Board • Workforce Housing Advisory Board

Population and Household Trends Population and Number of Households 455000 168000 167000 450000 166000 Number of Households 445000 Number of People 165000 440000 164000 435000 163000 162000 430000 161000 425000 160000 420000 159000 415000 158000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total Population Total Households

Population and Household Trends 2014 CHANGE % CHANGE 2005-2014 • Virginia Beach is young, compared to the region and 22,388 TOTAL POPULATION 451,227 5.2% the rest of the state < 18 102,929 -12,690 -11.0% 18-34 (MILLENIALS) 120,938 21,090 21.1% • Virginia Beach is attractive 35-49 (GENERATION X) 87,139 -19,196 -18.1% to Baby Boomers, but less 50-69 (BABY BOOMERS) 104,367 24,013 29.9% so to households headed by >70 35,854 9,171 34.4% people 35-49. TOTAL HOUSEHOLDS 167,009 5,377 3.3% • Virginia Beach is aging as 18-34 (MILLENIALS) 40229 4,194 11.6% Baby Boomers get older, -13,207 35-49 (GENERATION X) 46536 -22.1% and households live 50-69 (BABY BOOMERS) 57748 9,942 20.8% independently longer. 4,448 >70 22496 24.6%

Housing Market Indicators: Home Sales 2005, Height of the 2,550 Housing Bubble 2,350 2,150 1,950 2015, New Normal? 1,750 1,550 2008, Recession 1,350 1,150 950 Q1 Q2 Q3 Q4 2005, Height of the Housing Bubble 2006 2008, Recession 2010, Bottom of Recessionary Effects 2011 2013, Recovery 2014 2015, New Normal?

Housing Market Indicators: Building Single Family Permits Issued by Year by Number of Bedrooms 3000 • Household formation/in-migration 2500 slowed between 2010 and 2014 • Builder confidence and access to credit 2000 for SF development remains low nationally 1500 1000 500 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 NA 1 2 3 4 5+

Housing Market Indicators: Vacancy Vacancy Rates by Occupancy 7 6 5 4 3 2 1 2009 2010 2011 2012 2013 2014 Homeowner vacancy rate Rental vacancy rate

Implications for Virginia Beach • A strong market has persisted through the recession in part because of the • Large, strong middle class • Military investment • Good City management • Market strength may threaten the city’s green line • Simultaneously, shifts in demand may threaten the market (more to come).

Housing Units by Housing Stock Year Built 60,000 1970- 1980- 1979 47,788 1989 50,000 40,000 Before 1950* 1950-1959 1960-1969 36,876 1970-1979 1980-1989 1990-1999 2000-2009 2011 or later 30,000 22,537 19,894 19,587 20,000 10,036 10,000 5,379 3,317 - Before 1950* 1950-1959 1960-1969 1970-1979 1980-1989 1990-1999 2000-2009 2011 or later

Housing Re-investment & Redevelopment • A large percentage of the housing stock that was very marketable in the 1960s and 1970s is somewhat “stale” today , leaving a number of areas simultaneously vulnerable to a downturn and ripe for redevelopment. • From 1965-1995 a large supply of single-family homes on large lots was ideal for a large cohort of middle-class Boomer buyers . • Today that stock has become a high-risk mismatch, since an even larger generation of Millennials are less interested in the tens of thousands 50- year-old ranch houses and 30-year-old townhomes that dominate so much of Virginia Beach. • Targeted re-development and increased density in Strategic Growth Areas could refresh aging, stale neighborhoods , raising market values and create opportunities for more workforce housing and housing appealing to young, recent-college graduates .

Housing Affordability: Cost Burden Housing Cost Burden by Income Level 60,000 • Low-income household are somewhat more likely to rent. 50,000 • Moderate income households are somewhat more likely to 40,000 own their home. 30,000 • Moderate-income owners are disproportionately cost 20,000 burdened. 63% of moderate- income, cost-burdened households are owners, while 10,000 only 56% of all moderate- income households are owners. - Low Income Moderate Income Severly Cost-burdened Cost-burdened Not Cost Burdend

Housing Affordability: Selected Occupations Top 10 Occupations by Employment • With median house prices Occupation Employment Median Median Annual Affordable above $260,000 and median Wage Earnings Housing Cost Retail Salespersons 28,580 $9.47 $19,700 $492/mo. gross rent more than Cashiers 22,410 $8.80 $18,300 $457/mo. $1,200 , Virginia Beach is Combined Food Preparation and 21,570 $8.86 $18,420 $460/mo. roughly a $22/hr housing Serving Workers Including Fast Food market for renters and a Office Clerks General 16,540 $13.56 $28,200 $705/mo. $38/hr market for buyers. Registered Nurses 13,700 $29.50 $61,350 $1,533/mo. Waiters and Waitresses 13,560 $10.42 $21,680 $542/mo. • A large portion of the Customer Service Representatives 12,960 $13.94 $29,000 $725/mo. otherwise diverse Virginia Janitors and Cleaners Except Maids 11,870 $10.57 $21,990 $549/mo. Beach economy is tourist and Housekeeping Cleaners based, heavily reliant on jobs Stock Clerks and Order Fillers 11,500 $11.31 $23,530 $588/mo. that pay less than $10/hr. General and Operations Managers 9,190 $50.70 $105,460 $2,636/mo. • 8 out of top 10 occupations cannot afford the median rent ($1,200) in Virginia Beach, even when earning in the 90 th percentile. • Employees in occupations highlighted in dark orange , earning at the median could not afford the median rent if shared with another person with equivalent earnings.

Housing Affordability Gap Analysis, Owners 35000 Households that are not cost burdened Cost Burdened Households 30000 Units Occupied by Owners with Household Income > Affordability Income Range Units Occupied by Owners within Affordability Income Range 25000 Units Occupied by Owners with Household Income < Affordability Income Range Vacant 20000 15000 10000 5000 0 Households with Stock affordable Households with Stock affordable Households with Stock affordable Income <= 50% to households income 50%- to households income 80-100% to households of AMI with income <= 80% of AMI with income of AMI with income 50% of AMI 50%-80% of AMI 80%-100% of AMI Gap = 7,500 Gap = 7,950 Gap = 5,360

Housing Affordability Gap Analysis, Renters 30000 Households that are not cost burdened Cost Burdened Households 25000 Units Occupied by Renters with Household Income > Affordability Income Range Units Occupied by Renters within Affordability Income Range Units Occupied by Renters with Household Income < Affordability Income Range 20000 Vacant 15000 10000 5000 0 Households Stock affordable Households Stock affordable Households Stock affordable with Income <= to households with income to households with income to households 30% of AMI with income <= 30%-50% of with income 50%-80% of with income 30% of AMI AMI 30%-50% of AMI 50%-80% of AMI AMI Gap = 5,430 Gap = 5,830 Gap = 9,705

2014 HUD Income Limits 1-Person 2-person 3-person 4-person Household Household Household Household 30% of AMI $14,850 $17,000 $19,790 $23,850 50% of AMI $24,750 $28,250 $31,800 $35,300 80% of AMI $39,550 $45,200 $50,850 $56,500 100% of AMI $49,450 $56,500 $63,550 $70,600

Sources • 2014 American Community Survey 1-year Estimates, Public Use Microdata and published tables • 2009-2013 Consolidated Housing Affordability Strategy 5-year Estimates • 2014 & 2015 Bureau of Labor Statistics data • Hampton Roads Association of Realtors MLS data for the City of Virginia Beach • City of Virginia Beach building permit data