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HomeMy WebLinkAboutPresentation - Housing Needs– Bowen National ResearchCity Council Memorandum To:Mayor Fasbender & City Councilmembers From:John Hinzman, Community Development Director Date:April 21, 2025 Item:Presentation: Housing Needs Assessment –Bowen National Research Council Action Requested: Patrick Bowen, of Bowen National Research will present a summary of the Housing Needs Assessment for the City of Hastings. No action is required by Council. Background Information: Dakota County Community Development Agency (CDA) contracted with Bowen National Research to provide a Housing Needs Assessment for Dakota County along with an overview of larger cities including Hastings.The Hastings overview includes key demographic and economic development data, summaries of the multifamily rental market and on-sale housing supply, along with general conclusions on the housing needs of the area. Key Findings: •Hastings has an overall five-year housing gap of 1,483 units comprising of: o 402 rental units o 1,081 for-sale units. •Projected housing gaps encompass a variety of affordability levels for both rental and for-sale housing. •The greatest rental housing gap is for products serving households earning between 61% and 80% of the Area Median Household Income (AMHI) •The greatest for sale housing gap is for products serving households earning between 81% and 115% of the AMHI Advisory Commission Discussion: N\A Council Commission Discussion: N\A Attachments: •Hastings Housing Overview Source:Bowen National Research AMHI-Area Median Household Income ’Based on HUD limits for Hastings (4-person limit) Hastings Housing Gap Estimates Percent AMHI*£30%31%-60%61%-80%81%-115%116%+ Household Income $37,260 $37.261-$74,520 $74,521-$99,360 $99,361-$142,830 $142,831+Total Rent Range S931 $932-$1,863 $l,864-$2,484 $2,485-$3,570 $3,571+Housing Price Range £$124,200 $124,201-$248,400 $248,401-$331,200 $331,201-$476,100 $476,101+Gap Five-Year Estimates (2024-2029) Rental Housing Gap 53 67 130 92 60 402 For-Sale Housing Gap 0 87 261 532 201 1,081 10-Year Estimates (2024-2034) Rental Housing Gap 106 134 260 216 120 836 For-Sale Housing Gap 0 174 522 1,064 402 2,162 SWOT Analysis Strengths Weaknesses•Household growth of 5.1%(2010-2024) •Positive household income growth projections •A significant share of jobs based in the city are within stable industries (e.g.,public administration and health care) •Few vacancies among Tax Credit apartments.No vacancies among subsidized multifamily apartments•Extremely low availability rates for non- conventional rentals and for-sale housing Opportunities Threats•Housing need of 402 rental units •Housing need of 1,081 for-sale units•Attract some of the 5,036 non-residents commuting into Hastings for work to live in the city•Relatively young base of in-migrants with a variety of income levels •Rising cost of for-sale housing coupled with relatively low household income levels•Older average housing inventory subject to deterioration/neg1ect •Hastings risks losing some of the 8,774 residents that commute out of the city for employment BOWEN NATIONAL RESEARCH Addendum H-1 ADDENDUM H: CITY OF HASTINGS OVERVIEW While the primary focus of this Housing Needs Assessment is on the entirety of the Primary Study Area, or PSA (Dakota County), this section of the report includes an overview of demographic, economic, and housing metrics specific to the city of Hastings. To provide a base of comparison, various metrics of Hastings were compared with the entirety of Dakota County and statewide numbers. The analyses on the following pages provide overviews of key demographic and economic data, summaries of the multifamily rental market and for-sale housing supply, and general conclusions on the housing needs of the area. It is important to note that the demographic projections included in this section assume no significant government policies, programs or incentives are enacted that would drastically alter residential development or economic activity. Note that some topics presented in this analysis, particularly migration and economic data, may be limited to county-based metrics due to the availability of data. A. INTRODUCTION Hastings is located in the northeast portion of Dakota County, approximately 21 miles south of downtown St.Paul and 30 miles southeast of downtown Minneapolis. Hastings contains approximately 10 square miles and has an estimated population of 22,475 in 2024.Main throughfares in the Hastings area include U.S. Highways 10 and 61, and State Routes 55 and 316. Each of these highways provides access to nearby metropolitan centers. The following map illustrates the city of Hastings. BOWEN NATIONAL RESEARCH Addendum H-2 B. DEMOGRAPHIC ANALYSIS This section of the report evaluates key demographic characteristics for Hastings. Demographic comparisons provide insights into the human composition of housing markets.It should be noted that some total numbers and percentages may not match the totals within or between tables/graphs in this section due to rounding. The following graphs illustrate total population by year for Hastings and the projected population changes between 2024 and 2029 for each of the study areas. Source: 2010, 2020 Census; ESRI; Bowen National Research Source: 2010, 2020 Census; ESRI; Bowen National Research The population in Hastings decreased by 109 (0.5%) between 2010 and 2020, while the county (10.4%) and state (7.6%) each increased in population during this time period.Between 2020 and 2024, the population in Hastings increased by 1.5%and projections indicate that the city’s population will increase by 3.2% over the next five years. This is a higher projected rate of population increase than the increases projected for the county and state during this time period. 22,261 22,152 22,475 23,186 21,500 22,000 22,500 23,000 23,500 2010 2020 2024 2029 Total Population by Year -Hastings -0.5% 1.5% 3.2% 10.4% 3.2%2.8% 7.6% 2.1%2.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2010-2020 2020-2024 2024-2029 Population Percent Change (2010-2029) Hastings Dakota County Minnesota BOWEN NATIONAL RESEARCH Addendum H-3 The following graph illustrates the population density for each study area in 2024. Source: 2010, 2020 Census; ESRI; Bowen National Research With a population density of 2,225.6 persons per square mile, Hastings is significantly more densely populated than Dakota County and the state of Minnesota. The following graph illustrates select population characteristics that typically influence housing affordability for each of the study areas. Note that data included within the graph is derived from the 2018-2022 American Community Survey, which is the most recent time period available for this source. Source: 2018-2022 American Community Survey; ESRI; Bowen National Research As the data illustrates, the shares of unmarried population (46.4%) and population without a high school diploma (4.5%) in Hastings are comparable to the shares in the county and state. The city has a lower share of individuals with a college degree (41.0%)compared to Dakota County and the state. Hastings also has lower poverty rates for children less than 18 years of age (4.1%) and the overall population (6.1%) when compared to the state. 2,225.6 806.9 73.2 0.0 500.0 1,000.0 1,500.0 2,000.0 2,500.0 2024 Density Persons per Square Mile 2024 Population Density by Area Hastings Dakota County Minnesota 46.4% 4.5%41.0% 4.1% 6.1%44.3% 4.4% 55.9% 7.0% 5.6%48.0% 6.3%49.9% 10.9% 9.3% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Unmarried Population No High School Diploma College Degree < 18 Years Below Poverty Level Overall Below Poverty Level Select Population Characteristics by Area (2022) Hastings Dakota County Minnesota BOWEN NATIONAL RESEARCH Addendum H-4 The following graphs illustrate the number of total households in Hastings by year and the projected percent changes in households between 2024 and 2029 for each of the study areas. Source: 2010, 2020 Census; ESRI; Bowen National Research Source: 2010, 2020 Census; ESRI; Bowen National Research The number of households in Hastings increased by 315 (3.6%) between 2010 and 2020. This represents a smaller percentage increase as compared to the county (10.5%) and state (8.0%) during this time period.Between 2020 and 2024, the number of households in Hastings increased by 1.4%. It is projected that the number of households in the city will increase by 3.6%over the next five years, which is a higher rate of household growth compared to the county and state during this period. While household growth can heavily influence the total housing needs of a market, factors such as households living in substandard or cost-burdened housing, people commuting into the area for work, pent-up demand, and availability of existing housing all affect housing needs. These factors are addressed throughout this overview. 8,813 9,128 9,259 9,591 8,400 8,600 8,800 9,000 9,200 9,400 9,600 9,800 2010 2020 2024 2029 Total Households by Year -Hastings 3.6% 1.4% 3.6% 10.5% 3.5%3.3% 8.0% 2.5%2.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2010-2020 2020-2024 2024-2029 Households Percent Change (2010-2029) Hastings Dakota County Minnesota BOWEN NATIONAL RESEARCH Addendum H-5 The following graphs compare the share of household heads by age for each of the study areas in 2024 and the projected percent changes in household heads by age cohort between 2024 and 2029. Source: ESRI; Bowen National Research Source: ESRI; Bowen National Research Overall, the data shows that most households in Hastings (50.3%) are aged 55 and older, which is a higher share of older adult households compared to the county and state.Note that households headed by a person aged 75 and older are projected to increase by 16.4% during the next five years, while households between the ages of 65 and 74 and between the ages of 45 and 54 are projected to increase by 8.0% during this period. The overall projected changes in households by age in Hastings are broadly consistent with the projections for Dakota County and the state during this time. 14.9% 34.8% 50.3% 16.3% 38.7% 45.0% 19.0% 34.9% 46.1% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% <35 35 to 54 55+ Distribution of Household Heads by Age (2024) Hastings Dakota County Minnesota -3.2% 1.2% 0.1%8.0% -9.2% 8.0%16.4% -1.5% 0.0% -1.5% 6.1% -8.8% 9.3% 25.0% -3.6% -1.0% 0.0%5.6% -9.1% 6.5%20.9% -25.0% -15.0% -5.0% 5.0% 15.0% 25.0% 35.0% 45.0% <25 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75+ Percent Change Age Cohort Projected Percent Change in Household Heads by Age (2024-2029) Hastings Dakota County Minnesota BOWEN NATIONAL RESEARCH Addendum H-6 The following graphs compare the share of households by tenure (renters and owners) for 2024 and the projected percent change in households by tenure between 2024 and 2029 for each of the study areas. Source: 2010 Census; ESRI; Bowen National Research Source: 2010 Census; ESRI; Bowen National Research In 2024,the distribution of households by tenure in Hastings (72.2% owners and 27.8% renters)is very comparable to the shares for the county, but more heavily weighted toward owner households when compared to the state. Over the next five years, it is projected that the number of owner households in Hastings will increase by 4.0%, while the number of renter households will increase by 2.6%. This is a larger projected increase in both owner and renter households when compared to the county and state. The projected increase among owner and renter households in Hastings will likely contribute to an increase in demand within the rental and for-sale housing markets over the next five years.It is important to understand that housing demand is influenced by a variety of factors, which may include existing pent-up demand, substandard housing, housing cost burden, and/or other factors. 72.2% 73.0% 69.8% 27.8% 27.0% 30.2% 0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%100.0% Hastings Dakota County Minnesota Households by Tenure (2024) Owner-Occupied Renter-Occupied 4.0% 2.6% 3.9% 1.8% 3.3% 1.2% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% Owner-Occupied Renter-Occupied Projected Percent Change in Households by Tenure (2024-2029) Hastings Dakota County Minnesota BOWEN NATIONAL RESEARCH Addendum H-7 The following compares the median household income for each of the study areas from 2020 to 2029. Source: 2020 Census; ESRI; Bowen National Research As the preceding illustrates, the 2024 median household income in Hastings ($88,159) is 1.6% higher than the statewide median household income but 13.8% lower than that reported for the county. Over the next five years, it is projected that the median household income in Hastings will increase to $101,979, or 15.7%. As such, the median household income in Hastings will remain slightly above that of the state ($100,422), but lower than the county’s median household income ($113,606). The following graphs compare renter households by income for 2024 and the projected percent change in renter households by income between 2024 and 2029 for each of the study areas. Source: 2020 Census; ESRI; Bowen National Research $71,514 $88,159 $101,979 $88,904 $102,310 $113,606 $74,093 $86,801 $100,422 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 2020 2024 2029 Median Household Income by Year Hastings Dakota County Minnesota 26.5% 19.2% 26.3% 22.2% 22.9% 23.6% 36.8% 34.6% 30.3% 14.5% 23.3% 19.8% 0%20%40%60%80%100% Hastings Dakota County Minnesota 2024 Distribution of Renter Households by Income Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher BOWEN NATIONAL RESEARCH Addendum H-8 Source: 2020 Census; ESRI; Bowen National Research In 2024, Hastings has a smaller share (14.5%) of renter households with incomes of $100,000 or higher but higher shares of households earning less than $25,000 and between $50,000 and $99,999 when compared to Dakota County and the state of Minnesota. Between 2024 and 2029, renter household growth in Hastings is projected to be among households earning $100,000 or higher (51.5%), while those earning between $50,000 and $99,999 are projected to increase by 5.4% during this period. Note that the projected increase of high-income renter households (earning $100,000 and higher) in the city is significantly higher than increases in the county and state. The following graphs compare owner households by income for 2024 and the projected percent change in owner households by income between 2024 and 2029 for each of the study areas. Source: 2020 Census; ESRI; Bowen National Research -14.5%-14.0% 5.4% 51.5% -10.0%-11.4% -0.1% 26.9% -8.8%-10.0% 0.8% 28.2% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher Percent Change in Renter Households by Income (2024-2029) Hastings Dakota County Minnesota 5.5% 4.0% 6.4% 13.0% 8.8% 11.2% 26.8% 25.2% 28.3% 54.6% 61.9% 54.1% 0%10%20%30%40%50%60%70%80%90%100% Hastings Dakota County Minnesota 2024 Distribution of Owner Households by Income Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher BOWEN NATIONAL RESEARCH Addendum H-9 Source: 2020 Census; ESRI; Bowen National Research In 2024, the majority (54.6%) of Hastings owner households earn $100,000 or more, which is a slightly higher share compared to the state (54.1%), but lower than the county share (61.9%).Between 2024 and 2029, owner households earning $100,000 or higher are projected to increase, while those earning less than $100,000 are projected to decrease during this period. This is consistent with county and statewide projections for this time period. The following graphs compare senior renter households (age 62 and older)by income for 2024 and the projected percent change in senior renter households by income between 2024 and 2029 for each of the study areas. Source: 2020 Census; ESRI; Bowen National Research -32.7% -23.4% -6.5% 19.4% -22.4%-21.3% -9.3% 14.5% -21.1%-18.7% -7.3% 16.2% -40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher Percent Change in Owner Households by Income (2024-2029) Hastings Dakota County Minnesota 31.8% 23.6% 30.8% 22.3% 24.0% 23.9% 33.4% 32.6% 27.6% 12.4% 19.7% 17.6% 0%10%20%30%40%50%60%70%80%90%100% Hastings Dakota County Minnesota 2024 Distribution of Senior Renter Households (Age 62+) by Income Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher BOWEN NATIONAL RESEARCH Addendum H-10 Source: 2020 Census; ESRI; Bowen National Research In 2024, the largest share of senior renter households (age 62 and older) in Hastings earn between $50,000 and $99,999 (33.4%), followed by those earning less than $25,000 (31.8%). Over the next five years, significant growth among senior renter households in Hastings is projected to occur among households earning $100,000 or more, which are projected to increase by 82.1% during the time period. Senior renter households earning between $50,000 and $99,999 are also projected to increase (by 21.2%) during the next five years. By comparison, senior households earning less than $50,000 are projected to decline in Hastings between 2024 and 2029. The following graphs compare senior owner households (age 62 and older)by income for 2024 and the projected percent change in senior owner households by income between 2024 and 2029 for each of the study areas. Source: 2020 Census; ESRI; Bowen National Research -2.9%-1.8% 21.2% 82.1% 1.8%0.2%13.4% 46.5% -0.8%-2.3% 9.7% 40.2% -20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher Percent Change in Senior Renter Households (Age 62+) by Income (2024-2029) Hastings Dakota County Minnesota 6.0% 4.5% 6.9% 13.6% 9.3% 11.6% 27.5% 26.1% 28.5% 52.9% 60.0% 52.9% 0%10%20%30%40%50%60%70%80%90%100% Hastings Dakota County Minnesota 2024 Distribution of Senior Owner Households (Age 62+) by Income Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher BOWEN NATIONAL RESEARCH Addendum H-11 Source: 2020 Census; ESRI; Bowen National Research In 2024, the largest share of senior owner households (age 62 and older) in Hastings earn $100,000 or more (52.9%), followed by those earning between $50,000 and $99,999 (27.5%). Over the next five years, senior owner households in Hastings earning $100,000 or more are projected to increase by 26.4%, while senior owner households earning less than $100,000 are projected to decrease during this period. The projected growth among the highest income cohort and decrease among the lower income cohorts in Hastings is consistent with county and statewide projections between 2024 and 2029. The following table illustrates the components of population change for Dakota County between April 2010 and July 2023.Note that components of change data is only available at the county level or higher. Estimated Components of Population Change by County for the PSA (Dakota County) April 1, 2010 to July 1, 2023 Years Population Change* Percent Change Natural Change Net Domestic Migration Net International Migration Total Net Migration Dakota County 2010-2020 33,225 8.3%27,991 -1,115 6,511 5,396 2020-2023 7,562 1.7%5,686 -928 2,430 1,502 Source: U.S. Census Bureau,Population Division, June 2024 *Includes residuals of (-162 and 374) representing the change that cannot be attributed to any specific demographic component Based on the preceding data, the population growth within Dakota County between 2010 and 2023 is primarily the result of natural change (more births than deaths)and noteworthy international migration.While this data is not specific to Hastings, it is reasonable to conclude that the components of population change for Dakota County are likely to have a significant influence on each of the geographies located within the county. -29.3% -20.1% -1.5% 26.4% -16.1%-15.7% -2.2% 23.9% -16.4%-14.0% -1.8% 23.3% -40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% Less Than $25,000 $25,000 - $49,999 $50,000 - $99,999 $100,000 & Higher Percent Change in Senior Owner Households (Age 62+) by Income (2024-2029) Hastings Dakota County Minnesota BOWEN NATIONAL RESEARCH Addendum H-12 The following graphs illustrate the distribution of in-migrants by age and by income for each study area from 2018 to 2022.Note that the data illustrated in both graphs is based on population, not households. Source: U.S. Census Bureau, 2022 5-Year ACS Estimates (S0701); Bowen National Research Source: U.S. Census Bureau, 2022 5-Year American Community Survey (B07010); Bowen National Research *Excludes population with no income As the preceding data illustrates, the distribution of in-migrants by age for Hastings is weighted toward those aged 35 and older, as the city has slightly higher shares of in- migrants between the ages of 35 and 54 (22.5%) and in-migrants aged 55 and older (20.7%) compared to the county and state. The distribution of in-migrants by income in Hastings is more heavily weighted toward lower income individuals, as 40.3% of in-migrants earn less than $25,000. 56.8% 22.5%20.7% 66.2% 20.3%13.5% 67.0% 19.2%13.8% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 1 to 34 Years 35 to 54 Years 55+ Years Share of In-Migrants by Age (2018-2022) Hastings Dakota County Minnesota 40.3% 27.5% 32.1%29.8%28.0% 42.2%41.1% 25.3% 33.6% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% <$25,000 $25,000-$49,999 $50,000+ In-Migrants by Income (2018-2022)* Hastings Dakota County Minnesota BOWEN NATIONAL RESEARCH Addendum H-13 C. ECONOMY AND WORKFORCE ANALYSIS Labor Force The following table illustrates the employment base by industry for Hastings, Dakota County, and the state of Minnesota.The top five industries by share of employment for each area are highlighted in red text. Note that several metrics within this section are limited to county data and are not provided at the city level. Employment by Industry NAICS Group Hastings Dakota County Minnesota Employees Percent Employees Percent Employees Percent Agriculture, Forestry, Fishing & Hunting 0 0 387 0.2%17,215 0.5% Mining 4 0.0%73 0.0%4,549 0.1% Utilities 0 0.0%568 0.3%12,777 0.4% Construction 378 3.2%10,298 5.0%137,789 4.2% Manufacturing 1,595 13.4%22,907 11.1%342,911 10.3% Wholesale Trade 112 0.9%8,221 4.0%134,193 4.0% Retail Trade 1,266 10.6%27,952 13.6%385,870 11.6% Transportation & Warehousing 377 3.2%8,741 4.2%83,429 2.5% Information 63 0.5%9,796 4.8%88,304 2.7% Finance & Insurance 237 2.0%9,626 4.7%146,490 4.4% Real Estate & Rental & Leasing 209 1.8%4,877 2.4%68,105 2.1% Professional, Scientific & Technical Services 593 5.0%14,887 7.2%245,551 7.4% Management of Companies & Enterprises 0 0.0%87 0.0%6,945 0.2% Administrative, Support, Waste Management & Remediation Services 240 2.0%5,954 2.9%74,747 2.3% Educational Services 1,088 9.1%16,900 8.2%259,542 7.8% Health Care & Social Assistance 1,605 13.5%20,621 10.0%574,150 17.3% Arts, Entertainment & Recreation 207 1.7%3,924 1.9%89,508 2.7% Accommodation & Food Services 934 7.8%16,542 8.0%240,661 7.2% Other Services (Except Public Administration)675 5.7%12,232 5.9%204,837 6.2% Public Administration 2,324 19.5%10,454 5.1%184,476 5.6% Non-classifiable 22 0.2%852 0.4%17,626 0.5% Total 11,929 100.0%205,899 100.0%3,319,675 100.0% Source: 2010 Census; ESRI; Bowen National Research Note: Since this survey is conducted of establishments and not of residents, some employees may not live within each market. These employees, however, are included in our labor force calculations because their places of employment are located within each market. Hastings has an employment base of nearly 12,000 individuals that is concentrated within several employment sectors.The labor force within the area is based primarily in five sectors:Public Administration (19.5%), Health Care & Social Assistance (13.5%), Manufacturing (13.4%), Retail Trade (10.6%), and Educational Services (9.1%). Combined, the top five job sectors represent 66.1% of the city’s employment base. BOWEN NATIONAL RESEARCH Addendum H-14 Total employment reflects the number of employed persons who live within an area regardless of where they work. The following illustrates the total employment base (in thousands)for Dakota County between 2014 and 2024. Source: Department of Labor; Bureau of Labor Statistics *Through July As the preceding illustrates, total employment within Dakota County steadily increased between 2014 and 2019. In 2020, total employment decreased by roughly 3.1%, which can be largely attributed to the economic impact of the COVID-19 pandemic. As of year-end 2023, total employment in Dakota County was at 100.1% of the 2019 level.It should be noted, however, that total employment decreased slightly (0.8%) during the first half of 2024. The following illustrates the annual unemployment rate for Dakota County and the state of Minnesota from 2014 to 2024. Source: Department of Labor, Bureau of Labor Statistics *Through July 223.0 225.0 227.0 231.8 234.3 237.2 229.8 229.9 235.8 237.4 235.6 215.0 220.0 225.0 230.0 235.0 240.0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024* Total Employment (in thousands) Year Total Employment -Dakota County (2014-2024) 3.9% 3.4% 3.4% 3.1% 2.6% 2.9% 6.3% 3.5% 2.3% 2.6% 3.0%4.3% 3.8% 3.9% 3.5% 3.0% 3.3% 6.3% 3.7% 2.6% 2.8% 3.3% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024* Unemployment Rate Year Annual Unemployment Rate (2014-2024) Dakota County Minnesota Hill III I II II 1 1 li il BOWEN NATIONAL RESEARCH Addendum H-15 As the preceding data shows, the unemployment rate in Dakota County declined from 3.9% in 2014 to 2.9% in 2019. After the sharp increase in 2020, the unemployment rate in the county dropped to 2.3% in 2022. Although the unemployment rate increased to 2.6% in 2023, this still represents a lower rate as compared to the rate in 2019. It is also noteworthy that the unemployment rate in the county has been below the state unemployment rate in nine of the previous 10 years.The lone exception occurred during 2020, where both the county and state rates were 6.3%. At-place employment reflects the total number of jobs within the county regardless of the employee's county of residence. The following illustrates the total at-place employment base for Dakota County from 2013 to 2023. Source: Department of Labor; Bureau of Labor Statistics As the preceding illustrates, at-place employment within Dakota County increased each year since 2013, with the only exception occurring in 2020. Through 2023, at- place employment within the county is at 98.3% of the 2019 level.This likely indicates the county was disproportionately affected by the pandemic. Regardless,at-place employment increased by 5.8% (approximately 10,300 jobs) in Dakota County between 2013 and 2023, illustrating an overall positive economic trend for the county in the last decade. Economic Outlook WARN notices were reviewed in September 2024.According to the Minnesota Department of Employment and Economic Development website, there have been six WARN notices reported for Dakota County over the past 12 months. These WARN notices impact a total of 70 jobs within the county, of which none are located within Hastings. Overall, the reduction in jobs associated with these notices is relatively minor given the existing employment base and recent increases in at-place employment within the county. 177.7 180.3 183.9 187.0 188.3 189.6 191.2 177.8 181.2 185.6 188.0 170.0 175.0 180.0 185.0 190.0 195.0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 At-Place Employment (in thousands) Year At-Place Employment -Dakota County (2013-2023) BOWEN NATIONAL RESEARCH Addendum H-16 According to a representative with the Dakota County Community Development Agency, the Dakota County economy is steady,has opportunity for growth, and is capable of redeveloping large corporate campuses. The following table summarizes recent and/or ongoing economic development projects identified within Hastings: Economic Development Activity -Hastings Project Name Investment Job Creation Scope of Work/Details The Confluence Multimillion ($)55 Completed:In 2023, The Confluence opened in a former manufacturing building that was redeveloped into a boutique hotel, apartments, office space, and a restaurant. Minnesota Veterans Home Hastings Campus $221 million N/A Proposed: Plans include the demolition of five buildings, which will be replaced with one building that will consolidate veterans’ housing and services. All phases, including predesign to construction, could take up to 42 months. N/A –Not Available As the preceding illustrates, a multimillion-dollar economic project was recently completed within Hastings and a new $221 million project was recently proposed. The redevelopment of a former manufacturing building into a mixed-use project, which was completed in 2023, created approximately 55 new jobs in the area and provides a source of additional rental housing.This economic activity will likely have a positive impact on the community and labor market in the years to come. Commuting Data The ability of a person or household to travel easily, quickly, safely, and affordably throughout a market influences the desirability of a housing market. In addition, the individuals commuting into a market from neighboring markets represent a potential base of support for future residential development. The following table summarizes two commuting pattern attributes (mode and time) for Hastings. Commuting Attributes -Hastings, Minnesota Mode Drove Alone Carpooled Public Transit Walked Other Means Worked at Home Total Number 9,338 536 56 362 61 1,066 11,419 Percent 81.8%4.7%0.5%3.2%0.5%9.3%100.0% Time Less Than 15 Minutes 15 to 29 Minutes 30 to 44 Minutes 45 to 59 Minutes 60 or More Minutes Worked at Home Total Number 3,454 2,901 2,682 920 396 1,066 11,419 Percent 30.2%25.4%23.5%8.1%3.5%9.3%100.0% Source: ESRI; Bowen National Research As the preceding illustrates, 86.5% of individuals in Hastings utilize their own vehicles or carpool to work. Overall, 55.6% of residents have commute times of less than 30 minutes to their place of employment, with an additional 9.3% working from BOWEN NATIONAL RESEARCH Addendum H-17 home.As the majority of individuals in the area utilize personal vehicles and have relatively short commute times, only 0.5% of residents rely on public transit as their commuting mode. The following illustrates the overall commuter flow for Hastings based on 2021 U.S. Census Longitudinal Origin-Destination Employment Statistics (LODES) data. Hastings, MN –Inflow/Outflow Job Counts in 2021 Source: U.S. Census, Longitudinal Origin-Destination Employment Statistics (LODES); Bowen National Research Of the approximately 7,597 persons employed in Hastings, 66.3% (5,036) originate from outside the city, while 33.7% (2,561) live within the city. Nearly 8,800 residents of the city commute to surrounding areas daily for employment.Regardless, the 5,036 non-residents who work in the area represent a substantial base of potential support for future residential development within Hastings. The following compares the distribution of in-commuters by annual income for Hastings and Dakota County. Source: U.S. Census, Longitudinal Origin-Destination Employment Statistics (LODES); Bowen National Research 17.9%22.6% 59.5% 16.7%22.6% 60.7% 0.0% 20.0% 40.0% 60.0% 80.0% <$15,000 $15,000-$40,000 $40,000+ In-Commuters by Income (2021) Hastings Dakota County BOWEN NATIONAL RESEARCH Addendum H-18 The preceding shows that the largest share (59.5%) of in-commuters to Hastings earn $40,000 or more annually, while 22.6% earn between $15,000 and $40,000,and 17.9% earn less than $15,000 annually.While the majority of in-commuters earn $40,000 or more, the data indicates there is a slightly higher proportion of lower income in-commuters within Hastings when compared to the county. Regardless, a variety of housing types could be developed to potentially attract some of the 5,036 in-commuters to live within Hastings. D. HOUSING METRICS The estimated distribution of the area housing stock by occupancy/tenure status for each study area for 2022 is illustrated in the following table and graph: Number of Housing Units by Tenure (2022) Area Total Occupied Owner Occupied Renter Occupied Vacant Total Hastings 8,968 6,586 2,382 348 9,316 Dakota County 169,404 128,582 40,822 4,760 174,164 Minnesota 2,256,126 1,631,701 624,425 237,830 2,493,956 Share of Housing Units by Tenure (2022) Source: American Community Survey (2018-2022); ESRI; Bowen National Research Of the 8,968 total occupied housing units in Hastings, 73.4% are owner occupied and 26.6% are renter occupied. The distribution of occupied units by tenure is slightly more weighted toward renter-occupied units compared to the county, but slightly more weighted toward owner-occupied housing when compared to the state. Among the 9,316 total housing units in Hastings, only 3.7% (348 units) are classified as vacant. The share of vacant units in Hastings is lower than the share (9.5%) for the state.It should be noted that vacant units are comprised of a variety of units including abandoned properties, unoccupied rentals, for-sale homes, and seasonal housing units. 73.4% 26.6% 3.7% 75.9% 24.1% 2.7% 72.3% 27.7% 9.5% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% Owner-Occupied Renter-Occupied Vacant Hastings Dakota County Minnesota BOWEN NATIONAL RESEARCH Addendum H-19 The following table compares key housing age and conditions based on 2018-2022 American Community Survey data. Housing units built over 50 years ago (pre-1970), overcrowded housing (1.01+ persons per room), or housing that lacks complete indoor kitchens or bathroom plumbing are illustrated by tenure. It is important to note that some occupied housing units may have more than one housing issue. Housing Age and Conditions (2022) Pre-1970 Product Overcrowded Incomplete Plumbing or Kitchen Renter Owner Renter Owner Renter Owner Number Percent Number Percent Number Percent Number Percent Number Percent Number Percent Hastings 515 24.4%1,873 42.4%64 3.0%12 0.3%79 3.7%4 0.1% Dakota County 7,139 17.5%26,588 20.7%1,859 4.6%1,137 0.9%975 2.4%250 0.2% Minnesota 244,615 35.9%707,304 38.2%32,202 4.7%23,665 1.3%15,646 2.3%10,852 0.6% Source: American Community Survey (2018-2022); ESRI; Bowen National Research In Hastings, 24.4% of the renter-occupied housing units and 42.4% of the owner- occupied housing units were built prior to 1970. Both shares are notably higher than the county shares of such housing, though the share of older renter-occupied units in the city is significantly lower than the statewide share of 35.9%. The shares of overcrowded renter housing units (3.0%) and owner housing units (0.3%) are lower than county and statewide shares,while the share of renter-occupied (3.7%) housing units with incomplete plumbing or kitchens is slightly higher than county and state shares of such housing. Overall, there are approximately 143 renter households and 16 owner households in Hastings living in substandard housing conditions. The following table compares key household income, housing cost, and housing affordability metrics. It should be noted that cost burdened households pay over 30% of income toward housing costs, while severe cost burdened households pay over 50% of income toward housing. Household Income, Housing Costs and Affordability 2024 Households 2024 Median HH Income 2024 Median Home Value 2022 Median Gross Rent 2022 Share of Cost Burdened HH* 2022 Share of Severe Cost Burdened HH** Renter Owner Renter Owner Hastings 9,259 $88,159 $349,101 $1,146 42.0%19.2%21.0%6.9% Dakota County 173,920 $102,310 $413,686 $1,410 47.0%17.0%21.9%5.7% Minnesota 2,309,848 $86,801 $360,089 $1,178 44.0%18.2%21.4%6.7% Source: American Community Survey (2018-2022); ESRI; Bowen National Research HH –Households; *Paying more than 30% of income toward housing costs; **Paying more than 50% of income toward housing costs The estimated median home value in Hastings of $349,101 is 15.6% lower than the median home value within the county and 3.1% lower than the median home value for the state. The median gross rent of $1,146 in the city is 18.7% lower than that reported for Dakota County and 2.7% lower than the state. With a median household income of $88,159 in Hastings, approximately 42.0% of renter households and 19.2% of owner households are housing cost burdened. As a result, there are approximately 1,000 renter households and 1,265 owner households in Hastings that are housing cost burdened, of which over 950 total households are severe cost burdened (paying more than 50% of income toward housing costs). As such, affordable housing alternatives should be an integral part of future housing solutions. BOWEN NATIONAL RESEARCH Addendum H-20 Based on the 2018-2022 American Community Survey (ACS) data, the following is a distribution of all occupied housing by units in structure by tenure (renter or owner) for each of the study areas. Renter-Occupied Housing by Units in Structure Owner-Occupied Housing by Units in Structure 4 Units or Less 5 Units or More Mobile Home/Other Total 4 Units or Less 5 Units or More Mobile Home/Other Total Hastings Number 908 1,474 0 2,382 6,380 185 21 6,586 Percent 38.1%61.9%0.0%100.0%96.9%2.8%0.3%100.0% Dakota County Number 13,454 26,680 688 40,822 121,696 4,459 2,426 128,582 Percent 33.0%65.4%1.7%100.0%94.6%3.5%1.9%100.0% Minnesota Number 239,167 374,998 10,259 624,425 1,541,044 42,914 47,744 1,631,701 Percent 38.3%60.1%1.6%100.0%94.4%2.6%2.9%100.0% Source: American Community Survey (2018-2022); ESRI; Bowen National Research Approximately 38.1%of the rental units in Hastings are within structures of four units or less.Overall, the city’s share (61.9%) of multifamily rental housing (five or more units within a structure) is within the range of such units compared to the county (65.4%) and state (60.1%).Therefore, the majority of renter-occupied housing units in the city are comprised of multifamily rentals.Among owner-occupied units in Hastings, 97.2% are within structures of four units or less or mobile homes. The following graph illustrates the distribution of monthly gross rents (per unit) for rental alternatives within each of the study areas.Note that this data includes both multifamily rentals and non-conventional rentals. However, with 38.1%of all rental units in Hastings classified as non-conventional (four units or less within a structure), this data provides some insight into the overall distribution of rents among the non- conventional rental supply. Note that gross rents include tenant-paid rents and tenant- paid utilities. Source: American Community Survey (2018-2022); ESRI; Bowen National Research *Excludes rentals classified as “No Cash Rent” 10.3% 25.5% 36.6% 25.1% 8.4%10.6% 36.5% 42.0% 18.8%16.2% 32.3%28.4% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% <$750 $750- $999 $1,000- $1,499 $1,500+ Distribution of Monthly Gross Rents by Area Hastings Dakota County Minnesota BOWEN NATIONAL RESEARCH Addendum H-21 As the preceding illustrates, the largest share (36.6%) of Hastings rental units have gross rents between $1,000 and $1,499, followed by units with gross rents between $750 and $999 (25.5%).Approximately one-quarter (25.1%)of rentals in the area have gross rents of $1,500 and higher. The distribution of gross rents in Hastings is much more heavily weighted toward product with gross rents between $750 and $999 when compared to the county and state, and there is a notably smaller share of units in Hastings with rents of $1,500 or more as compared to the county. Bowen National Research’s Survey of Housing Supply Multifamily Rental Housing A field survey of multifamily rental properties was conducted as part of the Dakota County Housing Needs Assessment.The following table summarizes the surveyed multifamily rental supply by project type for Hastings and Dakota County. Note that vacancy rates below 1% are highlighted in red text. Surveyed Multifamily Rental Housing Supply by Area Dakota County, MN Projects Surveyed Total Units Vacant Units Overall Vacancy Rate Vacancy Rate by Program Type Market- Rate Tax Credit Government Subsidized Hastings 17 1,269 122 9.6%14.0%0.7%0.0% Dakota County 229 27,211 1,161 4.3%4.8%2.3%0.0% Source: Bowen National Research In Hastings, a total of 17 apartment properties were surveyed, comprising a total of 1,269 units.Overall, the multifamily units are 90.4% occupied, with a total of 122 vacancies. Typically, in a well-balanced and healthy market, multifamily rentals should have an overall occupancy rate between 94% and 96%. While Dakota County as a whole has a healthy overall occupancy rate of 95.7%, the occupancy rate within Hastings is considered low due to vacancies at market-rate properties, which contain 120 of the 122 vacant units among properties surveyed in the city. Note that a significant number of vacant units are within a recently opened market-rate property that is still within its initial lease-up period.Only two vacant units are within Tax Credit properties, while there are no vacancies at government-subsidized properties surveyed in Hastings. The occupancy rates among Tax Credit and government- subsidized units are high, and the presence of wait lists, particularly among the Tax Credit product, are evidence of pent-up demand for multifamily rentals for a variety of income levels within Hastings. This likely represents a future development opportunity within the city. BOWEN NATIONAL RESEARCH Addendum H-22 The following table illustrates the median rent by bedroom/bathroom type for the surveyed market-rate and Tax Credit units in Hastings and Dakota County. Median Rents by Program Type and Bedroom/Bathroom Type Area One-Br/ 1.0-Ba Two-Br/ 1.0-Ba Two-Br/ 2.0-Ba Three-Br/ 2.0-Ba Market-Rate Hastings $974 $1,275 $1,650 $2,235 Dakota County $1,385 $1,585 $1,785 $2,177 Tax Credit Hastings $504 $920 $1,472 - Dakota County $765 $920 $1,555 $1,604 Source: Bowen National Research As the preceding illustrates, the median rent for a typical one-bedroom market-rate unit in Hastings ($974) is nearly twice as high as the comparable one-bedroom Tax Credit unit ($504) in the area. Note that the median rents for one-and two-bedroom market-rate and Tax Credit units in Hastings are less than or equal to the corresponding median rents in Dakota County. Regardless of program type,the median rents steadily increase for each subsequently larger unit configuration for both study areas.With limited availability among Tax Credit and government-subsidized units in both Hastings and Dakota County, many low-income households are likely to seek rental alternatives among the available market-rate and non-conventional supply. This can result in a higher share of cost burdened households in an area, or in some instances, may cause households to relocate outside of an area to find more affordable housing choices. Non-Conventional Rental Housing Non-conventional rentals are considered rental units typically consisting of single- family homes, duplexes, units over store fronts, and/or mobile homes and account for 38.1% of the total rental units in Hastings. During August and September 2024, Bowen National Research conducted an online survey and identified four non-conventional rentals that were listed as available for rent in Hastings. While these rentals do not represent all non-conventional rentals, they are representative of common characteristics of the various non-conventional rental alternatives available in the market. As a result, these rentals provide a good baseline to compare the rental rates and the number of bedrooms of non-conventional rentals in the area. BOWEN NATIONAL RESEARCH Addendum H-23 The following table illustrates the vacancy rates, which compares the number of identified vacant non-conventional rentals to the total number of non-conventional rentals based on the American Community Survey, for the subject city and Dakota County. Surveyed Non-Conventional Rentals Overview Area Non-Conventional Rentals* Identified Vacant Units Vacancy Rate Hastings 908 4 0.4% Dakota County 14,142 83 0.6% Source: American Community Survey (2018-2022); ESRI; Bowen National Research *ACS reported number of rental units within structures of four units or less and mobile homes With a total of four available units identified,Hastings has an overall vacancy rate of just 0.4%for non-conventional rentals, which is slightly lower than the vacancy rate for Dakota County.This is well below the optimal range of 4% to 6% for non- conventional rentals and indicates a significant lack of available non-conventional supply in the area. A summary of the available non-conventional rental units in Hastings and Dakota County, which includes bedroom type, rent range, and median rent per square foot, follows: Available Surveyed Non-Conventional Rental Supply Bedroom Vacant Units Rent Range Median Rent Median Rent Per Square Foot Hastings Two-Bedroom 1 $910 $910 $1.01 Three-Bedroom 2 $2,075 -$2,950 $2,513 $1.60 Four-Bedroom 1 $2,400 $2,400 $0.90 Total 4 Dakota County One-Bedroom 2 $1,050 -$1,300 $1,175 $1.60 Two-Bedroom 18 $910 -$2,585 $1,750 $1.39 Three-Bedroom 44 $1,825 -$3,750 $2,500 $1.40 Four-Bedroom 19 $2,000 -$3,945 $2,600 $1.25 Total 83 Source: Zillow, Rent.com, Homes.com The four available non-conventional rentals in Hastings consist of a two-bedroom unit, two (2) three-bedroom units, and a four-bedroom unit. Median rents range from $910 for a two-bedroom unit to $2,513 for a three-bedroom unit. When typical utility costs ($300 or more) are considered, the identified non-conventional rentals in Hastings have gross rents ranging from $1,210 to $2,813. While the rent for the non- conventional two-bedroom unit is lower than comparable multifamily market-rate units surveyed in the city,the non-conventional three-bedroom and four-bedroom units have rents that exceed the median rents for the highest-priced multifamily rental product.As such,it is unlikely that most low-income households would be able to afford the typical non-conventional rental in the area, even if such a unit were readily available. BOWEN NATIONAL RESEARCH Addendum H-24 For-Sale Housing The following table summarizes the available (as of July 31, 2024) and recently sold (between January 2020 and July 2024) for-sale housing stock for Hastings and Dakota County. Hastings -Owner For-Sale/Sold Housing Supply Type Homes Median Price Hastings Available*17 $345,000 Sold**1,114 $302,000 Dakota County Available*579 $395,000 Sold**23,271 $380,000 Source: Redfin.com & Bowen National Research *As of July 31, 2024 **Sales from January 1, 2020 to July 31, 2024 The available for-sale housing stock in Hastings as of July 31, 2024 consists of 17 total units with a median list price of $345,000. This represents a lower median list price compared to the available for-sale homes in Dakota County ($395,000). Historical sales from January 2020 to July 2024 in Hastings consisted of 1,114 homes with a median sales price of $302,000, which is 20.5% lower than the median sales price reported for homes sold within Dakota County during this time period. The following table and graph summarize historical sales volume and median sales price by year from January 2020 through July 2024. Sales History/Median Sales Price by Year –Hastings (January 1, 2020 to July 31, 2024) Year Number Sold Percent Change Median Sales Price Percent Change 2020 240 -$268,750 - 2021 277 15.4%$301,000 12.0% 2022 254 -8.3%$310,500 3.2% 2023 205 -19.3%$320,000 3.1% 2024*138 (237)(15.6%)$327,000 2.2% Source: Redfin.com & Bowen National Research *As of July 31, 2024; Volume projected through the remainder of 2024 (in parenthesis) BOWEN NATIONAL RESEARCH Addendum H-25 *2024 full year volume projection As the preceding illustrates, home sales in Hastings increased by 15.4% between 2020 and 2021. Since 2021, volume decreased in each subsequent year; however, projections indicate that sales volume will increase 15.6%in 2024. It should be noted that the current year’s projection is based solely on transactions year-to-date, which may not account for seasonality in the market that can influence the projection. While volume decreased annually in recent years, the median sales price of homes sold in the city increased year over year during the sales period. Collectively, the median sales price of homes sold in Hastings increased by 21.7% between January 2020 and July 2024. The following table provides various housing market metrics for the available for-sale homes in Hastings and Dakota County as of July 31, 2024. Available For-Sale Housing (As of July 31, 2024) Area Total Available Units Share of County Availability Rate Months Supply of Inventory Average List Price Median List Price Average Days on Market Average Year Built Hastings 17 2.9%0.3%0.9 $383,594 $345,000 29 1976 Dakota County 579 100.0%0.5%1.4 $447,241 $395,000 43 1992 Source: Redfin.com & Bowen National Research The 17 available for-sale homes in Hastings represent 2.9% of the available for-sale homes in Dakota County. These homes equate to an availability rate of 0.3%when compared to the 6,586 owner-occupied units in the city. Based on recent sales history, this inventory represents less than one Months Supply of Inventory (MSI). Typically, in healthy, well-balanced markets, approximately 2% to 3% of the for-sale housing stock should be available for purchase and there should be between four and six months of available inventory to allow for inner-market mobility and household growth. The available for-sale homes have an average number of days on market of 240 277 254 205 237 $268,750 $301,000 $310,500 $320,000 $327,000 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 0 50 100 150 200 250 300 350 2020 2021 2022 2023 2024* Hastings Annual Sales/Median Price (2020-2024*) Number Sold Median Price BOWEN NATIONAL RESEARCH Addendum H-26 29 days and an average year built of 1976. Overall, the data illustrates that there is limited availability of for-sale homes and a short average number of days on market, which has likely contributed, at least in part, to the notable increase in for-sale pricing since 2020. The following graph compares the distribution of historical and available for-sale residential units by price point for Hastings: Source: Redfin.com & Bowen National Research As the preceding illustrates, there is extremely limited availability of for-sale homes in Hastings regardless of price point. Note that there is only one unit available for sale in the city priced below $200,000 and only six available units priced below $300,000. By comparison, the overall share of available homes priced above $400,000 is significantly higher than homes sold at this price point during the historical sales period. However, there are only seven homes available for sale at $400,000 or higher in Hastings. The lack of available housing at all price points is likely to create affordability issues for much of the area workforce and first-time homebuyers, as well as impact the ability of higher-income households to locate suitable housing.These factors may limit the city’s ability to attract new households. Senior Care Housing As part of the Dakota County Housing Needs Assessment, senior care facilities within the county were surveyed. The facilities that were evaluated include three levels of care that typically respond to older adults seeking, or who need, alternatives to their current living environment. This includes independent living, assisted living and nursing care.The following table summarizes the surveyed facilities by property type for Hastings and the entirety of Dakota County. 9.5% 39.0%35.2% 16.3% 5.9% (1) 29.4% (5)23.5% (4) 41.2% (7) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% <$200,000 $200,000-$299,999 $300,000-$399,999 $400,000+ Distribution of For-Sale Homes by Price Point -Hastings Historical vs Available (Number Available) Historical Sales Available For-Sale BOWEN NATIONAL RESEARCH Addendum H-27 Surveyed Senior Care Facilities Project Type Projects Marketed Beds/Units Vacant Occupancy Rate National Median Occupancy Rate Base Monthly Rates Hastings Independent Living 1 47 0 100.0%86.8%$1,506-$2,500 Assisted Living 2 99 0 100.0%85.4%$1,506-$3,735 Nursing Homes 2 129 9 93.0%82.0%$11,832-$12,167 Total 5 275 9 96.7%-$1,506-$12,167 Dakota County Independent Living 21 1,355 56 95.9%86.8%$775-$4,742 Assisted Living 32 1,975 115 94.2%85.4%$1,506-$12,100 Nursing Homes 7 616 113 81.7%82.0%$6,894-$21,292 Total 60 3,946 284 92.8%-$775-$21,292 Source: 2023 State of Seniors Housing and Bowen National Research Note: In some cases, daily rates were converted to monthly rates As the preceding illustrates, a total of five senior care projects were surveyed within Hastings. These projects have an overall occupancy rate of 96.7%. The independent living and assisted living facilities surveyed in the city are fully occupied, while the overall occupancy rate (93.0%)for the two nursing facilities in Hastings is above the national median occupancy rate (82.0%). The high occupancy rates and projected increase in households aged 65 and older in the area suggest that there could be an increase in demand for senior care options over the next five years. Planned & Proposed In addition to the surveys of each housing type within this overview, Bowen National Research conducted interviews with representatives of area building and permitting departments and performed extensive online research to identify residential projects either planned for development or currently under construction within Dakota County. The following summarizes the known details for the multifamily rentals, for-sale housing, and senior care housing projects that are planned, proposed, or under construction within Hastings. Multifamily Rental Housing Development -Hastings Project Name & Address Type Units Developer Status/ Details Tyler Street Landing 315 3rd St.Market-Rate 32 Star Realty Planned:Additional details unavailable at the time of this analysis. For-Sale Housing Development -Hastings Subdivision Name & Address Product Type Units/Lots Developer Status/Details Villas at Pleasant Pleasant Dr.&Northridge Dr.Villas 32 Epcon Under Construction:Approximately one-quarter complete at time of study. Homes from $494,900 to $640,990 and 1,418 sq. ft. to 2,832 sq. ft. Heritage Ridge 4th Addition West of General Sieben Dr.& Northridge Dr. Single- Family 36 Creative Homes Approved:Some lots still available from previous additions which will likely need sold before the 4th addition becomes available. Homes from $391,900 to $584,900 and 1,296 sq. ft. to 3,354 sq. ft. BOWEN NATIONAL RESEARCH Addendum H-28 Senior Care Housing Development Project Name & Address Type Units Developer Status/ Details Vermillion Acres Senior Housing. 1190 County Rd.47 Assisted Living & Memory Care 75 Real Estate Equities Under Construction:This community will include both assisted living and memory care. ECD unknown. Suite Living, Memory Care Facility SE Corner 33rd St. &Vermillion St. Assisted Living & Memory Care 32 Suite Living Senior Care Planned:Construction to start spring 2025; Unit mix and ECD unknown. ECD –Estimated Completion Date E.HOUSING GAP Based on ESRI household projections from 2024 to 2029, which is the most up-to- date version available, and taking into consideration the housing data from our field survey of area housing alternatives, we are able to project the potential number of new housing units that are needed (housing gap) in Hastings. The following paragraph summarizes the metrics used in our demand estimates. We included renter and owner household growth, the number of units required for a balanced market, the need for replacement of substandard housing, commuter/external market support, severe cost-burdened households, and step-down support as the demand components in our estimates for new rental and for-sale housing units. As part of this analysis, we accounted for vacancies reported among both renter-and owner- occupied housing alternatives, considered applicable units in the development pipeline, and concluded this analysis by providing the number of units that are needed by different income segments, rent levels, and purchase price points. Hastings has an overall five-year housing gap of 1,483 units, with a gap of 402 rental units and a gap of 1,081 for-sale units. The following table summarizes the rental and for-sale housing gaps by income and affordability levels for Hastings. Hastings Housing Gap Estimates Percent AMHI*≤30%31%-60%61%-80%81%-115%116%+ Total Housing Gap Household Income ≤ $37,260 $37,261-$74,520 $74,521-$99,360 $99,361-$142,830 $142,831+ Rent Range ≤ $931 $932-$1,863 $1,864-$2,484 $2,485-$3,570 $3,571+ Price Range ≤ $124,200 $124,201-$248,400 $248,401-$331,200 $331,201-$476,100 $476,101+ Five-Year Estimates (2024-2029) Rental Housing Gap 53 67 130 92 60 402 For-Sale Housing Gap 0 87 261 532 201 1,081 10-Year Estimates (2024-2034) Rental Housing Gap 106 134 260 216 120 836 For-Sale Housing Gap 0 174 522 1,064 402 2,162 Source: Bowen National Research AMHI –Area Median Household Income *Based on HUD limits for Hastings (4-person limit) As the preceding table illustrates, the projected housing gaps encompass a variety of affordability levels for both rental and for-sale housing product. It appears the greatest rental housing gap in the city is for product serving households earning between 61% and 80% of AMHI, while the greatest for-sale housing gap in the city is for product BOWEN NATIONAL RESEARCH Addendum H-29 serving households earning between 81% and 115% of AMHI.Although development within Hastings should be prioritized to the housing product showing the greatest gaps, it appears efforts to address housing should consider most rents and price points across the housing spectrum. The addition of a variety of housing product types and affordability levels would enhance the subject market’s ability to attract potential workers and help meet the changing and growing housing needs of the local market. F.STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT) A SWOT analysis often serves as the framework to evaluate an area’s competitive position and to develop strategic planning. It considers internal and external factors, as well as current and future potential. Ultimately, such an analysis is intended to identify core strengths, weaknesses, opportunities, and threats that can lead to strategies that can be developed and implemented to address local housing issues. The following is a summary of key findings from this SWOT analysis for Hastings. SWOT Analysis Strengths Weaknesses •Household growth of 5.1% (2010-2024) •Positive household income growth projections •A significant share of jobs based in the city are within stable industries (e.g., public administration and health care) •Few vacancies among Tax Credit apartments. No vacancies among subsidized multifamily apartments •Extremely low availability rates for non- conventional rentals and for-sale housing Opportunities Threats •Housing need of 402 rental units •Housing need of 1,081 for-sale units •Attract some of the 5,036 non-residents commuting into Hastings for work to live in the city •Relatively young base of in-migrants with a variety of income levels •Rising cost of for-sale housing coupled with relatively low household income levels •Older average housing inventory subject to deterioration/neglect •Hastings risks losing some of the 8,774 residents that commute out of the city for employment Hastings experienced notable positive household growth since 2010, and household growth is projected to continue over the next five years. In fact, the rate of household growth in the city is projected to exceed that of the county and state during this period. A significant share of employment in the city is based within stable industries, which may help retain existing households and potentially attract additional households to the city. Despite these positive attributes, Hastings has very low vacancy rates among affordable multifamily and non-conventional rentals and an extremely low availability rate within the for-sale housing market. These availability issues combined with rising for-sale costs and a significant number of residents commuting outside the city for employment may increase the likelihood of households relocating outside the city to find suitable housing. However, the city has a total housing gap of 1,483 units and over 5,000 non-residents commuting into the city daily for employment. This represents a significant development opportunity, which will contribute to positive household growth in Hastings and support a growing local economy.