Study: Housing costs burden 28 percent of Minot residents
A consultant is recommending an investment of nearly $40.5 million in affordable housing in Minot to alleviate cost burdens for about 1,000 households.
The recommendations come in a housing study authorized by the Minot City Council. The consultant, CDM Smith, has produced draft reports that analyze supply and demand and offer an action plan. CDM Smith continues to work on other aspects of the housing study.
The Minot Finance and Improvements Committees received the initial reports Tuesday.
The study’s housing survey found that more than 5,289 households in Minot, or 28 percent, are paying more than 30 percent of their annual income for housing. That translates to nearly 11,900 people living in households facing excessive housing cost burdens.
Most residents burdened with housing costs are renters, but 1,755 homeowner households also are paying a high percentage of income on housing.
To create more affordable housing, the consultant recommends:
– Creating a redevelopment program in the flood area to acquire and demolish substandard structures. Assuming 80 properties would be cleared, the cost is estimated at $5.28 million.
– Creating an affordable home ownership program on scattered sites throughout the city. Assuming the development of 300 units, the cost is estimated at $11.55 million.
– Creating 600 units of affordable rental housing, including 200 units designed for the elderly. The cost is estimated at $23.65 million.
In assessing the current housing supply, researchers determined that an affordable home for a person making $37,349 a year or 80 percent of the $46,687 median household income in Minot would be priced at $116,000 or less.
There are 3,098 single-family housing units assessed at or below $116,000 in Minot. There are 7,736 households with incomes at or below $37,349, including 4,853 existing homeowner households. In Minot, 41 percent of the population lives in households with incomes below $37,349.
In addition, the study reported that 48 percent of Minot households could not afford the median rent for a two-bedroom unit, based on census income data and median rents in Minot in September and October 2012. Seventy percent could not afford the median rent for a three-bedroom unit, using the standard of 30 percent of income or less going for housing. Median rent for a two-bedroom unit was $1,150 and for a three-bedroom unit $1,800.
There are 7,363 households living in rental housing, or 39 percent of all households in Minot, according to census data.
The study found that 4,320 Minot households have very low annual incomes of less than $23,343. There are 858 housing units available for renters in this income category that are owned or managed by Minot Housing Authority. However, some people in this low income category might be homeowners living on fixed incomes.
“While there has been a dramatic increase in the construction of new single-family homes and multi-family developments, none of this new construction provides housing that is affordable to a significant percentage of Minot residents,” the report stated. “For example, the average price of a home, including both existing homes and newly constructed homes sold in Minot from January to September 2012, was $256,842. Ninety-six percent of Minot residents could not afford a home in that price range.”
In analyzing housing demand, researchers used a model showing a 2012 population of 44,318 in Minot, a 8.39 percent growth from the official 2010 census of 40,888. The model projects a 2013 population of 46,519, increasing to 52,372 by 2015.
Researchers concluded there currently are 17,704 habitable housing units in Minot and 18,543 households. Hotels make up a substantial part of the existing short-term and mid-term housing supply.
The report identified some areas of concern:
– No new mobile or manufactured home communities are being developed, and existing ones are filled.
– Adequate off-campus student housing is lacking.
– Minot Air Force Base, relying on market housing for 90 percent of its needs, has had to increase housing allowances by more than 50 percent.
– House prices and rental rates have increased dramatically since 2010.
The next phases of the study will involve developing information on specific programs, policies, funding and financing resources, key players and implementation oversight. It will involve engaging a local project advisory committee, working with local organizations on their capacity to implement solutions and reviewing ordinances for possible changes.