East Iberville Housing MS (St Gabriel).Wpd
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April 17, 2012 Mr. Thomas C. David, Jr. Pan American Engineers - Alexandria, Inc. 1717 Jackson Street Alexandria, Louisiana 71301 Re: A multifamily rental housing market study for the Eastern portion of Iberville Parish, Louisiana Dear Mr. David: Per your request, we have completed the following Housing Needs Assessment for the Eastern portion of Iberville Parish. This report was developed for Iberville Parish, to support its decision making process regarding the construction of workforce/mixed-income multifamily residential housing with Ike- Gustav recovery funds. Cook, Moore and Associates is permitting the Parish’s publication of these reports in support of this effort. This report is a work-product created for the Parish. Cook, Moore and Associates will not discuss the report, or provide any interpretive support to third parties regarding the findings or conclusions contained within this report. Developers who are considering responding to any RFP issued by the Parish are advised to obtain their own market studies and should not rely solely on the broad determinations in this report for specific transactional decisions. Respectfully submitted, Craig A. Davenport Louisiana Certified General Real Estate Appraiser #G1128 A Rental Housing Market Study on the EAST IBERVILLE RENTAL HOUSING MARKET IBERVILLE PARISH, LOUISIANA April 17, 2012 A Proposed Prepared for: RENTAL HOUSING DEVELOPMENT MR. THOMAS C. DAVID, JR. PAN AMERICAN ENGINEERS-ALEXANDRIA, INC. in the Eastern Portion of Iberville Parish, LA 1717 Jackson Streeet Alexandria, LA 71301 FILE #12 - 11246 April 17, 2012 Mr. Thomas C. David, Jr. Pan American Engineers - Alexandria, Inc. 1717 Jackson Street Alexandria, Louisiana 71301 Re: A multifamily rental housing market study for the Eastern portion of Iberville Parish, Louisiana Dear Mr. David: In accordance with your request, we have completed a market analysis of the Eastern Portion of Iberville Parish. The contents of the study include a general economic overview, an analysis of current and probable future demand, an analysis of multifamily residential construction trends in the general market area and a primary market area analysis of the immediate market area. We present the following report for your approval. The data presented in this report represents the best found in the general market area as of the date of survey. It is understood that the terms of our engagement are such that we have no obligation to revise this report to reflect events or conditions which may occur subsequent to the date of survey. We will, however, always remain available to discuss the necessity for revision or additions in view of changes in the economic or market factors affecting the primary market area. It is expressly understood that the scope of this study does not include any potentially adverse affects of zoning requirements, environmental issues, governmental issues or other restrictions that could possibly affect the use of any property in the primary market area. We have assumed that you are knowledgeable of any and all issues that may impact the feasibility of any specific project. This report has been prepared to determine the feasibility of the proposed development option in the defined primary market area. As is customary in assignments of this nature, neither our names nor the material submitted may be included in any security prospectus, in newspaper publicity, or as part of any printed material, or used in offerings or representations in connection with the sale of securities or participation interests to the general public. Multifamily Housing Market Study Cook, Moore & Associates Eastern Portion of Iberville Parish April 17, 2012 Iberville Parish, Louisiana Page 2 We would be pleased to hear from you if we may be of further assistance in the interpretation and application of our findings and conclusions. We appreciate your cooperation extended to us during the course of this assignment and are glad to have had the opportunity to be of service. If we can be of any further assistance in this matter, please do not hesitate to call. Respectfully submitted, Craig A. Davenport Louisiana Certified General Real Estate Appraiser #G1128 TABLE OF CONTENTS EXECUTIVE SUMMARY............................................................ 1 INDEPENDENCE & NO IDENTITY OF INTEREST....................................... 5 MARKET AREA ANALYSIS ......................................................... 6 PRIMARY MARKET ANALYSIS ............................................... 7 SECONDARY MARKET ANALYSIS ........................................... 11 DEMOGRAPHIC ANALYSIS ........................................................ 51 MARKET/SUB-MARKET DEFINITION......................................... 51 RENTAL DEMAND HOUSING ANALYSIS ...................................... 60 OPERATING AND DEVELOPMENT COMPARISONS ................................... 73 SOURCES OF DATA............................................................... 78 CONCLUSIONS................................................................... 79 ADDENDUM ..................................................................... 80 EXECUTIVE SUMMARY The scope of this report is to determine if demand exists for the construction and rental of a proposed apartment complex in the Eastern portion of Iberville Parish. This development could be targeted towards a mixture of market rate and lower-income households. The subject’s defined market area encompasses the Eastern portion of Iberville Parish (basically the portion of Iberville Parish east of the Mississippi River). The Census Tracts (as defined by the U.S. Census Bureau) within the market area include Census Tracts #22047952501 and #22047952502. The neighborhood contains a broad mixture of property uses. In the Regional Analysis section of this report, it is determined that the Greater Baton Rouge MSA (including Iberville Parish) has a diverse economy. Population and income demographic data are presented. These figures show population within the subject’s trade area has been growing steadily since 1990, increasing significantly from 1990 to 2000, but increasing at a slower rate from 2000 to 2010. The number of households has also been growing steadily over the same time period. A review of the income demographics for the subject’s trade area indicate that the area has undergone a transformation. The Average Household Income for the subject’s trade area was $27,643 in 1990, however, by 2000 it had risen to $45,095. In 2010, the AHI is estimated at $51,650. In 1990, over 68.6% of the area’s households earned less than $35,000 per year. By 2000, that number had dwindled to approximately 53.9%, and has projected to be further decreased to 50.1% in 2010. In the Rental Demand Section, the demand for rental housing units in the defined Trade Area are estimated as follows: Cook, Moore & Associates 1 Executive Summary Projected Rental Housing Demand in Subject's Trade Area 2013 to 2016 Source 2013 2014 2015 2016 Current Year Projected # Renter Households 286 294 302 310 Less: Previous Year # Renter Households 246 286 294 302 Shift in Rental Housing Demand 40 8 8 8 Minus: Projects Completed 2000-2013 0000 Plus: Residual Demand from Previous Year 0 76 87 98 Plus: Replacement of Depletion/Demolition 36 3 3 3 Effective Demand 76 87 98 109 Plus: Allowance for 7% Vacancy 5678 Total Demand for New Units 82 93 105 117 The demand analysis indicates that approximately 82± units are needed to meet demand for all income segments by 2013. This analysis takes into account the expected natural increase in population, the population and household trends, the changes in supply of rental housing units within the primary market area and those units that have been demolished or are substandard. This analysis only considers those proposed units that are platted and have received site plan approval. As with any real estate market, there are likely other developers looking at the feasibility to develop multifamily housing complexes within the area that have not been made public yet (i.e. they have not received site plan approval or building permits). It is unreasonable to expect this analysis to encompass proposed apartment complexes that are still on the drawing board. In addition, we have been asked to provide a breakout of the demand based on various income level restrictions. Applying the same methodology for all of the various lower-income segments, the following table illustrates the projected demand for rental housing for the various income levels: Cook, Moore & Associates 2 Executive Summary Projected Low-Income Rental Housing Demand in Subject's Trade Area 2013 to 2016 Source 2013 2014 2015 2016 Total Demand for New Units - 60% AMI 41 47 53 59 Total Demand for New Units - 40% AMI 28 32 36 39 Total Demand for New Units - 30% AMI 20 23 26 29 Total Demand for New Units - 20% AMI 12 13 15 17 Total Demand for New Units - 80%/Market 40 45 51 57 Note that there is overlap in the above categories. The 60% projections include all units below 60% AMI, which would also include the units for the 20%, 30% and 40% levels (i.e., these are not cumulative totals, but inclusive totals). In addition, tenants that qualify in the 20% and 30% AMI levels would likely need some type of governmental assistance (in the form of Section 8 vouchers) in order to afford rents at the projected levels. In addition, there is overlap between the 80%/Market demand and the lower-income housing demand, as the income levels overlap. Trends in Employment According to the current Labor Force