2015-2020 Le Mars Housing Needs Assessment

2015-

2020

SIMPCO

1122 Pierce Street Sioux City, Iowa

Kirk Lehmann Community and Economic Development Planner

2015-2020 LE MARS HOUSING NEEDS ASSESSMENT The Siouxland Interstate Metropolitan Planning Council (SIMPCO) was engaged by the City of Le Mars to provide a comprehensive assessment of housing needs for the City of Le Mars, Iowa. The purpose of the assessment is to explore data related to the current housing market, to project the demand for different kinds of housing in Le Mars over the next five years, and to provide an action plan to accommodate future development.

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Acknowledgements and Contributors

Steering Committee Neal Adler, Executive Director, Le Mars Chamber of Commerce and Business Initiative Vaughn Bagstad, Owner, Vaughn Bagstad Construction Kevin Eekhoff, Bank President, Northwest Bank Pam Floy, Mortgage Loan Originator, Northwest Bank Jim Gergeni, Realtor, Broker, and Owner, Property Pros Realty Donley Hoogeveen, Lender, Kingsley State Bank Paul Jacobson, President, American Bank Dick Kirchoff, Mayor, City of Le Mars John Rexwinkel, City Council, City of Le Mars Wayne Schlotfeldt, Partner, Schlotfeldt Engineering, Inc. Peggy Sitzmann, Retail Mortgages Lending Officer, American Bank Joe Strub, President, PrimeBank Jason Vacura, Code Enforcement Officer and Assistant City Administrator, City of Le Mars

Le Mars City Council Dick Kirchoff, Mayor Clark Goodchild, Ward 1 Delana Ihrke, Ward 2 Ken Nelson, Ward 3 Rex E. Knapp, At Large John Rexwinkel, At Large

Other Acknowledgements City of Le Mars and Le Mars Public Library staff for help with surveying and data collection Linda Mayrose, Property Pros Realty, for assistance with Multiple Listing Service data

And a special thanks to everyone else who donated their time, especially those who participated in surveys, interviews, discussions, and meetings

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Contents Acknowledgements and Contributors ...... i

Contents ...... ii

Executive Summary……….…………………………………………………………………………..vi

Introduction ...... 1

Study Area ...... 2 Outline ...... 2

Chapter 1: Demographic Trends ...... 4

Population and Household Growth Trends ...... 4 Age Distribution ...... 5 School Enrollment Trends ...... 6 Household Income ...... 7 Housing Affordability ...... 9 Household Tenure ...... 10 Senior Population Trends ...... 11 Implications ...... 12

Chapter 2: Economic Trends ...... 14

Employment ...... 14 Labor Force ...... 16 Wages ...... 17 Commuting Patterns ...... 18 Implications ...... 19

Chapter 3: Housing Characteristics ...... 20

Units in Structure ...... 20 Age of Housing Stock ...... 21 Vacant Housing ...... 22 Housing Conditions ...... 23 Building and Demolition Permits ...... 25 Subdivisions ...... 26

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Current Housing Policy ...... 27

Chapter 4: For-Sale Market Analysis ...... 28

For-Sale Overview ...... 28 Realtors and Lenders ...... 30 Owner Survey ...... 32 Summary ...... 37

Chapter 5: Rental Market Analysis ...... 38

Rental Overview ...... 38 General Occupancy Development ...... 41 Senior Occupancy Development ...... 43 Renter Survey ...... 46 Summary ...... 51

Chapter 6: Conclusions and Recommendations ...... 52

Demographic Profile and Housing Trends ...... 52 New Housing Demand ...... 53 Strategies ...... 56 Actions ...... 58

APPENDIX I: Housing Financial Assistance Programs ...... 61

APPENDIX II: Resident/Non-Resident Survey and Results ...... 68

APPENDIX III: Resolution of Adoption ...... 80

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Tables Table 1: Population Growth Trends and Projections for Le Mars Iowa, 1990, 2000, and 2010 Census ...... 4 Table 2: Household Growth Trends and Projections for Le Mars Iowa, 1990, 2000, and 2010 Censuses ...... 4 Table 3: Average Household Size, Le Mars Iowa, 1990, 2000, and 2010 Census ...... 5 Table 4: Age Distribution, Le Mars Iowa, 1990, 2000, and 2010 Censuses ...... 6 Table 5: School Enrollment for the Le Mars Community School District, 2009 to 2015 ...... 7 Table 6: Household Income by Age of Householder / Median Income, Le Mars Iowa, 2013 5- Year American Community Survey ...... 8 Table 7: Household Income Limits by Persons in Household, Plymouth County ...... 10 Table 8: Household Tenure by Age of Householder, Le Mars Iowa, 2013 5-year ACS ...... 11 Table 9: Disability by Age Cohort, Le Mars Iowa, 2013 5-Year ACS ...... 11 Table 10: Total Employment by Industry in Plymouth County, 2013 BEA and 2003 BEA ...... 15 Table 11: Resident Labor Force and Employment in Plymouth County, 2000-2014 BLS ...... 16 Table 12: Change in Population, Households, and Housing Units, Le Mars Iowa, 1990, 2000, and 2010 Censuses ...... 20 Table 13: Tenure by Units in Structure, Le Mars Iowa, 2013 5-Year American Community Survey ...... 20 Table 14: Age of Housing Stock, Le Mars Iowa, 2013 5-Year American Community Survey ...... 21 Table 15: Condition Allocations for Le Mars’ Neighborhoods ...... 24 Table 16: Building and Demolition Permits 2005-2014, City of Le Mars ...... 25 Table 17: Subdivisions and Lot Creation 2005-2015, City of Le Mars ...... 26 Table 18: Comparison of Units in Structure for All Housing Units and Owner-Occupied Units, 2013 5-year ACS ...... 28 Table 19: Comparison of Age of Structure for All Housing Units and Owner-Occupied Units, 2013 5-year ACS ...... 28 Table 20: Specified Housing Problems, CHAS 2012 5-year ...... 30 Table 21: Multiple Listing Service Data, 2005 through 2015 ...... 30 Table 22: Lender Reponses for Loans Offered, Down Payments, and Interest Rates (Sept. 2015)31 Table 23: Owner Satisfaction and Timeframe for Moving ...... 34 Table 24: Potential Owners: Desired number of bedrooms ...... 36 Table 25: Comparison of Units in Structure for All Housing Units and Renter-Occupied Units, 2013 5-year ACS ...... 38 Table 26: Comparison of Age of Structure for All Housing Units and Renter-Occupied Units, 2013 5-year ACS ...... 39 Table 27: Specified Housing Problems, CHAS 2012 5-year ...... 40

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Table 28: Market Rate Development Survey Information by Bedroom ...... 41 Table 29: Subsidized Development Survey Information by Bedroom ...... 42 Table 30: Comparison of Rents: 2005 – 2015 ...... 43 Table 31: Market Rate Senior Development Survey Information by Bedroom ...... 44 Table 32: Subsidized Senior Development Survey Information by Bedroom ...... 45 Table 33: Renter Satisfaction and Timeframe for Moving ...... 48 Table 34: Potential Renters: Desired number of bedrooms ...... 50 Table 35: Life Cycle Housing Preferences ...... 52 Table 36: Housing Demand Summary, Le Mars Iowa, 2015 to 2020 ...... 54 Table 37: Projected Housing Demand for Ownership Properties ...... 55 Table 38: Projected Housing Demand for Rental Properties ...... 55

Figures Figure 1: Regional Map ...... 2 Figure 2: Proportion of Household Tenure by Age of Householder, Le Mars Iowa, 2013 5-year ACS ...... 10 Figure 3: Change in the Proportion of Population by Age Group, Le Mars Iowa, 1990, 2000, 2010 Census ...... 12 Figure 4: Changes in Employment and Population for Plymouth County Relative to 1990, BEA ...... 14 Figure 5: Resident Labor Force and Employment in Plymouth County, 2000-2014 BLS ...... 17 Figure 6: Earnings, Wages and Salaries, and Non-Farm Proprietors’ Income (adjusted for inflation), 1990-2013 BEA ...... 18 Figure 7: Commuting Patterns for Le Mars Residents and Workers, 2003 and 2013 On the Map19 Figure 8: Vacant units by type of vacancy, Le Mars Iowa, 2013 5-Year American Community Survey ...... 23 Figure 9: Neighborhoods Reference Map ...... 24 Figure 10: Home Value Distribution in Le Mars, 2013 5-Year ACS ...... 29 Figure 11: Current Home Value: Le Mars Residents and Non-Residents Respondents ...... 32 Figure 12: Reasons Non-Residents chose not to live in Le Mars ...... 33 Figure 13: House Value that Potential Le Mars’ Owners Could Afford ...... 35 Figure 14: Potential Owner Interest in Different Types of Housing ...... 36 Figure 15: Gross Rent in Le Mars, 2013 5-Year ACS ...... 39 Figure 16: Current Rent: Le Mars Residents and Non-Residents ...... 47 Figure 17: Reasons Non-Residents chose not live in Le Mars ...... 48 Figure 18: Potential Renters: What can you afford to pay? ...... 49 Figure 19: Potential Renters: Would you be interested in any of the following types of housing? ...... 50 SIMPCO | Contents v

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Executive Summary The Siouxland Interstate Metropolitan Planning Council (SIMPCO) was engaged by the City of Le Mars to provide a comprehensive assessment of housing needs for the City of Le Mars, Iowa.

The composition of Le Mars’ existing and future housing stock is critical to the future growth and development of the city. Maintaining satisfactory neighborhoods is central to preserving the quality of life Le Mars’ residents enjoy while accommodating residential growth. This report examines the dynamics of Le Mars’ housing market and reviews neighborhood conditions. It also analyzes current trends and recommends policies and actions to assure the vitality of Le Mar’s housing market and existing neighborhoods.

The scope of this study includes:

 An analysis of the demographic and economic data in Le Mars  An assessment of current housing market conditions in Le Mars  An analysis of the for-sale housing market in Le Mars  An analysis of the rental housing market in Le Mars  An estimate of the demand for housing in Le Mars through 2020  Recommendations for strategies and actions that the City of Le Mars can take to ensure the housing market meet the needs of Le Mars’ residents

According to the 2010 U.S. Census, Le Mars had a population of 9,826, an increase of 589 persons (6.4%) from 2000. The 2010 Census also reported that Le Mars had 3,950 households, an increased 310 households (8.5%) from 2000. These rates were lower than the phenomenal growth seen from 1990 to 2000.

Growth has been slow from 2010 through 2014, but SIMPCO projects that Le Mars will continue to grow from 2015 through 2020. It is projected that Le Mars will add 729 persons (7.4%) and 433 households (11.0%) during the current decade.

Shifting demographics will continue to affect Le Mars’ housing needs. Most age cohorts have been relatively stable since the passing of the Baby Boomers, which means modest changes in demand for housing that appeals to these groups. However, as Baby Boomers continue to age, the 55+ age cohorts will see high growth and increased demand for housing that appeals to these groups. This includes demand for homes appealing to empty nesters and independent seniors. There especially appears to be larger demand for owner-occupied senior housing.

As housing filters through owners, some affordable homeownership opportunities will appear. However, Le Mars’ housing is more expensive for similar products in surrounding areas due to the high demand for living in Le Mars. This fact prices many potential residents on the lower

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2015-2020 LE MARS HOUSING NEEDS ASSESSMENT 2015-2020 end out of the housing market out of Le Mars, a problem exacerbated by limited development during the Recession and through 2015. This indicates a need for more moderate and affordable housing in addition to housing appealing to older age groups.

Based on our analyses of demographic, economic, and market factors, we have calculated future demand for housing in Le Mars. Below is a summary table of our projected demand for Le Mars housing through 2020. We follow this table with two other summary tables that further break down our recommendations according to target market. A detailed discussion of the findings and conclusions can be found in the body of the report.

Housing Demand Summary Le Mars, Iowa 2015 to 2020

Household Growth 433

(times) Percent rental demand x 26% (equals) Rental demand = 113

(times) Percent owner demand x 74% (equals) Owner demand = 320

Rental Demand 113 (plus) Rental Replacement + 2 (less) Rental Construction (through 2014) - 2 (equals) Total rental demand = 113

Owner Demand 320 (plus) Owner Replacement + 10 (less) Owner Construction (through 2014) - 83 (equals) Total Owner demand = 247

Grand Total = 360

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Recommended For-Sale Housing Development Le Mars, Iowa 2015 to 2020

Price Range No. of Units Pct. of Total Single Family First-Time Homebuyers $125,000 - $150,000 52 30% Move-Up Buyers $150,000 - $200,000 86 50% High End and Executive $200,000+ 35 20% TOTAL 173 100%

Multifamily (townhomes/condominiums) First-Time Homebuyers $100,000 - $150,000 26 35% Empty-Nesters and Independent Seniors $150,000 - $175,000 48 65% TOTAL 74 100%

Total For-Sale Housing 247 100%

Recommended General-Occupancy Rental Development Le Mars, Iowa 2015 to 2020

Rental Range No. of Units Pct. of Total Multifamily Rentals Affordable Apartments $400 - $600 40 35% Moderate-Range Apartments/Townhomes $600 - $800 45 40% High-End Apartments/Townhomes $800 - $1,000 28 25% TOTAL 113 100%

Total Rental Housing 113 100%

The housing demand calculations and recommendations in this study are realistic options for the City of Le Mars and are based on the following strategies:

Encourage the development of additional rental housing stock. No large scale rental projects have been completed recently and the rental market is currently tight. Judging by the data, promoting rental projects is important, especially as one multifamily property can provide many units which will help address the backlog of rental units more quickly. While the market could support higher-end rental, an effort should be made to promote units within the $600 to $700 range that is most desired by renters.

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This should allow Le Mars’ new units to be more competitive with surrounding communities.

Develop additional owner-occupied housing stock. Most of the demand for housing in Le Mars comes at low to moderate price points. However, it can be difficult to construct new homes for less than $175,000 unless they are in duplexes or townhomes. Therefore it is important to encourage the development of additional affordable ownership stock.

Encourage the transition of move-up buyers, empty nesters, and independent seniors to alternative or new housing stock. One strategy to increase the availability of affordable ownership housing should be to provide current owners additional housing opportunities. By transitioning current owners into alternative products, units can filter through the housing market and new affordable housing options open up in lower price ranges that address needs which cannot be met by new construction.

Protect the existing housing stock. The housing stock in Le Mars is relatively old. To ensure that neighborhoods stay desirable and homes do not deteriorate, the City can enforce maintenance codes, and provide funds for rehabilitation. These two strategies are especially important for rental properties or for areas with many rental units.

Ease the entry of new homeowners into the housing market. Helping first time homebuyers and workers new to the area can be an important way to ensure that housing is meeting the needs of those who wish to move to Le Mars. This includes providing information to those within the housing market currently and making information easy to find for outsiders to the region. Without it, potential residents may live in other areas with more easily accessible housing opportunities.

Begin collecting information to ensure that programs are succeeding and meeting the needs of the community. Information is important to craft housing programs that actually meet the needs of the community and region. This includes monitoring some information that is already collected, such as building permits or subdivision permits, but it also includes other information that may be useful to calibrating programs. As such, it is important for the City be watchful of regional trends within the housing market in addition to local trends.

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proximity to job opportunities, retail, and public services. One public service specifically mentioned of deserving support was the library, with a few respondents even mentioning a desire for a larger facility. All of these considerations are important to providing for the needs of Le Mars’ residents within the community.

Form and maintain partnerships with stakeholders in the City of Le Mars. Forming partnerships is an important way to ensure that the needs of new workers are being met when they otherwise would not be. The Le Mars Business Initiative Corporation has been an active partner, and they can be useful in ensuring that the price points of new homes matches the wages of potential earners. Neighborhood groups can also be strong supporters of property maintenance. Partnering with employers on housing programs is also possible.

The following recommended actions are organized by priority as brief summaries of actions to be taken by the City of Le Mars:

HIGH PRIORITY

Formalize developer agreements to promote affordable rentals and ownership properties: By formalizing developer agreements as housing policy, the current uncertainty for developers is eliminated. Ad hoc negotiations would end and subsidies could be used to promote rental and ownership options that are affordable for typical wage earners. Through formalization, these programs can also be advertised to outside developers which will help incentivize the construction of additional units.

Attract outside developers: Currently, local developers are producing most of the units, but they seem to be at maximum capacity producing single family homes and duplexes. By attracting outside developers familiar with multifamily construction and property management, new rental units can be brought online faster and more efficiently. Alternatively, attracting outside developers willing to build low-cost speculative housing puts additional homes on the market that many potential owners do not have the time or inclination to have constructed on contract. Targeting nonprofit developers specifically may also help ensure that affordable units are produced.

Encourage affordable housing of high quality: Prefabricated or modular homes can be built of a high quality and built to be indistinguishable from other homes at low price points. By allowing well-constructed prefabricated homes on foundations in compatible neighborhoods, new affordable single family homes can be added quickly to the City.

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Use grant fund or creative financing to meet the need for affordable rentals: To help fill the demand for affordable rentals, developers may need to make use of grant funds. These include programs offered by USDA, the Iowa Finance Authority, the Iowa Economic Development Authority, or other state and governmental agencies. Developers should also be encouraged to cross-subsidize affordable rentals by having a mix of moderately-priced units with lower-priced units.

MEDIUM PRIORITY

Permit rental properties: It is difficult to assess the rental market without any public records to keep track of the characteristics of rental properties. Instituting “rental permits” to monitor rental homes can help the City maintain more current information. The permit does not need to cost anything, but it would still allow the City to better evaluate the demand for rentals in real time which is especially important if the City is promoting rental development. Permits are also beneficial to landlords because it allows the City to connect potential tenants with landlords (a process that could be done online) and to contact owners in case of emergency. Permits should only contain necessary data so as to minimize the burden to landlords.

Make use of underutilized space for rentals: Many vacant homes in Le Mars are currently not for rent or sale. This indicates that they are either being used for other purposes such as storage (which has happened to many former second story apartments downtown), are uninhabitable, are undesirable enough to not be on market, or are being held for some other purpose. Renovating these areas and using them as rentals again will open up additional affordable units without the need for new construction.

Leverage City-owned land to construct new affordable housing: Waiving the cost of City-owned land can allow developers to produce housing that is more affordable for potential homebuyers. In order for this program to work, strict criteria must be laid out, including ensuring that housing constructed on the land must be at affordable price points. Strict criteria also means that merit will determine what projects should have fees waived.

Enforce housing codes while funding rehabilitation: Protecting the housing stock is important to ensure that the quality of housing and neighborhoods in Le Mars remains high. The City can be more proactive in enforcing its maintenance codes. This can help ensure that properties do not fall into a state of disrepair. However, it should be supplemented by providing funding for rehabilitation, either with local funds or with federal programs. This creates a carrot-and-stick approach to maintaining high quality

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neighborhoods that can be particularly effective. Encouraging neighborhood groups to form and remain active can also contribute to higher levels of property maintenance by producing grassroots buy-in from current residents. Neighborhood pride may show itself through clean up days or by simply encouraging high standards of maintenance.

Promote high quality and sustainable neighborhoods: Le Mars is fortunate to have high quality neighborhoods. The City should encourage this trend to continue, especially with an eye to the sustainability of future development. This includes tying new development to existing City infrastructure instead of allowing leap-frog development; utilizing existing infrastructure is more fiscally responsible for tax payers. In addition, providing improvements such as open spaces, sidewalks, and other amenities including schools, or community centers is also important to creating high quality neighborhoods. City-wide amenities, such as the public library, are also important quality-of-life considerations.

LOW PRIORITY

Investigate senior condominiums as an alternative senior product: While some filtration of the housing stock will occur naturally as the Baby Boomers age, the process could be sped up by constructing senior condominiums. This would supplement current rental senior options at the hospital and nursing homes and cater to the desire of homeowners to continue owning instead of transitioning back to rentals. It would also offer an opportunity for joint maintenance of property and accessible units.

Keep track of regional housing data: Le Mars competes with the surrounding region to provide housing. This makes it important for Le Mars to remain aware of regional housing trends so that any housing programs are remaining responsive to regional need. For example, there are currently several plans for high-end housing in the Sioux City Metro, which may reduce the need for additional high-end in Le Mars. Regional data monitoring can be accomplished through partnerships with existing regional entities such as SIMPCO.

Make the housing market more accessible to outsiders: As a smaller housing market, Le Mars can be at a disadvantage when bringing new workers into the region. Helping newcomers with online listings or through other ways to make listings more widely available may help integrate outsiders into Le Mars’ housing market more easily. This can also help prevent outsiders from defaulting to Sioux City’s housing market. Marketing Le Mars may also be a way to attract additional residents.

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Support homeownership education: The City should not be in charge of educating potential homeowners, but it should support efforts to do so. This may include partnerships with lenders or the school district to inform students or potential owners how to save for down payment and manage household finances.

Allow the market to construct higher-end housing: The continued development of higher end housing allows move-up homebuyers to upgrade their housing situation and open up affordable housing. However, this is one of the few market segments that has seen new construction through current development. Lower end move-up housing may still require additional subsidy to remain affordable for move-up wage earners.

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Introduction

The Siouxland Interstate Metropolitan Planning Council (SIMPCO) was engaged by the City of Le Mars to provide a comprehensive assessment of housing needs for the City of Le Mars, Iowa. The purpose of the assessment is to explore data related to the current housing market and to project the demand for different kinds of housing in Le Mars over the next several years. It also provides an action plan to accommodate future development.

The Le Mars Housing Needs Assessment contains primary and secondary research. Primary research includes interviews with property managers and owners, major employers, City staff, and other community leaders involved in the housing market of Le Mars. It also includes several surveys with residents, workers, realtors, and lenders and a windshield survey of housing conditions within Le Mars. All of the market data on existing and pending development was gathered by SIMPCO staff and is accurate to the best of our knowledge. Secondary data, such as that from the U.S. Census Bureau or the Multiple Listing Service is credited to the source and is used as another basis of analysis.

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Study Area The City of Le Mars, Iowa is located in northwest Iowa in Plymouth County at the junction of U.S. Highway 75 and Iowa Highway 3. The City is the county seat and as such, is the largest city in the county with a population just under 10,000 residents. Other major cities near it include Sioux City, Iowa approximately 26 miles to the southwest, Sioux Falls, South Dakota found 86 miles northwest, Omaha, Nebraska located 127 miles to the south, and Des Moines, Iowa, located 215 miles to the southeast. A map of Le Mars and the surrounding region can be found in Figure 1.

Figure 1: Regional Map

Outline This Assessment is comprised of six chapters, each of which looks at topics of interest to the Le Mars housing market. The first two chapters investigate data that has a profound effect on the housing market. The following three chapters explore and analyze the current housing market

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2015-2020 LE MARS HOUSING NEEDS ASSESSMENT 2015-2020 in Le Mars. The final chapter synthesizes the first five chapters, estimates future housing demand, and provides policy recommendations. In order, the chapters are as follows:

1. Demographic Trends: Presents demographic trends and summarizes their impact on the housing market

2. Employment Trends: Presents economic trends and summarizes their impact on the housing market

3. Housing Characteristics: Explores the current characteristics of Le Mars’ housing market

4. For-Sale Housing Market Analysis: Provides an analysis of Le Mars’ owner-occupied housing market, including the supply and demand for homeownership

5. Rental Housing Market Analysis: Provides an analysis of Le Mars’ renter-occupied housing market, including the supply and demand for rental housing

6. Conclusions and Recommendations: Summarizes and synthesizes the five previous chapters, projects future demand, and concludes with policy recommendations

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Chapter 1: Demographic Trends A number of demographic factors affect the current and future demand for housing in Le Mars, Iowa. This section examines those factors, including data on population and household growth trends and projections, age distributions, household incomes, household tenure, and school enrollment trends. A review of these characteristics provides insight into the demand for housing in Le Mars, both current and future.

Population and Household Growth Trends Population and households form the basic units for determining demand for additional housing units. Table 1 and Table 2 present population and household growth trends and projections for Le Mars using data from the 1990, 2000, and 2010 Censuses as a base. Projections for year 2020 were determined using the average of linear and geometric population change over this time period. Data from Iowa and Plymouth County are used to provide relevant comparisons for growth.

Table 1: Population Growth Trends and Projections for Le Mars Iowa, 1990, 2000, and 2010 Census

US Census Proj. 1990-2000 2000-2010 Proj. 2010-20 1990 2000 2010 2020 No. Pct. No. Pct. No. Pct. Le Mars 8,454 9,237 9,826 10,555 783 9.3% 589 6.4% 729 7.4% Plymouth 23,388 24,649 24,986 25,787 1,261 5.4% 337 1.4% 824 3.3% Iowa 2.78M 2.93M 3.05M 3.19M 150K 5.4% 120K 4.1% 140K 4.6%

One noticeable key trend is that Le Mars has enjoyed relatively high population growth over the past 25 years. In 2010, Le Mars contained 9,826 people and 3,950 households. Between 2000 and 2010, the population increased by +589 people (+6.4%) and +310 households (+8.5%). These rates of population and household growth rates have been higher than those of Plymouth County and Iowa over the same time period. During the 2000’s, the number of net new residents to Le Mars even exceeded the number of new residents in the County. This suggests that Le Mars attracted residents from other areas of the County during that decade. Factors leading to Le Mars’ high growth rate likely include its proximity to Sioux City, its abundant employment opportunities, and its steady economic growth.

Table 2: Household Growth Trends and Projections for Le Mars Iowa, 1990, 2000, and 2010 Censuses

US Census Proj. 1990-2000 2000-2010 Proj. 2010-20 1990 2000 2010 2020 No. Pct. No. Pct. No. Pct. Le Mars 3,158 3,640 3,950 4,383 482 15.3% 310 8.5% 433 11.0% Plymouth 8,417 9,372 9,804 10,542 955 11.3% 432 4.6% 738 7.5% Iowa 1.06M 1.15M 1.22M 1.30M 85K 8.0% 67K 5.8% 84K 6.9%

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Le Mars also has higher rates of household formation compared to population growth. This trend has been occurring for many years, resulting in a declining average household size in Le Mars as seen in Table 3. This trend mirrors larger areas including Plymouth County and the State of Iowa, a process that is projected to continue through 2020. It is likely due to an aging population and the formation of non-traditional households. This results in smaller households including but not limited to persons living alone, senior households, non-familial households, and single-parent families.

Table 3: Average Household Size, Le Mars Iowa, 1990, 2000, and 2010 Census

US Census Proj. 1990 2000 2010 2020 Le Mars 2.68 2.54 2.49 2.41 Plymouth 2.78 2.63 2.55 2.45 Iowa 2.62 2.55 2.50 2.45

Looking forward, it is projected that population growth in Le Mars will continue with the addition of +729 residents (+7.4%) in +433 new households (+11.0%) from 2010 to 2020. This growth will be largely driven as a result of demand for employees by local employers and from employees who work outside of Le Mars, such as in Sioux City, but desire to reside in a small- town setting with abundant amenities. Because Le Mars’ is projected to grow at a faster pace than Plymouth County, it is expected to comprise a larger proportion of the County’s population, reaching 40.9 percent in 2020 compared to 39.3 percent in 2010. This follows trends seen from 1990 to 2000. However, it is important to note that because projections are an extrapolation of historical data, projected household growth is dependent on similar hiring patterns and suitable housing options in the City.

Age Distribution Le Mars’ population growth has not occurred equally over all age groups. Table 4 below examines the age distribution of Le Mars’ population from 1990 through 2010. A community’s age distribution is important because it helps assess the kinds of houses needed in a community. For example, entry-level households tend to be younger and often do not have families yet. Consequently, they are more attracted to higher-density living situations (for more information on how age affects housing choices, see Table 35).

The most noticeable trend is the aging of the population, a common phenomenon in the U.S. and the Midwest in particular. The largest age cohort in Le Mars is the Baby Boomers, those born from 1945 to 1964, a period of high birthrates which occurred in the prosperous years following World War II. In 2010, Baby Boomers were ages 45 to 64, explaining the large numeric

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2015-2020 2015-2020 LE MARS HOUSING NEEDS ASSESSMENT gains made in those two age cohorts during the 2000’s. The aging of the Baby Boomers helps explain the increasing median age from 36.9 in 2000 to 39.2 in 2010. As Baby Boomers continue to age, this will affect the demand for alternative kinds of housing over the next few decades, especially as Boomers reach the 65 to 74 and 75+ age cohorts, age groups which tend to have more health problems. This topic is discussed later in this chapter.

Another trend is that Le Mars tends to have a higher proportion of children compared to Iowa, but a lower number of young adults aged 18 to 24. These proportions have remained relatively stable since the passing of the Baby Boomers. This indicates that the City has been relatively successful at attracting households with children, but that as children finish high school, they leave for other places, including communities with 4-year colleges. Some but not all come back to the community. Others enter the workforce or attain additional education within driving distance of Le Mars.

Table 4: Age Distribution, Le Mars Iowa, 1990, 2000, and 2010 Censuses

US Census 1990 to 2000 2000 to 2010 1990 2000 2010 No. Pct. No. Pct. Under 5 610 677 686 67 11.0% 9 1.3% 5 to 9 700 697 671 (3) -0.4% (26) -3.7% 10 to 14 620 676 726 56 9.0% 50 7.4% 15 to 17 317 465 463 148 46.7% (2) -0.4% 18 to 24 935 769 714 (166) -17.8% (55) -7.2% 25 to 34 1,277 1,117 1,183 (160) -12.5% 66 5.9% 35 to 44 1,024 1,433 1,129 409 39.9% (304) -21.2% 45 to 54 765 1,127 1,483 362 47.3% 356 31.6% 55 to 64 704 747 1,118 43 6.1% 371 49.7% 65 to 74 709 695 726 (14) -2.0% 31 4.5% 75 to 84 546 562 610 16 2.9% 48 8.5% Over 85 247 272 317 25 10.1% 45 16.5% TOTAL 8,454 9,237 9,826 783 9.3% 589 6.4%

School Enrollment Trends School enrollment trends can help identify potential areas for future housing demand because they can help predict the number of young household that will be formed in the next five to ten years as well as the number of new jobs related to education. In smaller communities, this can have an especially important impact because public education is often one of the largest employment sectors. Table 5 presents the data on school enrollment for the public and private schools located in Le Mars.

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Trends indicate a decrease in public school students from 2009 to 2012, followed by an increase through the present year. However, the number of students in Gehlen Catholic Schools has generally increased from 2009 to 2015, excepting two years. Part of this increase came when Spalding Catholic schools merged with Gehlen in the 2013 to 2014 school year. On the whole, public schools have decreased by 1 percent from their 2009 enrollment levels while Gehlen Catholic schools have increased by 11 percent.

Overall, the total enrollment for Le Mars’ schools was 2,595 students in the 2014 to 2015 school year, up a total of 35 students from the 2009 to 2010 school year. These enrollment numbers are down a few hundred students since the 1999 to 2000 school year when the district had 2,889 students.1 This large drop is surprising given that Le Mars has enjoyed steady population growth since 2000. However, the 1990’s was a time when a large number of families moved to the city. As a result, this drop in enrollment can likely be attributed to these children aging out of the school district at the same time. Looking forward, there is not any reason to suspect current trends will substantially change from current levels.

Table 5: School Enrollment for the Le Mars Community School District, 2009 to 20152

School Year Change 2009 - 15 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 No. Pct. Le Mars Community 2,135 2,082 2,066 2070 2086 2123 -12 -0.6% Schools Gehlen Catholic 425 432 448 428 491 472 47 11.1% Schools TOTAL 2,560 2,514 2,514 2,498 2,577 2,595 35 1.4% Note: Data includes non-residents of Le Mars

Household Income Household income is another important factor for determining what choices households have in the housing market. Table 6 shows the household income for Le Mars, Iowa, including the distribution by age of householder. The following are key points regarding household incomes in Le Mars and their relation to age.

In general, Le Mars’ median income is similar to that of Iowa and the U.S. but lower than that of Plymouth County. In 2013, the median income of Le Mars was nearly $52,350, compared to

1 Source: 2005-2010 Housing Market Analysis and Plan For Le Mars, Iowa 2 Iowa Department of Education, Bureau of Information and Analysis, Address File, and SRI Fall Merged 1415 file SIMPCO | Chapter 1: Demographic Trends 7

2015-2020 2015-2020 LE MARS HOUSING NEEDS ASSESSMENT approximately $58,890 in Plymouth County, $51,840 in Iowa, and $53,050 nationally. Le Mars’ median increased from about $38,890 in 2000 and $31,510 in 1990. This amounts to an increase of 66.1 percent since 1990. However, median incomes are actually slightly lower than they were in 1990 and 2000 when adjusted for inflation. Median incomes may continue to trend downward as baby boomers age out of the workforce.

Table 6: Household Income by Age of Householder / Median Income, Le Mars Iowa, 2013 5-Year American Community Survey

Total Under 25 25 to 44 45 to 64 Over 65 Under $15K 335 8.2% 70 31.8% 41 3.1% 65 4.4% 159 14.9% $15K - $29K 653 16.0% 31 14.1% 175 13.3% 199 13.4% 248 23.3% $30K - $44K 779 19.0% 30 13.6% 242 18.3% 207 13.9% 300 28.2% $45K - $59K 504 12.3% 12 5.5% 163 12.3% 231 15.5% 98 9.2% $60K - $74K 522 12.8% 27 12.3% 192 14.5% 179 12.0% 124 11.6% $75K - $99K 625 15.3% - 0.0% 200 15.2% 327 22.0% 98 9.2% $100K - $124K 281 6.9% 19 8.6% 165 12.5% 65 4.4% 32 3.0% Over $125K 395 9.6% 31 14.1% 142 10.8% 216 14.5% 6 0.6% TOTAL 4,094 220 1,320 1,489 1,065

Median Income Le Mars $52,348 $36,500 $64,531 $61,207 $37,741 Iowa $51,843 $25,753 $59,046 $64,063 $35,113 US $53,046 $25,554 $57,885 $64,510 $37,000

When looking at household income by age of household, incomes in Le Mars rise with the age of the household until they peak for the householder cohort of 25 to 44 years before they begin declining again. This is unusual because at the national and state levels, household incomes peak at the age cohort of 45 to 64 before declining. However, it should be noted that these trends are not statistically significant in Le Mars, so this difference could be attributed to insufficient data.

Compared to national and state median incomes, Le Mars has far larger incomes for younger workers. In Le Mars, the median income of householders younger than 25 years is $36,500, nearly $10,000 higher compared to state or national levels. This is likely due to the fact that most workers under the age of 25 in Le Mars are probably working full time as there are no four year post-secondary education establishments in Le Mars. Similarly, households aged 25 to 44 also have higher incomes than their state and national counterparts, though to a lesser extent.

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Meanwhile householders, aged 44 to 64 in Le Mars have relatively lower incomes and senior’s median incomes are similar to the national average.

Housing Affordability It is important to note that as household incomes rise, households typically look to move up to larger or more upscale housing. However, many households, especially those that own their homes, often choose to remain in their current home despite being able to afford more expensive housing. This creates a situation in the marketplace where households with more modest incomes may not be able to find affordable housing. The development of alternative housing products such as senior housing, maintenance-free townhomes, or move-up product frees up some of the more affordable single family homes in a market for younger households. However, these products alone may not be enough to alleviate the need for affordable housing, leading some communities to promote the development of additional entry-level housing.

The industry standard for most households is to not allocate more than 30 percent of household income for housing. If a household spends more than 30 percent, the housing is considered unaffordable and the household is labeled “cost-burdened.” It should be noted that seniors are often able and willing to pay a higher proportion of their income on housing compared to young and middle-aged households. Some seniors are even willing to spend up to 80 percent of their income if housing provides other services such as maintenance or supportive services.3 Conversely, younger households have additional expenses (such as large purchases for furniture or cars), must undertake long-term saving for ownership and retirement, and often have other expenses related to raising children.

Households earning Le Mars’ median income would be able to afford monthly housing costs of approximately $1,310. Monthly housing costs include mortgages, real estate taxes, insurance, utilities, and condominium fees for owner-occupied households and contract rent, insurance, and utilities for renter-occupied households. Given the assumptions in the footnote, a household earning the median income could afford a house valued up to $231,000.4 It should be noted that this does not factor in equity in an existing home or the amount of debt a household has. Following the recession, many banks have tightened up lending practices, which has restricted the ability of some households to obtain mortgages.

To qualify for most subsidized housing in Le Mars, households must have an annual income at or below a certain threshold of the Plymouth County’s median income depending on the size of the household. These thresholds include 80% (low-income), 50% (very low income), or 30%

3 SIMPCO, 2005-2010 Housing Market Analysis and Plan for Le Mars, Iowa, 2005. 4 Assumes the following: 20% down payment and 3.95%, 30-year fixed loan; 1.39% in property taxes; $68 in home insurance per month; and $100 in utilities per month. Used realtor.com’s mortgage calculator SIMPCO | Chapter 1: Demographic Trends 9

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(extremely low income) of the median household income. You can see these thresholds for Plymouth County, Fiscal Year 2015 in Table 7. At these incomes, many seniors and younger householder could qualify for subsidized housing.

Table 7: Household Income Limits by Persons in Household, Plymouth County

Persons in 1 2 3 4 5 6 7 Household Low Income $42,700 $48,800 $54,900 $60,950 $65,850 $70,750 $75,600 (80%) Very Low $26,700 $30,500 $34,300 $38,100 $41,150 $44,200 $47,250 Income (50%) Extremely Low $16,000 $18,300 $20,600 $24,250 $28,410 $32,570 $36,730 Income (30%)

Household Tenure Tenure data is useful in determining the demand for certain types of housing because housing preferences change throughout an individual’s life cycle. Figure 2 and Table 8 present data on housing tenure by age of householder for Le Mars in 2013. In the City, approximately 74 percent of households own their homes, up from 72 percent in 2000. This is lower than Plymouth County where 79 percent of households own their home, but is a higher proportion than Iowa (72 percent) and the nation (65 percent). Other factors also affect the proportion of owners and renters including mortgage interest rates, the availability of kinds of housing, and lifestyle considerations, among other factors.

Figure 2: Proportion of Household Tenure by Age of Householder, Le Mars Iowa, 2013 5-year ACS

100.0% 80.0% 87% 86% 91% 60.0% 75% 76% 40.0% 53% 57% 20.0% 35% 0.0% 13% 14% 9% 25% 24% 20.0% 43% 40.0% 47% 65% 60.0% 80.0% 15 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75 to 84 85 +

Rent Own

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Table 8: Household Tenure by Age of Householder, Le Mars Iowa, 2013 5-year ACS

15 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65 - 74 75 - 84 85 + TOTAL No. Own 77 400 496 623 568 382 402 69 3,017 No. Rent 143 350 74 104 194 36 124 52 1,077 Pct. Own 35.0% 53.3% 87.0% 85.7% 74.5% 91.4% 76.4% 57.0% 73.7% Pct. Rent 65.0% 46.7% 13.0% 14.3% 25.5% 8.6% 23.6% 43.0% 26.3% TOTAL 220 750 570 727 762 418 526 121 4,094

For the most part, ownership peaks at age 65 to 74 (91 percent ownership), after which it declines. This is a later peak than was seen in 2000, indicating that owners are remaining in their homes longer. This could partially be attributed to new programs that help seniors stay in their homes, a trend that has proven challenging to segments of the senior housing rental market (see Chapter 5: Rental Market Analysis). It should be noted that this pattern has its discrepancies. For example, there are an unexpectedly large proportion of renters in the 55 to 64 age cohort.

The decline in homeownership as households get older is to be expected. As householders age, incomes increase and savings have time to accumulate, making homeownership more attainable. However, as households age above 74 years, the tendency to own decreases again. This is likely related to the fact that 44 percent of Le Mars’ residents aged 75 and above are disabled, as demonstrated in Table 9. As mobility declines and the chance of being disabled grows, the need for supportive services, maintenance assistance, and housing accessibility changes (discussed in the following section). This often makes rental housing a more attractive option than homeownership for many senior households.

Senior Population Trends The primary market for senior housing is persons age 65 and older, although owner-occupied age-restricted homes such as condominiums and townhomes are also attractive to some households between the ages of 55 to 64. Given that owners are staying in their homes longer before moving to rental products, these targeted markets may be shifting. However, age 65 and older tends to be when a larger proportion of the population is disabled. Once people reach age 75 and older, nearly half of Le Mars’ residents are considered to be disabled.

Table 9: Disability by Age Cohort, Le Mars Iowa, 2013 5-Year ACS

<5 5-17 18-34 35-64 65-74 75+ Disability 0 26 143 307 225 375 No Disability 644 1616 1918 3394 477 478 Percent 0.0% 1.6% 6.9% 8.3% 32.1% 44.0% Disabled

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Figure 3: Change in the Proportion of Population by Age Group, Le Mars Iowa, 1990, 2000, 2010 Census

20%

15%

10%

0% Under 5 5 to 9 10 to 14 15 to 17 18 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75 to 84 Over 85 1990 2000 2010

Importantly, the Baby Boomer population wave was age 45 to 64 in 2010 for Le Mars. Its movement through the age groups over the past 25 years is clearly visible in Figure 3. As a result of these changes, the ‘55 to 64’ and ‘45 to 54’ age cohorts saw especially large gains from 2000 to 2010. As this population wave continues to age, further gains are expected in age groups looking to downsize or move into homes with less maintenance. This is especially true as residents reach ages associated with a higher chance of disability, which will likely lead to a greater need for supportive services over the next 10 to 20 years. Needless to say, the Baby Boomers will have significant impacts on the senior age cohort.

Implications Le Mars has seen population growth over the past 25 years and projections indicate continued growth within City limits, assuming that past trends continue into the future. In addition, household growth is expected to continue at a higher rate compared to population growth, leading to smaller average household sizes over time. Much of the City’s growth has been fueled by the economic development of the region, especially given the relatively high incomes for younger households. This trend could draw additional young families to the area, and as Baby Boomers age out of the workforce and into retirement, this trend could accelerate. The aging of the Boomers will also likely lead many households to transition into alternative housing arrangements over the next 20 years.

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Chapter 2: Economic Trends Economic trends are a reliable indicator of housing demand because employment growth generally fuels household growth and incomes affect housing choices. Households often prefer to live near work for convenience, but housing is often less expensive in small communities. This makes commuting from outlying communities to work in larger employment centers attractive for many households concerned with housing affordability. However, larger cities have recently had resurgence in popularity across the nation with a renewed interest in livable urban neighborhoods. To some extent this can be seen in Plymouth County.

Employment Plymouth County has experienced significant employment growth since 1990, though its population has not grown to the same extent. From 1990 to 2013, the County saw the number of jobs increase by 34 percent which equates to roughly 4,200 jobs. However, the population only increased by 7 percent or 1,600 residents over that same time period. Nearly 66 percent of jobs and 40 percent of population within the County can be found in Le Mars.

Figure 4: Changes in Employment and Population for Plymouth County Relative to 1990, BEA

140%

135%

130%

125%

120%

115%

110%

105%

100%

95%

PercentChange to Relative1990 90%

2006 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2007 2008 2009 2010 2011 2012 2013

Population Jobs

As of 2013, the majority of Plymouth County’s 16,397 jobs were tied to five employment sectors according the Bureau of Economic Analysis (Table 10), the best source for accurate economic

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2015-2020 LE MARS HOUSING NEEDS ASSESSMENT 2015-2020 data. The largest of these was manufacturing, which accounted for approximately 15.6 percent of the County’s employment. Following this was retail trade and transportation and warehousing, tied at 9.1 percent, and then farm employment and local government at 8.8 percent and 8.4 percent respectively.

Table 10: Total Employment by Industry in Plymouth County, 2013 BEA and 2003 BEA

Proportion, Change, Jobs, 2013 2013 2003-13 TOTAL 16,397 100.0% 10.0% Manufacturing 2,552 15.6% 2.8% Retail trade 1,498 9.1% -15.3% Transportation and warehousing 1,497 9.1% 69.2% Farm employment 1,443 8.8% 5.9% Local government 1,384 8.4% 7.6% Aggregation of undisclosed industries* 1,246 7.6% NA Health care and social assistance 1,145 7.0% 1.8% Other services, except public administration 966 5.9% 6.3% Accommodation and food services 954 5.8% 7.6% Construction 844 5.1% 3.8% Finance and insurance 800 4.9% 39.4% Real estate and rental and leasing 456 2.8% 31.8% Wholesale trade 423 2.6% -37.2% Administrative and waste management services 337 2.1% unavailable Educational services 231 1.4% 6.9% Arts, entertainment, and recreation 214 1.3% 36.3% Information 117 0.7% -30.4% Military 102 0.6% -13.6% Utilities 78 0.5% -15.2% Federal, civilian 73 0.4% -7.6% State government 37 0.2% -21.3% * Industries which were aggregated because jobs were undisclosed include Forestry/Fishing, Mining, Professional/Scientific/Technical Services, and Management of companies/enterprises

Most of the top five industries saw their number of jobs increase over the past decade, but only Transportation and Warehousing increased as a share of the economy. Other quickly growing industries include finance and insurance (+39 percent), arts entertainment and recreation (+36 percent) and real estate and rental and leasing (+32 percent). Meanwhile, some of the largest decreases in employment occurred in retail (-15 percent or -126 jobs), wholesale trade (-37 percent or -297 jobs), and information (-30 percent or -21 jobs) sectors.

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Labor Force Table 11 contains recent labor force trends for Plymouth County from 2000 through 2014, including the size of the labor force, the number of unemployed and employed persons, and the unemployment rate. This data comes from the Bureau of Labor Statistics Local Area Unemployment and is only available at the County level.

Plymouth County’s labor force showed consistent growth between 2000 and 2014, continuing the trend of the 1990’s. During the past 14 years, the labor force has increased eight times and decreased six times, never changing more than 3.4% in either direction. The labor force was largest in 2014 when it contained approximately 14,800 people and was at its smallest in 2000 when it was at approximately 13,500 persons. As of 2014, the labor force was 10 percent larger than it was in 2000.

Table 11: Resident Labor Force and Employment in Plymouth County, 2000-2014 BLS

Labor Unemployment Rate Unemployed Employed Force Plymouth Iowa U.S. 2000 13,476 339 13,137 2.5% 2.6% 4.2% 2001 13,876 400 13,476 2.9% 3.3% 4.0% 2002 13,854 471 13,383 3.4% 4.0% 4.7% 2003 13,774 523 13,251 3.8% 4.5% 5.8% 2004 13,618 525 13,093 3.9% 4.6% 6.0% 2005 14,087 493 13,594 3.5% 4.5% 5.5% 2006 14,410 452 13,958 3.1% 3.6% 5.1% 2007 14,433 439 13,994 3.0% 3.7% 4.6% 2008 14,333 482 13,851 3.4% 4.0% 4.6% 2009 14,499 675 13,824 4.7% 6.3% 5.8% 2010 14,568 652 13,916 4.5% 6.1% 9.6% 2011 14,250 635 13,615 4.5% 5.6% 8.9% 2012 14,153 578 13,575 4.1% 5.0% 8.1% 2013 14,485 583 13,902 4.0% 4.8% 7.4% 2014 14,827 526 14,301 3.5% 4.4% 6.2%

2000-10 1,092 313 779 2.0% 3.5% 5.4% 2010-14 259 (126) 385 -0.9% -1.7% -3.4% 2000-14 1,351 187 1,164 1.0% 1.8% 2.0%

Unemployment has remained consistently lower in Plymouth County compared to the State of Iowa. Iowa in turn has had a lower unemployment rate than that of the nation. Unemployment rates were at their lowest in 2000 at 2.6 percent. There were two peaks of unemployment in 2004

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2015-2020 LE MARS HOUSING NEEDS ASSESSMENT 2015-2020 and 2009. These periods of unemployment also led to contractions in the size of the labor market (see Figure 5). The peak in 2009 was the highest unemployment rate over the past 15 years at 4.7 percent. Unemployment has steadily dropped since that time while the labor force has increased. While low unemployment rate is good for workers, it can restrain economic expansion in a community as it becomes more difficult for employers to find qualified workers to increase production or services.

Figure 5: Resident Labor Force and Employment in Plymouth County, 2000-2014 BLS

15,000 7.0%

6.0% 14,500

5.0%

14,000 4.0%

3.0%

13,500 Labor Labor Force

2.0% % % Unemployed 13,000 1.0%

12,500 0.0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Unemployment Labor Force

Wages While household income has decreased slightly when adjusted for inflation, the wage per job has steadily increased. In 1990, the average earnings per job was approximately $34,900 in 2013 dollars. This includes salaries, wages, benefits, and profits. By 2013, this had increased to $58,200. Much of the increase in the average earnings per job has come from a large increase in average proprietors’ income per job from 2008 to 2010, during which proprietors’ income surpassed those of wage and salary workers. Meanwhile, average wages and salaries per job have grown steadily over the past two and a half decades, though at a slower pace since the mid-2000’s. Figure 6 shows these trends from 1990 to 2013.

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Figure 6: Earnings, Wages and Salaries, and Non-Farm Proprietors’ Income (adjusted for inflation), 1990-2013 BEA

$65,000 $60,000 $55,000 $50,000 $45,000 $40,000 $35,000 $30,000 $25,000

$20,000

1995 1998 1990 1991 1992 1993 1994 1996 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Average Earnings Per Job Average Wages and Salaries Average Non-Farm Proprietors' Income

According to the 2014 and 2015 Quarterly Censuses of Employment and Wages, the sector with the highest average weekly wage came from the Professional & Businesses Services sector at $1,561. This is followed by the Federal Government ($1,104), State Government ($1,066), Manufacturing ($1,008), and Wholesale Trade ($1,008) industries. The lowest average weekly wages come from the Leisure & Hospitality and Retail Trade sectors with average weekly wages of $188 and $456 respectively. This is likely due to fewer hours worked per week, though lower wage rates also contribute to these trends. Retail trade is the only major employment sector with low levels of earnings, which is a good characteristic for a community.

Commuting Patterns The strong economy and lackluster population growth of Plymouth County noted above is also reflected in commuting data from the Census Bureau’s “On the Map” application for the City of Le Mars. Proximity to employment is often a major component of choosing where to live, particularly for lower income and younger employees.

In 2013, approximately 2,685 persons living in Le Mars were employed outside of Le Mars. This amounts to 49 percent of Le Mars’ resident workforce. This is significantly more than in 2003 when only 38 percent of Le Mars’ workforce was employed outside of the City. Most commuters drive between 10 to 24 miles away, though only 677 workers commute to the City of Sioux City. That number has actually decreased over the last decade, meaning a smaller proportion of people commute from Le Mars to Sioux City than a decade earlier.

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Similarly, a large percentage of Le Mars’ workforce consists of in-commuters. Only 38 percent (2,819) of those who work in Le Mars also live in Le Mars. This is down from 52 percent a decade prior, signaling a significant shift in commuting patterns for Le Mars. Most in- commuters live between 10 and 24 miles away. About 14 percent or 1,080 people who work in Le Mars live in Sioux City, a number that has more than doubled over the past decade. Whereas Sioux City workers used to live in Le Mars, the trend has reversed; now Le Mars workers live in Sioux City. Those working in Le Mars are willing to commute an average of 20 miles one way for the right opportunity.5 These shifts in commuting trends can be seen in Figure 7.

Figure 7: Commuting Patterns for Le Mars Residents and Workers, 2003 and 2013 On the Map

Where Le Mars' Residents Where Le Mars' Workers Work Live 70.0%

60.0%

50.0%

40.0%

2003 30.0% 2013 20.0%

10.0%

0.0% Le Mars <10 10 to 24 25 to 50 50+ Le Mars <10 10 to 24 25 to 50 50+

Implications Le Mars and Plymouth County have enjoyed an expanding economy over the past two decades. This includes increasing job opportunities, a burgeoning labor force, decreasing unemployment, and growing earnings. However, demand in Le Mars has also provided challenges. With commuters willing to drive further than before, there is increased regional competition for workers and residents and some expanding businesses have had trouble finding qualified workers to fill open positions. In addition, the high number of relatively high-wage job opportunities in Le Mars has affected the price of housing within the market, while Sioux City is able to take advantage of lower rents, more housing choices, and its status as the regional hub for entertainment, culture, and employment. This has led to more of Le Mars’ workforce commuting from Sioux City, a reverse of earlier trends.

5 Iowa Workforce Development, Le Mars/Plymouth County, Iowa Laborshed Analysis, 2010. SIMPCO | Chapter 2: Economic Trends 19

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Chapter 3: Housing Characteristics Housing is the primary building block of neighborhoods and creates a base to support population and household growth, employment growth, and community services. As such, the make-up and condition of the community’s housing stock provides the basis for an attractive living environment. This section reviews the housing situation in Le Mars by examining owner and renter housing by type and age, reviewing development trends, and assessing the condition of Le Mars’ housing stock. A housing unit is defined as a house, apartment, or room occupied or intended for occupancy as separate living quarters for a single household.

Table 12 demonstrates the past and projected changes in population, households, and housing units from 1990 projected through 2020. Units are projected to grow the same number as new households, making its growth at a rate slightly lower than that of household growth.

Table 12: Change in Population, Households, and Housing Units, Le Mars Iowa, 1990, 2000, and 2010 Censuses

US Census Proj. 1990-2000 2000-10 2010-20 1990 2000 2010 2020 No. Pct. No. Pct. No. Pct. Population 8,454 9,237 9,826 10,555 783 9.3% 589 6.4% 729 7.4% Households 3,158 3,640 3,950 4,383 482 15.3% 310 8.5% 433 11.0% Units 3,280 3,818 4,220 4,653 538 16.4% 402 10.5% 433 10.2%

Units in Structure Occupancy, tenure, and units in structure are key variables in assessing neighborhood stability and the character of neighborhoods. Table 13 shows the number of owner and renter households by number of units in structure in Le Mars in 2013. It also includes the number of units in vacant structures. In total, about 3,017 housing units (74 percent of occupied units) are owner-occupied; 1,077 housing units (26 percent of occupied units) are occupied by renters; and 6 percent of all homes remained vacant as of 2013.

Table 13: Tenure by Units in Structure, Le Mars Iowa, 2013 5-Year American Community Survey

Owner Renter Vacant LE MARS 1, detached 2,768 91.7% 369 34.3% 130 46.6% 3,267 74.7% 1, attached and 2 44 1.4% 89 8.3% 48 17.2% 181 4.1% 3 or 4 9 0.3% 212 19.7% 29 10.4% 250 5.7% 5 to 19 15 0.5% 189 17.5% 0 0.0% 204 4.6% 20 to 49 34 1.1% 99 9.2% 43 15.4% 176 4.0% 50 or more 0 0.0% 81 7.5% 0 0.0% 81 1.9% Mobile home 147 4.9% 38 3.5% 29 10.4% 214 4.9% TOTAL 3,017 1,077 279 4,373

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The overwhelming majority of occupied housing units in Le Mars in 2013 were detached single family homes. This included about 77 percent of the City’s housing stock or 3,137 units. Single family detached homes are the most likely type of home to be occupied by owner with 92 percent of owners living in detached single family housing units. Many homeowners also lived in mobile homes, the next largest category for ownership. Multifamily units make up only a small percentage of owner-occupied housing units.

The largest share of renter households also lived in detached single family homes with 369 units occupied by renters. Small multifamily properties with less than 20 units in the structure were also popular with another 490 living in these smaller multifamily structures. Another 181 renter households lived in large complexes. Mobile homes are less popular for renters.

In 2013, most vacant homes were single family detached structures as well, though detached single family homes only had vacancy rate of approximately 4 percent total. This rate is lower than the overall vacancy rate of 6 percent. Meanwhile, duplexes had the highest vacancy rate of 27 percent. Other types of multifamily properties differed in their performance with some having vacancy rates of 0 percent and others being as high as 24 percent. More recent vacancy information for multifamily properties was collected for this project and is presented and analyzed in the Chapter 5: Rental Market Analysis Chapter.

Age of Housing Stock Table 14 displays the age distribution of Le Mars’ housing stock in 2013. This table includes the number of housing units built in Le Mars over the past seven decades as well as the number of units built prior to 1940, according to the U.S. Census Bureau. This table further breaks down the data by number of owner-occupied units, number of renter-occupied units and vacant units.

Table 14: Age of Housing Stock, Le Mars Iowa, 2013 5-Year American Community Survey

Owner Renter Vacant LE MARS After 2010 9 0.3% 0 0.0% 0 0.0% 9 0.2% 2000-09 322 10.7% 54 5.0% 44 15.8% 420 9.6% 1990-99 413 13.7% 112 10.4% 59 21.1% 584 13.4% 1980-89 265 8.8% 159 14.8% 29 10.4% 453 10.4% 1970-79 308 10.2% 192 17.8% 0 0.0% 500 11.4% 1960-69 378 12.5% 140 13.0% 0 0.0% 518 11.8% 1950-59 398 13.2% 66 6.1% 103 36.9% 567 13.0% 1940-49 131 4.3% 167 15.5% 0 0.0% 298 6.8% Before 1939 793 26.3% 187 17.4% 44 15.8% 1,024 23.4% TOTAL 3,017 1,077 279 4,373

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A major share of the housing stock in Le Mars was built before 1940 (1,024 units or 23 percent), which may indicate substantial need for rehabilitation and/or replacement. Many older homes are well-maintained and preserved which adds variety and value to historic neighborhoods. However, older homes occupied by households unable or unwilling to maintain their homes may be more deteriorated due to decreased ability or incentive to maintain units.

Of the units built before 1940, 793 were owner-occupied, 187 were renter-occupied, and 44 units were vacant. This is a vacancy rate of 4 percent, below the overall vacancy rate. However, most vacant homes are still from the midcentury or before, meaning that their age still requires that special care be taken. Older homes left vacant are at increased risk for dilapidation, especially if maintenance has been neglected over a long period of time.

Housing construction stayed relatively consistent in Le Mars’ following the midcentury with approximately 500 to 600 units created annually. Construction did not slow down until the 1980’s, likely due to sluggish economic growth and a declining farm economy. This was followed by a housing boom in the 1990’s and another slowdown during the recession. A year- by-year breakdown of construction and building permits from 2005 to 2014 can be found in Table 16.

Vacant Housing According to the U.S. Census data, the 2013 vacancy rate in Le Mars among for-sale housing units was 0.4 percent (12 units) and 6.4 percent (72 units) for rental housing units. The overall vacancy rate in Le Mars (including housing units that were used for recreational or occasional use and other vacant) was 6.4 percent (279 units). The number of vacant units by type of vacancy can be seen in Figure 8.

A vacancy rate between one and two percent is healthy in a for-sale market while five percent is considered normal in a healthy rental housing market. These vacancy levels allow for sufficient consumer choice and turnover. Thus, the vacancy rate in Le Mars among for-sale housing units was lower than the normal while the range was higher among rental housing in 2013. More recent data presented in the Chapter 5: Rental Market Analysis chapter may suggest that the rental market is tighter today than it was in 2013. Furthermore, the large number of “other vacant” units (Figure 8) may suggest a greater need for housing rehabilitation.

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Figure 8: Vacant units by type of vacancy, Le Mars Iowa, 2013 5-Year American Community Survey

For rent 72

For sale only

For seasonal, 12 recreational, or occasional use

180 15 Other vacant

Housing Conditions SIMPCO conducted a drive-by windshield survey to determine housing conditions within the City. Housing units were rated individually for single family homes and townhomes. Multifamily units and mobile homes were rated on a parcel by parcel basis. While this makes direct comparison by the number of units difficult, it presents a picture of each neighborhood and the current condition of its housing stock. The overall condition of the structures was based on appearance of the paint, siding, windows, foundations, roofs, sidewalks and yards. The following criteria were used to rate the conditions:

1. Excellent: A structure recently built and meets codes. Excellent maintenance suggests that this property will likely remain in good condition. 2. Good: A structure recently built and meets codes or an older property which has been maintained. Little surface wear is apparent and repairs are not needed. 3. Fair: A sound structure but in need of surface maintenance. Shows signs of wear and needs some investment before attaining a condition rating of ‘Good.’ 4. Poor: Significant wear is noticeable and the structure may be unsound or totally substandard. The structure requires significant investment to upgrade its condition rating or may need to be demolished.

Conditions were aggregated to the neighborhood level to allow for comparison between areas of the City. Major roads were used as boundaries between neighborhoods. In total, 3,276 buildings were assessed in 7 neighborhoods (Table 15 and Figure 9). Overall, Le Mars’ housing stock is in relatively good condition. About 94 percent of the housing stock is in either good or

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2015-2020 2015-2020 LE MARS HOUSING NEEDS ASSESSMENT excellent condition, with the majority of the remaining housing in fair condition. Approximately 0.3 percent of assessed properties were determined to be poor condition. Most neighborhoods had at least 95 percent of their stock in good or excellent condition.

Table 15: Condition Allocations for Le Mars’ Neighborhoods

Downtown East Midtown North South Southeast West TOTAL Excellent 6.0% 2.4% 9.1% 4.3% 8.5% 6.0% 13.5% 6.3% Good 74.3% 88.2% 90.2% 94.1% 89.2% 89.4% 86.5% 87.5% Fair 18.3% 9.1% 0.7% 1.7% 2.3% 4.5% 0.0% 6.0% Poor 1.3% 0.4% 0.0% 0.0% 0.0% 0.2% 0.0% 0.3% Properties 530 549 441 538 518 537 163 3,276 Counted

Figure 9: Neighborhoods Reference Map

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The neighborhood exhibiting the most wear was the Downtown District. Approximately one fifth of homes in the area were in fair or poor condition, likely a result of the age of the area. Properties near industrial areas or the railroad tracks also showed signs of wear, likely due to external factors decreasing the property values, thus leading to less reinvestment in the property. The East District also had relatively more fair and poor properties.

For the most part, multifamily properties reflect the condition of single family properties near them. That is, in areas with homes in good conditions, the multifamily properties were also in good condition. In areas with homes in poor condition, multifamily properties were also in poor condition. Most mobile home parks were decently maintained, though some needed significant maintenance. Enforcing maintenance standards may help address any issues.

Building and Demolition Permits Table 16 shows new residential construction in Le Mars from the year 2005 to 2014, along with demolition information over the same time period. The number of units comes from building permit records from City staff.

From 2005 through 2014, there have been an estimated 193 new single family homes and 12 multifamily homes constructed at an average annual rate of approximately 21 units per year. During that same time, 16 single family homes and 1 multifamily unit has been demolished at an average annual rate of about 2 units per year. This created a net addition of 177 single family and 11 multifamily units. Approximately 94 percent of newly constructed units were single family. This means that the proportion of single family homes in Le Mars has continued to grow.

Table 16: Building and Demolition Permits 2005-2014, City of Le Mars

Building Permits Demolition Permits Net Change in Housing SF MF SF MF SF MF 2014 21 0 2 0 19 0 2013 23 2 3 1 20 1 2012 13 0 0 0 13 0 2011 15 0 0 0 15 0 2010 11 0 0 0 11 0 2009 7 0 4 0 3 0 2008 9 0 1 0 8 0 2007 21 2 4 0 17 2 2006 30 4 1 0 29 4 2005 43 4 1 0 42 4 TOTAL 193 12 16 1 177 11

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Home construction was highest in the middle of the decade, decreased through the recession, and increased again in 2013 and 2014. Construction is still slower than it was in 2005 and 2006. The average annual net change in units is about 19 units per year, which was slower than the rate of about 58 units per year in the 1990’s according to the Census.

Subdivisions Table 17 shows the number of subdivisions and the number of lots created and sold from 2005 to 2015, along with some supplemental information regarding those subdivisions. This information was obtained from City staff.

Like building permits, most activity occurred in 2005 and 2006. At that time, about three quarters of the last decade’s subdividing occurred, though more than a fifth of the lots created at that time are still not sold. Staff attributed some of the slow sales to the incredibly large and expensive lots created (with expected home values reaching $718,000). From 2008 to 2012, no subdividing occurred, but with the end of the recession, development slowly returned. There are still approximately 77 lots available for purchase within the City.

Table 17: Subdivisions and Lot Creation 2005-2015, City of Le Mars

Year Subdivisions Platted Lots Sold Lots Zoning Home Home Platted Size Value 2015 1 18 0 0.0% SF - - 2014 2 14 2 14.3% SF 1,800-2,000 $300-340K 2013 1 17 10 58.8% SF-MF 1,200-1,350 $165-195K 2008-12 0 ------2007 1 10 9 90.0% SF-MF 1,700-1,900 $250-$305K 2006 2 31 20 64.5% SF 1,700-4,750 $230-718K 2005 3 149 121 81.2% SF-MF 1,500-2,800 $125K-500K TOTAL 10 239 162 67.8% -

Some stakeholders noted that there are less new lots on the market recently and that the recession has resulted in pent up demand for housing. Another developer mentioned that many of the lots created have not been in desirable locations. Part of the slow recovery in development can be attributed to the fact that most new land is developed by the same few players who are developing at full capacity. This led some to suggest a need to attract new developers willing to invest in smaller communities to Le Mars, which can be challenging because of the cost of development.

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Current Housing Policy The City has worked with developers to continue developing land within the City. One program has been the urban revitalization tax exemption which allows the City to exempt property taxes for qualified construction over a period of five years. This kind of program incentivizes investment in property, though it can sometimes be criticized for not spurring new development above what would have occurred regardless. Though Le Mars’ urban revitalization program started in 2012, 75 individuals have participated with a total investment of $16.7 million dollars. After the five year abatement, the value of the investment will be taxed at its full rate.

The City has also used ad hoc development agreements, i.e. contracts with developers that modify certain requirements in exchange for public benefit. They are an excellent tool that allows the City additional flexibility when working with developers. However, without set rules, outside developers are often unaware of these options and many developers do not like the uncertainty ad hoc negotiations. In addition, development agreements may also lead to favoritism without strict criteria. So far, development agreements have been used to create additional tax rebates to spur a few new subdivisions.

Finally, the City has participated in groups looking to promote housing development within the area. The Le Mars’ Chamber of Commerce established a housing task force, looking to attract additional development to the City, and the City has taken an active role in the process.

Overall, the City of Le Mars has shown that it is willing to promote development within the community and is exploring additional incentives. However, there is currently little oversight as to the success of these programs in attracting new development that would not have occurred otherwise. A more rigorous evaluation of current policies should occur, and some programs, like the ad hoc development agreements, should be formalized to ensure impartiality in addition to maximizing public benefit relevant to public expenditure.

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Chapter 4: For-Sale Market Analysis The for-sale market analysis chapter explores the existing owner-occupied housing stock by investigating its characteristics, prices, and vacancy rates. This includes an overview of ownership properties in Le Mars. This chapter also looks at the demand for the ownership housing market which includes an analysis of owners living in and commuting to Le Mars. Interviews conducted with real estate agents, lenders, developers, and others familiar with Le Mars’ ownership housing market supplement this chapter.

For-Sale Overview According to the 2013 U.S. American Community Survey, Le Mars contained approximately 3,017 owner-occupied housing units, comprising approximately 69 percent of the City’s housing stock. Of these, nearly 92 percent of units were single family detached homes. The remainder is comprised of duplexes, condominiums, and mobile homes (Table 18). The majority of owner- occupied units were built before 1970, though many owner-occupied homes were specifically constructed in the 1950’s and 1990’s (Table 19). More than one quarter were built before 1940.

Table 18: Comparison of Units in Structure for All Housing Units and Owner-Occupied Units, 2013 5-year ACS

All housing units Owner-occupied units 1, detached 3,267 74.7% 2,768 91.7% 2 or 1, attached 181 4.1% 44 1.4% 3 or 4 250 5.7% 9 0.3% 5 to 9 181 4.1% 15 0.5% 10 to 19 23 0.5% 0 0.0% 20 to 49 176 4.0% 34 1.1% 50 or more 81 1.9% 0 0.0% Mobile home 214 4.9% 147 4.9% TOTAL 4,373 100% 3,017 100%

Table 19: Comparison of Age of Structure for All Housing Units and Owner-Occupied Units, 2013 5-year ACS

All housing units Owner-occupied units 2010 or later 9 0.2% 9 0.3% 2000 to 2009 420 9.6% 322 10.7% 1990 to 1999 584 13.4% 413 13.7% 1980 to 1989 453 10.4% 265 8.8% 1970 to 1979 500 11.4% 308 10.2% 1960 to 1969 518 11.8% 378 12.5% 1950 to 1959 567 13.0% 398 13.2% 1940 to 1949 298 6.8% 131 4.3% 1939 or earlier 1,024 23.4% 793 26.3% TOTAL 4,373 100% 3,017 100%

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In 2013, most owner-occupied homes values in Le Mars were between $80,000 and $174,999. At that time, the median home value in Le Mars was $124,900 with half of all homes valued between $90,700 and $169,500 (Figure 10). These prices are similar to Plymouth County where the median home value is $129,800 while Iowa’s median is at $124,300. However, Le Mars’ median home values were higher than those of O’Brien County to the northeast, Cherokee County to the east, Ida County to the southeast, and Woodbury County to the South. This is challenging for Le Mars as Woodbury County, home of Sioux City, has many more homes available which provides more choice for homebuyers.

Figure 10: Home Value Distribution in Le Mars, 2013 5-Year ACS

600 549 499 490

500

395 400 370

300 226 200 150 151

Number Number Unitsof 86 100

0 <$40K $40-59K $60-79K $80-99K $100-124K $125-149K $150-174K $175-199K $200K+ Home Value

The ownership vacancy rate was estimated to be 0.4 percent in 2013. This is much lower than 2 percent, the standard vacancy rate for a healthy ownership market in which supply generally meets demand. The asking values of vacant units ranged from $150,000 to $174,999. Vacancy data indicates a relatively tight market, though for the most part, home values seem reasonable.

Despite relatively moderate prices, approximately 16 percent of owners in Le Mars were “cost- burdened.” A cost-burdened household is one spending more than 30 percent of their income for housing costs (which includes mortgages, taxes, insurance, utilities, fuels, and condominium or mobile home fees). This can be problematic because cost-burdened households may not have money for other important quality of life expenditures such as healthcare or nutrition. The proportion of cost-burdened households in Le Mars is similar to that of Plymouth County but is lower than that of Iowa.

Owner-occupied units tend to be in better repair than renter-occupied housing. According to HUD’s 2012 Comprehensive Housing Affordability Strategy (CHAS) database, approximately 12 percent of owner-occupied units have a housing problem with about a quarter of them

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2015-2020 2015-2020 LE MARS HOUSING NEEDS ASSESSMENT considered “severe.” Meanwhile, 33 percent of rental units have housing problem half of which are considered “severe.” While some of this is likely due to the old age of the housing stock, fewer problems with owner-occupied housing may also be tied to other factors. Owner- occupants have more incentives to maintain property both as an investment and as their place of residence. Meanwhile, renter households only are incentivized by the property as their place of residence and landlords only are incentivized by the property as an investment.

Table 20: Specified Housing Problems, CHAS 2012 5-year

All housing units Owner-occupied units Household has specified 725 17.9% 360 12.2% housing problems Specified housing problems 95 6.8% 95 3.2% labeled “Severe” Household has no specified 3,320 81.9% 2,590 87.5% housing problems NA 15 0.4% 15 0.5% TOTAL 4,055 100.0% 2,960 100.0%

Realtors and Lenders To gain a better perspective on the market, SIMPCO surveyed realtors and lenders to understand current conditions shaping the housing market. Realtors provided valuable information from the Multiple Listing Service (MLS). Lenders provided insight into lending in Le Mars.

Table 21: Multiple Listing Service Data, 2005 through 2015

Sale Price Ave. Days Ave. Sale / Sold Average Median SQFT $/SQFT On Market List Price 2015 YTD* 87 $164,100 $132,450 1,586 $105.74 117 94.7% 2014 121 $171,429 $155,500 1,687 $100.18 171 95.0% 2013 110 $163,031 $144,000 1,595 $101.75 160 94.3% 2012 105 $142,095 $120,750 1,510 $95.29 207 95.7% 2011 94 $125,515 $106,000 1,515 $85.31 181 - 2010 97 $144,206 $122,500 1,569 $96.05 221 - 2009 107 $121,305 $102,500 1,528 $81.74 204 93.6% 2008 110 $139,525 $122,750 1,471 $93.88 200 93.3% 2007 110 $145,457 $132,500 1,675 $92.00 209 94.4% 2006 133 $148,504 $124,750 1,677 $90.05 151 95.1% 2005 155 $110,353 $95,350 1,505 $73.18 143 94.6% * 2015 YRD data through October 20

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In general, MLS shows that the housing market has improved since 2005. While the value of sales mostly decreased from 2006 through 2009, the market has improved since that time with housing prices reaching a new peak in sales price in 2014. However, it should be noted that the number of homes sold annually is still lower than it was in 2005 and 2006, as is the average sale price once adjusted for inflation. Despite that, the average number of days properties are on market is much lower in 2015 than at other previous years.

Realtors had a diversity of opinion about housing needs, but there was consensus on a few central issues. First, realtors agreed on the need for affordable single family homes in good condition, especially around the $125,000 to $175,000 price range. Ranch styles were specifically mentioned as being popular. Realtors also agreed that there is some need for multifamily ownership opportunities (like condominiums, duplexes, or townhomes). These were suggested as providing additional affordable ownership opportunities closer to the $100,000 range. A few realtors also noted the need for homes valued up to $200,000 and $250,000, though many realtors mentioned that these were the price ranges that the market seemed to naturally be supplying.

As far as financing was concerned, lenders in Le Mars mentioned their wide offering of loan products including in-house, secondary, and government loans. For the most part, lenders do not see the loan products as being a primary barrier to ownership. Rather, the availability and affordability of homes has played the largest role. However, lenders also noted that many consumers lacked information on the buying process. This has led potential consumers to have insufficient down payments and unrealistic expectations regarding the homes that they can afford. Bad credit has also caused issues following the more stringent lending requirements which came from the Recession.

Table 22: Lender Reponses for Loans Offered, Down Payments, and Interest Rates (Sept. 2015)

Down Payment 10 Year Interest 30 Year Interest In-House 5% - 20% 2.750% - 3.950% 3.750% - 4.000% Secondary 3% - 5% NA 4.000% - 5.125% FHA 3.5% NA 3.500% - 3.625% Government Sponsored USDA 0% NA 3.500% - 3.650% VA 0% NA 3.500% - 3.750%

Government loans were noted as being a popular loans product, especially those with 0 percent down payment required upon purchase. However, it was also noted that government loans tend to have higher foreclosure rates, and that higher upfront fees and the large amount of paperwork has caused some banks to work less with those products. Other lenders mentioned

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2015-2020 2015-2020 LE MARS HOUSING NEEDS ASSESSMENT that many homes eligible for government loans still need additional work beyond the conventional mortgage amount. This has resulted in additional barriers to using governmental loan products.

Owner Survey In addition to talking with realtors and lenders, SIMPCO also surveyed those who live and work in Le Mars. In total, 512 surveys were collected with 350 responses from Le Mars’ residents and 162 responses from those living outside of Le Mars. Owners comprised approximately 79 percent of all respondents with a higher proportion of owner respondents residing in Le Mars.

Owners: Le Mars Residents and Non-Residents When comparing owners living in Le Mars to those not living in Le Mars, several things become apparent. First, owners surveyed in Le Mars tend to have more expensive homes. The median Le Mars respondent had a house value between $150,000 and $174,999 while the median non-Le Mars respondent had a house value between $125,000 and $149,999 (Figure 11). However, it should be noted that in all cases, owner respondents were skewed towards higher incomes compared to other household counts. This trend was seen for non-resident respondents too. While total values reflected a difference in costs, the dollar per square foot was also higher for those living within Le Mars compared to those living outside of Le Mars.

Figure 11: Current Home Value: Le Mars Residents and Non-Residents Respondents

45% 40% 40%

35% 30% 26% 25% 20% 16% 14% 14%13% 14% 15% 12% 13% 9% Percent of Owners 10% 8% 6% 5% 3% 3% 5% 2% 1% 2% 0% <$40K $40 - 59K $60 - 79K $80 - 99K $100 - $125 - $150 - $175 - $200K+ 124K 149K 174K 199K LM Residents Non-Residents

As far as the types of residences that respondents owned, 92 percent of Le Mars’ residents lived in single family homes with another 3 percent living in condominiums and 4 percent residing in mobile homes. Non-residents were more likely to live in single family homes (94 percent) than 32 Chapter 4: For-Sale Market Analysis | SIMPCO

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Le Mars Residents with smaller numbers living in condominiums (2 percent) and mobile homes (3 percent).

Figure 12: Reasons Non-Residents chose not to live in Le Mars

Cost of homes / cost to rent 53% Taxes are too high 33% Availability of housing, 31% Distance from family or friends 21% Distance from entertainment or retail 18% Atmosphere / the feel of the city 16% Size of the city 15% Distance from work 10% Other 9% Quality / type of homes 9% Distance from cultural events 8% Quality of schools 5% Bought before employment in Le Mars 3% Taking over family farm 2% Wants space from coworkers 2% Lack of safety 2%

0% 10% 20% 30% 40% 50% 60%

Le Mars’ higher home values were reflected in reasons non-residents of Le Mars chose not to Owner Comments live in Le Mars. More than half of respondents said that the cost of homes was prohibitive to “We’ve been trying for 20 years to move moving to Le Mars (Figure 12). The next most to Le Mars... There’s tons of appealing important issues keeping households out of Le existing homes in Le Mars. What would it Mars was the cost of taxes and the availability of take for them to move…And free up their homes. Both categories had about a third of non- home[s] for purchase?” residents saying these reasons led them to live elsewhere. The quality of homes was not “Surrounding communities have houses considered too much of an issue (especially cheaper, lower property taxes, and cheaper compared to renter households, as noted in the Rental Market Analysis). Other significant utilities. I would have to be an idiot to factors included one fifth of respondents saying buy in town.”

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2015-2020 2015-2020 LE MARS HOUSING NEEDS ASSESSMENT that distance from family or friends prevented them from living in Le Mars. This and several other factors are beyond the City’s control and cannot be influenced by policy. On the whole, there was a wider variety of reasons that owners chose not to live in Le Mars compared to renters.

While most owners were happy with their living arrangements, Le Mars’ residents were slightly less satisfied with their current housing situation compared to non-residents (Table 23). Approximately 87 percent of Le Mars’ owners were satisfied or somewhat satisfied, while 93 percent of non-resident owners were satisfied or somewhat satisfied. Despite this, Le Mars’ residents were actually less likely to say they were looking to move within 5 years, with those thinking of moving looking to do so further down the road. Compared to renters, owners are stable and happy with their housing. Even those who are somewhat dissatisfied do not always want to move. As one resident stated, “Love where I’m at – just needs some [tender love and care].”

Table 23: Owner Satisfaction and Timeframe for Moving

How satisfied are you with your current housing arrangement? Residents Non-Residents Satisfied 185 67% 73 63% Somewhat Satisfied 55 20% 35 30% Somewhat Dissatisfied 22 8% 3 3% Dissatisfied 13 5% 4 3%

If you are looking to move in the next five years, when would you do so? Within 1 Year 17 6% 17 15% 1 – 2 Years 48 17% 13 11% 3 – 5 Years 77 28% 32 28% Not Looking 135 49% 53 46%

While owners tend to be fairly stable, many non-resident owners still wish to move to Le Mars. 23 percent said they would move to Le Mars and another 50 percent said they would possibly move to Le Mars. Of those showing a preference to move, most wished to continue owning (only 3 percent of residents and non-residents wanted to transfer from owning to renting). Because many Baby Boomers own currently, it could help explain reluctance to move to senior rental housing, an issue discussed in the Rental Market Analysis Chapter.

Potential Le Mars Owners To estimate future demand in the owner market, SIMPCO looked specifically at non-residents who said they would consider moving to Le Mars to own, in addition to residents who said

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2015-2020 LE MARS HOUSING NEEDS ASSESSMENT 2015-2020 they were looking to move to another home within Le Mars. In total 289 (56 percent) respondents were thinking of moving to or within Le Mars with the intention of buying a home. Another 40 (8 percent) said they would be willing to rent in Le Mars. About 36 percent of respondents would not consider living in Le Mars.

Of those looking to move to Le Mars, potential owners said they would be able to afford slightly more than they currently spent on average. This was especially true for those living outside of Le Mars who had bought less expensive housing. When comparing income to what respondents said they could afford, most respondents seemed to have a relatively good idea of their financial capabilities for housing.

Figure 13: House Value that Potential Le Mars’ Owners Could Afford

25%

20%

15% 15% 13% 11% 10% 10% 9% 7% 7%

6% Percent of Owners 5%

0% <$80K $80 - 99K $100 - $125 - $150 - $175 - $200 - $225 - $250K+ 124K 149K 174K 199K 224K 249K

Owners have a very clear pattern of demand. Most owners prefer detached single family housing and are less willing to buy alternative arrangements. 83 percent of respondents said they would be interested in new single family homes and another 38 percent they would be interested in rehabilitated single family homes (Figure 14).

While there is a strong desire for single family homes, only 68 percent of respondents were only interested in single family homes – others would consider alternative living arrangements. A quarter said they would be willing to purchase new duplexes or townhomes and a tenth responded that they would be willing to purchase rehabilitated townhomes. Very few potential owners were interested in purchasing condominiums in multifamily structures that were not townhomes. One interesting outcome of the survey was the interest several people showed in owning senior housing instead of renting it. This was true for both independent and dependent seniors.

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Figure 14: Potential Owner Interest in Different Types of Housing

90% 83% 80% 70% 60% 50% 38% 40% 30% 25% 20% 10% 10% 3% 2% 3% 3% 1% 0%

Table 24: Potential Owners: Desired number of bedrooms

Compared to renters, owners are seeking Bed Rooms No. Pct. larger homes. This includes a majority 1 1 0.4% looking for a three bedroom home, and more 2 37 13% than another quarter looking for four 3 143 51% bedroom homes. This different demand is 4 76 27% likely due to the larger and more established 5 24 8% nature of owner-occupied households. This 6 2 1% includes households that are families, many of which have dual incomes.

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For-Sale Market Summary The for-sale market analysis can be summarized by the following seven points:

1. The vast majority of owner-occupied homes are single family properties, though mobile homes are the next most popular. 2. Most owner-occupied properties are more than fifty years old. There has been limited development following the Recession, though development is returning to the community. 3. According to the American Community Survey, Le Mars’ home values are reasonable. However, it is more expensive compared to some nearby counties and to the City of Sioux City, which provides challenges in attracting new residents and development. 4. Some but not many of Le Mars’ owners are cost-burdened. Owner-occupied housing units are less likely to have housing problems. 5. Ownership vacancy rates are low. Sales values have been increasing over time, though they are still lower than they were prior to the recession after adjusting for inflation. The decreasing length of time for which homes are on market also reflects higher demand for homes meeting the needs of homeowners. 6. Surveyed residents of Le Mars’ have higher home values compared to non-residents of Le Mars. The cost of owning has proven prohibitive for some non-residents to move to Le Mars, in addition to the cost of taxes and the availability of housing. These factors lead to less satisfaction for residents, though residents still have a lower likelihood of moving from their current home. 7. Most potential Le Mars’ owners can pay slightly more for housing than they currently do. This may indicate demand for some higher-end housing, though most households are still looking for costs which would be affordable to the general workforce. Survey responses suggest that owner demand is highest for single family homes, though duplexes and townhomes are viable alternatives for more affordable products. Three bedroom units are most in demand, though many are looking for four bedroom units as well.

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Chapter 5: Rental Market Analysis The rental market analysis explores the existing rental housing stock by investigating its characteristics, prices, and vacancy rates. This includes an overview of existing data about rental properties in Le Mars, in addition to a survey of rental properties with three or more units. This chapter also looks at demand within the rental housing market which includes an analysis of renters living in Le Mars and commuting to Le Mars. Finally, interviews were conducted with real estate agents, rental housing managers, housing agency representatives, and others familiar with Le Mars’ rental housing market to supplement the chapter.

Rental Overview According to U.S. American Community Survey data, Le Mars contained approximately 1,077 rental units in 2013, comprising approximately a quarter of the City’s housing stock. Of these, nearly 54 percent of units were in structures with at least three units. The remainder was comprised of single family homes, duplexes, and mobile homes (Table 25). The majority of rental units were built before 1970, though many rentals were built in the 1970’s and 1980’s (Table 26). Only 5 percent of Le Mars’ rental stock was built in the past 15 years.

Table 25: Comparison of Units in Structure for All Housing Units and Renter-Occupied Units, 2013 5-year ACS

All housing units Renter-occupied units 1, detached 3,267 74.7% 369 34.3% 2 or 1, attached 181 4.1% 89 8.3% 3 or 4 250 5.7% 212 19.7% 5 to 9 181 4.1% 166 15.4% 10 to 19 23 0.5% 23 2.1% 20 to 49 176 4.0% 99 9.2% 50 or more 81 1.9% 81 7.5% Mobile home 214 4.9% 38 3.5% TOTAL 4,373 100.0% 1,077 100.0%

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Table 26: Comparison of Age of Structure for All Housing Units and Renter-Occupied Units, 2013 5-year ACS

Year Built All housing units Renter-occupied units 2010 or later 9 0.2% 0 0.0% 2000 to 2009 420 9.6% 54 5.0% 1990 to 1999 584 13.4% 112 10.4% 1980 to 1989 453 10.4% 159 14.8% 1970 to 1979 500 11.4% 192 17.8% 1960 to 1969 518 11.8% 140 13.0% 1950 to 1959 567 13.0% 66 6.1% 1940 to 1949 298 6.8% 167 15.5% 1939 or earlier 1,024 23.4% 187 17.4% TOTAL 4,373 100.0% 1,077 100.0%

In 2013, Le Mars tended to have a large number of units in relatively low rent ranges with the number of properties decreasing as rent increased (Figure 15). At that time, the median rent in Le Mars was $569 with nearly a third of all properties ranging from $400 to $499. This was lower than in Plymouth County and Iowa where median rents were $589 and $670 respectively. However, Le Mars’ median rent was higher than some nearby counties, including those of O’Brien County to the northeast, Cherokee County to the east, and Ida County to the southeast.

Figure 15: Gross Rent in Le Mars, 2013 5-Year ACS

350 308 300

250

200 179

139 150 126

Number of Units 86 100 72 57 50 18 17 0 <$400 $400 - $500 - $600 - $700 - $800 - $900 - $1,000 - More $499 $599 $699 $799 $899 $999 $1,249 than $1,250 Gross Rent

The rental vacancy rate was estimated to be 6.3 percent in 2013. This is slightly higher than 5 percent, a standard vacancy rate for a healthy market in which supply can generally meet

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2015-2020 2015-2020 LE MARS HOUSING NEEDS ASSESSMENT demand. The asking gross rents of those units that were vacant ranged from $450 to $549, in line with the rest of the market’s prices. This indicates a relatively soft market, that is, one that has more potential units than renters.

Despite the relatively large number of lower-rent units, approximately 40 percent of renters in Le Mars were “cost-burdened.” A cost-burdened renter is a renter that spent more than 30 percent of their income for housing costs including contract rent, utilities, and renter’s insurance. This can be problematic because cost-burdened households may not have the money for other important quality of life expenditures such as healthcare or adequate nutrition. The proportion of cost-burdened households in Le Mars is higher than that of Plymouth County, though lower than that of Iowa.

Rental units tend to be in worse repair than owner-occupied housing. According to HUD’s 2012 Comprehensive Housing Affordability Strategy database, approximately 33 percent of rental units have housing problems with about half of those problems considered “severe.” Meanwhile, only 12 percent of owner-occupied households experience housing problems with a quarter of those problems being labeled “severe.” While much of this is likely due to the age of the rental housing stock, it also is tied to simply being a rental property. Renters have less incentive to undertake maintenance activities, and rental owners have a financial incentive to keep revenue as additional profit rather than reinvesting it in the property to prevent its decline. This can lead to slums and blight as housing deteriorates over time.

Table 27: Specified Housing Problems, CHAS 2012 5-year

All housing units Renter-occupied units Household has specified 725 17.9% 365 33.5% housing problems Specified housing problems 95 6.8% 180 16.5% labeled “Severe” Household has no specified 3,320 81.9% 730 67.0% housing problems NA 15 0.4% 0 0.0% TOTAL 4,055 100.0% 1,090 100.0%

For more current information, SIMPCO conducted additional surveys of Le Mars’ rental properties with 3 or more units. This survey included 29 apartment and assisted living properties comprising a total of 360 general occupancy units and an additional 105 units and 169 beds for senior occupancy. For the purposes of this analysis, general occupancy is characterized by market rate and subsidized units for the general population while senior occupancy is characterized by age- or handicap-restricted units.

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It is important to keep in mind that these numbers only represent a snapshot of the housing market from September and October 2015, and thus do not necessarily represent yearlong trends. This time period tends to have tighter (i.e. lower) vacancy rates.6 In addition, this survey does not cover single family, mobile home, or duplex rentals which comprise about 46 percent of the rental market. Despite these limitations, it does illuminate several important trends within Le Mars’ rental market.

General Occupancy Development

Market Rate SIMPCO inventoried 20 market rate apartment complexes containing 281 units. At the time that surveys were conducted, the vacancy rate stood at approximately 2.8 percent. This is substantially lower than 5 percent, widely considered a healthy vacancy for a rental market, and it is also lower than vacancy rates reported by the American Community Survey in 2013. Larger units had lower vacancy rates, with three-bedroom units at zero percent vacancy.

Rents depended on the size of the unit, but averaged about $533 with a median rent of approximately $525, similar to that suggested by the American Community Survey (Table 28). Approximately 49 percent of units were two-bedroom units. One-bedroom units comprised another 45 percent of the units surveyed, while three-bedroom units only made up 6 percent of units surveyed.

Table 28: Market Rate Development Survey Information by Bedroom

# Bed Units Vacant Sq. Ft. Ave. Market Rent Range Percent of units Rooms Rent including ___ in rent: 1 127 4 (3.1%) 500 - 700 $464 $300 - $575 Garbage (84%), Water 2 138 4 (2.9%) 600 - 1,200 $581 $350 - $800 (70%), Sewer (65%), 3 16 0 (0.0%) 800 - 1,400 $678 $535 - $900 In-Unit or On-Site TOTAL 281 8 (2.8 %) 500 - 1,400 $533 $300 - $900 Laundry (52%), Garage (50%)

Most market rate units in this survey were constructed in the 1970’s and 1980’s, though a few smaller multiplexes were built in the early 2000’s as well. The approximate average age of surveyed units was 1959 due to a large complex built in 1921. Because of their older age, most units do not have additional on-site amenities such as gyms, pools, or playgrounds (with one exception). The majority of contract rents include some of the cost of utilities with garbage, water, sewer, in-unit or on-site laundry, and garages being the most commonly included

6 Since 2010, Census data indicates that Quarters 3 and 4 have had the lowest rental vacancy rates in Iowa. SIMPCO | Chapter 5: Rental Market Analysis 41

2015-2020 2015-2020 LE MARS HOUSING NEEDS ASSESSMENT utilities and perks included in the cost of the rental. Roughly 35 percent of units were handicap accessible.

It was beyond the scope of this project to research individual rental properties (including single family homes), but it is likely that the full rental market mirrors the multifamily rental market. It should also be noted that the single family rental market would be difficult to study as the City of Le Mars does not keep track of rentals using rental permits.

Subsidized SIMPCO inventoried three subsidized general occupancy rental developments in Le Mars in which rents are generally determined by the income of the tenant. Combined, these properties offer 76 units, 3 of which were vacant at the time of the survey for a vacancy rate of 3.8%. While this is a higher vacancy rate than for market-rate units, it is also lower than the 5 percent threshold. Three-bedroom units again had a zero percent vacancy rate. Around 53 percent of surveyed apartments were two-bedroom units. Another 25 percent were one-bedroom units, and the remaining 22 percent were three-bedroom units.

Table 29: Subsidized Development Survey Information by Bedroom

# Bed Units Vacant Sq. Ft. Rent Percent of units Rooms including ___ in rent: 1 20 1 (5.0%) ~600 30% of Income Water and Sewer 2 42 2 (4.8%) 720 - 958 30% of Income (100%), On-Site 3 17 0 (0.0%) 800 - 1,056 30% of Income Laundry (90%), Off- TOTAL 79 3 (3.8 %) 600 - 1,056 30% of Income Street Parking (70%), Garbage (61%)

Of these properties, all were created in the 1980’s and 1990’s, making them newer than many of the market rate units. In all subsidized units surveyed, water and sewer utilities were provided as part of rent. The majority also had on-site laundry, off-street parking, and garbage included. However, fewer subsidized units offered garages (only 30 percent) compared to market-rate units. Most do not have additional on-site amenities such as pools, gyms, or common rooms, though one complex has a playground. Only 16 percent of units were handicapped accessible.

Discussion Given this data, the general occupancy rental market looks to be strong. Vacancies are relatively low, and average rents for units have increased by 18 percent since the last housing study in 2005 with rents increasing more for larger units (Table 30). During this same time, inflation increased nationally by 22 percent. While many multifamily unit rents have generally increased less than the rate of inflation, the change in the median gross rent outpaced inflation according

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2015-2020 LE MARS HOUSING NEEDS ASSESSMENT 2015-2020 to the American Community Survey.7 This suggests that rents for duplexes and single family homes not included in this sample may be increasing even more rapidly than for multifamily properties.

Table 30: Comparison of Rents: 2005 – 2015

BR 2005 Average Rent 2015 Average Rent Percent Change 2005 – 2015 1 $407 $464 14.0% 2 $477 $581 21.9% 3 $519 $678 30.7% TOTAL $453 $533 17.7%

Corroborating the relatively strong market is the fact that most landlords get regular inquiries about their properties. As a result, they are less likely to keep a waiting list, which is behavior common in stronger markets.8 This seems to be especially true for larger apartment units, as evidenced by the higher price increases and the lower vacancies of three bedroom units. Conversely, there seems to be less demand for smaller units despite steadily decreasing household sizes.

Senior Occupancy Development The term senior occupancy development refers to any housing that is restricted by a person’s age or handicap. In Le Mars, threshold ages are typically 55 or 62, though having a disability makes younger residents eligible to live in many senior occupancy developments. Senior housing includes an entire spectrum of housing alternatives, much of which is often offered in a single complex. Senior housing can be classified into four general categories by the level of support services offered.

 Independent Senior Living – where few, if any, support services are provided and rents tend to be modest as a result;  Congregate/Support Service – where few support services, such as meals and light housekeeping, are available for an additional fee or may be included in rent;  Assisted Living – where 2 or 3 daily meals as well as basic support services such as transportation, housekeeping, and/or linen changes are included in the monthly rents. Personal care services such as assistance with bathing, groom, and dressing are available either for an additional fee or included in the rents; and

7 Le Mars median gross rent increased at an average annual rate of 3.1 percent compared to average annual inflation of 2.7 percent 8 Only 32 percent of landlords maintained an active waiting list. SIMPCO | Chapter 5: Rental Market Analysis 43

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 Intensive Care – where rigorous and service intensive personal care is required. Clients may include persons with dementia and Alzheimer’s disease. Typically, support services and meal plans are similar to those found in assisted living facilities, but the heightened levels of personalized care demand more staffing and higher rental fees.

These four senior developments tend to share several characteristics. First, many offer independent living apartments with living areas, bathrooms, and kitchens or kitchenettes. Second, they generally have an emergency response system with pull-cords or pendants to promote security. Finally, they often have a community room and other common space to encourage socialization.

In total, the different categories of developments offer a continuum of care, from a lower level of need to a need for intensive services. Typically, complexes with fewer services tend to attract younger, more independent seniors while assisted living and intensive care tend to attract older, more dependent seniors. SIMPCO surveyed six senior occupancy developments: three market-rate complexes with 199 units/beds and three subsidized complexes with 75 units.

Market Rate The three market rate senior housing developments that were surveyed contained 199 units/beds. Of those units/beds, 24 were unoccupied creating a vacancy rate of 12 percent. Market rate rents are dependent upon the level of care needed with rents varying from $2,000 to $5,000 per month (with rates often provided at a daily rate). Market rate senior units run most of the continuum of care including independent senior living, intermediate care, 24 hour skilled nursing servicing, and hospice care.

Table 31: Market Rate Senior Development Survey Information by Bedroom

Unit Type Number Vacant Sq. Ft. Rent Senior Services 1 BR 30 2 (6.7%) 391 - 414 $3,000 Independent senior living, Beds 169 22 (13.0%) NA $2,000 - $5,000 assistance with daily living, TOTAL 199 24 (12.1 %) 391 - 414 $2,000 - $5,000 skilled services, hospice, and related senior care.

While 12 percent vacancy is high compared to typical unit vacancy rates, the median nursing facility vacancy rate is roughly 14 percent. According to the American Health Care Association, this rate has been increasing steadily since 2007, partially due to a 5 percent decrease in the number of patients over the past decade.9 Iowa also tends to have slightly higher nursing home

9 American Health Care Association, Trends in Nursing Facility Characteristics, 2014. 44 Chapter 5: Rental Market Analysis | SIMPCO

2015-2020 LE MARS HOUSING NEEDS ASSESSMENT 2015-2020 vacancy rates than the nation, according to the Kaiser Family Foundation.10 By these standards, Le Mars’ market rate senior facilities seem to be at a relatively typical occupancy rate.

Subsidized SIMPCO surveyed three subsidized senior housing developments containing 75 units. Of these, 14 units, 19 percent were unoccupied. Subsidized senior rents are based on income, with 30 percent of a resident’s income determining rent. However, one complex had rents ranging from $470 - $645. Many of the subsidized senior care facilities seem to have less intensive levels of care compared to market rate senior housing, including independent senior living with some services and assisted living facilities.

Table 32: Subsidized Senior Development Survey Information by Bedroom

BR Units Vacant Sq. Ft. Rent Senior Services 1 75 14 (18.7%) 535 - 600 Depending upon Independent senior living, light the complex, support services, and assisted 30% of Income living services (emergency $470 - $645 response, medical oversight, etc.)

Le Mars’ 19 percent vacancy for subsidized senior rental units is slightly higher than what is seen nationally for nursing facilities, but these vacancies are not spread evenly among the complexes. One complex in particular has a vacancy rate of 37 percent, while the other two maintained vacancies averaging 8.3 percent (which had decreased to 4.2 percent by December).

Discussion The data collected in these surveys suggests that demand for senior rental housing seems to be satisfied at the moment. Market-rate senior housing vacancies are slightly below national rates while subsidized senior housing vacancies are above national rates.

Reasons for higher vacancy rates in subsidized senior housing may be related to the changing nature of senior healthcare in the U.S. As more healthcare programs help seniors to stay independently in their homes, the need for senior housing with light support services is decreasing. This may also explain why the number of residents in senior housing who require assistance with the Activities of Daily Living is increasing despite the decrease in total patient numbers.11 In other words, those now moving to senior rental housing tend to need higher levels of care.

10 Henry J. Kaiser Family Foundation, State Health Facts: Certified Nursing Facility Occupancy Rate, 2014. 11 American Health Care Association, Trends in Nursing Facility Characteristics, 2014. SIMPCO | Chapter 5: Rental Market Analysis 45

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Other explanations were also suggested during interviews. One respondent suggested that many seniors may not know they could afford subsidized senior housing, especially given the high prices of market-rate senior housing. Another attributed past high vacancy rates to ineffectual property management; after changing managers, vacancies dropped substantially.

Looking to the future, there may be increasing need for alternative housing or senior supportive housing as the population continues to age. From 2000 to 2010, the 55 to 64 age cohort increased by 50 percent and the 45 to 54 age cohort increased by 32 percent. As these groups continue to age, large population gains can be expected in the 65 to 74 and 75+ age groups, which are associated with a higher chance of disability and therefore higher likelihood of requiring senior care. This trend will occur in the next 10 to 20 years.

Renter Survey In addition to talking with landlords, SIMPCO also surveyed those who live and work in Le Mars. In total, 512 surveys were collected with 350 responses from Le Mars’ residents and 162 responses from those living outside of Le Mars. Renters comprised approximately 21 percent of all respondents with a higher proportion of renter respondents coming from outside Le Mars.

Renters: Le Mars Residents and Non-Residents When comparing renters living in Le Mars to those not living in Le Mars, several trends become apparent. First, Le Mars’ renters tended to pay higher rents. Most non-resident renters paid rents less than $599, while most Le Mars residents pay rents between $500 and $799 (Figure 16). Furthermore, only 46 percent of those surveyed in Le Mars rent single family homes while 62 percent of those outside Le Mars lived in single family homes. This demonstrates that while gross rent may not differ substantially between Le Mars and Plymouth County according to the American Community Survey, the same rent can command more desirable sizes and types of rental units outside of Le Mars.

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Figure 16: Current Rent: Le Mars Residents and Non-Residents

35% 31%

30%

25% 20% 20% 20% 20% 18% 15% 14% 15% 15% 9% 9% Percent of Renters 10% 7% 7%

5% 3% 3% 3% 3% 3% 0% 0% Under $400 - $500 - $600 - $700 - $800 - $900 - $1,000 - Over $400 $499 $599 $699 $799 $899 $999 $1,249 $1,249 LM Residents Non-Residents

The higher cost of renting in Le Mars was also reflected in why those living outside of Le Mars Renter Comments chose not to live in Le Mars (Figure 17). More than half of respondents said that the cost to rent “Le Mars needs new or renovated homes was prohibitive to moving to Le Mars. Similarly, that are more affordable to its residents. A a third of respondents noted the availability of lot of the rentals in town are either very housing was an issue, and another fifth noted dated or rundown and/or extremely that Le Mars did not have the right quality or overpriced.” type of housing for which they were searching. Many cited all three of these reasons. “I have been working in Le Mars for just Of course, these were not the only factors that over 6 months. I was looking to move led renters to live outside of Le Mars. Factors closer to work. I asked around from people affecting renters’ decision to live elsewhere at work and no one could even tell me include the size of the city, commute, and ties to where to look for a place in Le Mars. I family and friends in other areas. Most reasons are outside of the City’s control and cannot be stopped looking.” influenced by policy.

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Figure 17: Reasons Non-Residents chose not live in Le Mars

Cost of homes / cost to rent 53%

Availability of housing 33%

Quality / type of housing 19%

Atmosphere / feel of the city 19%

Distance from entertainment / retail 19%

Taxes are too high 17%

Size of the city 17%

Distance from family / friends 14%

Distance from work 11%

Distance from cultural events 6%

Safety 3%

Distance from entertainment / retail 3%

0% 10% 20% 30% 40% 50% 60% Percent of Respondents

Those who chose to live in Le Mars tended to be less satisfied with their housing situation compared to non-residents. Only 53 percent of Le Mars’ renters were satisfied or somewhat satisfied, while 61 percent of renters commuting from outside Le Mars were satisfied or somewhat satisfied. While this means that the majority of renters were satisfied in both cases, Le Mars renters were still more likely to move. 93 percent of Le Mars’ renters who were surveyed want to move in the next five years, compared to 72 percent of non-residents.

Table 33: Renter Satisfaction and Timeframe for Moving

How satisfied are you with your current housing arrangement? Residents Non-Residents Satisfied 11 16% 10 28% Somewhat Satisfied 26 37% 12 33% Somewhat Dissatisfied 16 23% 8 22% Dissatisfied 17 24% 6 17%

If you are looking to move in the next five years, when would you do so? Within 1 Year 30 42% 16 44% 1 – 2 Years 28 39% 6 17% 3 – 5 Years 8 11% 4 11% Not Looking 5 7% 10 28%

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Despite non-residents being less likely to move, many still wish to move to Le Mars. Just over one third of non-residents said they would move to Le Mars, and another 43 percent said that they would possibly move to Le Mars. However, most renters who want to move, including those living in Le Mars, want to own instead of rent (54 percent). The remainder wishes to continue renting (34 percent) or has no preference (12 percent).

Potential Le Mars Renters To look at future demand in the rental market, SIMPCO looked specifically at non-residents who said they would consider moving to Le Mars to rent, in addition to residents who said they are looking to move to another rental unit within Le Mars. In total, 40 respondents (8 percent) were looking to move to or within Le Mars with the intention of renting.

Figure 18: Potential Renters: What can you afford to pay?

35% 33%

30%

25%

20%

15% 13% 13% 10% 10% 10%

Percent of Renters 10% 8% 5% 5% 0% 0% Under $400 - $500 - $600 - $700 - $800 - $900 - $1,000 - Over $400 $499 $599 $699 $799 $899 $999 $1,249 $1,249

While there is no clear trend about what potential Le Mars’ renters can afford to pay, a few things become clear (Figure 18). First, one third of respondents can afford to pay rents between $600 and $699. This mirrors the largest category of what current Le Mars’ renters are actually paying, and suggests that this may be one of the most desirable price points for new units. However, another just under one quarter of respondents is also able to pay rents between $800 and $999. This may show the potential for some new rental properties of high quality as well. However, this does not discount the need for new affordable rental units – many renters are looking for rents between $400 and $499.

Renters also have clear patterns of demand. For one, most renters prefer new housing to rehabilitated housing. Approximately two thirds of potential renters would be interested in a

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2015-2020 2015-2020 LE MARS HOUSING NEEDS ASSESSMENT new single family home while another half would be interested in a new duplex or townhome. However, there is also a relatively strong demand for renovated properties as well. 40 percent showed interest for renovated single family homes and 35 percent were interested in rehabilitated duplexes or townhomes. Potential renters were less interested in multifamily properties, mobiles homes, or senior rentals. Overall, the data shows that renters are more willing than owners to live in a variety of housing types

Figure 19: Potential Renters: Would you be interested in any of the following types of housing?

80% 68% 70% 60% 50% 50% 40% 40% 35% 30%

20% 13% 10% 10% 5% 3% 0%

Table 34: Potential Renters: Desired number of bedrooms

Renters also tended to be searching for Bed Rooms No. Pct. smaller units than owners (Table 34). Two 1 5 13% bedroom units were the most desirable size. 2 17 45% However, units with three or more bedrooms 3 13 34% are also in strong demand, as suggested by 4 3 8% the vacancy rates and increasing rents noted earlier.

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Rental Market Summary The rental market analysis can be summarized by the following eight points:

1. Most rentals are multifamily properties, though single family homes are also popular. 2. Most rental properties are more than fifty years old. There have been few if any new construction rental projects in the past decade. 3. According to the American Community Survey, Le Mars’ rents are relatively affordable; its median gross rent is moderate for Plymouth County communities, and compared to counties to the north and west, it has a lower median rent. However, it is more expensive than counties to the east. Unfortunately, similar rents in Le Mars buy less than they would in surrounding communities. 4. Many of Le Mars’ renters are cost-burdened. Rental housing units are more likely to have housing problems and severe housing problems 5. Recent vacancy rates in general multifamily units are low, especially for units with more bedrooms. Average rents have increased since 2005, but at a rate slower than inflation. The exception to this rule is for three bedroom units. This data indicates a greater demand for larger multifamily rental units. These trends hold for market-rate and subsidized general occupancy developments. 6. Senior occupancy developments are more nuanced. Market rate units have vacancy rates slightly lower than the national rate for nursing homes. Subsidized units have higher vacancy rates compared to the national rate. Over the next 10 to 20 years, there may be demand for additional senior housing, but for now the data suggests that the demand for senior rental housing is being met. 7. Surveyed residents of Le Mars’ pay higher rents than non-residents. The cost to rent has proven prohibitive for non-residents to move to Le Mars, in addition to a lack of available housing and lack of quality housing. These factors have led to less satisfaction with housing for resident renters; as a result, they have a higher likelihood of moving from their current residence. 8. Potential Le Mars’ renters can pay slightly more for housing than they currently do. This may indicate demand for some higher-end rentals, though workforce rents are also still in high demand. Survey responses suggest that renters’ demand is higher for single family homes, though duplexes and townhomes are also in high demand. Fewer renters are interested in new multifamily properties. Two and three bedroom units are in the most demand, with a smaller percentage looking for one bedroom units.

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Chapter 6: Conclusions and Recommendations Previous chapters of this study analyzed the existing housing supply and the growth and demographic characteristics of the population and household base in Le Mars. This section of the report presents estimates of housing demand for the Le Mars area through 2020 and suggests appropriate development concepts to meet the needs of current and future residents.

This chapter begins by describing how demographic characteristics typically impact demand for for-sale and rental housing. Next it discusses the demand for new housing. Finally, it outlines conclusions and recommendations for Le Mars.

Demographic Profile and Housing Trends The demographic profile of a community affects housing demand and types of housing that are needed. The housing life-cycle stages can be seen in Table 35. These are general archetypes of buyers and renters.

Table 35: Life Cycle Housing Preferences

Preferences Age and Household Type Entry-level Prefer to rent basic, inexpensive Usually singles, occasionally householders apartments; as a result, are often unrelated roommates or couples attracted to denser areas without children in their early 20’s First-time Prefer to purchase modestly-priced Usually married or cohabitating homebuyers and single family homes or rent more couples, some with children, in their move-up renters upscale apartments mid-20’s or 30’s. Move-up Prefer to purchase newer, larger, and Typically families with children homebuyers typically more expensive single family where householders are in their late homes 30’s to 40’s. Empty-nesters Prefer owning but will consider renting Generally couples in their 50’s or and never- their housing to downsize and free their 60’s. nesters time from home maintenance. Independent Prefer owning but will consider renting; Generally in their late 60’s or 70’s. Seniors retirees may move (at least part of the year) to the Sunbelt to reduce responsibilities for upkeep and maintenance and avoid the cold winter months. Dependent May need to move out of single family Generally singles (often female Seniors homes due to physical and/or health widows) in their mid-70’s or older. constraints or a desire to reduce their responsibilities for upkeep and maintenance.

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The biggest trend affecting the current housing market in Le Mars is the relative scarcity of housing. Le Mars has a high demand for housing because of its strong economy, good schools, and desirable neighborhoods. However, housing development has been slow, especially since the recession, and most of it has occurred in the higher end of the ownership market. This has meant that supply has lagged behind demand for the majority of price points within the housing market, especially the lower and middle ownership market and the rental market in general. As a result, vacancy rates have decreased while the price per square foot has increased. This process has negatively affected the ability to attract entry-level householders, first-time homebuyers and move-up renters to the City. It also means that more jobs are filled by people commuting into the City.

Several other factors also affect the housing market in Le Mars. First, the aging of the housing stock presents opportunities and threats. On one hand, it makes the housing more affordable as it filters through multiple owners. However, it increases the risk of housing deterioration and disinvestment in properties. Second, housing consumers are often ill-prepared for ownership roles. This has made it harder for some first time homebuyers to transition into ownership. Finally, the City has little in terms of formal housing programs, and they do not target the needs of the community. In the end, these characteristics have presented challenges to the housing market in Le Mars, but they also present opportunities to help balance the market to make it better meet the needs of the Le Mars’ residents and employees.

New Housing Demand Some of Le Mars’ demand can be met by natural shifting within the housing market as the Baby Boomers age into alternative housing products. This frees up affordable homes, which can be especially desirable if they have been well-maintained. However, meeting demand will also require intentional action to boost the supply of housing if the City wishes to continue its strong growth. Whether that action is led by developers, by employers, or by the City, the Le Mars’ housing market is not currently fulfilling its potential for growth or the needs of residents within the boundaries of the City of Le Mars. Without action, many of Le Mars’ workers will have little choice but to locate to surrounding communities as prices increase due to demand outstripping supply.

Table 36 summarizes the overall for-sale and rental housing demand for the Le Mars market. We project demand for 360 additional housing units between 2015 and 2020, including 247 for sale units and 113 rental units. This requires an average construction rate of about 49 owner occupied units and 23 rental units per year. Some of the rental demand could be substituted by the filtration of the housing stock if single family construction rates are high enough. This may

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Table 36: Housing Demand Summary, Le Mars Iowa, 2015 to 2020

Household Growth 433

(times) Percent rental demand x 26% (equals) Rental demand = 113

(times) Percent owner demand x 74% (equals) Owner demand = 320

Rental Demand 113 (plus) Rental Replacement + 2 (less) Rental Construction (through 2014) - 2 (equals) Total rental demand = 113

Owner Demand 320 (plus) Owner Replacement + 10 (less) Owner Construction (through 2014) - 83 (equals) Total Owner demand = 247

Grand Total = 360

For-Sale Housing The City of Le Mars has seen housing construction begin to recover after the recession over the past five years. During this time, an average of 17 homes was built each year, which is down from the average of 22 homes built each year during the five years prior. Given these lower levels of building, it may be difficult to reach the City’s potential growth for the decade within the next five years. There still appears to be many buildable lots available in Le Mars, but many of them are targeted for higher value housing and their prices make it difficult for first-time homebuyers to purchase lots to build.

Of those 247 owner-occupied homes expected to be built by 2020, 173 are expected to be single family units and 74 are expected to be multifamily units. The demand for different price ranges indicates approximately 31 percent of new homes should be below $150,000, 54 percent should be between $150,000 and $200,000, while the remaining 14 percent should be more than $200,000. For the full breakdown, see Table 37.

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Table 37: Projected Housing Demand for Ownership Properties

Price Range No. of Units Pct. of Total Single Family First-Time Homebuyers $125,000 - $150,000 52 30% Move-Up Buyers $150,000 - $200,000 86 50% High End and Executive $200,000+ 35 20% TOTAL 173 100%

Multifamily (townhomes/condominiums) First-Time Homebuyers $100,000 - $150,000 26 35% Empty-Nesters and Independent Seniors $150,000 - $175,000 48 65% TOTAL 74 100%

Total For-Sale Housing 247 100%

For the types of products in demand, the majority of owners prefer single family homes, but there is still some demand for multifamily products, specifically duplexes, townhomes, and condominiums. Many of these homes are intended for first-time homebuyers, move-up buyers, and empty-nesters/independent seniors. Because high end and executive housing was constructed throughout the recession, there is generally less demand for these products.

Rental Housing Based on our rental unit survey, Census data, and building permit data, there has been very little construction of new rental housing during the past decade. This continues trends seen in the 2005 Housing Needs Assessment, meaning that rental unit construction is lagging far behind demand. This suggests a strong need for new multifamily rental housing, though single family homes are a more desirable rental product than multifamily properties. However, multifamily complexes allow rents more in line with what renters are willing and able to pay, given the rents of surrounding communities.

Table 38: Projected Housing Demand for Rental Properties

Total Rental Housing 113 100%

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There is a strong demand for most types of rental product in Le Mars. This includes all price ranges for townhomes and apartments, though new construction will likely not allow rents below $400. Some affordable rents may be possible through the rehabilitation of currently vacant homes, or it may be met informally through the conversion of large, older single family homes into multifamily properties. However, conversions are typically a less desirable form of development, so this process should be preempted by producing alternative multifamily developments of a higher quality.

Many renters also prefer single family homes, though this demand cannot be met through new construction because new homes would have rents far above what the market is willing to pay. However, single family rentals can be created through the filtering process. Providing larger units in townhomes may help meet some of the demand for the single family rentals by satisfying aspects of living in a single family home, including more living space, additional privacy, and private outdoor space.

It appears that there will be little additional demand for senior rental housing in Le Mars over the next five years. However, there will be new demand generated in the future, so monitoring the senior housing rental market is important to ensure that senior housing can be proactively constructed prior to future shortages.

Strategies The following recommended strategies should help address Le Mars’ housing needs. They are general in nature but must be kept in mind moving forward. They are listed roughly in order of importance:

2015-2020 LE MARS HOUSING NEEDS ASSESSMENT 2015-2020 ownership housing should be to provide current owners additional housing opportunities. By transitioning current owners into alternative products, units can filter through the housing market and new affordable housing options open up in lower price ranges that address needs which cannot be met by new construction.

Support quality-of-life initiatives within Le Mars. Most people surveyed have a positive view of Le Mars, but to help ensure that Le Mars’ maintains its appeal, amenities that provide a high quality of life must be supported. The top neighborhood amenities mentioned included parks or playground equipment, biking and walking trails, and schools. Survey respondents also wanted other city-wide amenities including proximity to job opportunities, retail, and public services. One public service specifically mentioned of deserving support was the library, with a few respondents even mentioning a desire for a larger facility. All of these considerations are important to providing for the needs of Le Mars’ residents within the community.

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Actions Actions are steps that the City can take to meet the demand for development within Le Mars and as such, will help implement the strategies mentioned in the previous section. They are organized by priority. The “high priority” designation means they are actions that the City should begin addressing as soon as possible because they alleviate the immediate need for housing. Medium priority items are actions that the City should act on, but do not need to begin working on until high priority actions are addressed. Low priorities actions are items that will help Le Mars housing market, but that are not essential to its functioning. The actions by priority are:

HIGH PRIORITY

1) Formalize developer agreements to promote affordable rentals and ownership properties: By formalizing developer agreements as housing policy, the current uncertainty for developers is eliminated. Ad hoc negotiations would end and subsidies could be used to promote rental and ownership options that are affordable for typical wage earners. Through formalization, these programs can also be advertised to outside developers which will help incentivize the construction of additional units. 2) Attract outside developers: Currently, local developers are producing most of the units, but they seem to be at maximum capacity producing single family homes and duplexes. By attracting outside developers familiar with multifamily construction and property management, new rental units can be brought online faster and more efficiently. Alternatively, attracting outside developers willing to build low-cost speculative housing puts additional homes on the market that many potential owners do not have the time or inclination to have constructed on contract. Targeting nonprofit developers specifically may also help ensure that affordable units are produced. 3) Encourage affordable housing of high quality: Prefabricated or modular homes can be built of a high quality and built to be indistinguishable from other homes at low price points. By allowing well-constructed prefabricated homes on foundations in compatible neighborhoods, new affordable single family homes can be added quickly to the City. 4) Use grant fund or creative financing to meet the need for affordable rentals: To help fill the demand for affordable rentals, developers may need to make use of grant funds. These include programs offered by USDA, the Iowa Finance Authority, the Iowa Economic Development Authority, or other state and governmental agencies. Developers should also be encouraged to cross-subsidize affordable rentals by having a mix of moderately- priced units with lower-priced units.

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MEDIUM PRIORITY

1) Permit rental properties: It is difficult to assess the rental market without any public records to keep track of the characteristics of rental properties. Instituting “rental permits” to monitor rental homes can help the City maintain more current information. The permit does not need to cost anything, but it would still allow the City to better evaluate the demand for rentals in real time which is especially important if the City is promoting rental development. Permits are also beneficial to landlords because it allows the City to connect potential tenants with landlords (a process that could be done online) and to contact owners in case of emergency. Permits should only contain necessary data so as to minimize the burden to landlords. 2) Make use of underutilized space for rentals: Many vacant homes in Le Mars are currently not for rent or sale. This indicates that they are either being used for other purposes such as storage (which has happened to many former second story apartments downtown), are uninhabitable, are undesirable enough to not be on market, or are being held for some other purpose. Renovating these areas and using them as rentals again will open up additional affordable units without the need for new construction. 3) Leverage City-owned land to construct new affordable housing: Waiving the cost of City- owned land can allow developers to produce housing that is more affordable for potential homebuyers. In order for this program to work, strict criteria must be laid out, including ensuring that housing constructed on the land must be at affordable price points. Strict criteria also means that merit will determine what projects should have fees waived. 4) Enforce housing codes while funding rehabilitation: Protecting the housing stock is important to ensure that the quality of housing and neighborhoods in Le Mars remains high. The City can be more proactive in enforcing its maintenance codes. This can help ensure that properties do not fall into a state of disrepair. However, it should be supplemented by providing funding for rehabilitation, either with local funds or with federal programs. This creates a carrot-and-stick approach to maintaining high quality neighborhoods that can be particularly effective. Encouraging neighborhood groups to form and remain active can also contribute to higher levels of property maintenance by producing grassroots buy-in from current residents. Neighborhood pride may show itself through clean up days or by simply encouraging high standards of maintenance. 5) Promote high quality and sustainable neighborhoods: Le Mars is fortunate to have high quality neighborhoods. The City should encourage this trend to continue, especially with an eye to the sustainability of future development. This includes tying new development to existing City infrastructure instead of allowing leap-frog development; utilizing existing infrastructure is more fiscally responsible for tax payers. In addition,

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providing improvements such as open spaces, sidewalks, and other amenities including schools, or community centers is also important to creating high quality neighborhoods. City-wide amenities, such as the public library, are also important quality-of-life considerations.

LOW PRIORITY

1) Investigate senior condominiums as an alternative senior product: While some filtration of the housing stock will occur naturally as the Baby Boomers age, the process could be sped up by constructing senior condominiums. This would supplement current rental senior options at the hospital and nursing homes and cater to the desire of homeowners to continue owning instead of transitioning back to rentals. It would also offer an opportunity for joint maintenance of property and accessible units. 2) Keep track of regional housing data: Le Mars competes with the surrounding region to provide housing. This makes it important for Le Mars to remain aware of regional housing trends so that any housing programs are remaining responsive to regional need. For example, there are currently several plans for high-end housing in the Sioux City Metro, which may reduce the need for additional high-end in Le Mars. Regional data monitoring can be accomplished through partnerships with existing regional entities such as SIMPCO. 3) Make the housing market more accessible to outsiders: As a smaller housing market, Le Mars can be at a disadvantage when bringing new workers into the region. Helping newcomers with online listings or through other ways to make listings more widely available may help integrate outsiders into Le Mars’ housing market more easily. This can also help prevent outsiders from defaulting to Sioux City’s housing market. Marketing Le Mars may also be a way to attract additional residents. 4) Support homeownership education: The City should not be in charge of educating potential homeowners, but it should support efforts to do so. This may include partnerships with lenders or the school district to inform students or potential owners how to save for down payment and manage household finances. 5) Allow the market to construct higher-end housing: The continued development of higher end housing allows move-up homebuyers to upgrade their housing situation and open up affordable housing. However, this is one of the few market segments that has seen new construction through current development. Lower end move-up housing may still require additional subsidy to remain affordable for move-up wage earners.

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APPENDIX I: Housing Financial Assistance Programs Federal Housing Development/Redevelopment Resources:

Brownfield Economic Development Initiative, HUD: The Brownfields Economic Development Initiative (BEDI) is a key competitive grant program that HUD administers to stimulate and promote economic and community development. BEDI is designed to assist cities with the redevelopment of abandoned, idled and underused industrial and commercial facilities where expansion and redevelopment is burdened by real or potential environmental contamination.

Community Development Block Grant, HUD: This is a federal program aimed at creating viable communities by providing funds to improve housing, the living environment, and economic opportunities, principally for persons with low and moderate incomes. It is administered through the Iowa Economic Development Authority (see State Housing Development/Redevelopment Resources below).

Community Investment Advance, FHLB Des Moines: Members of FHLB Des Moines can use a Community Investment Advance to support housing and economic development projects. Members are provided long term fixed rate advances at lower rates for eligible residential and commercial loans. The standard requirements of FHLB Des Moines credit and collateral policies apply to these special advances. Other Community Investment projects may be eligible for non-members.

Competitive Affordable Housing Program, FHLB Des Moines: The Competitive Affordable Housing Program (AHP) is one of the largest sources of private sector grants for housing and community development in the nation. This competitive grant program encourages member financial institutions to partner with local housing providers (sponsors) to secure funds for the purchase, construction or rehabilitation of affordable owner-occupied or rental housing units. Projects serve low-to-moderate income households, and may include households with special needs including seniors, persons with disabilities and the homeless.

Historic Preservation Tax Incentives Program, NPS and IRS: The Federal Historic Preservation Tax Incentives program encourages private sector investment in the rehabilitation and re-use of historic buildings. It creates jobs and is one of the nation's most successful and cost-effective community revitalization programs, leveraging over $73 billion in private investment to preserve 40,380 historic properties since 1976. The National Park Service and the Internal Revenue Service administer the program in partnership with State Historic Preservation Offices.

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HOME Investment Partnership Program, HUD: The HOME Investment Partnerships Program (HOME) provides formula grants to States and localities that communities use - often in partnership with local nonprofit groups - to fund a wide range of activities including building, buying, and/or rehabilitating affordable housing for rent or homeownership or providing direct rental assistance to low-income people. HOME is the largest Federal block grant to state and local governments designed exclusively to create affordable housing for low-income households. It is administered through the Iowa Finance Authority (see State Housing Development/Redevelopment Resources below).

Housing Preservation Grants, USDA: This program provides grants to sponsoring organizations for the repair or rehabilitation of housing occupied by low and very low income residents.

Lead-Based Paint and Lead Hazard Reduction Demonstration Grant Programs, HUD: The purpose of the Lead-Based Paint Hazard Control (LHC) and the Lead Hazard Reduction (LHRD) grant programs is to identify and control lead-based paint hazards in eligible privately owned housing for rental or owner-occupants. The Lead-Based Paint Hazard Control Grant program is the largest program in terms of dollar amount and number of grants. Both programs have a stellar track record across the country. Funding opportunities are published in the annual Notice of Funding Availability (NOFA) and is available online.

Low-Income Housing Tax Credt (LIHTC), HUD: Created by the Tax Reform Act of 1986, the LIHTC program gives State and local LIHTC-allocating agencies the equivalent of nearly $8 billion in annual budget authority to issue tax credits for the acquisition, rehabilitation, or new construction of rental housing targeted to lower-income households. LIHTC is the most important resource for creating affordable housing in the United States today with 40,502 projects and 2.6 million housing units placed in service between 1987 and 2013.

Multi-Family Housing Direct Loans, USDA: This program provides competitive financing for affordable multi-family rental housing for low-income, elderly, or disabled individuals and families in eligible rural areas.

Project-Based Rental Assistance, HUD: The Section 8 Program was authorized by Congress in 1974 and developed by HUD to provide rental subsidies for eligible tenant families (including single persons) residing in newly constructed, rehabilitated and existing rental and cooperative apartment projects. The rents of some of the residential

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units are subsidized by HUD under the Section 8 New Construction, Substantial Rehabilitation and/or Loan Management Set-Aside (LMSA) Programs. All such assistance is "project-based", i.e.; the subsidy is committed by HUD for the assisted units of a particular Mortgaged Property for a contractually determined period.

Public housing, HUD: Public housing was established to provide decent and safe rental housing for eligible low-income families, the elderly, and persons with disabilities. Public housing comes in all sizes and types, from scattered single family houses to high- rise apartments for elderly families. There are approximately 1.2 million households living in public housing units, managed by some 3,300 Housing Agencies (HA). HUD administers Federal aid to local HAs that manage the housing for low-income residents at rents they can afford. HUD furnishes technical and professional assistance in planning, developing and managing these developments.

Rural Housing Resources, HUD: For much of the last century, the poor quality and condition of homes was the primary housing concern facing rural areas in the United States. Drastically increasing housing costs and affordability have replaced poor housing conditions as the greatest problem facing low-income rural households today. Despite the fact that housing costs are lower in non-metro areas than in cities and suburbs, many households find it difficult to meet their basic housing costs. Most cost-burdened households have low incomes, and a disproportionate number are renters. At the same time, housing quality problems persist in rural places. Some housing programs for rural America include the following programs: Section 202 Supportive Housing for the Elderly; Section 502 Self-Help Housing; Section 504 Very Low-Income Housing Repair Loans and Grants; Section 515 Rural Rental Housing; and Section 811 Supportive Housing for Persons with Disabilities.

YouthBuild: YouthBuild is an alternative education program that focuses on the students, school, and leadership and work strengths. Students ages 16 – 24, who enroll in this program, earn pay while working to obtain their high school diploma or GED. They also learn occupational skills by building low-income housing and become community leaders by learning the importance of volunteerism and other skill-building activities. There is a YouthBuild Chapter in Sioux City.

State Housing Development/Redevelopment Resources:

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structures that have sat vacant for at least 6 months. The program requires that communities have a redevelopment plan and have conducted due diligence (a Phase I Environmental Assessment at least). The City of Le Mars is too large to qualify for these funds, but this program may be important to satisfying regional housing need.

Certified Local Governments Grant, Iowa SHPO: The Certified Local Government (CLG) grant program is open only to Iowa cities, counties, and land use districts that have signed a Certified Local Government Agreement with the State of Iowa and the National Park Service. In addition, in order to be eligible to apply for this grant opportunity, the Certified Local Government must be in good standing and current in their submission of annual reports. CLG grants may be used for identification, evaluation, and registration of historic properties which may open projects up to additional sources of grant funding.

Community Development Block Grant, IEDA: This is a federal program aimed at creating viable communities by providing funds to improve housing, the living environment, and economic opportunities, principally for persons with low and moderate incomes. While there are a number of different CDBG programs in Iowa, the Housing Rehabilitation CDBG provides annual competitive program funds for owner- occupied rehabilitation of single family homes being used as the principal residence. It is administered through the Iowa Economic Development Authority.

Historic Resource Development Program, SHPO: The Resource Enhancement and Protection/Historical Resource Development Program (REAP/HRDP) is funded by the Resource Enhancement and Protection Act (REAP). The purpose of the REAP/HRDP Grants Program is to provide funds to preserve, conserve, interpret, enhance, and educate the public about the historical resources of Iowa.

Housing Tax Credit Program, IFA: The Tax Reform Act of 1986 created an incentive for Housing Tax Credit project owners to invest in the development of rental housing for individuals and families with fixed or limited incomes. The tax credit provides a dollar for dollar reduction (or credit) to offset an owner's federal tax liability on ordinary income. IFA administers Housing Tax Credit allocation and compliance.

Iowa Brownfield Redevelopment Program, IDNR: Helps Iowa communities facilitate redevelopment of sites by reducing the environmental uncertainties that are hindering interest in site redevelopment. The grant can be used to pay for the cost of environmental assessments, among other qualified uses.

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Main Street Challenge Grant, IEDA: The Iowa Economic Development Authority (IEDA) provides Main Street Iowa Challenge Grants to communities around the state with a Main Street program. The grants benefit local improvement projects such as façade upgrades and restoration, upper floor rehabilitation for rental units, and remodeled spaces for expanding downtown businesses.

Main Street Mortgage Loan Program, IFA: A partnership between Main Street Iowa, IFA and the Federal Home Loan Bank of Des Moines, the Main Street Mortgage Loan program provides funds to Main Street communities in Iowa for community development projects.

Multifamily GREEN Program, IFA: The Iowa Multifamily GREEN initiative provides assistance to affordable housing developers and management companies for energy efficiency equipment and upgrades.

Multifamily Housing Loan Program, IFA: The IFA Multifamily Housing Loan program seeks to preserve the existing supply of affordable rental units and to foster the production of new affordable units in Iowa.

Paint Iowa Beautiful, Keep Iowa Beautiful: Keeping up the appearance of buildings and facilities is an important component of viable communities with well-maintained and painted buildings reflecting pride. Through a partnership with Diamond Vogel Paint of Orange City, Iowa groups can receive paint for community enhancement projects. More than 5,000 gallons of paint have been donated to community groups through the Paint Iowa Beautiful program.

State Housing Trust Fund, IFA: The State Housing Trust Fund (SHTF) helps ensure decent, safe and affordable housing for Iowans through two important programs. Through the Local Housing Trust Fund Program, receiving 60 percent of the annual SHTF allocation, the SHTF provides grants for organizations certified by IFA as a Local Housing Trust Funds (LHTF) to rehabilitate housing for low income individuals. SIMPCO is a designated LHTF. Through the Project-Based Housing Program, SHTF funds the development of affordable single-family and multifamily housing.

Workforce Housing Tax Credits, IEDA: Projects must meet one of four criteria: Housing development located on a grayfield or brownfield site; Repair or rehabilitation of dilapidated housing stock; Upper story housing development or; new construction in a greenfield (community with demonstrated workforce housing needs). The developer must build or rehabilitate at least four single-family homes or at least one multi-family building containing three or more units or at least two upper story units.

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Local Housing Development/Redevelopment Resources:

Tax Increment Finance (TIF) for Housing: Tax increment financing is a method whereby a portion of property taxes within a tax increment financing district (urban renewal area) are reallocated to the municipality undertaking the urban renewal project. These can then be used to fund infrastructure or create developer incentives. TIF can be used for housing development if a percentage of the future tax increment revenues from the project provides housing assistance to low- and moderate-income families.

Tax Abatement and Urban Renewal: Property tax abatement is a way for City Councils to give property owners an incentive to improve property by providing an exemption from property taxes for all or a portion of the increase in property valuation which occurs from new construction or improvements. For residential properties, it is enacted through the Urban Revitalization Act of the Code of Iowa (Chapter 404).

Down Payment Assistance: Cities can set up down payment assistance programs. Often they are targeted at low and middle-income families and can be targeted to certain groups, including first time home buyers, displaced homemakers or single parents. Down payment assistance programs are often funded by grants, such as using the state’s Housing Funds’ HOME program, but they can also be set up using City funds. They can also be set up as a joint grant administered by regional Councils of Government, like SIMPCO. One example of a community setting up a down payment assistance program is the City of Nevada, Iowa.

Development Agreements: A development agreement is a contract between a municipality and a property owner or developer, through which the municipality agrees to incentives, such as modify the existing zoning regulations, in exchange for public benefits. Development agreements are a flexible and useful tool, but they are performed on an ad hoc basis can result in discrepancies in what is offered to different developers. However, they do recognize that no two projects are the same, and it allows unique public benefits which might otherwise be too burdensome to require.

City-Owned Lots: Some communities use city-owned property to leverage public benefits such as affordable housing. It can be sold to individuals or developers at low prices which reduces the cost of development substantially. However, care must be taken to ensure that the benefit to the City should outweigh the cost of providing discounted lots. Orange City is one example of a City providing affordable city-owned lots to incentivize development.

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Housing Agencies or Development Corporations: Cities can create or support Housing Agencies or Development Corporations to actively develop land within City limits. Sometimes these responsibilities are given to existing Economic Development groups, such as the Cherokee Area Economic Development Corporation. Other times they are actively pursued by City departments. In Le Mars, the LBIC is one possible group that could take on housing development activities. Alternatively, regional groups could be created or brought in to perform similar tasks.

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APPENDIX II: Resident/Non-Resident Survey and Results

Do you live in Le Mars? Yes 350 68.40% No 162 31.60%

RESIDENTS

In which part of the city do you live? Midtown District 61 17.6% South District 57 16.5% North District 45 13.0% East District 43 12.4% Downtown District 28 8.1% West District 23 6.6% Outside of City Limits but within the zip code 14 4.0% Southeast District 3 0.9%

Do you work in Le Mars? Yes 319 92.2% No 27 7.8%

Do you own or rent your home? Own 278 79.7% Rent 71 20.3%

In what kind of a structure do you currently live? Single family home 287 82.9% Apartment/condominium (no income restrictions) 36 10.4% Mobile home 13 3.8% Other 5 1.4% Apartment/condominium (income restrictions) 3 0.9% Unit with another family 2 0.6% Assisted living unit or nursing home 0 0.0%

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What is the total monthly rent or mortgage payment for your Under $400 43 13.3% $400 - $499 23 7.1% $500 - $599 31 9.6% $600 - $699 47 14.6% $700 - $799 33 10.2% $800 - $899 24 7.4% $900 - $999 18 5.6% $1,000 - $1,249 61 18.9% $1,250 or more 43 13.3%

If you own your home, please estimate its current market value (i.e. the amount a person would pay if it were for sale)? Under $40,000 8 2.5% $40,000 - $59,999 3 0.9% $60,000 - $79,999 11 3.4% $80,000 - $99,999 15 4.7% $100,000 - $124,999 37 11.5% $125,000 - $149,999 37 11.5% $150,000 - $174,999 35 10.9% $175,000 - $199,999 22 6.9% $200,000 or more 112 34.9% Not Applicable 41 12.8%

How satisfied are you with your current housing situation? Satisfied 196 56.6% Somewhat satisfied 81 23.4% Somewhat dissatisfied 38 11.0% Dissatisfied 31 9.0%

Would you be interested in making a housing change within the next five years? Yes, I am actively searching. 77 22.3% Maybe, I would think of moving. 127 36.7% I probably will not move. 68 19.7% No, I will be here more than five years. 74 21.4%

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If you are interested in making a housing change within the next five Within 1 year 48 15.0% In 1 - 2 years 76 23.8% In 3 - 5 years 85 26.6% Not Applicable 111 34.7%

If you made a housing change, where would you wish to move? Elsewhere in Le Mars 224 71.1% Another city in Plymouth County 15 4.8% Unincorporated Plymouth County 33 10.5% A city of less than 2,000 people outside of Plymouth County 4 1.3% A city of 2,000 to 14,999 people outside of Plymouth County 23 7.3% A city of 15,000 to 49,999 people outside of Plymouth County 20 6.3% A city of 50,000 people or larger outside of Plymouth County 29 9.2% Unincorporated County outside of Plymouth 12 3.8% Other 27 8.6%

Why might you change your current housing arrangement Home is too small 100 32.3% Other 69 22.3% Home is too large 54 17.4% To be near family or friends 54 17.4% To own instead of rent 48 15.5% Home is too costly to maintain 36 11.6% Change in marital status 23 7.4% To find a place without accessibility barriers (ex. without steps, etc.) 20 6.5% To be near work 18 5.8% To be near entertainment or retail 18 5.8% To be near services (ex. medical, educational, recreational, child care, 14 4.5% etc.) Safety is a concern 9 2.9% Available transportation is inadequate 3 1.0%

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NON-RESIDENTS

Do you work in Le Mars? Yes 121 95.3% No 6 4.7%

How far from the City of Le Mars do you live? Under 10 miles 31 19.1% 10 - 24 miles 69 42.6% 25 - 49 miles 60 37.0% 50 miles or more 2 1.2%

How long have you lived at your current address? Less than 1 year 21 13.0% 1 - 2 years 26 16.0% 3 - 4 years 23 14.2% 5 - 9 years 30 18.5% 10 - 19 years 41 25.3% 20 years or more 21 13.0%

How long have you lived in the Siouxland area? Less than 1 year 5 3.1% 1 - 2 years 5 3.1% 3 - 4 years 11 6.8% 5 - 9 years 13 8.0% 10 - 19 years 22 13.6% 20 years or more 92 56.8% Other 14 8.6%

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What were the three primary reasons that led you to live at your current address? To be near family or friends 90 55.6% Cost of homes / cost to rent 74 45.7% To be near work 57 35.2% Quality of schools 43 26.5% Other 31 19.1% To be near entertainment or retail 30 18.5% Availability of housing 30 18.5% Size of the city 25 15.4% Atmosphere / the feel of the city 22 13.6% Safety 21 13.0% Quality / type of homes 20 12.3% Taxes 16 9.9% Access to transportation / proximity to major highways 9 5.6% To be near cultural events 2 1.2%

What were the primary reasons to NOT live at in Le Mars? Cost of homes / cost to rent 86 54.8% Availability of housing 55 35.0% Taxes are too high 48 30.6% Distance from family or friends 31 19.7% Distance from entertainment or retail 31 19.7% Other 28 17.8% Size of the city 27 17.2% Atmosphere / the feel of the city 24 15.3% Quality / type of homes 21 13.4% Distance from work 12 7.6% Distance from cultural events 12 7.6% Quality of schools 6 3.8% Lack of safety 2 1.3% Lack of access to transportation / proximity to highways 1 0.6%

Do you own or rent your home? Own 117 76.5% Rent 36 23.5%

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In what kind of a structure do you currently live? Single family home 137 86.2% Apartment/condominium (no income restrictions) 11 6.9% Mobile home 5 3.1% Unit with another family 3 1.9% Other 3 1.9% Assisted living unit or nursing home 0 0.0% Apartment/condominium (income restrictions) 0 0.0%

What is the total monthly rent or mortgage payment for your dwelling unit? Under $400 19 12.2% $400 - $499 17 10.9% $500 - $599 20 12.8% $600 - $699 23 14.7% $700 - $799 13 8.3% $800 - $899 15 9.6% $900 - $999 10 6.4% $1,000 - $1,249 19 12.2% $1,250 or more 20 12.8%

If you own your home, please estimate its current market value

Under $40,000 3 2.1% $40,000 - $59,999 2 1.4% $60,000 - $79,999 9 6.2% $80,000 - $99,999 14 9.7% $100,000 - $124,999 19 13.1% $125,000 - $149,999 15 10.3% $150,000 - $174,999 10 6.9% $175,000 - $199,999 18 12.4% $200,000 or more 29 20.0% Not Applicable 26 17.9%

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How satisfied are you with your current housing situation? Satisfied 88 55.0% Somewhat satisfied 49 30.6% Somewhat dissatisfied 12 7.5% Dissatisfied 11 6.9%

If you were to consider moving within the next five years, would you move to Le Mars? Yes 43 27.0% Maybe 77 48.4% No 39 24.5%

If you are interested in moving to Le Mars within the next five years, when would you want to move? Within 1 year 35 24.6% In 1 - 2 years 22 15.5% In 3 - 5 years 38 26.8% Not Applicable 47 33.1%

If you are not interested in living in Le Mars, where outside of the city Another city in Plymouth County 54 40.6% Unincorporated Plymouth County 42 31.6% A city of less than 2,000 people outside of Plymouth County 18 13.5% A city of 2,000 to 14,999 people outside of Plymouth County 21 15.8% A city of 15,000 to 49,999 people outside of Plymouth County 11 8.3% A city of 50,000 people or larger outside of Plymouth County 23 17.3% Unincorporated County outside of Plymouth 11 8.3% Other 11 8.3%

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ALL RESPONDENTS

If you were to move, would you rent or own? Rent 49 11.1% Own 394 88.9%

What is the highest monthly rent or mortgage payment you would be able to pay? Under $400 21 4.3% $400 - $499 30 6.2% $500 - $599 45 9.3% $600 - $699 54 11.1% $700 - $799 58 12.0% $800 - $899 49 10.1% $900 - $999 41 8.5% $1,000 - $1,249 95 19.6% $1,250 or more 92 19.0%

If you could have a new house, condominium, or townhome, what would you be able to afford? Under $80,000 51 10.5% $80,000 - $99,999 44 9.0% $100,000 - $124,999 68 13.9% $125,000 - $149,999 60 12.3% $150,000 - $174,999 61 12.5% $175,000 - $199,999 45 9.2% $200,000 - $224,999 41 8.4% $225,000 - $249,999 35 7.2% $250,000 or more 83 17.0%

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At least how many bedrooms must a residence have to meet your 1 11 2.2% 2 85 17.3% 3 244 49.8% 4 118 24.1% 5 30 6.1% 6 2 0.4%

What are three housing features that you must have in your home? Attached garage 343 67.4% Air conditioning 339 66.6% Finished basement 167 32.8% Washer / dryer on main floor 163 32.0% Storage space 147 28.9% Master suite (bathroom off of master bedroom) 147 28.9% Master bedroom on main floor 119 23.4% Off-street parking 93 18.3% High-end kitchen 73 14.3% Covered parking 37 7.3% Other 19 3.7% Building security system 13 2.6% Handicapped-accessible or barrier free 11 2.2% Assisted living services 4 0.8%

Which of the following living arrangements interests you? New single family house 394 80.7% Rehabilitated single family house 181 37.1% New duplex / townhouse 121 24.8% Rehabilitated duplex / townhouse 53 10.9% Unit in a new multi-family building 15 3.1% Rehabilitated multi-family building 13 2.7% Independent living senior apartments 11 2.3% Other 11 2.3% Continued care retirement community 8 1.6% Mobile homes 8 1.6% Assisted living / skilled nursing unit 5 1.0%

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What are three amenities you believe are important to have in your

Parks / playground equipment 312 61.3% Biking / walking trails 262 51.5% Schools 256 50.3% Near job opportunities 251 49.3% Recreation facilities (ex. basketball court) 128 25.1% Neighborhood retail 115 22.6% Swimming pool 74 14.5% Community center 66 13.0% Library 5 1.0% Other 42 8.3%

What is your gender? Male 235 50.3% Female 225 48.2% Do not wish to identify 7 1.5%

What is your age? 18 - 24 years 27 5.3% 25 - 34 years 123 24.2% 35 - 44 years 121 23.8% 45 - 54 years 135 26.5% 55 - 64 years 81 15.9% 65 years and over 22 4.3%

What is the highest grade you completed in school? Less than high school diploma 12 2.4% High school diploma or equivalent (ex. GED) 97 19.1% Some college education 100 19.7% Associate's or technical degree 80 15.8% Bachelor's degree 128 25.2% Post-bachelor's degree 90 17.8%

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What is your household’s approximate annual income from all Under $15,000 10 2.0% $15,000 to $29,999 17 3.4% $30,000 to $44,999 47 9.5% $45,000 to $59,999 60 12.1% $60,000 to $74,999 77 15.5% $75,000 to $99,999 89 17.9% $100,000 to $124,999 92 18.5% $125,000 or more 104 21.0%

How many people are in your household? 1 64 13.3% 2 160 33.3% 3 81 16.9% 4 92 19.2% 5 53 11.0% 6 23 4.8% 7 5 1.0% 8 1 0.2% 9 1 0.2%

Which of the follow best describes your household?

Couple with one or more children at home 231 45.5% Couple with children no longer living at home 80 15.7% Couple, no children 74 14.6% Single, no children 55 10.8% Single with one or more children at home 36 7.1% Single with roommate(s) 12 2.4% Single with children no longer living at home 10 2.0% Other 8 1.6% Couple with roommate(s) 2 0.4%

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APPENDIX III: Resolution of Adoption

RESOLUTION No. ____

A RESOLUTION TO ADOPT THE 2015 LE MARS HOUSING NEEDS ASSESSMENT

WHEREAS, the 2015 Le Mars Housing Needs Assessment was presented to the Le Mars City Council on March 1, 2016, and

WHEREAS, said assessment identifies the city's housing needs, and

WHEREAS, said assessment outlines a housing plan that may be implemented by the community to meet its housing needs, and

WHEREAS, a housing needs assessment assists the community in securing housing funds and provides documentation of the need for such funds, and

WHEREAS, said plan is in the best interests of the City of Le Mars, now therefore

BE IT HEREBY RESOLVED that the Le Mars City Council does hereby approve and adopt the 2015 Le Mars Housing Needs Assessment this 1st day of March 2016.

Signed:

Dick Kirchoff, Mayor

Date: March 1, 2016

ATTEST:

Signed:

Beverly Langel, Le Mars City Clerk

Date: March 1, 2016

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