RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY Park Forest, Illinois

Prepared for the Village of Park Forest

September 2019 2 INTRODUCTION

In late May of 2019, the Village of Park Forest, Illinois engaged Development Planning Partners to investigate the Village rental housing market and to provide development planning guidance for several key Village-owned sites located in the DownTown, 211th Street Metra Station, and former Hidden Meadows Golf Club areas.

The following report provides our findings and conclusions regarding area rental market trends and current conditions together with our assessment of rental housing development potentials within the three subject site areas. The timeframe analyzed for the purpose of our investigation was the near- to mid-term (generally speaking, one to five years). The report further provides guidance and recommendations for the development and pricing of new rental product deemed to have measurable levels of market support.

The Village of Park Forest should be proud of its many accomplishments. Working together, the residents of Park Forest have adopted a series of visionary plans and policies that set the stage for new investment in their community. Our work on this assignment has aimed at providing a set of market- based “starting points” to guide future efforts to spur rental housing development – a logical next step for the Village on the path to accomplishing the goals of achieving housing balance and building a foundation for community growth. In providing this guidance, it is our hope that Park Forest can further capitalize on past efforts and look forward to a bright future.

3 TABLE OF CONTENTS

INTRODUCTION ...... 3 TABLE OF CONTENTS...... 4 LIST OF FIGURES...... 5 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY...... 6 Background to the Assignment...... 6 Summary of Findings ...... 9 Background to the Market ...... 11 Rental Market Conditions...... 19 The DownTown Submarket: Findings & Strategy ...... 24 211th Street Metra Station TOD Site: Findings & Strategy ...... 27 Hidden Meadows Site: Findings & Strategy...... 30 Product Guidance & Market Support...... 32 APPENDIX A: Analysis of Rental Housing Demand Potential...... 36 APPENDIX B: Data Tables ...... 38 APPENDIX C: Assumptions & Limiting Conditions...... 44

4 LIST OF FIGURES

Figure 1: Subject Site Orientation...... 7 Figure 2: Park Forest Primary Market Area...... 12 Figure 3: Population by PMA place...... 12 Figure 4: Population comparison, Park Forest and PMA ...... 12 Figure 5: Median age by place...... 13 Figure 6: Population by age, Park Forest...... 13 Figure 7: Median household income by housing tenure...... 13 Figure 8: Workers in Park Forest by place of residence ...... 13 Figure 9: Change in workers flows, Park Forest...... 14 Figure 10: Occupancy characteristics ...... 14 Figure 11: Vacant units by status, Park Forest...... 14 Figure 12: Change in households by tenure...... 15 Figure 13: Household size by tenure...... 15 Figure 14: Housing units by tenure and units in structure, Park Forest ...... 15 Figure 15: Renter occupied housing units by units in structure...... 16 Figure 16: Renter households by age of householder ...... 16 Figure 17: Renter households by household income ...... 17 Figure 18: Incidence of housing cost burden among renter households...... 17 Figure 19: Renter households by gross rent as a percent of household income, Park Forest...... 18 Figure 20: Conventional rental apartment developments, Park Forest ...... 19 Figure 21: Conventional rental apartment developments by place...... 20 Figure 22: Current conventional rental apartment market characteristics ...... 20 Figure 23: Conventional apartment market rent growth...... 20 Figure 24: Conventional rental apartment market vacancy trend...... 21 Figure 25: Profile of HUD-subsidized rental units...... 23 Figure 26: Profile of IHDA-financed, rent-restricted developments ...... 23 Figure 27: Suggested plan types and benchmark rent, DownTown market rate apartments ...... 33 Figure 28: Capture rate analysis, 90-unit affordable development (50%-60% AMI) ...... 34 Figure 29: Affordable unit penetration rate analysis ...... 35 Figure 30: Suggested plan types and benchmark rent, TOD area market rate apartments (2022 lease-up)...... 35 Figure 31: Consolidated forecast of five-year market rate rental apartment demand potentials, Park Forest ...... 37

5 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Background to the Assignment As a result of its efforts, the Village has developed a From its founding in the late 1940s as one of the nation’s collaborative vision of its current and future housing needs first planned communities, Park Forest has had a rich and aspirations. Now, as part of this vision, Park Forest is history of innovative and progressive planning. At a time interested in pursuing rental apartment development on when exclusionary tactics were common, Park Forest’s multiple sites throughout the Village. Three of the sites forefathers actively and peacefully ushered integration into are located within the walkable DownTown core. These the Village. Over the years, the Village has diversified its sites include the following: housing stock to address the needs of a changing . Northeast corner of Main Street and Forest Boulevard population, and in 2017 it adopted major revisions to its (20 Main Street) – 2.25 acres, list price $425,000 zoning and subdivision ordinances to allow for a variety of new housing types, including accessory dwelling units, . Northwest corner of Main Street and Cunningham Drive live/work units, and mixed-use development. – 0.94 acres, list price $91,913

The planning tradition in Park Forest continues, with seven . Main Street at Orchard Drive – 4.80 acres, list price major plans adopted since the early 2000s providing a $483,000. foundation for the future of the Village. These include the In addition, the scope of this assignment includes two DownTown Master Plan Update (2002), Strategic Plan for large redevelopment sites located outside of the Land Use and Economic Development (2009), 211th Street DownTown core: Metra Station Transit Oriented Development Plan (2011), Growing Green: Park Forest Sustainability Plan (2011), Park . The former Hidden Meadows municipal golf course site Forest Bicycle and Pedestrian Plan (2014), Comprehensive located at the northeast corner of Crawford Avenue and Housing Plan (2018), and the Park Forest Climate Action Stuenkel Road, where three parcels are available for and Resilience Plan (2019). redevelopment, encompassing 72 acres.

In addition, in 2012 Park Forest was chosen as a subject . The defined Transit-Oriented Development (TOD) community for the Metropolitan Planning Council’s (MPC) district surrounding the 211th Street Metra station. Homes for a Changing Region program. The plan that Portions of the district are located within the villages of resulted was adopted by the Village as its Comprehensive Matteson and Olympia Fields as well as Park Forest. Housing Plan and formed the basis of the 2018 update. Planning studies were completed for the TOD and Hidden Referencing the Village’s history as a forward-thinking Meadows sites in 2011 and 2015, respectively. planned community, the 2012 report noted that “housing planning is at the center of Park Forest’s DNA.”

6 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Figure 1: Subject Site Orientation

Source: Village of Park Forest and Development Planning Partners While site-specific housing market studies are undertaken Purpose of the Study by municipalities for a variety of reasons, the primary uses of such studies are to provide current, in depth market After the deep planning and preparation work already information to community officials and other stakeholders, completed by the Village, this study should be seen as a to help guide planning and policy decisions, and to assist logical next step that brings the community’s housing the municipality in its evaluation of development goals and aspirations closer to reality. Building off the proposals. In addition, these studies are often used as broad housing policy and planning framework embodied economic development tools to “shop” key sites to in this previous work, this study provides up to date “nuts developers and by developers themselves as they create and bolts” analyses of rental housing market conditions project designs and proformas. In short, market studies and development potentials. This includes an assessment serve as the link between long range land use and of the depth and character of demand for new rental units community development planning and the creation and over the near- to mid-term as well as conclusions implementation of successful development project plans. regarding achievable rents and likely absorption rates. In addition, the study provides an assessment of the subject Any housing market is subject to continual change, and sites with regards to their suitability for rental market conditions may, at times, evolve quite quickly. development and offers specific product criteria (including However, a primary objective of this report is to provide recommendations regarding unit type, size, mix, features the Village with a market-based strategy to spur and amenities) for rental units that can achieve maximum development interest, thereby kickstarting the market acceptance. development process and setting the stage for the future growth of the Village.

7 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Work Plan & Methodology . A review of projects in the market area planning pipeline that could pose some degree of competitive influence The work plan for this assignment encompassed a series on any developments proposed for the subject sites. of interrelated research investigations, including (but not limited to) the following: . An assessment of features and amenities that could be offered to enhance the marketability of any units . A review of prior planning documents relevant to the developed within the subject sites and/or to increase assignment, including those discussed above. their overall revenue potential. . An in-depth field investigation of the subject sites and The conclusions and recommendations provided within their general environs to determine the geographic this report were based on a variety of analyses. boundaries of the study area, taking into consideration Methodology included, where applicable, a modified rent the properties’ orientation to major auto and transit comparison approach and statistical modeling. routes, employment concentrations, existing areas of commercial and residential development, general Current demographic and socio-economic estimates cited household movement over time (i.e., the flow of within this report are from the U.S. Census Bureau. They households throughout the local environs), and the are the most recent vintages available and are derived propensity of households to relocate from one location from the Decennial Census (for longer term population within the local environs to another. trend data), Annual Estimates of Resident Population (for the most current population estimates), and from the . An on-site inspection and evaluation of the subject 2013-2017 American Community Survey, Five-Year properties. Included in this evaluation were an Estimates. assessment of the properties’ physical character; locational attributes such as visibility, accessibility, and Extensive field work and interviews with real estate adjacent land uses; and proximity to shopping, services, professionals provided rich contextual support for schools, centers of employment, public transportation, conclusions regarding market conditions and potentials and other life-enhancing amenities. within the investigative area. Additional information related to housing market trends was gleaned from CoStar . Interviews with area real estate professionals and other and local apartment and for sale home listing services. stakeholders and subject matter experts, undertaken to gain valuable firsthand perspectives on local real estate A Note on Strategy needs, desires, and potentials. As a market study, the guidance and recommendations . An analysis of area demographic and socioeconomic provided within this report are based on our analyses of trends—including age, income, household formation current and projected market conditions. The and derivation, employment, and other factors specific recommended development planning strategies – to the defined study area—and a resulting including the type of product specified and the order in measurement of the depth of the market for new rental which the subject sites are prioritized – are built off our units. analysis of what is deemed the most viable development scenario within the one- to five-year timeframe that is . An analysis of existing housing occupancy and supply covered within the scope of this assignment. This is not to conditions and characteristics within the Village, suggest, however, that the sites could not be developed in including housing tenure trends, occupancy/vacancy another order if suitable development interest can be levels, and housing stock composition. secured – only that market timing is an important strategic . A survey and analysis of currently active apartment component for the near term. As noted within this report, communities within the defined market area that existing conditions appear to require that ample time for represent either a direct or indirect source of market incubation be given between rental development competitive influence. projects. As success is demonstrated, however, and market potentials rise, this could change at some point in the future.

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Summary of Findings timeframe, encompassed five Village-owned sites in three th From its inception as one of the nation’s first planned subareas of the Village: the DownTown core, the 211 communities, Park Forest has been at the leading edge of Street Metra Station Transit-Oriented Development (TOD) community planning. A multitude of plans over the years district, and the former Hidden Meadows Golf Club site. has provided support for Village-led efforts to become a The three subareas are very different in character and stronger community. unique in the opportunities and challenges they afford. Measurable levels of near-term market support for the These efforts have produced many successes and positive development of new multifamily rental units were found in results. The early transformation of the Park Forest Plaza both the DownTown and TOD areas, while our shopping mall into a traditional downtown, recent cutting- investigation suggested that the Hidden Meadows site will edge zoning and subdivision updates that allow for a wide be more suited (within the near- to mid-term) to for-sale variety of housing types, and ongoing beautification and housing development. neighborhood stabilization efforts have helped to prepare the Village for growth and are indicative of high levels of More specifically, our investigation yielded the following: civic engagement and a strong sense of community pride. . Among the investigative areas assessed, we find the Yet despite its efforts, Park Forest continues to suffer from strongest level of support for new market rate rental market challenges that have impeded growth and eroded units within the Village’s DownTown core. Not only resources and municipal capacity in many of the southern does DownTown offer a variety of commercial, suburbs. Moreover, the Village continues to lose entertainment, recreation, and civic amenities, together population and, with it, support for local businesses. with relatively easy transit connections in a walkable environment, it is also home to Park Forest’s most Our extensive investigation of market history and current recent examples of larger scale residential development. conditions in Park Forest clearly showed that the Village Moreover, increasing DownTown residential density and needs a set of starting points based in current market providing consumer support to new and existing realities in order to kickstart development and fuel the businesses is critical to the Village’s economic future. implementation of its visionary planning initiatives. All three DownTown sites were found to be appropriate While Park Forest offers some of the most affordable for residential use and are considered equivalent in their housing available in the regional for-sale sector, its rental marketability. However, it is unlikely that all three can housing market, like that of its neighboring communities, be developed at once. Rather, we recommend a is out of balance. A lack of multifamily development over strategy of periods of development followed by periods the last several decades has left the market area with few of “hiatus” to allow for market incubation. rental options in both the market rate and affordable segments of the market. Within Park Forest itself, Current and projected market conditions suggest that occupancy conditions are extremely tight within the the strongest market approach is for the Village to focus market rate segment, and no new conventional its efforts on the smallest site as a starting point to apartments have been built since the 1970s. Meanwhile, in jumpstart DownTown growth and densification. We the affordable sector, no units serving families and recommend that the Village seek a development of individuals at the 50 to 60 percent area median income approximately 25 units for this site (Main Street and (AMI) level exist at all. Moreover, though the total number Cunningham Drive); follow this with a mixed-use of households living in Park Forest has declined in recent development of approximately 50 units with ground years, by Census estimates the Village had nearly 600 floor commercial space for the site at Main Street and more renter households in 2017 than it did in 2010, Forest Boulevard; and proceed finally to seeking a elevating the urgency to address rental market development of approximately 100 units (in two phases) imbalances. for the largest site at Main Street at Orchard Drive. Each period of development should be followed by a hiatus Conclusions & Strategic Recommendations period of approximately 12 months. Our investigation, which assessed market potentials within a near- to mid-term (approximately 1-5 years) planning 9 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Thus, we see market potential for the development of However, the location and character of the site, together approximately 175 multifamily rental units within a 5-6 with adjacent residential uses, suggest that year timeframe within the DownTown core. This opportunities could exist there for the development of projected volume is supported by the analysis of new new for-sale housing. This could include detached rental housing demand potential found in Appendix A single family homes, attached townhomes, and ranch of this report. villas or duplex units targeted to active adults.

. The 211th Street Metra Station TOD site obviously In the future – and particularly if employment- benefits first and foremost from excellent connection to generating uses can be drawn to the Hidden Meadows transit. In addition, numerous commercial amenities are site – conventional apartment development may located along Lincoln Highway, and Interstate 57 is become feasible. easily accessible two miles to the west. Despite its many Product guidance for the recommended DownTown and benefits and positive attributes, however, in the 211th Street Metra TOD developments and suggested immediate future the successful development of market benchmark pricing for the initial conventional apartment rate units simultaneously in the DownTown core and in developments are provided in the main body of this the TOD site is seen as unlikely, as demand potentials report. As mentioned, our analysis of rental housing do not appear strong enough to accomplish both. market demand potentials – together with an explication However, need exists today for rent-restricted affordable of the methodology utilized – can be found in Appendix units targeted to individuals and families earning A. While data collected and analyzed is presented in approximately 50-60 percent of AMI. As mentioned tables, charts, and graphs throughout the report, for above, there are no such units currently in Park Forest, interested parties, a more extensive array of data is and only 400 exist throughout the five-community presented in tabular form in Appendix B. Primary Market Area (defined later in this report). Analyses of current market penetration of such units and capture rate requirements confirm that more than sufficient market depth exists for the development of approximately 90 units within the site. Such a development would serve as a strong starting point – setting the stage for future redevelopment efforts on the site while providing critical, family-supporting housing, bringing new housing balance to Park Forest, and potentially drawing new residents to the Village.

Within a three-year development horizon, however, sufficient market strength should be present to support a new market rate development with approximately 50 units. Additional market rate and/or mixed-income uses could follow on as the market continues to strengthen.

. The former Hidden Meadows Golf Club site was found to exhibit the weakest potential for near- to mid-term conventional rental development among the three subareas. While the site benefits from significant natural amenities and proximity to Governors State University, it is challenged by its relative remoteness from commercial and other amenities. Moreover, demand for student housing at Governors State is likely, for the foreseeable future, to be met on campus, while support for housing targeted to university staff is seen as minimal.

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Background to the Market lies approximately 2.5 miles to the west of the Village. Located primarily in extreme southern Cook County, and Three interchanges provide connectivity to I-57, the wider with a small portion extending into northern Will County, regional freeway system, and the City of Chicago. approximately 33 miles south of Chicago’s Loop and eight Park Forest is bordered by four villages (Matteson, miles west of the Illinois-Indiana border, the Village of Park Olympia Fields, Richton Park, and University Park) along Forest was founded in 1946 as one of the nation’s first with the City of Chicago Heights. The Primary Market planned developments, primarily to provide housing for Area (PMA) defined for the purpose of our analyses and returning World War II veterans. With the post-war calculation of rental market demand potentials includes all housing and baby booms, the Village grew rapidly of these municipalities with the exception of Olympia through the 1950s and reached a peak population of more Fields. Olympia Fields has a significantly higher median than 30,000 residents in the 1960s. household income than the other municipalities that surround Park Forest and is home to very few renter households. It was thus considered non-comparable to the other municipalities and was excluded from the PMA.

The defined PMA was established based on the following: 1) Demographic, geographic, and socioeconomic linkages between the five municipalities; 2) Recent trends in localized residential and commercial development throughout the area; 3) Proximity to regional employment concentrations; 4) Commutation patterns along primary area roadways and via Metra’s Electric Line; and 5) Information gleaned generally on local geographic mobility, customs, and propensities.

By traditional definition, approximately 75 percent of market support for any new residential units introduced within a subject site can be expected to emanate from within the defined PMA. However, during the near term, it Today, the Village encompasses roughly five square miles. is likely that the proportion of market support contributed U.S. Highway 30 (Lincoln Highway/211th Street) runs along by the defined PMA will be even higher than this, given the northern Village border, while Western Avenue runs current market conditions and the trend of declining through its easternmost portion. Metra’s Electric Line population within the PMA (and throughout most of closely aligns with the Village’s western border, with three Chicago’s south suburbs), as discussed below. stations easily accessible from the Village. Interstate 57

11 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Figure 2: Park Forest Primary Market Area

Source: Development Planning Partners same decade, however, Park Forest lost nearly 1,400 Population Trend residents. Population losses in Park Forest, though moderating, continued after 2010, with 2018 estimates According to the latest (2018) resident population suggesting that the Village lost more than 500 residents estimates from the Census Bureau, the Village of Park between 2010 and 2018. Moreover, the proportion of Forest is home to 21,429 people. Among the five Primary PMA residents who live in Park Forest has shrunk over the Market Area (PMA) municipalities, only Chicago Heights is years, from 26.4 percent in 2000 to 23.6 percent in 2018. larger, with a population of 29,571. In total, the estimated population within the PMA is 90,831. Figure 4: Population comparison, Park Forest and PMA Change 2018 Figure 3: Population by PMA place Area 2000 2010 2010- Est. 2018 Place 2010 Census 2018 Est. Change PMA 88,881 92,035 90,831 -1.3% Chicago Heights 30,276 29,571 -2.3% Park Forest 23,462 21,975 21,429 -2.5% Park Forest 21,975 21,429 -2.5% Park Forest % of 26.4 23.9 23.6 -- Matteson 19,009 19,464 +2.4% PMA

Richton Park 13,646 13,409 -1.7% Source: U.S. Census Bureau, Decennia Census and Annual Estimates of University Park 7,129 6,958 -2.4% the Resident Population PMA Total 92,035 90,831 -1.3% Age Dynamics

Source: U.S. Census Bureau, Decennia Census and Annual Estimates of By current estimates from the Census Bureau’s American the Resident Population Community Survey (ACS), the median age of Park Forest Population losses have challenged Park Forest, as they residents stands at 38.7 years, an increase of 3.5 percent have many of the south suburbs. Between 2000 and 2010 since 2010. By comparison, the median age of residents the PMA added nearly 3,200 people, largely as a result of within the Chicago Metropolitan Area as a whole is 37.0 population gains in developing Matteson, which added years. more than 9,000 residents during the decade. During this 12 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Figure 5: Median age by place Park Forest renters stands 20 percent below that of the Chicago Metro as a whole. Place 2010 2017 Change

Chicago Heights 31.2 34.1 +9.3% Figure 7: Median household income by housing tenure

Matteson 38.4 39.9 +3.9% Place Owner Renter Total

Park Forest 37.4 38.7 +3.5% Chicago Heights $61,808 $20,770 $45,843

Richton Park 35.6 40.1 +12.6% Matteson $91,425 $30,881 $85,202

University Park 30.1 32.0 +6.3% Park Forest $58,407 $31,547 $50,343

Chicago Metro Area N/A 37.0 -- Richton Park $75,449 $29,096 $53,179

Source: U.S. Census Bureau, Decennial Census and 2013-2017 American University Park $61,813 $29,727 $48,397 Community Survey, 5-Year Estimates Chicago Metro Area $85,081 $39,354 $65,757 Changing age dynamics in Park Forest have meant that in Source: U.S. Census Bureau, 2013-2017 American Community Survey, 5- recent years the number of young adult residents between year estimates the ages of 20 and 34 has shrunk as a percent of overall Employment Trend population, while that of residents age 35 to 44 has grown. The proportion of residents who are children has The Census Bureau provides data on where workers live remained essentially constant, while that of seniors (age 65 and work. While the latest vintage available from this and older) has grown. survey is 2015, the information does provide valuable insights into employment trends within the investigative Figure 6: Population by age, Park Forest area. 2010 2017 These data show that nearly 4,700 people work in Park

% Forest. While nearly 300 workers are both employed and % 2 % 6 . . % 0 9 . 8 7 .

2 living in Park Forest, the vast majority of workers commute 7 2 5 2 2

% into the Village from other locations, principally the City of 0 . % % % 8 % 3 2 5 . . % 1 . 6 Chicago, where more than 22 percent of Park Forest’s . 5 7 5 . 4 1 1 3 1 2 1 1 workers live.

Figure 8: Workers in Park Forest by place of residence

0 - 1 9 2 0 - 3 4 3 5 - 4 4 4 5 - 6 4 6 5 + Place Count Share Chicago 1,045 22.3% Source: U.S. Census Bureau, Decennial Census and 2013-2017 American Park Forest 299 6.4% Community Survey, 5-Year Estimates Chicago Heights 196 4.2% Household Income Comparison Matteson 102 2.2% By current ACS estimates, the median income of Park Richton Park 102 2.2% Forest households stands at $50,343 (in 2017 inflation- Tinley Park 80 1.7% adjusted dollars), more than 30 percent lower than that of Calumet City 68 1.4% the Chicago Metro as a whole. Among PMA municipalities, Chicago Heights and University Park have a South Holland 63 1.3% lower median household income than Park Forest, while Steger 59 1.3% that of Matteson is significantly higher. A more nuanced Harvey 58 1.2% analysis of household income by housing tenure suggests, All Other Locations 2,624 55.9% however, that renter households in Park Forest generally have higher incomes than those of the other PMA Source: U.S. Census Bureau, OnTheMap Application and LEHD Origin- Destination Employment Statistics (Beginning of Quarter Employment, 2nd municipalities, though the median household income of Quarter of 2002-2015).

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Census Bureau estimates show that employment in Park The Census Bureau classifies vacant housing units into a Forest grew significantly with recovery from the Great variety of status categories. Within Park Forest, more than Recession. From 2010 to 2015, 900 jobs were added to 600 vacant housing units were either for rent or for sale Village payrolls, an increase of nearly 24 percent. (without the option of renting) at the time of the survey. However, all of this increase consisted of workers Another 115 were sold but not yet occupied. An additional commuting into the Village, while the number of workers 205 units were classified as “other vacant” – a category living in Park Forest and working outside of the Village that can often include properties that are uninhabitable, declined by nearly 500, suggesting that Park Forest has abandoned, foreclosed, or distressed in some other way. not been able to participate in the full economic benefit of For this reason, municipalities seek to limit the number of increased employment in the Village. other vacant properties, often through housing policy and/or programs. The 205 other vacant housing units in Figure 9: Change in workers flows, Park Forest Park Forest represent 22.1 percent of the total vacant Worker Status 2010 2015 Change housing stock. This is a significantly lower proportion than Workers employed in Park that for the Chicago Metro as a whole, where other vacant 3,479 4,397 26.4% Forest living outside the Village units represent more than 44 percent of the total vacant

Workers living in Park Forest stock, and is a sign that recent housing interventions (such 8,501 8,040 -5.4% employed outside the Village as demolitions) have had a positive effect on the overall health of the Park Forest housing market. Workers living and employed in 317 299 -5.7% Park Forest Figure 11: Vacant units by status, Park Forest

Source: U.S. Census Bureau, OnTheMap Application and LEHD Origin- Vacancy Status Units Destination Employment Statistics (Beginning of Quarter Employment, 2nd Quarter of 2002-2015). For rent 333 Housing Tenure & Occupancy Characteristics Rented, not occupied 0 For sale only 273 By latest ACS estimates, there are 9,397 housing units (of all types and forms) in Park Forest. Of these, 8,471 were Sold, not occupied 115 occupied at the time of the survey. The owner-occupancy Seasonal, recreational, or occ. use 0 rate within Park Forest stood at 60.4 percent, which is For migrant workers 0 somewhat lower than the PMA, at 63.4 percent, and the Other vacant 205 Chicago Metro area as a whole, at 64.4 percent. Total 926 Figure 10: Occupancy characteristics Source: U.S. Census Bureau, 2013-2017 American Community Survey, 5- Attribute Park Forest PMA year estimates

Total Housing Units 9,397 37,529 Household Trends

Occupied Housing Units 8,471 33,216 By ACS estimates, the number of households in Park Forest has declined in recent years. The Village lost 279 Owner-Occupied 60.4% 63.4% households (3.2 percent) between the 2010 Census and Renter-Occupied 39.6% 36.6% the 2017 ACS. During this same time, the number of Vacant Housing Units 926 4,313 households within the PMA grew 2.2 percent. In both the Vacancy Rate 9.9% 11.5% Village and the PMA as a whole, the number of owner households declined. Yet during this same time the Source: U.S. Census Bureau, 2013-2017 American Community Survey, 5- number of renter households grew significantly – nearly year estimates 22 percent within Park Forest. By these estimates, the An additional 926 housing units were vacant at time of Village now has nearly 600 more renter households than it survey, yielding a vacancy rate of 9.9 percent. While this did at the time of the 2010 Census, while the PMA has vacancy rate is somewhat higher than the Chicago Metro 1,450 more. area, at 8.9 percent, it is lower than the PMA as a whole, at 11.5 percent.

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Figure 12: Change in households by tenure Park forest has a slightly higher proportion of three person

Housing Tenure Park Forest PMA households than the PMA and a similar proportion of households with four or more people. All Households 2010 8,750 32,514 Housing Structure Characteristics 2017 8,471 33,216 The majority of owner-occupied housing units in Park Change -3.2% +2.2% Forest are comprised of single family forms, which, by Owner Households Census definition, include both detached and attached 2010 5,991 21,823 homes (i.e., duplex, townhome, and other “single address” 2017 5,116 21,074 units). Very few multifamily units in the Village are owner- Change -14.6% -3.4% occupied. Renter-occupied units are more varied in terms of structure type; however, more than two thirds consist of Renter Households single family forms. 2010 2,759 10,691 2017 3,355 12,142 Figure 14: Housing units by tenure and units in structure, Park Forest Change +21.6% +13.6%

Source: U.S. Census Bureau, 2013-2017 American Community Survey, 5- 6,000 year estimates 5,000 Such shifts in housing tenure, ushered in by the recession 4,000 and its aftermath, are not uncommon in the Chicago area. For instance, within the Metro area as a whole, the 3,000 proportion of households who own their homes fell from 2,000 66.0 percent in 2013 to 64.4 in 2017. Even seemingly small tenure shifts such as this can have profound implications 1,000 for municipalities and often require the updating of 0 housing policies and strategies to address changing Owner-occupied Renter-occupied housing needs. 1, detached 1, attached 2 to 4

Household Composition 5 to 19 20 or more Mobile home

More than 40 percent of renter households in Park Forest Source: U.S. Census Bureau, 2013-2017 American Community Survey, 5- consist of a single person, while nearly 20 percent consist year estimates of two people – proportions similar to the PMA as a A unique characteristic of Park Forest (when compared to whole. most suburban locations), arising from the Village’s Figure 13: Household size by tenure development as a planned community, is the large Household Type Park Forest PMA representation of attached single family units in both the Owner owner and renter segments. Within the rental segment, 1-person 33.5% 28.5% attached single family units (primarily townhomes) make 2-person 33.7% 29.8% up more than 20 percent of all units – more than double 3-person 13.3% 16.5% that of the PMA as a whole. 4 or more people 19.5% 25.3% Park Forest has a much lower representation of smaller Renter scale multifamily units than the PMA as a whole, with, in 1-person 42.0% 43.6% particular, very few units in buildings of 2-4 units. 2-person 19.6% 20.8% Meanwhile, larger scale multifamily buildings (i.e., of 20 or 3-person 16.6% 13.0% more units) make up roughly 20 percent of all rental units 4 or more people 21.8% 22.6% within the Village – approximately the same proportion as Source: U.S. Census Bureau, 2013-2017 American Community Survey, 5- that of the PMA as a whole. year estimates

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Figure 15: Renter occupied housing units by units in structure

50.0%

40.0%

30.0%

20.0%

10.0%

0.0% 1, detached 1, attached 2 to 4 5 to 19 20 or more Mobile home

Park Forest PMA

Source: U.S. Census Bureau, 2013-2017 American Community Survey, 5-year estimates Renter Household Profile As noted previously, the median income among renter households in Park Forest is higher than that of any other Renter households in Park Forest skew significantly older municipality within the PMA. Though extremely low than those in the remainder of the PMA and in the income households (i.e., earning less than $35,000 Chicago Metro as a whole. The median age of renter annually) make up more than half of all renter households householders in Park Forest is 48.2 years, compared to within the Village, those earning $50,000 or more 46.6 years for the PMA and 42.0 years for the Chicago encompass more than a third. In total, there were 1,250 Metro as a whole. Nearly 50 percent of renter renter households earning $50,000 or more annually in householders in Park Forest are between the ages of 35 Park Forest at the time of the ACS survey and more than and 54. Additionally, a quarter of renter householders in 3,700 such households within the PMA as a whole. the Village are 65 or older. Meanwhile, Park Forest has a Household incomes at this level can be thought of as far lower proportion of Millennial generation (i.e., 34 or generally supportive of new construction rental units younger) renter householders than either the PMA or the (depending, of course, on household size and other Chicago Metro. expenses). Figure 16: Renter households by age of householder

Park Forest PMA Chicago Metro % 9 . 9 % 7 4 . 4 % 4 4 . 7 3 % 6 . % 8 0 . 2 5 % 2 % 2 . 3 . % 9 % 8 % % 1 3 1 5 . 0 9 . . . 4 3 % 3 2 1 1 1 1 7 % . % 8 9 . 8 . 6 % 4 8 . 1

LESS 2 5 - 3 4 3 5 - 5 4 5 5 - 6 4 6 5 O R T H A N 2 5 MORE

Source: U.S. Census Bureau, 2013-2017 American Community Survey, 5- year estimates 16 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Figure 17: Renter households by household income

Park Forest PMA % 9 . % 7 9 5 . 3 5 % 6 . % % 0 6 7 2 % . . 0 6 6 . % 1 1 4 4 . 1 % 1 9 1 . 8

LESSTHAN $35,000-$49,999 $50,000-$75,000 $75,000 OR MORE $ 3 5 , 0 0 0

Source: U.S. Census Bureau, 2013-2017 American Community Survey, 5-year estimates Housing Cost Burden single family rental units than the PMA as a whole, and a significantly lower proportion of units in small scale The U.S. Department of Housing and Urban Development multifamily buildings. This analysis suggests that many of defines housing cost burdened households as those paying the Villages renter households may be struggling to afford 30 percent or more of household income on housing the cost of single family home rents. costs. For renter households, housing cost is defined as “gross rent,” which includes contract rent (the actual rent Figure 18: Incidence of housing cost burden among renter paid per month) together with the estimated average households monthly cost of utilities. Affordability Level Park Forest PMA

While renter households in Park Forest may on the whole Less than 30.0% (no burden) 1,383 8,720 have higher incomes than those in other portions of the Percent 41.2% 62.5% PMA, housing cost burden yet impacts many renters in the 30.0 - 49.9% (moderate burden) 560 2,756 Village. Percent 16.7% 19.7% In Park Forest, nearly 17 percent of renter households face 50.0% or more (severe burden) 1,204 2,277 moderate housing cost burden, paying 30 to 50 percent of Percent 35.9% 16.3% household income on housing costs. Another 36 percent Not computed 208 209 face severe housing cost burden, paying 50 percent or Source: U.S. Census Bureau, 2013-2017 American Community Survey, 5- more on housing cost. While Park Forest has a smaller year estimates proportion of moderately housing cost burdened renter Not surprisingly, levels of housing cost burden are, households than the PMA as a whole, the proportion of generally speaking, inversely related to household income. severely burdened households in the Village is more than At incomes of less than $35,000, nearly all renter twice that of the PMA as a whole. households in Park Forest experience some level of One potential cause for this difference could be the housing cost burden. The incidence of housing cost difference in rental housing makeup in Park Forest versus burden diminishes at higher income levels, and 74 percent the PMA as a whole. Single family rental units generally of renter households with incomes of $50,000 or more are command higher rents than multifamily units. As shown not considered housing cost burdened. above, Park Forest has a significantly higher proportion of

17 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Figure 19: Renter households by gross rent as a percent of household income, Park Forest

Less than 20% 20-29% 30% or More % 2 . 1 9 % 5 . 9 7 % 4 . 7 % 5 5 . % 0 5 . 5 6 4 % 7 . % 2 1 % . 3 % 2 9 % . 5 2 . 4 6 . 4 2 3 2 2 % 4 . % 4 0 1 % . 8 0 . % 1 1 8 . 6 % 0 . 0

LESSTHAN $ 2 0 , 0 0 0 - $ 3 5 , 0 0 0 - $ 5 0 , 0 0 0 - $ 7 5 , 0 0 0 O R $ 2 0 , 0 0 0 $ 3 4 , 9 9 9 $ 4 9 , 9 9 9 $ 7 4 , 9 9 9 MORE

Source: U.S. Census Bureau, 2013-2017 American Community Survey, 5-year estimates Notably, more than 500 Village renter households earning $50,000 or more pay less than 20 percent of income on housing costs. While for many of these households keeping housing costs at such a low level may be a choice, it is also potentially a sign of housing imbalance within the Village. Rental housing that may be better suited to these households’ needs – and carry a higher (yet affordable) rent – may simply not be available in Park Forest.

18 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Rental Market Conditions For the purposes of this analysis, we define the Our investigation included an analysis and assessment of conventional rental market as encompassing market rate, trends and current conditions within the rental housing non-senior multifamily and townhome developments of 10 market in Park Forest and throughout the defined PMA. or more units that were either built as rental units or have This investigation examined three important segments of since been put onto the rental market in their entirety. the localized market: conventional market rate Within Park Forest itself, CoStar lists just five developments apartments, “built-for-sale” homes that have been entered (encompassing 1,064 units) that fall within conventional into the rental market, and designated affordable rental market parameters: Autumn Ridge, Central Park apartments. Apartments, Majestic Luxury Townhomes, Oakwood Manor Conventional Rental Market Apartments, and Pangea Park Townhomes. Four of the five developments are located along the Western Avenue We have utilized information gleaned from the real estate spine, with Central Park and Pangea Park located in the listing and the data service CoStar in our analysis of the DownTown core and Autumn Ridge and Oakwood Manor conventional rental market within Park Forest and the located in the extreme southeastern portion of the Village. surrounding PMA municipalities. The fifth, Majestic Luxury Townhomes, is located in the south-central portion of the Village.

Figure 20: Conventional rental apartment developments, Park Forest

Source: CoStar and Development Planning Partners

19 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Autumn Ridge, Central Park, and Pangea Park offer a mix The significant representation of townhomes among Park of single level apartment homes and multi-level Forest developments produces a large average unit size townhomes; Majestic Luxury Townhomes offers only when compared to the PMA as a whole. Among townhome units; and Oakwood Manor offers only conventional developments in Park Forest, the average apartments. The two DownTown developments were built monthly asking rent currently stands at $1,071 for 1,159 in 1946 as part of the original Park Forest planned square feet of living space, or $0.92 per square foot. development, with the others built in the 1960s and 1970s While the average asking rent PMA-wide is nearly as the Village grew. identical, at $1,070, the average unit size throughout the PMA is significantly smaller, resulting in an average rent- Within the whole of the PMA, CoStar lists 36 properties per-square foot of $1.02. that fall within the defined parameters for conventional rental developments. Together, these developments Figure 22: Current conventional rental apartment market encompass 2,488 units. While the majority of the characteristics developments are located in Chicago Heights and Attribute Park Forest PMA Matteson, the relatively few developments located within Properties 5 36 the other PMA municipalities are, on average, much larger Units 1,064 2,488 in scale. Thus, the majority of units are located among the 11 developments in these three places. Park Forest itself Avg. Unit Size (SF) 1,159 1,054 has the largest representation of units, with the five Avg. Asking Rent $1,071 $1,070 developments there making up 43 percent of all Per SF $0.92 $1.02 conventional apartments in the PMA. 3-Year Avg. Rent Growth/Yr 2.5% 2.6%

Figure 21: Conventional rental apartment developments by place Occupancy 96.7% 91.6%

No. of Median Yr. Avg. No. Total Source: CoStar and Development Planning Partners Municipality Dev. Built of Units Units Rent growth over the last three years (on an average Chicago 11 1964 25 273 annualized basis) is nearly identical within Park Forest and Heights the PMA (as well as the Chicago Metro as a whole, at 2.7 Matteson 14 1970 21 290 percent). Meanwhile, the current occupancy level among Park Forest 5 1961 213 1,064 the Park Forest development stands at 96.7 percent – Richton Park 2 1977 171 342 considered tight by most market standards, and significantly tighter than that of the PMA as whole, at 91.6 University Park 4 1974 130 519 percent. (For comparison, the current occupancy among Total/Avg. 36 1971 69 2,488 all Chicago Metro developments stands at 94.2 percent.) Source: CoStar and Development Planning Partners Figure 23: Conventional apartment market rent growth Generally speaking, Park Forest has maintained a higher whole dollar rent position (i.e., the rent paid in total rather $1,100 than per square foot) than that of the PMA as a whole for some time. Over the last ten years, rents within the Village $1,000 have contracted just once, in 2013 (though the current year-to-date total has declined modestly compared to the $900 2018 annualized total).

$800 The current vacancy rate among conventional apartment developments stands at 3.3 percent within Park Forest and $700 8.4 percent PMA-wide. The Village experienced a cyclical 2010 2011 2012 2013 2014 2015 2016 2017 2018 high vacancy rate in 2011 and now stands near the cyclical Park Forest Rent PMA Rent low experienced in 2016. Meanwhile, PMA-wide vacancies Park Forest Rent/SF PMA Rent/SF have been on the rise since 2016 and have now surpassed the 2011 high of 8.0 percent. Source: CoStar and Development Planning Partners

20 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Eighty-eight of the rental units were built in 2016. These Figure 24: Conventional rental apartment market vacancy trend two-level plans feature a high level of unit finishes and amenities and currently represent the top of the PMA rental 10.0% market in terms of whole dollar asking rents. Current asking rents range from $1,718 for a two-bedroom, 2.5 bath unit 8.0% with 1,224 square feet to $1,894 for a three-bedroom, 2.5 bath unit with 1,459 square feet. 6.0% Excluding Manors at Brookmere, the nearest conventional rental developments that were built within the last 20 years 4.0% are located 12-15 miles from Park Forest in Orland Park and in the southwest Indiana municipalities of Highland and St. 2.0% John. 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD

Park Forest PMA Proposed Development Our analysis of market conditions in the conventional Source: CoStar and Development Planning Partners rental market sector included an investigation of Newer Development developments in the proposal stage or currently under construction. Information on two such developments was With a median year built of 1971, the vast majority of reviewed – one a small scale phase of an existing conventional rental developments within the PMA are quite development and the other a large mixed-use old. In fact, just one conventional rental development of development. (It should be noted that at anytime other recent vintage exists within the PMA. projects may be in more informal planning stages; The Manors at Brookmere is the only market rate, non-age however, the two projects analyzed represent those for restricted rental development to be built within the PMA which information is publicly available.) since 2000. Located at Vollmer Road and Cicero Avenue in The Manors of Brookmere – Phase II: CalAtlantic is Matteson, the Manors is part of the larger Brookmere currently building a new phase of the Manors of master-planned community being developed by Brookmere. The new phase will encompass 19 additional CalAtlantic Homes (a division of Lennar). Brookmere was units and will offer a townhome product type similar to originally envisioned by another developer pre-housing that detailed above for Phase I. Unit sizes and rents are market crash as a large development of over 300 for-sale expected to be in line with the existing phase single family homes, townhomes, and condominiums. Market Square Crossing: In December of 2018 the Village of Matteson formally adopted a master redevelopment plan to transform the 60-acre former Lincoln Mall site at the southeast corner of Cicero Avenue and Lincoln Highway into a large-scale mixed-use development to be known as Market Square Crossing. If built as currently

The development stalled in the long aftermath of the recession, however, and in 2014 CalAtlantic began negotiations with the Village of Matteson to acquire and develop a large portion of the undeveloped lots within the property. Now, CalAtlantic has re-envisioned the envisioned, the new development has transformative community as 126 single family homes, 72 townhomes, and potential, calling for, among other offerings, 31 acres of 108 rental townhomes in four-plex (i.e., “quad”) buildings. athletic fields, a 2.5-acre community square with concert 21 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY venue, 200,000 square feet of retail space, and more than Through our analysis of online listings, we gleaned the 600 residential units. While the mix and character of the following market characteristics: units to be built is largely dependent on developer interest . Inventory conditions are quite tight. Only about 20 such and will not be determined for some time, the homes are currently listed. development could include multifamily rental and/or for . Asking rents for listed homes range generally from sale units, townhomes, and senior housing. No $1,000 to $2,000 per month, with the largest portion preliminary rent pricing is yet available; however, it can be falling within the $1,200 to $1,500 range. expected that rents will surpass those of existing rental . The listed homes represent a cross-section of Park product within the PMA by a significant margin. The Forest’s single family housing stock, from 1940s development is now in the initial marketing stages, and bungalows to 1970s ranch and split-level homes. The Lord Companies of Chicago has been chosen to . While homes at the higher end of the rent range coordinate and market all elements of the plan. generally have some contemporary updates, those at Alternative Rental Market: “Built for Sale” the lower end generally have older features and finishes. . The listed homes are not concentrated in any one area While the market area’s conventional rental apartment but are scattered throughout the Village’s developments are the most directly comparable to any neighborhoods. new units likely to be built in Park Forest, other rental options should not be overlooked. Namely, as noted Affordable Rental Market previously in this report, nearly 1,500 rental households The affordable rental housing sector in Park Forest and the live in detached single family homes that were most likely PMA more broadly consists of a number of developments built as for-sale homes. These rented homes, offering rent-subsidized and rent-restricted apartments encompassing more than half of the renter-occupied supported by federal and/or state low income housing housing stock in Park Forest, are an important aspect of finance and assistance programs. Rent-subsidized units the Village rental market. are those for which federal subsidies administered by the While Department of Housing and Urban Development (HUD) comprehensive are provided to ensure that tenant households pay no data on this more than 30 percent of income on housing costs. Rent- portion of the restricted units are those for which monthly rents are rental market is not capped based on affordability levels determined by the readily available, area median income (AMI). In either case, tenants must some general qualify based on household income, generally capped at characteristics of the 30, 50, or 60 percent AMI levels. the market can be According to current data from HUD, there are a total of gleaned from an analysis of homes currently available on 426 apartment units in Park Forest1 and 2,780 PMA-wide the most popular online listing engines. These sources that receive HUD subsidies in the form of tenant-based or represent the more common ways in which homeowners project-based assistance.2 The current occupancy level and independent landlords list their single family for these units stands at 86 percent in Park Forest and 89 properties for rent; however, it should be noted that other percent PMA-wide. On average, the households currently homes are almost certainly available, though they may not living in these units earn roughly $15,000 annually, or 22 be listed with any source or may be listed only informally, percent of AMI. More than 75 percent of these such as with yard signs or word of mouth. households qualify as “extremely low income” (30 percent of AMI or less by HUD definition).

2 1Note that records from the Park Forest Public Housing Authority show These are primarily tenant-based Housing Choice Voucher units and that there are a total of 434 subsidized units. For data comparability, public or privately-owned project based HUD-assisted units. Some however, we have used the somewhat lower HUD total. projects that receive funding from other federal programs, such as HOME and Community Development Block Grants, may be excluded. 22 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

The Illinois Housing Development Authority (IHDA) also Figure 26: Profile of IHDA-financed, rent-restricted provides affordable housing financing assistance through developments a number of programs – most prominently through the Attribute Park Forest PMA administration of federal Low Income Housing Tax Credits Non-Section 8 developments 2 10 (LIHTC). IHDA-financed units are generally rent-restricted and reserved for households at the 50-60 percent AMI Family -- 2 level, though some may also be HUD-subsidized through Senior 2 7 Section 8 or other programs (and generally serve Special needs -- 1 extremely low income households). Non-Section 8 units 174 1,444 Figure 25: Profile of HUD-subsidized rental units Family -- 402 Park Attribute PMA Forest Senior 174 1,017 Total units receiving subsidies 426 2,780 Special needs -- 25

Occupied units 366 2,465 Source: Illinois Housing Development Authority

Occupancy rate (%) 86.0 88.7

Total residents served 1613 6856

Average household income $15,048 $14,589

Percent of area median income (AMI) 22.0 21.6

Percent very low income households 96.0 96.0 (50% AMI)

Percent extremely low income 76.1 76.2 households (30% AMI)

Source: U.S. Department of Housing & Urban Development Currently, IHDA lists two non-Section 8 developments in Park Forest, consisting of the two phases of the Victory Centre senior housing development located in the DownTown area of the Village, with a total of 174 units. PMA-wide, there are ten non-Section 8 IHDA developments encompassing 1,444 units. Of these, seven serve seniors only, encompassing 1,017 units, while one, with 25 units, serves residents with special needs. This leaves just two developments, encompassing 402 units, that serve a general population of families and individuals. These include Carriage Creek Apartments in Richton Park, with 226 units, and Arbors at Hickory Creek in University Park, with 176 units.

23 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

The DownTown Submarket: Findings & core. This includes the Victory Centre senior housing Strategy development, built during the early years of the new century, as well as Legacy Square, a new urbanist The commercial heart of Park Forest, the DownTown area development of attached homes built from 2006-2008 by represents an early example of the transformation of an Bigelow Homes. outmoded retail mall into a traditional, walkable Village Main Street. The mix of current uses includes shopping, Victory Centre personal and professional services, dining, entertainment, outdoor recreation, and civic amenities that draw nearly 6,000 workers and visitors each day, by Village estimates. In addition, the Village hosts a variety of festivals and other events DownTown that draw nearly 200,000 visitors annually.

Among many Village-owned DownTown assets are the Village Green and outdoor stage, Public Library, and Village Hall. Fire and police protection services are also located within the DownTown core, as is the Park Forest Post Office.

A mix of retail shops and eating and drinking Legacy Square establishments are located within the DownTown area, and the arts have a strong presence there, anchored by two performance theaters, two performing arts schools, two galleries, and the administrative office of the Illinois Philharmonic Orchestra. Prominent DownTown retailers include discounters Dollar General and Family Dollar. The recently sold 103,000-square foot Orchard Park Plaza retail center contains a built-out space for a full service grocery store. While the previous grocer tenant recently closed, the new owners are planning a new grocery concept to open in the next few months. According to the new owners, the new store will feature prepared meals as well as a selection of groceries. Finally, one bank located within the DownTown area offers financial services for area residents, while Walgreens and CVS are available for pharmacy and daily living needs.

Pace regional bus service is available throughout the DownTown core, with stops along Forest Boulevard, Lakewood Boulevard, Main Street, and Orchard Drive. Aligning the east side of DownTown, Western Avenue provides connectivity to Lincoln Highway to the north, while Sauk Trail, south of DownTown, provides access to the Richton Park Metra station and Interstate 57 to the west.

Recent DownTown Development

Much of the most recent large scale residential development in the Village has occurred in the DownTown

24 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Subject Sites as well as within an Opportunity Zone and Enterprise Zone. The subjects of our investigation include three vacant, Village-owned sites that have been prioritized for Conclusions & Recommended Strategy redevelopment. These sites, all currently for sale by the Based on our evaluation of the subject sites and their Village, align Main Street and include the following: environs, including adjacent land uses, transportation . Northeast corner of Main Street and Forest Boulevard. corridors, and proximity of civic, commercial, and This 2.25-acre site sits adjacent to the new Dollar recreational amenities, we conclude that all three sites are General Store and across Main Street from the Victory appropriate for residential development. We further Centre senior housing development. The current list conclude, based on our analysis of market conditions price for the site is $425,000. Village wide, that the DownTown core is a critical starting . Northwest corner of Main Street and Cunningham Drive. point in future efforts to strengthen the housing market This 0.44-acre site is adjacent to the Legacy Square and the broader economic health of the Village. home development and across Main Street from the Demand for new market rate rental housing does exist in Village Green. The site is being marketed together with Park Forest and will accrue to the DownTown core (see an existing adjacent parking lot, for a total land area of Appendix A of this report; however, is extremely unlikely, 0.94 acres. The site is currently listed for $91,913. however, given past trends and current market conditions, . Main Street at Orchard Drive. This 4.83-acre site aligns that all three sites can be developed concurrently. Periods Orchard Drive between Main Street and Indianwood of development should be followed by periods of hiatus to Boulevard. The site originally served as the parking lot allow for market incubation. We therefore recommend for the since-demolished Marshall Field’s department the following strategy: store. The current list price for the site is $483,000. 1. Getting started. The most immediate efforts to attract All three sites are located immediately adjacent to Pace multifamily development to the DownTown area should bus service. All three lie within the DownTown TIF District, focus on the smallest of the parcels first. The scale of

25 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

this parcel and the benefit of the existing parking lot For this site, we recommend seeking a development of could be attractive to “pioneer” investment in the approximately 100 rental apartments in two buildings current rental market. A development of approximately encompassing two separate development phases.3 If 25 rental apartments should be sought for this parcel. possible, one or both buildings should be oriented to take advantage of Village Green views. 2. Growing market. Given the successful lease-up of the For the three DownTown sites, we thus see market initial development, and after a hiatus period of roughly potential for the successful lease-up of approximately 175 12 months, the 2.25-acre parcel at Main Street and new market rate multifamily rental units over a five to six Forest Boulevard is a natural follow-up. A development year marketing timeframe. It should be noted that this of approximately 50 units in a mixed-use building with conclusion is based on the expectation of strengthening ground floor commercial space should be sought for market conditions over time and given the product this parcel. Note that the introduction of new development criteria (including suggested benchmark commercial space could pose challenges to a market rental rates) provided later in this report. It is supported which has struggled to fill existing space. It is unlikely by our analysis of localized rental demand potentials, as that retail potentials will be strong enough to fill the discussed later and detailed in Appendix A. While our space in its entirety. Therefore, planning should include recommendations are considered reasonable, it should be either an institutional use or non-retail commercial use further noted that economic conditions can – and such as medical office, fitness studio, or salon. It is also regularly do – impact the performance of markets and possible that the new space would appeal to a individual developments, as does the marketability of new restaurant operator. housing product as built.

3. Market maturity. After the successful lease-up of the mixed-use development and another hiatus period of roughly 12 months, sufficient market strength should be evident to allow for the development of the largest of the three sites.

3 Subject to physical restrictions and land planning by others. 26 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

211th Street Metra Station TOD Site: In 2011, in the aftermath of the national housing and Findings & Strategy financial market crises and the deep recession that ensued, the villages once again came together to form a The 211th Street Metra station transit-oriented Steering Committee tasked with investigating further development (TOD) district encompasses land around the mechanisms for implementation of the 2007 plan. At station’s Lincoln Highway location. The district that time, the market analysis included in the 2007 plan encompasses land in the villages of Matteson, Olympia was updated to reflect new market realities, and input was Fields, and Park Forest, with the portion located within sought from a variety of stakeholders and subject matter Park Forest consisting of approximately 7.6 acres. A experts in both the public and private sectors. The result former commuter parking lot currently encompasses 3.8 was an Implementation Study Report that included new acres on the west side of the Park Forest portion of the recommendations, case study examples, and financial TOD site, with the remainder made up two large parcels – feasibility analyses. one owned by the Village and the other privately held. However, even with the new work and recommendations, Planning Context & History implementation of the redevelopment plan has, for the In 2007 the three villages completed a Transit-Oriented most part, failed to occur, due primarily to a variety of Development Study, which put forward a preferred market challenges. Most recently, the 2018 Comprehensive development concept for the station area. This concept Housing Plan for Park Forest included, as a primary goal, called for a mix of uses that included 131,000 square feet to “continue moving forward with planning and of retail space, 36,000 square feet of office space, and 220 development of the 211th Street Metra station transit- condominium units, among other recommendations. oriented development plan,” with a specific strategy to

Preferred Concept Plan – 211th Street Metra Station Transit-Oriented Development Study

Source: Village of Park Forest

27 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY seek a multifamily residential developer for a portion of Street station. Additionally, Pace provides bus service the area. The 2018 housing plan further noted that, since along Lincoln Highway, with stops located immediately the adoption of the 2007 plan, the Village had acquired adjacent to the site at Indiana Street. Finally, from the the property at 3200 Lincoln Highway and prepared it for subject site the regional freeway network is easily redevelopment, with the intention that a restaurant and accessible, with the closest access point to Interstate 57 other commercial uses should be located there. The located two miles to the west along Lincoln Highway. adjacent property (3250 Lincoln Highway) was purchased Despite these assets, several physical challenges exist for by a new private buyer, and it was determined that the site, with many of these documented in the 2011 demolition of the existing structure on that parcel was not implementation report. The site suffers from a sense of in the interest of the community. Thus, the report noted isolation from the surrounding communities, with the that the best location for a new residential development Metra railway, wide and busy Lincoln Highway corridor, would be on a portion of the former 3.8-acre commuter and the large commercial structure located at 3250 lot. Lincoln Highway constituting physical barriers to Site Assessment surrounding residential neighborhoods. Moreover, the area is perceived by many stakeholders as “uninteresting” The subject site is located in the extreme northwest corner or “monotonous,” with little character. Finally, the wide of the Village, approximately 2.5 miles from the streets, narrow sidewalks, and high speeds of cars on DownTown area, on Lincoln Highway, a primary Lincoln Highway can feel dangerous to pedestrians and commercial thoroughfare for the area. Adjacent land motorists alike. In short, the site as it currently exists uses, apart from Metra facilities and commuter lots, are possesses little of the walkability, human scale, or vitality generally single family residential. However, a wide variety that are so often sought after by today’s prospective of retail, restaurants, and service businesses are located on homeowners and renters. (Though the new Unified Lincoln Highway approximately one mile to both the east Development Ordinance will ensure that future and west of the site. Notable businesses include both development meets standards of walkability.) quick service and full service restaurants; a Walmart Supercenter offering a full service grocery store; Food 4 Conclusions Less; and several banks, pharmacies, and auto service If fully realized, the mix of development specified in the centers. Access to transit is obviously a primary asset of 2007 TOD plan would obviously help to mitigate many of the site, with Metra offering daily service via its Electric the site’s shortcomings while creating a sense of place and Line into Chicago’s Millennium Station from the 211th

28 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY connection to the three host communities. However, long Example of area affordable housing: Arbors at Hickory Creek, University term changes to the market since the time of adoption Park constitute serious challenges to the existing plan and make it unlikely that a full buildout of the various uses identified could occur at any time in the foreseeable future.

For instance, the plan calls for the development of 140 condominium units within the Park Forest portion of the TOD site. But the regional condominium market remains essentially frozen in all but the best locations – typically those highly urbanized neighborhoods and affluent “boutique” areas. Thus, condominiums are not considered spur household growth in the Village by attracting some a viable product type for the site within the time horizon of the households with workers who currently live outside that our work investigated (i.e., near- to mid-term). the Village but commute into it for work – including more than 1,000 who commute to Park Forest from the City of Rental apartments are thus the recommended residential Chicago and more than 400 who commute from other product type for any portion of the site, and we parts of the PMA. As such, the development could pay recommend that the Village, following the guidance of its multiple dividends to the local economy. most recent Comprehensive Housing Plan, seek such a development. However, in the near term (i.e., within the Phase 2: Market Rate Units next three years), demand potentials are likely not Given that demand for new market rate rental apartments sufficient to support the simultaneous development of is expected to be limited over the near term, it is market rate apartments in both the TOD site and the recommended that the Village focus its primary efforts to critical DownTown core. Therefore, we offer the following attract such development on the DownTown core. two-phase strategy based in market realities. However, the locational attributes of the TOD site make it Phase 1: Affordable Units a strong candidate for future development as the market strengthens. Namely, within a three-year timeframe, it is A need exists today for new, high quality affordable anticipated that market conditions will have strengthened apartments. Under the suggested scenario, we enough to make market rate rental development viable recommend that the Village seek the development of high within the site (while development continues in the quality rent-restricted units designated as affordable at the DownTown core). At that point, it is recommended that 50 percent and 60 percent AMI limit. In keeping with the the Village seek a development of 50 market rate units. TOD nature of the site, the units should be targeted as family-serving (i.e., not restricted to seniors or those with Additional mixed-income or market rate residential special needs). Such a development could potentially take components could follow on as the market matures in the advantage of IHDA-administered Low Income Housing Tax longer term (i.e., beyond the timeframe of this analysis). Credit (LIHTC) financing. It would also represent a The redevelopment of the demolished Lincoln Mall in considerable near-term jumpstart to the overall Matteson as Market Square Crossing, together with the redevelopment of the TOD area and provide new levels of successful implementation of residential development vitality and support for nearby commercial establishments. strategies in DownTown Park Forest (as detailed in this In keeping with the residential proforma analysis report), should in time provide a boost to market presented in the 2011 Implementation Study Report, we potentials along the Lincoln Highway corridor and within recommend the development of approximately 90 units in the TOD site by offering “proof of concept” that market two buildings. rate multifamily development is viable.

Such a development would provide stable, high quality housing for workers who commute via Metra to areas outside of Park Forest. Equally important, it could help

29 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Hidden Meadows Site: Findings & University Golf Club and northeast of the Governors State Strategy University Campus. The Hidden Meadows site encompasses 72 acres located Given its former use and the adjacency of the Will County in the extreme southwest portion of Park Forest, north of Forest Preserve District, the site is largely rural and Stuenkel Road, west of the Will County Forest Preserve wooded in character, offering many natural amenities. District, east of Crawford Avenue/University Parkway, and However, one of Park Forest’s newest and most upscale south of Tamarack Road. Not included in our residential developments, consisting of 55 detached single consideration of the site is a 17.5-acre parcel located north family homes, aligns Tamarack Road at the north end of of Tamarack Street, which the Village has said is likely to the site. remain open space. The site is somewhat isolated from shopping, services, and The site was home to the former municipally-owned dining and entertainment venues. From the site, the Hidden Meadows Golf Club, consisting of two nine hole nearest significant concentrations are located either in courses together with a clubhouse, which closed in 2006. DownTown Park forest, 2.5 miles to the northeast, or Since that time, the Village has undertaken efforts to lay along the Lincoln Highway corridor, 3.5 miles to the north. the groundwork for the redevelopment of the site. However, opportunities for outdoor recreation abound, including those offered by Thorn Creek Woods Nature In 2015, the Village engaged Houseal Lavigne Associates Preserve and the University Golf Club. Nearby Governors to create a “Conceptual Redevelopment Plan” that State University also offers a regular schedule of cultural explored development potentials for a range of uses, and performing arts events – including concerts, film, including residential, retail, hospitality, and office. The theater, and dance – as well as opportunities for resulting ambitious plan, while preliminary by design, put continuing education and lifelong learning. forward a wide variety of potential uses, including 50,000 square feet of convenience commercial space, a 75-120 While relatively remote to the DownTown Core of Park room hotel, a multi-building technology and research and Forest, the site benefits from good transportation development park, 700-950 multifamily residential units, connections. Metra’s University Park station, the terminus and 72 attached single family homes. of the Metra Electric line, is located one mile to the west, while Interstate 57 is accessible 2.5 miles to the west via Site Assessment Stuenkel Road. The Hidden Meadows subject site is located in the Will : County portion of Park Forest, adjacent to the 18-hole

30 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Governors State University Housing scale (250-300 units) to make projects financially viable. And though a minimal amount of demand for housing The housing needs of Governors State University are an targeted to married students does exist, it is seen as important consideration for the subject site, given its insufficient for the development of housing specifically student population and proximity. Our investigation of geared toward this need. demand potentials related to the current and future needs of Governors State University included data analysis and Finally, it is likely, given its past housing plans and the an interview with the university’s director of housing. This amount of land available to it, that the University will investigation yielded the following insights: develop additional on-campus housing at some point in the future. Such housing would constitute a significant . Total enrollment at Governors State University for Fall source of competitive interference to any student housing 2018 stood at 4,857 students, including both developed off campus and an associated investment risk. undergraduate and graduate classes. The university is growing and expects to add roughly 100 students for The site is removed from the Village core and the type of the coming academic year, with a projected enrollment active, walkable, amenities-rich environment that today’s for Fall 2019 of 4,950 students. renters desire. Though the Hidden Meadows setting . The University categorizes its students as “traditional” provides significant natural amenities, the site as it (under 25 years old) or “nontraditional” (over 25 years currently exists is generally better suited to for-sale old). Sixty percent of students fall under the housing. nontraditional classification. While a formal investigation of opportunities within the . The University recently built its first on campus housing, for-sale market sector is beyond the scope of this a 288-bed facility. assignment, the location and character of the site (as . An abundance of land is available to the University for detailed in this report) – together with existing adjacent additional housing development, and at one time a residential uses – suggest that the potential could exist for University housing plan called for the construction of six the development of a number of for-sale housing or seven buildings over a 20-year timespan. products within the site. These could include detached . However, a recent analysis of student housing need single family homes, attached townhomes, and ranch villas suggests that current demand potentials are only about or duplex units targeted to the active adult market. The 30 additional beds, and the University has no plans to site could thus be marketed in smaller development pods build any additional housing for at least three or four or individual subdivisions that could appeal to home years. builders who wish to manage risk. . The University does not keep records of the number of students who are married; however, each semester the In the future, if the site were to be developed with housing office receives approximately 12 calls inquiring commercial amenities and employment-generating uses, about housing for married students, which it does not such as the tech/R&D center shown in the conceptual currently have. development plan, new market rate rental apartments may find sufficient support. It may therefore be prudent to Conclusions & Recommended Strategy reserve a portion of the site (particularly that portion The Hidden Meadows subject site offers access to natural aligning University Parkway) for this type of future and recreational amenities and transportation development. connections, as well as proximity to Governors State In the meantime, however, we recommend that the Village University. Despite this, our investigation of near- to mid- focus its efforts to draw rental apartment development on term rental apartment development opportunities the DownTown core and 211th Street TOD site. suggests that little rental apartment development potential currently exists for this site.

By its own estimates, demand for student housing associated with Governors State University is presently only about 30 additional units, while developers of student housing facilities typically look for projects of significant

31 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Product Guidance & Market Support fact that 64.4 percent of renter households within the PMA Previous sections of this report have provided analysis and consist of one or two people, while 35.6 percent consist of conclusions with regards to near to mid-term rental three or more. market opportunities in the subject sites and strategic As support for studio units is negligible in most suburban guidance regarding the development of new market rate locations, none are recommended. (However, this could and affordable rental units. This section of the report change over time as the market matures and rents rise.) provides more specific product and pricing guidance, as Likewise, since families with children are not expected to well as evidence of market support for the recommended make up a significant portion of the DownTown tenant development programs and product types. base, no three-bedroom units are recommended. It should be noted that the pricing recommendations The recommended average size for one-bedroom units is provided, termed “benchmark,” are given in today’s dollars 675 square feet, while that for two-bedroom units is 950 (except where otherwise noted). They are a measure of square feet. At the recommended sizes, the units will be current market price potential and are provided as a basis smaller than average compared to existing product within for further financial feasibility analysis by others once the market area. However, they are in keeping with the specific project plans have been created. They are based recommended value positioning for the development and on the development of new rental product as specified will help to keep the “whole dollar” price of the units and are considered the appropriate price position in order within a range that will allow for an acceptable level of unit to achieve an acceptable rate of unit absorption, given absorption. Moreover, the smaller recommended unit current market conditions. sizes are in keeping with comparable product successfully DownTown Development Planning Guidelines developed in recent years region wide.

For the three subject sites located within the DownTown In order to achieve an acceptable rent position and unit area, we recommend the Village plan for and actively seek absorption, the units should feature a “standard” level of market rate rental apartments developed over a five- to contemporary features, finishes, and amenities. This six-year timeframe with periods of hiatus for market should include a full standard appliance package that incubation between development projects. To begin with, includes a dishwasher, microwave, disposal, stove, and we recommend a development of approximately 25 units refrigerator with ice maker; standard cabinetry; window be sought for the smallest of the three sites, followed by a coverings; carpet or faux-wood flooring in living areas, 50-unit mixed-use development for the second largest site ceramic tile or faux wood in kitchens and baths, and and, finally, a development of approximately 100 units carpet in bedrooms. Where upgrade-level features (such built in two phases on the largest site. Thus, a total of 175 as granite countertops and stainless steel appliances) can new market rate rental units will be developed during the feasibly be incorporated, they should in order to increase specified timeframe, bringing new vitality to the marketability. DownTown area and support for the businesses located In addition, the inclusion of in-unit laundry facilities (either there. as stacked or side-by-side washer and dryer) is considered The development planning guidelines and suggested necessary for market acceptance, as is the inclusion of pricing presented below are specific to the first balconies or patios for all units. These highly desirable development (i.e., the 25 units to be developed within the amenities will provide strong points of differentiation Main Street and Cunningham Drive site). As the market between the proposed units and the many older evolves and conditions change, modifications to these developments within the market area and will facilitate guidelines will undoubtedly be warranted. market acceptance.

Based on our analyses of demographic characteristics and For small-scale developments, the inclusion of building household makeup among renter households within the amenities such as pools, fitness centers, and gathering PMA, together with our analysis of current rental market spaces is usually not possible. However, we do conditions, we recommend a unit mix of approximately recommend the inclusion of extra storage space – two thirds one-bedroom, one bath units and one third particularly for bicycles – and an area for outdoor grilling. two-bedroom, one bath units. This is supported by the 32 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Finally, surface parking for all units should be included in location are not currently found within the PMA, which the cost of rent. will make the new units highly desirable.

DownTown Market Rate Rent . Moreover, while the only new development currently Suggested benchmark base monthly rents for the proposed proposed – Market Square Crossings – has the potential apartments are $1,050 for the one-bedroom units and to bring a large number of new units to Matteson, it is $1,375 for two-bedroom units, averaging $1,167 across the likely that any units offered there will be positioned group for 774 square feet of living space, or $1.51 per above our suggested benchmark levels (given the type square foot. The recommended rents are assumed to of development proposed and the generally stronger include the cost of water, sewer, and garbage pickup, with market fundamentals found in Matteson). Thus, the other utilities to be paid by tenants. lease-up for the initial DownTown development is expected to occur in a market with very little Figure 27: Suggested plan types and benchmark rent, competition that could be said to be comparable. DownTown market rate apartments

Plan Type Units Avg. SF Rent Rent/SF . Finally, our analysis of new market rate rental housing 1-Bed, 1 BA 16 675 $1,050 $1.56 demand potentials within the PMA generally (discussed at length in an Appendix to this report) demonstrates 2-Bed, 1 BA 9 950 $1,375 $1.45 that nearly 300 renter households with a qualifying Total/WAVG 25 774 $1,167 $1.51 household income of $45,000 or more are expected to Source: Development Planning Partners move within the PMA each year. Utilizing a reasonable capture rate estimate of 15 percent of qualifying Target Market household moves for Park Forest yields a total expected With the product characteristics and at the rent levels demand potential of 44 units per year within the Village. specified, the target market for the proposed units will be Additionally, demand for 15 units per year is expected to primarily (though not exclusively) singles and couples emanate from outside the PMA. With tight supply without children living at home. The target household conditions overall and no other comparable units income level will be from approximately $45,000 to available, this level of demand is deemed more than $75,000. The targeted tenant profile cuts across all age adequate to support the absorption of the proposed groups, including empty nesters and retirees who are new units. looking to downsize in a maintenance-free living Future DownTown Development environment. Tenants are expected to share common lifestyle interests, including a desire to be active and As the area housing market matures and – in particular – engaged in DownTown life. as the DownTown rental market strengthens, modifications to these initial product planning guidelines Supportive Rationale and benchmark rent levels will undoubtedly be warranted. The product guidance provided above, including the Most specifically, in a healthy market we can expect rents suggested benchmark rents, is supported by a variety of to escalate on an annual basis. While annual rent market factors, including the following: escalations at the beginning of the five to six year . At suggested benchmark levels, the rents for the development period are likely to be lower than those at proposed development will be positioned significantly the end of the period (when the market has gained more above those found within the conventional rental strength), as a conservative estimate, an average annual market elsewhere in the PMA (with the exception of the rent growth rate of approximately 2.5 percent can be new units at The Manors of Brookmere, discussed expected. (This, it should be noted, is in line with the earlier). This price position is considered justified, average annual growth rate experienced PMA-wide from however, on the basis of the new condition of the units, 2010 to the present.) the additional features and amenities to be included, In addition, as the scale of the buildings increases, it will and the prime DownTown location. Simply put, new be prudent to add more plan types to the portfolio – units offering contemporary features in a downtown 33 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY including additional one-bedroom plans and larger two- Rents will be restricted to conform to affordability bedroom plans that offer two baths – in order to appeal to thresholds within each of the AMI categories, adjusted for a broader audience. These should be priced in line with household size, with gross rents (inclusive of utilities) not prevailing rent potentials at the time of lease-up. And exceeding 30 percent of the maximum household income. finally, at larger scale, more building amenities can and Generally speaking, maximum monthly rents could thus should be added, including fitness facilities, business range from $650 for a one-bedroom unit to $1,200 for a centers, and social gathering spaces. three-bedroom unit, once adjustments are made to account for tenant-paid utilities. 211th Street Metra Station TOD Supportive Rationale As noted previously, we recommend that the Village seek the near-term development of a high quality 90-unit Support for the proposed affordable rental development is affordable rental apartment community on a portion of amply demonstrated in the fact that just two family- the 211th Street Metra Station TOD site offering rent- targeted developments encompassing 402 rent-restricted restricted units at the 50-60 percent AMI affordability units currently exist throughout the entire PMA. Yet the level. Such a development is needed within the market PMA is home to an estimated 2,300 households with area and will bring new vitality and a sense of community incomes falling between the $30,000 and $53,000 limits. to the TOD district, helping to set the stage for additional IHDA requires that, to be considered for financing, residential and commercial development over the long development proposal market studies must include term. analyses of market capture and penetration rates as a Additionally, within a three-year development timeframe, demonstration of market need, and that these analyses we find support for a market rate rental apartment must follow an IHDA-approved methodology. Following development with approximately 50 units on the site. this methodology, we have calculated these rates for the proposed 90-unit development, as follows: Product Planning Guidelines & Pricing Criteria: Affordable Apartments . Capture rate analysis is widely used to determine if the market share required to fully absorb the units within a It is recommended that the affordable development offer proposed development falls within reasonable limits by one-, two-, and three-bedroom apartments in a mix of measuring the number of proposed units as a percent of approximately 25 percent one-bedroom units, 50 percent income-qualifying households within the project market two-bedroom units, and 25 percent three-bedroom units. area. As discussed, the income limits for tenants of the Such a mix will provide plenty of options for both singles proposed development will range from approximately and larger families. Recommended unit sizes are 650 $30,000 to $53,000. Based on our analysis of Census square feet for one-bedroom, one bath units; 950 square data, there are an estimated 2,300 such households feet for two-bedroom, one bath units; and 1,250 square currently living within the PMA. As shown below, the feet for three-bedroom, two bath units. successful absorption of all 90 affordable units within The target market for the development will be income- the proposed development would thus require a qualifying single person and family households with or capture rate of 3.9 percent – well below the 5.0 percent without children. Household incomes, according to threshold that IHDA considers acceptable for family- current AMI limits, will range from approximately $30,000 targeted affordable developments. for a one-person household at 50 percent of AMI to Figure 28: Capture rate analysis, 90-unit affordable development $53,000 for a four-person household at 60 percent of AMI. (50%-60% AMI) With the convenience of the TOD location, it is anticipated that many residents of the development will be those who Attribute Total commute to jobs outside the PMA. However, it is also Total PMA Households 33,216 expected that, with demand for affordable housing high Estimated households with incomes between throughout the PMA and the wider region, the 2,300 $30,000 and $53,000 development will draw tenants from a wide area – Market capture by 90 units 3.9% including the City of Chicago.

34 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Source: Development Planning Partners We recommend that such a development encompass . An alternative method for gauging market depth is a three plan types: one-bedroom, one bath; two-bedroom, penetration rate analysis. Even though an individual one bath; and two-bedroom, two baths, with a unit mix of property may have a low capture rate, if enough other roughly two thirds one-bedroom units and one third two- affordable properties exist to meet market demand, bedroom units. The recommended unit sizes range from absorption could be challenging. The penetration rate is 675 square feet for the one-bedroom units to 1,100 square calculated by dividing the total number of affordable feet for the two-bedroom, two bath units, averaging 787 units within a market area by the number of income square feet across the group (when weighted by the eligible households. recommended unit mix).

As discussed previously in this report, within the PMA To provide a schedule of suggested benchmark rents, we there are ten affordable developments encompassing have projected rents forward to a 2022 lease-up, utilizing 1,444 units serving households with incomes generally at an annual rent escalation factor of 2.5 percent. At the 50 to 60 percent AMI level. (Note that this total benchmark, rents will thus range, on a whole dollar basis, excludes subsidized developments, which generally from $1,130 for the one-bedroom units to $1,650 for the serve households at much lower income levels.) A total two-bedroom, two bath units, or $1,269 across the group of 1,017 of these units are targeted to seniors, and 25 are On a price-per-square foot basis, rents will range from targeted to people with special needs, leaving just 402 $1.50 to $1.67, or $1.61 across the group (again, weighted units targeting families and individuals. Given the by the recommended unit mix).

estimated 2,300 PMA households in the targeted Figure 30: Suggested plan types and benchmark rent, TOD area income range (IHDA methodology calls for the inclusion market rate apartments (2022 lease-up) of all income-qualifying households in this calculation, including seniors, as they can choose to live in family- Plan Type Units Avg. SF Rent Rent/SF targeted units) the overall penetration rate for non-age 1-Bed, 1 BA 34 675 $1,130 $1.67 restricted affordable housing in the PMA stands at 17.5 percent, which is well below the 25 percent threshold 2-Bed, 1 BA 8 950 $1,480 $1.56 considered acceptable by IHDA and indicative of strong 2-Bed, 2 BA 8 1,100 $1,650 $1.50 income-qualified support for new affordable housing units. Total/WAVG 50 787 $1,269 $1.61

Figure 29: Affordable unit penetration rate analysis Source: Development Planning Partners Unit features, finishes, and amenities should be consistent Attribute Total with those offered within the DownTown area Total number of non-age restricted units at 50%- 402 developments. 60% AMI affordability level within PMA Support for the recommended unit types and suggested Estimated PMA households with incomes 2,300 between $30,000 and $53,000 benchmark rents is provided by the same factors cited above in support of unit and pricing recommendations Estimated market penetration rate 17.5% given for DownTown development, with the TOD location also fully considered. Source: Development Planning Partners Product Planning Guidelines & Pricing Criteria: Future Market Rate Apartments

Within three years, it is anticipated that market conditions will have strengthened to the point that a development of approximately 50 market rate units would be supported within the TOD site.

35 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

APPENDIX A: Analysis of Rental Housing Demand Potential

In the near to mid-term (i.e., 1-5 years) demand for new housing within the PMA will be influenced by a number of factors. First, shifts in resident and householder age makeup as members of the Millennial and Baby Boomer generations grow older could have a significant impact on the housing needs and desires of these groups. Upwardly mobile Millennials may look for rental options that offer contemporary features and lifestyle amenities. Young families may look for larger rental units with security features and outdoor space. On the other hand, downsizing seniors and retirees may seek out rental options that allow for single floor, maintenance-free living and that help them to live active and socially engaged lives.

In addition, employment growth associated with prominent economic drivers such as the development of the South Suburban Airport and ancillary facilities, the growth of Governors State University, and industrial sector growth in the south suburbs could bring more households to the area and help to pressurize housing demand throughout the South Suburban market area.

Finally, with no new conventional rental units built in Park Forest – and very few built in other areas of the PMA – in several decades, there is almost certainly a significant need for contemporary housing that offers the features and amenities today’s renters desire. This need currently exists as latent demand, and while difficult to measure, could be the primary driving force in the success of new rental development over the near term.

Forecast of New Rental Housing Demand Potentials

Traditional forecasts of demand for new housing within a market area are often based on estimates of household growth over time. However, forecasts of household growth within Park Forest and the wider PMA (such as those provided by the demographics data provider, Esri Business Analyst) that are based on recent history and status quo conditions are not considered by us to be reliable indicators of true future development potentials. Demand forecasts based on low or negative growth conditions (such as those experienced by Park Forest and the wider PMA) tend to understate future growth potentials if conditions change. Nor do long term forecasts (such as those provided at the region and community level by the Chicago Metropolitan Agency for Planning) offer much relevance for forecasts pegged to anticipated near to mid-term conditions.

We have therefore utilized a methodology that measures the depth of the market within the PMA to forecast new rental unit demand potentials within Park Forest within a one- to five-year timeframe. This methodology utilizes Census estimates of renter household income together with recent renter household movership rates to forecast the market-wide demand potential for new renter units at rent levels considered viable for new market rate units. Estimates of market capture potential are then incorporated to derive a forecast of the portion of this demand that is likely to accrue to the Village of Park Forest.

As shown in the table below, of the 12,142 renter households within the PMA, an estimated 4,185 have incomes of $45,000 or more.4

Based on the most current ACS estimates of geographic mobility, it is anticipated that 9.7 percent of renter households will move within the local area each year. (Local area moves are defined as moves within the same county, though in practice the majority of inter-county moves are within relatively short distances). Given that some local area moves will take households out of the PMA, we have utilized a more conservative estimate of 7.0 percent to represent the proportion of these moves that will occur between locations within the PMA. This suggests that some 293 renter households whose incomes are $45,000 or more will move within the PMA each year.

To calculate the number of these qualified moving renter households that Park Forest could reasonably capture, we have utilized estimates of current renter household distribution in the PMA. Park Forest accounts for roughly 25 percent of all

4 The minimum household income level that is considered viable to support the rents likely to be charged for newly constructed market rate multifamily apartments is $45,000. At this income, by HUD standards, a gross monthly rent of $1,150 is considered affordable, equating to a contract rent of $1,050 together with roughly $100 in monthly utilities. 36 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY households and 27 percent of renter households among the five PMA municipalities. However, rental development currently planned in other areas of the PMA – namely Matteson – could constrain Park Forest’s capture rate potential going forward. Adjusting for anticipated competitive interference, we therefore estimate that Park Forest could reasonably expect to capture 15 percent of such moves. Thus, our estimate of expected demand for new rental units within the Village is 44 units, on average, per year for the next five years, or roughly 220 units during the five-year forecast period.

As described above, this forecast attempts to capture demand potentials for a specific market segment – that is, qualifying households already living within the PMA. As noted earlier in this repot, however, a PMA, by definition, encompasses approximately 75 percent of residential market support over time, the remainder emanating from outside the immediate market area. Thus, we have included an estimate of qualified rental apartment demand emanating from outside the PMA in the following consolidated forecast of market rate rental apartment demand potentials.

Figure 31: Consolidated forecast of five-year market rate rental apartment demand potentials, Park Forest

Attribute Total PMA renter households 12,142 Earning $45,000 or more 4,185 Expected renter household movership rate within local area 7.0% Expected household moves in local area with qualifying income 293 Estimated Park Forest capture rate 15.0% Total expected qualified demand emanating from inside the PMA (average units per year) 44 Estimated demand emanating from outside the PMA (average units per year) 15 Total consolidated demand (average units per year) 59 Five-year total 295

Source: Development Planning Partners Note that the annual total represents an average. Most likely, demand potentials will be more modest during the first years of the forecast period, with increasing strength as successful unit absorption is demonstrated.

While this forecast is based on current market dynamics and propensities to move and includes movership and capture rate estimates that are considered reasonable, many factors could negatively impact realized demand. Chief among these are continued population and household losses among PMA municipalities to areas outside the PMA, a significant downturn in the regional or localized economy, and higher than expected levels of competitive interference by new rental developments built in other areas of the PMA.

Additional support for new rental units

While the objective of the forecast above is to bring a level of methodological rigor to bear in setting reasonable expectations for growth (effectively bringing a level of science to a process that is inherently a mixture of art and science), all forecasting has inherent limitations.

For example, while Park Forest has had a difficult time attracting new residents in the past, this condition could change in the future – particularly if local area employment strengthens and new housing options are offered in environments that are attractive to outsiders. Success in attracting a higher than expected number of new residents from outside the PMA would be a boon that would push development potentials (for both rental and for-sale units) higher.

Moreover, the forecast above is based on an expectation that, for the most part, homeowners will remain homeowners and are therefore not considered qualifying households for new rental product. However, this is not always the case, as, for instance, regionally and nationally the housing market experienced historic shifts in housing tenure brought on by the housing market crisis and recession. More recently, we have seen a marked uptick in the number of senior households that, as they downsize, shift from owning to renting. To the extent that new rental developments can capitalize on tenure shifts – particularly among senior households – demand potentials could rise.

37 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY APPENDIX B: Data Tables

Table A1: Population by Age Village of Park Forest, Illinois 2000 2010 2017 Estimate Percent Total Percent Estimate Percent All ages 23,462 100.0 21,975 100.0 21,672 100.0 Under 5 years 1,676 7.1 1,388 6.3 942 4.3 5 to 9 years 1,845 7.9 1,537 7.0 1,746 8.1 10 to 14 years 1,764 7.5 1,629 7.4 1,879 8.7 15 to 19 years 1,596 6.8 1,730 7.9 1,759 8.1 20 to 24 years 1,284 5.5 1,169 5.3 948 4.4 25 to 34 years 3,371 14.4 2,795 12.7 2,353 10.9 35 to 44 years 3,878 16.5 2,990 13.6 3,320 15.3 45 to 54 years 3,343 14.2 3,152 14.3 2,901 13.4 55 to 59 years 1,118 4.8 1,528 7.0 1,225 5.7 60 to 64 years 882 3.8 1,258 5.7 1,451 6.7 65 to 74 years 1,460 6.2 1,533 7.0 1,862 8.6 75 to 84 years 1,025 4.4 886 4.0 985 4.5 85 years and over 220 0.9 380 1.7 301 1.4 Median (years) 35.6 37.4 38.7

Source: U.S. Census Bureau, 2000 Decennial Census, 2010 Decennial Census, 2013-2017 American Community Survey 5-Year Estimates

Table A2: Households by Tenure and Size Park Forest PMA Estimate Percent Estimate Percent All households 8,471 100.0 33,216 100.0 Owner occupied 5,116 100.0 21,074 100.0 1-person 1,715 33.5 6,006 28.5 2-person 1,723 33.7 6,274 29.8 3-person 682 13.3 3,468 16.5 4-person 586 11.5 2,796 13.3 5-person 317 6.2 1,588 7.5 6-person 19 0.4 463 2.2 7-person or more 74 1.4 479 2.3 Renter occupied 3,355 100.0 12,142 100.0 1-person 1,409 42.0 5,296 43.6 2-person 658 19.6 2,524 20.8 3-person 557 16.6 1,579 13.0 4-person 457 13.6 1,634 13.5 5-person 132 3.9 493 4.1 6-person 138 4.1 371 3.1 7-person or more 4 0.1 245 2.0

Source: U.S. Census Bureau, 2000 Decennial Census, 2010 Decennial Census, 2013-2017 American Community Survey 5-Year Estimates

38 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Table A3: Households by Tenure & Household Income

Park Forest PMA Estimate Percent Estimate Percent All households 8,471 100.0 33,216 100.0 Owner households 5,116 100.0 21,074 100.0 Less than $5,000 239 4.7 840 4.0 $5,000 to $9,999 57 1.1 267 1.3 $10,000 to $14,999 82 1.6 591 2.8 $15,000 to $19,999 152 3.0 780 3.7 $20,000 to $24,999 229 4.5 956 4.5 $25,000 to $34,999 663 13.0 1,627 7.7 $35,000 to $49,999 680 13.3 2,313 11.0 $50,000 to $74,999 958 18.7 3,837 18.2 $75,000 to $99,999 867 16.9 3,885 18.4 $100,000 to $149,999 894 17.5 4,055 19.2 $150,000 or more 295 5.8 1,923 9.1 Renter-occupied housing units 3,355 100.0 12,142 100.0 Less than $5,000 438 13.1 1,991 16.4 $5,000 to $9,999 313 9.3 1,077 8.9 $10,000 to $14,999 193 5.8 828 6.8 $15,000 to $19,999 276 8.2 935 7.7 $20,000 to $24,999 228 6.8 802 6.6 $25,000 to $34,999 359 10.7 1,403 11.6 $35,000 to $49,999 298 8.9 1,382 11.4 $50,000 to $74,999 558 16.6 1,702 14.0 $75,000 to $99,999 410 12.2 1,051 8.7 $100,000 to $149,999 282 8.4 825 6.8 $150,000 or more 0 0.0 146 1.2

Source: U.S. Census Bureau, 2013-2017 American Community Survey 5-Year Estimates

Table A4: Housing Occupancy and Vacancy Characteristics Park Forest PMA Estimate Percent Estimate Percent All housing units 9,397 100.0 37,529 100.0 Occupied housing units 8,471 90.1 33,216 100.0 Owner-occupied 5,116 60.4 21,074 63.4 Renter-occupied 3,355 39.6 12,142 36.6 Vacant housing units 926 9.9 4,313 11.5 For rent 333 36.0 1,230 28.5 Rented, not occupied 0 0.0 66 1.5 For sale only 273 29.5 949 22.0 Sold, not occupied 115 12.4 332 7.7 For seasonal, recreational, or occasional use 0 0.0 25 0.6 For migrant workers 0 0.0 16 0.4 Other vacant 205 22.1 1,695 39.3

Source: U.S. Census Bureau, 2013-2017 American Community Survey 5-Year Estimates 39 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Table A5: Occupied Housing Units by Tenure and Units in Structure

Park Forest PMA Estimate Percent Estimate Percent All occupied housing units 8,471 100.0 33,216 100.0 Owner-occupied housing units 5,116 100.0 21,074 100.0 1-unit, detached 3,474 67.9 17,253 81.9 1-unit, attached 1,193 23.3 2,165 10.3 2 73 1.4 373 1.8 3 or 4 140 2.7 390 1.9 5 to 9 190 3.7 353 1.7 10 to 19 10 0.2 29 0.1 20 to 49 0 0.0 8 0.0 50 or more 0 0.0 0 0.0 Mobile home 36 0.7 495 2.3 Boat, RV, van, etc. 0 0.0 8 0.0 Renter-occupied housing units 3,355 100.0 12,142 100.0 1-unit, detached 1,487 44.3 4,249 35.0 1-unit, attached 723 21.5 1,254 10.3 2 60 1.8 963 7.9 3 or 4 42 1.3 1,022 8.4 5 to 9 227 6.8 1,200 9.9 10 to 19 139 4.1 793 6.5 20 to 49 143 4.3 503 4.1 50 or more 534 15.9 2,079 17.1 Mobile home 0 0.0 79 0.7 Boat, RV, van, etc. 0 0.0 0 0.0

Source: U.S. Census Bureau, 2013-2017 American Community Survey 5-Year Estimates

Table A6: Housing Units by Year Built Park Forest PMA Estimate Percent Estimate Percent All housing units 9,397 100.0 37,529 100.0 Built 2010 to later 0 0.0 188 0.5 Built 2000 to 2009 455 4.8 3,923 10.5 Built 1990 to 1999 368 3.9 3,399 9.1 Built 1980 to 1989 432 4.6 2,515 6.7 Built 1970 to 1979 879 9.4 7,080 18.9 Built 1960 to 1969 1,110 11.8 5,201 13.9 Built 1950 to 1959 4,584 48.8 9,685 25.8 Built 1940 to 1949 1,368 14.6 2,413 6.4 Built 1939 or earlier 201 2.1 3,125 8.3

Source: U.S. Census Bureau, 2013-2017 American Community Survey 5-Year Estimates

40 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Table A7: Where Workers Live Who are Employed in Park Forest Place Estimate Percent All places 4,696 100.0 Chicago 1,045 22.3 Park Forest 299 6.4 Chicago Heights 196 4.2 Matteson 102 2.2 Richton Park 102 2.2 Tinley Park 80 1.7 Calumet City 68 1.4 South Holland 63 1.3 Steger 59 1.3 Harvey 58 1.2 All Other Locations 2,624 55.9

Table A8: Where Workers are Employed Who Live in Park Forest Place Estimate Percent All places 8,339 100.0 Chicago 2,059 24.7 Chicago Heights 415 5.0 Park Forest 299 3.6 Matteson 237 2.8 University Park 200 2.4 Tinley Park 180 2.2 Orland Park 149 1.8 Harvey 139 1.7 Homewood 127 1.5 Richton Park 124 1.5 All Other Locations 4,410 52.9 Source: U.S. Census Bureau, OnTheMap Application and LEHD Origin-Destination Employment Statistics

41 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Table A9: Residential Building Permit Issuances Village of Park Forest, Illinois Year Multifamily Single Family Total 1980 0 0 0 1981 0 0 0 1982 0 1 1 1983 0 1 1 1984 0 0 0 1985 0 2 2 1986 0 2 2 1987 0 0 0 1988 0 0 0 1989 0 8 8 1990 0 6 6 1991 0 2 2 1992 3 83 86 1993 0 0 0 1994 0 7 7 1995 0 7 7 1996 0 10 10 1997 5 14 19 1998 18 19 37 1999 0 38 38 2000 95 15 110 2001 0 4 4 2002 0 7 7 2003 0 4 4 2004 0 11 11 2005 0 10 10 2006 0 40 40 2007 0 24 24 2008 0 0 0 2009 0 0 0 2010 0 0 0 2011 0 0 0 2012 2 0 2 2013 0 0 0 2014 0 0 0 2015 0 0 0 2016 0 0 0 2017 0 0 0 2018 (1) 0 0 0 Average 3.2 8.1 11.2 1980-1991 0.0 1.8 1.8 1992-2007 7.6 18.3 25.9 2008-2018 0.2 0.0 0.2

(1)Preliminary data, subject to revision. Source: U.S. Census Bureau, Building Permits Survey

42 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY

Table A10: Rent by Unit Type Conventional Rental Apartment Market

Studio 1-Bed 2-Bed 3-Bed All Types Attribute PF PMA PF PMA PF PMA PF PMA PF PMA Units 20 62 265 654 589 1,252 188 427 1,064 2,488 Avg. Unit Size (SF) 600 491 793 744 1,275 1,128 1,340 1,329 1,159 1,054 Avg. Asking Rent $720 $595 $854 $829 $1,108 $1,116 $1,290 $1,377 $1,071 $1,070 Per SF $1.20 $1.21 $1.08 $1.11 $0.87 $0.99 $0.94 $1.04 $0.92 $1.02

Source: CoStar and Development Planning Partners

Table A11: Conventional Rental Apartment Market History Primary Market Area Rent Avg. Unit Avg. Asking per Sq. Vacancy Period Developments Units Size (SF) Rent Ft. Rate (%) 2010 35 2,400 1,042 $869 $0.83 7.9 2011 35 2,400 1,042 $877 $0.84 8 2012 35 2,400 1,042 $886 $0.85 7.9 2013 35 2,400 1,042 $865 $0.83 7.9 2014 35 2,400 1,042 $917 $0.88 7.7 2015 35 2,400 1,042 $960 $0.92 6.6 2016 36 2,488 1,054 $992 $0.94 7.5 2017 36 2,488 1,054 $989 $0.94 8.1 2018 36 2,488 1,054 $1,048 $0.99 8.4 YTD 36 2,488 1,054 $1,070 $1.02 8.4

Table A12: Conventional Rental Apartment Market History Village of Park Forest Rent Avg. Unit Avg. Asking per Sq. Vacancy Period Developments Units Size (SF) Rent Ft. Rate (%) 2010 5 1,064 1,159 $907 $0.78 4.6 2011 5 1,064 1,159 $915 $0.79 4.8 2012 5 1,064 1,159 $926 $0.80 4.4 2013 5 1,064 1,159 $871 $0.75 3.8 2014 5 1,064 1,159 $939 $0.81 4.1 2015 5 1,064 1,159 $984 $0.85 3.5 2016 5 1,064 1,159 $993 $0.86 3.2 2017 5 1,064 1,159 $1,021 $0.88 3.6 2018 5 1,064 1,159 $1,072 $0.92 3.7 YTD 5 1,064 1,159 $1,071 $0.92 3.3

Source: CoStar and Development Planning Partners

43 RENTAL MARKET ANALYSIS & DEVELOPMENT PLANNING STUDY APPENDIX C: Assumptions & Limiting Conditions

Data collection for this assignment took place June-August of 2019. The information analyzed herein was obtained from a variety of sources deemed reliable at the time but is not guaranteed. The estimates, projections, recommendations, and opinions provided were based on the information analyzed. No liability is assumed for the accuracy of said information. Client agrees to indemnify and hold harmless Development Planning Partners, LLC, its owners, independent contractors, agents, employees, and assigns, from all liabilities they may be subject to as a result of these services.

Absorption forecasts and estimates of market potential provided in this report are based on the assumption that the properties will be developed in accordance with the recommendations given, with high caliber design, features, and amenities, and that the units will be professionally and aggressively marketed to the appropriate target markets. They also assume that normal economic conditions will prevail during the marketing of the properties. Unforeseen economic downturns can impact the performance of even the best housing developments.

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