Affordable housing needs assessment cITY OF COLORADO SPRINGS and el paso county final edition october 2014 table of contents executive summary 1 and introduction 2 Executive Summary 12 Introduction 12 Purpose of Study 12 Study Area 13 Methodology and Data 14 How this Document is Organized economic and 2 demographic analysis 18 Economic Context 18 Employment and Unemployment 24 Income 32 Educational Attainment 34 Demographic Context 34 Population Trends and Projections 40 Age 50 Race and Ethnicity 57 Tenure by Race 58 Poverty by Race 63 Household Size 66 Household Type 69 Place of Birth 70 Migration 73 Special Needs Populations housing market 3 analysis 82 General Trends 82 Growth in Households and Housing Units 83 Occupancy and Vacancy 89 Home Value and Rent 96 Cost Burden 102 Housing Supply Characteristics 102 Units by Structure Type and Tenure 108 Assisted Housing Supply 110 Units by Age 113 Units by Size 115 Affordability and Condition 120 At-Risk Affordable Rental Units 122 Affordable Housing Mismatch Analysis 124 Current Housing Problems by Income 126 Current Affordability of Housing 128 Projection of Housing Needs private sector 4 policies and trends 131 HMDA Data Analysis 131 General Mortgage Lending Practices 135 Geographic Distribution of Mortgage Denials 138 High-Cost Lending 140 Annual Trends in Mortgage Lending public sector policies 5 and trends 143 Planning and Zoning: City of Colorado Springs 147 Planning and Zoning: El Paso County 148 Code Enforcement 149 Homebuyer Programs 150 Public Transit 156 Federal Public Policy Barriers 156 Market Barriers 157 Physical Barriers 157 Other Barriers 6 RECOMMENDATIONS 158 appendix A Best Practices executive summary and introduction1 1 Both El Paso County and Colorado Executive Summary Springs were significantly affected by the Great Recession that started in Given steadily increasing demand for 2007. This is evidenced by the stagnant affordable housing and growing budget employment growth rates, lack of growth pressures, the City of Colorado Springs in real wages, and above-average and El Paso County intend to maximize the unemployment rates these areas impact of their community development experienced. Neither area has fully and housing activities by undertaking recovered from the economic shock. Job them in the right communities for the gains from this time period have been in right type of households. This requires sectors that pay below-average wages. comprehensive knowledge about the Income levels are fairly evenly distributed nature of the local housing market as across racial categories, but nearly all it exists and how it can reasonably be races have experienced a decline in real expected to change during coming years. income between 2000 and 2012. As real Housing is directly connected to the incomes decline while housing costs local economy, social and demographic remain the same, the need for affordable trends, and local policy. In order to housing options in Colorado Springs and understand affordable housing needs El Paso County increases. in the region, this research starts with an assessment of local conditions and unmet housing needs, and develops an action plan based upon these results. While the rate of population growth is projected to level off in the future, most of The local economy has not fully the growth will still be driven by migrants. recovered from the previous recession, New migrants tend to be highly educated, and the fastest-growing industries are contributing to the large and growing predominantly adding low- wage jobs skilled labor force. Despite fluctuations in the proportion of El Paso County’s growth was the fastest military jobs between 2000 and 2012, among all counties in Colorado in 2012. the armed forces represent a significant While the County has grown by about portion of the base economy (jobs 30% each decade between 1970 and that import wealth from outside the 2000, growth is expected to slow in the region). Four of the top five employers coming decades. On the whole, El Paso in Colorado Springs are military bases County’s population was more educated (the fifth is Memorial Health System). in 2012 than it was in 2000. Of persons Furthermore, many other professional aged 25 and older in the entire County, jobs in engineering and other high-paying 35.3% held a college or post-secondary fields are located in El Paso County degree compared to 31.8% in 2000. largely because of this military presence Migrants drive population growth and and concentration of specialized talent housing demand. The people coming to in the region. Attractions such as Pikes the region tend to be more educated than Peak and Garden of the Gods generate the general population. a significant tourism economy, and Colorado Springs also has large software and processing service facilities that employ large numbers of residents in a wide cross-section of income ranges. El Paso County added 50,782 jobs between 2000 and 2012. Of these jobs, 37,957 (74.7% of the total) were located in Colorado Springs. 2 Figure 1 : Median Earnings by Industry, El Paso County, 2012 3 The greatest future affordable housing the average household size in El Paso County fell from 2.61 people to 2.58. In needs will be among very young and very Colorado Springs, average household old households. size fell from 2.50 to 2.48 in the same time period. The average size of both family and non-family households is More senior citizens and Millennials projected to further decrease between combined with fewer baby boomers 2014 and 2019. The major driver of this mean new non-traditional housing needs is growth in one-person and two-person 1 for the region. Combined with shrinking households. household sizes, this means more units per person will be required in the future. While housing planning often considers There are not enough small housing a four-member nuclear family as the units in the region to satisfy future default, changing demographics and demand, and accessibility will become preferences mean that non-traditional increasingly important households will become increasingly important, and these households will Seniors and Millennials are expected be smaller and more vulnerable to to grow the most, while boomers are cost burden than previous populations. expected to decline in proportion to the Although 18.2% of the population lives general population. The relatively large alone, only 11.3% of the County’s population share accounting for members housing inventory is small (1-bedrooms of the baby boom generation has shifted or studios). There is also a shortage of upward in age, a phenomenon to which 2-bedroom housing units given the high the housing market will be required to number of two-person households in respond with supply suited to a larger the area. From an affordable housing number of elderly households. This will perspective, households that want to likely translate to increased demand access affordable housing can often for accommodations that would allow do so through living in a smaller house. such households to age in place. Very However, comparing the breakdown of young households have similar needs, bedrooms in housing units versus the often looking for “starter” homes that are breakdown of household size shows that affordable, manageable, and appropriate there may not enough smaller units for for smaller household sizes. all households to live in an appropriately- sized unit. As a result, some households As this demographic transitions, may be forced into a situation where household size in the region has they have “too much house”, becoming decreased. Between 2000 and 2012, cost burdened as a result. Seniors are 1 Millennials are persons born between particularly vulnerable and may become the early 1980s and the early 2000s cost burdened as a result. 4 Map 1: Residents AGE 65 AND UP by census tract, el paso county, 2012 Demand for affordable, accessible housing Minorities and non-English speakers are suitable for persons with disabilities geographically concentrated in southern exceeds current supply. Colorado Springs, in areas with higher poverty and renter occupancy rates. The Nearly 60,000 residents in El Paso most concentrated pockets of poverty are in County have a disability that could affect their housing situation. The most the City of Fountain. These areas have the common type of disability reported was an highest mortgage denial rates. ambulatory disability, meaning difficulty walking or moving around. Because this type of disability is correlated with Blacks in El Paso County were heavily increasing age, and the number of senior concentrated in South Colorado Springs, citizens is expected to rise significantly, despite earning only slightly less than the number of accessible housing units Whites on average. Hispanics were also required in the region is expected to heavily concentrated in South Colorado increase in the future. Furthermore, Springs. There was a high level of persons with disabilities as a group correlation between areas of Black have less educational attainment, lower concentration and areas of Hispanic incomes, and are more likely to live concentration. The highest concentration below the poverty line than the general of Blacks in a census tract was 25% population. compared to a 49.9% concentration of Hispanics. North-Central El Paso County As a result, persons with disabilities had an outlier concentration of Blacks are another key demographic in need and Hispanics, corresponding to the of affordable housing. Making new Census-designated places of Peyton affordable housing accessible should and Black Forest. The most commonly be a priority in future projects, especially spoken languages at home amongst LEP given the limited accessibility in the households was Spanish, followed by current housing inventory. Stakeholders Korean. These households are clustered interviewed for this analysis reported that in South Colorado Springs and, to a many of the affordable housing options lesser extent, in the Fountain Valley.