They Don’t Live Here Anymore Housing Implications of NH’s Shifting Economy, School Enrollment...

They Don’t Live Here AnymoreHousing Implications of NH’s Shifting Economy,

School Enrollment and Demographic Trends

Presentation to NHHFA Housing Seminar

November 2012

Applied Economic ResearchLaconia, New Hampshire

They Don't Live Here Anymore

Major Points • New Hampshire’s job, population and housing growth has slowed markedly

– Less growth pressure at the local level, including fewer students– Fewer new units in the housing inventory– Slower revenue growth at State level

• Earlier studies confirmed: fewer school kids– 20,000 fewer school kids than in 2000 in NH (grades1-12)

– Average NH occupied unit generates 0.40+/- kids– Districts now closing rather than building school capacity– Some districts actively recruiting tuition students– No longer too many kids…now: not enough kids to support fixed costs and existing

facilities• Ageing population has pronounced effect on housing occupancy

– All of state’s household growth 2000-10 was over age 45, younger households in decline– Almost two-thirds of state’s occupied units have two or fewer people in them– Older folks tend to stay put– Older folks tend to remain owners

Economic Trends: Slower Growth

NH Job Picture Is Improving

Recovery is Weaker Than Our Last One

Longer Term Trend is Revealing

The Bottom Line: A New Normal?

State’s Population Growth is Slowing:They Are Living Somewhere Else

• State’s population growth peaked in the 1970s and 1980s.

• Growth 2000-2010 was less than half the peak rate.

• Slower job growth overall and manufacturing job losses underlie this slower growth

Housing Inventory Growth Slows

• An obvious corollary to slower population growth is: we need fewer new housing units.

• During the past decade, inventory grew at half the pace of the go-go 1980s and one-third slower than in the 90s.

• Current pace is at record low

Powerful Demographic Changes

Both Natural Increase and Migration Ebb

Source: http://carseyinstitute.unh.edu/sites/carseyinstitute.unh.edu/files/publications/Report-Johnson-Demographic-Trends-NH-21st-Century.pdf

Slowdown is Speeding Up

They Don't Live Here AnymoreSource: http://carseyinstitute.unh.edu/sites/carseyinstitute.unh.edu/files/publications/Report-Johnson-Demographic-Trends-NH-21st-Century.pdf

All of State’s Net Population Growth 2000-2010 Was Over Age 55, School Age Population Fell

• Ageing in place is the primary reason—boomers are staying where they are, but getting older.

• It is not clear that younger households are fleeing the state, but state may not be as attractive as other areas to Gen X and Gen Y.

A Tale of Two States

They Leave In Their 20s….Then Come Back

Almost Half (42%) of State’s Household Heads Are Over Age 55

Younger Households in Decline• All of the household growth

2000-2010 was in households age 45 or over.

• Significant factor in public service requirements now and in the future—fewer schools, more nursing homes.

• Dramatic impact on housing markets

– Shifts in demand for rental versus ownership units

– Who will buy, when the boomers decide to downsize?

NH Household Composition 2010: Less Than One-Third of the State’s Housing Units Include

Someone Under Age 18

• Contributing factors include:– Ageing population– Delayed families– More singles

Traditional Households Are On The Decline: Non-Family Households Growing Five Times Faster than Married

Couple Families

Fastest Growth Is Among Smaller Households

• Ageing of the population is a significant contributor;

• Younger households delaying child rearing is another element;

Current Market Conditions

Sales Volume is Rising

Modest Decline in Inventory

Backlog Easing Modestly

Prices Essentially Stable

Light At The End Of The Tunnel?

Substantial Variation Within State

Significant Inventory Variation

Foreclosures Ease Modestly, But Are Still Problematic

Rental Market Is Healthy for Owners

Local Impact: The Demographics of Housing and School Enrollment

2000-2010:Enrollment per Occupied Unit Falls to 0.37 Students

Added 44,400 Households, But Enrollment Fell by 14,900 in Grades 1-12

NH Public School Enrollment Trends

2000 2005 2010 Number PercentTotal School Enrollment 205,300 205,800 194,000 -11,300 -5.5%

Pre-K 11,500 13,100 15,100 3,600 31.3%Grades 1-12 193,800 192,700 178,900 -14,900 -7.7%Occupied Housing Units 474,600 510,300 519,000 44,400 0

Enrollment per Occupied UnitTotal School Enrollment 0.43 0.40 0.37

Pre-K 0.02 0.03 0.03Grades 1-12 0.41 0.38 0.34

Source NH Dept. Of Education (enrollmnent) Census (Occupied Units 2000, 2010, NHHFA (Occupied Units 2005), AEREnrollments include students in Public District Schools, Public Academies, Joint Maintenance Agreement and Public Charter Schools.

Change 2000-2010

Pattern is Consistent: Most Communities Added Units But Most Also Experienced Enrollment Declines

They Don't Live Here AnymoreSource: NH Public Policy

Northern Counties Show Steepest Enrollment Decline

• State’s northern counties are ageing faster than the, southern-urban settings;

• State’s northern counties are growing slower, overall, including school age population;

• Southern counties experiencing immigration

NHHFA Enrollment Analysis 34

Southern, Urban NH Has Higher Enrollment per Unit

• They have experienced higher overall population growth;

• They have experienced higher immigration of younger foreign-born households.

Enrollment By Unit Type-- Overall 0.4 Students per Unit

• Census’s American Community Survey indicates single family units generate fewer than .5 students on average.

• Structures with more units (typically garden complexes) generate only .17 students per unit.

Large New Units=Slightly Higher Enrollment

• Number of bedrooms is the principal variable structuring enrollment per unit.

• Census American Community Survey confirms this is the case, especially among newer, larger units.

• Bedrooms are more critical than when unit was built, per se.

Case Study Data For New Units Is Consistent with Census Based Demographic Data

• Case study communities included just over 1,600 new units (2005-11) housing just under 800 students.

• Overall, a new housing unit generates less than one-half (.48) student.

Case Study New Unit Enrollment Varies Sharply with Bedroom Count

• New four bedroom single family units generate an average of just under one student per unit.

• New three bedroom single family units generate fewer than one-half students per units.

• Two bedroom units generate less than .1 students per units

First Grade Enrollment Has Fallen Sharply, But May Be Leveling Off

• First grade enrollment structures future total enrollment as those students pass through grade levels.

• Some stability emerged this year, but one year is not the whole story.

• This factor bears watching.

Births In Steep Drop—Older Marriages, Fewer Children

• In the absence of in-migration, this dramatic decline in births portends future enrollment declines;

• Reflect:– Slower overall population

growth;– Fewer women in childbearing

ages– Delayed marriage and

childbearing among younger households

Enrollment Declines Likely to Continue

• As fewer births and smaller entering class sizes continue to be a factor, enrollment will continue to decline.

• Would take a dramatic increase in migration into the state to reverse this trend

Declines Continue Even With Higher Migration

• If migration is increased by 400 basis points (add 4% to most likely scenario) enrollment only reaches 2005 level;

• If migration slows further (200 basis points) enrollment losses deepen

Older Households Tend To Stay Put

Majority of Elderly Remain Owners

Over Half of Our Ownership Units Have Only One or Two People in Them

Housing Strategy Considerations• The growth-generated demand for new housing units has

subsided;• More and more of our units have fewer and fewer people in

them—we need more smaller, sexy units and fewer four bedroom units as a share of total inventory;

• The status quo would have our aging population staying put, rattling around in houses too big, while young families stay in rental units that are too small;

• Newer, innovative housing for the aging population could free up larger SF units for younger households;

• Now or in the future we probably will find ourselves with too many large units;

Right-Sized Housing

Today’s Normal Tomorrow’s Normal?

They Don’t Live Here Anymore Housing Implications of NH’s Shifting Economy, School Enrollment...

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