POPULATION, HOUSING,

& OUR ECONOMY:A CASE FOR TAX ABATEMENT CITYWIDE

PRESENTED BY DAVID TOYER

JUNE 9, 2014

Why are we talking

about housing?

Because housing is a key

component of successful economic development

Studies Show:

A diverse, available and affordable

housing stock is a critical component of

strong, growing economies.

Looking at Burlington’s housing

inventory and the market demand for housing. . .

Burlington’s housing inventory is

inadequate to support existing

and future growth, and new

development is not keeping pace with demand.

Housing Inventory vs. Market Demand

Burlington’s Housing Inventory

• 87% of housing units were built before

1980

• 48% of housing units are 2 bedrooms

or less

• 65% of owned units have a value less

than $100,000

• 82% of owned units have a value less

than $150,000

• Burlington has a homeowner vacancy

rate of only 2.1% (ACS, 2011)

NAHB/NAR Buyer Preferences (2013)

• Only 45% of buyers (nationally) want

an existing home

• 79% want a home with 3 or 4

bedrooms

• 51% of Midwest buyers typically buy

homes with 3 bedrooms and 2 full

bathrooms

• Median age of a home bought in the

U.S. was 1996

• Median age of a home bought in the

Midwest was 1985

If Burlington were a retail store,

we’d have a lot of products on

the shelves that customers are

neither looking for nor willing to buy.

In other words, when it comes to housing. . .

What does the consumer think of Burlington’s housing?

Local Housing Surveys

Show Housing Needs Not Met

2012 Housing Survey

• 22% of respondents were currently

looking for housing

• 83% of respondents ranked Burlington’s

housing as “Fair or Poor”

• 28% of respondents did not find a home

that met their expectations

2014 Housing Survey• 42% of respondents have looked for

housing in past 18 months

• 45% of respondents describe housing as “available but old and poorly maintained”

• 52% of respondents did not find a home that met their needs

• 86% of respondents indicate more housing options are needed

• 17% of respondents indicate housing is top reason for difficulty in recruiting and retaining employees

• 93% of respondents support cities taking action to encourage new housing

• 45% of respondents would support tax abatement as a policy to encourage new housing development

The good news is. . .

Housing isn’t just an issue in

Burlington.

Other communities nationwide

face the same challenge. . .

December 4, 2013

Topeka-Capital Journal: Kansas council explores rural housing

shortage

October 9, 2013

Associated Press: Lawmakers cite housing shortage in rural Oklahoma

June 24, 2013

Norfolk Daily News: Housing shortage impacts local businesses

March 1, 2014

Coloradoan: Housing shortage threatens spirit of Fort Collins

May 13, 2014

Schuyler Sun: Specialist will address housing shortage

April 18, 2014

Alice Echo News Journal: Study confirms housing shortage

February 6, 2014

Gothenburg Times: Housing shortage seen in Dawson County

April 7, 2014

Des Moines Register: Shortage of

Market Rate Homes Plagues Rural

Communities

Burlington is competing against

those communities. . .

To attract new workers to fill middle

and high skilled jobs

Which is the workforce existing

businesses need to expand

And the workforce needed to

attract new businesses here

Another perspective on population

growth and why it’s important:

“The problem—actually there are four of them—is simple. We Baby

Boomers didn’t have enough kids, our birth rate isn’t high enough, we’re living

longer, and our educational system is dropping half our kids in the academic dirt.

As 78 million of us retire, there won’t be enough qualified workers behind us to fill

the jobs and grow the economy that is necessary to support all us new

dependents.

Communities and companies will fight each other for jobs and qualified

workers. Some communities will win and prosper. Others will fail. Those that fail

will be a mess. There won’t be enough qualified workers to fill demanding jobs.

Businesses will not only not come to those communities, they will leave.”

Excerpt from:When the Boomers Bail: How Demographics will Sort Communities into Winners and

Losers

—by Mark Lautman

Mark Lautman’s theory is

that a shift is taking place where:

• Middle to high skilled workers will locate to

places (quality communities) they want to

live, not to places where there are job

openings

• The result will change the paradigm from

one where workers relocate to companies,

to one that forces companies to relocate to

communities that can attract and retain the

workers

Can Burlington compete if we

don’t create more housing

options?

It’s Uncertain.

If Mark Lautman is right. . .

“The importance of housing in the economy is well

known. Analysts track building permits nationally

and locally and report housing starts as an

indicator of economic activity. New housing

construction creates jobs and generates income,

and a strong new housing market is seen as

an indicator of public confidence and a robust

economy.”

-Center for Urban Policy & the Environment

The issue of housing is growing in urgency. . .

Why? Because:

1. The local economy is gaining momentum

2. New jobs are being created

AND

3. People are looking to move here for a job

April unemployment at 4.9% is the

lowest month on record in Burlington since 2007

The number of employed (12,220) in

Burlington in 2013 was the highest annual total since 2002

Burlington’s resident civilian labor force

(13,040) in 2013 was the highest its been since 2003

12640

12290

11500

11800

12100

12400

12700

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YTD

Source: Iowa Workforce Development

Resident Total Employment

Resident Total Employment

Burlington, Iowa

13210

13070

12450

12650

12850

13050

13250

13450

13650

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YTD

Source: Iowa Workforce Development

Resident Civilian Laborforce

Resident Civilian Laborforce

Burlington, Iowa

And, for the first time in 40 years we

have population growth

1970 1980 1990 2000 2010 2013

Population 32366 29529 27208 26839 25663 25725

24000

26000

28000

30000

32000

34000

Pop

ula

tio

n

U.S. CensusPopulation Trends 1970 – 2013

-20.71%

+0.24%

In fact, an ISU population study from May 2014 shows that

Burlington is one of 275 cities in Iowa that have grown since 2010.

The other 681 cities declined or had no change.

However, Burlington had

the lowest % of population growth at 0.24%

The ISU Population Study found

that all cities in Des Moines County

grew.

Despite the momentum and new

economic growth. . .

Burlington had fewer total housing

units in 2010 than in 1970

And current stats show fewer

people occupy each unit (locally

and nationally)

Given that, are we adding enough

units to grow?

1197911899

12078

11159

10938

2.9 2.32.7

2.1

0

0.5

1

1.5

2

2.5

3

3.5

10750

11000

11250

11500

11750

12000

12250

1970 1980 1990 2000 2010 2012

Pop

ula

tio

n t

o H

ou

sin

g U

nit

Rat

ios

Tota

l Ho

usi

ng

Un

its

Axis Title

U.S. Census Data

Total Housing Units Occupied Housing Units

Household Size Population/Occupied Unit

Trends in Housing & Population

-0.66%

Decline in Total Housing Units

With a 2013 Population of 25,725 and a

Total Population/Total Housing Units

statistic of 2.1 people

Burlington needed to have 12,250 housing

units in 2013 just to stay level with growth.

That would be an increase of 172 units

over the 2012 housing inventory.

In contrast Burlington issued only 33 building permits in 2013 for new residential construction.

Not enough to sustain

momentum.

Burlington not only needs more

housing, but more diverse

housing.

Why?

• 42% of respondents have looked for housing in past 18 months

• 45% of respondents describe Burlington’s housing as “available

but old and poorly maintained”

• 52% of respondents did not find a home that met their needs

• 86% of respondents indicate more housing options are needed

• 17% of respondents indicate housing is top reason for difficulty in

recruiting and retaining employees

Because our housing stock isn’t satisfying buyers and it poses a threat to recruiting and

retaining the employees needed by our expanding industries.

2014 Housing Survey:

We need to have housing that appeals to a broad

range of buyers. Who are these buyers and what

do they want?

The National Association of Realtors in 2013 found

the following buying preferences by type of buyer:Housing

Type

All

Buyers

First

Time

Buyers

Repeat

Buyers

Married

Couple

Unmarried

Couple

Single

Female

Single

male

Other With Kids

under 18

in home

Without

kids

under 18

at home

Single

Family

Detached

80% 77% 82% 86% 79% 65% 67% 69% 88% 75%

Townhouse/

Rom House

7% 8% 6% 5% 9% 12% 12% 11% 4% 9%

Apartment

or Condo 5+

units

5% 6% 5% 3% 4% 12% 11% 7% 3% 7%

Duplex,

Apartment

or Condo 2

to 4 units

2% 2% 2% 2% 2% 4% 3% 2% 1% 3%

Other 6% 7% 5% 5% 7% 8% 8% 11% 4% 6%

What Housing Can You Find in

Burlington/West Burlington?

Home Price 5 or Less Years Old 10 or Less Years Old 20 or Less Years Old

$80,000 and above 8 15 31

Between Burlington & West Burlington there are only 31 housing options with 3 bedrooms and 2 baths for sale

above $80,000 in price that are 20 or fewer years in age. Search included: Single Family, Condos, Townhomes, Duplexes, Modulars, Manufactured Homes, etc.

Source: Realtor.com/Burlington Multiple Listing Service

Add 2-car garage requirement and the options drop:

Home Price 5 or Less Years Old 10 or Less Years Old 20 or Less Years Old

$80,000 and above 8 14 25

The Greater Burlington Partnership Supports:

More aggressive tax abatement for the

development and redevelopment of housing

citywide to encourage more housing options that

will include single family homes, duplexes,

apartments and condominiums throughout the

community.

And Our 2014 Housing Survey Found:

• 93% of respondents support cities taking action to encourage new housing

• 45% of respondents would support tax abatement as a policy to encourage new

housing development

The Greater Burlington Partnership Respectfully Requests:

• Council hold a public hearing to consider a more aggressive citywide housing tax abatement

We support a citywide tax abatement that:

• Is at or roughly equal to a 100% abatement for 5 years • Alternatives that would generate tax revenue for the city

sooner would be 50% abatement for 10 years or 75% abatement for 7 years

• Expiration of this more aggressive abatement in five years unless renewed or extended by the Council

Thank you for the opportunity to

present!

CONTACT INFORMATION

David Toyer, Director of Economic Development

Greater Burlington Partnership

610 N. 4th Street, Suite 200

Burlington, Iowa 52601

319-752-6365

dtoyer@greaterburlington.com

@GBPartnership

#GBPecondev

www.greaterburlington.com