Residential Demand Analysis
Transcript of Residential Demand Analysis
Residential Demand Analysis: Franklin County, Kansas PREPARED FOR: FRANKLIN COUNTY DEVELOPMENT COUNCIL 1428 S. MAIN STREET, SUITE 2 OTTAWA, KANSAS 66067
PREPARED BY: DEVELOPMENT INITIATIVES 4501 Fairmount Avenue Kansas City, Missouri 64111 PHONE: 816-916-3664 PREPARED:
JUNE 18, 2021
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Limiting Conditions
The reported analyses, opinions, and conclusions contained herein are limited only by the reported assumptions and limiting conditions, and are Development Initiatives’ unbiased professional analyses, opinions, and conclusions. Information provided and utilized by various secondary sources is assumed to be accurate. Development Initiatives cannot guarantee information obtained from secondary sources. Such information and the results of its application within this analysis are subject to change without notice. The nature of real estate development is an unpredictable and often tumultuous. The natural course of residential development is difficult to predict and forecast. Development Initiatives deems our projections as reasonable considering the existing market and various obtained information. It should be understood that fluctuations in local, regional and/or national economies could have substantial effects on the particular findings and recommendations contained within this document.
Copyright Statement This document was prepared for the intended use of Franklin County Development Council and/or its assignees. With the exception of the unlimited use by the Franklin County Development Council and/or its assignees, no part of this document may be reproduced, duplicated, or transmitted by mechanical, digital or other means without permission in writing from Development Initiatives. Development Initiatives retains all copyrights to the material located within this document and the material located herein is subjected to the U.S. Copyright Law found in the United States Code, Title 17, Chapter 1-13.
June 18, 2021 Mr. Paul Bean Executive Director Franklin Councy Development Council 1428 S. Main Street, Suite 2 Ottawa, Kansas 66067 Subject: Residential Demand Analysis – Franklin County, Kansas Dear Mr. Bean: It is our pleasure to present this residential demand analysis for your use related to the possible
development of various multi-family and single-family housing projects within Franklin County,
Kansas.
The purpose of this analysis is to conduct a residential demand analysis for Franklin County, Kansas.
The intent of this report is to assist County stakeholders in their efforts to grow its residential market
by analyzing possible demand for multi-family and single-family housing in the near future.
We have identified the following key characteristics.
The Market Area for this analysis is comprised of Franklin County, Kansas. Sub-market
data for the City of Ottawa and Wellsville was also utilized in certain demand
calculations.
Renter-occupied housing:
Franklin County: 23.0%.
City of Ottawa: 33.0%.
City of Wellsville: 17.6%
Owner-occupied housing:
Franklin County: 66.4%.
City of Ottawa: 56.3%.
City of Wellsville: 73.8%.
Vacant housing stock:
Franklin County: 10.6%.
City of Ottawa: 10.7%.
City of Wellsville: 8.6%.
Total number of renter households:
Franklin County: 2,642.
City of Ottawa: 1,867.
City of Wellsville: 131.
Total number of owner households:
Franklin County: 7,628.
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City of Ottawa: 3,186.
City of Wellsville: 551.
Population growth for Franklin County and the City of Ottawa, is projected to stagnate
and decline slightly over the course of the next five years (-0.07% and -0.09%
respectively). However, these estimates are based purely on Census and ACS data and
projections. At the same time, population growth for the City of Wellsville is projected to
increase slightly (0.06%).
Estimated Capture Rate, Renter-Occupied:
Table 1 - Estimated Capture Rates.
Market Area Units Estimated Capture
Rate range
Franklin County 10 Units
20 Units
30 Units
1.08% to 1.60%
1.43% to 2.13%
2.15% to 3.19%
City of Ottawa 10 Units
20 Units
30 Units
2.19% to 3.31%
2.92% to 4.42%
4.39% to 6.63%
City of Wellsville 10 Units
20 Units
30 Units
11.28% to 34.15%
22.57% to 45.37%
33.85% to 68.31%
Estimated Penetration Rate:
Table 2 - Estimated Penetration Rate.
Planned Units in the PMA Renter For-sale Renter For-sale Renter For-sale
The Proposed Project 0 0 0 0 0
Other Planned Projects 52 20 47 6 5 6
Total Planned Projects 52 20 47 6 5 6
Total Planned Units at 93% Occupancy 48 19 44 6 5 6
Total Existing Units available due to estimated Attrition (12%) 6 2 5 1 1 1
Total Units to be Occupied (Market) 54 21 49 6 5 6
Percentage of Units to be Occupied from PMA 90% 90% 90% 90% 90% 90%
Total Units to be Occupied from the PMA (a) 49 19 44 6 5 6
Estimated number of Income-Qualifying Households 450 787 373 469 20 47
Less: Existing Inventory of Available Comparable Units -20 -35 -10 -20 -5 -10
Estimated number of Income-Qualified Households (b) 430 752 363 449 15 37
Net Market Penetration Rate (a / b) 11.34% 2.49% 12.14% 1.25% 31.25% 15.20%
Franklin Co. Ottawa Wellsville
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Total estimated demand for the Market Area is difficult to determine and speculative, and
we estimate demand to vary depending upon population and housing trends. Demand
estimates are outlined in the executive summary and Section 5 of this report.
To summarize this study, it is our opinion that there continues to be a marginal demand for quality,
housing targeting mid-level income households within the Franklin County and Ottawa Market
Areas. Demand is for both rental and for-sale product. We have also identified a specific demand
for income-restricted rental units as part of this analysis and previous analyses completed for the City
of Ottawa and Franklin County.
Competitive supply for rental and for-sale product is limited. Existing supply is antiquated/outdated
and in some cases lacks modern conveniences (i.e. current up-to-date HVAC, electrical, plumbing,
technology systems, design layout, etc.). We do feel that the community will support the construction
of the additional multi-family rental products as well as single-family owner-occupied residential
units. However, quantifying the exact number of units is difficult. Current estimates indicate Franklin
County and surrounding market area population is declining, albeit at a very small pace.
Recommendations
The following are recommendations that resulted from stakeholder interviews, demand analysis calculations and project observations. Topics are general in nature and apply to Franklin County and its sub-markets (Ottawa and Wellsville).
Emphasis on “shovel-ready” single-family and multi-family projects which may be further
along in the development pipeline.
Continued encouragement of single-family residential development on existing subdivision
platted lots with utility infrastructure in place (City of Ottawa).
Note: We would not recommend larger scale subdivision development due to anticipated
population stagnation. Promotion of large scale subdivision development would pose risks
to both the viability of the development entity and potentially the City if said development
fails. Having said that, it appears that new home permits are increasing for the year
beginning 2019. According to the City, sixty-nine new single-family permits have been
issued for years 2019 and 2020.
Development of an infill rehab program to upgrade vacant/abandoned residential properties
which have the potential for continued habitation. Based on Census data approximately
10.6% of the existing housing stock within the County is vacant. In particular, City of Ottawa
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permit data shows almost 193 residential demolitions since 2006. Even if a small portion of
these units were rehabilitated for habitation that would certainly impact the overall residential
supply in Ottawa. While Ottawa has taken steps to initiate an infill rehab program, it’s our
opinion that other municipalities should also undertake similar programs (particularly
Wellsville).
Incentives. We would encourage the County and local municipalities to continue to pursue
the implementation of various incentive programs. Formulate a structured incentive program
to encourage both infill development as well as new subdivision development. Such
programs would address demand in both the for-sale and rental markets. Incentives should
be targeted towards property owners, housing developers and builders. Home ownership
programs could be considered for home buyers, but ideally they would need support of the
local lending community. Incentives may include but not be limited to;
o Property tax rebates,
o Utility rebates,
o Utility fee waivers, or reductions,
o City fee waivers,
o Special assessment waivers for a short period of time,
o Continued promotion of the RHID/MHID program. These programs go a long way
in supplementing developer funding towards infrastructure improvements.
Affordable Housing. At the time of report issuance, it is our understanding that a local Low
Income Housing Tax Credit (LIHTC) project is proposed for the City of Ottawa. However this
project only accounts for thirty two (32) units. Based on data from ECKAN it is estimated
that actual demand for 60% or less AMI households. We would recommend continued
development of housing for these 60% AMI or less households. Funding would be via KHRC
through the LIHTC program, and availability is limited, but if the City could obtain an
allocation every two to three years it would go a long way to fulfill this demand County-wide.
Additionally, our analysis indicated that approximately 495 households were income eligible
renter households (40%-60% AMI) and total demand for housing for these income cohorts is
estimated to be approximately 637 units through 2025.
Governmental Coordination and Marketing. Due to its proximity to the Kansas City
Metropolitan Area, Franklin County possesses many attractive qualities which may be
attractive to relocation opportunities, both from business and individual perspectives. These
include: great highway accessibility, small town/rural feel, and generally a lower cost of
living. It would be our recommendation to increase programming opportunities which
coordinate between the County and various communities to attract businesses and
individuals to consider relocating to Franklin County.
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Please feel free to contact us if you have any questions regarding any aspect of the following report.
We appreciate the opportunity to present this material to you.
Sincerely,
Jim Potter development initiatives
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TABLE OF CONTENTS
1: Introduction 1a Objective 1b Qualifications of the Surveyor 1c Surveyor Certifications 1d Assumptions and Data Sources 2: Executive Summary 3: Market Analysis 3a General Description and Location 3b Municipal Description 3c Definition of Market Area 3d Economic & Demographic Analysis 3e Tax Climate 3f Incentive Opportunities 3g Permit Data 4: Housing Market 4a Stakeholder Interviews 4b Rental Housing Market 4c For-Sale Housing Market 5: Demand Analysis 5a Assumptions 5b Demand Projections 6: Sample Project Outline 6a Multi-family Rental 6b Single-family for-sale. 7: Opportunities EXHIBITS
Exhibit A: Demographic Data- Included Under Separate Cover Exhibit B: Development Initiatives Corporate Info. Exhibit C: Certification, Assumptions and Limiting Conditions, Qualifications
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1 Introduction 1a. Objective Development Initiatives (DI) has been retained by The Franklin County Development Council
(FCDC) to conduct a residential demand analysis for Franklin County, Kansas. The intent of this
report is to assist the County in its efforts to attract and grow investment not only from a business
attraction perspective, but also from a residential growth perspective.
This analysis, recommendations, or opinions will include the following:
A review of previous housing market studies;
Identification of the Franklin County Market Area;
Identification of Ottawa Sub-Market Area;
Discussion of the Wellsville Sub-Market Area;
Identification of existing housing inventory and competitive locations; Demographic
analysis for the area;
Economic profile of the market;
Opinion of present and future housing demands.
As part of this analysis, Development Initiatives personally toured the County, the City of Ottawa
and the surrounding areas. We identified various housing developments and interviewed local
stakeholders and municipal officials. Additionally, Development Initiatives has analyzed the
current housing condition and trends in Franklin County and Ottawa, Kansas; reviewed and
analyzed demographic trends relating to the overall market area that influence future demand
for housing; studied adjacent communities; researched proposed new projects; and projected
current market rates; anticipated future housing demands and expected absorption of any future
projects.
1b. Qualifications of the Surveyor This demand analysis has been prepared by Mr. Jim Potter of Development Initiatives.
Company information for Development Initiatives is located in Exhibit B of this report.
1c. Surveyor Certifications
Exhibit C of this report contains a complete list of certifications, assumptions, and limitations for
this demand analysis.
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1d. Assumptions and Data Sources
In preparing this report and any recommendations, or opinions, the analyst has relied on various
physical, economic, and demographic data and information from various sources that the
consultant believes to be credible and reliable. The use of information obtained from the various
sources; including but not limited to:
ESRI
Kansas Department of Labor,
Kansas Department of Commerce,
Kansas Department of Transportation,
Kansas Department of Revenue,
U.S. Census Bureau,
U.S. Bureau of Economic Analysis,
American Community Survey (ACS),
Kansas City Regional Association of Realtors®
Heartland Multiple Listing Service (MLS),
Kansas League of Municipalities,
Existing community housing reports and analysis provided by the City,
Franklin County Development Council,
Franklin County, and
The City of Ottawa, Kansas.
It is critical to the preparation of the report and the analyst believes that the information
has resulted in a credible analysis.
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2. Executive Summary
The purpose of this study is to quantify the potential residential demand in Franklin County,
Kansas in the immediate near future. This study includes a demographic and economic analysis
of the community and a demand analysis of the surrounding housing markets. The analysis will
focus on the potential demand for both multi-family and owner-occupied housing. A review of
existing housing conditions, patterns of growth and decline, and any projected change in
influencing economic variables helps to determine if housing is currently underserved in the
market and estimating the number of units needed to meet any future demand.
Project Assumptions
Based on the supply and demand projections, we have developed the following general
conclusions for this analysis:
The Market Area utilized in this analysis for owner-occupied housing incorporates one
primary area; the County limits of Franklin County.
When referencing multi-family rental market, the Market Area has utilized the boundaries
of Franklin County.
The County is conveniently located, and for the most part within a 30-minute drive from
the Metropolitan Kansas City area.
The subject analysis is focused on proposed newly constructed multi-family residential
projects as well as newly constructed single-family for-sale units. Additionally, we do
touch on income-restricted multi-family rentals.
All data utilized has been obtained through ESRI Data Services and includes U.S. Census
Bureau data, as well as various forecasts and projections.
Population is projected to remain stable, if not declining slightly, within the Franklin
County Market Area through 2025.
The number and size of households is also projected to decline slightly within the Franklin
County Market Area through 2025.
The potential for a significant added population is available through the daily influx of
workers into Franklin County. It is estimated that approximately 4,600+ individuals enter
the County on a daily basis for work. It’s reasonable to consider that new housing
projects within the City could capture 1% to 3% of that daily influx. This conservatively
estimates another 46-138 households which potentially can be captured.
Incentives. Our analysis does not take into account any public incentives which may be
requested or required as part of proposed projects. However, we have identified certain
incentive tools which may be applicable for varying housing projects. The utilization of
incentives is a political issue the County and City will have to ultimately determine. Local
stakeholders can (it’s happened in other markets) decide to incentivize the housing
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market for an indefinite time period. This determination should be guided by the long-
term goals and objectives of area planning initiatives.
For the purposes of this demand analysis, the Primary Market Area (PMA) is defined as Franklin
County, Kansas. Sub-market areas also identified in this analysis include the cities of Ottawa
and Wellsville. Within the PMA, the total population is currently estimated to be 26,438. Total
households within the PMA are currently estimated to be 10,269 and an average household size
is 2.53.
Conclusions/Findings
Overall, the Franklin County housing market (and sub-markets) currently shows a minimal
growth in development and construction. Single-family home development and construction is
minimal and only one new project is proposed (a 32 unit income-restricted LIHTC project
located in Ottawa). All multi-family market rate rentals are at capacity and single-family home
inventory is tight. Sales have increased year-over-year (+8.1% 2019-2020), but lack of
inventory appears to be prohibiting additional growth.
Population growth for Franklin County, and surrounding areas, is projected to be stagnant, if
not declining slightly through 2025. However, population estimates are based purely on
Census data and often times do not reflect true market and municipal housing initiatives.
Data shows that net demand within the Franklin County Market Area is anticipated to outweigh
supply. Estimated annual demand for rental housing is estimated to be fifty-six (56) units over
the next five (5) years. In that same time period we estimate owner-occupied housing demand
(for-sale) at forty-nine (49) units. These figures equate to an annual demand of 11 units and 10
units, respectively.
It appears that Franklin County has a significant amount of daytime population. According to
Census estimates, the daily influx of workers is considerably high at approximately 4,698
individuals who are employed within the County, but currently live outside. Estimated daytime
population and employment-residence ratios were obtained from the US Census Bureau and
based on the 2018 Census estimates. It would be reasonable and conservative to consider that
one to three percent (1% to 3%) of these imported workers would live in Ottawa if the
opportunity existed. We conservatively estimate this to impact the overall household demand
factor at an additional 46 to 138 households.
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3a. General Description & Location
Franklin County is generally located southwest of the Metropolitan Kansas City Region (KCMSA),
midway between KCMSA and Emporia, Kansas to the southwest. Franklin County also resides
just south of the City of Lawrence and southeast of Topeka, the Capital of the State of Kansas.
The closest large airport is the Topeka Regional Airport located in south Topeka. Smaller,
regional air traffic is serviced by the Ottawa Municipal Airport four miles south of Ottawa. The
airport serves smaller business airplanes and jets.
Figure 1 – Location Map, Franklin County, Kansas.
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The County is well located with an excellent highway system linking it regionally. Interstate 35 (I-
35) bisects the County northeast to southwest, providing multiple access points. The City of
Ottawa is centrally located within the County. Old US Highway 59 bisects the County and City
running north and south. State Route 68 bisects the County and City running east and west.
Figure 2 - Regional Location Map. Courtesy Google Maps.
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Figure 3 – City of Ottawa Map. Courtesy Google Maps.
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3b. Municipal Description
The City of Ottawa is located in, and is the county seat of Franklin County, Kansas. The City
has a population of approximately twelve thousand eight hundred (12,800) according to 2020
estimates. Ottawa is located approximately thirty (30) miles southwest of the Kansas City
Metropolitan Area and approximately fifty-five (55) miles northeast of Emporia, Kansas.
Figure 4 – City of Ottawa, regional proximity.
Access
As previously mentioned, regional access to and from the Franklin County Market Area is
considered excellent due to the presence of Interstate 1-35, as well as Old US Highway 59 and
State route 68. Locally, there are numerous arterials providing easy access throughout the Area.
23 Miles
37 Miles
26 Miles
57 Miles
30 Miles
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Schools
Franklin County is served by four (4) Unified School Districts:
USD 287 – West Franklin,
USD 288 – Central Heights,
USD 289 – Wellsville, and
USD 290 – Ottawa.
USD-290 is the largest, accommodating 2,500+ students grades K-12. The District employs
approximately 160 staff members and enjoys a Student to Teacher Ratio of 12.81.
The City is also home to Ottawa University. Founded in 1895, the University has grown into an
institution that serves over 4,000 students through various campuses, including the home
campus in Ottawa.
Additionally, Ottawa also have a satellite campus for Neosho County Community College
(NCCC). According to NCCC, enrollment is approximately 750 full and part-time students.
3c. Definition of Market Area
A market area is defined as the smallest geographic area that is expected to generate the
greatest demand. The size and scope of each market area depends upon a number of different
factors, these include; geographic distance, travel time, natural barriers (lakes, rivers, open
space, undeveloped land), constructed barriers (railroads, freeways, large institutional uses), and
general accessibility. For the purposes of this analysis, an overall market area was not
determined, because we anticipate some demand to come from outside the market area and
that demand is difficult to determine. In order to make generalized projections in relation to this
analysis, market data for both the County and City was utilized.
It should be noted that population projections are quantitative in nature and are highly
influenced by local economies and growth trends. Overall Census projections often do not
convey local growth trends and are usually based on standard growth trends. Having said that,
the most accurate and standard population data is that which is provided thru Census
projections.
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Figure 5 – Primary Market Area: Franklin County, Kansas.
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Figure 6 – Ottawa Sub-Market Area.
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Figure 7 – Wellsville Sub-Market Area.
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3d. Economic & Demographic Analysis
Demographic Characteristics and Population
The following tables show population within the Franklin County and the Ottawa/Wellsville Sub-
Market Areas as previously defined.
Table 3 - Population & Household Data.
Franklin County, Kansas
Census 2010
Estimate 2020
Projection 2025
2020-2025 Change
2020-2025 Annual Rate
Population 25,992 26,438 26,346 -92 -0.07%
Households 10,104 10,269 10,229 -40 -0.08%
Housing Units 11,147 11,489 11,665 176 1.5%
Avg. Household Size
2.53 2.53 2.53 0.0 0.0%
Source: Esri: Market Profile 2021.
Table 4 - Population & Household Data.
City of Ottawa, Kansas
Census 2010
Estimate 2020
Projection 2025
2020-2025 Change
2020-2025 Annual Rate
Population 12,644 12,813 12,753 -60 -0.09%
Households 4,997 5,054 5,027 -27 -0.11%
Housing Units 5,517 5,659 5,742 83 1.44%
Avg. Household Size
2.45 2.46 2.46 0.0 0.0%
Source: Esri: Market Profile 2021.
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Table 5 - Population & Household Data.
City of Wellsville, Kansas
Census 2010
Estimate 2020
Projection 2025
2020-2025 Change
2020-2025 Annual Rate
Population 1,857 1,934 1,940 +6 0.06%
Households 722 747 747 0.0 0.00%
Housing Units 780 817 831 14 1.68%
Avg. Household Size
2.52 2.55 2.56 n/a n/a
Source: Esri: Market Profile 2021.
Figure 8 - Household Trends-Franklin County: 2020-2025.
Figure 9 - Household Trends-City of Ottawa: 2020-2025.
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Household Growth
Generally speaking, the primary source of demand for new housing is the formation of new
households from population growth. However, due to the rural nature of the housing market in
Franklin County, this demand could also equally be net in-migration, i.e. relocations into the
County from outside the market. The following tables show the household growth, average
household size, and the percentage of renters for the Franklin County and are Sub-Markets.
Table 6 - Household Composition: Franklin County.
2010 Census
2020 Estimate
% change 2010-2020
2025 projection
% change 2020-2025
Population 25,992 26,438 0.16% 26,346 -0.07% Households 10,104 10,269 1.60% 10,229 -0.08% Avg. HH Size 2.53 2.53 0% 2.53 0% Housing Units
11,147 11,489 2.9% 11,665 1.5%
% Owners 64.4% 66.4% 65.4% % Renters 26.2% 23.0% 22.3% % Vacant 9.4% 10.6% 12.3% Source: ESRI, Market Profile, 2021.
Table 7 - Household Composition: City of Ottawa.
2010 Census
2020 Estimate
% change 2010-2020
2025 projection
% change 2020-2025
Population 12,644 12,813 1.31% 12,753 -0.09% Households 4,997 5,054 1.12% 5,027 -0.11% Avg. HH Size 2.45 2.46 0.4% 2.46 0% Housing Units
5,517 5,659 2.5% 5,742 1.44%
% Owners 52.3% 56.3% 55.5% % Renters 38.2% 33.0% 32.1% % Vacant 9.4% 10.7% 12.5% Source: ESRI, Market Profile, 2021.
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Table 8 - Household Composition: City of Wellsville.
2010 Census
2020 Estimate
% change 2010-2020
2025 projection
% change 2020-2025
Population 1,857 1,934 3.98% 1,940 0.06% Households 722 747 3.34% 747 0.0% Avg. HH Size 2.52 2.55 1.17% 2.56 0.0% Housing Units
780 817 4.52% 831 1.68%
% Owners 68.2% 73.8% 72.7% % Renters 24.4% 17.6% 17.2% % Vacant 7.4% 8.6% 10.1% Source: ESRI, Market Profile, 2021.
The overall percentage of renters for the Franklin County market is average. Typically, it would
be anticipated that 20 to 25 percent of all housing units be renter-occupied. The renter
percentage is average for this market. However, the City of Ottawa is slightly higher than
surrounding “out-county” areas. This is an indication of a more dense population base (to be
expected as the County seat, as other residual factors). Overall, for all data sets, the
percentage of renter population is decreasing gradually on an annual basis. This might be
attributable to the significant amount of mature residential housing stock existing in the market
area, and renter households converting to owner-occupied households.
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Population by Age
In Franklin County, based on Census data and population projections, presently approximately
62.9 percent of the population within Ottawa was between the ages of 25 and 65. This is
projected to change slightly (to 60.5%) by 2025. The City of Ottawa exhibited similar
projections (63% to 61.6%) between 2000 and 2025. Generally population can be broken
down into cohorts identifying age, economic status and spending habits, in this case real estate
preferences.
Figure 10 – Population by Age: Franklin County: 2020-2025.
Figure 11 – Population by Age: City of Ottawa: 2020-2025.
Millennials whom are defined as those born between 1981 and 1996 currently number an
estimated 72 million nationally. Within the Franklin County Market we estimate that figure at
approximately 12 percent of the population. Generally, as it relates to real estate, Millennials
(also known as Gen Y) are less interested in homeownership than their parents were when they
were young adults. Gen Y mentality is that they will be renters by necessity or choice for the next
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few years. However, recent studies show that the millennial market will be the greatest impact
to the housing market in the next five years.
Gen X (typically born between mid1960’s and early 1980s). There are no precise dates or ages
for Generation X. Members may not be making as large of an impact on real estate as
Millennials, but Gen X was the cohort which bought more homes in 2017 than any other age
group. Gen X was also the cohort which suffered the greatest impact of the last recession,
entering homeownership at the peak and suffered the greatest job losses. But currently with the
stronger economy, housing values rebounding and an active job market, Gen X is in the prime
earning years of all age groups.
Younger Baby Boomers (ages 46-54 years old) are now entering their prime earning years, but will lack home equity and unlike older members of their generation, they won’t be able to purchase second homes.
Aging Baby Boomers (ages 55-64 years old) are experiencing longer professional careers and will likely be forced to stay in their homes until real estate values recover. Those households who are able to move will likely choose mixed-age living environments that cater to active lifestyles and minimize property maintenance.
Due to its location, impact of age on the Ottawa, Kansas market is difficult to estimate.
Generally as it relates to out-state, rural settings, many younger generations leave rural
communities for higher education and tend to stay away. However, a smaller segment of that
“move-away” group does seek out a rural lifestyle when raising children and tend to move back
to their “roots”. This provides a lifestyle which is near family and friends, and more stable when
compared to larger urban areas.
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Table 9 - Estimated Population by Age Franklin County, 2010-2025.
2010 2020 2025
Percent Number Percent Number Percent Number
Total 25,992 26,438 26,346 0-4 7.1% 1,845 6.4% 1,692 6.4% 1,686 5-9 7.5% 1,949 6.5% 1,718 6.4% 1,686
10-14 7.1% 1,845 6.8% 1,797 6.6% 1,738 15-24 13.1% 3,404 12.9% 3,410 12.6% 3,319 25-34 11.7% 3,041 12.1% 3,198 12.0% 3,161 35-44 12.2% 3,171 11.9% 3,146 12.1% 3,187 45-54 15.5% 4,028 11.9% 3,146 11.2% 2,950 55-64 11.6% 3,015 14.1% 3,727 12.6% 3,319 65-74 7.7% 2,001 10.2% 2,696 11.6% 3,056 75-84 4.5% 1,169 5.0% 1,321 6.1% 1,607 85+ 2.0% 519 2.2% 581 2.3% 605 18+ 74.0% 19,234 76.5% 20,225 76.6% 20,181
Median Age 37.9 39.2 39.8 Source: Esri: Market Profile 2021.
As evident from the Franklin County data, the median age of area residents is approximately 39
years of age and a significant amount of the population (24%) is between the ages of 25 and
44. This indicates a mid-age, professional, more demographic population.
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Table 10 - Estimated Population by Age City of Ottawa, 2010-2025.
2010 2020 2025
Percent Number Percent Number Percent Number
Total 12,644 12,813 12,757 0-4 8.3% 1,049 7.4% 948 7.4% 944 5-9 8.1% 1,024 7.0% 896 7.0% 892
10-14 6.8% 859 6.7% 858 6.5% 829 15-24 15.2% 1,921 15.2% 1,947 15.1% 1,926 25-34 14.2% 1,795 13.3% 1,704 13.4% 1,709 35-44 11.3% 1,428 12.7% 1,627 12.5% 1,594 45-54 13.0% 1,643 10.0% 1,281 10.3% 1,313 55-64 10.0% 1,264 11.8% 1,511 10.3% 1,313 65-74 6.4% 809 8.6% 1,101 9.7% 1,237 75-84 4.5% 568 4.6% 589 5.3% 676 85+ 2.4% 303 2.5% 320 2.4% 306 18+ 73.0% 9,230 74.9% 9,596 75.1% 9,580
Median Age 33.2 35.2 35.4 Source: Esri: Market Profile 2021.
Data from the City of Ottawa indicate the median age of area residents is approximately 35
years of age and a significant amount of the population (over 25%) is between the ages of 25
and 44. Again, this might be an indication of mid-age, professional, more demographic
populations.
28
Table 11 - Estimated Population by Age City of Wellsville, 2010-2025.
2010 2020 2025
Percent Number Percent Number Percent Number
Total 1,857 1,936 1,942 0-4 8.0% 148 6.6% 127 6.7% 130 5-9 8.3% 154 7.0% 135 6.9% 133
10-14 7.4% 137 7.1% 137 7.3% 141 15-24 11.1% 206 12.6% 243 12.0% 233 25-34 14.6% 271 13.0% 251 14.5% 281 35-44 14.7% 272 13.0% 251 12.8% 248 45-54 13.9% 258 14.1% 272 12.4% 240 55-64 8.7% 161 12.9% 249 11.6% 225 65-74 6.5% 120 7.7% 149 9.0% 174 75-84 4.4% 81 4.0% 77 4.7% 91 85+ 2.4% 44 2.0% 38 2.0% 38 18+ 72.2% 1,340 75.1% 1,453 75.2% 1,460
Median Age 35.4 37.7 37.1 Source: Esri: Market Profile 2021.
Data from the City of Wellsville indicate the median age of area residents is approximately 37
years of age and a significant amount of the population (over 38%) is between the ages of 25
and 44. This might be an indication of a more aging population in a smaller rural setting
when compared with the rest of the count.
29
Figure 12 - Franklin County Population by Age: 2020-2025.
Figure 13 - Ottawa Population by Age: 2020-2025.
Figure 14 - Franklin Co. Household Income Distribution.
Figure 15 - Ottawa Households Income Distribution.
30
Household Income
Household income data shows some interesting trends within the Franklin County Market Area.
According to Census data, approximately 67.5% of households have an annual income less
than $75,000. Average household income is also estimated at $66,843 and rising to $72,356
by 2025 (7.61% increase, 1.52% annually). Figures show that median household income is
significantly lower within that market area when compared to the national average ($78,500)1
which is about 32% higher.
Table 12 - Total Household Income: Franklin County: 2020-2025.
Income of:
2020 Estimate
% 2022 Projections
%
Less than $15,000 1,047 10.2% 957 9.3% $15,001 - $24,999 924 9.0% 823 8.0% $25,000 - $34,999 1,139 11.1% 1,094 10.7% $35,000 - $49,999 1,643 16.0% 1,605 15.7% $50,000 - $74,999 2,177 21.2% 2,209 21.6% $75,000 - $99,999 1,540 15.0% 1,585 15.5% $100,000-$149,000 1,191 11.6% 1,278 12.5% $150,000 - $199,999 379 3.7% 450 4.4% $200,000 or Greater 225 2.2% 235 2.3%
Avg. Household Income $66,843 $72,356
Median Household
Income $52,947 $55,204
Source: ESRI, Market Profile, 2021
1 www.huduser.gov/datasets/median 2020.
31
Table 13 - Total Household Income: City of Ottawa: 2020-2025.
Income of:
2020 Estimate
% 2022 Projections
%
Less than $15,000 646 12.8% 608 12.1% $15,001 - $24,999 490 9.7% 447 8.9% $25,000 - $34,999 641 12.7% 638 12.7% $35,000 - $49,999 980 19.4% 980 19.5% $50,000 - $74,999 975 19.3% 1,015 20.2% $75,000 - $99,999 631 12.5% 643 12.8% $100,000-$149,000 495 9.8% 492 9.8% $150,000 - $199,999 141 2.8% 140 2.8% $200,000 or Greater 60 1.2% 55 1.1%
Avg. Household Income $58,666 $61,386
Median Household
Income $45,489 $46,684
Source: ESRI, Market Profile, 2021
32
Household Tenure
Household tenure identifies a basic feature of the housing inventory; whether a dwelling unit is
owner occupied or renter occupied. Data for household tenure within the Franklin County and
Ottawa markets indicates total renter occupied housing at 23% and 33%, respectively for 2020.
These figures are lower than the overall Kansas City Metropolitan figure (35%2) and higher than
the U.S. national average of 34.7%3.
Table 14 - Household Tenure, Franklin County.
Census 2010 2020 Estimate 2025 Projection
Number Percent Number Percent Number Percent
Total Housing Units 11,147 100.0% 11,489 100.0% 11,665 100.0%
Occupied 10,098 90.6% 10,270 89.4% 10,229 87.7%
Owner 7,178 52.3% 7,628 66.4% 7,628 65.4%
Renter 2,920 38.2% 2,642 23.0% 2,601 22.3%
Vacant 1,047 9.4% 1,217 10.6% 1,434 12.3%
Source: Esri, Market Profile, 2021.
Table 15 - Household Tenure, City of Ottawa.
Census 2010 2020 Estimate 2025 Projection
Number Percent Number Percent Number Percent
Total Housing Units 5,517 100.0% 5,659 100.0% 5,742 100.0%
Occupied 4,992 90.5% 5,053 89.3% 5,029 87.6%
Owner 2,885 52.3% 3,186 56.3% 3,186 55.5%
Renter 2,107 38.2% 1,867 33.0% 1,843 32.1%
Vacant 518 9.4% 605 10.7% 717 12.5%
Source: Esri, Market Profile, 2021.
2 United States Census Bureau, Census Reporter, ACS 2019 1 year update. 3 US Census Bureau, Demographic Characteristics for Occupied Housing Units.
33
Household Size
Historical data indicates a stabilization of household size in both the Franklin County and
Ottawa market areas between 2010-2020. This figure is projected to continue to stabilize
through 2025.
Table 16 - Household Size, Franklin County.
2010 Census
2020 Estimate
% change 2010-2020
2025 projection
% change 2020-2025
Avg HH Size 2.53 2.53 0.0% 2.53 0.0% Source: Esri, Market Profile, 2021.
Table 17 - Household Size, Ottawa, Kansas.
2010 Census
2020 Estimate
% change 2010-2020
2025 projection
% change 2020-2025
Avg HH Size 2.45 2.46 0.4% 2.46 0.0% Source: Esri, Market Profile, 2021.
Housing Units
Housing units within the Franklin County and Ottawa Market Areas totaled 11,489 and 5,659
respectively for 2020. There was a distinct increase in units between 2010 and 2020. That
trend is projected to continue, albeit at a smaller pace.
2010 Census
2020 Estimate
% change 2010-2020
2025 projection
% change 2020-2025
Households 10,104 10,269 1.60% 10,229 -0.08% Housing Units 11,147 11,489 2.97% 11,665 1.50% Source: Esri, Market Profile, 2021.
Table 18 - Housing Units: Franklin County.
2010 Census
2020 Estimate
% change 2010-2020
2025 projection
% change 2020-2025
Households 4,997 5,054 1.12% 5,027 -0.11% Housing Units 5,517 5,659 2.50% 5,742 1.44% Source: Esri, Market Profile, 2021.
Table 19 - Housing Units: City of Ottawa.
34
Table 20 - Housing Unit Summary, Franklin County: 2000-2025.
Housing Unit Summary
2000 Census 2010 Census 2020 Estimate 2025 Projection
Number Percent Number Percent Number Percent Number Percent
Housing Units 10,229 11,147 11,489 11,665
Owner-Occ. 6,945 67.9% 7,178 64.4% 7,628 66.4% 7,628 65.4%
Renter-Occ. 2,506 24.5% 2,920 26.2% 2,642 23.0% 2,601 22.3%
Vacant 777 7.6% 1,047 9.4% 1,217 10.6% 1,434 12.3%
Source: Esri, Market Profile, 2021.
Table 21 - Housing Unit Summary, City of Ottawa: 2000-2025.
Housing Unit Summary
2000 Census 2010 Census 2020 Estimate 2025 Projection
Number Percent Number Percent Number Percent Number Percent
Housing Units 5,121 5,517 5,659 5,742
Owner-Occ. 3,006 58.7% 2,885 52.3% 3,186 56.3% 3,186 55.5%
Renter-Occ. 1,736 33.9% 2,107 38.2% 1,867 33.0% 1,843 32.1%
Vacant 378 7.4% 518 9.4% 605 10.7% 717 12.5%
Source: Esri, Market Profile, 2021.
Vacancy
The vacancy rate is the fraction of dwelling units available for habitation which are not being
occupied. Overall vacancy for all housing units within the Franklin County and Ottawa Market
Areas is currently estimated at 9.4% (see previous Tables 20 and 21). Owner-occupied vacancy
rate is difficult to determine due to the scattered nature of product, however, based on
stakeholder interviews, we can conclude that the owner-occupied market is at full capacity or
close to it. Upon canvasing of competitive projects/properties within the market, as well as data
provided by the City, we have come to the conclusion that overall vacancy for market rate rental
units is dramatically lower. Overall, we estimate a realistic vacancy rate to be +/- 5%.
35
Local Demographic Summary
Census data, projection and estimates indicate a clear stagnation and even a decrease in
population and household figures. Within the next five years population is expected to decrease
-0.07% and households -0.08%. These figures shouldn’t be a call for alarm, but could
possibility be attributed to any of the following; aging population, lack of in-migration of new
households, or younger generations moving away from the market for employment
opportunities.
Figure 16 - Demographic Trends: Franklin County.
Figure 17 - Demographic Trends: City of Ottawa.
However, within that same time period, we do see an increase in median household income.
This should be anticipated due to the rebound in employment since the recession, as well as
standard salary inflation.
36
Employment4
Franklin County and the City of Ottawa enjoy excellent access to the Interstate 35/NAFTA trade
corridor. Drive-time to Downtown Kansas City, Kansas/Missouri is approximately 55 minutes
and the Logistics Park Kansas City (LPKC) is an approximate 25 minute drive-time to Edgerton,
Kansas accessible via Interstate 35. Ottawa, Kansas is home to multiple large
industrial/distribution businesses including Walmart which operates a 1.3 million square foot
warehouse operation immediately East of the community, American Eagle Outfitters with a 1.1
million square foot warehouse located in the Northeast Ottawa Industrial Park and Kalmar-
Ottawa, a large terminal tractor manufacturing company started in Ottawa currently employing
approximately 300 workers. Ottawa is also home to multiple commercial and retail businesses
including multiple restaurants and retail businesses located downtown and multiple national
chain and restaurant retailers including Applebee’s, Maurices, Walmart Supercenter, Price
Chopper, Orscheln Farm and Home and multiple family owned businesses.
Employment and Unemployment Trends
The following chart outlines the employment and unemployment trends for Franklin County,
Kansas from 1990 to present.
Figure 18 - Unemployment Rate, Franklin County, Kansas. Updated April 28, 2021.
4 Courtesy Ottawa Area Chamber of Commerce., 2018.
37
Employment and Unemployment trends for Franklin County, Kansas have fluctuated within the
past decade. Franklin County continues to trend at lower unemployment percentages, but is still
higher when compared to the State of Kansas as a whole. Franklin County Unemployment rates
peaked at 10.6% in 2009, but as of March 2021 have dropped to 3.8%. As of January 2021
the State of Kansas had a 3.4% unemployment rate.
Major Employers
Due to the rural nature of the market area and its convenient highway access, it is anticipated
that major employers are oriented and related to the distribution and service industries. The
Franklin County Development Council provided information on major employers within the
Ottawa and Franklin County market area.
Table 22 – Major Employers, Ottawa, KS.
Employer Industry Est. Employment Level
Walmart Distribution/Logistics Distribution/Logistics 750
American Eagle Outfitters Distribution 851
USD 290 Education 425
AdventHealth-Ottawa Health Services 346
Kalmar Manufacturing 340
Walmart Supercenter Retail 300
Franklin County, KS Government 230
Ottawa University Education 178
City of Ottawa, KS Government 148
Ottawa Retirement Village Retirement Housing 145
Schuff Steel Manufacturing 161
Midwest Cabinet Co., Inc. Manufacturing 104
COF Training Services, Inc. Employment Training 100
ECKAN Social Services 89
MAC Fasteners, Inc. Manufacturing-Aerospace 65
Source: Franklin County Development Council, February 2021.
38
Wages by Industry
Table 23 below, identifies the top industries with the greatest estimated employment in Franklin
County in the Third Quarter, 2020 Annual Wage Census, and the average annual wage paid in
each occupation. 2020 data is the most current data available by the State of Kansas.
Table 23 – Employment Classifications, Franklin County, Kansas.
The above data illustrates the job sectors with the greatest estimated employment in Franklin
County, Kansas in the third quarter of 2020. Service, trade/transportation and education
represent the largest industries within Franklin County.
Commuting Patterns
The City of Ottawa and Franklin County are typically rural in nature and it could be assumed
that most commuting is anticipated to be relatively short in nature. However, 51.7% of all job
related commuting ingress is coming into the County from outside. Within the County, 40.3%
of those employed live and work within Franklin County. The primary question is, if 51% of the
workforce is coming into the market area on a daily basis for work…“would these individuals
live/rent within the market area (Franklin County and Ottawa) if the right residential living
39
opportunity presented itself?” It would be reasonable and conservative to consider that one to
three percent (1% to 3%) of these imported workers would live in Ottawa if the opportunity
existed. We conservatively estimate this to impact the overall household demand factor at an
additional 46-138 households.
40
Figure 18 - Estimated Daytime Population (Inflow-Outflow, 2018).
Figure 20 - Work to Home.
41
Figure 19 - Home to Work.
42
Figure 20 - Travel Time to Work.
Figure 21 - Commute Times.
The previous Figures 20 and 21 above, indicate that employees in the Franklin County/Ottawa
market have a shorter commute time (23.6) minutes than the normal US work (26.9 minutes)5.
Additionally, 1.6% of the Ottawa workforce has “super commutes” in excess of 90 minutes.
Longer commute times can be anticipated due to the close proximity to area municipalities
(Lawrence & Kansas City Metro).
Local Economic Summary
In Kansas and most of the Country, the economy over the last few years has been challenging,
irrespective of the pandemic. However, Franklin County and the Ottawa sub-market have been
fortunate to have many businesses that held strong and some even thrived in the last few years.
The business base in Franklin County is diversified and core industries have focuses on
transportation/distribution, government, healthcare, and manufacturing. As industries expand
and invest in the community, the available workforce continues to shrink. The current
unemployment rate for the County is 3.2%. Employers draw people daily from Franklin, Miami,
Osage, Anderson and Douglas Counties. But as businesses grow they are finding it more and
5 DATAUSA, Census Bureau, 2015-2019 ACS 5-year Estimate.
43
more difficult to fill vacant positions. Available housing is a major component of this concern.
Generally, the Franklin County, Kansas employment climate appears to be out-performing the
national climate in terms of employment and employment growth. The County has experienced
steady growth and as previously mentioned the economy is diverse.
44
3e. Tax Climate
One repeated theme which arose as part of this analysis and our stakeholder interviews was the
continued commentary of the tax climate in Franklin County and the City of Ottawa. Many
stakeholders indicate that the high level of taxes, particularly within Ottawa drive business and
development to other municipalities or to out-county locations.
Based on information obtained from the Kansas Department of Revenue and the Kansas League
of Municipalities, this perception seems to be confirmed. As of 2017, the County was higher
than its peer Counties. Ottawa had a higher assessed valuation6 figure than Olathe, Lawrence,
Gardner, Spring Hill, Paola, Louisburg, Topeka, Osawatomie and Kansas City. The only
municipality which has a higher assessed valuation is Garnett. Granted there may be
extraneous circumstances for which these levels have occurred, but a simple comparison with
other peer cities in Franklin, Johnson and Miami Counties reveals how high Ottawa’s tax burden
is. It should also be noted that Franklin County is also higher than its peer counties in the same
area.
Table 24 - Average Tax Burden, Ottawa and Surrounding Areas, 2017.
6 2016 Average rate (Per $1,000 of Assessed Value).
45
3f. Incentives
Many local, State and Federal incentive programs are available which can promote investment
in businesses and real estate, particularly housing projects. Some programs are available at the
County and/or municipal level. These include, but are not limited to;
Neighborhood Revitalization Program.
Authorized by KSA 12-17, 114-12-17, 120,
the Neighborhood Revitalization Act (NRA)
gave local governments and citizens in
Kansas the power to improve their
communities. This program promotes
revitalization and the increased health,
safety, welfare and prosperity in specific
areas of the City of Ottawa by stimulating
new construction and rehabilitation. By
issuing a property tax rebate as an incentive
to make improvements to property within
certain areas of the City. The City, County
and USD-290 taxes rebated are based on
the amount taxes have increased due to the
improvements made to either an existing
structure or property.
Rural Housing Incentive District (RHID). Authorized by KSA 12-5241, the RHID Act
provides cities and counties a program to assist developers to build housing in rural
communities by assisting in the financing of public improvements. The program allows
developers to pay for the cost of infrastructure improvements (like roads, water, sanitary
sewer, etc.) using the increase in taxes (tax Increment) associated with the development.
Moderate Income Housing (MIH) Program. The MIH program serves the needs of
moderate-income households, those families that cannot afford market-rate housing; yet
don’t qualify for federal housing assistance. MIH grants and/or loans are awarded to
cities and counties to develop multi-family rental units, single-family for-purchase homes
and water, sewer and street extensions in communities with populations fewer than
60,000 people. MIH awards also help finance construction costs, rehabilitate unsafe
or dilapidated vacant housing, and offer down-payment and closing-cost assistance to
home buyers. The program was created in 1991 and administered by the Kansas
Housing Resource Corporation (KHRC).
46
Improvement Benefit Districts , Also known locally as “Specials”, Improvement Benefit
Districts allow property owners to petition the City Commissions to make public
infrastructure improvements according to the Improvement District Procedures outlined in
Kansas Statutes (KSA 12-6a et seq.). Within Ottawa Administrative Guidelines for
Special Improvement Projects administer guidelines for the program. Should the City
Commission choose to accept such a petition to create a benefit district, the City of
Ottawa will assume design and construction responsibilities, allocating expenses
according to the petition. Staff will assist developers/property owners with this process.
General Observation: In multiple markets we are seeing tremendous demand in workforce/attainable housing projects. Whether it’s rural or urban, the cost of developing and constructing housing has increased, most recently due to sharp increases in the costs of materials and labor. In order to spur increased investment in housing development, many municipalities have
dramatically underwritten private development costs to varying extents. This could include,
but is not limited to:
Land contribution,
Tap fee waivers,
Expedited entitlement approvals,
Expedited permitting processes,
Annual municipal contribution to keep rental units affordable (+60% AMI to 120%
AMI).
47
Case Study: Winter Park, CO
Where: Winter Park, CO Problem: Significant demand in workforce/attainable housing. Idea: Utilize public resources to effectuate housing development. Project Size: 50 units or 60 beds. Project Budget: $14,300,000.
Municipal Contributions: -Land Contribution -Tap Fee Waiver -Tax Abatement -Sales Tax Exemption on Construction Materials. -Annual appropriate from Affordable Housing Fund (10yr max)
Solution: Town partnered with private development firm to develop and construct 50 workforce/attainable dwelling units oriented towards 120% AMI for the County. Utilizing considerable Town resources to write down overall development budget and mid-term operating expenses, the public/private partnership fulfilled a short-term gap in the local housing demand.
Case Study: Harlen, IA
Where: Harlan, Iowa Problem: Localized demand for workforce housing. Idea: Town land contribution to spur housing development. Project Size: 45 duplex units. Project Budget: $7,400,000. Municipal Contributions: -Land Contribution -Tap Fee Waiver -Tax Abatement -Sales Tax Exemption on Construction Materials. -Annual appropriate from Affordable Housing Fund (10yr max) Solution: The Town developed lots for single family homes and donated those lots to builders to underwrite the overall development costs.
48
3g. Permit Data
The City of Ottawa provided residential permit data for the City Limits of Ottawa. Data
indicated the number of residential demolitions, number of residential permits and valuation of
permits. Only data from 2006-2020 was available.
Total residential permits have risen sharply in the past two years (2019-2020), surpassing the
historical high from 2006 (26). The demolition data is interesting in that in many years
demolition outpaced new construction, indicating negative total number of housing units
available. However, since 2016-17 this has reversed trend and in 2020 it appears that
demolitions are gradually nearing the level of total new residential permits.
Total demolitions indicate 193 residential demolitions since 2006. This is an concerning figure
for a municipality the size of Ottawa. Considering if ½ of these structures were salvageable and
rehabilitated before property deterioration occurs, then that would significantly bolster the
existing housing stock within the City.
Table 25 - City of Ottawa Residential Permits & Demolitions, 2006-2020.
Permit Type 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006
Single-Family Residence 39 30 19 8 3 4 2 3 1 3 4 7 23 24 26
Duplex/Multi-Family 2 1 18 1 0 0 2 0 0 0 1 2 1 2 4
Manufactured Home/Parks/MHS 4 6 3 4 2 8 5 2 4 6 4 6 1 8 7
Avg. SF Valuation $135,572 $184,333 $203,033 $176,945 $163,466 $166,434 $168,253 $90,644 $136,353 $176,284 $188,510 $152,559 $143,068 $179,989 $150,223
Avg. Duplex/MF Valuation $235,000 $280,000 $258,000 $370,000 $0 $0 $166,054 $0 $0 $0 $270,480 $283,621 $252,176 $140,677 $77,502
Avg. Manufactured Valuation $21,313 $4,250 $15,033 $33,912 $25,792 $30,149 $28,138 $36,096 $29,388 $16,667 $29,524 $19,545 $43,991 $15,867 $25,252
Demolitions-Residential 20 14 7 6 3 17 18 15 16 15 11 18 10 15 8
Source: City of Ottawa, 2021
Attempts to obtain similar permit data County-wide were undertaken as part of this analysis. As
of the issuance of this report, no County-wide data was available.
49
4. Housing Market
The housing market within Franklin County and the City of Ottawa spans two primary sectors;
for-sale and for-rent unit types. Each is differentiated further by income variables and age-
restrictions. This section will address each accordingly.
4a. Stakeholder Interviews
As part of this analysis interviews of various stakeholders were performed to gauge the overall
conditions within the housing market for the Franklin County/Ottawa market area. The
following general conditions were identified as a result of the stakeholder interview process:
Possible decreased level of residential for-sale supply within the market.
180+ buildable lots currently exist within the City Limits.
Buildable lots are presently owned by several different builder entities and are being
slowly built upon.
There is currently little rental supply within the market. All existing rental properties
(single-family and multi-family) are at capacity.
Definite demand for the $180,000 to $225,000 for-sale product.
144 households currently on the extremely low income waiting list within Franklin County.
Many larger Ottawa employers have employee base which lives out-side the market.
Property tax burden is high for the County and City of Ottawa.
Regarding Ottawa permitting process, some City building regulations and requirements
are burdensome to the building community. Builders indicate that requirements increase
the learning curve by builders build and do business in the City.
Marketing: Collectively, the County and City could do a better job at marketing itself.
The community is a “hidden-gem” and with its location, should be attracting more
people, business, investment.
50
4b. Current and Anticipated Rental Housing
As part of this analysis, we have reviewed a number of competitive multi-family rental facilities
within the analysis area. Multi-family rentals included those which are oriented towards market-
rate households, as well as those with income restrictions. This analysis did not account for
single-family rentals due to the difficulty in quantifying that market. All competitive facilities are
located within the Ottawa Sub-Market.
Market Rate Facilities
Market-rate competitive projects are a mix of historic multi-family to low-rise multi-family. Many
of the competitive projects are already newly constructed facilities are more efficient than
historical properties. We would anticipate newer projects to be more attractive and conversely
maintain occupancy at a continued high level. Comparable properties were examined on the
basis of physical characteristics, i.e. building type, age/quality, and level of common amenities.
In this analysis we attempted to compare competitive properties to the subject property to
provide a “snap-shot” of the depth and available supply of the market.
Presently in the Franklin County/Ottawa Market Areas, we identified three (3) competitive multi-
family rental projects which are currently placed in service. No proposed, new-construction
market-rate projects were identified. These projects account for approximately one hundred
forty-three (143) multi-family market-rate housing units. Existing and proposed competitive
property information was determined through interviews with City and community officials, local
apartment managers and developers, as well as a market area investigation. We identified
many competitive projects, but certainly there are likely additional facilities that have been
omitted. However, this selection should provide a good representative sample.
Table 26 - Market Rate Apartments-Ottawa, KS.
Phone # units Type Age Occupancy
1 The Oaks at Canterbury Apts 913-393-9414 72 Market 1970 100%
2 Sienna South Apartments 785-242-3554 48 Market 2004 100%
3 KensingtonApts 785-248-9525 23 Market 1967 100%
143
Address
1-27 W. Canterbury Crt
907-913 W. 17th St.
744 S. Cedar St.
Based on our investigations, it appears that the market-rate multi-family rental market is at
capacity. All properties surveyed indicated a 100% occupancy rate and several had waiting
lists.
51
Market Rate unit sizes and rents
Based on our investigations, most market rate unit types are 1 and 2 bedroom. There are a
small number of three bedroom units existing within the market. Average unit sizes and average
unit rents are identified below.
Table 27 - Market Rate Rental Sizes and Rents.
Unit Type Avg. Size
(square feet)
Avg. Rent
(monthly rent)
1bedroom 705 $671
2bedroom 1,018 $768
3bedroom 1,158 $1,206
Income-Restricted Facilities
In addition to market-rate rental facilities, we have also canvased income-restricted multi-family
facilities. These range from Section 8 apartments (<30% qualifying median income
households) to Low Income Housing Tax Credit (LIHTC) apartments (30% to 60% qualifying
median income households).
Table 28 - Income Restricted Apartments, Ottawa, KS.
Phone # units Type Age Occupancy
1 Ottawa Plains 785-242-9333 48 1141 W. 17th St. LIHTC 2006 100%
2 Courthouse Square Apartments 785-242-2235 26 235 S. Main St. LIHTC 1992 100%
3 Mission Woods 785-242-2188 36 1617 S. Osage Dr. Incom-Rest. n/a 100%
4 Pine Manor 785-242-2188 30 1677-1699 S. Osage Dr LIHTC n/a 100%
5 Hidden Meadows 785-242-7001 80 1601 S. Hickory St. LIHTC 1995 100%
6 Prairie View Estates 785-241-9885 34 928 E. Prairie View St. LIHTC 2019 100%
7 Walnut Plaza 785-883-4044 24 317-325 Walnut St., Wellsville HUD 1975 100%
8 Gardenwalk of Wellsville 785-883-2726 24 833 Main St., Wellsville LIHTC 2011 100%
302
Address
Our investigations indicate there are eight (8) income-restricted facilities located in the Franklin
County market. These run the gamut from Section 8 housing to LIHTC facilities. Similarly to
market-rate product, the occupancy rates for income-restricted housing were very high. It
should be noted that a prospective thirty-two (32) unit LIHTC project has been proposed in
Ottawa, but further information on the project was unavailable. It should be noted that this 32-
unit project is single-family in nature.
52
Previous analysis indicated an overall
moderate demand for income-restricted
housing within Ottawa and Franklin County.
This demand has been confirmed by the East
Central Kansas Economic Opportunity
Corporation (ECKAN) who serves as the
community action agency for low-income
households within Franklin County. As of June
1, 2018 ECKAN has 144 households on the
waiting list for affordable housing within
Franklin County.
This is an additional indication that there is a
definitive demand for income-restricted
housing within the Ottawa and the Franklin
County market.
Age-restricted Rental Housing
Our investigations also reviewed age-restricted housing options within the Franklin County
market area. We identified four (4) different housing options for senior households. These were
a mix of market-rate senior rentals and income-restricted senior rentals. The four properties
accounted for approximately two hundred (200+) units and indications were that these were at
full capacity. This housing cohort mimics all other rental housing trends, identifying a definitive
demand for additional rental housing.
Table 29 - Age Restricted Rental Housing Options, Ottawa, KS.
Phone # units Type Age Occupancy
1 Washburn Towers 785-242-9444 45 506 S. Main Street Sr. LIHTC n/a 100%
2 Sunflower Plaza Tower 785-242-6655 60 701 S. Poplar St. Sr. Income Rest. 1978 100%
3 Cedar Square 785-242-8110 48 1550 S. Cedar St. Sr. 1986 100%
4 Park Place of Ottawa 785-242-2004 48 1519 E. Elm St. Sr. LIHTC 1992 100%
201
Address
53
4c. For-Sale Housing Market
Investigations into the for-sale housing market proved challenging to quantify an actual demand
number and the potential availability of supply. Data provided by the local Realtor, lender and
appraiser communities has been considered in order to attempt to quantify supply and demand
factors.
Franklin County Real Estate Sales
Data from the Kansas City Regional Association of Realtors (KCRAR) and the Heartland Multiple
Listing Service (MLS) was obtained for years 2019 thru 2020. It should also be noted that while
2020 was greatly impacted by Covid-19 pandemic issues, the real estate sales market showed
dramatic growth. Year to date sales indicate a sales level of approximately 30 closings per
month, or 360 total for 2020 a slight increase from 2019 (28 closings per month). Average
sales prices also increased from $158,649 in 2019 to $189, 956 in 2020, a 16.4% increase.
Additionally, the total number of closed sales was up 8.1% from 2019. However, days on
market (DOM) also decreased possibly indicating more demand and a shrinkage in supply.
Data for 2021 indicates that these same metrics continue to trend upwards for the near-term.
Figure 22 - Key Real Estate Metrics, Franklin County, KS. 2019-2020. Data courtesy Ellis-Lantis Group, 2021.
Buyer Profiles: Typically most home buyers who are now buying can be segmented to one of the
following:
Moving from a home they already own in the area.
Moving up into larger home, although some (mostly empty nesters positioning for
retirement) are downsizing.
54
Buying homes for the first time. After very few sales to this segment of the market since
the recession, about 15% of local residents who are now purchasing home are doing so
for the first time.
Figure 23 - Historical Average Sales, Franklin County, KS. Data courtesy Ellis-Lantis Group, 2021.
Statistical market analysis indicates a monthly supply of housing at 1.2 months (down from 2.4
in 2019). Overall data also trends towards higher home values between 2019 and 2020,
(+19.7% increase in average sales price). Additionally, a higher days-on-market (DOM) shows
a sharp drop (-18.2%) in home listings staying unsold on the market. This is another indication
of a tighter for-sale demand within the County.
Anecdotally, interviews with the realtor community repeatedly stated there was a definite lack of
product within both the County and the City of Ottawa. Often many sales are occurring prior to
listing on the MLS. Additionally, stakeholders indicated a lack of supply within the $185,000 to
$250,000 price point. This again is shown by the sharp increase of average sales prices within
the County.
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Buildable Lots: Ottawa
The number of buildable lots (i.e. those which are platted, zoned and with utilities.) appears to
be scattered and numerous. Larger scale subdivision development opportunities do exist within
the City and are currently being marketed and in some cases developed. Subdivision locations
mentioned below have only been referenced due to the fact that they have undergone some type
of preliminary or final plat process.
Table 30 - Existing Subdivision/Developments.
Subdivisions/Developments
Name # lots
Homes
Constructed?
Infra-
structure Zoned? Platted?
Available
Lots
The Coves 55 11 Yes Yes Yes 42
Crowell 2 1 Yes Yes In Process 1
Cuttings 59 58 Yes Yes Yes 1
Fairway Vista 67 59 Yes Yes Yes 8
Fieldstone 56 0 No Yes Prelim pending
Heartland 18 14 Yes Yes Yes 4
Jones on Milner 18 0 No Yes No pending
Juniper 8 0 No Yes Yes 8
Lakeside 22 6 (8 lots) Yes Yes Yes 2 (rest park)
Markley on Funston
(6dup/4
single) 0 No Yes No 10
Rooney-LIHTC 32 0 No Yes No 32
Sugar Creek 42 8 No Yes Yes 34
Sunrise Estates 5 1 Yes Yes Yes 4
Tallgrass 311 0 No Yes No pending
Cottage Project 25+ 0 No Yes In Process 25
Westwood 1/2 59 59 Yes Yes Yes 0
Westwood 3A 12 11 Yes Yes Yes 1
Westwood 4 15 0 No No In Process 15
Westwood Replat 4 0 Yes Yes Yes 4
785 222
Total Available today (May '21) 21
Available 2021 later 61
Available 2022 68
Source: City of Ottawa, KS 2021.
All subdivisions mentioned above are in various stages of completion or need to have final plat
approved by the City to begin development. By our calculations between the nineteen (19)
areas, approximately 189 buildable lots are, or could be easily developed for single-family
56
residential through 2022. It appears that there is plenty of capacity, as approximately 33.57%
of the available lots are unbuilt.
Housing Market Conclusion
Overall, the Franklin County/Ottawa housing market currently shows slow growth in
development and construction. Single-family home development and construction is minimal
and only one new project is proposed (a 32 unit income-restricted LIHTC project configured in
single-family residences). There are some infill developers constructing single-family homes on
infill lots, but supply to the market is limited to a handful of units (5-10 per year).
All multi-family market rate rentals are at capacity and single-family homes inventory is tight.
The University is obviously an impact to local rental housing with student population occupying
rental inventory. With increasing student population projections, added thought should be given
to the development and construction of student-only housing alternatives. This might free up
additional inventory for regular rental demand.
On the sales side, overall sales have stabilized, but there appears to be a definite lack of supply.
Sales across all price points are needed, but stakeholder feedback indicates an increasing
demand in the $180,000+ sales market.
Another focus should be on “shovel-ready” projects which are, or have been planned or are in
varying entitlement phases. These projects are likely to be further along in the overall
development schedule and may be closer to eventual completion than similar projects in earlier
stages of the development process.
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5. Demand
5a. Assumptions
Determining segmented demand for the Franklin County/Ottawa housing market is difficult.
Population growth projections estimate a relatively stable population growth for the next 5 years.
Demand for home sales is up and market rate rental opportunities are limited. In order to
determine some type of income eligible households for the area, we have utilized several basic
assumptions, as well as comparable market product sales and rental rates. As previously
mentioned, a standard 35% affordability factor was utilized to determine the anticipated number
of households within each particular Market Area. This figure takes into account rent and
utilities on a monthly basis and compares household affordability to income.
Income-Restricted Rental Households
Assumptions:
Market Area: Franklin County.
15, 20and 30 total projected unit count.
Calculations anticipated all units oriented towards 40% and 60% AMI households.
Income limits: $22,760 to $42,660.
LIHTC submission through KHRC.
Based on these parameters, we calculate that 2,191 households within the Franklin
County market are income-eligible for affordable rental product. Of these
households, 495 are renter households.
Market-Rate Rental Households
Market-rate rental households are difficult to determine based on income eligibility. One
theory is that those households are renter by choice, renters because of lack of housing
options, or renting due to lack of income to purchase. Identifying this segment is nearly
impossible due to lack of quantifiable factors.
For-Sale Households
Assumptions: Calculations relating to quantifying income eligible households the for-sale
housing market within Franklin County required a number of different financing assumptions
as they relate to housing affordability. These include;
Three different purchase price scenarios were calculated based on demand feedback
from stakeholder interviews. Participants identified a possible for-sale demand
between $190,000 and $250,000.
Interest Rate: 3.5%
Calculations were made for 30 Yr term.
58
Calculations included Principal Interest Taxes Insurance (PITI).
Table 31 - For Sale Assumptions.
30 Year Term Loan Amount*
Payment (PITI)
Monthly Utilities
Annual Income Required
Purchase Price $190,000 $152,000 $832.55 $180 $42,752 $210,000 $168,000 $904.40 $200 $45,147 $225,000 $180,000 $958.28 $220 $46,943 $250,000 $200,000 $1,048.09 $240 $49,936 Note: All figures estimates only. *Assumes a 20% down payment.
Based on these parameters, we calculate that 787 households within Franklin County are income-eligible for owner-occupied for-sale product within the parameters outlined in Table 31 above.
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5b. Demand Analysis
Occupancy
Presently, housing units within the Franklin County Market Area is estimated to number approximately 11,489 and projected to rise to 11,665 by 2025 (1.5% increase). While the ratio of rental to owner-occupied housing is moderate for Franklin County, we anticipate the ratio will remain relatively unchanged though 2025. Interestingly, the ratio of owner- and renter-occupied housing is projected to remain relatively stable; all the while the overall level of vacant housing units is projected to increase. Vacancy is projected to increase by 1.7% in the next five years. This equates to an estimated 97 total dwelling units or 19.4 units/year which are turning vacant. We have a difficult time believing this due to the overall housing demand within the County. We would anticipate these vacancies to quickly turn and either is re-rented or re-sold. This might provide another opportunity for a infill/rehab program oriented to promote rehab of these structures for additional housing stock. Our estimation is that the ratio of owner- and renter-occupied dwelling units would remain relatively stable.
Table 32 – Estimated Tenure of Occupied Housing Units: Franklin County, 2021.
2010 Census
Percent
2020 Estimate
Percent
2025 projection
Percent
Housing Units 11,147 11,489 11,665 % Owners 7,178 64.4% 7,628 66.4% 7,628 65.4% % Renters 2,920 26.2% 2,642 23.0% 2,601 22.3% % Vacant 1,047 9.4% 1,217 10.6% 1,434 12.3% Source: ESRI, Market Profile, 2021.
Table 33 – Estimated Tenure of Occupied Housing Units: City of Ottawa, 2021.
2010 Census
Percent
2020 Estimate
Percent
2025 projection
Percent
Housing Units 5,517 5,659 5,742 % Owners 2,885 52.3% 3,186 56.3% 3,186 55.5% % Renters 2,107 38.2% 1,867 33.0% 1,843 32.1% % Vacant 518 9.4% 605 10.7% 717 12.5% Source: ESRI, Market Profile, 2021.
Table 34 – Estimated Tenure of Occupied Housing Units: City of Wellsville, 2021.
2010 Census
Percent
2020 Estimate
Percent
2025 projection
Percent
Housing Units 780 817 831 % Owners 531 68.2% 602 73.8% 604 72.7% % Renters 190 24.4% 143 17.6% 142 17.2% % Vacant 57 7.4% 70 8.6% 83 10.1% Source: ESRI, Market Profile, 2021.
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Pent-Up Demand
Pent-up demand represents the requirement for additional housing in a market that is not
operating in equilibrium with the current supply. It could be estimated based on the number of
households or families waiting to rent or to buy a dwelling when they have an opportunity. Due
to some economic circumstances, those households or families have been living in housing
conditions not suiting their needs or their aspirations. Calculations are presented for both rental
and for-sale households. Several proposed developments are currently rumored for Franklin
County, namely within Ottawa, but specifics of programming for those projects is unavailable
and have not been incorporated into this analysis. The Franklin County Market Area can expect
to capture a small percentage of renters and buyers in addition to new households and
turnover, as discussed later in this document.
Presently within Franklin County and according to demographic data, renter households are
approximately 23% of overall households and owner-occupied households are 66.4%. All
Market Areas have seen the percentage of renters drop moderately since 2000. As previously
discussed, these figures will continue to decline slightly within the next five years.
Table 35 – Estimated Pent-Up Demand, Renter & Owner Households.
Pent-Up Demand
Franklin County City of Ottawa City of Wellsville
Renter Owner Renter Owner Renter Owner Percentage of Households 23.0% 66.4% 33.0% 56.30% 17.60% 73.8% Households 2,642 2,642 1,867 1,867 143 143 Pent-up Demand of Households 2,054 3,389 1,011 1,668 149 247
Proportion of Income Qualified Households
19.03% 7.66% 22.38% 9.29% 14.95% 6.27%
Income Qualified New Households from Pent-up Demand
391 391 226 155 22 15
Capture Rate of Pent-up Demand 25% 25% 25% 25% 25% 25% Estimated Capture of Pent-up Demand 98 91 57 39 6 4 Source: DI, Esri Housing Profile, 2021.
Demand from Household Growth
An additional source of demand for new residential projects is the formation of new households
from population growth. However; due to the relative stabilization of both population and
households through 2025, the Market Area’s capture rate of this source is limited. For this
calculation, we have estimated a decrease in growth of total households in the Market Area thru
2025. While Census and ACS data indicates a slight household decrease of 0.08 percent
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through 2025, we’ve factored in a more optimum forecast considered by the Census data.
We believe a one percent County-wide adjusted household growth over the next 5 years is
plausible, but conservative. Utilizing this calculation, we still only estimate minimal demand
from household growth across the market area.
Table 36 – Estimated Demand from Household Growth.
Demand from Household Growth
Franklin County City of Ottawa City of Wellsville
Renter Owner Renter Owner Renter Owner Income Qualified Household Turnover 435 151 214 154 27 103 Percentage of Income Qual. Households 19.03% 7.66% 22.38% 9.29% 14.95% 6.27% Est. Income Qualified New Households -1 -1 -1 0 0 0 Capture Rate for New Households 40% 40% 40% 40% 40% 40% Estimated Capture of New Households 0 0 0 0 0 0 Source: DI, esri Housing Profile, 2021.
Demand in Turnover
Concerning the multi-family rental market only, in general it represents a very transient
population of households, typically realizing a turnover rate of 33 percent per year. While this is
certainly extreme for the Franklin County/Ottawa market area, there is definitely an impact on
demand from turnover. We estimate that turnover in the Market Areas would show a negligible
impact. The Market Area provides little to no demand number based on current Census
population growth. Generally, we would anticipate the substantial portion, if not all, of growth
to be derived from demand in turnover; however we do estimate that some demand will come
from outside the market area, but quantifying this demand is difficult.
Overall, we would anticipate Franklin County/Ottawa Demand to result in higher numbers.
However all projections are based off of Census growth projections which show little to no
growth. In this case we would discount these projections, but they clearly show a nominal
demand for additional housing within the market. This could be realistic as tenants/home-
buyers would likely opt for a newer residence rather than the older housing stock as evidenced
by the relative high occupancy and demand rates of comparable properties.
We can also estimate the demand in turnover from the for-sale, owner-occupied market as well.
Due to the more stable nature of owner-occupied housing, this estimate is more difficult to
quantify, however using Census and ACS data and projections we can calculate a conservative
number.
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Table 37 – Demand from Turnover.
Demand from Turnover
Franklin County City of Ottawa City of Wellsville
Renter Owner Renter Owner Renter Owner Turnover 1,585 1,585 1,120 1,120 86 86 Percentage of Income Qual. Households 19.03% 7.66% 22.38% 9.29% 14.95% 6.27% Est. Income Qualified New Households -1 -1 -1 0 0 0 Capture Rate for New Households 60% 60% 60% 60% 60% 60% Estimated Capture of Turnover -1 -1 0 0 0 0 Source: DI, esri Housing Profile, 2021.
Market Area Demand 5yr Projection
Franklin County City of Ottawa City of Wellsville
Renter Owner Renter Owner Renter Owner (Total units captured, Pent-up Demand, Demand from Household Growth and Demand from Turnover)
56 49 32 15 5 3
Estimated Annual Demand 11 10 6 3 1 1
Actual absorption levels are difficult to estimate, but based on Census Data, we anticipate an
annual demand of approximately 56 total rental units and 49 for-sale units within the next 5
years. This equates to 11 unit and 10 units per year respectively. Note that these calculations
are generated by Census and ACS data and projections. Actual local housing and population
trends would significantly impact these calculations. For instance, actual sales data from the
Kansas City Regional Association of Realtors and Heartland MLS indicate total sales for Franklin
County at 36 closed sales (up 44% from 2019). If that trend continues that would significantly
outpace estimated stated above in Table 37.
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Capture Rate
The Capture Rate is the percentage of income qualified renter households in the Market Area
that the property must capture to achieve the Stabilized Level of Occupancy.
Table 38 – Multi-Family Rental Capture Rate: Franklin County.
Demand Calculation 15 units 20 units 30 units Number of Households in 2020 10,269 10,269 10,269 Increase in Number of Households (2020-2025) -40 -40 -40 Estimated Households (2025) 10,229 10,269 10,269 Existing Demand Income Qualified Households 19.03% 19.03% 19.03% Percentage of Total Households Renter/Owner-Occupied
66.40% 66.40% 66.40%
Number of Income Qualified Households 1,298 1,298 1,298 Percentage of Rent/Price Overburdened 35% 35% 35% Existing Income-Qualified Demand 454 454 454 Existing Demand from Household Turnover Occupied Households (2020) 7,628 7,628 7,628 Income Qualified-Percentage 19.03% 19.03% 19.03% Income Qualified Households 1,452 1,452 1,452 Percentage of Turnover from Occupied units 30% 30% 30% Existing Income-Qualified Household Turnover 435 435 435 New Income-Qualified Demand, Annually Annual Increase in Households (estimated) -8 -8 -8
Income Qualified 19.03% 19.03% 19.03% Percentage Renter/Owner-Occupied 66.40% 66.4% 66.40% New Income Qualified Households-Annually -1 -1 -1
Capture Rate Analysis New Proposed Units 15 20 30 Occupied Units in Subject Area (with vacancy rate 7%) 14 19 28 Pre-Leased/sold Units 2 5 8 Sub-Total Demand (Turnover & Growth) originating from Market Area
889 889 889
Portion originating from Area 100% 100% 100% Total Demand (Turnover & Growth) originating from Market Area
889 889 889
Number of Competitive Units available 15 15 15 Total Demand after Competition (Turnover and Growth) 874 874 874 Annual Capture Rate of Available Demand (2020) 1.60% 2.31% 3.19%
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Table 39 – Multi-Family Rental Capture Rate: City of Ottawa.
Demand Calculation 15 units 20 units 30 units Number of Households in 2020 5,054 5,054 5,054 Increase in Number of Households (2020-2025) -27 -27 -27 Estimated Households (2025) 5,027 5,027 5,027 Existing Demand Income Qualified Households 22.38% 22.38% 22.38% Percentage of Total Households Renter/Owner-Occupied
56.30% 56.30% 56.30%
Number of Income Qualified Households 637 637 637 Percentage of Rent/Price Overburdened 35% 35% 35% Existing Income-Qualified Demand 223 223 223 Existing Demand from Household Turnover Occupied Households (2020) 3,186 3,186 3,186 Income Qualified-Percentage 22.38% 22.38% 22.38% Income Qualified Households 713 713 713 Percentage of Turnover from Occupied units 30% 30% 30% Existing Income-Qualified Household Turnover 214 214 214 New Income-Qualified Demand, Annually Annual Increase in Households (estimated) -5.4 -5.4 -5.4 Income Qualified 22.38% 22.38% 22.38% Percentage Renter/Owner-Occupied 56.30% 56.30% 56.30% New Income Qualified Households-Annually -1 -1 -1
Capture Rate Analysis New Proposed Units 15 20 30 Occupied Units in Subject Area (with vacancy rate 7%) 14 19 28 Pre-Leased/sold Units 2 5 8 Sub-Total Demand (Turnover & Growth) originating from Market Area
436 436 436
Portion originating from Area 100% 100% 100% Total Demand (Turnover & Growth) originating from Market Area
436 436 436
Number of Competitive Units available 15 15 15 Total Demand after Competition (Turnover and Growth) 421 421 421 Annual Capture Rate of Available Demand (2020) 3.31% 4.42% 6.63%
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Table 40 – Multi-Family Rental Capture Rate: City of Wellsville.
Demand Calculation 15 units 20 units 30 units Number of Households in 2020 747 747 747 Increase in Number of Households (2020-2025) 0 0 0 Estimated Households (2025) 747 747 747 Existing Demand Income Qualified Households 14.95% 14.95% 14.95% Percentage of Total Households Renter/Owner-Occupied
73.8% 73.8% 73.8%
Number of Income Qualified Households 82 82 82 Percentage of Rent/Price Overburdened 35% 35% 35% Existing Income-Qualified Demand 29 29 29 Existing Demand from Household Turnover Occupied Households (2020) 602 602 602 Income Qualified-Percentage 14.95% 14.95% 14.95% Income Qualified Households 90 90 90 Percentage of Turnover from Occupied units 30% 30% 30% Existing Income-Qualified Household Turnover 27 27 27 New Income-Qualified Demand, Annually Annual Increase in Households (estimated) 0 0 0 Income Qualified 14.95% 14.95% 14.95% Percentage Renter/Owner-Occupied 73.8% 73.8% 73.8% New Income Qualified Households-Annually 0 0 0
Capture Rate Analysis New Proposed Units 15 20 30 Occupied Units in Subject Area (with vacancy rate 7%) 14 19 28 Pre-Leased/sold Units 2 5 8 Sub-Total Demand (Turnover & Growth) originating from Market Area
56 56 56
Portion originating from Area 100% 100% 100% Total Demand (Turnover & Growth) originating from Market Area
56 56 56
Number of Competitive Units available 15 15 15 Total Demand after Competition (Turnover and Growth) 41 41 41 Annual Capture Rate of Available Demand (2020) 34.15% 45.37% 68.31%
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Capture Rate percentages can also be calculated utilizing a secondary method as follows: Capture Rate = (A x B) / (C+D)
A=Stabilized level of occupancy. B=Number of units in subject area. C=Number of existing qualified households. D=Estimated new qualifying households.
Franklin County
Renter Capture Rate Calc., 15 Units: (93% x 15)/(1298-1) = 0.01076 or 1.08%
Renter Capture Rate Calc., 20 Units: (93% x 20)/(1298-1) = 0.01435 or 1.43%
Renter Capture Rate Calc., 30 Units: (93% x 30)/(1298-1) = 0.02152 or 2.15%
City of Ottawa
Renter Capture Rate Calc., 15 Units: (93% x 15)/(637-1) = 0.02193 or 2.19%
Renter Capture Rate Calc., 20 Units: (93% x 20)/(637-1) = 0.02924 or 2.92%
Renter Capture Rate Calc., 30 Units: (93% x 30)/(637-1) = 0.04386 or 4.39%
City of Wellsville
Renter Capture Rate Calc., 15 Units: (93% x 15)/(82+0) = 0.11284 or 11.28%
Renter Capture Rate Calc., 20 Units: (93% x 20)/(82+0) = 0.22568 or 22.57%
Renter Capture Rate Calc., 30 Units: (93% x 30)/(82+0) = 0.33852 or 33.85%
Based on the two previous capture rate calculations we can estimate a capture rate range for
the following market areas. We estimate this capture rate range to be:
Table 41 - Estimated Capture Rates.
Market Area Units Estimated Capture
Rate range
Franklin County 10 Units
20 Units
30 Units
1.08% to 1.60%
1.43% to 2.13%
2.15% to 3.19%
City of Ottawa 10 Units
20 Units
30 Units
2.19% to 3.31%
2.92% to 4.42%
4.39% to 6.63%
City of Wellsville 10 Units
20 Units
30 Units
11.28% to 34.15%
22.57% to 45.37%
33.85% to 68.31%
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Indications are that multi-family rental demand within Franklin County and Ottawa appear more
attractive when compared to Wellsville. Typically industry standards consider Capture Rates to
be below 10 percent. Estimated rates for Wellsville are considerably higher, an indication that
multi-family demand is weak within that sub-market.
Penetration Rate
Penetration rates help measure the degree to which a market is either underserved or saturated.
Simply put, what percentage of the qualified market must be captured to achieve stabilized
occupancy? Different types of penetration rates give insights into various stages of a area’s
development. Net market penetration is calculated by dividing the number of available dwelling
units in the Market Area by the number of income-qualified households in the Market Area.
Available units include planned and proposed units within the area and units becoming
available due to attrition. This calculation is particularly significant when more than one project
is entering the market during the same time frame. Calculations are based on demographics
interpolated for the year the project would be available for occupancy. The following table
presents an example of a net market penetration rate calculation.
Table 42 - Market Penetration.
Planned Units in the PMA Renter For-sale Renter For-sale Renter For-sale
The Proposed Project 0 0 0 0 0
Other Planned Projects 52 20 47 6 5 6
Total Planned Projects 52 20 47 6 5 6
Total Planned Units at 93% Occupancy 48 19 44 6 5 6
Total Existing Units available due to estimated Attrition (12%) 6 2 5 1 1 1
Total Units to be Occupied (Market) 54 21 49 6 5 6
Percentage of Units to be Occupied from PMA 90% 90% 90% 90% 90% 90%
Total Units to be Occupied from the PMA (a) 49 19 44 6 5 6
Estimated number of Income-Qualifying Households 450 787 373 469 20 47
Less: Existing Inventory of Available Comparable Units -20 -35 -10 -20 -5 -10
Estimated number of Income-Qualified Households (b) 430 752 363 449 15 37
Net Market Penetration Rate (a / b) 11.34% 2.49% 12.14% 1.25% 31.25% 15.20%
Franklin Co. Ottawa Wellsville
Standard industry acceptance prefers project penetration rates below five percent and market
saturation rates above 15 percent. If the penetration rate falls above the 75th percentile, the
market may be saturated and have a more difficult time filling units. Some markets, though,
may have a higher acceptance of certain product and may support higher penetration rates.
Even with higher penetration rates, if the majority of the competitors have high occupancies with
active waiting lists, this could be an indicator of demand for additional product.
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Market Demand Conclusion Demand Analysis for the Franklin County Market Area and sub-market areas closely parallel
population and household growth patterns in some ways. Population and households are
projected to decrease. Single-family home development and construction is minimal and only
one new project is proposed (a 32 unit income-restricted LIHTC project constructed as single-
family units). We calculated demand from three different aspects: pent-up demand; demand
from household growth; and demand from turnover. With all three scenarios under
consideration, we calculate the five year demand projection within the Franklin County Market
Area to be approximately 56 units of rental housing and 11 units of for-sale single-family
homes. Please note that these numbers are approximate and are calculated utilizing Census
and ACS population data and projections.
We anticipate the majority of growth to be derived from either the Pent-up-Demand segment or
the Demand from Household Growth. However quantifying overall demand is difficult due to
stagnating population and household figures. As previously mentioned, it should be noted that
our estimates do not take into account any qualitative variables when it comes to the selection
of housing. It is well known that qualitative elements in construction can affect housing choice. If
future housing is of the highest quality construction with amenities that cater to the lifestyles of
professionals, it is very likely that demand will be even higher than estimated.
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6. Sample Project
This section identifies some general project assumptions for a typical multi-family project.
Information is for illustrative purposes only. Many inputs have been assumed, but overall the
information should provide a good context for development costs and constraints.
Assumptions are for a shovel ready 18 unit duplex project immediately adjacent to an existing
Low Income Housing Tax Credit (LIHTC) previously approved, constructed and placed-in-
service. These assumptions take into account the following:
Land acquisition costs of $50,000.
Development site 4 acres.
Development anticipated slab-on-grade, stick built construction.
18 units total.
Attached garage, surface and street parking.
Standard unit types: 2-bedroom and 3-bedroom units.
Tenant pay all utilities.
Project could be phased based on actual demand.
Proposed site is located within an Opportunity Zone, as well as a previously
approved RHID.
Note: Similar information for single-family development was requested, but unavailable at the
time of this report issuance.
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Figure 24 - Sample Site Plan. Illustrative Purposed Only.
71
Figure 25 – Proposed front elevation.
72
Project SummaryThis document contains preliminary estimates only. The final proforma will be based on final input and verifications.
Document Version 1/14/20
Document Status Final Draft
Project Name Ottawa Moderate Income
Location Franklin County
Kansas
Product Type
New Construction Yes
Type Freestanding
Existing Bldg. Purchase No
Land Purchase No
Building Square Feet 20,510
Timeline
Site Identification 01/01/20
Site Contract Yes
Financing Commitment 2 current LOI's
Design Complete
Close and Start Construction 04/01/20
Certificate of Occupation 01/01/21
Lease Start 10/01/20
Site Characteristics
Purchase Price 50,000
Acreage 4.000
Square Feet 174,240
PP/Acre 12,500
PP/SF 0.2870$
Zoning R2
Utilities
Water City
Sewer City
Electric City
Development Budget
Acquisition 103,000
Soft Costs 252,000
Hard Costs 2,875,000
Developer Fee 60,000
Total Budget 3,290,000
Projections
Figure 26 - Sample Project Summary.
73
Development Budget Project: Ottawa Moderate Income
This document contains preliminary estimates only. The final proforma will be based on final input and verifications.
DEVELOPMENT COST COST % TOTAL
COSTS PER UNIT PSF - GROSS COST
1000 Land and Building Acquisition
1010 Acquisition - Land 100,000 5,556 4.88 3.0%
1020 Acquisition - Building - - 0.00 0.0%
1030 Closing Costs 3.0% 3,000 167 0.15 0.1%
1040 Other: - -
TOTAL ACQUISITION COSTS 103,000 5,722 5.02 3.1%
2000 SITE WORK AND HARD CONSTRUCTION
Total Hard Costs 2,500,000 138,888.89 121.89 0.0%
2310 Municipal Permits and Fees 24,000 1,333 1.17 0.7%
2320 Sewer & Water Fees 18,000 1,000 0.88 0.5%
2330 Builders Risk 8,000 444 0.39 0.2%
2340 Remodel Tax - - 0.00 0.0%
2350 Warranty - 0.00 0.0%
2360 Bond - - 0.00 0.0%
2370 General Conditions 5.00% 125,000 6,944 6.09 3.8%
2380 Builders Profit 3.00% 75,000 4,167 3.66 2.3%
2390 Contingency 5.00% 125,000 6,944 6.09 3.8%
Total Hard Costs + Contingency 2,875,000 159,722 140.18 11.4%
3000 Soft Costs
Professional Fees
3010 Architectural Design 25,000 1,389 1.22 0.8%
3020 Architectural Supervision - - 0.00 0.0%
3020 Civil Engineering 30,000 1,667 1.46 0.9%
3030 Environmental 1,500 83 0.07 0.0%
3030 Land Survey/Topo 5,000 278 0.24 0.2%
3040 Real Estate Attorney Fees 2,500 139 0.12 0.1%
3040 Accounting/Cost Certification/Audit 2,500 139 0.12 0.1%
3050 M/E/P - - 0.00 0.0%
3050 Consultant Fee - - 0.00 0.0%
Construction Interim & Financing Fees
3060 Bridge Loan Interest - 0.00 0.0%
3070 Bridge Loan Fee - 0.00 0.0%
3080 Construction Insurance 5,000 278 0.24 0.2%
3070 Construction Loan Interest 90,000 5,000 4.39 2.7%
3080 Origination Fees 33,000 1,833 1.61 1.0%
3080 Inspection Fees/Processing Agent - 0.00 0.0%
3090 Legal Fees - 0.00 0.0%
3090 Title & Recording 20,000 1,111 0.98 0.6%
3100 Real Estate Taxes (during construction) - 0.00 0.0%
Permanent Financing Fees
3110 Title & Recording 5,000 278 0.24 0.2%
3120 Permanent Loan Fee 25,000 1,389 1.22 0.8%
3130 Bank Due Diligence Fees 5,000 278 0.24 0.2%
Other Soft Costs
3140 Market Study - 0.00 0.0%
3150 Property Appraisal 2,500 139 0.12 0.1%
3160 Soft Cost Contingency - 0.00 0.0%
Other Soft Costs
3170 Debt Reserves - - 0.00 0.0%
3180 Operating Reserves 10,000 556 0.49 0.3%
3190 Lease Up/Marketing - - 0.00 0.0%
Total Soft Costs 262,000 14,556 12.77 7.94%
4000 Developer Fee
4010 Developer Fee - 0.00 0.0%
4020 Developer Overhead 60,000 3,333 2.93 1.8%
Total Developer Fee 60,000 3,333 2.93 1.8%
TOTAL PROJECT COST AND BASIS 3,300,000 183,333 160.90 24.2%
Total Acquisition + Hard Costs (Finance) 2,978,000 90.2%
Total Soft Cost 322,000 9.8%
Figure 27 - Sample Project: Estimated Development Budget.
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Revenue and Expense AssumptionsThis document contains preliminary estimates only. The final proforma will be based on final input and verifications.
Unit Identification # of Units Avg SF Mo Rent $/PSF Total Mo Rent
2 BR
2 BR + 14 1,095 1,300.00$ 1.19$ 18,200.00$
3 BR + 4 1,295 1,500.00$ 1.16$ 6,000.00$
TOTAL 18 1,195 24,200.00$
Other Income Per Unit Total Monthly
Security Deposit Forfeiture/Late Fee - -
Laundry Income - -
Cable/Internet - -
Garages/Carport - -
Vending - -
Other - -
TOTAL OTHER INCOME - -
TOTAL MONTHLY INCOME 24,200
TOTAL INCOME PER YEAR 290,400
Vacancy Assumption 7.0% (20,328)
# Units 1.26 REVENUE AFTER VACANCY 270,072
Income Growth Rate After 2 yrs 3.00%
OPERATING EXPENSES Budget Cost Per Unit Cost Per Sqft Total
Maintenance and Repair 10,000 555.56 0.06 10,000
Repairs - - -
Maintenance 10,000 555.56 0.06 10,000
Custodial - - - -
Exterminating 2,000 111.11 0.01 2,000
Grounds Upkeep 10,000 555.56 0.06 10,000
Elevator Maintenance - - - -
Misc/Decorating - - - -
Subtotal 32,000 1,777.78 0.18 32,000
Administrative
Accounting/Audit 1,500 83.33 0.01 1,500
Legal - - - -
Advertising 2,000 111.11 0.01 2,000
Telephone - - - -
Payroll 5,000 277.78 0.03 5,000
Other Fees - - -
Other Fees - - -
Misc. Admin - - -
Subtotal 8,500 472.22 0.05 8,500
Utilities
Electric - - - -
Heating/Hot Water - - - -
Water/Sewer - - - -
Internet / TV - - - -
Trash Removal 3,000 166.67 0.02 3,000
Other Electric - - - -
Subtotal 3,000 166.67 0.02 3,000
Management Fee 5,000 277.78 0.03 5,000
Property Taxes 5,000 277.78 0.03 5,000
Property Insurance 3,600 200.00 0.02 3,600
Total Operating Expenses 57,100 3,172.22 0.33 57,100
Replacement Reserves 2,000 200.00 0.01 2,000
TOTAL EXPENSE 59,100 3,372.22 0.34 59,100
Expense Growth Rate after 2 yrs 2.00%
Figure 28 - Sample Project: Revenue and Expense Projections.
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Financing Assumptions Project: Ottawa Moderate Income
This document contains preliminary estimates only. The final proforma will be based on final input and verifications.
Construction Loan Calculation
Interest Rate 4.25%
Origination Fee 1.00% 33,000
Term (In Months) 12
Construction Period 9
Loan Value 3,300,000
Construction Loan Amortization
Month 1 2 3 4 5 6 7 8 9 10 11 12
% Draw 5.0% 10.0% 10.0% 10.0% 10.0% 10.0% 15.0% 15.0% 5.0% 5.0% 5.0% 0.0%
Beg Bal - 165,584 497,340 830,270 1,164,379 1,499,672 1,836,152 2,339,408 2,844,446 3,020,105 3,196,385 3,373,290
Draw 165,000 330,000 330,000 330,000 330,000 330,000 495,000 495,000 165,000 165,000 165,000 -
Interest 584 1,755 2,930 4,109 5,293 6,480 8,256 10,039 10,658 11,281 11,905 11,947
End Bal 165,584 497,340 830,270 1,164,379 1,499,672 1,836,152 2,339,408 2,844,446 3,020,105 3,196,385 3,373,290 3,385,237
Permanent Loan Calculation Debt Service Coverage 1 Loan to Value 2 Loan to Cost 3
Select Sizing Requirement (Enter 1 or 2): 3 Interest Rate 4.00% Cap Rate 7.00% Total Development Cost 3,300,000
Loan Amount 2,640,000 Amortization Period 30.00 Equity Requirement 20.00% Hard Cost + Acquisition 2,978,000
Equity Requirement 660,000 Debt Coverage Ratio 1.25 Property Valuation 3,096,857 Soft Costs 322,000
Debt Service Coverage Ratio 1.25 Cash for Debt Service 173,424 Equity Requirement 20.00%
Amortization Period (Yrs.) 30
Interest Rate 4.00%
Origination Fee 1.00% Max Loan Amount 3,027,134 Max Loan Amount 2,477,486 Max Loan Amount 2,640,000
Total Mo Debt Service 12,604 Total Dev Cost 3,300,000 Total Development Cost 3,300,000 Total Development Cost 3,300,000
Total Annual Debt Service 151,245 Equity Requirement 272,866 Equity Requirement 822,514 Equity Requirement 660,000
Permanent Loan Amortization
Year 1 2 3 4 5 6 7 8 9 10 11 12
Beg Bal 2,640,000 2,593,509 2,545,123 2,494,766 2,442,358 2,387,814 2,331,049 2,271,970 2,210,485 2,146,494 2,079,897 2,010,586
Principle 46,491 48,385 50,357 52,408 54,544 56,766 59,079 61,485 63,990 66,598 69,311 72,135
Interest 104,754 102,860 100,888 98,837 96,702 94,479 92,167 89,760 87,255 84,648 81,934 79,110
Payment 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245
End Bal 2,593,509 2,545,123 2,494,766 2,442,358 2,387,814 2,331,049 2,271,970 2,210,485 2,146,494 2,079,897 2,010,586 1,938,451
Other Assumptions
Revenue Growth Rate 3.00%
Expense Growth Rate 2.00%
Figure 29 - Sample Project: Financing Assumptions.
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Profit and Loss Assumptions Project: Ottawa Moderate Income
This document contains preliminary estimates only. The final proforma will be based on final input and verifications.
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
Construction
Revenue
Lease Payment 290,400 299,112 308,085 317,328 326,848 336,653 346,753 357,155 367,870 378,906
Other Income - - - - - - - - - -
Vacancy 5.0% (14,520) (14,956) (15,404) (15,866) (16,342) (16,833) (17,338) (17,858) (18,394) (18,945)
TOTAL Net Revenue 275,880 284,156 292,681 301,462 310,505 319,821 329,415 339,298 349,477 359,961
Expenses
Maintenance and Repair 32,000 32,640 33,293 33,959 34,638 35,331 36,037 36,758 37,493 38,243
Administrative 8,500 8,670 8,843 9,020 9,201 9,385 9,572 9,764 9,959 10,158
Utilities 3,000 3,060 3,121 3,184 3,247 3,312 3,378 3,446 3,515 3,585
Management Fee 5,000 5,100 5,202 5,306 5,412 5,520 5,631 5,743 5,858 5,975
Property Taxes 5,000 5,100 5,202 5,306 5,412 5,520 5,631 5,743 5,858 5,975
Property Insurance 3,600 3,672 3,745 3,820 3,897 3,975 4,054 4,135 4,218 4,302
Replacement Reserves 2,000 2,040 2,081 2,122 2,165 2,208 2,252 2,297 2,343 2,390
Other - - - - - - - - - -
TOTAL Expenses 59,100 60,282 61,488 62,717 63,972 65,251 66,556 67,887 69,245 70,630
NET Operating Income (NOI) 216,780 223,874 231,193 238,744 246,534 254,569 262,859 271,410 280,231 289,331
Debt Service 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245
NOI After Debt Service 65,535 72,629 79,948 87,499 95,288 103,324 111,614 120,165 128,986 138,086
NET Cash Flow to Owner 65,535 72,629 79,948 87,499 95,288 103,324 111,614 120,165 128,986 138,086
Cumulative Cash flow 65,535 138,164 218,112 305,611 400,900 504,224 615,838 736,003 864,989 1,003,075
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Revenue Expense NOI
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2023
2025
2027
2029
2031Net Cash Flow Cumulative Cash Flow
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
Est Value Loan Bal Equity
Figure 30 - Sample Project: P&L Assumptions.
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Investor Analysis Detail Project: Ottawa Moderate Income
This document contains preliminary estimates only. The final proforma will be based on final input and verifications.
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
1 Cash Flow Analysis Construction
2 Gross Revenue 290,400 299,112 308,085 317,328 326,848 336,653 346,753 357,155 367,870 378,9063 Expenses 59,100 60,282 61,488 62,717 63,972 65,251 66,556 67,887 69,245 70,6304 Net Operating Income (NOI) 231,300 238,830 246,598 254,611 262,876 271,402 280,197 289,268 298,625 308,2765 Debt Service 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,2456 Debt Principle 2,593,509 2,545,123 2,494,766 2,442,358 2,387,814 2,331,049 2,271,970 2,210,485 2,146,494 2,079,8977 Net Cash Flow 80,055 87,585 95,353 103,365 111,631 120,157 128,951 138,023 147,380 157,0318
9 Retainage 0.00% 0 0 0 0 0 0 0 0 0 010 Net Cash Flow Available for Distribution 80,055 87,585 95,353 103,365 111,631 120,157 128,951 138,023 147,380 157,03111
12 Investor Carried Interest 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00%13 Initial percentage of the deal 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00%14 After investment is paid back 50.00% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a15
16 Waterfall Distribution of Cash17 Investor(s): 660,000 660,000 627,636 587,695 539,622 482,832 416,703 340,579 253,766 155,528 45,09018 Minimum ROI Rate 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%19 Minimum ROI Payment 39,600 37,658 35,262 32,377 28,970 25,002 20,435 15,226 9,332 2,70520 Other Distribution 0.00% 0 0 0 0 0 0 0 0 0 021
22 Carried Interest Remaining in the Waterfall 40,455 49,927 60,091 70,988 82,661 95,155 108,517 122,797 138,048 154,32623 Investor(s) 32,364 39,941 48,073 56,790 66,129 76,124 86,813 98,238 110,438 123,46024
25 Sale or Refi Event Sale/Refi26 Estimated Value CAP Rate: 7.00% 3,304,286 3,411,857 3,522,825 3,637,293 3,755,372 3,877,172 4,002,808 4,132,401 4,266,071 4,403,94527
28 3,523,15629 Potential Year of Event: 2030 10 Corresponding Sale Price: 4,403,94530 Debt at Sale: 2,079,89731 Equity at Sale: 2,324,04932 Distribution Payment from Sale, Refi, or Other Refinance Adjustor: 272,866 6.20% Based on DCR/NOI33 Investor(s) 80.00% 1,605,714 Less Closing Costs: 44,039 1.00%34 PFDG 20.00% 401,42935 Ownership Group Distribution: 2,007,14336
37 Equity Investor(s) Potential IRR: 19.4%38
39 Year of Sale/Refi >>> TOTAL 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 203040
41 Year of Sale or Refi Event: 203042 Construction
43 Initial Investment -660,000 -660,00044 Interest Payments 246,567 39,600 37,658 35,262 32,377 28,970 25,002 20,435 15,226 9,332 2,70545 Carried Interest 738,371 0 32,364 39,941 48,073 56,790 66,129 76,124 86,813 98,238 110,438 123,46046 Return of Capital 0 0 0 0 0 0 0 0 0 0 0 047 Sale /Refi Proceeds 1,605,714 0 0 0 0 0 0 0 0 0 0 1,605,71448 Pre-Tax Totals 1,930,652 -660,000 71,964 77,600 83,334 89,168 95,099 101,126 107,248 113,463 119,770 1,731,88049 Pre-Tax IRR 19.36%50 Cash on Cash Return 10.90% 11.76% 12.63% 13.51% 14.41% 15.32% 16.25% 17.19% 18.15% 262.41%
Figure 31 - Sample Project: Investor Analysis Summary.
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7. Opportunities
A number of different opportunities have come to light as a result of our analysis, stakeholder
interviews and overall market growth rates. These include;
Multi-family rentals (market-rate & age restricted). Based on our analysis there was a
clear demand for added multi-family market-rate rentals within the Franklin County
Market Area and sub-market areas. All competitive multi-family rentals are at or near
capacity, several with waiting lists. A significant number of stakeholders interviewed also
indicated a continued need for age-restricted (senior, 55+ years of age) maintenance
provided housing. Presently there is little to no product of this type within the market and
numerous stakeholders indicated there could be a demand for this product type.
Projections show an increase in this cohort of the population, and a move to
maintenance provided housing from existing dwelling units might provide a “move-up”
opportunity for other households within the market to “back-fill” these homes.
Multi-family rentals (income-restricted). Our analysis, along with previous analysis
completed for the Ottawa and Franklin County markets indicate a clear need for
additional income-restricted housing. Income restricted households focused on 40%
Average Median Income (AMI) and 60% AMI households within Franklin County.
Income guidelines for each were assumed to be:
40% AMI Households: $22,760 to $28,440.
60% AMI Households: $34,140 to $42,660.
Analysis indicated that approximately 495 households were income eligible renter households. Demand for 40%-60% AMI households within Franklin County were estimated to be approximately 637 units. We estimate that the income-restricted housing market within the market area is currently being unfulfilled. We definitely see an opportunity to develop and construct additional income-restricted housing units in Franklin County. This is substantiated by waiting list data from ECKAN also included in this report.
For-sale, Owner-Occupied Housing. Based on feedback from the local REALTOR®
community, there is currently a lack of supply within the Franklin County/Ottawa markets.
Our analysis somewhat confirms this, but in our opinion this is more of a stabilization.
Actual closings are up and sales prices have increased from 2019 to 2020. However,
days-on-market and available supply have decreased. Our demand analysis shows a
need for an additional 49 housing units over the next five years (or 10 per year).
However, this is based solely on Census and ACS data and projections. There is a
chance that given the right housing alternative, that demand number could be greater.
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Exhibit A: Demographic Data
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Exhibit B: Development Initiatives Company Profile
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Exhibit C Certification I certify that, to the best of my knowledge and belief…
1. The statements of fact contained in this report are true and correct.
2. The reported analysis, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial and unbiased professional analysis, opinions and conclusions.
3. I have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved.
4. Development Initiatives and none if its employees have no present or prospective interest in the property that is the subject of this report, and I have no personal interest with respect to the parties involved.
5. Development Initiatives and none of its employees has no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.
6. Our compensation for the preparation of this study is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use of, this report.
7. Development Initiatives has personally inspected the market area, including various proposed redevelopment projects and each of the competitive properties.
James Potter, aicp, leed ga development initiatives
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Exhibit C Assumptions and Limiting Conditions This demand analysis and associated economic analysis is subject to the following limited conditions and assumptions:
1. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are Development Initiatives’ unbiased professional analyses, opinions, and conclusions.
2. Information provided and utilized by various secondary sources is assumed to be accurate. Development Initiatives cannot guarantee information obtained from secondary sources.
3. In the formulation of this analysis, the consultant has relied extensively upon data which was provided by the client. Such information may have included; legal description, building plans, title policy and/or survey. All information supplied by the client is assumed to be correct and the consultant assumes no responsibility for legal matters, and renders no opinion of property title, which is assumed to be good and merchantable.
4. All exhibits incorporated within this report are strictly for the purposes of assisting the reader in visualizing the property. The Consultant has made no property survey and assumes no liability concerning such matters. Additionally, it is assumed that there is no property encroachment issues or trespass issues unless noted within the report.
5. This analysis report is made as of a certain date. Due to the principles of change and the anticipation of value, the value estimate is only valid as of the date of the report or valuation. The nature of real estate development is an unpredictable and often tumultuous. In particular, the natural course of residential development is difficult to predict and forecast. Development Initiatives deems our projections as reasonable considering the current and obtained information.
6. Development Initiatives has considered and analyzed the economic conditions in the market areas, and we have considered these conditions while making our projections. However, it should be understood that fluctuations in local, regional and/or national economies could have substantial effects on our projections.
7. The possession of this analysis report shall adhere to all applicable copyright statutes which are in effect as of the date of issuance.
8. The Consultant is not required to give testimony or attendance in legal or other proceedings relative to the data and analysis derived within this document without the
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specific written notification of the Client.
9. The opinions contained within this analysis report are those of the Consultant and no responsibility is accepted by the Consultant for the results of actions taken by others based upon the information contained within said report.
10. Our analyses, opinions and conclusions were prepared in conformance with the requirements and guidelines of the Code of Professional Ethics and Standards of the American Institute of Certified Planners.
11. Acceptance of and/or use of this analysis report constitutes acceptance of all assumptions listed within the document and the previously mentioned conditions.