Final project presentation RUTLAND HOUSING MARKET STUDY AND NEEDS ASSESSMENT

 6:00Welcome and overview of the study  6:15Presentation  Recap of findings  Discussion of recommendations  7:00Questions and comments AGENDA

 Met with City staff and toured Rutland neighborhoods  Interviewed local housing market stakeholders (Realtors®, affordable housing providers, landlords)  Compiled, analyzed and mapped data about the Rutland housing market  Meeting One: public feedback and input  Developed strategic recommendations PROJECT TASKS FOR THE HOUSING STUDY

 Revitalizing neighborhoods (and addressing vacant/blighted properties)  Promoting homeownership  Affordable housing needs KEY TOPIC AREAS FOR TODAY

REVITALIZING NEIGHBORHOODS

 The City of Rutland is losing population not just because of a regional economic decline, but also because it is not competing well against other towns when households decide where to live  Poverty and unemployment is concentrated in particular neighborhoods in Rutland  The housing “product” being offered in parts of Rutland – especially older, small-multiunit stock – is not desired by the marketplace  Key areas of concern are located west of Route 7 and close to downtown  Locally Undesirable Land Uses (LULUs) may be contributing to some issues with vacant buildings REVITALIZATION IN RUTLAND: KEY FINDINGS

 The region is not competing strongly for households  County locations are outcompeting city locations for household choices about where to live  From 2000 to 2010, Rutland City households declined by 1%; Rutland County increased by 1%.  Areas west of Route 7 have declined the fastest COMPETITION FOR HOUSEHOLDS Households % change Tract 96301,9551,9701% Tract 96311,7131,644-4% Tract 96321,4001,356-3% Tract 96332,3842,4342% Source: US Census Bureau

AreaPercent below poverty in 2010 Tract % Tract % Tract % Tract % Rutland City16% Rutland County12% Vermont11% CONCENTRATIONS OF POVERTY AreaUnemployment rate, 2010 Rutland City8.8% Rutland County7.3% Vermont6.2% Source: American Community Survey year estimates

 Median sale price of 2-4 unit properties during was $75,000 (40% less than single-family)  Current value does not support home improvements or financing A HOUSING PRODUCT IN NEED OF IMPROVEMENT

“LULUS” AND VACANT BUILDINGS

PROMOTING HOMEOWNERSHIP AreaHomeownership Rate, 2010 Tract % Tract % Tract % Tract % Rutland City52% Rutland County70% Vermont71% Source: American Community Survey year estimates

 Now is the time to buy (especially in Rutland)!  A large pool of renter households exist that could qualify to buy a home  Housing stock exists that could be converted from investor ownership to owner-occupancy  Mortgage market issues are the major barrier PROMOTING HOMEOWNERSHIP: KEY THEMES

 Median home price in Rutland of about $112,000 (28 percent decline from 2006)  Affordable to households earning ~ $34,250 (56% of HAMFI)  Estimated 829 renters in Rutland County have income between $22,000 and $55,000 and savings and debt characteristics to buy  Another 600 renters in higher income tiers NOW IS THE TIME TO BUY Source: VT Property Transfer Tax data

CONVERTING STOCK TO HOMEOWNERSHIP 480 single- family homes and 334 two- family homes in Rutland are not owner- occupied

Rutland County: Home purchase loan denial rate 19%17% Home improvement loan denial rate 30%29% Refinance denial rate29%23% Purchase originations Home improvement originations Refinance originations1, day mortgage delinquency 0.8%6.7% 90+ day credit card delinquency 9.2%16.3% MORTGAGE MARKET ISSUES Source: 2010 HMDA data; New York Federal Reserve credit conditions data

Hickory Street apartments, Rutland Housing Authority AFFORDABLE HOUSING

 Real household incomes have declined while rents have risen  Housing cost burdens are much more common now than they were 10 years ago  Cost burdens are as much a product of incomes as of house prices or rents  Affordable rental stock is concentrated in the City of Rutland out of proportion to its share of households and jobs in the region HOUSING AFFORDABILITY IN RUTLAND: KEY FINDINGS

Income Rental Households Rental Units Considered Affordable* Less than $5, $5,000 to $9, $10,000 to $14, $15,000 to $19, $20,000 to $24, $25,000 to $34, ,138 $35,000 to $49, ,202 $50,000 to $74, $75,000 to $99, $100,000 to $149, $150,000 or more110 RENTAL STOCK PRICING VS. RENTER INCOMES Source: American Community Survey year estimates Unavailability of affordable rental stock in Rutland is most pressing for very low-income renters

Rutland City: % change Median gross rent (2010 dollars)$634$72314% Median income (2010 dollars)$39,317$38,108-3% Percent of renters earning under $35,000 who are cost burdened 58%69%11 points Percent of renters earning over $35,000 /who are cost burdened 3%7%4 points Percent of homeowners earning under $35,000 who are cost burdened 54%70%16 points Percent of homeowners earning over $35,000 /who are cost burdened 6%24%18 points HOUSING COST BURDENS Source: 2000 Census; American Community Survey year estimates

CONCENTRATION OF SUBSIDIZED RENTAL HOUSING Jobs (as of May 2012) Households (2010) Subsidized Housing Units (2012) Rutland City8,0007, Rutland County31,55025,9841,309 % of City within the County 25%28%61% Source: DoRAH; Vermont Department of Labor; 2010 Census

RECOMMENDATIONS

1.Implement revitalization initiatives in the neighborhoods surrounding downtown 2.Use a “Healthy Neighborhoods” approach 3.Focus on a small area, building from strength rather than weakness 4.Neighborhood marketing 5.Connect neighbors to drive revitalization work REVITALIZATION RECOMMENDATIONS: SUMMARY

6.Incentivize and facilitate private market investment 7.Set outcomes by property, including targeted acquisition/rehab/resale 8.Invest in downtown and in key assets and amenities near the target area 9.Support community development nonprofits to develop a work focus on neighborhood revitalization 10.Support “big picture” planning efforts to change the regional context REVITALIZATION RECOMMENDATIONS: SUMMARY

 A healthy neighborhood is:  A place where it makes economic and emotional sense for people to invest their time, money and energy  A place where neighbors successfully manage neighborhood-related issues and neighborhood change  Outcome areas:  Image  Market  Physical conditions  Neighborhood self-management  A healthy neighborhoods approach is oriented around increasing demand for the neighborhood. This is not the same type of activity as increasing housing supply, providing social services, or other activities that local governments and nonprofits are used to doing. “HEALTHY NEIGHBORHOODS” ORIENTATION

 A revitalization initiative will work best in a defined area (as small as blocks)  Core of the work happens house by house, block by block  Need to pick this area based on strengths:  Strong resident engagement  Marketable assets (e.g. parks, schools, housing stock, location)  Emerging market segments or at least potential market segments of desirable homebuyers that could be attracted to the neighborhood TIGHT GEOGRAPHIC FOCUS, SELECTED BASED ON STRENGTHS

 Name the neighborhood  Neighborhood ambassadors  Realtors® on retainer  Neighborhood tours  Employer-based marketing NEIGHBORHOOD MARKETING EXAMPLES

Beauty, History, Civic Spirit The Corn Hill Neighborhood Corn Hill, a historic treasure on the banks of the Genesee River next to Center City, offers the best of the old and new. It is a revitalized landmark community full of restored 19th century homes in a variety of modest and elaborate styles—that are blended well with 20th century townhouses and condominiums. In most cities, these kinds of neighborhoods are only accessible by the wealthy. Here in Rochester, people from all walks of life make Corn Hill their home….

 Ice cream socials, dog walks, potlucks  Beautification projects  Purchasing cooperatives  Neighborhood mini-grants  One-on-one interviews, “neighbor circles” CONNECTING NEIGHBORS: EXAMPLES

 Housing rehab loan fund, purchase / rehab loan packages  Tax stabilization or abatement for owner-occupants purchasing in the target neighborhood  Study regulatory reforms for landlords  “Buy-hold” fund to intervene in key properties and make sure they go to a good buyer INCENTIVES FOR PRIVATE INVESTMENT

 Examples:  Market an exterior repair loan  Give help to this owner to bring building up to code and improve their rental management practices  Get this homeowner better connected to their neighbors  Get a strong homebuyer into this property that is for sale – help the seller to market it, hold a “pick your neighbor” party  Acquire, convert this property from a 3-family back into a 1-family and sell it to a strong buyer  Properties are next to an acquisition-rehab project – help neighbors organize a beautification effort SET OUTCOMES BY PROPERTY

 Goal of revitalization needs to be to increase demand, not increase the supply of affordable units  Generally, priority should go towards encouraging more people to buy homes in the neighborhood, including converting small multifamily properties to more appropriate designs for owner- occupancy whenever practicable  Want to encourage private sector investment, including investment by responsible landlords  That said: affordable rental development financing tools provide a unique resource to address existing, problem multifamily properties and rehabilitate them to a very high standard. AFFORDABLE RENTAL DEVELOPMENT?

 Downtown location for high-end rental development, cultural attractions  Farmer’s market, other quality-of-life investments  Waterways (East Creek, Otter Creek) / greenways / green space INVEST IN DOWNTOWN, KEY AMENITIES

 Community building and organizing  Neighborhood marketing  Loan programs  Targeted redevelopment  Property management assistance for small landlords POTENTIAL ROLES FOR COMMUNITY DEVELOPMENT NONPROFITS

 Regional planning around:  Economic and workforce development  Land use planning  Arts and culture  Environmental preservation  Food systems  Recreation  Education  Public health  Regional collaborations between local governments “BIG PICTURE” PLANNING EFFORTS

COST IMPLICATIONS

TRIAGE APPROACH FOR VACANT / BLIGHTED HOUSING

Let the market create the solution Historic rehab project Acquisition- rehab-resale project; or rental project if part of a cluster of multi-unit properties Located in strong neighbor- hood? Historic or arch. signifi- cance? In target revitaliza- tion area? In target revitaliza- tion area? Moderate rehab cost? Feasible to mitigate? Demolish and create buffer Incen- tives for purchase -rehab Rehab appraisal gap < demo + infill cost? Market- able with incen- tives? Demolish and create green space or build infill LULU impacts? yes no yes no Rehab appraisal gap < demo cost? Incen- tives for purchase -rehab Acquisi- tion / rehab / resale Demo and land bank yes no yes Distressed Property Intervention Decision Tree

TACKLING REGIONAL AFFORDABLE HOUSING CHALLENGES

 Future affordable housing creation needs to focus on households at income levels under $20,000  Future affordable housing creation needs to improve fair housing choice for these low-income populations – more should not be created in existing high-poverty Census Tracts in Rutland  Given overall economic and population trends, affordable housing creation should avoid adding significant net new units to the stock, when possible  Initiatives to boost employment and earnings are critically important for working-age households facing affordability challenges KEY ACTION IMPLICATIONS OF STUDY FINDINGS FOR AFFORDABLE HOUSING