1. Downtown Housing The Market Study and The Lender Prepared for:IDA Fall Conference 2012, Minneapolis Prepared by:Maxfield Research, Inc. Mary Bujold, President September 23, 2012

2. Roseau County Affordable Housing Fund Outline 1.Downtown Housing 2.Characteristics of Your Market 3.Who Lives Downtown? 4.Who Wants to Live Downtown? 5.What is Already Downtown? 6.Employment Base 7.What Does the Lender Want to Know? 8.How to Present to the Lender 9.Quantitative vs. Qualitative

3. Roseau County Affordable Housing Fund Downtown Housing What is Downtown Housing? Historically, people lived above Downtown businesses They may have owned their buildings or leased space above the business Some building owners had apartments above their stores in the Downtown and rented to their workers or others that may have worked nearby As buildings aged, many of these apartments became “low rent.” HUD buildings were often built near Downtowns or on the fringe of the Downtown. This further substantiated that Downtown was generally occupied by households with lower incomes. With very limited or no new construction of housing in the Downtown, these buildings aged and became less desirable.

4. Roseau County Affordable Housing Fund Characteristics of Your Market How large is your community? Increasing/decreasing in population? Increasing in households? Decreasing in households? Proportion of renters versus owners? Is there a relatively strong renter base? Young people, students, empty-nesters, seniors Each has a different reason for wanting more freedom and convenience Which of these groups in your community has an interest? Is Downtown interesting enough or is employment located there that would serve as a catalyst for living in Downtown? Is there an amenity (river, lake, mountains, historic buildings) to generate interest?

5. Roseau County Affordable Housing Fund Who Lives Downtown Now? Is there some housing in your Downtown now? Who lives there and why? Where do they live? What type of product exists in the Downtown? Is new housing needed? For what groups?

6. Roseau County Affordable Housing Fund Who Wants to Live Downtown? What market segments might be attracted to live in the Downtown? Rental housing is generally experiencing a resurgence all across the Country. Are there market segments in your community that would be interested in renting their housing and would be interested in living in the Downtown? Near employment, near entertainment, near goods and services. Can walk to work? Walk to restaurants?

7. Roseau County Affordable Housing Fund Employment Base Is there a strong and growing employment base in or near to the Downtown? What types of jobs are located in or near the Downtown? Is there a part of the workforce that would want to be close to work, within walking distance? Is there a college, university or technical school located near to the Downtown? Who are the Downtown workers? Is there a local transit system that brings workers into the Downtown?

8. Roseau County Affordable Housing Fund What Does the Lender Want to Know? Lender wants to reduce risk Wants information that will show that a housing development in the Downtown will succeed. Is the area growing? Is there housing in the Downtown now? If so, what type? What are the rent levels? Is it in good condition? Is the housing in the Downtown similar to or would it be competitive to what is being proposed? If not, why not? Is the proposed housing breaking new ground? Who is the new housing targeted to serve? Will the new housing move toward a balance of housing types in the Downtown or is it more of the same?

9. Roseau County Affordable Housing Fund How to Present to the Lender Who is your lender? Conventional City or Economic Development Authority HUD Each of these groups often needs different levels of information; Conventional Lender usually focuses on competitive properties, rents generated and vacancy rates. Wants support for rents and absorption. City or Economic Development Authority usually interested in supporting more people Downtown; want the project to be successful, but potentially willing to wait a little longer for performance. HUD is similar to the conventional lender, but wants to optimize risk reduction; focuses on how to ensure that the project will succeed.

10. Roseau County Affordable Housing Fund Qualitative vs. Quantitative Quantitative –Demographics –Employment Data –Comparables Unit Mix Rents Vacancies –Absorption Data Qualitative Interviews with Building Owners and Managers Interviews with Leasing Agents or Realtors Focus Groups Surveys