information. - Red Wing Housing and Redevelopment Authority

Transcription

A Comprehenssive Ho
ousing N
Needs Analyssis for tthe City of Red W
Wing, M
Minneso
ota Prepared
d for: Red W
Wing Hou
using and
d Redevvelopment Autho
ority Red Win
ng, Minnessota Decem
mber 201
14 1221
1 Nicollet Mall Suitee 218 Minn
neapolis, MN
N 55403
612..338.0012 Decembe
er 11, 2014 Mr. Rand
dal Hemmerlin Executive
e Director Red Wingg Housing an
nd Redevelo
opment Auth
hority 428 West Fifth Street 66 Red Wingg, MN 5606
Dear Mr.. Hemmerlin
n: Attached
d is the analyysis titled, “A
A Comprehensive Housinng Needs An
nalysis for th
he City of Red Wing, Miinnesota”. TThis market analysis examines curreent housing m
market cond
ditions and determin
nes the markket potential for develop
ping differennt types of o
owned and reented housing through 2025 in the City. The scop
pe of this study includes:: an analysiss of the dem
mographic an
nd economicc characteristics of the Citty and surrounding areaa; a review of existing hoousing stock characteristtics; an analyysis of the for‐sale housin
ng market; aan evaluation of rental m
market conditions in thee City; a senio
or housing ssupply and d
demand analysis; an ove
erview of speecial needs h
housing; and
d, an assessm
ment of housin
ng affordabillity in Red W
Wing. Detaile
ed recommeendations arre provided ffor the houssing types ide
entified as be
eing needed
d in Red Wing to 2025. A
An assessmeent of other challenges associate
ed with houssing develop
pment in the
e City is also provided. ontact us if yyou have que
estions or re
equire additiional inform
mation. Please co
Sincerelyy, H INC. MAXFIELLD RESEARCH
Joe Hollm
man Senior An
nalyst Attachment (main) 612‐338‐‐0012 (fax) 6122‐904‐7979 1221 N
Nicollet Mall, Suite 218, Minneaapolis, MN 554003 www.maaxfieldresearch.ccom Section Title TABLE OF CONTENTS Page i. EXECUTIVE SUMMARY ................................................................................... Overview ............................................................................................................ Demographic Analysis ........................................................................................ Employment Trends ........................................................................................... Housing Characteristics ...................................................................................... For‐Sale Market Analysis.................................................................................... Rental Market Analysis ...................................................................................... Senior Housing Market Analysis ........................................................................ Special Needs Housing ....................................................................................... Housing Affordability ......................................................................................... 1 1 3 4 5 6 7 8 9 9 PURPOSE AND SCOPE OF STUDY .................................................................... 10 DEMOGRAPHIC ANALYSIS .............................................................................. Introduction ....................................................................................................... Market Area Definition ...................................................................................... Population and Household Growth Trends ....................................................... Age Distribution ................................................................................................. Household Income ............................................................................................. Household Tenure by Income ............................................................................ Net Worth .......................................................................................................... Household Tenure by Age .................................................................................. Tenure by Household Size .................................................................................. Household Type ................................................................................................. Race and Ethnicity .............................................................................................. Summary of Demographic Trends ..................................................................... 11 11 11 13 15 17 20 22 23 26 28 30 32 ii. A. B. EMPLOYMENT TRENDS ................................................................................... Introduction ....................................................................................................... Employment Forecast ...................................................................................... Resident Employment ........................................................................................ Industry Employment and Wage Data ............................................................... Commuting Patterns of Area Workers .............................................................. Major Employers ................................................................................................ Employer Survey ................................................................................................ 34 34 34 36 38 41 43 44 HOUSING CHARACTERISTICS .......................................................................... Introduction ....................................................................................................... Housing Occupancy ............................................................................................ Housing Stock by Structure Type ....................................................................... Age of Housing Stock ......................................................................................... Residential Construction Trends ........................................................................ Owner‐Occupied Housing Units by Value .......................................................... Renter‐Occupied Units by Contract Rent .......................................................... Peer Community Comparison ............................................................................ 45 45 45 48 50 53 55 57 59 C. TABLE OF CONTENTS (continued) D. FOR‐SALE MARKET ANALYSIS ......................................................................... Introduction ....................................................................................................... Home Sales ......................................................................................................... Active Listings ..................................................................................................... Foreclosures ....................................................................................................... Residential Lots for Sale ..................................................................................... Residential Lot Supply ........................................................................................ New Construction Pricing .................................................................................. Real Estate Agent/Builder Interviews ................................................................ For‐Sale Housing Market Demand Analysis ....................................................... 63 63 63 67 69 72 74 76 77 78 RENTAL MARKET ANALYSIS ............................................................................ Introduction ....................................................................................................... Overview of Rental Market Conditions ............................................................. General Occupancy Rental Projects ................................................................... Pending Rental Developments ........................................................................... Rental Housing Demand Analysis ...................................................................... 80 80 80 84 93 94 SENIOR HOUSING ANALYSIS ........................................................................... Introduction ....................................................................................................... Senior Housing Defined ..................................................................................... Older Adult (Age 55+) Population and Household Trends ................................ Supply of Senior Housing in the Primary Market Area ...................................... Market Rate Adult/Few Services Senior Housing Demand ............................... Shallow‐Subsidy/Deep‐Subsidy Independent Senior Housing Demand ............ Demand for Congregate Senior Housing ........................................................... Assisted Living Demand Estimate ...................................................................... Demand for Memory Care Senior Housing ........................................................ Demand for Skilled Nursing Care ....................................................................... 97 97 97 99 102 111 113 114 117 120 122 SPECIAL NEEDS HOUSING ............................................................................... Introduction ....................................................................................................... Persons with Disabilities .................................................................................... Households with Limitations/Disabilities .......................................................... Housing Facilities for Disabled Persons ............................................................. Demographic and Economic Statistics on Homeless Populations ..................... Comparison of 2009 and 2012 Homeless Figures ............................................. HOPE Coalition ................................................................................................... Three Rivers Community Action ........................................................................ Veterans ............................................................................................................. Poverty ............................................................................................................... 124 124 124 125 127 128 132 133 134 135 136 E. F. G. TABLE OF CONTENTS (continued) H. HOUSING AFFORDABILITY .............................................................................. Introduction ....................................................................................................... Naturally‐Occurring Affordable Housing ........................................................... Rent and Income Limits ..................................................................................... Housing Cost Burden .......................................................................................... Housing Vouchers .............................................................................................. Housing Cost as Percentage of Household Income ........................................... 137 137 137 138 139 141 142 CONCLUSIONS AND RECOMMENDATIONS ..................................................... Introduction ....................................................................................................... Demographic Profile and Housing Demand ...................................................... Housing Demand Summary ............................................................................... Recommendations ............................................................................................. Challenges and Opportunities ........................................................................... 144 144 144 147 149 156 I. LIST OF TABLES Table Number and Title Page A‐1 A‐2 A‐3 A‐4 A‐5 A‐6 A‐7 A‐8 A‐9 B‐1 B‐2 B‐3 B‐4 B‐5 B‐6 C‐1 C‐2 C‐3 C‐4 C‐5 C‐6 C‐7 D‐1 D‐2 D‐3 D‐4 D‐5 D‐6 D‐7 D‐8 D‐9 E‐1 E‐2 E‐3 E‐4 E‐5 F‐1 F‐2 F‐3 F‐4 F‐5 F‐6 F‐7 F‐8 Population and Household Growth Trends and Projections ..................................... Age Distribution ......................................................................................................... Household Income by Age of Householder, Primary Market Area ........................... Tenure by Household Income .................................................................................... Net Worth .................................................................................................................. Tenure by Age of Householder .................................................................................. Tenure by Household Size .......................................................................................... Household Type ......................................................................................................... Population Distribution by Race & Ethnicity ............................................................. Employment Growth Trends and Projections ........................................................... Local Area Unemployment Statistics ......................................................................... Quarterly Census of Employment and Wages ........................................................... Commuting Patterns .................................................................................................. Commuting Inflow/Outflow Characteristics .............................................................. Major Employers ........................................................................................................ Housing Unit Occupancy ............................................................................................ Housing Units by Structure Type and Tenure ............................................................ Housing Units by Year Structure Built........................................................................ Residential Building Permit Trends ............................................................................ Owner‐Occupied Housing Units by Value .................................................................. Renter‐Occupied Housing Units by Contract Rent .................................................... Peer Community Comparison .................................................................................... Residential Resales Activity, Red Wing Market Area ................................................. Residential Sales Activity – Price Distribution, City of Red Wing .............................. Residential Homes Listed For Sale, City of Red Wing ................................................ Sheriff’s Sale Foreclosures in Minnesota ................................................................... Lender‐Mediated vs. Traditional Sales ...................................................................... Residential Lots For Sale by Subdivision .................................................................... Residential Lot Supply, City of Red Wing ................................................................... New Construction Pricing by Subdivision, Red Wing, Iowa ....................................... General Occupancy For‐Sale Housing Demand, City of Red Wing, 2014 to 2025 ..... Rental Housing Vacancy Estimates ............................................................................ Bedrooms by Gross Rent, Renter‐Occupied Housing Units ....................................... General Occupancy Rental Properties, City of Red Wing, Minnesota ....................... Unit Mix Summary, Selected General Occupancy Rental Developments ................. Demand for General Occupancy Rental Housing ...................................................... Senior Housing Projects, City of Red Wing, Minnesota ............................................. Skilled Nursing Care Facilities, City of Red Wing, Minnesota .................................... Market Rate Adult/Few Services Housing Demand ................................................... Subsidized Independent Housing Demand ................................................................ Congregate Living Demand ........................................................................................ Market Rate Assisted Living Demand ........................................................................ Memory Care Demand ............................................................................................... Skilled Care Demand .................................................................................................. 13 16 19 21 22 25 27 29 31 35 37 40 41 42 43 46 49 51 54 56 57 60 64 66 67 69 71 72 75 76 79 81 82 85 89 95 103 105 112 114 116 119 121 123 LIST OF TABLES (continued) G‐1 G‐2 G‐3 G‐4 G‐5 G‐6 G‐7 G‐8 H‐1 H‐2 H‐3 H‐4 I‐1 I‐2 I‐3 I‐4 Type of Disability by Age of Non‐Institutionalized Person, City of Red Wing ........... Estimates of Disability by Income Level, Goodhue County ....................................... Number of Homeless People, Southeast Minnesota and Minnesota ....................... Age Distribution, Homeless People in Southeast Minnesota and Minnesota .......... Ethnic Background of Homeless People Surveyed .................................................... Monthly Income of the Homeless People Surveyed ................................................. Maximum Affordable Rents among Surveyed Homeless People .............................. Number of Bedroom Size Needed, Southeast Minnesota and Minnesota ............... HUD Income and Rent Limits in Goodhue County ..................................................... Maximum Rent Based on Household Size and Area Median Income ....................... Housing Cost Burden, Red Wing Market Area ........................................................... Red Wing Housing Affordability – Based on Household Income ............................... Summary of Housing Demand, City of Red Wing ...................................................... General Occupancy For‐Sale Housing Recommendations, City of Red Wing ............ Recommended Rental Housing Development, City of Red Wing .............................. Recommended Senior Rental Housing Development, City of Red Wing .................. 125 126 128 129 130 130 131 132 138 139 140 143 147 150 152 154 EXECUTIVE SUMMARY Overview Maxfield Research Inc. was engaged by the Red Wing Housing and Redevelopment Authority to update a Comprehensive Housing Needs Analysis for the City. The Housing Needs Analysis, which was last completed in 2009, provides recommendations on the amount and types of housing that should be developed in order to meet the needs of current and future households residing in the City. The scope of this study includes: an analysis of the demographic and economic characteristics of the City and surrounding area; a review of existing housing stock characteristics; an analysis of the for‐sale housing market; an evaluation of rental market conditions in the City; a senior housing supply and demand analysis; an overview of special needs housing; and, an assessment of housing affordability in Red Wing. Detailed recommendations are provided for the housing types identified as being needed in Red Wing to 2025. An assessment of other challenges associated with housing development in the City is also provided. Based on the demographic characteristics of Red Wing and the PMA, there will be growing demand for a variety of housing products, including: rental housing targeting the young adult (25 to 34) age group as well as the empty nester population (55 to 74 age group); entry‐level ownership housing for first‐time home buyers (25 to 39); move‐up housing for the 35 to 44 age group; and, senior housing. In total, we find demand to support 619 general occupancy housing units between 2014 and 2025. Demand is expected to be fairly balanced between for‐sale housing and rental housing, with 299 for‐sale units and 320 rental housing units needed in Red Wing by 2025. Demand is strong for many types of housing in the area, but based on recent sale transactions, housing demand is highest for modestly‐priced housing in the $100,000 to $150,000 range (25% of all sales). Move‐up housing priced between $150,000 and $300,000 in Red Wing also ap‐
pears to be in high demand. Our survey of the competitive rental housing inventory identified that the vacancy rates for all types of general occupancy rental product are well‐below market equilibrium (5.0% vacancy rate), indicating pent‐up demand for rental housing in Red Wing. As of November 2014, the vacancy rate for market rate rental properties in Red Wing was 0.9% while the affordable/tax credit and subsidized properties were fully‐occupied. Because of the older age of Red Wing’s existing rental housing inventory, the majority of properties do not provide the modern fea‐
tures and amenities that many of today’s renters desire. Due to the extremely low vacancy rate in Red Wing and based on feedback provided by major employers and real estate professionals in the area, there is a need for new rental housing in the community. We estimate that Red Wing can accommodate approximately 128 new market rate rental housing units, 96 shallow‐
subsidy units, and 96 deep‐subsidy units through 2025. MAXFIELD RESEARCH INC. 1
EXECUTIVE SUMMARY We also found excess demand for a total of 459 senior housing units in 2020. Of these senior units, roughly 60% (about 277 units) would be market rate housing and the remaining 40% (about 182 units) would be shallow‐subsidy or deep‐subsidy units. We found demand for most senior housing product types over the next several years, and vacancy rates among the existing senior housing inventory are well‐below equilibrium suggesting that there is pent‐up demand for additional senior housing units in the Market Area. Based on current and projected excess demand potential, the market could support a new continuum of care senior housing develop‐
ment in Red Wing. The following chart illustrates calculated demand by product type. Housing demand is com‐
prised of several components, including projected household growth, pent‐up demand (i.e. below equilibrium housing vacancy rates), and replacement needs (functionally or physically obsolete units). Red Wing, Minnesota
Housing Demand Summary
2014 – 2025
MAXFIELD RESEARCH INC. General Occupancy 596 Units
Senior
Housing
459 Units
For‐Sale
Single‐Family
179 Units
Market Rate
Active Adult
79 Units
For‐Sale
Multifamily
120 Units
Subsidized
Active Adult
182 Units
Market Rate
Rental
119 units
Congregate
Shallow‐Sub. Rental
89 Units
Assisted
Living
48 Units
Deep‐Sub. Rental
89 Units
Memory
Care
46 Units
104 Units
2
EXECUTIVE SUMMARY Demographic Analysis 
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Red Wing’s population increased 2.1% from 2000 to 2010 (+343 people) against household growth of 6.9% (+455). As of 2010, the average household size in the City of Red Wing was 2.35, which is down ‐4.5% from 2000. This trend is an indication of an aging household base and also reflects a general shift in demographic factors that favor smaller households, such as a declining proportion of married couple households with children. By 2020, Red Wing is projected to add 330 people (+2.0%) and 262 households (+3.7%). The greatest growth is expected to occur among older adults in the Market Area. Aging of baby boomers led to 49% increase in the 55 to 64 population between 2000 and 2010 in Red Wing. As this group ages, all cohorts age 55 or greater are expected to see increases over the next several years. Based on the median contract rent of $616 for renter‐occupied housing units in the City of Red Wing, a household would need to have an annual income of roughly $25,000 or greater to not exceed 30% of its monthly income on rental housing costs. In 2014, 81% of all PMA households are estimated to have incomes of at least $25,000. By 2020, the total number of income‐qualified households is projected to increase by 511 households (+6%) after ac‐
counting for inflation. In 2013, the median sale price for a single‐family home in Red Wing was $125,235. A household would need to have a minimum annual income of roughly $33,200 to be income‐qualified for a home purchased at the median sale price in Red Wing. In 2014, roughly 73% of the households have incomes of $33,200 or higher, and the number of income‐qualified households is projected to increase 8% by 2020. In Goodhue County, the percentage of renter households increased from 21.0% in 2000 to 22.7% in 2010, while the percentage of owner households declined from 79.0% to 77.3% over the decade. This was consistent with household tenure trends throughout Minnesota and the United States. In Red Wing, the trend was slightly more pronounced, as the per‐
centage of renter households increased from 28.3% in 2000 to 31.7% in 2010, while owner households declined from 71.7% to 68.3% over the decade. In Red Wing, the number of renter households expanded 20% between 2000 and 2010, while the number of owner households increased 2%. Shifting household types can drive demand for housing in a community. Married couple families with children typically generate demand for single‐family detached ownership housing. Married couple families without children often desire multifamily housing options for convenience reasons, however older couples in rural areas often hold onto their single‐
family homes until they need services. Other family households (typically single‐parent households) often require affordable housing, and the 31% increase in other family house‐
holds in Red Wing suggests a growing need for affordable housing options in the City. An increase in the percentage of nonfamily households indicates a shift in housing needs that favors rental development. The number of households with one resident increased 12% in Red Wing over the decade, while the number of households with roommates climbed 14% as more renters lived together in an attempt to save money during the recession. MAXFIELD RESEARCH INC. 3
EXECUTIVE SUMMARY Employment Trends 
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Low unemployment often generates demand for both existing home purchases and new‐
home purchases. Red Wing and Goodhue County have historically maintained a lower un‐
employment rate than the rest of the United States. Red Wing’s unemployment rate of about 3.8% as of September 2014 was below equilibrium (generally considered to be 5.0%) and higher than the United States (5.7%). Today’s unemployment rate has come down from a high of 8.2% in 2009. It appears that the decline in Red Wing’s unemployment rate in recent years can be partially attributed to a declining labor force. Red Wing’s labor force contracted roughly ‐6.3% from 2010 to 2013 while resident dropped ‐4.4% during that same time period. Because the labor force has declined at a faster pace than the number of employed residents, the unemployment rate has decreased. Low unemployment in combination with a shrinking labor force can restrain economic expansion in a community, as it becomes difficult for employers in the area to hire workers and increase production or services. Red Wing’s labor force experienced little change between 2000 and 2013, declining roughly ‐0.1% as resident employment in Red Wing slipped ‐2.2%. Despite the economic recession, industry employment increased 3.9% in Red Wing from 2008 to 2013 as over 500 jobs were added in Red Wing during that time period. Roughly 1,723 jobs are projected to be added in Red Wing between 2010 and 2020. The expansion of jobs in Red Wing compared to flat labor force and resident employment growth in the City indicates that Red Wing employers have attracted workers from outside the City in re‐
cent years. As such, it appears that Red Wing is a strong “importer” of workers. With over 6,600 workers commuting into Red Wing daily, many coming from over 50 miles, there ap‐
pears to be an opportunity to provide housing options for a portion of these workers. The Trade, Transportation, and Utilities industry is the largest employment sector in Red Wing, providing 2,860 jobs in 2013 (21.3% of the total), followed closely by the Education and Health Services sector with 2,565 jobs (9.1%). Manufacturing and the Leisure and Hos‐
pitality industry are also major employment sectors in Red Wing with 2,530 (18.9%) and 2,366 jobs (17.6%), respectively. A household earning the average weekly wage in Red Wing ($840) would be able to afford an apartment renting for approximately $1,090 per month to not exceed 30% of its monthly income on housing costs. Assuming that a potential home buyer has good credit and makes a 10% down payment, a household earning the average weekly wage would be able to af‐
ford to purchase a home priced at approximately $160,000 or lower to not be cost‐
burdened (paying more than 30% of their income for housing). MAXFIELD RESEARCH INC. 4
EXECUTIVE SUMMARY Housing Characteristics 
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As of the 2010 Census, the City of Red Wing maintained an occupancy rate of 93.1%. Occupancy rates have declined slightly over the past decade. In 2000, occupancy was at 95.6% in Red Wing. Nearly 64% of Red Wing’s housing units were owner‐occupied in 2010, 29% were renter‐occupied, and the remaining 7% were vacant. In total, Red Wing gained 672 housing units between 2000 and 2010 (+9.8%). Owner‐occupied units increased by 1.8% (+87) while renter‐occupied units expanded by nearly 20% (+368 units). The City of Red Wing experienced a 71% increase in vacant units (+217 units) during the decade. Single‐family (one‐unit) detached units are the most common housing type in the Market Area, comprising roughly 62% of the housing units in Red Wing. Housing units in structures with 20 or more units represent 12% of the housing supply in Red Wing with 934 units, and single‐unit, attached housing units represent 8% of all housing units in Red Wing (606 units). Housing production has been remarkably steady in Red Wing since the 1940s when only 380 housing units were constructed (5% of the total). Aside from a spike in the 1970s when nearly 1,300 units were built (17%), construction activity has consistently delivered between 800 and 900 new units in each decade since 1950 (11% growth per decade). Since 2000, a total of 818 new housing units have been permitted in Red Wing, for an average of 55 new units per year. Red Wing’s single‐family housing stock has grown at an average rate of 23 new units per year, while the multifamily supply has expanded by rough‐
ly 32 units per year. By comparison, the single‐family housing stock in the Remainder of the PMA has expanded at an average rate of 43 units per year. Residential construction activity dropped off sharply in Red Wing since 2005 after a total of 561 housing units were permit‐
ted between 2000 and 2005 for an annual average of 94 new housing units per year. Since 2006, a total of 257 housing units have been permitted for an average of 29 new housing units per year. However, after only eight new units were permitted in each of the past three years, residential building activity accelerated through the first ten months of 2014 with 16 units permitted. The median owner‐occupied home value was $166,500 in Red Wing during the 2008‐2012 ACS period, roughly ‐14% lower than the Statewide median of $194,300. The largest pro‐
portion of owner‐occupied housing units in Red Wing is estimated to be valued in the $150,000 to $199,999 range with 30% of all owner‐occupied units in the City (1,524 units). The median contract rent in Red Wing was $616 during the 2008‐2012 ACS, roughly ‐14% lower than the statewide median of $717. Based on a 30% allocation of income to housing, a household in Red Wing would need an income of about $25,000 to afford an average monthly rent of $616. MAXFIELD RESEARCH INC. 5
EXECUTIVE SUMMARY For‐Sale Market Analysis 
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As of 2013, the median sale price for single‐family homes in Red Wing was $125,235, roughly ‐17% lower than the Goodhue County median sale price of $150,000. On average, Red Wing’s median single‐family home price has been ‐8% lower than the County median price since 2007. Residential sales activity spiked in 2013, with 273 total sales in Red Wing, compared to an average annual rate of 219 sales per year since 2007. Toughly 89% of all sales in Red Wing were for detached single‐family homes. The median sale price for single‐family homes is trending up, climbing from $119,614 in 2011 to $125,235 in 2013 and $133,450 through the first six months of 2014. Condominium and townhome pricing has not exhibited the steady growth being experienced in the single‐
family market. The 2013 median of $127,900 for townhouse units is slightly lower than the median sale price of $138,000 in 2012, and it is substantially lower than the average pricing of $148,780 over the previous five years. Condominium prices declined ‐41% between 2011 ($84,500) and 2013 ($50,000), before climbing to $74,000 as of June 2014. There appears to be an oversupply of higher‐priced homes in Red Wing while lower‐priced homes seem to be undersupplied. Lower‐priced (below $100,000) homes represented 36% of all sale transactions since 2012, while only 13% of the homes listed for sale are priced lower than $100,000. Conversely, 29% of the homes listed for sale are priced at $300,000 or more while only 4% of the closed sales were for homes in the $300,000+ price range. There are roughly 326 residential lots available for development in the City. Based on the total average annual lot absorption of 36.8 lots per year, the 326 undeveloped lots could take nearly nine years to be developed. The industry standard for a balanced lot supply is three to five years. As such, it appears that the existing supply of platted lots in Red Wing is adequate to meet demand through the end of the decade. Demand was estimated at nearly 300 units of new for‐sale housing in the City by 2025. The general consensus is that there is demand for many types of housing in the area, but based on recent sale transactions, housing demand appears to be highest for modestly‐priced housing in the $100,000 to $150,000 range (25% of all sales). Move‐up housing priced be‐
tween $150,000 and $300,000 in Red Wing also appears to be in high demand. In total, we found demand for 179 single‐family homes in the City between 2014 and 2025. Based on the age distribution of City households along with comments from Realtors and hiring trends at the major employers in the City, we recommend that that 55% of these homes be priced in the move‐up range (99 units), 15% priced as executive homes (27 units), and 30% in the modest price range (54 units). We also found demand for 120 multifamily units. Because the multifamily target market will likely be first‐time homebuyers or older householders looking to downsize, we recommend that multifamily housing be evenly split between the modest and move‐up price ranges. MAXFIELD RESEARCH INC. 6
EXECUTIVE SUMMARY Rental Market Analysis 
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Maxfield Research Inc. compiled detailed information for general occupancy apartment projects with eight or more units in the City of Red Wing, including 13 market rate apart‐
ment properties, two affordable tax credit communities, and eight subsidized properties in November 2014. These properties represent a combined total of 641 units. At the time of our survey, only three units were vacant, resulting in an overall vacancy rate of 0.5% in Red Wing. There were a total of 325 market rate units, three of which were vacant representing a 0.9% vacancy rate. There are two affordable tax credit projects with a total of 68 units, all of which are occupied. There are also eight fully‐occupied deep‐subsidy rental projects in Red Wing with a total of 248 units. Red Wing’s rental housing market is aging, as the median year built for all properties is 1980 and there has not been a new project developed since the mid‐2000s. Roughly 31% of the units were constructed in the 1980s while and 22% were built in the 1970s, and 10% were constructed prior to 1950. Most of the newest developments are either tax credit or subsi‐
dized projects. There has not been a large (8 units or more) market rate rental housing pro‐
ject developed in Red Wing in nearly 20 years (1995). On average, units in these general occupancy projects are 853 square feet, with efficiency units being the smallest (207 square feet) and three‐ and four‐bedroom units being the largest at 1,111 square feet. One‐bedroom units have an average size of 658 square feet, while the two‐bedroom units are 925 square feet. The weighted average rental rate across all general occupancy properties is $658 per month. Three‐ and four‐bedroom units are the highest priced, averaging $761 per month, roughly 10% higher than the average monthly rent of $692 for two‐bedroom units. One‐bedroom units have an average rent of $597 per month, while the efficiency units have an average rent of $537 per month. The majority of the properties surveyed provide kitchen appliances and wall unit air condi‐
tioning, but relatively few offer an in‐unit washer and dryer. Most of the properties provide a common laundry room. Garage parking is available at most of the rental properties, alt‐
hough parking in Downtown Red Wing is generally accommodated off‐site. It appears that modern features and amenities such as stainless steel appliances, granite countertops, in‐
unit washer/dryer, walk‐in closets, fitness center, swimming pool, community room, and outdoor living options (fire pit, picnic area, etc.) do not seem to be available at the general occupancy rental properties in Red Wing. We find demand for 320 new general occupancy rental units in Red Wing between 2014 and 2025. Based on a review of renter household incomes and income limits set by HUD, we estimate that approximately 30% of the total demand will be for deep‐subsidy housing, 30% will be for shallow‐subsidy housing, and 40% will be for market rate housing. In total, we find demand for 96 deep‐subsidy units, 96 shallow‐subsidy units, and 128 market rate rental units in Red Wing between 2014 and 2025. MAXFIELD RESEARCH INC. 7
EXECUTIVE SUMMARY Senior Housing Market Analysis 
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The greatest population growth is expected to occur among older adults in the Market Area. Aging of baby boomers led to an increase of 1,345 people (+59%) in the 55 to 64 population between 2000 and 2010 in the PMA. As this group ages, all cohorts age 55 or greater are expected to see increases over the next several years, particularly the 70 to 74 age group which is projected to grow 29% (+310 people) in the PMA between 2014 and 2020. Maxfield Research identified ten separate senior housing developments in the Primary Market Area. Combined, these projects contain a total of 539 senior housing units and 294 skilled nursing beds. Two of these projects with 204 units are subsidized, while the remain‐
ing facilities are market rate. Of the 539 senior housing units, four are currently vacant, representing a 0.7% vacancy rate. There are a total of 342 active adult units (138 market rate and 204 deep‐subsidy units), only one of which is vacant for a 0.3% vacancy rate. There are no vacant subsidized units, and one market rate unit is vacant (0.7% vacancy). The equilibrium vacancy rate for active adult housing is considered to be 5.0% which allows for normal turnover and an adequate supply of alternatives for prospective residents. In effect, the supply of available active adult housing in the Market Area appears to be below the adequate level to meet demand. Roughly 37% of the senior housing inventory consists of service‐enhanced housing units, for a total of 197 units (50 congregate, 108 assisted living, and 39 memory care units). As of October 2014, there are only three vacant service‐enhanced units (1.5% vacancy rate). A 93% occupancy rate is generally considered equilibrium in service‐enhanced senior housing, so the current supply of units appears to be extremely tight. There are also 294 skilled nurs‐
ing beds in three facilities in the PMA. At the time of our survey, 95 of these beds were va‐
cant, which represents a 32% vacancy rate. However, Benedictine Health System (St. Brig‐
id’s) and Mayo Health Clinic (Seminary Home) plan to consolidate their skilled nursing oper‐
ations into a new 80‐bed facility called St. Crispin Living Community. This consolidation would result in a net loss of ‐69 skilled nursing beds in Red Wing. The involved parties are in the process of revising their strategy for the facility, and while a new campus is expected to proceed, exact details are not known at this time. We found demand for most senior housing product types over the next several years, and vacancy rates among the existing senior housing inventory is well‐below equilibrium sug‐
gesting that there is pent‐up demand for additional senior housing units in the Market Area. Demand was projected for about 79 market rate active adult units in Red Wing in 2020. We also estimate that there is demand for 182 subsidized active adult units through 2020. In addition, we find demand for a total of 198 service‐enhanced units in Red Wing through 2020 (104 congregate units, 48 assisted living units, and 46 memory care units). This level of demand will likely best be satisfied with a continuum of care project, so a resident can change their level of care as they age without having to relocate from the facility. MAXFIELD RESEARCH INC. 8
EXECUTIVE SUMMARY Special Needs Housing 

Overall, roughly 13% of Red Wing’s non‐institutionalized population could have some form of disability, slightly higher than the Statewide proportion of 10%. Approximately 45% of renter households are occupied by a person with a disability, significantly higher than 24% of owner households. A large number of renter households (850 households) or 53% of all renter households with incomes of 30% or less of AMI indicated some type of limitation. There are four adult foster care providers in Red Wing and one Intermediate Care Facility licensed to provide services for persons with disabilities. HOPE Coalition offers transitional housing for victims of domestic violence, sexual assault, homelessness, and child abuse in the area. Additionally, Three Rivers Community Action provides three transitional housing units in Red Wing. Housing Affordability 

Approximately 26% of all owner households in Red Wing are considered to be cost bur‐
dened, while 49% of the existing renter households in the City are considered cost bur‐
dened. Based on current home prices, over 81% of existing owner households in the Red Wing PMA could afford to purchase a single‐family home sold at the median sale price ($125,000 in 2013). Roughly 53% of existing renter householders could afford to rent a one‐
bedroom unit at an existing market rate rental project; however, only 37% could afford monthly rents at a new rental development. Currently, the Red Wing HRA is allocated 169 vouchers, but they have funding to issue 134 vouchers, all of which have been issued. There are currently 383 households on the Section 8 voucher waiting list. Nearly 36% of those on the waiting list are in need of a one‐bedroom unit. Another 34% are waiting for a three‐bedroom unit and 28% are waiting for a two‐
bedroom unit. Relatively few households on the waiting list need four‐ or five‐bedroom units (4%). The Red Wing HRA also has six units of Shelter + Care vouchers for homeless disabled households, all six of which have been issued. The current wait for households on the waiting list is over two and one‐half years (30 months) for most applicants. The Red Wing HRA has a policy stating that the wait list should be closed any time the wait is longer than 24 months for applicants. As such, the wait list was closed as of October 31, 2014. MAXFIELD RESEARCH INC. 9
PURPOSE AND SCOPE Purpose and Scope of Study Maxfield Research Inc. was engaged by the Red Wing Housing and Redevelopment Authority to update a Comprehensive Housing Needs Analysis for the City. The Housing Needs Analysis, which was last completed in 2009, provides recommendations on the amount and types of housing that should be developed in order to meet the needs of current and future households residing in the City. The scope of this study includes: an analysis of the demographic and economic characteristics of the City and surrounding area; a review of existing housing stock characteristics; an analysis of the for‐sale housing market; an evaluation of rental market conditions in the City; a senior housing supply and demand analysis; an overview of special needs housing; and, an assessment of housing affordability in Red Wing. Detailed recommendations are provided for the housing types identified as being needed in Red Wing to 2025. An assessment of other challenges associated with housing development in the City is also provided. MAXFIELD RESEARCH INC. 10
DEMOGRAPHIC ANALYSIS Introduction Demographic characteristics and trends are an important factor when evaluating housing needs in any given market. This section of the report begins by delineating the draw area for housing products in Red Wing and examines the demographic and economic characteristics of this draw area. A review of these characteristics provides insight into the demand for various types and styles of housing in Red Wing. Market Area Definition The draw area or “Market Area” for housing products in Red Wing was determined based on geographic and man‐made boundaries, commuting patterns, community orientation, and places of employment. We also reviewed boundaries of the Red Wing School District. Based on these factors, we delineated a Primary Market Area (PMA) consisting of seven county subdivi‐
sions in Goodhue County, Minnesota and four county subdivisions in Pierce County, Wisconsin. With the exception of the county subdivisions located in Wisconsin, this PMA approximates the school district boundaries. Minnesota County Subdivisions Wisconsin County Subdivisions  City of Red Wing  Village of Bay City  Welch Township  Town of Trenton  Vasa Township  Town of Hartland  Featherstone Township  Town of Isabelle  Hay Creek Township  Wacouta Township  Florence Township Due, in large part, to community amenities such as the Mississippi River and Lake Pepin, Red Wing will also draw a portion of potential renters and home buyers from areas outside the PMA, particularly the southeast portion of the Twin Cities Metro Area. For the purpose of this Study, comparisons are made to Goodhue County, Minnesota as well as the adjacent seven‐county Twin Cities Metro Area, which is comprised of the Counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. MAXFIELD RESEARCH INC. 11
D
DEMOGRAPHIC
C ANALYSIS Primaary Market Areaa M
MAXFIELD RESEEARCH INC. 12
DEMOGRAPHIC ANALYSIS Population and Household Growth Trends Table A‐1 presents population and household growth trends in the Market Area from 2000 to 2025. The 2000 and 2010 figures are from the U.S. Census while data for 2014, 2020, and 2025 are based on projections from ESRI (a nationally recognized demographics firm) and the Minne‐
sota State Demographic Center with adjustments made by Maxfield Research Inc. to reflect recent trends. Adjustments are made based on residential building permit activity and em‐
ployment growth trends. The following are key figures from Table A‐1.  As of 2010, the Primary Market Area contained 25,191 people and 10,415 households. Between 2000 and 2010, the population increased by 668 people (+2.7%) while the number of households expanded by 838 (+8.8%). TABLE A‐1
POPULATION AND HOUSEHOLD GROWTH TRENDS AND PROJECTIONS
RED WING MARKET AREA
2000 ‐ 2025
Change
Census
2000
Forecast
Estimate
2010
2014
2020
2000‐2010
2010‐2020
2025
No.
Pct.
No.
Pct.
Population
Primary Market Area
24,523
25,191
25,310
25,756
26,375
668
2.7%
565
2.2%
City of Red Wing
Remainder of PMA
16,116
8,407
16,459
8,732
16,498
8,812
16,789
8,967
17,192
9,183
343
325
2.1%
3.9%
330
235
2.0%
2.7%
Goodhue County
44,127
46,183
46,535
48,123
49,261
2,056
4.7%
1,940
4.2%
7.9% 273,863
9.6%
8.8%
425
4.1%
455
6.9%
383 12.7%
262
163
3.7%
4.8%
1,138
6.1%
Twin Cities Metro Area* 2,642,062 2,849,567 2,968,000 3,123,430 3,259,000 207,505
Households
Primary Market Area
9,577
10,415
10,583
10,840
11,213
City of Red Wing
Remainder of PMA
6,562
3,015
7,017
3,398
7,069
3,514
7,279
3,561
7,454
3,759
16,983
18,730
19,058
19,868
20,543
1,747
Twin Cities Metro Area* 1,021,456 1,117,749 1,154,100 1,259,450 1,325,000
96,293
Goodhue County
838
10.3%
9.4% 141,701 12.7%
*Includes the 7‐County Area (Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington Counties)
Sources: US Census Bureau; ESRI; Metropolitan Council; State Demographic Centers; Maxfield Research, Inc.

The number of new households was high relative to the number of new people suggesting a trend toward decreasing household sizes in the PMA. In 2000, the average household size in the PMA was 2.56 persons per household. This number declined to 2.42 in 2010, a drop of ‐5.5%. By comparison, the average household size in the Twin Cities Metro Area declined ‐1.5%, from 2.59 in 2000 to 2.55 in 2010. MAXFIELD RESEARCH INC. 13
DEMOGR
RAPHIC ANA
ALYSIS 
Red W
Wing’s population increaased 2.1% frrom 2000 to 2010 (+3433 people) agaainst househ
hold grow
wth of 6.9% (+
+455). As o
of 2010, the average houusehold size in the City o
of Red Wing was 2.35, which is down ‐4.5% fro
om 2000. Th
his trend is aan indication
n of an agingg household base hift in demoggraphic factoors that favo
or smaller ho
ouseholds, ssuch and aalso reflects a general sh
as a d
declining pro
oportion of m
married couple househoolds with chiildren. 


By 20
020, the PMA
A is expected to add 565
5 people (+22.2%) and 4225 household
ds (+4.1%). Mostt of the PMA
A’s growth w
will occur in the City of Reed Wing as u
urban servicces are availaable to accommodate
e residential developmen
nt. Red Winng is projecteed to add 33
30 people (+2.0
0%) and 262 households (+3.7%). Th
he pace of grrowth in thee PMA is exp
pected to app
prox‐
imate
e the growth
h experience
ed throughout Goodhuee County, butt it is expectted to trail th
he rate o
of growth th
hroughout th
he adjacent TTwin Cities M
Metro Area. The Twin C
Cities Metro Area is pro
ojected to exxperience 9.6% growth in populationn between 22010 and 2020, while the numb
ber of house
eholds increaases 12.7%. In 2000, roughly 36.5% of Go
oodhue Coun
nty’s popula tion was loccated in Red Wing. This perce
entage dippe
ed to 35.6% in 2010. We
e anticipate that the pro
oportion of C
County resid
dents livingg in Red Wing will essenttially hold steady over thhe next seveeral years. B
Based on pop
pula‐
tion p
projections p
provided by the Minnesota State Deemographic Center for G
Goodhue County, we an
nticipate thaat the pace o
of growth will increase i n the PMA b
between 202
20 and 2025
5. By 2025, we projectt that there w
will be 26,37
75 people reesiding in thee PMA and 1
17,192 people in Red W
Wing, for an annual grow
wth rate of 0
0.48% comp ared to 0.222% annual grrowth in thee PMA between 20
010 and 2020
0. mportant to
o recognize that projecte
ed householdd growth in Red Wing iss highly depeend‐
It is im
ent o
on increased or decrease
ed hiring by tthe major em
mployers in the City, as well as the availaability of suittable housin
ng options in
n Red Wing. Population and househ
hold growth will be difficult to ach
hieve in Red Wing witho
out the addittion of new h
housing unitts in the Cityy.
MAXFIELLD RESEARCH INC. 14
DEMOGR
RAPHIC ANA
ALYSIS Age Disstribution The age d
distribution of a commu
unity’s popullation helps in assessingg the type of f housing neeed‐
ed. For e
example, you
unger and older people are more atttracted to h
higher‐densitty housing located n
near urban services and entertainme
ent while miiddle‐aged p
people (particularly thosse with child
dren) traditionally prefe
er lower‐den
nsity single‐faamily homess. Table A‐2
2 presents th
he age distribution of th
he Market Area populatiion from 20000 to 2020. Information
n from 2000 and 2010 is sourced from
m the U.S. Ce
ensus. The 2
2014 estimattes and projections for 2
2020 were calculate
ed by Maxfie
eld Research Inc. based o
on informatiion from ESR
RI.  In 2010, the large
est adult coh
hort in the Primary Markket Area wass 45 to 54, totaling 4,063 opulation). TThe 55 to 644 age group was the second largest co‐
people (16.1% off the total po
hort in the PMA w
with 3,620 p
people. Simiilarly, the 455 to 64 age ggroup was th
he largest co
ohort in the
e City of Red
d Wing with 2,404 people (14.6% of the total), fo
ollowed by tthe 55 to 64 co‐
hort w
with 2,163 p
people.  The ggreatest grow
wth is expeccted to occurr among old er adults in the Market Area. Agingg of baby boomers led to an incre
ease of 711 p
people (+49 %) in the 555 to 64 population betweeen 2000 and 2010 in
n Red Wing. As this grou
up ages, all ccohorts age 55 or greateer are expectted to see increases o
over the nexxt several ye
ears, particullarly the 65 tto 74 age group which iss ected to grow
w 21.3% (+334 people) in Red Wing between 20014 and 2020. Similar proje
grow
wth rates are anticipated throughoutt the Primaryy Market Areea. 
3.3% decline in the 35 too 44 age grou
up between 2000 and 20
010 In Red Wing, there was a ‐23
resultting in a losss of ‐582 peo
ople. This agge group is eexpected to experience modest grow
wth betw
ween 2014 an
nd 2020, while the 45 to
o 54 age grouup experiencces a ‐10.9%
% decline. MAXFIELLD RESEARCH INC. 15
DEMOGRAPHIC ANALYSIS 
The loss projected for the 45 to 54 cohort is a result of the comparatively small number of people who will move into this age group between 2014 and 2020, a phenomenon known as the “baby bust.” The “baby bust” is often referred to the generation of children born be‐
tween 1965 and 1980, an era when the United States birthrate dropped sharply. TABLE A‐2
AGE DISTRIBUTION
2000 ‐ 2020
Change
Census
Age
2000
2010
Estimate
Projection
2014
2020
2000‐2010
2014‐2020
No.
Pct.
No.
Pct.
City of Red Wing
Under‐20
4,443
20 to 24
846
25 to 34
1,924
35 to 44
2,502
45 to 54
2,289
55 to 64
1,452
65 to 74
1,220
75+
1,440
Total
16,116
4,076
902
2,006
1,920
2,404
2,163
1,381
1,607
16,459
3,916
958
2,016
1,849
2,258
2,332
1,567
1,602
16,498
3,880
903
2,120
1,868
2,012
2,376
1,902
1,729
16,789
‐367
56
82
‐582
115
711
161
167
343
‐8.3
6.6
4.3
‐23.3
5.0
49.0
13.2
11.6
2.1
‐36
‐55
104
19
‐246
44
334
127
291
‐0.9
‐5.8
5.2
1.0
‐10.9
1.9
21.3
7.9
1.8
Primary Market Area
Under‐20
6,864
20 to 24
1,193
25 to 34
2,826
35 to 44
4,004
45 to 54
3,684
55 to 64
2,275
65 to 74
1,776
75+
1,901
Total
24,523
6,244
1,246
2,837
3,032
4,063
3,620
2,107
2,042
25,191
6,071
1,356
2,883
2,890
3,662
3,830
2,484
2,135
25,310
6,027
1,275
2,969
2,935
3,330
3,883
3,027
2,310
25,756
‐620
53
11
‐972
379
1,345
331
141
668
‐9.0
4.4
0.4
‐24.3
10.3
59.1
18.6
7.4
2.7
‐44
‐80
86
46
‐332
52
543
175
446
‐0.7
‐5.9
3.0
1.6
‐9.1
1.4
21.9
8.2
1.8
Goodhue County
Under‐20
20 to 24
25 to 34
35 to 44
45 to 54
55 to 64
65 to 74
75+
Total
11,936
2,231
5,288
5,463
7,485
6,186
3,723
3,871
46,183
11,586
2,462
5,367
5,293
6,862
6,808
4,328
3,830
46,535
11,777
2,401
5,567
5,647
6,010
7,286
5,318
4,116
48,123
‐1,002
184
370
‐1,909
1,189
2,234
587
403
2,056
‐7.7
9.0
7.5
‐25.9
18.9
56.5
18.7
11.6
4.7
191
‐61
200
354
‐852
479
991
286
1,588
1.6
‐2.5
3.7
6.7
‐12.4
7.0
22.9
7.5
3.4
12,938
2,047
4,918
7,372
6,296
3,952
3,136
3,468
44,127
Sources: U.S. Census Bureau; ESRI; Maxfield Research, Inc.
MAXFIELD RESEARCH INC. 16


The Primary Market Area approximates the boundaries of the Red Wing School District. The under‐20 population experienced a decline (‐9.0%) between 2000 and 2010. While the un‐
der‐5 age group expanded 5% (+68 people), the five to nine cohort decreased by ‐2% (‐29), and the 10 to 14 age group declined ‐13.4% (‐246 people). However, the 15 to 19 age group expanded by nearly 21% (+271 people). These younger age groups are all projected to ex‐
perience flat to negative growth during the current decade. Over the next six years, most adult age groups (except for 45 to 54 and 20 to 24) are ex‐
pected to experience population growth throughout the Market Area. In Red Wing, the 25 to 34 age group is projected to grow 5.2% between 2014 and 2020. Additionally, the 35 to 44 cohort is expected to experience modest growth, increasing 1.0% in Red Wing and 1.6% in the PMA. The age 25 to 44 population is the age group most likely to have children and seek single‐family housing. Based on age distribution projections for Red Wing and the PMA, there appears to be growing demand for a variety of housing products, including: – Rental housing targeting the young adult (25 to 34) age group as well as the empty nester population (55 to 74 age group); – Entry‐level ownership housing for first‐time home buyers (25 to 39); and, – Senior housing. Household Income Household income data helps ascertain the demand for different types of owned and rented housing based on the size of the market at specific cost levels. In general, housing costs of up to 30% of income are considered affordable by the Department of Housing and Urban Devel‐
opment (HUD). Table A‐3 presents data on household income by age of householder for the Primary Market Area in 2014 and 2020. The data is estimated by ESRI and adjusted by Maxfield Research Inc. to reflect the most current local household estimates and projections. The following are key points from Table A‐3:  In 2014, the median household income is estimated to be approximately $52,112 in Red Wing, compared to $56,143 in the PMA, and $66,599 in the Twin Cities Metro Area. This data suggests that Red Wing residents are not as affluent as residents in surrounding areas and have fewer resources to devote toward housing than residents elsewhere in the PMA and the adjacent Metro Area. Household incomes are lower in Red Wing than the Remain‐
der of the PMA, as the elderly and disabled households need to live closer to services. Addi‐
tionally, there is a substantially higher proportion of lower income households in Red Wing than the Remainder of the PMA, particularly in the younger age cohorts, because there are more lower cost housing options in Red Wing. MAXFIELD RESEARCH INC. 17
DEMOGR
RAPHIC ANA
ALYSIS 


By 20
020, the med
dian household income is projected to increase 21% to $67,919 in the P
PMA. The aannual averaage increase (3.5%) is estimated to eexceed the h
historical ann
nual inflation rate o
of 2.4% overr the past ten years. As ho
ouseholds agge through the lifecycle, household incomes ten
nd to peak in
n the late 40
0s and e
early 50s which explains why most u
upscale houssing is targetted to perso
ons in these aage group
ps. This tren
nd is evidentt throughoutt the Markett Area as thee age 45 to 5
54 cohort haas the h
highest estim
mated incomes at $66,09
92 in Red Wiing, $72,2955 in the PMA
A, and $88,36
62 in the M
Metro Area. As illu
ustrated in tthe followingg graph, the median incoome in the PPMA is $33,2
244 for housse‐
holdss under the aage of 25, increasing to $55,433 in tthe 25 to 34 age group aand $70,768 in the 3
35 to 44 age group. Afte
er age 45 to 5
54, median hhousehold in
ncomes decline with agee as olderr householdss are more liikely to only have one inncome per household an
nd senior ho
ouse‐
holdss often do no
ot have income‐producing employm
ment. 

ugh 2020, th
he PMA is exxpected to exxperience hoousehold growth in seveeral age grou
ups, Throu
particcularly those
e over the agge of 55 (the
e baby boom
mers). The 225 to 34 and 35 to 44 agee group
ps are also e
expected to ggrow. Based
d on the disttribution of projected ho
ousehold gro
owth acrosss age group
ps, there will likely be gro
owing demaand for a variety of housing options in the n
near future. Department of Housing aand Urban D
Developmennt (HUD) defiines affordable housing cost The D
as lesss than 30% of a household’s adjuste
ed gross incoome. Houseeholds earniing below 50
0% of the A
Area Median Income (AM
MI) are qualified for dee p‐subsidy ho
ousing whilee householdss earning between
n 50% and 80
0% AMI are q
qualified forr shallow‐sub
bsidy housin
ng. Often, sh
hal‐
me‐restricted
d at 60% AM
MI. All houseeholds earnin
ng incomes low‐ssubsidy houssing is incom
above 80% AMI ccomprise the
e target marrket for markket rate hou
using. MAXFIELLD RESEARCH INC. 18

Based on the median contract rent of $616 for renter‐occupied housing units in the City of Red Wing, a household would need to have an annual income of roughly $25,000 or greater to not exceed 30% of its monthly income on rental housing costs. In 2014, approximately 8,580 households in the PMA (81% of the total) are estimated to have incomes of at least $25,000. By 2020, the total number of income‐qualified households is projected to increase by 511 households (+6%) after accounting for inflation. It appears that many PMA residents could afford higher rents. The average weekly wage of $840 paid by employers in Red Wing equates to an annual income of approximately $44,000. A household with this income could afford a monthly rent of $1,100. TABLE A‐3
HOUSEHOLD INCOME BY AGE OF HOUSEHOLDER
PRIMARY MARKET AREA
2014 & 2020
Age of Householder
Total
<25
25‐34
35‐44
45‐54
55‐64
65 ‐74
75+
911
1,091
1,104
1,419
2,276
1,687
2,095
10,583
78
67
47
63
72
23
21
372
91
121
130
228
346
196
244
1,357
89
96
105
172
350
323
405
1,540
109
128
125
224
472
406
582
2,046
185
143
165
233
500
440
573
2,239
123
198
184
260
346
213
206
1,531
235
337
347
237
192
85
64
1,497
$56,143
$33,244
$55,433
$70,768
$72,295
$67,749
$49,960
$29,105
853
791
875
1,342
2,185
2,051
2,744
10,840
73
50
36
56
77
28
28
348
79
89
102
211
344
240
324
1,388
76
63
71
149
312
379
499
1,548
83
78
73
160
372
425
655
1,846
154
88
113
198
433
515
751
2,252
131
156
168
283
410
331
369
1,848
257
268
311
285
238
133
117
1,610
$67,919
$39,250
$64,442
$82,023
$84,342
$82,903
$60,803
$34,693
‐59
‐300
‐229
‐77
‐91
364
648
257
‐5
‐18
‐11
‐7
5
5
7
‐24
Change 2014 ‐ 2020
‐12
‐13
‐32
‐33
‐28
‐34
‐17
‐24
‐2
‐37
43
56
79
94
31
8
‐26
‐50
‐52
‐65
‐100
19
73
‐200
‐32
‐55
‐52
‐35
‐67
75
179
13
8
‐43
‐16
23
64
117
163
316
22
‐69
‐35
48
45
48
53
113
$11,776
$6,006
$12,047
$15,154
$10,843
$5,588
2014
Less than $15,000
$15,000 to $24,999
$25,000 to $34,999
$35,000 to $49,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 or more
Total
Median Income
2020
Less than $15,000
$15,000 to $24,999
$25,000 to $34,999
$35,000 to $49,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 or more
Total
Median Income
Less than $15,000
$15,000 to $24,999
$25,000 to $34,999
$35,000 to $49,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 or more
Total
Median Income
$9,009
$11,255
Sources: ESRI; US Census Bureau; Maxfield Research Inc.




New housing will likely have to be priced higher than the existing stock of rental housing. If a new apartment unit were priced at $800 per month, a household would need to have an annual income of roughly $32,000 or greater to not exceed 30% of its monthly income on rental housing costs. In 2014, approximately 7,800 PMA households (74% of the total) are estimated to have incomes of at least $32,000. Households under the age of 35 are most likely to rent their housing. In 2014, 61% of households age 24 and below and 84% of households age 25 to 34 in the PMA have incomes of at least $25,000. However, because younger householders are often willing to live with roommates, the percent income‐qualified is likely somewhat higher. Between 2014 and 2020, the number of income‐qualified households in the PMA in the 34 and younger age group is expected to grow over 4%. Another potential target market for rental housing in the City would be the senior population. The number of income‐qualified households over the age of 65 is expected to increase by 453 households (+21%) between 2014 and 2020. In 2013, the median sale price for a single‐family home in Red Wing was $125,235. Assum‐
ing that a potential home buyer has good credit and makes a 10% down payment, a house‐
hold would need to have a minimum annual income of roughly $33,200 to be income‐
qualified for a home purchased at the median sale price in Red Wing. In 2014, roughly 73% of the households (7,676) have incomes of $33,200 or higher. The number of income‐qualified households is projected to increase 8% (+646 households) by 2020. Most of this growth will occur in the 65 to 74 and 55 to 64 age groups, but the 35 to 44 and 25 to 34 age groups will also experience growth in income‐qualified households (+70 and +81 households, respectively). This data indicates a growing demand for entry‐level (first‐time home buyers) and move‐up housing in Red Wing. The 45 to 54 age group is the cohort most likely to seek higher‐priced “executive” housing, but income‐qualified house‐
hold growth in this age group is expected to be flat between 2014 and 2020, suggesting that demand for executive housing will be modest. Household Tenure by Income Table A‐4 shows estimated household tenure by income in the Market Area during 2014. Data is based on an estimate from the 2008‐2012 American Community Survey, and adjusted by Maxfield Research to reflect current year household estimates. As stated earlier, the Depart‐
ment of Housing and Urban Development determines affordable housing as not exceeding 30% of the household’s income. MAXFIELD RESEARCH INC. 20
DEMOGRAPHIC ANALYSIS It is important to note that the higher the income, the lower percentage a household typically allocates to housing. Many lower income households, as well as many young and senior households, spend more than 30% of their income on housing, while middle‐aged households in their prime earning years typically allocate 20% to 25% of their income to housing.  Typically, as income increases, so does the rate of homeownership. This can be seen in the PMA, where the homeownership rate increases from 42% of households with incomes be‐
low $15,000 to nearly 100% of households with incomes above $100,000. TABLE A‐4
TENURE BY HOUSEHOLD INCOME
2014
Primary Market Area
Own
No.
Pct.
Rent
No.
Goodhue County
Pct.
Own
No.


Rent
No.
Pct.
Less than $15,000
$15,000 to $24,999
$25,000 to $34,999
$35,000 to $49,999
$50,000 to $74,999
$75,000 to $99,999
$100,000+
485
530
633
1,139
1,750
1,425
2,230
41.9
50.5
59.2
80.7
84.6
89.8
99.6
671
519
437
273
319
162
9
58.1
49.5
40.8
19.3
15.4
10.2
0.4
802
972
1,139
2,056
3,250
2,472
4,038
39.5
51.6
59.9
77.3
87.0
90.0
98.4
1,228
911
762
603
487
274
65
60.5
48.4
40.1
22.7
13.0
10.0
1.6
Total
8,193
77.4
2,390
22.6
14,728
77.3
4,330
22.7
Source: U.S. Cens us Burea u; Ameri ca n Communi ty Survey; Ma xfi el d Res ea rch Inc.

Pct.
A portion of renter households that are referred to as lifestyle renters, or those who are financially able to own but choose to rent, often have household incomes of $50,000 or higher and rent newer apartments (about 21% of PMA renter households). Lifestyle renters could also have lower incomes and be living in older apartments. Single‐person households with incomes below $15,000 are typically a market for deep‐
subsidy rental housing. An estimated 671 renter households in the PMA have incomes of less than $15,000, which represents roughly 28% of all renter households in the PMA. According to income limits for Goodhue County established by HUD, to qualify for afforda‐
ble (shallow‐subsidy) rental housing, a two‐person household in Goodhue County would need to have an income of roughly $35,000 or lower. We estimate that over 1,600 renter households in the PMA have incomes of less than $35,000, representing 68% of all renter households. By comparison, roughly 57% of all renter households have incomes below $35,000 across Minnesota. This data suggests that there are a considerable number of renter households in the PMA income‐qualified for affordable rental housing in Red Wing. MAXFIELD RESEARCH INC. 21
DEMOGRAPHIC ANALYSIS Net Worth Table A‐5 shows the estimated net worth by age of household in the Red Wing Market Area for 2014. Household net worth data was compiled by ESRI based on the Federal Reserve Board “Survey of Consumer Finances” and adjusted by Maxfield Research Inc. with consideration given to current U.S. Census figures as well as population and household estimates for 2014.  In 2014, the median net worth is estimated to be $109,099 in Red Wing and $141,701 throughout the Primary Market Area. By comparison, the median net worth is estimated to be $132,097 across Minnesota. The net worth distribution of households in Red Wing shows concentrations of net worth at the low and high ends of the spectrum. The largest concentration (31.4%) of households has a net worth of $250,000 or more, while 24.3% of households have a net worth of less than $15,000. In total, roughly 52% of all households have a net worth of $100,000 or higher. Median net worth is highest in the age 65 to 74 cohort at $250,001. TABLE A‐5
NET WORTH BY AGE OF HOUSEHOLDER
PRIMARY MARKET AREA
2014
Age of Householder
Total % of Total
Less than $15,000
$15,000 to $34,999
$35,000 to $49,999
$50,000 to $99,999
$100,000 to $149,999
$150,000 to $249,999
$250,000 or more
Total
Median Net Worth
Less than $15,000
$15,000 to $34,999
$35,000 to $49,999
$50,000 to $99,999
$100,000 to $149,999
$150,000 to $249,999
$250,000 or more
Total
Median Net Worth
1,720
512
259
901
614
841
2,221
7,069
24.3%
7.2%
3.7%
12.7%
8.7%
11.9%
31.4%
100%
$109,099
2,203
660
361
1,277
911
1,355
3,820
10,583
$141,701
<25
CITY OF RED WING
182
392
52
174
18
53
26
171
13
82
8
50
4
63
303
985
$12,486
20.8%
6.2%
3.4%
12.1%
8.6%
12.8%
36.1%
100%
25‐34
$23,596
35‐44
45‐54
55‐64
65 ‐74
75+
325
93
74
191
96
120
105
1,004
249
72
38
160
94
189
476
1,278
232
54
32
122
114
192
639
1,385
99
26
27
88
129
111
496
976
241
41
17
143
86
171
439
1,138
$51,486 $159,424 $213,819 $250,001 $167,115
PRIMARY MARKET AREA
214
474
448
67
217
126
26
75
106
37
262
279
17
134
154
9
82
226
4
109
202
375
1,354
1,543
$13,107
$32,878
340
96
53
236
139
316
866
2,046
331
72
47
165
168
281
1,179
2,244
131
36
35
126
178
201
820
1,529
265
45
18
170
119
239
639
1,497
$60,930 $190,168 $250,001 $250,001 $194,072
Data Note: Net Worth is total household wealth minus debt, secured and unsecured. Net worth includes home equity, equity in pension plans, net equity in vehicles, IRAs and Keogh accounts, business equity, interest‐earning assets and mutual fund shares, stocks, etc. Examples of secured debt include home mortgages and vehicle loans; examples of unsecured debt include credit card debt, certain bank loans, and other outstanding bills. Forecasts of net worth are based on the Survey of Consumer Finances, Federal Reserve Board. Detail may not sum to totals due to rounding.
Sources: ESRI; Maxfield Research, Inc.
DEMOGR
RAPHIC ANA
ALYSIS Househ
hold Tenure by Age Table A‐6
6 shows hou
usehold tenu
ure by age off householdeer for the Reed Wing Market Area in 2000 and
d 2010. The data is compiled from tthe U.S. Censsus Bureau. The table shows the number aand percentt of renter‐ aand owner‐o
occupied houusing units in
n the Markeet Area. All d
data excludes unoccupied
d units and ggroup quarte
ers such as ddormitories aand nursing homes. Hou
use‐
ure informattion is imporrtant in unde
erstanding hhouseholds’ preferencess to either reent hold tenu
or own th
heir housingg. In addition to preferences, factorrs that contriibute to these proportio
ons include m
mortgage intterest rates, household aage, and lifeestyle consid
derations, am
mong otherss.  In Red Wing, 68.3
3% of all hou
useholds ow
wned their hoousing in 2010, resultingg in a home ership rate that is substaantially lowe
er than the C
County (77.33% in 2010). Throughoutt the owne
Primaary Market A
Area, 75.4% of all households owne d in 2010. W
Within the prime ownersship yearss (35 to 64), nearly 76% of households in Red W
Wing owned in 2010, com
mpared to 82
2% of PMA householde
ers and 83% in Goodhue County.  The n
number of ow
wner households in Red
d Wing incre ased by 87 ((+1.8%) betw
ween 2000 aand 2010. The largesst increases o
occurred in tthe 65 and oolder age gro
oup (+192 households fo
or a 16% ggain) and the 55 to 64 age group (+3
334 househoolds for a 488% increase), while all otther age ggroups experrienced conttraction in th
he number oof owner households. The 35 to 44 age group
p experience
ed the most significant d
decrease, exxperiencing aa ‐32% decline in owner house
eholds (‐343
3 householdss).  Typiccally, the you
ungest and o
oldest house
eholds rent ttheir housingg in greater proportionss than middle‐age households. Thiss pattern is aapparent am
mong the you
unger Markeet Area housse‐
holdss as 48% of tthe populatio
on under the
e age of 35 rrents in the PMA while 4
42% of Good
dhue Coun
nty householders under tthe age of 35 rent. In Reed Wing, 53.7% of the u
under 35 agee group
p rented in 2
2010. MAXFIELLD RESEARCH INC. 23
DEMOGR
RAPHIC ANA
ALYSIS 




Nearly 73% of ho
ouseholds un
nder the age
e of 25 renteed in the PMA in 2010 w
while approxi‐
ely 41% of ho
ouseholds agge 25 to 34 rrented. The se percentages are som
mewhat higheer mate
than in the Countty which had
d 65% of hou
useholds un der age 25 aand 35% of aage 25 to 34
4 eholds renting in 2010. In Red Wingg, 77% of thee under‐25 aage group an
nd 46% of th
he 25 house
to 34
4 age group rrented in 2010. In the
e PMA, 25% of all house
eholds rented
d in 2010, giiving it a ren
ntal rate thatt was slightlyy highe
er than the C
County (23%
% of househo
olds rented inn 2010). In Red Wing, 3
32% of all ho
ouse‐
holdss rented. Alll age groups rented at higher rates i n Red Wing and the PM
MA than in Go
ood‐
hue C
County. In the
e County, the percentagge of renter h
households increased frrom 21.0% in
n 2000 to 22
2.7% in 2010, while the percentage of owner h
households declined fro
om 79.0% to 77.3% over the de. This wass consistent with househ
hold tenure trends throughout Minnesota and tthe decad
Unite
ed States. In
n Red Wing, the trend was slightly m
more pronounced, as thee percentagee of rente
er household
ds increased from 28.3%
% in 2000 to 331.7% in 20110, while ow
wner househ
holds declin
ned from 71
1.7% to 68.3%
% over the d
decade. In Red Wing, the number of rrenter house
eholds grew
w by 368 hou
useholds between 2000 and 2010 (+19.8%), w
while the num
mber of own
ner househoolds climbed 1.8% (+87 h
households) over the d
decade. As de
epicted in the following chart, the largest increaase occurred
d in the 55 to
o 64 age group in Red W
Wing, as 128
8 renter households werre added (+995%) and thee number off owner housse‐
holdss climbed byy 48% (+334 households)). Substantiaal growth also occurred in the 65 an
nd olderr age group w
with the add
dition of 192
2 owner hou seholds (+166%) and 105
5 renter house‐
holdss (+20%). All other age ggroups contrracted durinng the decad
de. MAXFIELLD RESEARCH INC. 24
DEMOGRAPHIC ANALYSIS TABLE A‐6
TENURE BY AGE OF HOUSEHOLDER
2000 & 2010
City of Red Wing
2000
Age
No.
Primary Market Area
2010
Pct.
No.
2000
Pct.
No.
Goodhue County
2000
2010
Pct.
No.
Pct.
No.
2010
Pct.
No.
Pct.
Under 25
Own
Rent
Total
89
240
329
27.1
72.9
100.0
73
245
318
23.0
77.0
100.0
120
278
398
30.2
69.8
100.0
104
275
379
27.4
72.6
100.0
236
442
678
34.8
65.2
100.0
228
429
657
34.7
65.3
100.0
25‐34
Own
Rent
Total
578
416
994
58.1
41.9
100.0
530
455
985
53.8
46.2
100.0
859
518
1,377
62.4
37.6
100.0
785
537
1,322
59.4
40.6
100.0
1,573
826
2,399
65.6
34.4
100.0
1,613
884
2,497
64.6
35.4
100.0
35‐44
Own
Rent
Total
1,065
300
1,365
78.0
22.0
100.0
722
326
1,048
68.9
31.1
100.0
1,769
382
2,151
82.2
17.8
100.0
1,203
396
1,599
75.2
24.8
100.0
3,358
641
3,999
84.0
16.0
100.0
2,236
669
2,905
77.0
23.0
100.0
45‐54
Own
Rent
Total
1,099
242
1,341
82.0
18.0
100.0
1,067
307
1,374
77.7
22.3
100.0
1,803
281
2,084
86.5
13.5
100.0
1,882
372
2,254
83.5
16.5
100.0
3,094
431
3,525
87.8
12.2
100.0
3,557
631
4,188
84.9
15.1
100.0
55‐64
Own
Rent
Total
695
135
830
83.7
16.3
100.0
1,029
263
1,292
79.6
20.4
100.0
1,123
156
1,279
87.8
12.2
100.0
1,809
306
2,115
85.5
14.5
100.0
2,000
236
2,236
89.4
10.6
100.0
3,084
507
3,591
85.9
14.1
100.0
65 +
Own
Rent
Total
1,181
522
1,703
69.3
30.7
100.0
1,373
627
2,000
68.7
31.4
100.0
1,726
562
2,288
75.4
24.6
100.0
2,068
678
2,746
75.3
24.7
100.0
3,155
991
4,146
76.1
23.9
100.0
3,761
1,131
4,892
76.9
23.1
100.0
TOTAL
Own
Rent
Total
4,707
1,855
6,562
71.7
28.3
100.0
4,794
2,223
7,017
68.3
31.7
100.0
7,400
2,177
9,577
77.3
22.7
100.0
7,851
2,564
10,415
75.4
24.6
100.0
13,416
3,567
16,983
79.0
21.0
100.0
14,479
4,251
18,730
77.3
22.7
100.0
Sources: U.S. Census Bureau; Maxfield Research Inc.
DEMOGRAPHIC ANALYSIS Tenure by Household Size Table A‐7 shows household tenure by size of household in the Market Area during 2000 and 2010 from the U.S. Census Bureau. The tables show the number and percent of renter‐ and owner‐occupied housing units in the Market Area. All data excludes unoccupied units and group quarters such as nursing homes. Household size for renters tends to be smaller than for owners. This trend is a result of the typical market segments for rental housing, including households that are younger and less likely to be married with children, as well as older adults and seniors who choose to downsize from their single‐family homes.  In 2000, the average renter household in Red Wing consisted of 1.83 persons, while the average owner household included 2.55 persons. By 2010, the average household size in‐
creased slightly to 1.94 persons in renter households, while the average owner household size decreased to 2.41 persons. The decline in owner household sizes can be attributed, in large part, to a shift toward older households and fewer married couple families with chil‐
dren.  In 2010, 36% of all Red Wing households were comprised of two persons while 32% were one‐person households. Roughly 14% were three‐person households, 11% of the house‐
holds consisted of four persons, and 4% were five‐person households. There were relatively few six‐ and seven‐person households in the City.  Smaller households comprised the greatest proportion of renter households in the Market Area in 2010. In Red Wing, 52% of the renter households were one‐person households, while 23% were two‐person households. A similar pattern occurred throughout Goodhue County, although the proportion of one‐person households was slightly lower at 50%.  The number of renter households increased for all household sizes in Red Wing during the decade, but the largest increase occurred in the number of one‐person renter households, which gained 138 renter households (+13%), followed by two‐person renter households (+84 households for a 19% increase).  Owner households also experienced growth during the decade, but not all household sizes increased. Greatest growth occurred in the number of two‐person owner households which increased by 12% in Red Wing (+219 households), followed by one‐person owner house‐
holds which expanded 11% (+106 households). Contraction occurred in owner households with three or more persons, with the number of four‐person owner households experienc‐
ing substantial contraction (‐153 households for a ‐20% decline).  This data indicates that there has been a trend toward older households moving to rental housing or downsizing and renters needing smaller unit types. MAXFIELD RESEARCH INC. 26
TENURE BY HOUSEHOLD SIZE
2000 & 2010
Primary Market Area
Red Wing
2000
Age
2000
2010
Goodhue County
2010
2000
2010
No.
Pct.
No.
Pct.
No.
Pct.
No.
Pct.
No.
Pct.
No.
Pct.
1‐Person
Own
Rent
Total
991
1,024
2,015
49.2
50.8
100.0
1,097
1,162
2,259
48.6
51.4
100.0
1,355
1,120
2,475
54.7
45.3
100.0
1,620
1,282
2,902
55.8
44.2
100.0
2,444
1,837
4,281
57.1
42.9
100.0
2,959
2,121
5,080
58.2
41.8
100.0
2‐Person
Own
Rent
Total
1,811
436
2,247
80.6
19.4
100.0
2,030
520
2,550
79.6
20.4
100.0
2,893
536
3,429
84.4
15.6
100.0
3,377
622
3,999
84.4
15.6
100.0
5,091
866
5,957
85.5
14.5
100.0
6,001
997
6,998
85.8
14.2
100.0
3‐Person
Own
Rent
Total
753
192
945
79.7
20.3
100.0
721
254
975
73.9
26.1
100.0
1,190
243
1,433
83.0
17.0
100.0
1,199
306
1,505
79.7
20.3
100.0
2,144
410
2,554
83.9
16.1
100.0
2,198
526
2,724
80.7
19.3
100.0
4‐Person
Own
Rent
Total
762
130
892
85.4
14.6
100.0
609
167
776
78.5
21.5
100.0
1,268
167
1,435
88.4
11.6
100.0
1,025
204
1,229
83.4
16.6
100.0
2,247
270
2,517
89.3
10.7
100.0
2,024
360
2,384
84.9
15.1
100.0
5‐Person
Own
Rent
Total
287
48
335
85.7
14.3
100.0
239
73
312
76.6
23.4
100.0
514
71
585
87.9
12.1
100.0
428
91
519
82.5
17.5
100.0
1,057
120
1,177
89.8
10.2
100.0
892
153
1,045
85.4
14.6
100.0
6‐Person
Own
Rent
Total
78
10
88
88.6
11.4
100.0
63
22
85
74.1
25.9
100.0
131
21
152
86.2
13.8
100.0
134
30
164
81.7
18.3
100.0
317
33
350
90.6
9.4
100.0
287
51
338
84.9
15.1
100.0
7‐Person
Own
Rent
Total
25
15
40
62.5
37.5
100.0
35
25
60
58.3
41.7
100.0
49
19
68
72.1
27.9
100.0
68
29
97
70.1
29.9
100.0
116
31
147
78.9
21.1
100.0
118
43
161
73.3
26.7
100.0
TOTAL
Own
Rent
Total
4,707
1,855
6,562
71.7
28.3
100.0
4,794
2,223
7,017
68.3
31.7
100.0
7,400
2,177
9,577
77.3
22.7
100.0
7,851
2,564
10,415
75.4
24.6
100.0
13,416
3,567
16,983
79.0
21.0
100.0
14,479
4,251
18,730
77.3
22.7
100.0
Avg. HH Size
Own
Rent
2.55
1.83
2.41
1.94
2.63
1.93
2.48
1.99
2.69
1.93
2.53
2.00
Sources: U.S. Census Bureau; Maxfield Research Inc.
DEMOGR
RAPHIC ANA
ALYSIS Househ
hold Type Table A‐8
8 on the follo
owing page shows household type ttrends in thee City of Red
d Wing and tthe PMA, as well as Good
dhue Countyy in 2000 and 2010. Thee data is collected from the U.S. Cen
nsus. The following are keyy points from
m Table A‐8:: 1.7% of all h ouseholds in
n Red Wing, 66.3% in the  In 2010, family households comprised 61
PMA,, and 67.7% in Goodhue
e County. Be
etween 20000 and 2010, tthe numberr of family house
eholds incre
eased in all three markett areas, how
wever, the prroportions dropped from
m 63.5%
% in 2000 in Red Wing, 6
68.6% in the PMA, and 770.1% in the County. 

married couple families with childreen declined b
by ‐314 house‐
In Red Wing, the number of m
presenting a ‐22% declin e, while the number of married cou
uple holdss during the decade, rep
families without children increased by 22
21 (+12%). O
Other familyy households in Red Win
ng jump
ped 31% afte
er increasing by 252 households. Thhe PMA also experienced
d a ‐21% deccline in the
e number off married cou
uples with children (‐4944 household
ds), while thee number off married couples without children increassed by 524 hhouseholds ((+17%). Oth
her family house
eholds incre
eased 28% during the de
ecade (+307 households). Goodhue County experi‐
enced
d an increase in the num
mber of famiily househol ds during th
he decade ass the number of married couples without children climbe
ed 17% and tthe number of other fam
mily househo
olds grew 28%. Marriied couples with children declined ‐15% in the C
County. Married couple families with
h children typ
pically generrate demand
d for single‐ffamily detacched owne
ership housin
ng. Within tthe PMA, sin
ngle‐family ddetached housing deman
nd is also likkely beingg driven by o
other househ
hold types su
uch as marriied couples without chilldren and no
on‐
family household
ds due to a limited supplly of availab le multifamiily housing o
options. Married without child
dren are generally made up of youngger couples that have no
ot couple families w
had cchildren (and
d may not haave children) and older ccouples with
h adult child
dren that havve MAXFIELLD RESEARCH INC. 28
DEMOGRAPHIC ANALYSIS moved out of the home. These household types often desire multifamily housing options for convenience reasons, however older couples in rural areas often hold onto their single‐
family homes until they need services. Other family households, defined as a male or fe‐
male householder with no spouse present (typically single‐parent households), often re‐
quire affordable housing. The 31% increase in other family households in Red Wing sug‐
gests a growing need for affordable housing options in the City. TABLE A‐8
HOUSEHOLD TYPE
2000 & 2010
NON‐FAMILY HHs
Total Households
Persons
Living Alone
Other
(Roommates)
FAMILY HHs
Married w/
Children
Married w/o
Children
Other
Family
1,447
2,385
4,526
1,915
3,090
5,523
807
1,091
1,851
1,133
1,891
3,864
2,136
3,614
6,456
1,059
1,398
2,369
2000
Red Wing
Primary Market Area
Goodhue County
6,562
9,577
16,983
2,015
2,475
4,281
378
536
802
2010
Red Wing
Primary Market Area
Goodhue County
7,017
10,415
18,730
Red Wing
Primary Market Area
Goodhue County
No.
Pct.
455
6.9%
838
8.8%
1,747 10.3%
2,259
2,902
5,080
430
610
961
Change (2000‐2010)
No.
Pct.
No.
Pct.
244 12.1%
52 13.8%
427 17.3%
74 13.8%
799 18.7%
159 19.8%
No.
Pct.
‐314 ‐21.7%
‐494 ‐20.7%
‐662 ‐14.6%
No.
Pct.
221 11.5%
524 17.0%
933 16.9%
No.
Pct.
252 31.2%
307 28.1%
518 28.0%
Between 2000 and 2010, non‐family households collectively increased by 296 in Red Wing (+12.4%). The PMA experienced a 16.6% increase (+501) in nonfamily households while the number of nonfamily households in Goodhue County expanded by 18.8%. An increase in the percentage of these household types indicates a shift in housing needs that favors rent‐
al development. However, households composed of unrelated roommates can also be un‐
married couples that may choose to own and can often afford to own if they are double‐
income. The number of households with one resident increased 12% in Red Wing over the decade, from 2,015 households in 2000 to 2,259 in 2010, while the number of households with roommates increased 14% (+52 households) as more renters lived together in an attempt to save money during the recession. Single‐person households climbed 17% in the PMA and 19% in the County, while the number of roommate households increased 14% in the PMA and 20% in the Metro Area. Sources: U.S. Census Bureau; ESRI; Maxfield Research Inc.


DEMOGR
RAPHIC ANA
ALYSIS Race an
nd Ethnicitty Table A‐9
9 on the follo
owing page displays the
e breakdownn of the Market Area pop
pulation by race and ethn
nicity. This d
data is useful in that it illustrates shiffts in the demographic ccharacteristiics of the Markket Area pop
pulation from
m 2000 to 20
010. Data w
was obtained
d from the U.S. Census. Federal sstandards mandate that race and ethnicity are sseparate and
d distinct ideentities, and Census re
esults are baased on self‐‐identificatio
on. A personn may be cattegorized ass one of two ethnic caategories; “H
Hispanic or Latino” origin
n or “Not Hisspanic or Lattino”. In add
dition, a perrson can self‐iidentify as having one or more raciaal identity, inncluding; “W
White”, “Black or African American
n”, “Americaan Indian or Alaska Nativve”, “Asian”,, and “Nativve Hawaiian or Other Paccific Islander””. Responde
ents could also identify aas being “Som
me Other Raace”. e people com
mprised the largest propportion of th
he Market A
Area population,  As off 2010, White
at 92% in Red Wiing, 93% in tthe PMA, and 95% in Gooodhue Coun
nty. The Cityy of Red Win
ng is becoming more d
diverse, as th
he number o
of people ideentified as W
White declined by ‐1% (‐‐138 people) between
n 2000 and 2
2010, while tthe Black population increased 47% (+99 peoplee). People identified
d as being Tw
wo or More R
Races and Soome Other R
Race experieenced the m
most substtantial increaases, climbin
ng 192% (+253 people) aand 133% (++113 people)), respectiveely. In the
e Remainderr of the PMA
A (outside off Red Wing),, the White p
population eexperienced the largest growth, adding 187 p
people, follow
wed by Ameerican Indian
n (+57 people). 

number of people self‐id
dentifying ass being of Hisspanic or Latino origin eexperienced The n
dram
matic growth over the de
ecade, climbiing 196% in Red Wing (++402 peoplee), 65% in thee Remaainder of the
e PMA (+33 people) and 184% in Gooodhue Coun
nty (+869 peeople). In Red Wing, roughly 70% of the White h
householderrs owned theeir housing u
unit in 2010,, comp
pared to justt 11% of the Black house
eholders. Rooughly 42% o
of the houseeholds identtified as be
eing of Hispanic origin ow
wned. MAXFIELLD RESEARCH INC. 30
POPULATION DISTRIBUTION BY RACE & ETHNICITY
2000
No.
Pct.
2010
No.
Pct.
Change ('00 ‐ '10)
No.
Pct.
City of Red Wing
Population by Race
White
Black
American Indian
Asian
Pacific Islander
Other
Two or More Races
16,116
15,202
213
357
119
8
85
132
100.0%
94.3%
1.3%
2.2%
0.7%
0.0%
0.5%
0.8%
16,459
15,064
312
366
129
5
198
385
100.0%
91.5%
1.9%
2.2%
0.8%
0.0%
1.2%
2.3%
343
‐138
99
9
10
‐3
113
253
2.1%
‐0.9%
46.5%
2.5%
8.4%
‐37.5%
132.9%
191.7%
Population by Ethnicity
Hispanic or Latino
Not Hispanic or Latino
16,116
205
15,911
100.0%
1.3%
98.7%
16,459
607
15,852
100.0%
3.7%
96.3%
1,060
402
‐59
6.6%
196.1%
‐0.4%
Population by Race
White
Black
American Indian
Asian
Pacific Islander
Other
Two or More Races
24,523
23,489
226
404
137
8
94
165
100.0%
95.8%
0.9%
1.6%
0.6%
0.0%
0.4%
0.7%
25,191
23,538
328
470
158
12
230
455
100.0%
93.4%
1.3%
1.9%
0.6%
0.0%
0.9%
1.8%
668
49
102
66
21
4
136
290
2.7%
0.2%
45.1%
16.3%
15.3%
50.0%
144.7%
175.8%
Hispanic or Latino
24,523
256
24,267
100.0%
1.0%
99.0%
25,191
691
24,500
100.0%
2.7%
97.3%
3,795
435
233
15.5%
169.9%
1.0%
Population by Race
White
Black
American Indian
Asian
Pacific Islander
Other
Two or More Races
44,127
42,613
280
434
251
12
232
305
100.0%
96.6%
0.6%
1.0%
0.6%
0.0%
0.5%
0.7%
46,183
43,684
445
533
274
17
511
719
100.0%
94.6%
1.0%
1.2%
0.6%
0.0%
1.1%
1.6%
2,056
1,071
165
99
23
5
279
414
4.7%
2.5%
58.9%
22.8%
9.2%
41.7%
120.3%
135.7%
Hispanic or Latino
44,127
473
43,654
100.0%
1.1%
98.9%
46,183
1,342
44,841
100.0%
2.9%
97.1%
2,056
869
1,187
4.7%
183.7%
2.7%
Primary Market Area
Goodhue County
Sources: US Census Bureau; ESRI; Maxfield Research, Inc
DEMOGRAPHIC ANALYSIS Summary of Demographic Trends The following points summarize key demographic trends that will impact demand for housing in Red Wing.  As of 2010, the Primary Market Area contained 25,191 people and 10,415 households. Between 2000 and 2010, the population increased by 668 people (+2.7%) while the number of households expanded by 838 (+8.8%). The number of new households was high relative to the number of new people suggesting a trend toward decreasing household sizes in the PMA. In 2000, the average household size in the PMA was 2.56 persons per household. This number declined to 2.42 in 2010, a drop of ‐5.5%. Red Wing’s population increased 2.1% from 2000 to 2010 (+343 people) against household growth of 6.9% (+455). As of 2010, the average household size in the City of Red Wing was 2.35, which is down ‐4.5% from 2000. This trend indicates an aging household base and also reflects a general shift in demographic factors that favor smaller households, such as a declining proportion of mar‐
ried couple households with children.  By 2020, the PMA is expected to add 565 people (+2.2%) and 425 households (+4.1%). Most of the PMA’s growth will occur in the City of Red Wing as urban services are available to accommodate residential development. Red Wing is projected to add 330 people (+2.0%) and 262 households (+3.7%). The greatest growth is expected to occur among older adults in the Market Area. Aging of baby boomers led to 49% increase in the 55 to 64 popu‐
lation between 2000 and 2010 in Red Wing. As this group ages, all cohorts age 55 or great‐
er are expected to see increases over the next several years.  In Red Wing, there was a ‐23.3% decline in the 35 to 44 age group between 2000 and 2010 resulting in a loss of ‐582 people. This age group is expected to experience modest growth between 2014 and 2020, while the 45 to 54 age group experiences a ‐10.9% decline. The 25 to 34 age group (i.e. the age group most likely to have children) is projected to grow 5.2% by 2020. Additionally, the 35 to 44 cohort is expected to experience modest growth.  In 2014, the median household income is estimated to be approximately $52,112 in Red Wing, compared to $56,143 in the PMA, and $66,599 in the Twin Cities Metro Area. As such, it appears that Red Wing residents are not as affluent as residents in surrounding are‐
as and have fewer resources to devote toward housing than residents elsewhere in the PMA and the adjacent Metro Area. Based on the median contract rent of $616 for renter‐
occupied housing units in the City of Red Wing, a household would need to have an annual income of roughly $25,000 or greater to not exceed 30% of its monthly income on rental housing costs. In 2014, 81% of all PMA households are estimated to have incomes of at least $25,000. By 2020, the total number of income‐qualified households is projected to increase by 511 households (+6%) after accounting for inflation. MAXFIELD RESEARCH INC. 32



In 2013, the median sale price for a single‐family home in Red Wing was $125,235. A household would need to have a minimum annual income of roughly $33,200 to be income‐
qualified for a home purchased at the median sale price in Red Wing. In 2014, roughly 73% of the households have incomes of $33,200 or higher, and the number of income‐qualified households is projected to increase 8% by 2020. Most of this growth will occur in the 65 to 74 and 55 to 64 age groups, but the 35 to 44 and 25 to 34 age groups will also experience growth in income‐qualified households. This data suggests a growing demand for entry‐
level (first‐time home buyers) and move‐up housing in Red Wing. In Red Wing, 68.3% of all households owned their housing in 2010, resulting in a home ownership rate that is substantially lower than the County (77.3% in 2010). Throughout the Primary Market Area, 75.4% of all households owned in 2010. Within the prime ownership years (35 to 64), nearly 76% of households in Red Wing owned in 2010, compared to 82% of PMA householders and 83% in Goodhue County. In the County, the percentage of renter households increased from 21.0% in 2000 to 22.7% in 2010, while the percentage of owner households declined from 79.0% to 77.3% over the decade. This was consistent with household tenure trends throughout Minnesota and the United States. In Red Wing, the trend was slightly more pronounced, as the percentage of renter households increased from 28.3% in 2000 to 31.7% in 2010, while owner households declined from 71.7% to 68.3% over the decade. In Red Wing, the number of renter households expanded 20% be‐
tween 2000 and 2010, while the number of owner households increased 2%. Shifting household types can drive demand for housing in a community. Married couple families with children typically generate demand for single‐family detached ownership housing. Married couple families without children often desire multifamily housing options for convenience reasons, however older couples in rural areas often hold onto their single‐
family homes until they need services. Other family households, defined as a male or fe‐
male householder with no spouse present (typically single‐parent households), often re‐
quire affordable housing, and the 31% increase in other family households in Red Wing sug‐
gests a growing need for affordable housing options in the City. An increase in the percent‐
age of nonfamily households indicates a shift in housing needs that favors rental develop‐
ment. However, households composed of unrelated roommates can also be unmarried couples that may choose to own and can often afford to own if they are double‐income. The number of households with one resident increased 12% in Red Wing over the decade, while the number of households with roommates climbed 14% as more renters lived to‐
gether in an attempt to save money during the recession. Based on the demographic characteristics of Red Wing and the PMA, there appears to be growing demand for a variety of housing products, including: rental housing targeting the young adult (25 to 34) age group as well as the empty nester population (55 to 74 age group); entry‐level ownership housing for first‐time home buyers (25 to 39); move‐up hous‐
ing for the 35 to 44 age group; and, senior housing.
EMPLOYMENT TRENDS Introduction Employment characteristics are an important component in assessing housing needs in any given market area. These trends are important to consider since employment growth generally fuels household growth. Typically, households prefer to live near work for convenience, which is a primary factor in choosing a housing location. Many households commute greater distanc‐
es to work provided their housing is affordable enough to offset the additional transportation costs. Often, in less densely‐populated areas, people will choose to live further from their place of work because they prefer a rural lifestyle (i.e. they want to live on a wooded lot or be on a lake) or suitable housing may not be available in their employer’s community. Employment Forecast The 2000, 2005, 2010, and 2013 employment data in Table B‐1 is gathered from the Minnesota Department of Employment and Economic Development (DEED) for the City of Red Wing, Goodhue County, the southeast Minnesota economic development region (Region 10), and Minnesota. It’s important to note that a reporting adjustment was made by DEED in 2008, and a portion of jobs previously reported in Welch Township, Minnesota are now being reported in the City of Red Wing, Minnesota. We estimate that this adjustment shifted approximately 2,500 jobs from Welch Township to the City of Red Wing between 2007 and 2008. The 2020 forecast is based on 2010‐2020 industry projections published by DEED. This is the most recent employment forecast available for the State. Maxfield Research applied the projected ten‐year growth rates of 14.3% for Region 10 and 13.0% for the State to the 2010 employment data to arrive at the 2020 forecast for those two areas. We arrived at the 2020 forecast for Goodhue County based on the average proportion of Region 10 jobs located in the County from 2010 through 2013. We then projected 2020 employment for the City of Red Wing based on the proportion of the County’s growth expected to occur in the City.  In 2000, there were 10,649 jobs in Red Wing. By 2005, employment in the City fell by ‐587 jobs (‐5.5%) before climbing back to 10,185 jobs in 2007. Despite the economic recession, employment increased by over 130 jobs between 2008 and 2010 (+1.0%). Another 375 jobs were added between 2010 and 2013. In total, Red Wing gained over 500 jobs (+3.9%) be‐
tween 2008 and 2013, compared to 1.2% growth in Goodhue County and 0.4% growth in Region 10.  Goodhue County experienced job losses during the decade, declining by ‐3.2% (‐706 jobs). A similar pattern emerged throughout Region 10, with employment increasing 1.9% be‐
tween 2000 and 2005, then declining ‐2.0% from 2005 to 2010 for a ‐0.1% loss over the decade (‐298 jobs). Total job loss was more pronounced throughout Minnesota, declining roughly ‐1.7% during the decade. MAXFIELD RESEARCH INC. 34
EMPLOYMENT TRENDS 



The employment situation has improved significantly in the Region and the State, as Region 10 employment expanded by 4.5% (+10,060 jobs) while Statewide employment increased by 5.0% between 2010 and 2013. Red Wing and Goodhue County also experienced growth, but at a slightly slower pace. Employment in Red Wing increased 2.9% (+375 jobs) while Goodhue County added 676 jobs (+3.2%) between 2010 and 2013. Roughly 1,723 jobs are projected to be added in Red Wing while Goodhue County adds 2,642 jobs between 2010 and 2020. Employment over the decade is anticipated to increase 13.2% in Red Wing and 12.6% in the County, compared to 14.3% in Region 10 and 13.0% in Minnesota. Region 10 includes Olmsted County and the City of Rochester. Olmsted County comprised over 39% of the Region’s employment in 2013, and it will continue to attract a higher pro‐
portion of jobs than other areas of the Region due to the large base of employers in Roches‐
ter, most notably Mayo Clinic. By comparison, Goodhue County represented 9.2% of the Region’s employment in 2013. In 2000, Goodhue County employment represented 9.6% of all Region 10 jobs. The propor‐
tion dropped to 9.1% through the first half of the decade, then increased slightly to 9.3% in 2010 as other areas of Region 10 lost jobs. Goodhue County’s share of Region 10 employ‐
ment dropped 0.1 percentage points to 9.2% over the past three years. Due to projected hiring at several major employers in the County, we expect that Goodhue County’s share of Region 10 jobs will stop declining and stabilize. By 2020, we project that the proportion of Region 10 jobs in the County will hold at approximately 9.2%. Red Wing contained 60.2% of Goodhue County’s jobs in 2008. The proportion increased to 62.1% in 2010, before drop‐
ping slightly to 61.9% in 2013. We expect that Red Wing’s share of County employment will climb to 62.4% by 2020. TABLE B‐1
EMPLOYMENT GROWTH TRENDS AND PROJECTIONS
2000‐2020
Change
2000
2005
2010
2013
Projection
2020
2000‐2010
No. Pct.
2010‐2020
No.
Pct.
Red Wing
10,649
10,062
13,049
13,424
14,772
2,400
22.5
1,723
13.2
Goodhue County
21,724
20,976
21,018
21,694
23,660
‐706
‐3.2
2,642
12.6
225,388
229,647
225,090
235,150
257,170
‐298
‐0.1
32,080
14.3
2,608,844 2,637,323 2,563,391 2,691,838 2,896,632
‐45,453
‐1.7 333,241
13.0
SE Minnesota*
Minnesota
Note: Due to a reporti ng a djus tment ma de i n 2008, a porti on of jobs tha t were previ ous l y reported i n Wel ch Towns hi p, MN a re now bei ng reported i n the Ci ty of Red Wi ng.
*SE Mi nnes ota cons i s ts of the Counti es of: Dodge, Fi l l more, Freeborn, Goodhue, Hous ton, Mower, Ol ms ted, Ri ce, Steel e, Wa ba s ha , a nd Wi nona
Sources: Minnesota Department of Employment and Economic Development; Maxfield Research Inc.
EMPLOYMENT TREN
NDS Residen
nt Employm
ment Table B‐2
2 shows info
ormation on the residentt labor forcee and employyment in Reed Wing com
m‐
pared to Goodhue Co
ounty, Regio
on 10, Minne
esota, and thhe United Sttates. The d
data is sourceed from DEEED. Resident employme
ent data reve
eals the worrk force and number of eemployed peeople living in tthe area. It is importantt to note thaat not all of tthese individ
duals necesssarily work in
n the area. Decliningg unemploym
ment driven by job grow
wth often stim
mulates dem
mand for hou
using in a community, as house
eholds generally prefer tto live near work for con
nvenience. Many housee‐
holds, ho
owever, will commute grreater distan
nces to workk if their hou
using is afforrdable enouggh to offset the
e additional transportattion costs. In
n rural areass, other facto
ors such as lifestyle choiice and houssing availability impact this decision. The following points summarize key employment trendss that will im
mpact the deemand poten
ntial for housiing in Red W
Wing.  The ffollowing chaart illustrate
es how unem
mployment inn Red Wing and Goodhu
ue County haas impro
oved at a pace similar to
o the Region
n and State oof Minnesotaa, but at a faaster pace th
han the U
United Statess, since masssive job losses were incuurred in 20008 and 2009.. MAXFIELLD RESEARCH INC. 36



The decline in Red Wing’s unemployment rate in recent years can be partially attributed to a declining labor force. Red Wing’s labor force contracted from 9,307 in 2010 to 8,724 in 2013, a loss of roughly ‐6.3%. Resident employment also contracted, dropping ‐4.4% during that same time period. Because the labor force has declined at a faster pace than the num‐
ber of employed residents, the unemployment rate has decreased. Despite increases late last decade, Red Wing’s labor force has declined since 2000, contract‐
ing from 8,736 in 2000 to 8,724 in 2013 (‐0.1%). Resident employment has also contracted, but at a faster pace, declining from 8,451 in 2000 to 8,261 in 2013 (‐2.2%). Low unemploy‐
ment in combination with a shrinking labor force can restrain economic expansion in a community, as it becomes difficult for employers in the area to hire workers and increase production or services. The labor force contraction in Red Wing is due, in large part, to an aging population, as the workforce population (age 16 to 64) experienced little growth be‐
tween 2000 and 2010, and Red Wing’s workforce population has not experienced any growth since 2010. Labor force participation has also been a factor. The labor force partic‐
ipation rate in Minnesota declined from 75.3 in 2000 to 72.0 in 2010 and 70.4 in 2013. The labor force participation rate reflects the percentage of working‐age persons who are em‐
ployed or are unemployed but looking for a job. The declining participation rate suggests that there are fewer unemployed working‐age persons seeking employment. Despite declining ‐1.0 percentage point over the past year to 3.8%, the unemployment rate in Red Wing is slightly higher than Goodhue County (3.5%), the Region (3.3%), and the State of Minnesota (3.6%). The unemployment rate in Red Wing and Goodhue County is substan‐
tially lower than the United States (5.7%). Between September 2013 and September 2014, Red Wing’s labor force remained essential‐
ly unchanged while the number of employed residents increased 1.2% (+97), causing Red Wing’s unemployment rate to drop ‐1.0% over the year to 3.8%. By comparison, the labor force in Goodhue County held steady against a 1.2% increase in employment. The Region 10 labor force also held steady as employment in the Region increased by 0.9%, resulting in a ‐0.9% drop in the unemployment rate to 3.3%. Minnesota’s labor force increased 0.4% while employment in the State expanded by 1.4%. TABLE B‐2
LOCAL AREA UNEMPLOYMENT STATISTICS
City of Red Wing
Goodhue County
SE Minnesota Region
Minnesota
United States
Labor Force
8,718
25,672
274,392
2,989,818
155,903,000
September 2014
Employment Unemployment
8,391
3.8%
24,785
3.5%
265,347
3.3%
2,881,553
3.6%
146,941,000
5.7%
Labor Force
8,710
25,642
274,488
2,977,653
155,536,000
September 2013
Employment Unemployment
8,294
4.8%
24,500
4.5%
262,962
4.2%
2,841,993
4.6%
144,651,000
7.0%
Notes: Data not seasonally adjusted
Sources: MN Department of Employment and Economic Development; Maxfield Research, Inc.
EMPLOYMENT TRENDS Industry Employment and Wage Data Table B‐3 displays information on the employment and wage situation in Red Wing compared to Goodhue County and the State of Minnesota. The Quarterly Census of Employment and Wages (QCEW) data is sourced from Minnesota DEED for 2012 and 2013, the most recent annual data available. All establishments covered under the Unemployment Insurance (UI) Program are required to report wage and employment statistics quarterly to DEED. Federal government establishments are also covered by the QCEW program. It should be noted that certain industries in the table may not display any information which means that there is either no reported economic activity for that industry or the data has been suppressed to protect the confidentiality of cooperating employers. This generally occurs when there are too few employers or one employer comprises too much of the employment in that geography.  The Trade, Transportation, and Utilities industry is the largest employment sector in Red Wing, providing 2,860 jobs in 2013 (21.3% of the total), followed closely by the Education and Health Services sector with 2,565 jobs (19.1%). Manufacturing and the Leisure and Hospitality industry are also major employment sectors in Red Wing with 2,530 (18.8%) and 2,366 jobs (17.6%), respectively.  Trade, Transportation, and Utilities is also the largest employer throughout Goodhue County with over 4,800 jobs (22.2% of the total), followed by Education and Health Services with over 4,500 jobs (20.9%) and Manufacturing with nearly 4,000 jobs (18.4%). The Educa‐
tion and Health Services sector is the largest employer in Minnesota, representing 24.7% of total employment statewide. 2013 Employment: % of Total
0%
5%
Natural Resources & Mining
Construction
Manufacturing
Trade, Transportation, Utilities
Information
Financial Activities
Professional & Business Services
Education & Health Services
Leisure & Hospitality
Other Services
Public Administration
15%
20%
25%
30%
Red Wing
Goodhue Co
Minnesota
MAXFIELD RESEARCH INC. 10%
38




In Red Wing, total employment experienced little change between 2012 and 2013, although the Trade, Transportation, and Utilities sector gained 156 jobs (+5.8%). This increase was partially offset by job losses in several other sectors, most notably the Financial Activities sector which lost ‐77 jobs over the year (‐20%) and the Leisure and Hospitality sector which lost ‐49 jobs (‐2%). Goodhue County experienced 1.1% job growth over the year (+237 jobs). This increase was due, in large part, to growth in the Trade, Transportation, and Utilities sector which gained 242 jobs (+5.3%), as well as the Manufacturing sector (+112 jobs for a 2.9% increase). The most notable job losses occurred in Financial Activities (‐79 jobs for a ‐12.4% decrease) and Leisure and Hospitality (‐75 jobs for a ‐2.3% decline). The number of business establishments in Red Wing declined modestly, losing ‐14 business‐
es over the year (‐2.5%). Most sectors experienced modest contraction in business estab‐
lishments. The number of businesses operating throughout Goodhue County increased by five (+0.4%), most notably in Education and Health Services (+6 business establishments). At $840, the average weekly wage across all industries in Red Wing is 7.1% higher than in Goodhue County ($784), but ‐12.9% lower than the State average ($964). Wages increased over the year, rising 5.3% in Red Wing, 5.0% in Goodhue County, and 1.6% across Minneso‐
ta. Nearly all industry sectors experienced wage growth during the year. A household earning the average weekly wage in Red Wing ($840) would be able to afford an apartment renting for approximately $1,090 per month to not exceed 30% of its monthly income on housing costs. Assuming that a potential home buyer has good credit and makes a 10% down payment, a household earning the average weekly wage would be able to af‐
ford to purchase a home priced at approximately $160,000 or lower to not be cost‐
burdened (paying more than 30% of their income for housing). 2013 Average Weekly Wage
$0
$500
Total, All Industries
Construction
Manufacturing
Information
Other Services
$1,000
$1,500
$2,000
Red Wing
Goodhue Co
Minnesota
EMPLOYMENT TRENDS TABLE B‐3
QUARTERLY CENSUS OF EMPLOYMENT AND WAGES
Industry
2012
Establish‐ Employ‐
ments
ment
2013
Weekly Establish‐ Employ‐ Weekly Wage
ments
ment
Wage
Change 2012 ‐ 2013
Employment
Wage
# %
# %
CITY OF RED WING
Construction
Manufacturing
Information
Other Services
570
‐‐
‐‐
32
152
‐‐
56
71
82
59
47
21
13,401
‐‐
‐‐
2,522
2,704
‐‐
385
1,039
2,576
2,415
485
899
$798
‐‐
‐‐
$813
$1,029
‐‐
$779
$1,002
$760
$474
$318
$971
556
‐‐
‐‐
32
149
10
56
69
81
56
47
17
13,424
‐‐
‐‐
2,530
2,860
179
308
1,008
2,565
2,366
465
907
$840
‐‐
‐‐
$865
$1,101
$963
$824
$1,020
$786
$494
$293
$1,003
23
‐‐
‐‐
8
156
‐‐
‐77
‐31
‐11
‐49
‐20
8
0.2%
$42 ‐‐
‐‐
‐‐
‐‐
0.3%
$52 5.8%
$72 ‐‐
‐‐
‐20.0% $45 ‐3.0%
$18 ‐0.4%
$26 ‐2.0%
$20 ‐4.1% ($25)
0.9%
$32 5.3%
‐‐
‐‐
6.4%
7.0%
‐‐
5.8%
1.8%
3.4%
4.2%
‐7.9%
3.3%
21,694
350
725
3,994
4,823
243
557
1,347
4,541
3,169
748
1,180
$784 $538 $996 $871 $927 $869
$828 $1,021 $754 $419 $375 $890 237
11
50
112
242
‐‐
‐79
‐7
‐23
‐75
‐33
11
1.1%
$37 3.2%
($7)
7.4%
$64 2.9%
$37 5.3%
$52 ‐‐
‐‐
‐12.4% $45 ‐0.5%
$27 ‐0.5%
$26 ‐2.3%
$19 ‐4.2% ($18)
0.9%
$40 5.0%
‐1.3%
6.9%
4.4%
5.9%
‐‐
5.7%
2.7%
3.6%
4.8%
‐4.6%
4.7%
GOODHUE COUNTY
Construction
Manufacturing
Information
Other Services
1,342
46
149
92
365
‐‐
107
131
152
131
112
41
21,457
339
675
3,882
4,581
‐‐
636
1,354
4,564
3,244
781
1,169
$747
$545
$932
$834
$875
‐‐
$783
$994
$728
$400
$393
$850
1,347
45
154
94
365
17
106
124
158
129
115
41
MINNESOTA
Construction
Manufacturing
Information
Other Services
162,333 2,644,935 $949
2,666
26,386
$835
16,069 101,595 $1,067
7,996
305,611 $1,130
38,164 518,682 $832
3,371
57,275 $1,220
15,497 175,981 $1,565
27,875 339,431 $1,308
17,646 651,479 $861
14,328 261,491 $350
14,358
84,607
$539
4,300
122,373 $941
164,460 2,691,838 $964 46,903 1.8%
2,737
26,814
$851 428
1.6%
16,123 107,369 $1,098 5,774 5.7%
8,048
307,237 $1,145 1,626 0.5%
38,406 525,073 $849 6,391 1.2%
3,414
57,017 $1,253
‐258 ‐0.5%
15,485 179,660 $1,561 3,679 2.1%
28,685 348,262 $1,332 8,831 2.6%
18,094 665,302 $869 13,823 2.1%
14,408 265,904 $356 4,413 1.7%
15,251
85,345
$555 738
0.9%
3,810
123,852 $961 1,479 1.2%
$15 $16 $31 $15 $17 $33 ($4)
$24 $8 $6 $16 $20 1.6%
1.9%
2.9%
1.3%
2.0%
2.7%
‐0.3%
1.8%
0.9%
1.7%
3.0%
2.1%
Sources: Minnesota Department of Employment and Economic Development; Maxfield Research, Inc.
EMPLOYMENT TRENDS Commuting Patterns of Area Workers Proximity to employment is often a primary consideration when choosing where to live, par‐
ticularly for younger and lower income households since transportation costs often account for a greater proportion of their budgets. For the purpose of this analysis, we reviewed commuting patterns in the City of Red Wing. Table B‐4 highlights the commuting patterns of workers in Red Wing based on data from the U.S. Census Bureau Local Employment Dynamics data for 2011, the most recent data available.  As the table illustrates, Red Wing is the top home destination for workers in the City with a 39% share, while 61% of Red Wing’s workers reside outside the City, with most commuting from Lake City (2.9%), Ellsworth (1.9%), and Hastings (1.6%) for employment.  Approximately 50% of the workers in Red Wing reside within ten miles of their place of employment while over 9% travel greater than 50 miles. Roughly 26% of workers in the City travel 10 to 24 miles for employment and 15% commute a distance ranging from 25 to 50 miles. TABLE B‐4
COMMUTING PATTERNS
CITY OF RED WING
2011
Home Destination
Work Destination
Place of Residence
Count
Share
Place of Employment
Count
Share
Red Wing city, MN
Lake City city, MN
Ellsworth village, WI
Hastings city, MN
Lakeville city, MN
Goodhue city, MN
St. Paul city, MN
Rochester city, MN
Woodbury city, MN
Cannon Falls city, MN
All Other Locations
4,220
313
210
173
164
158
106
100
94
93
5,224
38.9%
2.9%
1.9%
1.6%
1.5%
1.5%
1.0%
0.9%
0.9%
0.9%
48.1%
Red Wing city, MN
Minneapolis city, MN
Rochester city, MN
St. Paul city, MN
Hastings city, MN
Lake City city, MN
Bloomington city, MN
Eagan city, MN
Lakeville city, MN
Mankato city, MN
All Other Locations
4,220
439
218
182
128
122
107
87
86
77
1,774
56.7%
5.9%
2.9%
2.4%
1.7%
1.6%
1.4%
1.2%
1.2%
1.0%
23.8%
7,440
4,350
566
1,941
583
100.0%
58.5%
7.6%
26.1%
7.8%
Distance Traveled
Total Primary Jobs
Less than 10 miles
10 to 24 miles
25 to 50 miles
Greater than 50 miles
Distance Traveled
10,855
5,431
2,764
1,655
1,005
100.0%
50.0%
25.5%
15.2%
9.3%
Total Primary Jobs
Less than 10 miles
10 to 24 miles
25 to 50 miles
Greater than 50 miles
Home Destination = Where workers live who are employed in the selection area
Work Destination = Where workers are employed who live in the selection area
Sources: US Census Bureau Local Employment Dynamics; Maxfield Research, Inc.

Roughly 57% of the workers living in Red Wing also have jobs in Red Wing. The remaining 43% commute to other communities, most notably to Minneapolis (5.9%). Rochester (2.9%) and St. Paul (2.4%) are also common work destinations for residents of Red Wing. Nearly 59% of Red Wing’s residents travel less than ten miles to their place of employment, while 8% have a commute distance of more than 50 miles. Over 26% commute between 25 and 50 miles to get to work and 8% travel from 10 to 24 miles. Table B‐5 provides a summary of the inflow and outflow characteristics of the workers in Red Wing. Outflow reflects the number workers living in Red Wing but employed outside the City while inflow measures the number of workers that are employed in the City but live outside Red Wing. Interior flow reflects the number of workers that both live and work in Red Wing.  As the table shows, Red Wing can be considered an importer of workers as a significantly higher number of nonresidents commute into the City for work. Roughly 6,635 workers come into Red Wing for work (inflow) while 3,220 leave (outflow) and 4,220 both live and work in Red Wing. In 2011, Red Wing experienced net job inflow of 3,415 workers. TABLE B‐5
COMMUTING INFLOW/OUTFLOW CHARACTERISTICS
CITY OF RED WING
2011
Outflow
City Total
By Age
Workers Aged 29 or younger
Workers Aged 30 to 54
Workers Aged 55 or older
By Monthly Wage
Workers Earning $1,250 per month or less
Workers Earning $1,251 to $3,333 per month
Workers Earning More than $3,333 per month
By Industry
"Goods Producing"
"Trade, Transportation, and Utilities"
"All Other Services"*
Inflow
Interior Flow
3,220
100.0%
6,635
100.0%
4,220
100.0%
770
1,795
655
23.9%
55.7%
20.3%
1,674
3,593
1,368
25.2%
54.2%
20.6%
1,029
2,144
1,047
24.4%
50.8%
24.8%
643
991
1,586
20.0%
30.8%
49.3%
1,438
2,701
2,496
21.7%
40.7%
37.6%
1,098
1,694
1,428
26.0%
40.1%
33.8%
678
823
1,719
21.1%
25.6%
53.4%
860
923
4,852
13.0%
13.9%
73.1%
589
608
3,023
14.0%
14.4%
71.6%
*includes the following sectors: Information, Financial Activities, Professional & Business Services, Education & Health Services, Leisure & Hospitality, Other Services, and Public Administration
Sources: US Census Bureau Local Employment Dynamics; Maxfield Research, Inc.

The highest proportion of workers coming into Red Wing is aged 30 to 54 (54%), earning between $1,251 and $3,333 per month (41%), and employed in the “All Other Services” in‐
dustry category (73%), which includes Education and Health Services. With over 6,600 workers commuting into Red Wing daily, many coming from over 50 miles, there appears to be an opportunity to provide housing options for a portion of these workers. MAXFIELD RESEARCH INC. 42
Many households are willing to commute greater distances to work if their housing is affordable enough to offset transportation costs, so declining fuel costs could support an increase in housing demand in Red Wing. Conversely, a sharp increase in fuel prices could restrain housing demand in Red Wing, particularly from younger households. Major Employers The following list provides a summary of the major employers in the City of Red Wing. This data is sourced from the Red Wing Port Authority community profile report. TABLE B‐6
MAJOR EMPLOYERS
CITY OF RED WING MINNESOTA
Employer
NAICS Industry
Treasure Island
Casino
Red Wing Shoe Co
Footwear Manufacturing
975
Mayo Red Wing Health Ctr.
General Medical and Surgical Hospitals
780
Xcel Energy
Electric Power Generation
750
BIC
Independent School District 256
DBI Capital Safety
Goodhue Public Health
Express Services
SB Foot Tanning Co
Fairview Seminary Home
St. James Hotel
Riedell Shoes Inc.
Sign Manufacturing
Elementry and Secondary Schools
Fabricated Textile Products
Home Health Care Services
Employment Placement Agencies
Leather and Hide Tanning and Finishing
Nursing Care Facilities
Hotels and Motels
Sporting and Athletic Goods Mfg
525
500
475
325
185
178
115
100
85
Sources: Red Wing Port Authority; Maxfield Research, Inc.



Employees
1,500
Treasure Island and Red Wing Shoe Company are the largest employers in the City. Com‐
bined, these two establishments employ nearly 20% of all workers in the City. The list of major employers represents several industry sectors, but the highest concentra‐
tions of large employers are in the Manufacturing and Health Care and Social Assistance in‐
dustry sectors. This finding is supported by the 2013 Quarterly Census of Employment and Wages data presented earlier in this section. Based on that data, the Manufacturing sector employs an average of 79 workers per business establishment while the Education and Health Services sector employs an average of 32 workers per establishment. MAXFIELD RESEARCH INC. 43
The Manufacturing industry also has the largest employers across the State with an average of 38 workers per business establishment, significantly lower than in Red Wing. The Educa‐
tion and Health Services industry averages 37 workers per business across Minnesota. On average, Red Wing employers are slightly larger than the rest of the State, with 24 employ‐
ees per business establishment in Red Wing compared to 16 employees per business across Minnesota.
Employer Survey Maxfield Research surveyed representatives of the largest employers in Red Wing during November 2014. The questions covered topics such as recent trends in job growth, average wages and salaries, employee turnover, projected job growth. In addition, representatives were asked their opinion about issues related to housing in the area. Specifically, they were asked whether the current supply of housing in the area matches the needs of their workforce. The following points summarize the findings of this survey process. 




While a majority of the City workforce comes from Red Wing, many employees commute from 20 to 50 miles away. Hiring is expected to increase over the next five years as service needs and business condi‐
tions dictate. There was a general consensus that most employees in the City currently own their homes, but many new employees relocating to Red Wing from other areas are seeking rentals. There appears to be a short supply of rental units in the area, particularly “mid‐level” rentals with modern features and amenities, which is preventing new workers from relocat‐
ing to Red Wing. The lack of available housing, particularly rental housing, is limiting the ability of employers to attract potential candidates to Red Wing. MAXFIELD RESEARCH INC. 44
HOUSING
G CHARACTEERISTICS Introdu
uction The varie
ety and cond
dition of the housing sto
ock in a comm
munity provvides the bassis for an attrac‐
tive livingg environme
ent. We examined the h
housing markket in Red W
Wing and thee surroundin
ng Primary M
Market Areaa in comparison to the State of Minnnesota by reeviewing data on the total number o
of housing u
units by occu
upancy statu
us, housing tyypes, age off the housingg supply, and
d residential constructtion trends. Housing uniit is defined as a house, an apartmeent, a group of rooms, o
or a single room occupied or intende
ed for occup ancy as sepaarate living q
quarters. Househo
older refers tto the person in whose n
name the hoousing unit iss owned or rrented. Housingg Occupan
ncy Housing occupancy is a key variaable used to assess neighhborhood sttability. Table C‐1 on thee followingg page show
ws the total n
number of ho
ousing units , as well as tthe occupan
ncy status in 2000 and 2010
0. This data is sourced from the U.S. Census. It is importantt to note, th
hat the Censu
us’ definition
n of a vacant housing un
nit includes: Units that w
were listed fo
or sale or for rent at thee time of the Census su
urvey; Units that have b
been rented or sold, but were not yeet occupied; Seasonal housing (vaacation or se
econd homess); and, “Othher” vacant housing. Otther vacant housing u
units include
e housing for migratory workers, hoousing units held for occupancy of a caretaker, and units in the forecllosure proce
ess.  As off the 2010 Ce
ensus, the Primary Markket Area conntained 11,2991 housing u
units, roughly 67% o
of which we
ere located in
n the City off Red Wing w
with the rem
maining 33% were located elsew
where in the PMA. MAXFIELLD RESEARCH INC. 45 HOUSING CHARACTERISTICS 

As illustrated in the preceding graph, approximately 92% of the PMA’s housing stock was occupied in 2010, compared to 89% in Minnesota. The City of Red Wing maintained an oc‐
cupancy rate of 93.1% while occupancy throughout the Remainder of the Primary Market Area was at 90.6% in 2010. Occupancy rates have declined slightly over the past decade. In 2000, occupancy was at 94.6% throughout the PMA, compared to 91.7% in the State of Minnesota. The City of Red Wing had a 2000 occupancy rate of 95.6% while housing units in the Remainder of the Pri‐
mary Market Area were 92.6% occupied. TABLE C‐1
HOUSING UNIT OCCUPANCY
2010
City of Red Wing
Total Housing Units
No. Pct.
7,539 100%
No. Pct.
11,291 100%
No. Pct.
3,752 100%
Pct.
100%
Occupied Units
Owner‐Occupied
mortgage or loan
free and clear
7,017
4,794
3,238
1,556
10,415
7,851
5,317
2,534
92.2%
69.5%
47.1%
22.4%
3,398
3,057
2,079
978
90.6%
81.5%
55.4%
26.1%
88.9%
64.9%
47.3%
17.7%
2,564 22.7%
341
9.1%
24.0%
354
209
30
42
19
54
9.4%
5.6%
0.8%
1.1%
0.5%
1.4%
11.1%
5.6%
2.0%
1.3%
0.4%
1.8%
Renter‐Occupied
2000
Vacant Units
Seasonal/Recreational
For Rent
For Sale Only
Rented/Sold, Not Occupied
Other
93.1%
63.6%
42.9%
20.6%
2,223 29.5%
522
54
183
124
33
128
6.9%
0.7%
2.4%
1.6%
0.4%
1.7%
876
263
213
166
52
182
7.8%
2.3%
1.9%
1.5%
0.5%
1.6%
Total Housing Units
6,867 100%
10,124 100%
3,257 100%
100%
Occupied Units
Owner‐Occupied
Renter‐Occupied
6,562 95.6%
4,707 68.5%
1,855 27.0%
9,577 94.6%
7,400 73.1%
2,177 21.5%
3,015 92.6%
2,693 82.7%
322 9.9%
91.7%
68.4%
23.3%
Vacant Units
Seasonal/Recreational
For Rent
For Sale Only
Rented/Sold, Not Occupied
Other
305
32
92
69
30
82
4.4%
0.5%
1.3%
1.0%
0.4%
1.2%
Sources: US Census Bureau; Maxfield Research, Inc.

Remainder of PMA Minnesota
PMA
547
192
104
92
42
117
5.4%
1.9%
1.0%
0.9%
0.4%
1.2%
242
160
12
23
12
35
7.4%
4.9%
0.4%
0.7%
0.4%
1.1%
8.3%
5.1%
1.0%
0.6%
0.4%
1.1%
Nearly 64% of Red Wing’s housing units were owner‐occupied in 2010, 29% were renter‐
occupied, and the remaining 7% were vacant. Approximately 43% of all housing units in the City of Red Wing were owner‐occupied with a mortgage or loan while 20.6% were owned free and clear. MAXFIELD RESEARCH INC. 46 HOUSING
G CHARACTEERISTICS 



The R
Remainder o
of the PMA h
had a higher rate of ownner‐occupied
d units in 201
10, at 81.5%
% of the to
otal. Roughly 55.4% of aall housing u
units were owned with aa mortgage o
or loan and 26.1%
% were owned free and clear. Only 9.1% of the housing uniits in the Remainder of tthe Markket Area werre renter‐occcupied, compared to 24%
% throughout the State. Roughly 9.4% of the
e housing un
nits in the Re
emainder off the Markett Area were vvacant in 20
010. Comp
pared to the
e State of Minnesota, the
e PMA has aa relatively lo
ow housing vvacancy ratee, as 7.8% of the housing units we
ere vacant in
n 2010 whilee the State had an 11.1%
% vacancy ratte. The P
PMA had a significantly llower propo
ortion of seassonal/recreaational unitss (2.3% com‐‐
pared
d to 5.6% in Minnesota). Approximately 1,,167 housingg units were
e added in thhe PMA betw
ween 2000 aand 2010 forr an % increase. The numberr of renter‐o
occupied uni ts grew 17.88% (+387 units) during the 11.5%
decad
de while the
e number of owner‐occu
upied units inncreased 6.11% (+451 un
nits). The tottal numb
ber of vacant units jump
ped 60% (+32
29 units) in tthe PMA. Byy compariso
on, Minnesotta’s housing stock inccreased 13.6
6% during the decade: oowner‐occup
pied units inccreased 7.9%
%; rente
er‐occupied units grew 1
16.8%; and the number oof vacant un
nits climbed 52%. The raapid rise in
n residential foreclosure
es experiencced throughoout the United States du
uring the lattter part o
of the 2000ss impacted h
housing unit occupancy tthroughout Minnesota aas reflected in the significant inccrease in vaccant housingg units from 2000 to 20110. The C
City of Red W
Wing experie
enced a 71% increase in vacant unitss (+217 unitss), most notably in the
e “vacant for rent” categgory which increased byy 91 units (+999%). All vacant unit cate‐
gories experience
ed increasess over the de
ecade. In tottal, Red Win
ng gained 67
72 housing units durin
ng the decad
de (+9.8%). O
Owner‐occupied units inncreased by 1.8% (+87) w
while renterr‐
occup
pied units exxpanded by nearly 20% (+368 units)). MAXFIELLD RESEARCH INC. 47 HOUSING
G CHARACTEERISTICS Housingg Stock by Structure Type The data in Table C‐2
2 is sourced from the Am
merican Com
mmunity Survvey (“ACS”) which is an ongoing statistical su
urvey administered by th
he U.S. Censsus Bureau that is sent to
o approximaately three million addressses annuallyy. The surveyy gathers daata previously contained
d only in the long he survey is oongoing and
d can providee a more “up‐to‐
form of tthe decenniaal census. As a result, th
date” portrait of dem
mographic, e
economic, so
ocial, and hoousehold chaaracteristics every year, not just every ten years. The currentt ACS highlights data col lected betw
ween 2008 an
nd 2012, thee most recent data avaailable. Because of the differrence in metthodology be
etween the decennial ceensus and th
he ACS, therre are slight diffferences in tthe total num
mber of hou
using units p resented beetween the ttwo surveys.. Census d
data indicate
es that there were 11,291 housing u nits in the PMA in 2010 while the ACS shows 11
1,346 housin
ng units in th
he PMA. The
e following ppoints summ
marize key fin
ndings from Table C‐2
2.  Single
e‐family (one‐unit) detached units aare the mostt common ho
ousing type in the Markket Area,, comprisingg 70% of all o
occupied hou
using units inn the PMA. By comparison, 67% of all housing units are
e single‐famiily detached throughoutt Minnesota. Roughly 62% of the ho
ous‐
Wing are singgle‐unit, dettached strucctures, whilee nearly 88%
% of the houssing ing units in Red W
units in the Remaainder of the
e PMA are detached singgle‐unit hom
mes. 
Housing units in sstructures w
with 20 or mo
ore units reppresent 12%
% of the houssing supply in Red W
Wing with 93
34 units, butt there are n
no structuress with 20 or more units in the PMA out‐
side o
of Red Wingg. MAXFIELLD RESEARCH INC. 48 HOUSING CHARACTERISTICS 

Single‐unit, attached housing units represent 8% of all housing units in Red Wing (606 units), but only 1% (45 units) of the units in the Remainder of the PMA. By comparison, sin‐
gle‐unit, attached housing represents 6% of the total housing supply across Minnesota. Approximately 4% of all housing units in Red Wing are mobile homes (341 units), while mobile homes represent 9% of all housing units in the Remainder of the PMA with 350. TABLE C‐2
HOUSING UNITS BY STRUCTURE TYPE AND TENURE
City of Red Wing
No.
Pct.
PMA
No.
Pct.
Remainder of PMA
No.
Pct.
Minnesota
Pct.
Total Housing Units
7,630
100%
11,346
100%
3,716
100%
100%
1‐unit, detached
1‐unit, attached
2 units
3 or 4 units
5 to 9 units
10 to 19 units
20 or more units
Mobile home
Boat, RV, van, etc.
4,702
606
332
124
202
389
934
341
0
62%
8%
4.4%
1.6%
2.6%
5.1%
12.2%
4.5%
0.0%
7,961
651
355
135
224
389
934
691
6
70%
6%
3%
1%
2%
3%
8%
6%
0%
3,259
45
23
11
22
0
0
350
6
88%
1%
1%
0%
1%
0%
0%
9%
0%
67%
7%
2%
2%
2%
4%
11%
4%
0%
Total Occupied Housing Units
7,024
100%
10,394
100%
3,370
100%
100%
Owner‐Occupied
1‐unit, detached
1‐unit, attached
2 units
3 or 4 units
5 to 9 units
10 to 19 units
20 or more units
Mobile home
Boat, RV, van, etc.
5,067
4,035
455
102
13
49
57
67
289
0
72%
57.4%
6.5%
1.5%
0.2%
0.7%
0.8%
1.0%
4.1%
0.0%
8,047
6,745
489
111
13
49
57
67
513
3
77%
65%
5%
1%
0%
0%
1%
1%
5%
0%
2,980
2,710
34
9
0
0
0
0
224
3
88%
80%
1%
0%
0%
0%
0%
0%
7%
0%
73%
62%
6%
0%
0%
0%
0%
1%
3%
0%
Renter‐Occupied
1‐unit, detached
1‐unit, attached
2 units
3 or 4 units
5 to 9 units
10 to 19 units
20 or more units
Mobile home
Boat, RV, van, etc.
1,957
456
24
158
97
153
332
688
49
0
28%
6.5%
0.3%
2.2%
1.4%
2.2%
4.7%
9.8%
0.7%
0.0%
2,347
724
27
172
105
175
332
688
121
3
23%
7%
0%
2%
1%
2%
3%
7%
1%
0%
390
268
3
14
8
22
0
0
72
3
12%
8%
0%
0%
0%
1%
0%
0%
2%
0%
27%
5%
2%
2%
2%
2%
3%
10%
0%
0%
Sources: 2008‐2012 American Community Survey; Maxfield Research, Inc.
MAXFIELD RESEARCH INC. 49 HOUSING CHARACTERISTICS 



In Red Wing, over 4% of the housing units are in duplex (two‐unit) structures, while struc‐
tures with three or four units represent less than 2% of the City’s housing inventory. Based on ACS data, it appears that 72% of Red Wing’s occupied housing units are owner‐
occupied and 28% are renter‐occupied. These proportions are comparable to the State (73% owner‐occupied and 27% renter‐occupied). The Remainder of the PMA has a much higher percentage of owner‐occupied housing units, as 88% of all occupied housing units (2,980 units) are owned. Of the owner‐occupied housing units in Red Wing, roughly 80% are single‐unit, detached structures (4,035 units), 9.0% (455) are in attached single‐unit structures, 5.7% are mobile homes (289), and 2.0% are in duplexes (102 units). Over 23% of the renter‐occupied hous‐
ing units in Red Wing are detached single‐unit structures (456 units), while 35% of the rent‐
er‐occupied units are in structures with 20 or more units (688) and 17% are in structures with 10 to 19 units (332). Approximately 21% of the renter‐occupied units in Red Wing are situated in structures with between two and ten units. Compared to Minnesota, the PMA has a slightly higher proportion of renter‐occupied detached single‐unit structures. Roughly 20% of the State’s renter‐occupied units are de‐
tached single‐unit structures, compared to 23% in Red Wing and 69% in the Remainder of the PMA. Red Wing has a relatively low proportion of renter‐occupied single‐unit, attached units, as only 1% of all renter‐occupied units are in single‐unit, attached structures, com‐
pared to 8% in Minnesota. Age of Housing Stock Similar to the structure type data presented in Table C‐2, housing age data presented in Table C‐3 is also sourced from the ACS. The table includes the number of housing units built in the Market Area prior to 1940 and during each subsequent decade. The Census Bureau began collecting year‐built data in 1940.  Much of the Red Wing’s housing stock is over 60 years old, as approximately 28% of the housing units (2,122 units) were constructed prior to 1950, while 23% of Minnesota’s hous‐
ing stock is over 60 years old. Over 22% of the PMA’s housing units (2,551 units) were built prior to 1940. While many homes built before 1940 are in good condition, a high number of housing units this age increases the potential for the housing stock to become substandard and maintenance costs are generally higher. Roughly 23% of the homes in Red Wing were built prior to 1940, while 22% of the housing stock in the Remainder of the PMA was built before 1940. By comparison, approximately 18% of all homes in Minnesota were built prior to 1940. Older housing is common in counties where shrinking populations and slower economic activity generates less demand for new housing. MAXFIELD RESEARCH INC. 50 HOUSING
G CHARACTEERISTICS TABLE C‐3
OUSING UNITS BY YEAR STRUC
CTURE BUILT
HO
RED WIN
NG MARKET AR
REA
City of Re
ed Wing
No.
Pct.
PMA
N
No.
Pct.
Remainde r of PMA
No.
Pct.
Miinnesota
Pct.
Total
7,630
100%
1
11,346
100%
%
3,716
100%
100%
2010 or laterr
2000 to 2009
9
1990 to 1999
9
1980 to 1989
9
1970 to 1979
9
1960 to 1969
9
1950 to 1959
9
1940 to 1949
9
1939 or earli er
8
808
872
837
1,299
876
808
380
1,742
0%
11%
11%
11%
17%
11%
11%
5%
23%
21
1,394
1,370
1,208
2,011
1,233
1,014
544
2,551
0%
%
12%
12%
%
11%
%
18%
%
11%
%
9%
5%
%
22%
13
586
498
371
712
357
206
164
809
0%
16%
13%
10%
19%
10%
6%
4%
22%
0%
14%
14%
13%
16%
10%
11%
5%
18%
Sources: 200
08‐2012 Ameri can Communitty Survey; Maxxfield Research
h, Inc.


Aside
e from the number of ho
omes built prior to 1940, the 1970s w
was the mosst active deccade in Red Wing in te
erms of resid
dential building activity. Over 17% o
of Red Wing’’s housing sttock was b
built from 19
970 to 1979.. n remarkablyy steady in R
Red Wing sin
nce the 1940
0s when onlyy 380 Housing productiion has been
housing units we
ere constructted (5% of th
he total). Asside from the spike in th
he 1970s when nearly 1,300 unitts were builtt (17%), consstruction acttivity has con
nsistently deelivered betw
ween 800 aand 900 new
w units in eacch decade since 1950 (11% growth p
per decade). MAXFIELLD RESEARCH INC. 51 HOUSING

Comp
pared to Red
d Wing, the housing stocck in the Rem
mainder of tthe PMA (ou
utside of Red
d Wingg) is relatively new as nearly 30% of tthe housing inventory h
has been con
nstructed sin
nce 1990 while 22% o
of Red Wing’s housing units were coonstructed aafter 1990. B
By comparison, of Minnesotta’s housing inventory has been buillt since 19900. 28% o
Since
e 1940, the 1
1970s was th
he most activve decade inn the Remain
nder of the P
PMA and Miinne‐
sota, as 712 unitss were consttructed (19%
%) in the PM A outside off Red Wing aand 16% of tthe State
e’s housing u
units were bu
uilt between
n 1970 and 11979. Construction activvity was also
o rel‐
atively strong during the 200
00s in the Re
emainder of the PMA, ass 586 housin
ng units weree consttructed (16%
%). By comparison, 14% of Minnesoota’s housingg units were built betweeen 2000 and 2009. The following photoggraphs repre
esent a samp
ple of the hoousing stockk in Red Wingg. 0’s housing aalong Old We
est Example of pre‐1940
Maain Street 1970’’s era subdivvision in the western sid
de of Red Wing Attached
d housing in the Cannon
n Trails Estattes um development condominiu
Neweer, single‐fam
mily homes iin southern Red Wing MAXFIELLD RESEARCH INC. 52 HOUSING
G CHARACTEERISTICS Residen
ntial Consttruction Trrends Building permit data from 2009 tthrough 201
14 was provi ded by the C
City of Red W
Wing, Goodh
hue County, aand the County Subdivissions in Piercce County, W
Wisconsin inccluded in the PMA. Datta prior to 2
2009 was de
erived from tthe Housing Market andd Demand Esstimates report prepared
d for the Red W
Wing Housin
ng and Redevelopment A
Authority in 2009. At th
hat time, datta was obtained from the City of Red Wing, Good
dhue Countyy, and Piercee County. Table C‐4
4 on the follo
owing page displays the number of units permittted for singgle‐family ho
omes and multtifamily strucctures from 2000 througgh October 22014 in the C
City of Red W
Wing as welll as the Coun
nty Subdivisions comprissing the Rem
mainder of thhe PMA. Mu
ultifamily ho
ousing includ
des both for‐‐sale and ren
ntal units, an
nd is generallly defined aas residential buildings ccontaining un
nits built one
e on top of another and tthose built sside‐by‐side which do no
ot have a gro
ound‐to‐roo
of wall and//or have com
mmon facilitties.  Since
e 2000, a total of 818 new
w housing units have beeen permitteed in Red Wing, for an averaage of 55 new units per yyear. Red W
Wing’s singlee‐family houssing stock haas grown at an averaage rate of 2
23 new units per year, w
while the mulltifamily sup
pply has expaanded by rough‐
ly 32 units per ye
ear. By comp
parison, the single‐familly housing sttock in the R
Remainder o
of the erage rate off 43 units peer year. PMA has expanded at an ave
 As de
epicted in the following chart, reside
ential constrruction activvity dropped off sharply in Red W
Wing since 2
2005 after a total of 561 housing uniits were permitted betw
ween 2000 and 2005 for an annu
ual average o
of 94 new ho
ousing units per year. Siince 2006, aa total of 257
7 housing units havve been perm
mitted for an average off 29 new housing units p
per year. Ho
ow‐
eight new un
nits were perrmitted in eaach of the past three years, residenttial ever, after only e
e first ten moonths of 20114 with 16 units permitted. building activity aaccelerated through the
MAXFIELLD RESEARCH INC. 53 HOUSING
G CHARACTEERISTICS T
TABLE C‐4
RESIDENTIAL BUILDING PERM
R
MIT TRENDS
2000 ‐ 2014
Red Wingg
SF
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014*
MF
30
43
36
43
47
32
29
17
8
8
11
8
8
8
16
20
22
20
18
75
175
121
10
9
0
0
4
0
0
0
R
Remainder of PMA
TOTAL
50
65
56
61
122
207
150
27
17
8
11
12
8
8
16
S
SF
43
73
90
93
1
103
64
44
37
22
21
10
13
11
19
5
MF
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
T
TOTAL
43
73
90
93
103
64
44
37
22
21
10
13
11
19
5
PMA Total
SFF
MF
73
116
126
136
150
96
73
54
30
29
21
21
19
27
21
20
22
20
18
75
175
121
10
9
0
0
4
0
0
0
T
TOTAL
93
138
146
154
225
271
194
64
39
29
21
25
19
27
21
Notes: SF == Single Family; MF = Multifa mily
*through October
mmunities; Ma xfield Researcch, Inc.
Sources: Ciity of Red Wingg; Goodhue County; PMA com

From
m 2000 through October 2014, permits were issuued for a tottal of 992 sin
ngle‐family home
es and 474 m
multifamily u
units in the P
PMA. All thee multifamilyy units weree located in tthe City o
of Red Wing. By comparrison, only 35% of the peermitted sin
ngle‐family h
homes are lo
ocat‐
ed in Red Wing. Multifamily units comprrised nearly 58% of all th
he new houssing units in Red Wingg since 2000 (474 units). MAXFIELLD RESEARCH INC. 54 HOUSING
G CHARACTEERISTICS Owner‐‐Occupied Housing U
Units by Vaalue Table C‐5
5 and the folllowing map
p present datta on housinng values sum
mmarized in
n ranges and
d median vvalue. Home
e value refle
ects the owner’s estimatte of how mu
uch the prop
perty (housee and lot or con
ndominium unit) would sell for if it w
were for salee. The follow
wing are thee main pointts from Tab
ble C‐5.  As illu
ustrated on the followin
ng map, with
hin the PMA,, median home values are highest in
n the Census Tracts to the south an
nd east of Re
ed Wing, as well as in th
he area to th
he west of th
he ome values ccan be found
d in the City of Red Wingg, and in thee Town of Haart‐
PMA. Lowest ho
land, Wisconsin. Red Wing Prrimary Markket Area 2012 Median Hom
me Value byy Census Traact MAXFIELLD RESEARCH INC. 55 HOUSING
The m
median owner‐occupied home value
e was $166,5500 in Red W
Wing during the 2008‐20
012 ACS p
period, roughly ‐14% low
wer than the
e Statewide m
median of $194,300. Th
he Remaindeer of the P
PMA had a m
median home
e value of $2
237,490, subbstantially hiigher than in
n the City of Red Wingg. TABLE C‐5
OWNER‐OCCUPIED
D HOUSING UN
NITS BY VALUE
RED WIN
NG MARKET AR
REA
City off Red Wing
N
No.
Pct.
PMA
No.
Pct.
Remaainder of PMA
No.
Pct.
Minnesota
a
Pct.
Total
5,067
100%
8,047
1
100%
2
2,980
100%
100%
Less tthan $50,000
$50,0
000 to $99,999
9
$100 ,000 to $149,9
999
999
$150 ,000 to $199,9
999
$200 ,000 to $299,9
$300 ,000 to $499,9
999
999
$500 ,000 to $999,9
00,000 or moree
$1,00
435
349
1,160
1,524
1,130
374
82
13
9%
7%
23%
30%
22%
7%
2%
0%
588
518
1,474
2,100
1,993
961
328
85
7%
6%
18%
26%
25%
12%
4%
1%
153
169
314
576
863
587
246
72
5%
6%
11%
19%
29%
20%
8%
2%
6%
10%
15%
21%
26%
16%
5%
1%
Mediian Value
$166,500
$192,789
7,490
$237
$194,300
Sourcces: 2008‐201
12 American Co
ommunity Survvey; Maxfield R
Research, Inc.

The laargest propo
ortion of ow
wner‐occupie
ed housing uunits in Red W
Wing is estim
mated to be value
ed in the $15
50,000 to $199,999 rangge with 30% of all ownerr‐occupied u
units in the C
City (1,524 units), followed by ho
omes valued in the $100,,000 to $1499,999 and th
he $200,000 to $299,999 ranges (23% and 22
2%, respectiively). MAXFIELLD RESEARCH INC. 56 HOUSING CHARACTERISTICS 

Approximately 9% (435) of Red Wing’s owner‐occupied housing units are valued below $50,000 while 7% (349) have values between $50,000 and $99,999. Another 7% (374) of the homes in Red Wing are valued between $300,000 and $499,999, while only 2% of the homes (95) have values of $500,000 or more. Outside of Red Wing, the largest proportion of owner‐occupied housing units in the Re‐
mainder of the PMA is estimated to be valued in the $200,000 to $299,999 range with 29% of all owner‐occupied units (863 units), followed by homes valued in the $300,000 to $499,999 range (20%). Approximately 19% of the housing units in the PMA outside of Red Wing are valued between $150,000 and $199,999 and 11% have values between $100,000 and $149,999. Roughly 5% of the homes (153) are valued at less than $50,000, while 6% (169 housing units) have values ranging from $50,000 to $99,999. Nearly 11% of the homes in the Remainder of the PMA (318 homes) have values of $500,000 or more. Renter‐Occupied Units by Contract Rent Table C‐6 presents information on the monthly housing costs for renters called contract rent (also known as asking rent). Contract rent is the monthly rent agreed to regardless of any utilities, furnishings, fees, or services that may be included. The following are key points from Table C‐6.  The City of Red Wing contains approximately 83% of the Primary Market Area’s supply of renter‐occupied housing units, while the remaining 17% are scattered around the Remain‐
der of the Primary Market Area. TABLE C‐6
RENTER‐OCCUPIED HOUSING UNITS BY CONTRACT RENT
2012
PMA
City of Red Wing
Remainder of PMA Minnesota
No.
Pct.
No.
Pct.
Total:
1,957
100%
2,347
100%
Median Contract Rent
$616
Less than $200
$200 to $299
$300 to $499
$500 to $749
$750 to $999
$1,000 or more
No cash rent
81
108
551
657
304
187
69
$624
4%
6%
28%
34%
16%
10%
4%
88
141
594
769
361
240
154
No.
390
MAXFIELD RESEARCH INC. 100%
$663
4%
6%
25%
33%
15%
10%
7%
7
33
43
112
57
53
85
Pct.
Pct.
100%
$717
2%
8%
11%
29%
15%
14%
22%
5%
6%
12%
29%
23%
21%
5%
57 HOUSING



The m
median contract rent in Red Wing w
was $616 durring the 20088‐2012 ACS, roughly ‐14
4% lower than the sttatewide me
edian of $717. Based onn a 30% alloccation of income to houssing, a hou
usehold in Re
ed Wing would need an income of aabout $25,0000 to afford an average montthly rent of $
$616. The m
median rent o
outside of R
Red Wing is sslightly higheer, at $663.
Approximately 93
3% of Primary Market A
Area renters are paying ccash rent, wiith most units rentin
ng for betwe
een $500 and $749 per m
month (33%
%). Housing units witthout payme
ent of rent (“no cash rennt”) comprisse roughly 4%
% of Red Wing’s rente
ers and 22% of the rente
ers in the Remainder of tthe PMA. In
n Minnesota, renter‐
occup
pied housingg units witho
out a rent paayment com
mprise about 5% of all renter‐occupieed units. Typically, tthese units m
may be owned by a relattive or friend who lives elsewhere m allow occu
upancy without charge. Other sourcces may include caretakkers or minissters whom
who may occupyy a residence
e without chaarge. In Red Wing, neaarly 34% (657
7 units) of alll renter‐occcupied housing units havve monthly contrract rents in the $500 to
o $749 range
e, while 28% (551 units) have rents ffrom $300 to
o $499 per month. Roughly 16
6% of the units have monthly rents iin the $750 tto $999 rangge and 1
10% rent for $1,000 or m
more per mo
onth. Approxximately 6%
% of the renter‐occupied units have month
hly rents in tthe $200 to $
$299 range, and anotheer 4% have reents of less tthan $200 per month. MAXFIELLD RESEARCH INC. 58 HOUSING
G CHARACTEERISTICS Peer Co
ommunity Compariso
on Table C‐7
7 on the follo
owing comp
pares key dem
mographic, eemploymen
nt, and housiing characteris‐
tics for Red Wing to ffive other co
ommunities that were iddentified by the Client as peer comm
muni‐
ties to Re
ed Wing, including Alberrt Lea, Faribaault, Northfiield, St. Peteer, and Wino
ona. on and houssing data was sourced from the 20000 and 2010 C
Census and tthe 2012 Am
meri‐
Populatio
can Community Survvey. Employment data w
was providedd by the Min
nnesota Dep
partment of Employm
ment and Eco
onomic Deve
elopment. R
Resident em ployment daata is not avvailable for the City of Stt. Peter.  Comp
pared to the
e other comm
munities, Red Wing’s poopulation and
d household
ds grew at a faster pace than Albert Lea aand Winona from 2000 tto 2010, while Faribault,, Northfield, and St. Pe
eter experienced much ffaster growtth. 


n, the averagge householld size in Red
d Wing decliined Due, in large partt, to an agingg population
% during the decade to 2
2.35. The average houseehold size in Red Wing iss smaller thaan all ‐4.5%
of the
e peer comm
munities except for Albe
ert Lea (2.32)). With a median agge of 41.8, R
Red Wing is tthe second ooldest city am
mong the seelected peer comm
munities, behind only Albert Lea (44
4.0). The 2
2012 median
n household income in R
Red Wing ($551,290) is co
omparable to
o Faribault ($51,559) and St.. Peter ($50,279), but it is substantiaally higher th
han Albert LLea ($36,276
6) and Wino
ona ($37,519
9). MAXFIELLD RESEARCH INC. 59 HOUSING CHARACTERISTICS TABLE C‐7
PEER COMMUNITY COMPARISON
DEMOGRAPHIC, HOUSING, AND EMPLOYMENT CHARACTERISTICS
November 2014
‐‐‐‐‐‐‐‐‐‐ Peer Communities ‐‐‐‐‐‐‐‐‐‐
Red Wing
Albert Lea
Faribault
Northfield
St. Peter
Winona
Demographic Characteristics
2010 Population
% Change from 2000
2010 Median Age
16,459
2.1%
18,016
‐1.9%
23,352
12.2%
20,007
16.7%
11,196
14.9%
27,592
1.9%
41.8
44.0
35.4
26.4
27.5
26.7
7,017
6.9%
7,774
‐0.1%
8,317
11.3%
6,272
27.8%
3,491
17.2%
10,449
1.4%
% Family HHs
% Family HHs w/ Children
% HHs Living Alone
61.7%
26.0%
32.2%
59.7%
23.3%
34.9%
62.6%
31.1%
31.0%
62.9%
31.3%
30.7%
61.6%
30.2%
29.9%
48.1%
19.3%
35.6%
2010 Average Household Size
% Change from 2000
2.35
‐4.5%
2.32
‐1.7%
2.81
0.8%
3.19
‐8.7%
3.21
‐2.0%
2.64
0.5%
$51,290
$36,276
$51,559
$58,594
$50,279
$37,519
2013 Labor Force
% Change from 2000
8,724
‐0.1%
8,840
‐4.4%
10,888
2.3%
10,532
11.8%
NA
NA
15,485
1.1%
2013 Resident Employment
% Change from 2000
8,261
‐2.2%
8,329
‐6.1%
10,122
‐1.1%
9,981
8.9%
NA
NA
14,686
‐0.7%
2013 Unemployment Rate
5.3%
5.8%
7.0%
5.2%
NA
5.2%
13,424
3.9%
10,581
‐3.6%
11,707
1.1%
9,772
2.7%
5,293
‐3.7%
19,631
‐0.7%
$840
4.7%
$691
3.6%
$726
3.2%
$850
2.9%
$718
2.7%
$692
2.8%
7,539
93.1%
6.9%
8,410
92.4%
7.6%
8,946
93.0%
7.0%
6,832
91.8%
8.2%
3,697
94.4%
5.6%
10,989
95.1%
4.9%
68.3%
31.7%
69.8%
30.2%
67.7%
32.3%
68.6%
31.4%
65.3%
34.7%
58.7%
41.3%
9.9%
11.2%
8.9%
11.4%
14.5%
12.3%
$166,500
$92,100
$153,500
$211,800
$158,900
$144,500
$713
19.6%
16.7%
$541
18.1%
17.9%
$792
25.2%
18.4%
$706
19.2%
14.5%
$733
23.6%
17.5%
$596
19.9%
19.1%
2010 Households
% Change from 2000
Median HH Income*
Employment Characteristics
2013 Industry Employment
% Change from 2008
2013 Avg. Weekly Wage
Annual Rate of Growth since 2000
Housing Characteristics
Housing Units
% Occupied
% Vacant
% Owner‐Occupied
% Renter‐Occupied
Mobility Rate (% moved in since 2010)*
Median Home Value*
Median Gross Rent*
Annual Rent/Avg. Annual Wage
Annual Rent/Median HH Income
*2012 American Community Survey data
Sources: US Census Bureau; MN Department of Employment & Economic Development; Maxfield Research, Inc.
MAXFIELD RESEARCH INC. 60 HOUSING
Red W
Wing’s laborr force experrienced little
e change bettween 2000 and 2013, d
declining rou
ughly ‐0.1%
% (‐12), while
e resident em
mployment in Red Wingg slipped ‐2.22%. Among the peer com‐
munities, only Albert Lea exp
perienced lab
bor force coontraction du
uring the tim
me period, dee‐
ng ‐4.4% (‐40
04). Residen
nt employme
ent in Albertt Lea decreased ‐6.1% beetween 2000
0 clinin
and 2
2013. Reside
ent employm
ment also co
ontracted mooderately in Faribault (‐1.1%) and Wino
ona (‐0.7%), but those tw
wo cities exp
perienced labbor force gro
owth, expan
nding 2.3% aand 1.1%,, respectivelly. 



Wing had an
n unemploym
ment rate of 5.3%, slighttly higher thaan Northfield As off 2013, Red W
(5.2%
%) and Winona (5.2%), but lower thaan Albert Leaa (5.8%) and
d Faribault (7
7.0%). Despite the economic recesssion, industryy employmeent increased
d 3.9% in Reed Wing from
m over 500 job
bs were adde
ed in Red W
Wing during th
hat time perriod. Faribault 2008 to 2013 as o
and SSt. Peter werre the only o
other communities to exxperience job growth du
uring that fivve year time period,, expanding 1.1% and 2.7%, respectively. The e
expansion off jobs in Red Wing comp
pared to flat labor force and resident employmeent grow
wth in the City indicates tthat Red Win
ng employerrs have attraacted workers from outsside the C
City in recentt years. Base
ed on this an
nalysis, it apppears that R
Red Wing is aa stronger “im‐
porte
er” of workers than the p
peer commu
unities includded in this ccomparison. At $8
840, the averrage weekly wage in Red
d Wing is thee second higghest amongg the commu
uni‐
ties in
ncluded in th
his comparisson, behind only Northfiield ($850). Wages in Red Wing aree nearly 22% highe
er than in Alb
bert Lea, 21%
% higher thaan Winona, 117% higher tthan St. Peteer, 16% higher tthan Faribau
ult. and 1
MAXFIELLD RESEARCH INC. 61 HOUSING CHARACTERISTICS 





With a 6.9% vacancy rate, Red Wing’s supply of housing is fairly tight compared to North‐
field (8.2% vacancy rate), Albert Lea (7.6%), and Faribault (7.0%), but occupancy is signifi‐
cant higher in St. Peter (5.6% vacancy) and Winona (4.9% vacancy). Of the occupied housing units in Red Wing, 68.3% are owner‐occupied and 31.7% are renter‐occupied. Red Wing has a slightly higher proportion of owner‐occupied housing units than Faribault (67.7%) and St. Peter (65.3%), but it is significantly higher than Winona (58.7%). Albert Lea and Northfield have a slightly higher proportion of owner‐occupied housing units than Red Wing, at 69.8% and 68.6%, respectively. Based on the percent of households that have moved into their housing unit since 2010, it appears that turnover of housing units has been slightly slower in Red Wing than in most of the peer communities. With 9.9% of the households moving in since 2010, Red Wing’s mo‐
bility rate is higher than only Faribault (8.9%). Albert Lea (11.2%), Northfield (11.4%), Winona (12.3%), and St. Peter (14.5%) all have higher mobility rates than Red Wing. The median value of an owner‐occupied housing unit in Red Wing ($166,500) is the second highest among the communities evaluated, behind only Northfield with a median value of $211,800. Red Wing’s home values are slightly higher than St. Peter ($158,900), Faribault ($153,500), and Winona ($144,500), but substantially higher than Albert Lea ($92,100). Based on an analysis of median household income compared to the minimum income required to purchase a home at the median home value, it appears that housing in Red Wing is more affordable than Northfield and Winona, but less affordable than St. Peter, Faribault, and Albert Lea. In Red Wing, a household would need to earn a minimum of roughly $44,000 annually to afford to purchase a home at the median value, ‐16.2% lower than the median household income. Albert Lea has the most affordable housing as the min‐
imum income required is ‐48.5% below the median household income, while housing in Winona is the least affordable as the minimum income needed is 2.1% higher than the me‐
dian household income. The median gross rent in Red Wing ($713 per month) is higher than Albert Lea ($541), Winona ($596), and Northfield ($733), but it is slightly lower than St. Peter ($733) and Fari‐
bault ($792). However, comparing the median gross rent to median household income in‐
dicates that rental housing in Red Wing is more affordable than the peer communities other than Northfield. In Red Wing, 16.7% of a household’s income (based on the median house‐
hold income) would be needed to afford the median gross rent. In Northfield, the median gross rent represents 14.5% of the median household income. Winona has the least afford‐
able rents (19.1% of median household income), followed by Faribault (18.4%), Albert Lea (17.9%), and St. Peter (17.5%). MAXFIELD RESEARCH INC. 62 FOR‐SALE MARKET A
ANALYSIS Introdu
uction Maxfield Research an
nalyzed the for‐sale hou
using markett in Red Wing by collectiing data on home salles, foreclosures, the supply of resid
dential lots inn the area, aand conductting interview
ws with areaa real estate
e professionaals. Demand
d calculationns for generaal occupancyy for‐sale ho
ous‐
ing in the
e Market Are
ea between 2014 and 20
025 are also provided. Home SSales Table D‐1
1 on the follo
owing page provides infformation onn sales of sin
ngle‐family d
detached ho
omes and multtifamily unitss (includes townhomes, twinhomes,, and condominiums) in the City of R
Red Wing and
d Goodhue C
County from
m 2007 throu
ugh June 20114. The dataa was obtain
ned from thee Greater M
Minneapoliss Association
n of Realtors. The follow
wing points ssummarize kkey findings:  From
m 2007 through June 201
14, there were 1,656 ressidential salees in Red Wing, represen
nting appro
oximately 56
6% of all Goo
odhue County sales. Hoomes in Red Wing have b
been selling at an avverage annuaal rate of 219 units per yyear since 20007. Within
n Red Wing, roughly 89%
% of all sales were forr detached siingle‐family homes. Thee multifamilyy market ap
ppears to be rela‐
tivelyy small in Red Wing, as there have been only 36 condominiu
um sales sincce 2007 (2%
% of the to
otal) and 147 townhouse sales (9% o
of the total) . Throughou
ut the Remaainder of Good‐
hue C
County, overr 91% of all ssales were fo
or detached single‐family homes wh
hile only 9% of the saales were fo
or multifamilly units.  Resid
dential sales activity spikked in 2013, with 273 tottal sales in R
Red Wing. B
Between 200
07 and 2
2012, the nu
umber of hom
me sales decclined ‐9% w
with a total o
of 205 closed
d transaction
ns in 2012. The number of single‐‐family detacched sales d ropped ‐16%
% while multtifamily salee transsactions nearrly doubled. MAXFIELLD RESEARCH INC. 63 FOR‐SALE MARKET ANALYSIS TABLE D‐1
RESIDENTIAL RESALES ACTIVITY
2007 through June 2014
City of Red Wing
Median
Sale Price
%
Change
$133,450
$125,235
$125,000
$119,614
$125,000
$134,775
$141,950
$154,950
6.6%
0.2%
4.5%
‐4.3%
‐7.3%
‐5.1%
‐8.4%
‐‐
$154,750
$127,900
$138,000
$129,000
$136,000
$155,000
$185,900
$179,850
$74,000
$50,000
$70,000
$84,500
$71,500
$90,000
$95,000
$91,700
Goodhue County
Closed
Sales
%
Change
Median
Sale Price
%
Change
Closed
Sales
%
Change
104
237
179
176
181
196
188
212
‐‐
32.4%
1.7%
‐2.8%
‐7.7%
4.3%
‐11.3%
‐‐
$151,789
$150,000
$135,456
$130,000
$134,900
$142,500
$142,000
$159,950
1.2%
10.7%
4.2%
‐3.6%
‐5.3%
0.4%
‐11.2%
‐‐
176
453
344
296
346
354
317
355
‐‐
31.7%
16.2%
‐14.5%
‐2.3%
11.7%
‐10.7%
‐‐
21.0%
‐7.3%
7.0%
‐5.1%
‐12.3%
‐16.6%
3.4%
‐‐
12
‐‐
33 73.7%
19 ‐5.0%
20 ‐16.7%
24 26.3%
19 111.1%
9 ‐18.2%
11
‐‐
$148,000
$151,000
$138,000
$119,000
$126,800
$154,000
$171,450
$168,450
‐2.0%
9.4%
16.0%
‐6.2%
‐17.7%
‐10.2%
1.8%
‐‐
17
45
29
31
34
29
16
22
‐‐
55.2%
‐6.5%
‐8.8%
17.2%
81.3%
‐27.3%
‐‐
48.0%
‐28.6%
‐17.2%
18.2%
‐20.6%
‐5.3%
3.6%
‐‐
7
‐‐
3 ‐57.1%
7 40.0%
5 25.0%
4 ‐20.0%
5 150.0%
2 ‐33.3%
3
‐‐
$80,855
$83,000
$67,450
$90,000
$119,000
$94,900
$97,500
$82,246
‐2.6%
23.1%
‐25.1%
‐24.4%
25.4%
‐2.7%
18.5%
‐‐
11
7
12
11
12
7
6
5
‐‐
‐41.7%
9.1%
‐8.3%
71.4%
16.7%
20.0%
‐‐
Single‐family Detached
June 2014 ytd
2013
2012
2011
2010
2009
2008
2007
Townhouse
June 2014 ytd
2013
2012
2011
2010
2009
2008
2007
Condominium
June 2014 ytd
2013
2012
2011
2010
2009
2008
2007
Sources: Greater Minneapolis Area Association of Realtors; Maxfield Research, Inc.


Through the first six months of 2014, sales activity is trailing 2013 slightly as a total of 123 transactions have closed (21 per month average), compared to an annual average of 23 per month in 2013. By the end of the year, activity may surpass 2013, as summer tends to be a busy residential real estate season. As of 2013, the median sale price for single‐family homes in Red Wing was $125,235, roughly ‐17% lower than the Goodhue County median sale price of $150,000. On average, Red Wing’s median single‐family home price has been ‐8% lower than the County median price since 2007. MAXFIELD RESEARCH INC. 64 FOR‐SALE MARKET A
ANALYSIS 



As illu
ustrated in tthe followingg graph, the median salee price for single‐family homes hit a low pointt in 2011, at $130,000 in
n Goodhue C
County and $$119,614 in Red Wing. W
While home prices fluctuated over the ye
ears, the med
dian sale pri ce for singlee‐family hom
mes is trending m $119,614 in 2011 to $1
125,000 in 22012, $125,2235 in 2013, and $133,45
50 up, climbing from
ugh the first half of 2014
4. A similar ttrend is occuurring in thee Twin Cities Metro Areaa. throu
While
e multifamilyy values havve jumped during the firsst six month
hs of 2014, condominium
m and ttownhome p
pricing has not exhibited
d the steady growth expeerienced in tthe single‐faamily markket. The 201
13 median off $127,900 fo
or townhousse units is slightly lowerr than the medi‐
an sale price of $
$138,000 in 2
2012, and it is substantiaally lower th
han the averrage pricing o
of $148,780 over th
he previous ffive years. C
Condominium
m prices exp
perienced a ‐‐41% declinee be‐
tween 2011 ($84
4,500) and 20
013 ($50,000
0), before cl imbing to $774,000 as off June 2014.
In Red Wing, new
w constructio
on comprise
ed roughly 1%
% of all single‐family sales and 15% of 14 new singl e‐family hom
mes, 19 new
w townhousee multiifamily sales since 2007. A total of 1
units, and 14 new
w condominium units we
ere purchaseed in Red W
Wing during that time perriod. Since
e 2007, new construction
n single‐family homes haave sold at aa median priice of $165,4
485, rough
hly 25% high
her than prevviously owned homes. TThe median sale price fo
or new construc‐
tion ttownhome u
units ($200,0
000) is 33% h
higher than previously o
owned, whilee new construc‐
tion ccondominium
m unit pricin
ng ($219,490
0) is more thhan double tthe sale pricee of previously owne
ed condomin
niums. Association of Realtors, home sales in Minnesota increased
d According to the Minnesota A
appro
oximately 3.9% between
n 2007 and 2
2013, while tthe median sale price drropped ‐10.5
5% to $1
170,000. It appears that sale prices h
have bottom
med and are beginning to increase, aas the m
median price
e increased 9
9.5% betwee
en 2011 and 2012 and 13.0% between 2012 and
d 2013. Through Ju
une 2014, th
he median saale price in M
Minnesota cclimbed 3.2%
% since year‐‐end to $1
175,500. MAXFIELLD RESEARCH INC. 65 FOR‐SALE MARKET ANALYSIS 
As depicted in Table D‐2, single‐family detached homes priced between $100,000 and $149,999 have been the most popular product in Red Wing since 2012, representing 27% of all sales, while homes sold in the $50,000 to $99,999 price range represent 22% of all sales. Single‐family detached homes priced between $150,000 and $199,999 and between $200,000 and $299,999 represented 17.6% and 17.4% of all single‐family detached sales, respectively. Homes priced above $300,000 represented only 5% of all transactions, and homes priced below $50,000 represented 12% of all sales. TABLE D‐2
RESIDENTAL SALES ACTIVITY ‐ PRICE DISTRIBUTION
CITY OF RED WING
2012
Closed
Sales
Less than $50,000
$50,000 to $99,999
$100,000 to $149,999
$150,000 to $199,999
$200,000 to $299,999
$300,000 or more
% of
Total
2013
Closed
Sales
% of
Total
2014 ytd
Closed
Sales
% of
Total
Total
Closed
Sales
% of
Total
23
39
47
35
31
6
12.7%
21.5%
26.0%
19.3%
17.1%
3.3%
26
55
68
40
38
12
10.9%
23.0%
28.5%
16.7%
15.9%
5.0%
13
19
26
17
22
7
12.5%
18.3%
25.0%
16.3%
21.2%
6.7%
62
113
141
92
91
25
11.8%
21.6%
26.9%
17.6%
17.4%
4.8%
181
100%
239
100%
104
100%
524
100%
Multifamily
Less than $50,000
$50,000 to $99,999
$100,000 to $149,999
$150,000 to $199,999
$200,000 to $299,999
$300,000 or more
2
13
6
5
2
0
7.1%
46.4%
21.4%
17.9%
7.1%
0.0%
3
13
7
9
4
0
8.3%
36.1%
19.4%
25.0%
11.1%
0.0%
0
10
1
7
1
0
0.0%
52.6%
5.3%
36.8%
5.3%
0.0%
5
36
14
21
7
0
6.0%
43.4%
16.9%
25.3%
8.4%
0.0%
Total
28
100%
36
100%
19
100%
83
100%
Total

Of the multifamily units sold in Red Wing since 2012, over 43% were priced in the $50,000 to $99,999 range. One‐quarter (25%) of the multifamily units were priced between $150,000 and $199,999, and 17% were in the $100,000 to $149,999 price range. Roughly 8% of the multifamily units sold were priced between $200,000 and $299,999 while 6% of the sales were for units priced below $50,000. There have not been any multifamily units sold for $300,000 or more. MAXFIELD RESEARCH INC. 66 FOR‐SALE MARKET ANALYSIS Active Listings Table D‐3 presents a summary of single‐family detached and multifamily homes currently listed for sale in Red Wing. Multifamily includes condominiums, townhouses, twin homes, and patio homes.  There are 133 homes listed for sale in Red Wing as of November 2014. Roughly 91% of the for‐sale listings (121 homes) are single‐family detached housing units and the remaining 9% (12 homes) are multifamily units. The median asking price for single‐family homes in the City is $195,000, which is 46% higher than the median price of closed sales through the first six months of 2014 and 56% higher than the median price of sales closed in 2013. The me‐
dian asking price for multifamily units is $135,700, roughly 11% higher than the median price of closed multifamily sales in 2013 ($122,500). TABLE D‐3
RESIDENTIAL HOMES LISTED FOR SALE
CITY OF RED WING
November 2014
Listings
% of
Total
Median
Year Built
Average
Size
Median
Price
Price per
Sq. Ft.
Less than $50,000
$50,000 to $99,999
$100,000 to $149,999
$150,000 to $199,999
$200,000 to $299,999
$300,000 or more
2
12
26
22
20
39
1.5%
9.0%
19.5%
16.5%
15.0%
29.3%
1900
1914
1935
1963
1985
1981
1,112
1,295
1,503
2,263
2,418
3,740
$41,825
$83,750
$129,250
$179,200
$249,950
$375,000
$37.61
$64.67
$85.99
$79.19
$103.37
$100.27
Subtotal
121
91.0%
1961
2,486
$195,000
$78.44
0
2
6
2
2
0
0.0%
1.5%
4.5%
1.5%
1.5%
0.0%
‐‐
1985
1998
2005
2006
‐‐
‐‐
1,083
1,478
1,251
2,311
‐‐
‐‐
$86,700
$129,450
$189,900
$252,500
‐‐
‐‐
$80.06
$87.58
$151.80
$109.26
‐‐
Subtotal
12
9.0%
2005
1,513
$135,700
$89.69
Market Total
133
100%
1966
2,399
$190,000
$79.20
Multifamily
Less than $50,000
$50,000 to $99,999
$100,000 to $149,999
$150,000 to $199,999
$200,000 to $299,999
$300,000 or more

The average size of homes listed for sale is 2,399 square feet which equates to a median price per square foot of $79.20. With an average size of 2,486 square feet, the median price per square foot for single‐family homes is $78.44. Multifamily units are substantially small‐
er, at 1,513 square feet, but priced higher on a per square foot basis with a median price of $89.69 per square foot. MAXFIELD RESEARCH INC. 67 FOR‐SALE MARKET A
ANALYSIS 


Approximately 14
4% of the lissted homes w
were built inn the year 20000 or later while 15% w
were built in the 1990ss, 6% in the 1980s, 12% in the 1970ss, 10% in thee 1960s, 8% in the 1950ss, 4% in the 1940s. Over 31% of all listted homes w
were built prrior to 1940 and may be in and 4
need of some improvementss. All of the homes builtt in the 19600s or earlier aare single‐faamily detacched housingg units. Multifamily units representt 39% of the for‐sale hom
mes that weere built in 2000 or laater. There
e is a fairly d
direct relatio
onship betwe
een the priciing, age, and
d size of hom
mes in Red W
Wing. The o
older homes tend to be ssmaller and have a loweer asking pricce per squarre foot than newe
er homes. Siingle‐family homes with
h asking pricees below $100,000 are tthe smallest with sizes ranging from
m as small as 741 square
e feet to neaarly 2,050 sq
quare feet w
with an averaage of 1,233 squaare feet. Ho
omes in this price range are also thee oldest, as aall of these h
hous‐
size o
es we
ere built prio
or to 1960. SSingle‐familyy homes witth asking prices at $300,,000 or higheer are, b
by far, the laargest with sizes rangingg from 1,877 square feett to as large as 7,626 squ
uare feet ((average size
e of 3,740 sq
quare feet). Nearly half of the homees in this price range weere built since 1990. As illu
ustrated in tthe followingg graph, there appears tto be an oversupply of h
higher‐priced
d home
es in Red Wing while low
wer‐priced h
homes seem to be underrsupplied. LLower‐priced
d (belo
ow $100,000) homes rep
presented 36
6% of all salee transaction
ns since 2012, while onlyy 13% o
of the home
es listed for ssale are priced lower thaan $100,0000. Converselly, 29% of th
he home
es listed for sale are pricced at $300,0
000 or moree while only 4% of the closed sales w
were for ho
omes in the $300,000+ p
price range. Housing deemand (as in
ndicated by cclosed sale transsactions since 2012) appears to be highest for m
moderately‐p
priced homes as 26% of tthe closed transactio
ons were for homes price
ed between $100,000 to
o $149,999, 25% were in
n the $50,0
000 to $99,9
999 range, an
nd 19% were
e priced betw
ween $150,0000 to $199
9,999. Similaarly, 24% o
of the home
es listed for ssale are priced between $100,000 and $149,999
9, while 18%
% are in the
e $150,000 tto $199,999 range, but o
only 11% aree priced from
m $50,000 to
o $99,999. MAXFIELLD RESEARCH INC. 68 FOR‐SALE MARKET ANALYSIS Foreclosures Table D‐4 presents sheriff’s sale foreclosure data compiled by HousingLink for the Minnesota Homeownership Center. Sheriff’s sale records do not necessarily reflect the total number of properties that enter the foreclosure process as some portion of properties identified in sher‐
iff’s sale records do not result in actual loss of title and occupancy for borrowers because they are redeemed within the allowed timeframe. Foreclosure rate is defined as the number of foreclosed mortgages as a percent of total residential parcels.  There were 11,834 foreclosures in Minnesota during 2013 which was down ‐34% from 2012 and is slightly lower than the total number of foreclosures in 2006 (11,907), which is gener‐
ally considered to be the first year of the foreclosure crisis. Greater Minnesota experienced a ‐30% decline in foreclosures between 2012 and 2013, while the Twin Cities Metro Area experienced a ‐37% drop in foreclosures.  Goodhue County had 113 foreclosures in 2013, down ‐18% from 2012 and ‐50% from 2010 when foreclosures peaked at 225. Foreclosures in Goodhue County and the rest of the State have declined sharply for three consecutive years. TABLE D‐4
SHERIFF'S SALE FORECLOSURES IN MINNESOTA
2006 ‐ 2013
Goodhue County
Minnesota
Greater MN
Twin Cities
Foreclosures
2013
2012
2011
2010
2009
2008
2007
2006
Count
113
138
170
225
174
188
153
106
% Change
‐18.1%
‐18.8%
‐24.4%
29.3%
‐7.4%
22.9%
44.3%
‐‐
Count
11,834
17,895
21,298
25,673
23,019
26,251
20,398
11,907
% Change
‐33.9%
‐16.0%
‐17.0%
11.5%
‐12.3%
28.7%
71.3%
‐‐
Count
5,080
7,209
8,117
9,894
8,560
8,987
7,430
4,777
% Change
‐29.5%
‐11.2%
‐18.0%
15.6%
‐4.8%
21.0%
55.5%
‐‐
Count
6,754
10,686
13,181
15,779
14,459
17,264
12,968
7,130
% Change
‐36.8%
‐18.9%
‐16.5%
9.1%
‐16.2%
33.1%
81.9%
‐‐
Rate
0.67
0.82
1.02
1.34
1.04
1.13
0.92
0.65
% Change
‐18.3%
‐19.6%
‐23.9%
28.8%
‐8.0%
22.8%
41.5%
‐‐
Rate
0.65
0.99
1.18
1.42
1.28
1.46
1.15
0.68
% Change
‐34.3%
‐16.1%
‐16.9%
10.9%
‐12.3%
27.0%
69.1%
‐‐
Rate
0.57
0.81
0.91
1.11
0.97
1.02
0.85
0.55
% Change
‐29.6%
‐11.0%
‐18.0%
14.4%
‐4.9%
20.0%
54.5%
‐‐
Rate
0.73
1.16
1.43
1.72
1.58
1.89
1.44
0.80
% Change
‐37.1%
‐18.9%
‐16.9%
8.9%
‐16.4%
31.3%
80.0%
‐‐
Foreclosure Rate
2013
2012
2011
2010
2009
2008
2007
2006
Foreclosure rate = the number of foreclosed mortgages as a percent of total residential parcels
Sources: HousingLink; Maxfield Research, Inc.
MAXFIELD RESEARCH INC. 69 FOR‐SALE MARKET A
ANALYSIS 
Based
d on a foreclosure rate ccomparison, Goodhue C
County has historically m
maintained a lower level of forreclosures th
han Minneso
ota, althoughh in 2013, M
Minnesota’s fforeclosure rate was 0
0.65, slightlyy lower than 0.67 in Goo
odhue Countty. Greater M
Minnesota h
had a foreclo
osure rate o
of 0.57 while
e the Twin C
Cities Metrop
politan Area had a forecclosure rate o
of 0.73 in 20
012. Good
dhue Countyy’s foreclosure rate peakked at 1.34 inn 2010 whilee Minnesotaa’s rate peakked in 2008 at 1.46. 


Manyy foreclosed properties aare neglecte
ed and in pooor condition
n with extensive repairs needed. As such, they can be very difficu
ult to sell annd can have a negative im
mpact on ho
ome prices. Foreclose
ed homes are typically p
priced at a di scount and they increasse the supplyy of home
es on the maarket, likely resulting in lower pricess for other homes on thee market. The prese
ence of a forreclosed hom
me in poor condition cann lessen the desirability of a neighbo
or‐
hood for potentiaal buyers and exert dow
wnward presssure on hom
me prices. Table
e D‐5 on the next page e
examines the
e number off lender‐med
diated (forecclosure and sshort sale) transactionss that occurrred in Red W
Wing from 20006 to 2013 and the imp
pact of thosee sales on pricing. Foreclosure
es are properties in whicch the financcial institutio
on has reposs‐
sesse
ed the home from the ow
wner due to non‐paymeent of mortgage obligatio
ons. A shortt sale refers to an arran
ngement wh
here the financial instituttion and thee in‐default h
homeownerr work together in an attempt to sell the h
home beforee it is foreclo
osed upon. FForeclosuress and shortt sales (lende
er‐mediated
d properties)) are differennt than traditional real eestate sales be‐
cause
e a lender is involved by acting direcctly as the cuurrent owneer/seller or aas an intermeedi‐
ary w
with approval powers. er‐mediated
d transaction
ns representted approxim
mately 28% o
of all residen
ntial sales in Red Lende
Wingg in 2013 (25
5% were fore
eclosures and 3% were sshort sales), while the reemaining 72% were traditional ssales. The p
proportion of lender‐me diated transsactions in R
Red Wing hass de‐
clined
d sharply sin
nce peaking at 41% of to
otal sales (888 transaction
ns) in 2011. MAXFIELLD RESEARCH INC. 70 FOR‐SALE MARKET A
ANALYSIS 

As illu
ustrated below, the med
dian sale price for forecllosed homess is significan
ntly lower th
han home
es sold in traaditional tran
nsactions, an
nd the relatiively high nu
umber of forreclosures th
hat occurrred from 20
010 to 2012 exerted dow
wnward presssure on priccing. On avverage, the m
median sale price for a fforeclosed pproperty is ro
oughly ‐48%
% lower than the price of a home ssold in a trad
ditional transaction. Homes sold through a short sale proceess have median sale
e prices that are approxiimately ‐31%
% lower than
n homes sold
d in a traditional transsaction. TABLE D‐5
LEENDER‐MEDIATTED VS. TRADITIO
ONAL SALES
CITY
Y OF RED WING
2
2006 ‐ 2013
2013
2012
2011
2010
2009
2008
2007
2006
oreclosure
Fo
Trraditional
Total
S
Short Sales
M
Median
Saale Price
ed
Close
Sale
es
Median
Sale Price
Closed
Sales
% of
Tottal
Median
e
Sale Price
Closed
Sales
%
% of
To
otal
Median
n
Sale Pricce
Closed
Sales
%
% of
TTotal
$1
126,900
$1
127,500
$1
119,850
$1
125,000
$1
139,900
$1
142,000
$1
158,250
$1
164,425
285
5
219
9
217
7
222
2
235
5
214
4
246
6
287
7
$145,000
$153,500
$142,712
$149,900
$150,250
$153,750
$162,620
$169,700
206
152
129
145
188
161
226
269
72..3%
69..4%
59..4%
65..3%
80..0%
75..2%
91..9%
93..7%
$75,908
$70,000
$75,992
$89,550
$77,202
$78,000
$87,000
$85,275
72
60
80
63
45
51
19
16
25
5.3%
27
7.4%
36
6.9%
28
8.4%
19
9.1%
23
3.8%
7..7%
5..6%
$100,00 0
$78,500
0
$132,50 0
$82,950
0
$88,550
0
$139,95 0
$111,00 0
$106,50 0
7
7
8
14
2
2
1
2
2.5%
2
3
3.2%
3
3.7%
6
6.3%
0
0.9%
0
0.9%
0
0.4%
0
0.7%
Sources: Greater Minneeapolis Area As sociation of Reealtors; Maxfieeld Research, In
nc.
MAXFIELLD RESEARCH INC. 71 FOR‐SALE MARKET ANALYSIS Residential Lots for Sale Table D‐6 provides a summary of the residential lots currently listed for sale in the City of Red Wing (or just outside the City limits) from information gathered from the Greater Minneapolis Association of Realtors.  There are currently 41 residential lots listed for sale in Red Wing (34 single‐family lots and seven townhome lots), divided between 12 separate subdivisions. Pine Ridge Second Addi‐
tion is currently the most active subdivision, with seven single‐family listings (21% of the total) and three townhome lots (43%), followed by Thoreau Mountain and Hi Park Heights Fourth Addition, both with five lots listed for sale. TABLE D‐6
RESIDENTIAL LOTS FOR SALE BY SUBDIVISION
CITY OF RED WING
November 2014
Lots Min. Size Max. Size Average for Sale (Sq. Ft.)
(Sq. Ft.)
Size
Min. Price
Max.
Price
Average Price
Price/ Est. Home 1
Sq. Ft.
Value
Single‐Family Subdivisions
Total Single‐Family
Cannondale Court
Charlson Crest
Gadient Estates
Gadient Heights
Hi Park Heights 4th
Pine Ridge 2nd
Pleasant View Poplar Ridge
Sunny Meadow
Thoreau Mountain
Westwood Hills III
34
1,263
295,337
62,089
$4,000
$159,900
$62,759
$1.01
$313,795
4
1
2
3
5
7
1
3
1
5
2
18,295
14,810
8,319
10,381
10,686
14,375
6,534
190,357
10,785
87,120
109,771
44,431
14,810
12,086
18,274
63,162
16,202
6,534
295,337
10,785
206,474
209,959
27,878
14,810
10,203
13,671
31,153
15,117
6,534
233,917
10,785
124,582
159,865
$24,900
$19,850
$34,500
$44,500
$45,000
$19,000
$12,850
$91,000
$45,000
$105,000
$89,500
$52,500
$19,850
$39,500
$54,500
$99,000
$38,900
$12,850
$119,000
$45,000
$159,900
$99,500
$43,700
$19,850
$37,000
$48,500
$67,600
$28,914
$12,850
$104,167
$45,000
$123,980
$94,500
$1.57
$1.34
$3.63
$3.55
$2.17
$1.91
$1.97
$0.45
$4.17
$1.00
$0.59
$218,500
$99,250
$185,000
$242,500
$338,000
$144,570
$64,250
$520,835
$225,000
$619,900
$472,500
7
1,263
8,712
4,624
$4,000
$30,000
$15,557
$3.36
$77,785
4
3
1,263
8,712
1,699
8,712
1,557
8,712
$4,000
$28,900
$5,500
$30,000
$5,000
$29,633
$3.21
$3.40
$25,000
$148,165
Multifamily Subdivisions
Total Multifamily
Cannon River Bluffs
Pine Ridge 2nd
1
Home value represents the anticipated value of homes built in the subdivision, based on the assumption that land values equate to 20% of total home value.
Sources: Greater Minneapolis Area Association of Realtors; Goodhue County; Maxfield Research, Inc.

Lot prices vary depending on location, features and community amenities. List prices range from as low as $0.35 per square foot for a 6.8‐acre site in the Poplar Ridge Subdivision to a high of $4.68 per square foot for a 10,700 square‐foot (.25 acre) lot in Hi Park Heights Fourth Addition. Throughout Red Wing, the average per square foot cost for single‐family lots is $1.01 with an average lot price of $62,759. Multifamily lots have an average per square foot cost of $3.36 and average lot cost of $15,557.
MAXFIELD RESEARCH INC. 72 FOR‐SALE MARKET A
ANALYSIS 


Sizes range from as small as 1,263 square
e feet for a ttownhome lot in Cannon River Blufffs to uare feet (6.8
8 acres) for aa single‐fam
mily lot in Pop
plar Ridge. TThe averagee sin‐
over 295,000 squ
e in Red Win
ng is 62,089 ssquare feet (1.42 acres), while multtifamily lots aav‐
gle‐faamily lot size
erage
e 4,624 squaare feet (0.11
1 acre).
Based
d on the median list pricce in each su
ubdivision annd assumingg that land vaalues equatee to 20% o
of the total home value,, we estimatte the anticippated value of homes in
n these subd
divi‐
sions. Single‐fam
mily values raange from ass low as $644,250 in the PPleasant Vieew subdivisio
on to nearly $620,000 in Thoreau M
Mountain. TThe average value for neew constructtion homes in these
e subdivision
ns is estimated to be $31
13,795. In Red Wing, geo
ographic facttors such as topography and floodplains (i.e. Mississippi River, pring Creek, aand Hay Cre
eek) restrict tthe amount of land thatt is able to be Cannon River, Sp
uch, most off the availab
ble lots are c lustered in aareas that caan accommo
odate subdivided. As su
opment, nottably the sou
uthern and w
western secttions of the City. residential develo
Resiidential Lotss for Sale by Subdivision
n MAXFIELLD RESEARCH INC. 73 FOR‐SALE MARKET ANALYSIS Residential Lot Supply Table D‐7 identifies residential lots and subdivisions in Red Wing. Information in the table includes year open, total number of lots, the number of lots developed, and the number of lots that remain available. This information was derived from the Housing Market Analysis and Demand Estimates study prepared for the Red Wing Housing and Redevelopment Authority in 2009. According to the City of Red Wing, no new residential subdivisions have been platted since 2009. Maxfield Research reviewed residential lot sales and new construction sales data to determine changes in the supply of available lots since 2009.  There have been a total of 342 single‐family lots and 395 multifamily lots platted in the City of Red Wing since the late 1990s. Roughly 55% of these single‐family lots and 56% of the multifamily have been developed or sold. Of these platted lots, 326 remain available (153 single‐family lots and 173 multifamily lots).  On average, the single‐family subdivisions have absorbed lots at a rate of roughly 1.3 lots per year, with Charlson Crest 5th Addition being absorbed at the fastest pace (3.1 lots per year). Multifamily developments have experienced stronger demand, as lots absorbed at an average annual rate of 3.0 lots per year. The Ridgeview townhome development ab‐
sorbed at the fastest pace (6.9 units per year), followed by Cannon River Bluffs (4.6 units per year).  Based on the total average annual lot absorption of 36.8 lots per year in the City of Red Wing, the 326 available lots could potentially take nearly nine years to be developed, alt‐
hough the pace of lot sales could accelerate with increasing demand for new housing after the recession. Also, this assumption does not take into account the quality and marketabil‐
ity of specific lots.  In total, the single‐family subdivisions have absorbed lots at an annual rate of 15.7 lots per year, while the multifamily subdivisions have absorbed slightly faster, at 21.1 lots per year. As such, the 153 available single‐family lots could take nearly ten years to be developed and the 173 remaining multifamily lots could take up to eight years to develop.  The industry standard for a balanced lot supply is three to five years. As such, it appears that the existing supply of platted lots in Red Wing is adequate to meet demand through the end of the decade.  Based on the information presented in Table D‐6 (Residential Lots Listed for Sale by Subdivi‐
sion), it appears that many of these available lots are not being actively marketed through real estate agents, although builders may be marketing lots separately. MAXFIELD RESEARCH INC. 74 FOR‐SALE MARKET ANALYSIS TABLE D‐7
RESIDENTIAL LOT SUPPLY
CITY OF RED WING
November 2014
Year Open
Total Lots
Lots Developed
Available
Lots
Average Annual Lot Absorption
2008
2006
2006
2005
2004
2004
2003
2002
2001
2001
1997
1992
15
65
44
5
12
18
27
6
19
31
36
64
7
25
5
4
6
14
18
3
11
29
26
41
8
40
39
1
6
4
9
3
8
2
10
23
1.2
3.1
0.6
0.4
0.6
1.4
1.6
0.3
0.8
2.2
1.5
1.9
342
189
153
15.7
21
38
108
144
51
9
24
20
21
41
69
48
2
21
1
17
67
75
3
7
3
2.2
2.3
4.6
6.9
3.7
0.1
1.2
Multifamily Total:
395
222
173
21.1
Red Wing Total:
737
411
326
36.8
Subdivisions
Single‐Family
Gadient Heights 3rd Charlson Crest 5th
Highlands of Red Wing
Westwood Hills 3rd
Danforth Place
Cannondale Court
Westwood Hills 2nd
Westwood Hills
Briarwood 1st & 2nd
Charlson Crest 3rd
Pine Ridge 2nd
Hi Park Heights 4th
Single‐Family Total:
Multifamily
Central Park Condominiums
Charlson Crest 4th
Cannon River Bluffs
Ridgeview
Briarwood 1st & 2nd
Hi Park Hills 7
Pine Ridge 2nd
2005
2005
2005
2004
2001
2000
1997
Sources: City of Red Wing; Goodhue County; Maxfield Research, Inc.
MAXFIELD RESEARCH INC. 75 FOR‐SALE MARKET ANALYSIS New Construction Pricing Table D‐8 identifies residential subdivisions in Red Wing that have had new construction homes sold in the past three years. No new construction homes are currently listed for sale through local real estate agents. Information in the table includes subdivision name, asking price ranges, the finished square feet of new construction homes, and the style of homes sold. This information was derived from new construction homes sold since 2011.  There has been limited new construction sales activity in Red Wing in recent years. Accord‐
ing to available data, there have been seven new single‐family homes, three new town‐
home units, and four condominium units sold since 2011. New construction pricing in these single‐family subdivisions ranges from a low of $115,000 in Highlands of Red Wing to a high of $284,500 in Sunny Meadow. On average, the price for these new construction single‐
family homes is $168,045. Multifamily pricing ranges from $102,000 at Ridgeview Town‐
homes to over $226,000 for a townhome in the Siewerts Briarwood development, with an average price of $177,767. Condominium units at the Central Park Condominium project have sold for an average price of nearly $207,000.  The average size (based on total finished square feet) for new single‐family homes in Red Wing is 1,562 square feet, with a range of 1,466 square feet for in Highlands of Red Wing to 1,761 square feet in Sunny Meadow. On average, new single‐family construction in Red Wing is priced at roughly $108 per square foot. New multifamily units are generally target‐
ed to the empty‐nester population and are slightly larger (average size of 1,585 square feet), and they are priced higher, with an average sale price of $123 per square foot. TABLE D‐8
NEW CONSTRUCTION PRICING BY SUBDIVISION
RED WING, MINNESOTA
November 2014
Sale/List Price Range
Subdivision
Low
High
Finished Square Feet
Average
Low
High
Average $/Sq. Ft. Style
Single‐Family
Sunny Meadow
Highlands of Red Wing
Westwood Hills
Danforth Place
$284,500
$115,000
$180,000
$150,845
‐ $284,500
‐ $115,000
‐ $180,000
‐ $174,720
$284,500
$115,000
$180,000
$162,783
1,761
1,466
1,624
1,329
‐ 1,761
‐ 1,466
‐ 1,624
‐ 1,717
1,761
1,466
1,624
1,523
$161.56
$78.44
$110.84
$106.88
Total
$115,000 ‐ $174,720
$168,045
1,329 ‐ 1,761
1,562
$107.58
Central Park Condos
Ridgeview
Siewerts Briarwood
$194,000 ‐ $219,980
$102,000 ‐ $102,000
$205,000 ‐ $226,300
$206,990
$102,000
$215,650
1,560 ‐ 1,760
1,323 ‐ 1,323
1,616 ‐ 1,705
1,660
1,323
1,661
$124.69
$77.10
$129.87
Total
$172,142 ‐ $431,825
$194,469
1,323 ‐ 1,760
1,585
$122.69
one‐story
two‐story
two‐story
two‐story
Multifamily
condominium
townhome
townhome
MAXFIELD RESEARCH INC. 76 FOR‐SALE MARKET ANALYSIS Real Estate Agent/Builder Interviews In an attempt to gain additional insight into trends in the for‐sale residential market in Red Wing, Maxfield Research solicited input from real estate agents, developers, and builders active in the area. Topics addressed included issues such as the general condition of Red Wing’s housing stock, the types of homes being sought by buyers, and whether the existing supply of available housing in Red Wing satisfies current buyer demand. The following points summarize the findings from this process.  Most properties in Red Wing have been well‐maintained and Red Wing has a strong resi‐
dential market. There seems to be a housing shortage in the City, and both sales activity and pricing are expected to trend upwards over the next several years, but at a gradual pace.  There is demand for a variety of housing types, ranging from affordable entry‐level homes to higher‐priced executive housing. Entry‐level housing was described as being anything below $150,000, while move‐up housing is generally in the $150,000 to $300,000 range. Homes priced above $300,000 would be considered executive housing. Temporary housing (i.e. housing for short‐term or contract workers/employees) and affordable rental housing are also in demand.  Buyers currently active in the market are a mix of existing residents looking to purchase move‐up housing and households that are new to Red Wing. Renters have also been mov‐
ing into the for‐sale market, seeking entry‐level housing, as the perceived monthly cost for an entry‐level home is similar to the cost of a rental unit on a monthly basis.  Many area workers and executives reside in other communities because they are not able to find suitable housing in Red Wing.  Land costs are relatively affordable, but rising construction costs are pushing new construc‐
tion pricing upwards. Buyers can generally find better value in an existing home. MAXFIELD RESEARCH INC. 77 FOR‐SALE MARKET ANALYSIS For‐Sale Housing Market Demand Analysis Table D‐9 presents demand calculations for general occupancy for‐sale housing in Red Wing between 2014 and 2025. This analysis identifies potential demand for general occupancy for‐
sale housing that is generated from both new households and turnover households. The following points summarize our findings.  According to our projections, the PMA is expected to grow by 630 households between 2014 and 2025. Because the 65 and older cohort is typically not a target market for new general occupancy for‐sale housing, we limit demand from household growth to only those households under the age of 65. In the PMA, roughly 20% of the projected household growth will occur among households age 64 and younger which results in projected demand for 126 general occupancy for‐sale units from household growth. Based on household ten‐
ure data from the US Census, we expect that 75% of the demand will be for owner‐occupied housing units, equating to a potential of 95 owner households from household growth.  As of 2014, there are approximately 5,689 owner households under the age of 65 in the PMA. Based on household turnover data from the 2012 American Community Survey, we estimate that 49% of these under‐65 owner households will experience turnover between 2014 and 2025. This estimate results in anticipated turnover of approximately 2,788 exist‐
ing households by 2025.  We then estimate the percent of existing owner households turning over that would prefer to purchase new housing. In Red Wing, roughly 3% of all home sales were for new con‐
struction since 2007, while nearly 5% of all sales were for new construction throughout the remainder of Goodhue County. In the United States, approximately 8% of all home sales were for new homes in recent years while nearly 5% of Midwest sales were for new homes. Considering the age of Red Wing’s housing stock along with recent sale trends in the Market Area, and understanding that new construction activity slowed significantly due to the Great Recession, we estimate that 10% of the households turning over in the City will desire new housing. This estimate results in demand from existing households for 279 new owned units in the PMA between 2014 and 2025.  Total demand from household growth and existing household turnover between 2014 and 2025 equates to 374 new for‐sale housing units in the PMA. An additional proportion is added for households that would move into ownership housing in the PMA who currently reside outside the area.  Due, in large part, to the employment opportunities along with other community amenities (i.e. Mississippi River, natural features, etc.), Red Wing will draw a portion of potential home buyers from areas outside the PMA. We estimate that 25% of the demand potential for general occupancy ownership housing in Red Wing would be derived from outside the area, increasing total demand to 498 units. MAXFIELD RESEARCH INC. 78 FOR‐SALE MARKET ANALYSIS 
Based on our population and household growth projections, we estimate that the City of Red Wing will capture 60% of the PMA’s demand for new for‐sale housing between 2014 and 2025, equating to demand for 299 units between 2014 and 2025. Based on building permit trends, new construction sales data, and our household growth projections by age group in the Market Area, we estimate that 60% of the householders seeking new housing will desire single‐family housing, while the remaining 40% will seek multifamily units. We anticipate that there will be demand for approximately 179 general occupancy single‐family homes and 120 multifamily units in Red Wing between 2014 and 2025. TABLE D‐9
GENERAL OCCUPANCY FOR‐SALE HOUSING DEMAND
CITY OF RED WING
2014 to 2025
DEMAND FROM PROJECTED HOUSEHOLD GROWTH
Projected household growth in the PMA 2014 to 2025¹
2
630
x
=
20%
126
x
=
75%
95
=
5,689
x
(times) Estimated % of owner turnover (age 64 and younger, 2014 to 2025)
(equals) Total existing households projected to turnover between 2014 and 2025 =
49%
2,788
(times) Pct. of HH growth for general occupancy housing
(equals) Projected demand for general occupancy units
3
(times) Propensity to Own
(equals) Number of potential owner households from HH growth
DEMAND FROM EXISTING OWNER HOUSEHOLDS
Number of owner households (age 64 and younger) in the PMA, 2014
4
(times) Estimated % desiring new owner housing
(equals) Demand from existing households
x
=
10%
279
Total Demand From Household Growth and Existing Households, 2014 to 2025
=
374
(times) Ownership demand generated from outside PMA
(equals) Total demand potential for ownership housing in the PMA
+
=
25%
498
% of PMA Demand Capturable in the City of Red Wing
Demand from Household Growth and Existing Households in Red Wing
x
=
60%
299
(times) Percent desiring for‐sale single family (SF) vs. multifamily (MF)
5
(equals) Total demand potential for new for‐sale housing in Red Wing
1
Estimated household growth based per ESRI and Maxfield Research Inc.
2
Pct. of household growth under age 65
Single Family
Multi‐
family
x
60%
40%
=
179
120
3 Pct. Owner households under age 65 in 2010
4
Based on household turnover and mobility data (2012 American Community Survey, Five Year Estimates).
5 Based on new construction sales data, building permit data, and growth projections by age group.
* Multifamily demand includes demand for townhomes, twinhomes, and condominium units.
Source: Maxfield Research Inc.
MAXFIELD RESEARCH INC. 79 RENTAL MARKET ANALYSIS Introduction The following section of the report analyzes current market conditions for general occupancy rental housing in Red Wing. Topics covered include rental housing data from the American Community Survey, detailed information on individual rental developments in Red Wing, and a calculation of rental housing demand. Overview of Rental Market Conditions Maxfield Research utilized data from the American Community Survey (ACS) to summarize rental market conditions in Red Wing and the surrounding Market Area. The ACS is an ongoing survey conducted by the United States Census Bureau that provides data every year rather than every ten years as presented by the decennial census. We use this data because these figures are no longer available from the decennial census. Table E‐1 shows estimated rental vacancy rates and gross rental rates by community from the 2008‐2012 ACS (the most recent data available) compared to estimates from the 2007‐2011 ACS, the 2006‐2010 ACS, and the 2005‐2009 ACS. This vacancy estimate is typically higher than what is found in apartment buildings due to the inclusion of other types of rental situations. Based on the ACS definition, a housing unit is considered vacant if no one is living in it at the time of the interview. Also, units occupied at the time of interview entirely by persons who are staying two months or less and who have a more permanent residence elsewhere are consid‐
ered to be temporarily occupied and are classified as vacant. Vacant units are excluded from the housing inventory if they are open to the elements (roof, walls, windows, and/or doors no longer protect the interior), if they have been condemned, or if they are to be demolished. Gross rent is defined as the amount of the contract rent plus the estimated average monthly cost of utilities (electricity, gas, and water and sewer) and fuels (oil, coal, wood, etc.) if these are paid by the renter.  In 2012, it was estimated that the rental vacancy rate in Red Wing was 7.7%, slightly higher than the rest of Goodhue County, which had an estimated vacancy of 6.4%. Red Wing’s va‐
cancy rate was also higher than the adjacent Minneapolis‐St. Paul Metropolitan Statistical Area (4.9%) and State of Minnesota (5.2%).  Compared to the 2007‐2011 ACS, the estimated rental vacancy in Red Wing increased 3.0 percentage points from 4.7% while Goodhue County’s vacancy rate held relatively steady. The State of Minnesota and the Minneapolis‐St. Paul MSA experienced declining vacancy, dropping ‐0.6% and ‐0.7%, respectively. MAXFIELD RESEARCH INC. 80 RENTAL MARKET ANALYSIS 
The median gross rent in Red Wing jumped 3.3%, from $690 during the 2007‐2011 ACS to $713 in the 2008‐2012 ACS, after experiencing more modest increases since the 2005‐2009 ACS. Similarly, Goodhue County experienced a 3.3% increase in the median gross rent to $690, while the median gross rent in the MSA and in Minnesota climbed 2.3% and 2.4%, re‐
spectively. TABLE E‐1
RENTAL HOUSING VACANCY ESTIMATES
2009 ‐ 2012
2012
Vacancy
City of Red Wing
Goodhue County
Mpls‐St. Paul MSA*
Minnesota
7.7%
6.4%
4.9%
5.2%
2011
Rent
$713
$690
$884
$802
Vacancy
4.7%
6.5%
5.6%
5.8%
2010
Rent
$690
$668
$864
$783
Vacancy
6.8%
6.7%
6.1%
6.3%
2009
Rent
$678
$667
$842
$759
Vacancy
4.4%
6.0%
6.6%
6.8%
Rent
$671
$661
$830
$746
Notes: MSA represents the 16‐County Metropolitan Statistical Area; Rent equals median gross rent
Sources: American Community Survey; Maxfield Research, Inc.
Table E‐2 on the following page presents a breakdown of median gross rent and monthly gross rent ranges by number of bedrooms in renter‐occupied housing units from the 2008‐2012 ACS in Red Wing and the Remainder of the Primary Market Area in comparison to the State of Minnesota.  Because of the difference in methodology between the decennial census and the ACS, there are slight differences in the total number of renter‐occupied units presented between the two surveys. Census data indicates that there were 2,223 renter‐occupied housing units in Red Wing in 2010 while the ACS shows 1,957 renter‐occupied housing units. The ACS unit count is based on sample data and single‐family units can fluctuate between owned and rented.  As presented in Table C‐2 in an earlier section of this study, 23% of the renter‐occupied units in Red Wing are in single‐family (1‐unit), detached structures while 35% are in struc‐
tures with 20 or more units, and approximately 17% of the renter‐occupied units are in structures with between 10 and 19 units. Red Wing has a relatively low proportion of rent‐
er‐occupied single‐unit, attached units, as only 1% of all renter‐occupied units are in single‐
unit, attached structures, compared to 8% in Minnesota.  Red Wing has relatively affordable rents when compared to Minnesota. The median gross rent in the City was at $713 during the 2008‐2012 ACS, roughly 11% lower than the median rent of $802 in the State. However, the median gross rent in the Remainder of the PMA ($923) is slightly higher than the State median, although there are relatively few renter‐
occupied housing units (390) in the Remainder of the PMA. MAXFIELD RESEARCH INC. 81 RENTAL MARKET ANALYSIS TABLE E‐2
BEDROOMS BY GROSS RENT, RENTER‐OCCUPIED HOUSING UNITS
PRIMARY MARKET AREA
2012
Red Wing
PMA
% of Total
#
Total:
1,957
Median Gross Rent
$713
100%
Remainder of PMA
% of Total
#
2,347
100%
$748
% of Total
#
390
100%
$923
MN
% of Total
100%
$644
No Bedroom
Less than $200
$200 to $299
$300 to $499
$500 to $749
$750 to $999
$1,000 or more
No cash rent
43
0
0
26
17
0
0
0
2%
0%
0%
1%
1%
0%
0%
0%
43
0
0
26
17
0
0
0
2%
0%
0%
1%
1%
0%
0%
0%
0
0
0
0
0
0
0
0
0%
0%
0%
0%
0%
0%
0%
0%
4%
0%
0%
1%
2%
0%
0%
0%
0
1 Bedroom
Less than $200
$200 to $299
$300 to $499
$500 to $749
$750 to $999
$1,000 or more
No cash rent
755
68
94
182
232
88
91
0
39%
3%
5%
9%
12%
4%
5%
0%
820
68
94
207
261
90
91
9
35%
3%
4%
9%
11%
4%
4%
0%
65
0
0
25
29
2
0
9
17%
0%
0%
6%
7%
1%
0%
2%
34%
1%
3%
5%
11%
9%
4%
0%
2 Bedrooms
Less than $200
$200 to $299
$300 to $499
$500 to $749
$750 to $999
$1,000 or more
No cash rent
681
0
0
83
148
268
125
57
35%
0%
0%
4%
8%
14%
6%
3%
792
0
0
93
190
296
143
70
34%
0%
0%
4%
8%
13%
6%
3%
111
0
0
10
42
28
18
13
28%
0%
0%
3%
11%
7%
5%
3%
38%
1%
1%
2%
8%
12%
12%
1%
0
3 or More Bedrooms
Less than $200
$200 to $299
$300 to $499
$500 to $749
$750 to $999
$1,000 or more
No cash rent
478
0
0
102
115
88
161
12
24%
0%
0%
5%
6%
4%
8%
1%
692
7
0
103
124
113
270
75
29%
0%
0%
4%
5%
5%
12%
3%
214
7
0
1
9
25
109
63
55%
2%
0%
0%
2%
6%
28%
16%
24%
0%
0%
1%
3%
4%
12%
3%
MAXFIELD RESEARCH INC. 82 RENTAL MARKET AN
NALYSIS 
One‐bedroom un
nits are the m
most commo
on rental un it type in Reed Wing, rep
presenting 39
9% ental units in
n the City compared to 334% in Minnesota. Onlyy 17% of the of all occupied re
e Remainder of the PMA
A are one‐beedroom unitts. Most ren
ntal units in tthe rentaal units in the
Remaainder of the
e PMA have three or mo
ore bedroom
ms (55%). Un
nits with three or more bed‐
room
ms comprise 24% of the rrenter‐occup
pied housingg units in Red Wing and the State. 


Approximately 35
5% of the re
enter‐occupied housing uunits in Red Wing have ttwo bedroom
ms comp
pared to 28%
% in the Rem
mainder of th
he PMA and 38% in Minn
nesota. Theere are very ffew units without a b
bedroom (stu
udio/efficien
ncy units) in the PMA as only 2% of tthe units in Red Wingg do not have
e a bedroom
m while the R
Remainder oof the PMA d
does not havve any studio
o units. By comparrison, 4% of all renter‐occcupied unitts in the Statte have no b
bedroom. Rougghly 4% of the renter‐occcupied units in Red Wingg were repo
orted as having no cash rrent. These
e units may be owned by friends or relatives whho live elsew
where and w
who allow occcu‐
pancyy at no chargge. Rent‐fre
ee houses orr apartment units may b
be provided tto compensaate carettakers, minissters, tenantt farmers, orr others. ents in in Red
d Wing range
e from less tthan $200 to
o over $1,00
00 with over 26% Montthly gross re
rentin
ng for betwe
een $500 and $749 per m
month. Appproximately 23% have grross monthlyy rentss between $7
750 and $99
99, and 20% have rents bbetween $3000 and $499
9. Over 19% rent for $1
1,000 or more per montth, while 5% have monthhly rents in tthe $200 to $299 range,, while
e 3% rent forr less than $200 per mon
nth. 0% of the un
nits without a bedroom in Red Wingg have gross monthly ren
nts Approximately 60
betw
ween $300 an
nd $499 while 40% have
e rents betweeen $500 an
nd $749. No
o units witho
out a bedro
oom have re
ents that are
e lower than $300 per m
month or high
her than $74
49 per montth. Nearly 31% of the one‐bedro
oom units in Red Wing reent for betw
ween $500 and $749 perr mately 24% have gross m
monthly rentts between $300 and $4
499 while 13
3% montth. Approxim
have rents betwe
een $200 and $299. Rou
ughly 12% off the units h
have monthlyy rents ranging MAXFIELLD RESEARCH INC. 83 RENTAL MARKET AN
NALYSIS 

from $750 to $99
99 while ano
other 12% re
ent for $1,0000 or more p
per month an
nd 9% rent ffor less tthan $200 pe
er month. Over 39% of the two‐bedroom units in R
Red Wing havve rents ranging from $7
750 to $999, and e of $500 to $749. Two‐‐bedroom units with ren
nts of $1,000
0 or 22% have a rentaal rate range
e represent 1
18% of all renter‐occupie
ed units in t he City, while 12% havee rents rangin
ng more
from $300 to $49
99. There arre no two‐be
edroom unitts renting forr less than $
$200 per month. ore bedroom
ms in Red Wiing rent for $
$1,000 or more Nearly 34% of the units with three or mo
per m
month, while
e 24% rent fo
or between $500 and $7749 per mon
nth. Over 21
1% have a reental rate rrange of $30
00 to $4999 and 18% ren
nt for $750 tto $999 per month. Theere are no un
nits with three or mo
ore bedroom
ms renting for less than $$200 per mo
onth. General Occupancy Rental Projects Maxfield Research In
nc. compiled detailed infformation foor general occcupancy ap
partment pro
o‐
jects with
h eight or more units in the City of R
Red Wing, inncluding 13 m
market rate apartment propertie
es, two afforrdable tax crredit commu
unities, and eeight subsidized propertties in November 2014. Daata for these
e apartment projects waas collected bby contactin
ng managerss and owners for each of the propertie
es. present a com
mbined totaal of 641 unitts, includingg 325 markett rate units, 68 These properties rep
d 248 subsidized units. TThe rents sh own represeent quoted rrents and haave affordable units, and
not been
n adjusted to
o reflect the inclusion orr exclusion oof utilities at this time. TTable E‐3 on the followingg pages summarizes info
ormation on these proje cts. MAXFIELLD RESEARCH INC. 84 RENTAL MARKET ANALYSIS TABLE E‐3
GENERAL OCCUPANCY RENTAL PROPERTIES
CITY OF RED WING, MINNESOTA
November 2014
Project Name/Location
Occp.
Date
No. of Total
Units Vacant
Type
Unit Description
Size
No. Vac.
AFFORDABLE/TAX CREDIT PROJECTS
2005
48
0
2BR
36
0
928 ‐ 950
vacancy rate: 0.0%
3BR
12
0
1,000 ‐ 1,266
Eagle Ridge Apts
582 Tyler Rd S
Red Wing
Monthly Rent
Min
Max
Rent/sq. ft.
Min
Max
$650 ‐ $650
$765 ‐ $765
$0.68 ‐ $0.70
$0.60 ‐ $0.77
Notes: Tax Credit property. Two‐story building. Amenities include community room, full kitchen appliance package, on‐site laundry, balcony/patio, and playground. Rent includes gas, water, garage, and sewer.
20
0
3BR
20
0
1,201 ‐ 1,201
$780 ‐ $780
$0.65 ‐ $0.65
Pheasant Run Townhomes 1995
259‐298 Frenn Ave
vacancy rate: 0.0%
Red Wing
Notes: Two‐story Tax Credit townhome rental community. Amenities include stove/refrigerator, washer/dryer hook‐ups, balcony/patio, and private entrances.
Affordable Subtotal:
Maple Hills
521 Maple St
Red Wing
68
0
0.0% vacant
SUBSIDIZED PROJECTS
'72/'07 96
0
1BR
72
0
NA ‐ NA
$640 ‐ $640
NA ‐ NA
vacancy rate: 0.0%
2BR
16
0
NA ‐ NA
$730 ‐ $730
NA ‐ NA
3BR
8
0
NA ‐ NA
$885 ‐ $885
NA ‐ NA
Notes: Four two‐story buildings. Project funded through Tax Credit, Section 8, HOME, and Long Term Homeless programs. Minimum rent is $25 with rents based on 30% of adjusted monthly income. Rents shown above reflect market rent. Tenant pays phone and cable. Waiting list for all units. The estimated wait for a one‐bedroom apartment is about six months; for a two or three‐bedroom apartment, the wait is about 12‐18 months.
Trailside Acres I & II
1988
48
0
1BR
24
0
575 ‐ 575
$490 ‐ $665
$0.85 ‐ $1.16
211‐219 Sargent Dr
vacancy rate: 0.0%
2BR
16
0
725 ‐ 725
$510 ‐ $685
$0.70 ‐ $0.94
Red Wing
3BR
8
0
925 ‐ 925
$530 ‐ $705
$0.57 ‐ $0.76
Notes: Two‐story building. Tenant pays phone and cable. 29 units with rental assistance. Utilities included. On‐site laundry, playground, and garage parking available for additional fee.
$505 ‐ $725
$0.88 ‐ $1.26
Malmquist Estates
1985
30
0
1BR
6
0
575 ‐ 575
2622 Malmquist Ave
vacancy rate: 0.0%
2BR
21
0
725 ‐ 725
$575 ‐ $735
$0.79 ‐ $1.01
Red Wing
3BR
3
0
925 ‐ 925
$600 ‐ $745
$0.65 $0.81
Notes: Two‐story building. Tenant pays phone and cable. 25 units with rental assistance. On‐site laundry, garage parking available for additional fee.
Wings Apartments
1983
24
0
1BR
18
0
650 ‐ 650
$465 ‐ $490
$0.72 ‐ $0.75
2536 Malmquist Ave
vacancy rate: 0.0%
2BR
6
0
750 ‐ 750
$505 ‐ $530
$0.67 ‐ $0.71
Red Wing
Notes: Two‐story building. Tenant pays electric, phone, and cable. 10 units with rental assistance. Assigned surface lot parking. Heat, water, sewer, and trash removal included in rent. On‐site coin operated laundry.
Burnside Apartments
1988
32
0
1BR
20
0
624 ‐ 624
$430 ‐ $590
$0.69 ‐ $0.95
187 Sargent Dr
vacancy rate: 0.0%
2BR
12
0
768 ‐ 768
$465 ‐ $640
$0.61 ‐ $0.83
Red Wing
Notes: Two‐story building. Tenant pays electric, phone, and cable. 14 units with rental assistance. Heat, water, sewer, and trash removal included. Amenities include on‐site laundry, controlled entrance, and playground. Garage fee of $25/month.
‐‐‐‐‐continued‐‐‐‐‐
MAXFIELD RESEARCH INC. 85 RENTAL MARKET ANALYSIS TABLE E‐3 continued
November 2014
Pioneer Place
341 Pioneer Rd
Red Wing
Occp.
Date
No. of Total
Units Vacant
1975
6
0
vacancy rate: 0.0%
Type
3BR
4BR
Unit Description
Size
No. Vac.
5
1
0
0
NA ‐ NA
NA ‐ NA
Monthly Rent
Min
Max
Rent/sq. ft.
Min
Max
30% of AGI
30% of AGI
NA ‐ NA
NA ‐ NA
Notes: Six‐plex property. Residents pay utilities. Rent based on 30% of AGI. Owned by Red Wing HRA.
Deer Run Townhomes
1974
6
0
3BR
5
0
NA ‐ NA
30% of AGI
NA ‐ NA
613 21st Street
vacancy rate: 0.0%
4BR
1
0
NA ‐ NA
30% of AGI
NA ‐ NA
Red Wing
Notes: Six‐plex property. Residents pay utilities. Rent based on 30% of AGI. Owned by Red Wing HRA
Featherstone Court
1974
6
0
3BR
5
0
NA ‐ NA
30% of AGI
NA ‐ NA
861 Featherstone Rd
vacancy rate: 0.0%
4BR
1
0
NA ‐ NA
30% of AGI
NA ‐ NA
Red Wing
Notes: Six‐plex property. Residents pay utilities. Rent based on 30% of AGI. Owned by Red Wing HRA.
Subidized Total:
248
0
0.0% vacant
MARKET RATE PROJECTS
Pleasant Ridge Apts
1995
38
0
1BR
11
0
675 ‐ 675
$669 ‐ $669
$0.99 ‐ $0.99
2488 Malmquist Ave
vacancy rate: 0.0%
2BR
27
0
879 ‐ 899
$769 ‐ $769
$0.86 ‐ $0.87
Red Wing
Notes: Three‐story building. Tenant pays electric, phone, cable. Heat, trash pick‐up, and garage parking included in rent. Units include walk‐in closets and full kitchen applicance package.
Siewert Apartments
1913 Perlich Ave
Red Wing
Notes:
Siewert Apartments
1935 Perlich Ave
Red Wing
Notes:
Siewert Apartments
2005 Perlich Ave
Red Wing
Notes:
Siewert Apartments
1826 Pioneer Rd
Red Wing
Notes:
Siewert Apartments
725 Featherstone Rd
Red Wing
Notes:
Pottery Place Apts
2000 Old W Main St
Red Wing
Notes:
1994
36
0
vacancy rate: 0.0%
1BR
2BR
6
30
0
0
800 ‐ 800
1,000 ‐ 1,000
$665 ‐ $665
$715 ‐ $730
$0.83 ‐ $0.83
$0.72 ‐ $0.73
Three‐story building. Tenant pays utilities. Detached garages included in rent.
1994
36
0
1BR
6
0
800 ‐ 800
$665 ‐ $665
vacancy rate: 0.0%
2BR
30
0
1,000 ‐ 1,000
$715 ‐ $730
$0.83 ‐ $0.83
$0.72 ‐ $0.73
1989
36
0
1BR
6
0
800 ‐ 800
$650 ‐ $650
vacancy rate: 0.0%
2BR
30
0
1,000 ‐ 1,000
$690 ‐ $710
$0.81 ‐ $0.81
$0.69 ‐ $0.71
1978
24
0
2BR
24
0
1,000 ‐ 1,000
$700 ‐ $700
vacancy rate: 0.0%
$0.70 ‐ $0.70
1972
24
0
2BR
24
0
1,000 ‐ 1,000
$690 ‐ $690
vacancy rate: 0.0%
$0.69 ‐ $0.69
1982
24
0
1BR
9
0
900 ‐ 900
$825 ‐ $825
vacancy rate: 0.0%
2BR
15
0
1,100 ‐ 1,100
$875 ‐ $995
$0.92 ‐ $0.92
$0.80 ‐ $0.90
Fourth floor of historic Pottery Place Building. Tenant pays electric, phone, cable, intenet, and garage. Units include washer/dryer hook‐up and dishwasher. Garage parking available for $50/month.
‐‐‐‐‐continued‐‐‐‐‐
MAXFIELD RESEARCH INC. 86 RENTAL MARKET ANALYSIS TABLE E‐3 continued
November 2014
Occp.
Date
No. of Total
Units Vacant
Type
Unit Description
Size
No. Vac.
Monthly Rent
Min
Max
Rent/sq. ft.
Min
Max
Kingswood Apartments 1978
24
1
2BR
24
1
775 ‐ 875
$625 ‐ $625
$0.71 ‐ $0.81
134 Kingswood Dr
vacancy rate: 4.2%
Red Wing
Notes: Surface and garage parking available. Rent includes city services; tenant responsible for electric. Single‐car garage parking space included in rent.
Bluffview Townhomes
NA
12
0
2BR
12
0
1,000 ‐ 1,000
$697 ‐ $697
$0.70 ‐ $0.70
515 E 5th Street
vacancy rate: 0.0%
Red Wing
Notes: Two‐story building. Four first‐floor units handicap accessible. Tenant pays electricity. Gas, sewer, water, and garbage included in rent. Surface parking. Units include stove, refrigerator, washer and dryer. Managed by Red Wing HRA.
Siewert Apartments
1885
28
0
EFF
15
0
NA ‐ NA
$470 ‐ $470
NA ‐ NA
309/213 Bush St
vacancy rate: 0.0%
1BR
13
0
NA ‐ NA
$540 ‐ $540
NA ‐ NA
Red Wing
Notes: Rent includes heat. Second and third floor apartment units above commercial space. No parking available on site.
Liberty's Pizza Building
1900
5
0
1BR
4
0
NA ‐ NA
$500 ‐ $500
NA ‐ NA
NA ‐ NA
303 W 3rd St
vacancy rate: 0.0%
3BR
1
0
NA ‐ NA
$750 ‐ $750
Red Wing
Notes: Apartment units above Liberty's Pizza restaurant. Rent includes heat and water. No parking available on site.
Metro Apartments
1880
13
1
1BR
10
1
500 ‐ 500
$400 ‐ $450
$0.80 ‐ $0.90
309/313 Plum Street
vacancy rate: 7.7%
2BR
3
0
700 ‐ 700
$500 ‐ $500
$0.71 ‐ $0.71
Red Wing
Notes: Second story apartment units above commercial space. Rent includes water. No parking available on site. Adjacent property owner rents parking spaces for $20 per month.
Eagle House Apartments 1900
17
1
Room
8
0
190 ‐ 190
$500 ‐ $500
$2.63 ‐ $2.63
325 Plum Street
vacancy rate: 5.9%
EFF
9
1
250 ‐ 250
$680 ‐ $680
$2.72 ‐ $2.72
Red Wing
Notes: Originally 25 private sleeping rooms; 16 rooms remodeled into 6 efficiency units. The one vacant unit is currently being renovated after a fire. Rent includes furnishings and all utilities.
Alleva Apartments
1962
8
NA
EFF
8
NA
NA ‐ NA
NA ‐ NA
NA ‐ NA
5th Street W
vacancy rate: NA
Red Wing
Notes: Unable to contact owner. Surface parking behind building. Second story apartment units above commercial space.
Market Rate Subtotal:
325
3
0.9% vacant
City of Red Wing Total:
641
3
0.5% vacant
Source: Ma xfi eld Res ea rch Inc.
MAXFIELD RESEARCH INC. 87 R
RENTAL MARKEET ANALYSIS General‐Occupancy Rental H
Housing Lo
ocation Map M
MAXFIELD RESEEARCH INC. 88 RENTAL MARKET AN
NALYSIS 
Red W
Wing’s rentaal housing market is agin
ng, as the meedian year b
built for all properties is 1980 and tthere has no
ot been a new
w project de
eveloped sin ce the mid‐22000s (Eaglee Ridge and aan expan
nsion of Maple Hills). Ro
oughly 31% of the units were constrructed in thee 1980s while 22% w
were built in
n the 1970s, and 10% we
ere construccted prior to
o 1950. The inventory exx‐
panded by 21% in
n the 1990s and 15% in the 2000s. Most of the newest devvelopments aare er tax credit o
or subsidized projects. TThere has noot been a large (8 units or more) maarket eithe
rate rrental housing project developed in Red Wing inn nearly 20 yyears (1995)). 4 provides a summary off the unit miix, average ssizes, and avverage rental rates amon
ng Table E‐4
these gen
neral occupaancy rental p
properties. Rental ratess presented in the table are a weighted average based on the
e number off units in eacch project. TTherefore, d
developmentts with a largger of units conttribute more
e toward the
e average thhan those with fewer units. number o
TABLE E‐4
UNIT MIX SUMMARY
Y
SELECTED GENERAL OCC
CUPANCY RENTTAL DEVELOPM
MENTS
Novvember 2014
Weighted Monthly Rent
Unit Type
Unitt
Mix
Vacant
Units
Avg. A
Size
Studio/Effiiciency
1‐Bedroom
m
2‐Bedroom
m
3+Bedroom
m
6%
32%
%
51%
%
11%
%
1
1
1
0
207
658
925
1
1,111
Total:
100%
%
3
853
R
Range
Low
w ‐ High
Avg. Rent
Avg. R
Rent/
Sq.. Ft.
‐ $680
‐ $825
‐ $995
‐ $885
$537
$597
$692
$761
$2 .59
$0 .91
$0 .75
$0 .68
$470
0 ‐ $995
$658
$0 .77
$470
0
$400
0
$465
5
$530
0
Source: Maa xfi el d Res ea rch Inc.
r

ur survey, on
nly three unitts were vacaant, resultingg in an overaall vacancy rrate At the time of ou
of 0.5
5% in Red W
Wing. There w
were a total of 325 markket rate unitts, three of w
which were vva‐
MAXFIELLD RESEARCH INC. 89 RENTAL MARKET ANALYSIS cant representing a 0.9% vacancy rate. There are two affordable tax credit projects (Eagle Ridge and Pheasant run) with a total of 68 units, all of which are occupied. There are also eight fully‐occupied deep‐subsidy rental projects in Red Wing with a total of 248 units. 





The equilibrium vacancy rate for rental housing is considered to be 5.0% which allows for normal turnover and an adequate supply of alternatives for prospective renters. In effect, the supply of rental housing in Red Wing is below the level adequate to meet demand. As depicted in Table E‐4, roughly 51% of the units in the inventory of general occupancy rental projects are two‐bedroom units. Approximately 32% of the units have one bedroom and 11% have three or four bedrooms. Efficiency units comprise roughly 6% of the invento‐
ry. Vacancies are spread evenly between efficiency, one‐bedroom, and two‐bedroom units, with one vacancy each. On average, units in these general occupancy projects are 853 square feet, with efficiency units being the smallest (207 square feet) and three‐ and four‐bedroom units being the largest at 1,111 square feet. One‐bedroom units have an average size of 658 square feet, while the two‐bedroom units are 925 square feet. The weighted average rental rate across all general occupancy properties is $658 per month with a range of $470 for an efficiency unit at the 309 Bush Street apartment property to as high as $995 for a three‐bedroom unit at Pottery Place Apartments. Three‐ and four‐bedroom units are the highest priced, averaging $761 per month, roughly 10% higher than the average monthly rent of $692 for two‐bedroom units. One‐bedroom units have an average rent of $597 per month, while the efficiency units have an average rent of $537 per month. On a per square‐foot basis, one‐bedroom units average $0.91, compared to $0.75 in two‐bedroom units, and $0.68 in the three‐ and four‐bedroom units. There is limited unit size information for the efficiency units, but based on the information available, efficiency units have an average rent of $2.59 per square foot. While each property manages utilities differently, heat, water, and sewer are included in the rent at most properties. Most new rental properties (post 2000) require the tenant to pay most, if not all, of the utilities. The majority of the properties surveyed provide kitchen appliances and wall unit air conditioning, but relatively few offer an in‐unit washer and dry‐
er. Most of the properties provide a common laundry room. Garage parking is available at most of the rental properties, although parking in Downtown Red Wing is generally accom‐
modated off‐site. It appears that modern features and amenities such as stainless steel ap‐
pliances, granite countertops, in‐unit washer/dryer, walk‐in closets, fitness center, swim‐
ming pool, community room, and outdoor living options (fire pit, picnic area, etc.) are not available at the general occupancy rental properties in Red Wing. MAXFIELD RESEARCH INC. 90 RENTAL MARKET AN
NALYSIS The following are photographs o
of select general occupanncy rental properties in Red Wing.
Eagle Ridge Apartme
ents M
Maple Hills Trailside Acres Malmquist Estattes Wings Apartmentss Piioneer Placee MAXFIELLD RESEARCH INC. 91 RENTAL MARKET AN
of select general occupanncy rental properties in Red Wing.
Deer Run Townhomes Siewert Apartmeents ents Pottery Place Apartme
wood Apartm
ments Kingsw
w Townhomes Bluffview
Upper ‐Story Aparttments Dow
wntown Red W
Wing MAXFIELLD RESEARCH INC. 92 RENTAL MARKET ANALYSIS Pending Rental Developments Maxfield Research Inc. interviewed City staff in Red Wing and the communities comprising the PMA to identify any new rental developments that are proposed, planned, or under construc‐
tion in the Market Area. As of November 2014, there are two pending projects totaling 70 units in the City of Red Wing.  The City recently approved Northstar Development Partners’ Conditional Use Permit application to allow construction of a 30‐unit market rate apartment building at 1851 Old West Main Street in Red Wing. As proposed, the development would consist of a three and one‐half story building along with 30 stalls of indoor parking and a 30‐stall surface parking lot. Unit sizes range in size from 700 square‐foot one‐bedroom units to 1,047 square‐foot two bedroom units, and each unit would have a balcony or patio. While this project has been approved by the City, the developer has been unable to secure financing for the de‐
velopment.  CommonBond Communities proposed to construct a 40‐unit Low Income Housing Tax Credit (LIHTC) townhome rental project on a site located near the intersection of Tyler Road South and Hewitt Boulevard in Red Wing. Four of the 40 units would be reserved for long‐
term homeless households. This project, referred to as Two Waters Townhomes, would be comprised of a mix of two‐ and three‐bedroom units affordable to households earning less than 60% of Area Median Income (AMI). However, this project did not receive tax credit funding from Minnesota Housing in the most recent round of allocations.  Due to the uncertain timing and funding status of these two projects, we do not include these units in our demand calculations presented on the following pages. MAXFIELD RESEARCH INC. 93 RENTAL MARKET ANALYSIS Rental Housing Demand Analysis Table E‐5 presents a calculation of general‐occupancy rental housing demand in Red Wing. This analysis identifies potential demand for rental housing that is generated from both new house‐
holds and turnover households. A portion of the demand will be drawn from existing house‐
holds in Red Wing that want to upgrade their housing situations. First, we calculate potential demand from new household growth based on the propensity of households to rent their housing. For the purpose of this analysis, we focus on households between the ages of 18 and 64 that will account for the vast majority of general‐occupancy rental demand. Based on an analysis of household growth forecast in specific age cohorts, household growth is projected in the age 25 to 34 age cohort and the 35 to 44 age cohort. The under‐25 and 45 to 64 age groups are expected to experience little to no growth. We also include a portion (15%) of the demand potential generated by households age 65 and older, as a segment of this age group that is able to live independently could be drawn to a new general occupancy rental housing development in Red Wing. Next, we calculate the percentage of household growth that will likely rent their housing based on 2010 Census data by age group. In 2010, roughly 25% of households under the age of 65 rented. The second part of the analysis calculates demand from existing households, or turnover demand. Younger households tend to be highly mobile, relative to older households. Mobility rates were calculated for the renter population based on 2008‐2012 American Community Survey data and were applied to the existing renter household base. Finally, we estimate the percentage of the existing renter households will seek new rental housing by age cohort result‐
ing in demand for 281 units by 2020. We estimate that 25% of the total demand for new rental housing units in Red Wing will come from people currently living outside of the area. As a result, we find demand for 427 renter households based on household growth and turnover of existing households between 2014 and 2025. Due to factors such as the geographic distribution of the renter population in the PMA along with the location of services (entertainment, shopping, education, etc.) in the PMA, we anticipate that the City of Red Wing can capture 75% of the excess demand potential in the PMA. Based on this capture rate, we find demand for 320 new general occupancy rental units in Red Wing between 2014 and 2025. Based on a review of renter household incomes and income limits set by HUD, we estimate that approximately 30% of the total demand will be for deep‐subsidy housing, 30% will be for shallow‐subsidy housing, and 40% will be for market rate housing. Next we subtract housing projects that are under construction or pending at this time at 95% occupancy (equilibrium), since these projects will satisfy some of the demand for new general occupancy rental housing. There are two pending rental housing projects in Red Wing (CommonBond’s Two Waters Townhome development and the 30‐unit Northstar apartment project) containing a total of 40 shallow‐subsidy units and 30 market rate units. However, because the timing and funding status of these two projects is uncertain, we exclude these units from the demand calculations. MAXFIELD RESEARCH INC. 94 RENTAL MARKET ANALYSIS In total, we find demand for 96 deep‐subsidy units, 96 shallow‐subsidy units, and 128 market rate rental units in Red Wing between 2014 and 2025. TABLE E‐5
DEMAND FOR GENERAL OCCUPANCY RENTAL HOUSING
CITY OF RED WING
2014 to 2025
Demand From Household Growth
Projected household growth in the PMA 2014 to 2025¹
630
2
x
=
25%
158
3
x
=
25%
39
=
1,974
x
=
89%
1,757
x
=
16%
281
(times) Pct. Of HH growth for general occupancy housing
(equals) Projected demand for general occupancy units
(times) Proportion Estimated to Be Renting Their Housing
(equals) Projected Demand for Rental Housing Units
Demand From Existing Households
Number of renter households in the PMA, 2014
4
5
(times) Estimated % of renter turnover between 2014 & 2025
(equals) Existing Renter Households Projected to Turnover, 2014 to 2025
6
(times) Estimated % Desiring New Rental Housing
(equals) Demand From Existing Households
Total Demand From Household Growth and Existing Households
320
(plus) Rental demand from outside Market Area
(equals) Total Demand for Rental Housing in the PMA
+
=
25%
427
(times) percent of PMA Demand Capturable in the City of Red Wing
(equals) Total Demand for Rental Housing the City of Red Wing
x
=
75%
320
Deep‐
Subsidy
Shallow‐
Subsidy
Market Rate
7
(times) Percent of rental demand by product type
(equals) Total demand for new general occupancy rental housing units
x
=
30%
96
30%
96
40%
128
(minus) Units under construction or approved*
‐
0
0
0
(equals) Excess demand for new general occupancy rental housing
=
96
96
128
1 Es ti ma ted hous ehol d growth ba s ed per ESRI a nd Ma xfi el d Res ea rch Inc.
² Pct. of hous ehol d growth under a ge 65 pl us 15% of hous ehol ds a ge 65 a nd ol der.
3
Pct. Renter hous ehol ds under a ge 65 i n 2010
4
Renter hous ehol ds a ge 64 a nd younger pl us 15% of renter hous ehol ds a ge 65 a nd ol der.
5
Ba s ed on hous ehol d turnover a nd mobi l i ty da ta (2012 Ameri ca n Communi ty Survey, Fi ve Yea r Es ti ma tes ).
6
Source ‐ The Ups ca l e Apa rtment Ma rket: Trends a nd Pros pects . Prepa red by Ja ck Goodma n of Ha rtrey Advi s ors for the Na ti ona l Mul ti Hous i ng Counci l .
7
Ba s ed on the combi na ti on of current renta l product, i ncome l i mi ts , a nd hous ehol d i ncomes of a rea renters (non‐s eni or hous ehol ds ).
*Pendi ng competi ti ve uni ts a t 95% occupa ncy.
MAXFIELD RESEARCH INC. 95 RENTAL MARKET ANALYSIS Our competitive inventory identified that the vacancy rate (0.5%) for all types of general occupancy rental product is well‐below market equilibrium (5.0% vacancy rate), suggesting that there is substantial pent‐up demand for rental units in Red Wing. As of November 2014, there is a 0.0% vacancy rate in the shallow‐subsidy and deep‐subsidy rental projects in Red Wing, while the market rate vacancy rate is 0.9%. Based on feedback provided by major employers in Red Wing as well as the real estate commu‐
nity, it appears that many renters are forced to reside in rental communities located outside of Red Wing because they can’t find available housing in the City. We believe that the develop‐
ment of new general occupancy rental housing is needed to increase the variety of housing in the community and provide housing opportunities for a market that currently has very few options. Strong demographics from the echo boom generation will likely generate rental housing demand over the next several years. Additionally, there continues to be more lifestyle renters in the market, those with busy professional lives and people who prefer to spend their free time in leisure pursuits rather than on the upkeep and maintenance of a home. Demand for new market rate rental housing is driven primarily by professional young to mid‐age adults and empty nesters. These households tend to have higher incomes and desire rental housing with modern features and higher finish levels. The strongest sources of demand for rental housing in Red Wing will likely be young singles and couples without children in their late‐20s and early‐30s who work in Red Wing or in nearby communities. Additionally, mid‐age households (never‐nesters or empty‐nesters) could be attracted to Red Wing and account for a portion of demand for new rental housing in the area. A rental townhome development could also attract family households, and shallow‐subsidy rental housing will draw from a wide variety of population segments, including; low‐wage workers, single‐parent households, and low‐income family households. MAXFIELD RESEARCH INC. 96 SENIOR HOUSING ANALYSIS Introduction This section provides an assessment of the market support for senior housing (active adult, congregate, assisted living, memory care, and skilled nursing) in Red Wing, Minnesota. An overview of the demographic and economic characteristics of the senior population in the PMA is presented along with an inventory of existing and pending senior housing developments in the PMA. Demand for senior housing is calculated based on demographic, economic and competitive factors that would impact demand for additional senior housing units in the City. Senior Housing Defined Senior housing is a concept that generally refers to the integrated delivery of housing and services to seniors. However, as Figure 1 illustrates, senior housing embodies a wide variety of product types across the service‐delivery spectrum. Products range from independent apartments and/or townhomes with virtually no services on one end, to highly specialized, service‐intensive assisted living units or housing geared for people with dementia‐related illnesses (termed "memory care") on the other end of the spectrum. In general, independent senior housing attracts people age 65 and over while assisted living typically attracts people age 80 and older who need assistance with activities of daily living (ADLs). For analytical purposes, Maxfield Research Inc. classifies market rate senior housing into five categories based on the level and type of services offered: FIGURE 1
CONTINUUM OF HOUSING AND SERVICES FOR SENIORS
Single‐Family Congregate Apartments w/ Optional Townhome or Apartment
Home
Services
Age‐Restricted Independent Single‐Family or Townhomes or Apartments or Condominiums or Cooperatives
Assisted Living
Congregate Apartments w/ Intensive Services
Fully Independent Lifestyle
Nursing Facilities
Memory Care (Alzheimer's Units)
Fully or Highly Dependent on Care
Senior Housing Product Type

Active Adult properties (independent living without services available) can have a rental or owner‐occupied (condominium or cooperative) format and are similar to a general occu‐
pancy building, in that they offer virtually no services but have age‐restrictions (typically 55 or 62 or older). Residents are generally age 70 or older if in an apartment‐style building. Organized entertainment, activities and occasionally a transportation program represent the extent of services typically available at these properties. Because of the lack of services, active adult properties generally do not command the rent premiums of more service‐
enriched senior housing. MAXFIELD RESEARCH INC. 97 SENIOR HOUSING ANALYSIS 



Congregate properties (or independent living with services available) offer support services such as meals and/or housekeeping, either on an optional basis or a limited amount includ‐
ed in the rents. These properties often dedicate a larger share of the overall building area to common areas, in part, because the units are smaller than in adult housing and in part to encourage socialization among residents. Congregate properties attract a slightly older tar‐
get market than adult housing, typically seniors age 75 or older. Rents are also above those of the active adult buildings. Sponsorship by a nursing home, hospital or other health care organization is common. Assisted Living properties come in a variety of forms, but the target market for most is generally the same: very frail seniors, typically age 80 or older (but can be much younger, depending on their particular health situation), who are in need of extensive support ser‐
vices and personal care assistance. Absent an assisted living option, these seniors would otherwise need to move to a nursing facility. At a minimum, assisted living properties in‐
clude two meals per day and weekly housekeeping in the monthly fee, with the availability of a third meal and personal care (either included in the monthly fee or for an additional cost). Assisted living properties also have either staff on duty 24 hours per day or at least 24‐hour emergency response. Memory Care properties, designed specifically for persons suffering from Alzheimer’s disease or other dementias, is one of the newest trends in senior housing. Properties con‐
sist mostly of suite‐style or studio units or occasionally one‐bedroom apartment‐style units, and large amounts of communal areas for activities and programming. In addition, staff typically undergoes specialized training in the care of this population. Because of the great‐
er amount of individualized personal care required by residents, staffing ratios are much higher than traditional assisted living and thus, the costs of care are also higher. Unlike conventional assisted living, however, which addresses housing needs almost exclusively for widows or widowers, a higher proportion of persons afflicted with Alzheimer’s disease are in two‐person households. That means the decision to move a spouse into a memory care facility involves the caregiver’s concern of incurring the costs of health care at a special facil‐
ity while continuing to maintain their home. Skilled Nursing Care, or long‐term care facilities, provides a living arrangement that inte‐
grates shelter and food with medical, nursing, psychosocial and rehabilitation services for persons who require 24‐hour nursing supervision. Residents in skilled nursing homes can be funded under Medicare, Medicaid, Veterans, HMOs and private insurance as well as use of private funds. MAXFIELD RESEARCH INC. 98 SENIOR H
HOUSING AN
NALYSIS Older A
Adult (Age 55+) Popu
ulation and
d Househo
old Trends
The Dem
mographic An
nalysis sectio
on of this stu
udy presenteed general d
demographicc characterisstics of the PM
MA’s populattion. The fo
ollowing poin
nts summari ze key findin
ngs from thaat section ass they pertain to the older aadult populaation in the M
Market Areaa. pulation grow
wth is expected to occurr among oldeer adults in tthe Market Area.  The ggreatest pop
Agingg of baby boomers led to
o an increase of 1,345 p eople (+59%
%) in the 55 tto 64 populaation betw
ween 2000 an
nd 2010 in th
he PMA. As this group aages, all coho
orts age 55 o
or older are ex‐
pecte
ed to see inccreases over the next sevveral years, particularly the 70 to 74
4 age group
which
h is projecte
ed to grow 29
9% (+310 pe
eople) in thee PMA betweeen 2014 and 2020. 

primary market for service‐enhanced housing is senior housseholds age 75 and oldeer. The p
While
e individualss in their 50ss and 60s typ
pically do noot comprise tthe market b
base for servvice‐
enhanced senior housing, the
ey often havve elderly paarents to wh
hom they pro
ovide support n they decide
e to relocate
e to senior h
housing. Sincce elderly paarents typicaally prefer to
o be when
near their adult ccaregivers, ggrowth in the
e older adultt age cohortt (age 55 to 6
64) generallyy re‐
sults in additionaal demand fo
or senior hou
using produccts. The ffrailer the se
enior, the gre
eater the pro
oportion of ttheir incomee they will tyypically spen
nd on housing and servvices. Studie
es have show
wn that senioors are willin
ng to pay inccreasing propor‐
tions of their inco
omes on hou
using with se
ervices, begiinning with aan income aallocation of 40% to 50
0% for marke
et rate adult senior houssing with litttle or no servvices, increaasing to 65% for congrregate housing and to 80% to 90% o
or more for aassisted livin
ng housing. The proceed
ds from the sales off their homes, as well as financial asssistance from
m their adullt children, aare n used as sup
pplemental iincome in orrder to afforrd senior hou
using alternaatives. often
MAXFIELLD RESEARCH INC. 99 SENIOR H
HOUSING AN
NALYSIS 



The kkey market ffor active adult/few servvices housingg is compriseed of senior householdss (age 65+), with incomes of $35,00
00 or more. The age thrreshold increeases to 70++ if in an apart‐
mentt‐style building. In 2014, we estimatte there are 1,605 age‐ aand income‐‐qualified house
eholds in the
e PMA that comprise the key markeet for active adult housin
ng. Including all house
eholds with incomes of $40,000 and
d over (adjussted for inflaation), the number of 65
5+ senio
or household
ds projected to income‐q
qualify for acctive adult/ffew servicess housing is eex‐
pecte
ed to grow to
o 1,978 households in 2020 (+23%).. d is driven byy senior hou seholds (agee 75+) with iincomes of Congregate houssing demand
$35,0
000 or more. We estimaate the number of age‐ aand income‐‐qualified ho
ouseholds in
n the PMA as of 2014 tto be 579 ho
ouseholders,, increasing tto 679 (+17%
%) householders in 2020
0. The ttarget marke
et for assiste
ed living housing is senioor household
ds age 75 and older with
h incom
mes of at leaast $40,000 ((plus senior homeownerrs with loweer incomes). There are aabout 500 o
older senior households (age 75+) in
n the PMA w
with incomess of at least $
$40,000. Incclud‐
ing alll household
ds with incom
mes of $45,0
000 and overr (adjusted ffor inflation)), the numbeer of olderr senior housseholds projected to inccome‐qualifyy for senior h
housing with
h services is ex‐
pecte
ed to grow to
o 584 house
eholds in 202
20 (+17%). mory care housing has a ttarget marke
et of senior households age 65 and older with aa Mem
memory impairm
ment and incomes of at least $60,0000. In 2014, w
we estimatee that there are appro
oximately 89
90 age 65+ h
households in the PMA w
with incomees of at least $60,000, acc‐
countting for 29%
% of all senior households. The num ber of incom
me‐qualified ($65,000 ad
d‐
justed for inflatio
on) households is projected to increaase to 1,3400 by 2020 (+3
39%). We esti‐
mate
e that roughly 15% of the
e senior pop
pulation has a memory im
mpairment aand would b
be a candiidate for me
emory care h
housing. MAXFIELLD RESEARCH INC. 100 SENIOR HOUSING ANALYSIS 




Since senior housing with services is need‐driven, seniors with low incomes are still candi‐
dates for private pay housing, provided they have home equity or other financial assistance that they can utilize to pay for the costs. Very low‐income seniors who are Medicaid‐
qualified also could live in assisted living or memory care facilities that accept Elderly Waiv‐
ers. Due to the limited availability of facilities that accept Elderly Waivers, demand from low‐income seniors is often substantial. Homeownership information lends insight into the number of households that may still have homes to sell and could potentially supplement their incomes from the sales of their homes to support monthly fees for alternative housing. The PMA maintains relatively high rates of homeownership in the older adult age cohorts. The homeownership rate in 2010 was 86% for age 55 to 64 households compared to 85% throughout Minnesota. The PMA homeownership rate increases to 87% for age 65 to 74 households compared to 85% in Minnesota. Seniors typically begin to consider moving into senior housing alternatives or more convenient housing such as apartment buildings or twin homes in their early to mid‐
70s. This movement pattern is demonstrated by the drop in homeownership between the 65 to 74 age cohort (87%) and the 75+ age cohort (65%). This pattern is slightly more pro‐
nounced in the PMA than in the State which has a homeownership rate drop from 85% (age 65 to 74) to 70% (age 75+). With a homeownership rate of 75% for all households over the age of 65, a large number of residents would be able to use the proceeds from the sales of their homes toward senior housing alternatives. The resale of single‐family homes would allow additional senior households to qualify for market rate housing products, since equity from the home sale could be used as supplemental income for alternative housing. These considerations are factored into our demand calculations. In 2013, the median resale price of single‐family homes in Red Wing was $125,235. Because seniors often reside in older homes, we discount the home values by 15% to estimate a me‐
dian sale price of homes occupied by seniors. Applying the 15% discount to the 2013 medi‐
an for the City of Red Wing results in an estimated median sale price of $106,450 for older single‐family homes. Based on the discounted 2013 median sale price ($106,450), a senior household could generate approximately $2,000 of additional income annually (about $167 per month), if they invested in an income‐producing account (2.0% interest rate) after ac‐
counting for marketing costs and/or real estate commissions (6.0% of home sale price). Should a senior utilize the home proceeds dollar for dollar to support living in senior hous‐
ing with services, the proceeds of this home would last over four years in congregate hous‐
ing (monthly rent approximated at $2,000), nearly two and one‐half years in assisted living (monthly rent approximated at $3,500), or approximately two years in memory care hous‐
ing (monthly rent approximated at $4,500). Seniors in service‐intensive housing typically have lengths of stays between two and three years indicating that a large portion of PMA seniors will be financially prepared to privately pay for their housing and services. MAXFIELD RESEARCH INC. 101 SENIOR H
HOUSING AN
NALYSIS Supply of Senior H
Housing in
n the Primaary Market Area Table F‐1
1 provides in
nformation o
on the variou
us senior housing products by servicce‐level. Info
or‐
mation in
n the table in
ncludes yearr built, numb
ber of units, unit sizes, vvacancies, reents, and gen
neral comments about eacch project. TThe following section suummarizes key points fro
om our Octo
ober 2014 survey of the su
upply of senior housing in the Red W
Wing PMA.
 Maxffield Researcch identified ten separatte senior houusing develo
opments in tthe Primary Markket Area. Co
ombined, the
ese projects contain a tootal of 539 seenior housin
ng units and 294 skilled nursing be
eds. Two of these projects with 2044 units are su
ubsidized, w
while the rem
main‐
ing faacilities are m
market rate. Of the 539 senior houssing units, fo
our are curreently vacant, repre
esenting a 0.7% vacancy rate. 

There
e are a total of 342 activve adult units (138 mark et rate and 204 deep‐su
ubsidy units)), only o
one of which
h is vacant fo
or a 0.3% vaacancy rate. There are n
no vacant subsidized uniits, and o
one market rrate unit is vvacant (0.7%
% vacancy). TThe equilibriium vacancyy rate for acttive adultt housing is cconsidered tto be 5.0% w
which allows for normal turnover and an adequaate supply of alternatives for pro
ospective ressidents. In eeffect, the su
upply of available activee adultt housing in tthe Market A
Area appearrs to be beloow the adequate level to
o meet demaand. Rougghly 37% of tthe senior ho
ousing inven
ntory consistts of service‐‐enhanced h
housing unitss, for a totaal of 197 uniits (50 congrregate, 108 aassisted livinng, and 39 m
memory caree units). As o
of Octob
ber 2014, th
here are onlyy three vacan
nt service‐ennhanced uniits (1.5% vaccancy rate). A 93% o
occupancy rrate is generally considered equilibriium in servicce‐enhanced
d senior hou
using, so the current supply of unitss appears to
o be extremeely tight. MAXFIELLD RESEARCH INC. 102 SENIOR HOUSING ANALYSIS TABLE F‐1
SENIOR HOUSING PROJECTS
October 2014
Occp.
Date
Village Cooperative
2533 Eagle Ridge Rd
Red Wing
Notes:
The Downtown Plaza
434 W 4th Street
Red Wing
No. of
Units
Jordan Towers I
433 West 4th St
Red Wing
Notes:
Unit Description
Type
Size
Monthly Rent/Price
Min
Max
Rent/sq. ft.
Min
Max
ACTIVE ADULT/FEW SERVICES
Market Rate
2006
44
0
1BR
871 ‐ 871
$690 ‐ $720
$0.79 ‐ $0.83
vacancy rate: 0.0%
1BR+D 1,049 ‐ 1,049
$910 ‐ $940
$0.87 ‐ $0.90
2BR
1,049 ‐ 1,413
$910 ‐ $1,280
$0.87 ‐ $0.91
3‐story building with underground parking. Amenities include woodworking shop, walking path, community room, in‐unit washer and dryer, and walk‐in closets. Shares range in price from $36,300 to $68,970, and fees covering utilities and maintenance range from $690 to $1,280 per month.
1986
94
vacancy rate:
Notes:
Total
Vacant
1
1.1%
1BR
560 ‐ 690
$978 ‐ $1,245
$1.75 ‐ $1.80
2BR
840 ‐ 1,300
$1,440 ‐ $2,133
$1.71 ‐ $1.64
2BR+D 1,700 ‐ 1,700
$2,400 ‐ $2,400
$1.41 ‐ $1.41
10‐story building. Rent includes apartment, appliances, taxes, maintenance, all utilities, cable TV, trash removal, limited transportation, security, programming, and outings. Parking available for $55/month.
Shallow‐Subsidy/Deep‐Subsidy
1974
100
0
1BR
525 ‐ 528
30% of AGI
NA ‐ NA
vacancy rate: 0.0%
Project‐based Section 8 owned by the Red Wing HRA. All utilities included in rent. Air conditioning available for $5 per month. Laundry facilities available on first floor and parking available for $10 per month. Residents pay 30% of their Adjusted Gross Income (AGI) for rent.
Jordan Towers II
440 West 4th St
Red Wing
1981
104
vacancy rate:
EFF
400 ‐ 400
30% of AGI
NA ‐ NA
1BR
572 ‐ 572
2BR
895 ‐ 895
Notes: Project‐based Section 8 owned by the Red Wing HRA. All utilities included in rent (except electric). Tenants pay their own electric but receive a utility allowance in the amount of $36 for a one‐bedroom unit and $46 for a two‐bedroom unit. Laundry facilities available on first floor and parking available for $10 per month. Residents pay 30% of their Adjusted Gross Income (AGI) for rent.
Total
Vac.
Vac.%
Active Adult (Market Rate) Total:
138 1 0.7%
Active Adult (Affordable) Total:
204 0 0.0%
Deer Crest
470 Fairview Ave
Red Wing
0
0.0%
CONGREGATE
0
EFF
371 ‐ 477
$1,530 ‐ $1,630
$4.12 ‐ $3.42
0.0%
1BR
529 ‐ 811
$1,860 ‐ $2,580
$3.52 ‐ $3.18
1BR+D
677 ‐ 916
$2,200 ‐ $2,850
$3.25 ‐ $3.11
2BR
700 ‐ 1,150
$2,370 ‐ $3,310
$3.39 ‐ $2.88
Catered living facility. Adjacent to Mayo Clinic Health System. Rent includes weekly transportation, emergency response system, and all utilities. Health care services, meals, housekeeping, and underground parking ($52/month) available at an extra charge (continental breakfast included in rent). Amenities include activity room, barber shop, chapel, elevator, and fitness center. 2008
11
vacancy rate:
Notes:
St. Brigid's @ Hi Park
135 Pioneer Rd
Red Wing
1987
39
vacancy rate:
3
7.7%
1BR
2BR
652 ‐ 652
705 ‐ 705
$2,345 ‐ $2,345
$2,905 ‐ $2,905
$3.60 ‐ $3.60
$4.12 ‐ $4.12
Catered living community. Continuum of care campus with 51 total units of independent living, assisting living, and memory care. Amenities include beauty parlor, chapel, emergency call system, weekly housekeeping and laundry, dining services, and free continental breakfast.
Congregate Total:
Total
50 Vac.
3 Vac.%
6.0%
‐‐continued‐‐
MAXFIELD RESEARCH INC. 103 SENIOR HOUSING ANALYSIS TABLE F‐1 continued
SENIOR HOUSING PROJECTS
October 2014
Occp.
Date
Deer Crest
470 Fairview Ave
Red Wing
No. of
Units
Total
Vacant
Unit Description
Type
Size
Monthly Rent/Price
Min
Max
Rent/sq. ft.
Min
Max
ASSISTED LIVING
0
EFF
371 ‐ 477
$2,460 ‐ $2,560
$6.63 ‐ $5.37
0.0%
1BR
529 ‐ 811
$2,790 ‐ $3,510
$5.27 ‐ $4.33
1BR+D
677 ‐ 916
$3,130 ‐ $3,780
$4.62 ‐ $4.13
2BR
700 ‐ 1,150
$3,130 ‐ $4,240
$4.47 ‐ $3.69
Catered living facility. Adjacent to Mayo Clinic Health System. Add $260/month for double occupancy. Rent includes weekly housekeeping, breakfast, transportation, and all utilities. Health care services, additional meals, and underground parking available at an extra charge. Amenities include activity room, barber shop, chapel, elevator, and fitness center. 2008
32
vacancy rate:
Notes:
Valentines Senior Living
2557 Eagle Ridge
Red Wing
2007
15
vacancy rate:
Notes:
Potter Ridge
1979 Neal St
Red Wing
Notes:
1993
11
vacancy rate:
NA ‐ NA
$997 ‐ $997
NA ‐ NA
0
0.0%
Private
NA ‐ NA
$997 ‐ $997
NA ‐ NA
Board and lodging facility. Rent includes a private room, utilities, and cable TV. Basic services include 3 meals daily, snacks, housekeeping, laundry/linen, beauty salon, emergency response system, and safety checks. Services are billed in packages which are determined based on need.
Assisted Living Total:
Deer Crest
470 Fairview Ave
Red Wing
Private
Board and lodging facility. Rent includes a private room, utilities, and cable TV. Basic services include 3 meals daily, snacks, housekeeping, laundry/linen, beauty salon, emergency response system, and safety checks. Services are billed in packages which are determined based on need.
2005
50
0
1BR
510 ‐ 646
$2,521 ‐ $2,585
$4.94 ‐ $4.00
vacancy rate: 0.0%
1BR+D
980 ‐ 980
$2,745 ‐ $2,840
$2.80 ‐ $2.90
$3.40 ‐ $3.09
2BR
780 ‐ 880
$2,650 ‐ $2,715
Services and amenities include 24‐hour staffing, emergency response system,meals, weekly housekeeping and laundry, movie theatre, elevator, library, chapel, outdoor patio, and a fireplace room. Add $445/month for 2nd person occupancy.
Loving Residence
1760 Perlich Ave
Red Wing
Notes:
0
0.0%
Total
108 Vac.
0 Vac.%
0.0%
MEMORY CARE
0
EFF
371 ‐ 477
$2,840 ‐ $3,090
$7.65 ‐ $6.48
0.0%
1BR
529 ‐ 811
$3,115 ‐ $3,540
$5.89 ‐ $4.36
1BR+D
677 ‐ 916
$3,565 ‐ $4,210
$5.27 ‐ $4.60
Catered living facility. Adjacent to Mayo Clinic Health System. Add $465/month for double occupancy. Rent includes weekly housekeeping, 3 meals/day, transportation, and all utilities. Health care services and underground parking available at an extra charge. Amenities include activity room, barber shop, chapel, elevator, and fitness center. 2008
27
vacancy rate:
Notes:
St. Brigid's @ Hi Park
135 Pioneer Rd
Red Wing
2007
12
vacancy rate:
Notes:
0
0.0%
EFF
260 ‐ 386
$6,355 ‐ $6,975
$24.44 ‐ $18.07
Continuum of care campus with 51 total units of independent living, assisting living, and memory care. Amenities include beauty parlor, chapel, emergency call system, weekly housekeeping and laundry, dining services, and free continental breakfast.
Memory Care Total:
Total
39 Vac.
0 Sources : Ma xfi el d Res earch Inc.
MAXFIELD RESEARCH INC. Vac.%
0.0%
104 SENIOR HOUSING ANALYSIS TABLE F‐2
SKILLED NURSING CARE FACILIITES
October 2014
Occp.
Date
No. of
Beds
Total
Vacant
Unit Type
Daily Rate
Min
Max
Red Wing Healthcare Community
'65/'72/'86
145
34
Private
$153.66 ‐ $357.91
1412 W 4th Street
vacancy rate: 23.4%
Semi‐Private
$124.21 ‐ $337.91
Red Wing
Notes: Short‐term care, long‐term care and brain injury services with 21 beds in the Special Care Unit dedicated to dementia care. Amenities include beauty salon, religious services, convenience store, community outings, and scheduled activities. $20 additional charge for private room.
Seminary Home
906 College Avenue
Red Wing
St. Brigids at Hi Park
213 Pioneer Road
Red Wing
1943
84
14
vacancy rate: 16.7%
Private
Semi‐Private
$163.32 ‐ $377.50
$138.32 ‐ $352.50
Notes: Transitional short‐term care and long‐term care. Amenities include housekeeping, laundry, weekly worship, open dining, emergency call system, beauty salon, bird aviaries, and scheduled trips. $25 additional charge for private room.
1978
65
47
Private
$179.50 ‐ $405.95
vacancy rate: 72.3%
Semi‐Private
$137.95 ‐ $343.40
Notes: All residents except for Transitinal Care patients relocated to Seminary Home in preparation for a building project. Housekeeping, laundry, and linen services provided. Facility includes a short‐term transitional care unit. Additional charge for private room ranges from $41.55 to $62.55.
Total Skilled Nursing Beds:
294
32.3% Vacancy Rate
Source: Ma xfi el d Res ea rch Inc.
105 SSENIOR HOUSIN
NG ANALYSIS Red Wiing Senior Houssing and Skilled Nursing Facilitiies Lo
ocation Map M
MAXFIELD RESEEARCH INC. 106 SENIOR H
HOUSING AN
of select seniior housing aand skilled n
nursing faciliities in Red Wing: Village Cooperative
e The D
Downtown P
Plaza Jordan Towers Deer Crest St. Brigiid’s @ Hi Parrk Valentines Senior LLiving MAXFIELLD RESEARCH INC. 107 SENIOR H
HOUSING AN
of select seniior housing aand skilled n
nursing faciliities in Red Wing: Pottter Ridge Lovving Residencce Re
ed Wing Heaalthcare Com
mmunity Sem
minary Hom
me MAXFIELLD RESEARCH INC. 108 SENIOR HOUSING MARKET ANALYSIS Market Rate Active Adult Properties  Village Cooperative is a fully‐occupied, 44‐unit active adult project located in southern Red Wing near the intersection of County Road 58 and Flower Valley Road. The unit mix con‐
sists of one‐bedroom, one‐bedroom plus den, and two‐bedroom units with fees ranging from $690 to $1,280 per month. With the cooperative format, residents own a share of the community, and share prices range from $36,300 to $68,970.  The Downtown Plaza is a ten‐story, 94‐unit active adult project located in Downtown Red Wing. Rental rates range from $978 for a one‐bedroom unit to $2,400 for a two‐bedroom plus den unit. According to the Housing Manager, the facility has maintained an average occupancy rate of approximately 88% over the past seven years, but there is currently only one vacant unit (99% occupancy rate). Subsidized Active Adult Properties  Jordan Towers I & II are project‐based Section 8 facilities owned by the Red Wing Housing and Redevelopment Authority containing a total of 204 units where residents pay 30% of their Adjusted Gross Income (AGI) for rent. Both buildings are fully‐occupied with a mix of elderly and disabled residents. Service‐Enhanced Facilities  Deer Crest is a fully‐occupied 70‐unit catered‐living facility located near the Mayo Clinic Health System – Red Wing Medical Center. According to the Housing Manager, there are currently 11 independent living residents and 32 residents receiving assisted living services, along with 27 memory care units. Rental rates for independent living residents range from $1,530 to $3,310 per month depending on unit size. Assisted living rents range from $2,460 to $4,240 per month, while memory care unit rents start at $2,840 per month. Independ‐
ent living residents have a continental breakfast included in the rent, and services such as additional meals, housekeeping, and underground parking are available at an extra charge. Assisted living rents include weekly housekeeping, while the memory care rent also includes three meals per day.  St. Brigid’s @ Hi Park is a continuum of care campus with a total of 51 senior housing units (12 memory care units and 39 congregate units) as well as 65 skilled nursing beds. Three units are currently vacant (5.9% vacancy rate). Independent living rents range from $2,345 to $2,905 per month which includes a continental breakfast, weekly housekeeping, and laundry. Additional meals and medical services are available at additional cost. Memory Care rents range from $6,355 to $6,975 per month, which includes three meals per day, weekly housekeeping, and daily assistance with grooming and dressing. MAXFIELD RESEARCH INC. 109 SENIOR HOUSING MARKET ANALYSIS 

Valentines Senior Living and Loving Residence are fully‐occupied assisted living facilities consisting of 15 private rooms and 11 private rooms, respectively. The monthly rent ($997) includes a private room, utilities, and cable TV. Basic services such as three meals daily, snacks, housekeeping, laundry, and emergency response system are included in each ser‐
vice package. Services are billed in packages which are determined based on need. Addi‐
tional fee for use services such as beauty salon, guest meals, and transportation are also available. Potter Ridge is a fully‐occupied 50‐unit assisted living facility, with monthly rents ranging from $2,521 to $2,715 depending on unit size. Rent includes weekly housekeeping, laundry, and a noon meal. Breakfast, an evening meal, and health care services are available on an a‐la‐carte basis. Skilled Nursing Facilities  There are 294 skilled nursing beds in three facilities in the PMA. At the time of our survey, 95 of these beds were vacant, which represents a 32% vacancy rate. However, except for the Transitional Care patients, all other residents of the St. Brigids @ Hi Park skilled nursing facility have been transferred to Seminary Home in preparation for a planned development project. This project is described in more detail below.  Benedictine Health System (St. Brigid’s) and Mayo Health Clinic (Seminary Home) plan to consolidate their skilled nursing operations into a new 80‐bed facility to be built near the existing Mayo Clinic Hospital site off Tyler Road and County Road 1. The new facility will be called St. Crispin Living Community. This consolidation would result in a net loss of ‐69 skilled nursing beds in Red Wing, as the two facilities currently have 149 beds combined. A ceremonial groundbreaking for this project was held in June 2013, but construction was never initiated. The involved parties are in the process of revising their strategy for the fa‐
cility, and while a new campus is expected to proceed, exact details are not known at this time. Additionally, preliminary plans indicated that the vacated skilled nursing space at St. Brigid’s would be converted into memory care suites. This remains a strategy considera‐
tion, but details were not available at the time this report was written. MAXFIELD RESEARCH INC. 110 SENIOR HOUSING MARKET ANALYSIS Market Rate Adult/Few Services Senior Housing Demand Table F‐3 presents demand calculations for market rate active adult/few services housing in the PMA in 2014 and 2020. The market for active adult/few services housing is comprised of older adult (age 55 to 64), younger senior (age 65 to 74) and older senior (age 75+) households, with market demand weighted most heavily toward older seniors. In order to arrive at the potential age‐, income‐ and asset‐qualified base for active adult hous‐
ing, we include all age‐qualified households with incomes of $35,000 or more plus homeowner households with incomes between $25,000 and $34,999 who would qualify with the proceeds from a home sale. The number of qualifying homeowner households is estimated by applying the appropriate homeownership rate to each age cohort. We estimate there are 3,879 age‐, income‐ and asset‐qualified PMA households that comprise the market for active adult housing in 2014, increasing to 4,234 qualified households in 2020. Adjusting to include appropriate capture rates for each age cohort (0.5% of households age 55 to 64, 5.0% of households age 65 to 74, and 12.0% of households age 75 and older) results in a demand potential for 165 active adult housing units in 2014 and 183 units in 2020. These capture rates reduce the total number of age/income/asset‐qualified households to consider only the portion of older adult and senior households who would be able, willing, and inclined to move to senior housing alternatives, including both owner‐ and renter‐occupied housing. We estimate that seniors currently residing outside the PMA will generate 20% of the demand for active adult housing – increasing demand to 207 active adult units in 2014. Demand from outside the PMA includes parents of adult children living in the area, individuals who live outside the PMA but have an orientation to the area and former residents who desire to return upon retirement. Demand for active adult/few services housing in the PMA is apportioned between ownership and rental product types. Based on the age distribution of the population, homeownership rates and trends for active adult housing products, we project that 40% of the demand will be for owner‐occupied active adult housing (83 units in 2014), and the remaining 60% of demand will be for rental active adult housing units (124 units in 2014). From the demand potential, we subtract existing and pending active adult units in the PMA at 95% occupancy. In total, there are 44 existing owner‐occupied units in Red Wing located at Village Cooperative and 94 market rate active adult rental units at The Downtown Plaza. In total, we calculate pent‐up demand for 41 owner‐occupied units and 35 renter‐occupied units in 2014. Adjusting for inflation, we estimate that households with incomes of $40,000 or more and home‐owners with incomes of $30,000 to $39,999 would be candidates for market rate active adult housing in 2020. Following the same methodology, we project a slight increase in demand to 50 owner‐occupied units and 49 renter‐occupied units by 2020. MAXFIELD RESEARCH INC. 111 SENIOR HOUSING MARKET ANALYSIS Due to factors such as the geographic distribution of the senior population in the PMA along with the location of services (medical, religious, retail, etc.) in the PMA, we anticipate that the City of Red Wing can capture 80% of the excess demand potential in the PMA. Based on this capture rate, we find demand for 61 market rate active adult units in Red Wing in 2014 (33 owner‐occupied and 28 renter‐occupied units), growing to 79 units in 2020 (40 owner‐occupied and 39 renter‐occupied units). TABLE F‐3
MARKET RATE ADULT/FEW SERVICES HOUSING DEMAND
PRIMARY MARKET AREA
2014 & 2020
2014
Age of Householder
55‐64 65‐74
75+
2020
Age of Householder
55‐64 65‐74
75+
1,746
1,026
579
1,832
1,299
679
165
86%
= 1,888
184
87%
1,186
347
65%
805
+
x
123
86%
= 1,938
178
87%
1,454
251
65%
842
x
=
5.0%
59
12.0%
97
x
=
5.0%
73
12.0%
101
# of Households w/ Incomes of >$35,000 1
# of Households w/ Incomes of $25,000 to $34,999
(times ) Homeownership Rate
(equals) Total Potential Market Base
1 +
x
(times) Potential Capture Rate (equals) Demand Potential 0.5%
9
Potential Demand from PMA Residents
(plus) Demand from Outside PMA (20%)
(equals) Total Demand Potential
2
= 165
= 183
+ 41
= 207
+ 46
= 229
Renter‐
Owner‐
Occupied
(times) % by Product Type
(equals) Demand Potential by Product Type
(minus) Existing and Pending MR Active Adult Units
(equals) Excess Demand for MR Active Adult Units
3
(times) Percent capturable in Red Wing
(equals) # of units supportable in Red Wing
0.5%
10
Renter‐
Owner‐
Occupied
Occupied
Occupied
x
=
40%
83
x
=
60%
124
x
=
40%
92
x
=
60%
138
‐
=
42
41
‐
=
89
35
‐
=
42
50
‐
=
89
49
x
=
33
x
80%
28
80%
40
39
1
2020 calculations define income‐qualified households as all households with incomes greater than $40,000 and homeowner households with incomes between $30,000 and $39,999.
2
Based on interviews and historical trends. We estimate that roughly 25% of demand will come from outside the PMA.
3
Existing and pending are deducted at market equilibrium (95% occupancy).
MAXFIELD RESEARCH INC. 112 SENIOR HOUSING MARKET ANALYSIS Shallow‐Subsidy/Deep‐Subsidy Independent Senior Housing Demand Table F‐4 presents our demand calculations for shallow‐subsidy and deep‐subsidy independent senior housing in Red Wing in 2014 and 2020. While the methodology used to calculate de‐
mand for affordable housing closely mirrors the methodology used to calculate demand for market rate housing, we make adjustments to more precisely quantify demand among this market segment. The following points summarize these adjustments:  Income‐Qualifications: In order to arrive at the potential age and income‐qualified base for low‐income and affordable housing, we include all senior households age 55 and older that qualify for the income guidelines for two‐person households in 2014. Households earning between 30% and 60% of AMI are generally candidates for affordable housing, while households earning less than 30% AMI are typically a market for subsidized housing. The income‐restriction for a two‐person household at 30% AMI is $17,430 and the income‐
restriction for a two‐person household at 60% AMI is $34,860. 
Capture Rates: Households in a need‐based situation (either requiring services or financial assistance) more readily move to housing alternatives than those in non‐need based situa‐
tions. Based on our experience in market feasibility for affordable and subsidized senior housing, along with our analysis of demographic and competitive market factors in the PMA, we apply a conservative 20% capture rate to the age/income‐qualified market in the PMA to arrive at a total potential demand from the PMA. Using the methodology described above results in a demand potential for 327 shallow‐subsidy and deep‐subsidy active adult housing units in 2014. We estimate that seniors currently residing outside the PMA will generate 20% of the demand for shallow/deep‐subsidy active adult housing – increasing demand to 408 units. Based on the existing and projected distribu‐
tion of households with incomes below $35,000, we estimate that roughly 60% of the demand will be for deep‐subsidy units and 40% will be for shallow‐subsidy units. Next we subtract existing competitive units. There is one deep‐subsidy project in the PMA (Jordan Towers) with 204 units. Shallow‐subsidy funding (i.e. Tax Credit) is awarded by Minnesota Housing through a competitive process, and it is very difficult for senior housing projects to receive Tax Credit funding in Minnesota. As such, there are no shallow‐subsidy projects in the PMA. Overall, we subtract 194 deep‐subsidy units from the demand potential after accounting for a 5% vacancy rate, resulting in excess demand for 51 deep‐subsidy active adult housing in the PMA. We also find excess demand potential for 163 shallow‐subsidy active adult housing units in the PMA in 2014. To calculate demand in 2020, we increase the income‐qualifications to account for inflation. Following the same methodology, demand is projected to increase to 59 deep‐subsidy and 169 shallow‐subsidy units in 2020. As of September, 2014, Jordan Towers has approximately 129 applicants on the waiting list, suggesting that there is significant pent‐up demand for subsidized senior housing in Red Wing. A portion of the people on the waiting list would qualify for either deep‐subsidy or shallow‐subsidy housing. MAXFIELD RESEARCH INC. 113 SENIOR HOUSING MARKET ANALYSIS We anticipate that the City of Red Wing can capture 80% of the excess demand potential for subsidized active adult housing in the PMA. Based on this capture rate, we find demand for 41 deep‐subsidy and 131 shallow‐subsidy units in Red Wing in 2014. Demand is expected to grow to 47 deep‐subsidy and 135 shallow‐subsidy units in 2020. TABLE F‐4
SUBSIDIZED INDEPENDENT HOUSING DEMAND
PRIMARY MARKET AREA
2014 & 2020
2014
Age of Householder
55‐64
65‐74
75+
# of Households w/ Incomes of <$35,000
Less Households w/ Incomes of $30,000 to $34,999
(times ) Homeownership Rate
(equals) Total Potential Market Base by Age
1 494
506
919
‐
x
83
88%
92
89%
173
76%
=
=
421
424
1,633
788
(times) % of Seniors Needing/Desiring Affordable Hsg x
(equals) Potential Demand from PMA
=
20.0%
327
(plus) Demand from Outside PMA (20%)
+
=
82
408
(minus) Existing and Pending Independent Units
(equals) Excess Demand for Subsidized Units
2
(times) Percent that could be captured in Red Wing
(equals) Excess subsidized demand in Red Wing
421
549
931
‐
x
65
88%
94
89%
94
76%
=
=
364
465
1,689
860
x
20.0%
338
+
=
Deep‐Sub.
(times) % by Product Type
(equals) Demand Potential by Product Type
2020
Age of Householder
55‐64
65‐74
75+
Shallow‐Sub.
84
422
Deep‐Sub.
Shallow‐Sub.
x
=
60%
245
x
=
40%
163
x
=
60%
253
x
=
40%
169
‐
=
194
51
‐
=
0
163
‐
=
194
59
‐
=
0
169
x
=
41
80%
80%
131
47
135
¹ 2020 calculations define income‐qualified households as all households with incomes less than $40,000. Homeowner households with incomes between $35,000 and $39,999 are excluded from the market potential for financially‐assisted housing.
² Existing units are deducted at market equilibrium, or 95% occupancy. Source: Maxfield Research Inc.
Demand for Congregate Senior Housing Table F‐5 presents our demand calculations for congregate living senior housing in Red Wing in 2014 and 2020. This analysis focuses on the potential private pay/market rate demand for congregate living units in the City. In order to arrive at the potential age‐income qualified base for congregate senior housing, we include all senior households with incomes of $35,000 or more and homeowners with incomes between $25,000 and $35,000 who would qualify with the proceeds from a home sale (this proportion was estimated based on the homeownership rates for each age cohort). Senior householders with incomes of $35,000 allocating 65% of their income toward base housing cost MAXFIELD RESEARCH INC. 114 SENIOR HOUSING MARKET ANALYSIS could afford beginning rents of $1,900, which is roughly the congregate living rent for a one‐
bedroom unit at Deer Crest ($1,860). We estimate the number of age/income/asset‐qualified households in the Market Area to be 1,991 householders in 2014, increasing to 2,296 in 2020. Demand for congregate housing is need‐driven, which reduces the qualified market to only the portion of seniors who need some assistance. Thus, the age/income‐qualified base is multiplied by the percentage of seniors who need some assistance with IADLs (at least three), but not six or more ADLs/IADLs, as these frailer seniors would need the level of care found in service‐
intensive assisted living. According to the Summary Health Statistics of the U.S. Population: National Health Interview Survey, 2007 (conducted by the U.S. Department of Health and Human Services), the percent‐
age of seniors having limitation in activities of daily living (bathing, dressing, toileting, transfer‐
ring, eating) and instrumental activities of daily living (using the telephone, shopping, food preparation, housekeeping, laundry, transportation, taking medication, handling finances) are as follows: Limitation in ADLs & IADLs Age ADLs IADLs 65‐74 years 3.3% 6.3% 75+ years 11.0% 20.0% It is most likely that seniors who need assistance with ADLs also need assistance with multiple IADLs, and are more likely to be candidates for service‐intensive assisted living. The prime candidates for congregate living are seniors needing assistance with IADLs, but not ADLs. We derive the capture rate for congregate housing by subtracting the percentage of seniors need‐
ing assistance with ADLs from those needing assistance with IADLs, which equates to 3.0% of seniors age 65 to 74 and 9.0% of seniors 75+. For the purposes of this report and understand‐
ing current market conditions, we have reduced the potential capture rates for the 65 to 74 age group to 1.5% while increasing the capture rate of the 75+ age group to 13.0%. Multiplying the senior household base by these capture rates results in Market Area demand potential for 122 congregate housing units in 2014 and 131 units in 2020. We estimate that seniors currently residing outside the PMA will generate 20% of the demand for congregate senior housing – increasing total demand by 41 congregate units. This demand consists primarily of parents of adult children living in the PMA, individuals who live just outside the PMA and have an orientation to the area, retirees who wish to relocate to the area and former residents who desire to return upon retirement. Together, the demand from PMA seniors and demand from seniors who would relocate to the area totals about 153 congregate units. Next, existing congregate units are subtracted from overall demand. There are two market rate facilities with a total of 50 congregate units in the PMA. Overall, we subtract 48 competitive MAXFIELD RESEARCH INC. 115 SENIOR HOUSING MARKET ANALYSIS units after accounting for a 5% vacancy rate from the demand potential, resulting in excess demand potential for 105 congregate units in 2014, increasing to 116 units in 2020. Due to factors such as the geographic distribution of the senior population in the PMA along with the location of services (medical, religious, retail, etc.) in the PMA, we anticipate that the City of Red Wing can capture 90% of the excess demand potential in the PMA. Based on this capture rate, we find demand for 94 congregate units in Red Wing in 2014, growing to 104 congregate units in 2020. TABLE F‐5
CONGREGATE LIVING DEMAND
PRIMARY MARKET AREA
2014 & 2020
2014
Age of Householder
65‐74
75+
# of Householders w/ Incomes of $35,000+ in 2014 / $40K in 2020
(plus)
+
# of Hhldrs w/ Incomes of $25K ‐ $35K in 2014 / $30K ‐ $40K in 2020
(times) Homeownership Rate
x
(equals) Potential Market
=
1,026
184
87%
160
347
65%
226
1
(times) Potential Capture Rate of Congregate Living Demand
(equals) Potential Demand
=
1,186
805
x
=
1.5%
13.0%
18 + 105
Total Local Demand Potential
(plus) Demand from Outside the PMA (20%)
2
(minus) Existing Competitive Units
(equals) Excess Limited‐Care Demand Potential
(times) Proportion Capturable in Red Wing
(equals) Excess Limited‐Care Demand Potential in Red Wing
2020
Age of Householder
65‐74
75+
579
1,299
679
x
=
178
87%
155
251
65%
163
=
1,454
x
=
1.5%
22
+
842
13.0%
+ 109
=
+
=
122
31
153
=
+
=
131
33
164
‐
=
x
=
48
105
90%
94
‐
=
x
=
48
116
90%
104
1 The potential capture rate is derived from data from the Summary Health Statistics for the U.S. Population: National Health Interview Survey, 2007 by the U.S. Department of Health and Human Services. The capture rate used is the percentage of seniors needing assistance with IADLs, but not ADLs (seniors needing assistance with ADLs typcially need assistance with multiple IADLs and are primary candidates for service‐intensive assisted living.).
2
Competitive existing and pending units at 95% occupancy (market equilibrium). Source: Maxfield Research Inc.
MAXFIELD RESEARCH INC. 116 SENIOR HOUSING MARKET ANALYSIS Assisted Living Demand Estimate Table F‐6 presents demand calculations for assisted living housing in Red Wing in 2014 and 2020. This analysis focuses on the potential private pay/market rate demand for assisted living units in the City. The availability of more intensive support services such as meals, housekeeping and personal care at assisted living facilities usually attracts older, frailer seniors. According to the 2009 Overview of Assisted Living (which is a collaborative research project by the American Associa‐
tion of Homes and Services for the Aging, the American Seniors Housing Association, National Center for Assisted Living, and National Investment Center for the Seniors Housing and Care Industry), the average age of residents in freestanding assisted living facilities was 87 years in 2008. Hence, the age‐qualified market for assisted living is defined as seniors ages 75 and over, as we estimate that of the half of demand from seniors under age 87, almost all would be over age 75. In 2014, there are an estimated 2,134 seniors ages 75 and over in the PMA. We project that this number will increase to 2,309 in 2020. Demand for assisted living housing is need‐driven, which reduces the qualified market to only the portion of seniors who need assistance. According to a study completed by the Centers for Disease Control and the National Center for Health Statistics (Health, United States, 1999 Health and Aging Chartbook), about 35% of seniors needed assistance with everyday activities (from 25.5% of 75‐to‐79‐year‐olds, to 33.6% of 80‐to‐84‐year‐olds and 51.6% of 85+ year olds). Applying these percentages to the senior population yields a potential assisted living market of an estimated 792 seniors in the PMA in 2014 and 842 units in 2020. Due to the supportive nature of assisted living housing, most daily essentials are included in monthly rental fees which allow seniors to spend a higher proportion of their incomes on housing with basic services. Therefore, the second step in determining the potential demand for assisted living housing in the PMA is to identify the income‐qualified market based on a senior’s ability to pay the monthly rent. We consider seniors in households with incomes of $40,000 or greater to be income‐qualified for assisted living senior housing in the PMA. House‐
holds with incomes of $40,000 could afford monthly assisted living fees of $3,500 by allocating a high proportion of their income toward the fees. According to the 2009 Overview of Assisted Living, the average arrival income of assisted living residents in 2008 was $27,260, while the average annual assisted living fee was $37,281 ($3,107/month). This data highlights that seniors are spending down assets to live in assisted living and avoid institutional care. Thus, in addition to households with incomes of $40,000 or greater, there is a substantial base of senior households with lower incomes who income‐
qualify based on assets – their homes, in particular. Sixty five percent of age 75+ households in the PMA are homeowners and the estimated median sale price of older homes in the City in 2013 was $106,450. Seniors selling their homes for the median price would generate about $100,000 in proceeds after selling costs. Using an MAXFIELD RESEARCH INC. 117 SENIOR HOUSING MARKET ANALYSIS average monthly fee of $3,500, these proceeds would last approximately 2.4 years (29 months) in assisted living housing, which is slightly longer than the average length of stay in assisted living (20 months according to the 2009 Overview of Assisted Living). We estimate the income‐qualified percentage to be all seniors in households with incomes at or above $40,000 (who could afford monthly rents of $3,500+ per month) plus 40% of the esti‐
mated seniors in owner households with incomes below $40,000 (who will spend down assets, including home‐equity, in order to live in assisted living housing). This results in a total poten‐
tial market for about 365 units from the PMA in 2014. Because the vast majority of assisted living residents are single (88% according to the 2009 Overview of Assisted Living), our demand methodology multiplies the total potential market by the percentage of seniors age 75+ in the PMA living alone, or 58% based on Census data. This results in a total base of about 211 age/income‐qualified singles. The 2009 Overview of Assisted Living found that 12% of residents in assisted living were cou‐
ples. Including couples results in a total of 240 age/income‐qualified seniors needing assistance in the PMA in 2014. We estimate that 60% of the qualified market needing significant assistance with ADLs could either remain in their homes or less service‐intensive senior housing with the assistance of a family member or home health care, or would need greater care provided in a skilled care facility. The remaining 40% could be served by assisted living housing. Applying this market penetration rate of 40% results in demand for 96 assisted living units in 2014. We estimate that a portion of demand for assisted living units in the PMA (20%) will come from outside the area. This secondary demand will include seniors currently living just outside the area, former residents, and parents of adult children who desire supportive housing near their adult children. Applying this figure results in total potential demand for 120 assisted living units in 2014. Next, existing and pending assisted living units are subtracted from overall demand. There are four existing assisted living properties in the PMA with a total of 108 units. However, we exclude estimated units occupied by low‐income seniors utilizing Elderly Waivers (22 units). Subtracting these existing units (minus a 7% vacancy factor) from the total demand equates to excess demand potential for 40 market rate assisted living units in the PMA in 2014, increasing to 53 units in 2020. We anticipate that the City of Red Wing can capture 90% of the excess assisted living demand potential in the PMA. Based on this capture rate, we find demand for 36 assisted living units in Red Wing in 2014, growing to 48 units in 2020. MAXFIELD RESEARCH INC. 118 SENIOR HOUSING MARKET ANALYSIS TABLE F‐6
MARKET RATE ASSISTED LIVING DEMAND
PRIMARY MARKET AREA
2014 & 2020
2014
2020
Percent
Needing
Number
Needing
Percent
Needing
1
Age group
People
Assistance¹
Assistance
People
75 ‐ 79
80 ‐ 84
85+
Total
766
604
764
2,134
25.5%
33.6%
51.6%
195
203
394
792
905
627
777
2,309
Percent Income‐Qualified
2
Number
Needing
1
Assistance¹ Assistance
25.5%
33.6%
51.6%
231
211
401
842
46%
48%
x
=
365
58%
211
404
58%
235
(plus) Proportion of demand from couples (12%)³
+
(equals) Total age/income‐qualified market needing assistance =
29
240
32
266
4
Total potential market
(times) Percent living alone
(equals) Age/income‐qualified singles needing assistance
(times) Potential penetration rate
(equals) Potential demand from PMA residents
x
=
40%
96
40%
107
(plus) Proportion from outside the PMA (20%)
(equals) Total potential assisted living demand
+
=
24
120
27
133
(minus) Existing market rate assisted living units
(equals) Total excess market rate assisted living demand
‐
=
80
40
80
53
(times) Percent that could be captured in Red Wing
x
90%
90%
(equals) Excess market rate assisted living demand
=
36
48
5
1
The percentage of seniors unable to perform or having difficulting with ADLs, based on the publication Health, United States, 1999 Health and Aging Chartbook, conducted by the Centers for Disease Control and Prevention and the National Center for Health Statistics.
2
Includes households with incomes of $40,000 or more (who could afford monthly rents of $3,000+ per month) plus 40% of the estimated owner households with incomes below $40,000 (who will spend down assets, including home‐
equity, in order to live in assisted living housing).
3
The 2009 Overview of Assisted Living (a collaborative project of AAHSA, ASHA, ALFA, NCAL & NIC) found that 12% of assisted living residents are couples.
4
We estimate that 60% of the qualified market needing assistance with ADLs could either remain in their homes or reside at less advanced senior housing with the assistance of a family member or home health care, or would need greater care provided in a skilled care facility.
5
Existing and pending units at 93% occupancy, minus units estimated to be occupied by Elderly Waiver residents.
MAXFIELD RESEARCH INC. 119 SENIOR HOUSING MARKET ANALYSIS Demand for Memory Care Senior Housing Table F‐7 presents our demand calculations for memory care housing in Red Wing in 2014 and 2020. Demand is calculated by starting with the estimated PMA senior (ages 65+) population in 2014 and multiplying by the incidence rate of Alzheimer’s/dementia among this population’s age cohorts. This yields a potential market of about 631 seniors in the PMA. We project that this number will climb to 678 in 2020. According to data from the National Institute of Aging, about 25% of all individuals with memory care impairments are a market for memory care housing units. This figure considers that seniors in the early stages of dementia will be able to live independently with the care of a spouse or other family member, while those in the latter stages of dementia will require intensive medical care that would only be available in skilled care facilities. Applying this figure to the estimated population with memory impairments yields a potential market of about 158 seniors in the PMA in 2014 and 169 in 2020. Because of the staff‐intensive nature of dementia care, typical monthly fees for this type of housing start at about $4,500. Although some of the seniors will have high monthly incomes, most will be willing to spend down assets and/or receive financial assistance from family members to afford memory care housing. Based on our review of senior household incomes in the PMA, homeownership rates, and home sale data, we estimate that 37% of all seniors in the PMA have incomes and/or assets to sufficiently cover the costs for memory care housing. This figure takes into account married couple households where one spouse may have memory care needs and allows for a sufficient income for the other spouse to live independently. Multiply‐
ing the potential market (158 seniors) by 37% results in a total of about 58 income‐qualified seniors in the PMA in 2014. We estimate that 20% of the overall demand for memory care housing would come from outside the PMA, for a total demand for 73 units in 2014. Currently, there are two memory care facilities in the PMA with a total of 39 units. We subtract 15% of these units (excluding public Elderly Waivers) and allocate a 7% vacancy factor for a total of 31 existing units. This reduces excess demand potential in the PMA to 42 units in 2014. Excess demand is expected to grow to approximately 52 units in 2020. We anticipate that the City of Red Wing can capture 90% of the excess memory care demand potential in the PMA. Based on this capture rate, we find demand for 38 memory care units in Red Wing in 2014, growing to 46 units in 2020. MAXFIELD RESEARCH INC. 120 SENIOR HOUSING MARKET ANALYSIS TABLE F‐7
MEMORY CARE DEMAND
PRIMARY MARKET AREA
2014 & 2020
2020
2014
65 to 74 Population
3,026
2,483
1
(times) Dementia Incidence Rate
(equals) Estimated Senior Pop. with Dementia
x
=
75 to 84 Population
2%
50
x
=
1,532
1,370
1
x
=
19%
260
1
x
=
42%
321
85+ Population
x
=
19%
291
x
=
42%
326
777
764
(equals) Total Population with Dementia
631
(times) Percent Needing Specialized Memory Care Assistance
(equals) Total Need for Dementia Care
2%
61
678
x
=
25%
158
=
25%
169
(times) Percent Income/Asset‐Qualified
(equals) Total Income‐Qualified Market Base
x
=
37%
58
x
=
39%
66
(plus) Demand from Outside the Market Area (20%)
Total Demand for Memory Care Units
+
15
73
+
17
83
(minus) Existing and Pending Memory Care Units
(equals) Excess Primary Market Area Demand Potential
3
‐
=
31
42
‐
=
31
52
(times) Estimated Percent Capturable in Red Wing
(equals) Memory Care Demand Capturable in Red Wing
x
=
90%
38
x
=
90%
46
2
¹ Al zhei mer's As s oci a tion: Al zhei mer's Di s ea s e Fa cts & Figures (2007)
2
Income grea ter tha n $60,000 i n 2014 a nd grea ter tha n $65,000 in 2020, pl us s ome l ower‐income homeowners .
3
Exi s ti ng a nd pending uni ts a t 93% occupa ncy, minus units es tima ted to be occupi ed by Elderl y Wa i ver res i dents .
MAXFIELD RESEARCH INC. 121 SENIOR HOUSING MARKET ANALYSIS Demand for Skilled Nursing Care According to the Minnesota Department of Health and Human Services, there are 392 licensed nursing facilities in Minnesota with a total of 31,966 beds. Based on population estimates for the State, this equates to roughly 47 nursing beds per 1,000 residents age 65 and older and 296 beds per 1,000 people age 85 and older. Minnesota is aggressively reducing the bed count throughout the State as alternative care options are made available to seniors. In 2000, there were over 74 beds per 1,000 people age 65 and older (520 beds for the 85 and older age group). As shown in the following figure, the bed‐to‐population ratios in the PMA are substan‐
tially higher than Minnesota and the United States. PMA Minnesota United States Beds/1,000 pp 65+ 64 47 41 Beds/1,000 pp 85+ 385 296 297 Sources: MN Dept. of Human Services; Maxfield Research, Inc.
The demand methodology for nursing home beds, as shown in Table F‐8, begins with the estimated senior population in 2014 and 2020 in each age cohort, age 65 to 84 as well as 85 and older. We apply specific utilization rates for each age cohort based on information availa‐
ble from the Minnesota Continuing Care Administration’s Status of Long Term Care Report (2010). Utilization rates of 2.2% for seniors age 65 to 84 and 15.1% for age 85 and older are applied to the PMA senior population, equating to demand for an estimated 200 nursing beds from PMA seniors in 2014. Due to the decline in disability rates, shortened nursing home stays and increased utilization of alternatives to nursing home services (i.e. home health care, assisted living facilities, memory care housing, etc.), utilization rates have been declining. The trend of declining utilization of nursing beds is projected to continue. Based on historical trends and forecast information provided by the Minnesota Continuing Care Administration, the 2020 utilization rates are adjusted to 1.9% among the 65 to 84 cohort and 13.4% among the 85 and older age group in the PMA. While the population in these age cohorts is projected to grow, utilization rates are expected to decline. As such, total skilled nursing bed demand in the PMA will decrease slightly through 2020. We estimate that seniors currently residing outside the PMA will generate 20% of the demand for skilled nursing – increasing total demand to 250 beds in 2014. We then subtract the existing nursing beds in the PMA at 90% occupancy, 95% occupancy, and 100% occupancy. As shown in Table F‐8 on the following page, there is very limited demand potential for additional skilled nursing beds in the PMA, and it appears that the PMA is oversupplied with skilled nursing beds. This finding is supported by the high vacancy rates among the existing skilled nursing facilities in Red Wing. As mentioned previously, Benedictine Health System (St. Brigid’s) and Mayo Health Clinic (Seminary Home) plan to consolidate their skilled nursing operations into a new 80‐bed facility, MAXFIELD RESEARCH INC. 122 SENIOR HOUSING MARKET ANALYSIS which would result in a net loss of ‐69 skilled nursing beds in the PMA, as the two facilities have a total of 149 beds combined. However, this consolidation strategy is being reevaluated, so our demand calculation assumes that the supply of beds in the PMA will hold steady between 2014 and 2020. Despite population growth in the 65 and older age group, demand potential will decline by 2020. Should the skilled nursing bed consolidation occur as currently proposed, the loss of ‐69 skilled nursing beds in the PMA would result in a much more balanced market, although the demand potential for new beds would remain negligible. At 90% occupancy, we anticipate that there would be demand for 36 additional beds. Demand potential declines to 25 beds at 95% occu‐
pancy with the reduced bed count. TABLE F‐8
SKILLED CARE DEMAND
PRIMARY MARKET AREA
2014 & 2020
2020
2014
Age Group
Skilled Nursing
Bed Need*
Primary Market Area
65 to 84
85+
Total:
2.2%
15.1%
Population
Bed
Need
Skilled Nursing
Bed Need*
3,854
764
4,618
85
115
200
1.9%
13.4%
Local Demand
demand from outside PMA (20%)
Total Demand
+
=
(beds/65+ pop.)
Bed
Need
4,558
777
5,335
87
104
191
200
50
250
+
=
64
=
‐14
‐29
‐44
191
48
238
55
Occupancy Rate
90%
95% 100%
265
279
294
(Minus) Number of Existing Beds
Demand Potential for Beds
Population
Occupancy Rate
90%
95% 100%
265
279
294
=
‐26
‐41
‐56
NOTE: Includes demand for long‐term, short‐term, respite and hospice care and is based on average length of stay for each component.
Sources: Minnesota Continuing Care Administration; Maxfield Research Inc.
MAXFIELD RESEARCH INC. 123 SPECIAL NEEDS HOUSING Introduction This section of the Comprehensive Housing Needs Analysis examines the need for additional special needs housing in Red Wing by examining the following data:  Number of people in Red Wing with disabilities;  Estimates of disability by household income level in Goodhue County;  Housing facilities for disabled persons;  Demographic data on the homeless population;  US Census American Community Survey results; and Persons with Disabilities Data on the number of non‐institutionalized people in the City of Red Wing with disabilities was obtained from the 2012 US Census American Community Survey. The Census Bureau defines a disability as a long‐lasting physical, mental, or emotional condition lasting six months or more. Table G‐1 on the following page shows the number of people by age group who are classified as having one or more disabilities, including; hearing, vision, cognitive (difficulty with various types of mental tasks), ambulatory (difficulty moving from place to place without aid), self‐care, or independent living. It should be noted that a person can have more than one disability, so the age group subtotal by disability exceeds the number of persons with a disability for each age group. The following are key points from Table G‐1.  Overall, roughly 13% of Red Wing’s non‐institutionalized population could have some form of disability, slightly higher than the Statewide proportion of 10%.  When comparing disabilities by age, 3% of the City’s age 5 to 17 population had a disa‐
bility, as did about 9% of the age 18 to 64 population and 32% of the age 65 and over population.  Cognitive disability is the most prevalent type of disability among children (age 5 to 17) with 2.3% of the population, as well as the 18 to 64 age group (6.0%). Among seniors, the most common disability is ambulatory (19.7%). Hearing disabilities are also com‐
mon among seniors (16.1%). MAXFIELD RESEARCH INC. 124 SPECIAL NEEDS HOUSING TABLE G‐1
TYPE OF DISABILITY BY AGE OF NON‐INSTITUTIONALIZED PERSON
2012
With a Disabilty
Percent with Disability
76
0
0
59
17
17
3.0%
0.0%
0.0%
2.3%
0.7%
0.7%
Age 18 to 64 years
Hearing disability
Vision disability
Cognitive disability
Ambulatory disability
Self‐care disability
Independent Living Disability
879
180
139
573
400
122
323
9.2%
1.9%
1.5%
6.0%
4.2%
1.3%
3.4%
Age 65 years and over
Hearing disability
Vision disability
Independent Living Disability
961
489
113
214
599
170
350
31.5%
16.1%
3.7%
7.0%
19.7%
5.6%
11.5%
1,916
12.7%
Age 5 to 17 years
Hearing disability
Vision disability
Total disabilities (all ages):
Sources: Census 2012 ACS; Maxfield Research Inc.
Households with Limitations/Disabilities The 2000 Census provided a strong dataset on the number of people with disabilities. Disability categories were expanded in the 2000 Census and included several categories. This data gathering was not available for the 2010 Census and information obtained through the Ameri‐
can Community Survey provides only limited information for selected larger communities. HUD Consolidated Planning division has compiled specific tabulations of households with various types of disabilities to address this issue. The special tabulations were developed using infor‐
mation specifically provided to HUD by the Census Bureau using an average of three years between 2009 and 2011. Table G‐2 on the following page summarizes the number of households in Goodhue County that have identified some physical or mental limitation or none of the above limitations. Data is not available for the City of Red Wing. Disabilities represented on the table include: hearing or vision impairment, ambulatory limitation (a condition that substantially limits one or more basic MAXFIELD RESEARCH INC. 125 SPECIAL NEEDS HOUSING physical activities, such as walking, climbing stairs, reaching lifting, or carrying), cognitive (difficulty learning, remembering, or concentrating) and self‐care or independent living limita‐
tion (household requires assistance with activities of daily living such as bathing, dressing, grooming). A household may have more than one member with these limitations and an individual may have more than one limitation. TABLE G‐2
ESTIMATES OF DISABILITY BY INCOME LEVEL
GOODHUE COUNTY
2009‐2011 (Three Year Average)
Total HHs
No.
Pct.
Type of Limitation and Income Category
Owner HHs
No.
Pct.
Renter HHs
No.
Pct.
Households w/Incomes at or less than 30% AMI
With a hearing or vision impairment
With an ambulatory limitation
With a cognitive limitation
With a self‐care or independent living limitation
With none of the above limitations
210
420
435
340
1,310
1.0%
2.0%
2.1%
1.6%
6.3%
85
230
90
150
555
0.5%
1.4%
0.6%
0.9%
3.5%
125
190
345
190
755
2.6%
3.9%
7.1%
3.9%
15.5%
Households w/Incomes greater than 30% but 50% or less of AMI
460
380
210
225
1,530
2.2%
1.8%
1.0%
1.1%
7.3%
240
155
105
95
940
1.5%
1.0%
0.7%
0.6%
5.9%
220
225
105
130
590
4.5%
4.6%
2.2%
2.7%
12.1%
Households w/Incomes greater than 50% but 80% or less of AMI
315
375
135
260
2,600
1.5%
1.8%
0.6%
1.2%
12.5%
225
200
55
190
1,985
1.4%
1.3%
0.3%
1.2%
12.4%
90
175
80
70
615
1.9%
3.6%
1.6%
1.4%
12.7%
Households w/Incomes greater than 80% of AMI
785
690
365
425
9,370
3.8%
3.3%
1.8%
2.0%
45.0%
705
640
285
390
8,660
4.4%
4.0%
1.8%
2.4%
54.2%
80
50
80
35
710
1.6%
1.0%
1.6%
0.7%
14.6%
Total
20,840
100.0%
15,980
100.0%
4,860
100.0%
Source: HUD CHAS 2009‐2011 (Three‐year average)


Roughly 45% of renter households are occupied by a person with a disability, significant‐
ly higher than 24% of owner households. A large number of renter households (850 households) or 53% of all renter households with incomes of 30% or less of AMI indicat‐
ed some type of limitation either vision/hearing, ambulatory, cognitive, or self‐care. As incomes increase, the percentage of households with disabilities decreases. Nearly 52% of all households with incomes at or below 30% of AMI have disabilities, followed by 46% of households with incomes ranging from 30% to 50% of AMI. By comparison, 29% of households with incomes in the 50% to 80% of AMI range and 20% of house‐
holds with incomes greater than 80% of AMI have disabilities. MAXFIELD RESEARCH INC. 126 SPECIAL NEEDS HOUSING 
In total, 3,840 owner households indicated some type of disability compared to 2,190 renter households. Owner households with disabilities are more likely to have higher incomes than are renter households with disabilities. Housing Facilities for Disabled Persons The following points summarize the various facilities in Red Wing licensed by the Minnesota Department of Human Services to serve persons with disabilities.  Adult Foster Care – There are four active adult foster care facilities in Red Wing with a combined capacity of 14 clients. Four other facilities with a capacity for 12 clients are locat‐
ed elsewhere in Goodhue County. Adult foster care provides a living arrangement offering food, lodging, supervision, and household services. They may also provide person care and medication assistance. Costs for room and board are met with clients such as Social Securi‐
ty Income and Group Residential Housing (GRP). Information regarding the four facilities located in Red Wing is summarized below. Name Address Capacity REM River Bluffs 1066 Birch Avenue 4 William & Sally Ogren 713 Central Avenue 1 Royalty Homes Inc. 2295 Bevans Circle 5 Jane & Jon Shirk 5528 Cannondale Court 4  Residential Services – There is one Intermediate Care Facility‐certified residential service provider in Red Wing (located at 2606 Malmquist Avenue) licensed to serve persons with developmental disability or related conditions. MAXFIELD RESEARCH INC. 127 SPECIAL NEEDS HOUSING Demographic and Economic Statistics on Homeless Populations The following tables present findings from the 2012 Wilder Survey of the homeless population and information on the housing needs of the homeless in Southeast Minnesota, which includes Goodhue County. Data is not available specifically for Goodhue County. Number of Homeless in Southeast Minnesota Table G‐3 shows the number of homeless people in temporary housing programs or unshel‐
tered as of October 2012.  In Southeast Minnesota, 619 people including adults as well as youth and children were homeless. Of that number, 352 were adults age 18 or older. Of all adults, 146 were unshel‐
tered in Southeast Minnesota. The adult counts exclude parents with children. TABLE G‐3
NUMBER OF HOMELESS PEOPLE
SOUTHEAST MINNESOTA AND MINNESOTA
2012
Total number of people in temporary housing programs, informal housing or unsheltered
Housing Situation
Emergency shelter
Battered women's shelter
Transitional housing
Unsheltered
TOTAL
Total number of adults* age 18+ in temporary housing programs, informal housing or unsheltered
SE Minnesota
Minnesota
SE Minnesota
Minnesota
121
90
206
202
619
3,210
669
4,082
2,221
10,182
79
35
92
146
352
2,374
294
2,148
1,820
6,636
* Homel es s peopl e a ge 18 a nd older, excl udi ng chi l dren wi th pa rents a nd una ccompa ni ed youth
Sources : Wi l der Res ea rch, Ma rch 2013, "2012 Mi nnes ota Homel es s Study"; Ma xfi el d Res ea rch, Inc.

As shown on the table, roughly 6% of those identified as homeless in Minnesota are located in the Southeast Minnesota region. Of the homeless population in Southeast Minnesota, 33% were unsheltered, compared to 22% in Minnesota. Age Distribution of Homeless in Southeast Minnesota Table G‐4 presents information on the age distribution of homeless adults, age 18 or older in Southeast Minnesota as of 2012.  The table shows that the median age of the homeless in Southeast Minnesota was 35, slightly younger than the statewide median age of 37. MAXFIELD RESEARCH INC. 128 SPECIAL NEEDS HOUSING 

In Southeast Minnesota, the largest number of homeless was those ages 30 to 39, followed by those 22 to 29 and those 40 to 49. In Minnesota, the largest number of homeless was in the 40 to 49 age group, followed by 22 to 29, then 30 to 39. In general, the largest group of homeless is young to mid‐age, between the ages of 20 and 50 years old. TABLE G‐4
AGE DISTRIBUTION
HOMELESS PEOPLE IN SOUTHEAST MINNESOTA AND MINNESOTA
2012
Age
18 to 21
22 to 29
30 to 39
40 to 49
50 to 54
55 to 59
60 to 69
70 to 79
80+
SE Minnesota
Number
Pct.
52
78
87
59
40
16
5
‐‐
‐‐
337
35
Median Age
15.4%
23.1%
25.8%
17.5%
11.9%
4.7%
1.5%
‐‐
‐‐
100.0%
Minnesota
Number
Pct.
848
1,301
1,288
1,343
735
474
259
22
3
6,273
13.5%
20.7%
20.5%
21.4%
11.7%
7.6%
4.1%
0.4%
0.0%
100.0%
37
* Peopl e l i vi ng i n tempora ry hous i ng progra ms or i nforma l hous i ng a nd i denti fi ed uns hel tered peopl e, excl udi ng youth l es s tha n 18 yea rs of a ge a nd chi l dren s ta yi ng wi th pa rents
Sources : Wi l der Res ea rch, Ma rch 2013, "2012 Mi nnes ota Homel es s Study"
Ma xfi el d Res ea rch, Inc.
Ethnic Background of the Homeless Table G‐5 presents information on the ethnic background of those that were identified as homeless in 2012. The table presents information based on self‐identification of ethnic back‐
ground from the homeless that were surveyed.  As shown on the table, the largest number of homeless was identified as being White or Caucasian in Southeast Minnesota and Minnesota. In Southeast Minnesota 67.8% of home‐
less were identified as White or Caucasian, compared to 41.8% across Minnesota.  The second highest category was African American, accounting for 17.2% of the homeless in Southeast Minnesota and 34.6% in Minnesota, while African Natives represented 4.7% of the homeless population in Southeast Minnesota. American Indians accounted for 3.6% in Southeast Minnesota but 10.1% across the State. Other ethnicities such as Asian or other groups were identified in much smaller proportions. MAXFIELD RESEARCH INC. 129 SPECIAL NEEDS HOUSING TABLE G‐5
ETHNIC BACKGROUND OF HOMELESS PEOPLE SURVEYED
2012
Racial/Ethnic background
SE Minnesota
Number
Pct.
White or Caucasian
African American
American Indian
Multiracial
African Native
Other
Asian or Pacific Islander
Not Specified
TOTAL
229
58
12
8
16
8
7
‐‐
338
67.8%
17.2%
3.6%
2.4%
4.7%
2.4%
2.1%
‐‐
100.0%
Minnesota
Number
2,622
2,172
634
348
220
142
93
43
6,274
Pct.
41.8%
34.6%
10.1%
5.5%
3.5%
2.3%
1.5%
0.7%
100.0%
Monthly Income of the Homeless Table G‐6 presents information on the monthly income of those that are homeless.  The highest proportion of homeless people surveyed has a monthly income of less than $200. In Southeast Minnesota, 39.2% of those surveyed are in this category, compared to 32.1% in Minnesota. TABLE G‐6
MONTHLY INCOME OF THE HOMELESS PEOPLE SURVEYED
OCTOBER 2012
Monthly Income
Under $200
$200 to $400
$400 to $600
$600 to $800
$800 to $1,000
$1,000+
TOTAL
SE Minnesota
Number
Pct.
115
42
46
43
14
33
293
$462
$300
Mean Income
Median Income
39.2%
14.3%
15.7%
14.7%
4.8%
11.3%
100.0%
Minnesota
Number
1,852
1,116
749
885
424
744
5,770
MAXFIELD RESEARCH INC. 32.1%
19.3%
13.0%
15.3%
7.3%
12.9%
100.0%
$509
$400
Pct.
130 SPECIAL NEEDS HOUSING 


About 11% of homeless in Southeast Minnesota and 13% in Minnesota have a monthly income of $1,000 or more. The mean monthly income for the homeless surveyed was $462 in Southeast Minnesota, ‐
9% lower than $509 across Minnesota. The median monthly income for the homeless sur‐
veyed was $300 in Southeast Minnesota and $400 in the State. At the mean and median income levels, the homeless are generally not able to afford to house themselves through the private market. Public housing may be available, but the wait lists are exceptionally long. Other life issues may be a challenge as well for many homeless requiring support services in addition to housing. Maximum Affordable Rents Table G‐7 presents information on the maximum rent affordable for the homeless that were surveyed in October 2012.  The table shows the mean affordable rent was $271 per month in Southeast Minnesota and $299 per month in Minnesota. The median affordable rent in Southeast Minnesota was $250 per month, compared to $240 across the State. Roughly 47% of those surveyed could only afford a monthly rent of less than $200 in Southeast Minnesota, while 47% of those surveyed in Minnesota could only afford less than $200. With a median gross rent of $713 in Red Wing (2012 ACS), it is easy to understand the dilemma. Most one‐bedroom units in Red Wing rent for between $500 and $749 per month. Unless the household can obtain a Housing Choice Voucher or is in project‐based Section 8 housing or public housing, there is little likelihood of being able to find housing at a cost level that is affordable to the vast ma‐
jority of these households. TABLE G‐7
MAXIMUM AFFORDABLE RENTS AMONG SURVEYED HOMELESS PEOPLE
2012
Monthly Income
Under $200
$200 to $400
$400 to $600
$600 to $800
$800 to $1,000
$1,000+
TOTAL
SE Minnesota
Number
Pct.
129
70
50
18
4
1
272
$271
$250
Mean Affordable Rent
Median Affordable Rent
47.4%
25.7%
18.4%
6.6%
1.5%
0.4%
100.0%
Minnesota
Number
2,538
1,186
940
491
173
58
5,386
47.1%
22.0%
17.5%
9.1%
3.2%
1.1%
100.0%
$299
$240
MAXFIELD RESEARCH INC. Pct.
131 SPECIAL NEEDS HOUSING Size of Bedroom Needed Table G‐8 presents information on the size of bedroom needed for those surveyed as of October 2012.  The data shows that the overwhelming need was for efficiency and two‐bedroom units. Roughly 40% of those surveyed indicated they would need an efficiency unit in Southeast Minnesota. There also appears to be significant need for two‐bedroom units in the Region, as 30.3% indicated they would need two bedrooms.  This information suggests that the majority of homeless are likely singles that do not have children and would only require housing for themselves. There is also a substantial portion in need of two‐bedroom units, single‐parents with children. TABLE G‐8
NUMBER OF BEDROOM SIZE NEEDED
2012
No. of Bedroom
0BR or single‐room occ.
1 BR
2 BR
3 BR
4 BR
5 BR
TOTAL
SE Minnesota
No.
Pct.
135
40.5%
47
14.1%
101
30.3%
43
12.9%
7
2.1%
‐‐
‐‐
333
100.0%
Minnesota
No.
Pct.
3,259
52.5%
898
14.5%
1,230
19.8%
647
10.4%
151
2.4%
21
0.3%
6,206
100.0%
Comparison of 2009 and 2012 Homeless Figures Based on figures from the 2009 and 2012 studies completed by the Wilder Foundation, home‐
less populations in Minnesota have continued to increase, exacerbated by the economic recession. The Wilder study counted 10,182 homeless in Minnesota as of October 2012, a 5.5% increase from October 2009. Clearly, tough economic times have had a significant impact on the num‐
ber of homeless in Minnesota. Consistent with findings from the 2009 report, the 2012 study showed increasing levels of distress among the homeless, including high rates of mental illness, physical disabilities and recent incarceration. MAXFIELD RESEARCH INC. 132 SPECIAL NEEDS HOUSING Other significant findings as compared to the 2009 report include:  51% of all homeless adults had been homeless for more than one year, compared to 52% in 2009;  59% of all homeless adults had been jobless for more than one year (up from 48% in 2009);  7% of homeless adults reported full‐time employment (up from 6% in 2009);  26% of homeless adults reported “physical health” as one of their main reasons for not working (up from 22% in 2009);  Median monthly income of homeless adults was $400 in 2012 (up from $300 in 2009);  67% of homeless adults reported using food stamps during the month of October 2012 (up from 63% in 2009).  Study findings show that those who are homeless for at least one year are significantly more likely to experience barriers to finding stable housing situations. Examples of these barriers to finding and securing a stable housing situation include; persistent mental illness, chronic health condition, cognitive disability, traumatic brain injury, and substance abuse. HOPE Coalition The following summarizes information provided by the Executive Director of “HOPE Coalition”, a private non‐profit corporation dedicated to serving victims of domestic violence, sexual assault, homelessness, and child abuse primarily in Goodhue County, Minnesota and Pierce County, Wisconsin.  HOPE Coalition leases a triplex through the Red Wing Housing and Rehabilitation Authority for long‐term transitional housing. Clients can reside in this housing from six months to two years. In 2013, four families (four adults and five children) were served by this facility. An‐
other six families (seven adults and five children) were served at their apartment supported by the “Homes for God’s Children” program through United Lutheran Church of Red Wing.  During 2012‐2013, their Haven of Hope Domestic Violence Shelter served 150 women, and there were 136 unmet requests for shelter due to a lack of space and funding. The average length of stay at Haven of Hope was 47 days (54 days for women with children and 33 days for women without children). The overall occupancy rate was 98%, with 92% of the families served coming from within a one‐hour travel time radius. MAXFIELD RESEARCH INC. 133 SPECIAL NEEDS HOUSING Three Rivers Community Action Three Rivers Community Action is a nonprofit human services organization that has been serving low‐income families in southeast Minnesota since 1966, and they now serve over 11,000 clients. Three Rivers participates in annual Project Community Connect events, which are free events providing information on resources available in each community. The following points summarize homeless survey results from the Goodhue County Project Community Connect in 2014.  There were a total of 114 people in attendance that completed the survey in 2014, roughly 30% of which were single while 57% had children. Approximately 42% of the respondents stated that they were employed while 58% were not employed at the time of the survey. Of the employed attendees, 53% stated that they earned between $6.00 and $8.00 per hour, while 35% earned $9.00 to $11.00 per hour, and 13% earned at least $12.00 an hour.  In 2014, 18 respondents identified themselves as being homeless, with seven claiming long‐
term homelessness (homeless for at least one year or at least four times in the past three years) and ten claiming to be homeless for the first time.  Four of the respondents stayed in an emergency shelter the night before the event, while three were in transitional housing, 16 stayed with friends or family, and one stayed in a ho‐
tel. Five others stated that they stayed in a hospital, trailer, car, or camper. In total, 33 re‐
spondents were seeking help finding housing. The agency also offers a transitional housing program to help move the homeless into afforda‐
ble housing. The program provides individuals and families with furnished housing, utility payments, and up to two years of case management. Transitional housing units are located in Northfield, Faribault, and Red Wing. The following points summarize information provided by the Program Director regarding the transitional housing units located in Red Wing.  Three Rivers Community Action has three units located in Red Wing; a one‐bedroom unit and two three‐bedroom units. Two of the units are co‐located in a duplex owned by a pri‐
vate landlord, and the third unit is also located in a duplex adjacent to a private non‐
transitional housing unit.  The average length of stay is roughly 14 months, which is an increase of approximately one month over the past couple years. They do not have any vacancies in Red Wing, and no va‐
cancy is anticipated in the near future. Program participants can stay up to two years, so there is limited turnover of units. At their last admission (in August 2014), they evaluated 11 applications for one vacancy. It was suggested that there is possibly a need for a home‐
less shelter in Red Wing. MAXFIELD RESEARCH INC. 134 SPECIAL NEEDS HOU
USING Veteran
ns deral Govern
nment, a veteran is any pperson who served hono
orably on acctive According to the Fed
duty in th
he armed forces of the U
United State
es. The following points summarize key demogrraph‐
ic characteristics of tthe veteranss residing in tthe Red Winng. Data is sourced from
m the US Cen
nsus Bureau’s American C
Community SSurvey 2012.  There are an estimated 1
1,713 veterans in Red W ing.  34.4% are Vie
etnam Era ve
eterans.  17.6% are Wo
orld War II vveterans.  12.0% are Korean War ve
eterans.  12.0% are Gu
ulf War (9/20
001 or later) veterans.  4.7% are Gulff War veteraans (8/1990 tto 8/2001).
 94.7% are maale.  75% are overr 55 years old
d.  95.2% are wh
hite and 4.7%
% are Americcan Indian/A
Alaska Native.  Median incom
M
me over the past 12 mon
nths (2012 innflation adju
usted dollarss) was $30,1
100, co
ompared to $27,970 forr the entire ccivilian popuulation (age 118+) in Red Wing.  55.5% are colllege‐educatted (Bachelo
or’s degree oor higher, Asssociate’s deegree or som
me co
ollege) comp
pared to 59.9% for the ccivilian popuulation age 225 and older.  The labor force participattion rate am
mong veteranns is 69.5% ccompared to
o 81.2% of th
he ciivilian population.  18.1% unemp
ployment ratte for veteraans in the labbor force, significantly h
higher than tthe ciivilian population (age 1
18 to 64) une
employmentt rate of 5.8%
%. MAXFIELLD RESEARCH INC. 135 SPECIAL NEEDS HOU
USING Povertyy The US C
Census Bureaau uses a sett of money income thressholds that vvary by famiily size and composittion to deterrmine wheth
her an indiviidual is in pooverty. If a ffamily’s total income is less than the family’s threshold, then
n every indivvidual in thatt family is co
onsidered in poverty. Th
he followingg points sum
mmarize key findings from
m the Ameriican Commu
unity Survey 2012 Poverrty Status re
eport for Red
d Wing comp
pared to Min
nnesota.  Roughly 10.6% of Red Wiing’s population (1,698) is considereed to be belo
ow poverty level, sllightly below
w the Minnessota povertyy rate of 11.2%  An estimated
A
d 17.8% of all individualss under the aage of 18 in Red Wing arre living in pov‐
erty, considerably higher than 14.3%
% in Minnesoota.  The poverty rrate for indivviduals age 1
18 to 64 is sllightly lowerr in Red Wing (8.4%) thaan in Minnesota (1
M
10.6%), while
e the 65 and
d older popu lation has a higher poveerty rate in R
Red Wing (9.6%) t
W
than Minnessota (8.3%).






Over 93% of t
O
the Black po
opulation and 25% of thee American IIndian population are beelow th
he poverty le
evel in Red W
Wing, compaared to 35% and 38%, reespectively, in Minnesotta. Nearly 28% o
N
of the populaation living in
n poverty in Red Wing h
has less than
n a high scho
ool education (26
6% in Minne
esota). Approximate
A
ly 40% of the age 16 and
d older popuulation livingg in poverty is in the civilian laabor force. The unemplo
oyment rate for the civilian labor forrce (age 16 aand older) livving in poverrty is Wing, substaantially lower than 25.9%
% in Minneso
ota. 9.2% in Red W
Of the emplo
O
oyed personss living in poverty in Redd Wing, rougghly 28% worked full‐tim
me and 72% worked part‐tim
me in the passt 12 monthss. Nearly 58% o
N
of the age 16
6 and older p
population li ving in poveerty did not w
work at all in
n the past 12 montths. MAXFIELLD RESEARCH INC. 136 HOUSING AFFORDABILITY Introduction Affordable housing is a term that has various definitions according to different people and is a product of supply and demand. According to the U.S. Department of Housing and Urban Development (HUD), the definition of affordability is for a household to pay no more than 30% of its annual income on housing (including utilities). Families who pay more than 30% of their income for housing (either rent or mortgage) are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care. Generally, housing that is income‐restricted to households earning at or below 80% of Area Median Income (AMI) is considered affordable. However, many individual properties have income restrictions set anywhere from 30% to 80% of AMI. Rent is not based on income but instead is a contract amount that is affordable to households within the specific income re‐
striction segment. Moderate‐income housing, often referred to as “workforce housing,” refers to both rental and ownership housing. Hence the definition is broadly defined as housing that is income‐restricted to households earning between 50% and 120% AMI. The following figure summarizes income ranges by definition. AREA MEDIAN INCOME (AMI) DEFINITIONS
Definition
AMI Range
Extremely Low Income
0% ‐ 30%
Very Low Income
31% ‐ 50%
Low Income
51% ‐ 80%
Moderate Income | Workforce Housing
50% ‐ 120%
Naturally‐Occurring Affordable Housing (i.e. Unsubsidized Affordable) Although affordable housing is typically associated with an income‐restricted property, there are other housing units in communities that indirectly provide affordable housing. Housing units that were not developed or designated with income guidelines (i.e. assisted) yet are more affordable than other units in a community are considered “naturally‐occurring” or “unsubsi‐
dized affordable” units. This rental supply is available through the private market, versus assisted housing programs through various governmental agencies. Property values on these units are lower based on a combination of factors, such as: age of structure/housing stock, location, condition, size, functionally obsolete, school district, etc. Because of these factors, housing costs tend to be lower. MAXFIELD RESEARCH INC. 137 HOUSING AFFORDABILITY According to the Joint Center for Housing Studies of Harvard University, the privately unsubsi‐
dized housing stock supplies three times as many low‐cost affordable units than assisted projects nationwide. Unlike assisted rental developments, most unsubsidized affordable units are scattered across small properties (one to four unit structures) or in older multifamily structures. Many of these older developments are vulnerable to redevelopment due to their age, modest rents, and deferred maintenance. Because many of these housing units have affordable rents, project‐based and private housing markets cannot be easily separated. Some households (typically those with household incomes of 50% to 60% AMI) income‐qualify for both market rate and project‐based affordable housing. Rent and Income Limits Table H‐1 shows the maximum allowable incomes by household size to qualify for affordable housing and maximum gross rents that can be charged by bedroom size in Goodhue County. These incomes are published and revised annually by the Department of Housing and Urban Development (HUD) and also published separately by the Minnesota Housing Finance Agency (MHFA) based on the date the project was placed into service. Fair market rent is the amount needed to pay gross monthly rent at modest rental housing in a given area. This table is used as a basis for determining the payment standard amount used to calculate the maximum monthly subsidy for families at financially assisted housing. TABLE H‐1
HUD INCOME AND RENT LIMITS IN GOODHUE COUNTY
2014
‐‐‐Income Limits by Household Size‐‐‐ 1 PERSON 2 PERSON 3 PERSON 4 PERSON 5 PERSON 6 PERSON 7 PERSON 8 PERSON 30% AMI
40% AMI
50% AMI
60% AMI
80% AMI
$15,270
$20,360
$25,450
$30,540
$40,700
$17,430
$23,240
$29,050
$34,860
$46,500
$19,620
$26,160
$32,700
$39,240
$52,300
$21,780
$29,040
$36,300
$43,560
$58,100
$23,550
$31,400
$39,250
$47,100
$62,750
$25,290
$33,720
$42,150
$50,580
$67,400
$27,030
$36,040
$45,050
$54,060
$72,050
0‐BR
1‐BR
2‐BR
3‐BR
4‐BR
5‐BR
6‐BR
$381
$509
$636
$763
$408
$545
$681
$817
$490
$564
$817
$981
$566
$755
$944
$1,133
$632
$843
$1,053
$1,264
$697
$930
$1,162
$1,395
$762
$1,016
$1,270
$1,524
$28,770
$38,360
$47,950
$57,540
$76,700
‐‐‐‐‐Maximum Gross Rents by Bedroom Size‐‐‐‐‐
30% AMI
40% AMI
50% AMI
60% AMI
‐‐‐‐‐Fair Market Rent by Bedroom Size‐‐‐‐‐
Fair Market Rent
EFF
1BR
2BR
3BR
4BR
$483
$551
$745
$1,087
$1,297
*Extremely Low Income defined as 30% AMI or less; Very Low Income defined as 30% to 50% AMI; Low‐income defined as 50% to 80% AMI
Sources: MHFA; HUD; Maxfield Research, Inc.
MAXFIELD RESEARCH INC. 138 HOUSING AFFORDABILITY Table H‐2 shows the maximum rents by household size and AMI based on income limits illus‐
trated in Table H‐1. The rents on Table H‐2 are based on HUD’s allocation that monthly rents should not exceed 30% of income. In addition, the table reflects maximum household size based on HUD guidelines of number of persons per unit. For each additional bedroom, the maximum household size increases by two persons. TABLE H‐2
MAXIMUM RENT BASED ON HOUSEHOLD SIZE AND AREA MEDIAN INCOME
GOODHUE COUNTY ‐ 2014
‐‐‐‐‐ Maximum Rent Based on Household Size (@ 30% of Income) ‐‐‐‐‐
Unit
Type
Studio
1BR
2BR
3BR
4BR
HHD Size
Min ‐ Max
1
1
2
3
4
‐
‐
‐
‐
‐
1
2
4
6
8
30% AMI
Min ‐ Max
$383
$383
$436
$495
$596
‐ $383
‐ $436
‐ $596
‐ $799
‐ $1,002
40% AMI
Min ‐ Max
$509
$509
$581
$654
$726
‐ $509
‐ $581
‐ $726
‐ $843
‐ $959
50% AMI
Min ‐ Max
$636
$636
$726
$818
$908
‐ $636
‐ $726
‐ $908
‐ $1,054
‐ $1,199
60% AMI
Min ‐ Max
$764
$764
$872
$981
$1,089
‐ $764
‐ $872
‐ $1,089
‐ $1,265
‐ $1,439
80% AMI
Min ‐ Max
$1,018
$1,018
$1,163
$1,308
$1,453
‐ $1,018
‐ $1,163
‐ $1,453
‐ $1,685
‐ $1,918
Sources: MHFA; HUD; Maxfield Research, Inc.
Housing Cost Burden Table H‐3 on the following page shows the number and percentage of owner and renter house‐
holds in Red Wing, the PMA, and Goodhue County that pay 30% or more of their gross income for housing. This information was compiled from the American Community Survey 2012 estimates. The Federal standard for affordability is 30% of income for housing costs. Moderately cost‐
burdened is defined as households paying between 30% and 50% of their income to housing; while severely cost‐burdened is defined as households paying more than 50% of their income for housing. Higher‐income households that are cost‐burdened may have the option of moving to lower priced housing, but lower‐income households often do not. The figures focus on owner house‐
holds with incomes below $50,000 and renter households with incomes below $35,000. Key findings from Table H‐3 follow. MAXFIELD RESEARCH INC. 139 HOUSING
G AFFORDAB
BILITY TABLE H‐3
HOUSIN
NG COST BURDEEN
RED WING MARKET AR
REA
2012
Red Wing
N
No.
Pct.
PMA
No.
Pctt.
Rem. of P
PMA
Goodh
hue Co.
M
MN
No.
Pct.
No.
Pct.
P
Pct.
Owner Ho
ouseholds
All Owne r HHs
Cost Burrden 30.0% or ggreater
Cost Burden 30.0% to 3
34.9%
49.9%
more
Cost Burden 50.0% or m
5,067
5
1
1,338
290
518
530
26.4%
5.7%
10.2%
10.5%
8,047
2,170
488
833
849
0%
27.0
6.1
1%
10.4
4%
10.6
6%
2,980
832
198
315
319
27.9%
2
6.6%
1
10.6%
1
10.7%
14,444
4
4,033
3
969
9
1,614
4
1,450
0
27.9%
6.7%
11.2%
10.0%
26
6.5%
7
7.1%
10
0.3%
9
9.1%
Hs w/ incomes <$50,000
Owner HH
1,804
1
932
51.7%
2,710
1,436
0%
53.0
906
504
5
55.6%
4,839
9
2,542
2
52.5%
52
2.2%
Renter Ho
ouseholds
All Rente r HHs
den 30.0% or grreater
Cost Burd
34.9%
49.9%
more
Cost Burden 50.0% or m
1,957
1
961
291
306
363
49.1%
14.9%
15.6%
18.5%
2,347
1,084
304
355
425
2%
46.2
13.0
0%
15.1
1%
18.1
1%
390
123
13
49
62
31.5%
3
3.3%
1
12.6%
1
15.9%
4,246
6
1,978
8
515
5
586
6
877
7
46.6%
12.1%
13.8%
20.7%
46
6.5%
8
8.9%
14
4.6%
23
3.0%
Hs w/ incomes <$35,000
Renter HH
1,282
1
888
69.3%
1,422
1,002
5%
70.5
140
114
8
81.4%
2,599
9
1,792
2
74.9%
71
1.2%
2012 Med
dian Contract R
Rent
$616
$624
$663
588
$5
$7
717
Sources: American Community Survey, 2008‐2012 esttimates; Maxfieeld Research Inc.

Abou
ut 26% of ow
wner households and 49%
% of renter hhouseholders are estimated to be payin
ng more than
n 30% of the
eir income fo
or housing coosts in Red W
Wing, similar to the propor‐
nesota, rougghly 26% of tion o
of cost burde
ened househ
holds througghout the Sttate. In Minn
owne
er household
ds are cost b
burdened wh
hile 47% of rrenter houseeholds are co
ost burdened. MAXFIELLD RESEARCH INC. 140 HOUSING AFFORDABILITY 


The number of cost burdened households in Red Wing increases proportionally based on lower incomes. About 69.3% of renters with incomes below $35,000 are cost burdened and 51.7% of owners with incomes below $50,000 are cost burdened. These percentages are slightly higher in Minnesota, as 71.2% of renter households with incomes below $35,000 are cost burdened and 52.2% of the owner households with incomes below $50,000 are cost burdened. In total approximately 33% of all households in Red Wing are cost burdened compared to 28% in the Remainder of the PMA, 32% in Goodhue County, and 32% in Minnesota. Com‐
pared to the Remainder of the PMA and Goodhue County, Red Wing has a slightly lower proportion of cost burdened owner households, but a higher percentage of cost burdened renter households. Roughly 10.5% of owner households in Red Wing are severely cost‐burdened (50% or more), slightly higher than Minnesota (9.1%) and Goodhue County (10.0%). Approximately 18.5% of renter households in Red Wing are severely cost‐burdened, lower than Minnesota (23.0%) and Goodhue County (20.7%). Housing Vouchers In addition to subsidized apartments, “tenant‐based” subsidies like Housing Choice Vouchers, can help lower income households afford market‐rate rental housing. The tenant‐based subsidy is funded by the Department of Housing and Urban Development (HUD), and is man‐
aged by the Red Wing HRA. Under the Housing Choice Voucher program (also referred to as Section 8) qualified households are issued a voucher that the household can take to an apart‐
ment that has rent levels with Payment Standards. The household then pays approximately 30% of their adjusted gross income for rent and utilities, and the Federal government pays the remainder of the rent to the landlord. Currently, the HRA is allocated 169 vouchers, but they have funding to issue 134 vouchers, all of which have been issued. There are currently 383 households on the Section 8 voucher waiting list. Nearly 36% of those on the waiting list are in need of a one‐bedroom unit. Another 34% are waiting for a three‐bedroom unit and 28% are waiting for a two‐bedroom unit. Relatively few households on the waiting list need four‐ or five‐bedroom units (4%). The Red Wing HRA also has six units of Shelter + Care vouchers for homeless disabled households, all six of which have been issued. The current wait for households on the waiting list is over two and one‐half years (30 months) for most applicants. The Red Wing HRA has a policy stating that the wait list should be closed any time the wait is longer than 24 months for applicants. As such, the wait list was closed as of October 31, 2014. MAXFIELD RESEARCH INC. 141 HOUSING AFFORDABILITY Housing Costs as Percentage of Household Income Housing costs are generally considered affordable at 30% of a households’ adjusted gross income. Table H‐4 on the following page illustrates key housing metrics based on housing costs and household incomes in Red Wing. The table estimates the percentage of Red Wing house‐
holders that can afford rental and for‐sale housing based on a 30% allocation of income to housing. Housing costs are based on the Red Wing average. The housing affordability calculations assume the following: For‐Sale Housing  10% down payment with good credit score  Closing costs rolled into mortgage  30‐year mortgage at 4.375% interest rate  Private mortgage insurance (equity of less than 20%)  Homeowners insurance for single‐family homes and association dues for townhomes  Owner household income estimates per 2012 ACS Rental Housing  Background check on tenant to ensure credit history  30% allocation of income  Renter household income estimates per 2012 ACS Because of the down payment requirement and strict underwriting criteria for a mortgage, not all households will meet the income qualifications as outlined above.  Approximately 81% of existing owner households could afford to buy a modestly‐priced single‐family home ($125,000) in Red Wing, but the proportion of income‐qualified house‐
holds declines as the sale price increases. Over 63% of existing owner households could af‐
ford to purchase a move‐up single‐family home priced at $200,000, but the proportion able to afford an executive single‐family home priced at $350,000 declines to 32% of existing owner households.  About 53% of existing renter households can afford to rent a one‐bedroom unit in Red Wing ($597/month). The percentage of renter income‐qualified households decreases to only 40% that can afford an existing three‐bedroom unit ($761/month). Furthermore, an esti‐
mated 37% of renters could afford to rent a one‐bedroom apartment within a new devel‐
opment renting for $800 per month. MAXFIELD RESEARCH INC. 142 HOUSING AFFORDABILITY TABLE H‐4
RED WING HOUSING AFFORDABILITY ‐ BASED ON HOUSEHOLD INCOME
For‐Sale (Assumes 10% down payment and good credit)
Single‐Family
Modest Move‐Up Executive
Price of House
$125,000 $200,000 $350,000
Pct. Down Payment
10.0%
10.0%
10.0%
Total Down Payment Amt.
$12,500 $20,000 $35,000
Estimated Closing Costs (rolled into mortgage)
$3,750
$6,000 $10,500
Cost of Loan
$116,250 $186,000 $325,500
Interest Rate
Number of Pmts.
Monthly Payment (P & I)
(plus) Prop. Tax
(plus) HO Insurance/Assoc. Fee for TH
(plus) PMI/MIP (less than 20%)
Subtotal monthly costs
Housing Costs as % of Income
Minimum Income Required
Pct. of PMA Owner Households
Townhome/Condo
Modest Move‐Up
$125,000 $200,000
10.0%
10.0%
$12,500 $20,000
$3,750
$6,000
$116,250 $186,000
4.375%
360
‐$580
‐$156
‐$42
‐$50
‐$829
4.375%
360
‐$929
‐$250
‐$67
‐$81
‐$1,326
4.375%
360
‐$1,625
‐$438
‐$117
‐$141
‐$2,320
4.375%
360
‐$580
‐$156
‐$150
‐$50
‐$937
4.375%
360
‐$929
‐$250
‐$150
‐$81
‐$1,409
30%
30%
30%
30%
30%
$33,148
$53,037
$92,816
$37,482
$56,371
81.3%
63.4%
32.2%
77.6%
60.5%
Existing Rental 1BR
2BR
3BR
$597
$692
$761
$7,164
$8,304
$9,132
1BR
$800
$9,600
Rental (Market Rate)
Monthly Rent
Annual Rent
Housing Costs as % of Income
Minimum Income Required
Pct. of PMA Renter Households
30%
30%
30%
30%
30%
30%
$23,880
$27,680
$30,440
$32,000
$40,000
$52,000
52.6%
45.3%
40.2%
37.4%
28.1%
19.4%
Source: Maxfield Research Inc. MAXFIELD RESEARCH INC. New Rental
2BR
3BR
$1,000
$1,300
$12,000 $15,600
143 CONCLUSIONS AND RECOMMENDATIONS Introduction This section summarizes demand calculated for specific housing products in Red Wing and recommends development concepts to meet the housing needs forecast for the City. All recommendations are based on findings of the Comprehensive Housing Needs Analysis. Demographic Profile and Housing Demand The demographic profile of a community affects housing demand and the types of housing that are needed. The various housing life‐cycle stages can generally be described as follows. 1. Entry‐level householders  Often prefer to rent basic, inexpensive apartments and will often “double‐up” with roommates in apartment setting. Usually singles or couples without chil‐
dren in their early 20's. 2. First‐time homebuyers and move‐up renters  Usually married or cohabitating couples in their mid‐20's or 30's, some with chil‐
dren, but most are without children that prefer to purchase modestly‐priced sin‐
gle‐family homes or rent more upscale apartments. 3. Move‐up homebuyers  Typically families with children where householders are in their late 30's to 40's and prefer to purchase newer, larger, and therefore more expensive single‐
family homes. 4. Empty‐nesters (persons whose children have grown and left home) and never‐
nesters (persons who never have children)  Generally couples in their 50's or 60's that prefer owning but will consider rent‐
ing their housing and some will move to alternative lower‐maintenance housing products. 5. Younger independent seniors  Prefer owning but will consider renting their housing and will often move (at least part of the year) to retirement havens in the Sunbelt and desire to reduce their responsibilities for housing upkeep and maintenance. Generally in their late 60's or 70's. 6. Older seniors  May need to move out of their single‐family home due to physical and/or health constraints or a desire to reduce their responsibilities for upkeep and mainte‐
nance. Generally single females (widows) in their mid‐70's or older. MAXFIELD RESEARCH INC. 144
CONCLUSIONS AND RECOMMENDATIONS DEMOGRAPHICS & HOUSING DEMAND
Age Cohort
Student
Housing
18‐24
25‐29
30‐34
35‐39
40‐44
45‐49
50‐54
55‐59
60‐64
65‐69
70‐74
75‐79
80‐84
85+
18 ‐ 24
Source: Maxfield Research Inc. MAXFIELD RESEARCH INC. Rental
Housing
1st‐time
Home Buyer
Move‐up
Home Buyer
2nd
Home Buyer
Empty Nester/
Downsizer
Senior
Housing
18‐34
25‐39
30‐49
40‐64
55‐74
65‐79
55+ & 65+
145
CONCLUSIONS AND RECOMMENDATIONS TYPICAL HOUSING TYPE CHARACTERISTICS
Target Market/
Demographic
Unit/Home
Characteristics
Lot Sizes/
Units Per Acre
Entry‐level single‐family
First‐time buyers: Families, couples w/no children, some singles
1,200 to 2,200 sq. ft.
2‐4 BR | 2 BA
80'+ wide lot
2.5‐3.0 DU/Acre
Move‐up single‐family
Step‐up buyers: Families, couples w/no children
2,000 sq. ft.+
3‐4 BR | 2‐3 BA
80'+ wide lot
2.5‐3.0 DU/Acre
Executive single‐family
Step‐up buyers: Families, couples w/no children
2,500 sq. ft.+
3‐4 BR | 2‐3 BA
100'+ wide lot
1.5‐2.0 DU/Acre
Small‐lot single‐family
First‐time & move‐down buyers: Families, couples w/no children, empty nesters, retirees
1,700 to 2,500 sq. ft.
3‐4 BR | 2‐3 BA
40' to 60' wide lot
5.0‐8.0 DU/Acre
Entry‐level townhomes
First‐time buyers: Singles, couples, 1,200 to 1,600 sq. ft.
2‐3 BR | 1.5BA+
6.0‐12.0 DU/Acre
Move‐up townhomes
First‐time & step‐up buyers: Singles, couples, some families, empty‐nesters
1,400 to 2,000 sq. ft.
2‐3 BR | 2BA+
6.0‐8.0. DU/Acre
Executive townhomes/twinhomes
Step‐up buyers: Empty‐nesters, retirees
2,000+ sq. ft.
3 BR+ | 2BA+
4.0‐6.0 DU/Acre
Detached Townhome
Step‐up buyers: Empty‐nesters, retirees, some families 2,000+ sq. ft.
3 BR+ | 2BA+
4.0‐6.0 DU/Acre
Condominums
First‐time & step‐up buyers: Singles, couples, empty‐nesters, retirees
800 to 1,700 sq. ft.
1‐2 BR | 1‐2 BA
Low‐rise: 18.0‐24.0 DU/Acre
Mid‐rise: 25.0+ DU/Acre
Hi‐rise: 75.0+ DU/Acre
Apartment‐style rental housing
Singles, couples, single‐parents, some families, seniors
675 to 1,250 sq. ft.
1‐3 BR | 1‐2 BA
Townhome‐style rental housing
Single‐parents, families w/children, empty nesters
900 to 1,700 sq. ft.
2‐4 BR | 2BA
8.0‐12.0 DU/Acre
Student rental housing
College students, mostly undergraduates
550 to 1,400 sq. ft.
1‐4BR | 1‐2 BA
Senior housing
Retirees, Seniors
550 to 1,500 sq. ft.
Suites ‐ 2BR | 1‐2 BA
Varies considerably based on
senior product type
Both
Rental Housing
For‐Sale Housing
Housing Types
Smaller, outstate communities and rural areas tend to have higher proportions of younger households that own their housing than in the larger growth centers or metropolitan areas. In addition, senior households tend to move to alternative housing at an older age. These condi‐
tions are a result of housing market dynamics, which typically provide more affordable single‐
family housing for young households and a scarcity of senior housing alternatives for older households. The baby boom generation will have the biggest effect on the housing market in Red Wing as their life cycle continues. Baby boomers are currently ages 50 to 68, and as they age over this decade, they will increase the population in the age groups 55 to 74. Some of these baby boomers will prefer more expensive single‐family homes, while many others who become empty nesters may prefer to downsize or desire maintenance‐free alternatives. With the baby busters following in the baby boomers’ wake, the age group 45 to 54 will decline, somewhat decreasing the overall demand for move‐up housing. MAXFIELD RESEARCH INC. 146 CONCLUSIONS AND RECOMMENDATIONS Housing Demand Summary The following table and charts illustrate calculated demand by product type. Housing demand is comprised of several components, including projected household growth, pent‐up demand (i.e. below equilibrium senior housing vacancy rates), and replacement needs (housing func‐
tionality or physically obsolete units). It is important to recognize that projected household growth is highly dependent on increased or decreased hiring by the major employers in the City, as well as the availability of suitable housing options in Red Wing. TABLE I‐1
SUMMARY OF HOUSING DEMAND
CITY OF RED WING
November 2014
General‐Occupancy Housing
2014‐2025
For‐Sale Units
Single‐Family
Multifamily
299
179
120
Rental Units
Market Rate
Shallow‐Subsidy
Deep‐Subsidy
320
128
96
96
Total General Occupancy Housing Units
619
Senior Housing
2014
2020
Market Rate Active Adult
Renter‐Occupied
Owner‐Occupied
61
28
33
79
39
40
Congregate
94
104
Assisted Living
36
48
Memory Care
38
46
229
277
131
41
135
47
172
182
Market Rate Senior Housing
Total Market Rate Senior Housing Units
Subsidized Senior Housing
Shallow‐Subsidy Active Adult
Deep‐Subsidy Active Adult
Total Subsidized Senior Housing Units
Source: Maxfield Research, Inc.
MAXFIELD RESEARCH INC. 147 CONCLUSSIONS AND RECOMMEN
NDATIONS In total, w
we find dem
mand to supp
port 619 gen
neral occupa ncy housingg units betweeen 2014 an
nd 2025. De
emand is exp
pected to be
e evenly splitt between reental housin
ng (320 unitss) and for‐saale housing ((299 units). We also ffound excesss demand fo
or a total of 459 senior hhousing unitts in 2020. O
Of these seniior units, rou
ughly 60% w
would be market rate housing and thhe remainingg 40% would
d be shallow
w‐
subsidy o
or deep‐subssidy units. TThis level of ssenior housiing demand (particularlyy market ratte active ad
dult) may nott be realized
d in the shorrt‐term as m any seniors,, especially in rural areass, prefer to
o age in place
e and delay moving to se
enior housinng until theyy need servicces. MAXFIELLD RESEARCH INC. 148 CONCLUSIONS AND RECOMMENDATIONS Based on the findings of the analysis and demand calculations, Tables I‐2 to I‐4 provide a summary of the recommended development concepts by product type for the City of Red Wing. It is important to note that these proposed concepts are intended to act as a develop‐
ment guide to effectively meet the housing needs of existing and future households in Red Wing.  A total of 179 new single‐family housing units over the forecast period equates to a growth rate of approximately 18 units per year. The pace of growth would be slightly higher than the rate of single‐family residential development activity that occurred in the City between 2006 and 2013 (12 units per year), but it is well‐below the pace of growth that occurred in the period from 2000 through 2005 (39 units per year).  The 120 new multifamily units equate to an annual average of roughly 12 units per year, slightly lower than the average of 18 new units per year between 2006 and 2013 and 55 units per year from 2000 through 2005. However, the building permit data includes rental and senior housing units while the multifamily demand presented in Table D‐10 is for gen‐
eral occupancy for‐sale housing only. Recommendations Based on the findings of the analysis and demand calculations, Tables I‐2 and I‐3 on the follow‐
ing pages provide a summary of recommended development concepts for for‐sale and rental housing in Red Wing. It is important to note that these proposed concepts are intended to act as a development guide to meet the housing needs of existing and future households in the City. For‐Sale Housing Based on information gathered on for‐sale properties in the City along with feedback from local officials, major employers and area real estate professionals, we provide the following conclu‐
sions regarding the Red Wing for‐sale housing market. Our recommendations include a break‐
down of units by price range: Modest housing is defined as housing priced less than $150,000; Move‐up housing is priced between $150,000 and $300,000; and, Executive housing is priced over $300,000.  Demand was estimated at nearly 300 units of new for‐sale housing in the City by 2025. The general consensus is that there is demand for many types of housing in the area, but based on recent sale transactions, housing demand appears to be highest for modestly‐priced housing in the $100,000 to $150,000 range (25% of all sales). Move‐up housing priced be‐
tween $150,000 and $300,000 in Red Wing also appears to be in high demand. MAXFIELD RESEARCH INC. 149 CONCLUSIONS AND RECOMMENDATIONS 

Multifamily housing can be an option for buyers looking for a starter home and households seeking to downsize or don’t want the responsibilities of upkeep and maintenance. As such, we estimate that 40% of the demand for new for‐sale housing development in the City will be multifamily units, and we recommend that most for‐sale multifamily units in the City be geared toward the entry‐level market or for older households. While there is currently strong demand for modestly‐priced homes, it is difficult to build new single‐family detached housing in that price range (less than $150,000). One way to provide entry‐level single‐family housing is to generate household turnover by increasing the supply of move‐up and executive housing. Entry‐level home demand will primarily be satisfied by existing single‐family homes as residents of existing homes move into move‐up and executive housing products built in the community. A move‐up buyer is typically one who is selling one house and purchasing another one, usually a larger and more expensive home. The move is typically desired because of a lifestyle change, such as a new job or a growing family. The 45 to 54 and 35 to 44 age groups are target markets for move‐up and executive housing. TABLE I‐2
GENERAL OCCUPANCY FOR‐SALE HOUSING RECOMMENDATIONS
CITY OF RED WING
November 2014
Product Type
% of
Total
# of
Units
Single‐Family
60%
179
30%
55%
15%
54
99
27
40%
120
50%
50%
59
60
100%
299
38%
53%
9%
113
158
27
Modest (less than $150,000)
Move‐up ($150,000 ‐ $300,000)
Executive (over $300,000)
Multifamily
Move‐up ($150,000 ‐ $300,000)
Total For‐Sale Housing
Move‐up ($150,000 ‐ $300,000)
Executive (over $300,000)
Source: Maxfield Research, Inc.

Development
Timing
2014+
2014+
2014+
2014+
2014+
2014+
2014+
2014+
In total, we found demand for 179 single‐family homes in the City between 2014 and 2025. Based on the age distribution of City households along with comments from Realtors and hiring trends at the major employers in the City, we recommend that that 55% of these homes be priced in the move‐up range (99 units), 15% priced as executive homes (27 units), and 30% in the modest price range (54 units). MAXFIELD RESEARCH INC. 150 CONCLUSIONS AND RECOMMENDATIONS 

We also found demand for 120 multifamily units. Because the multifamily target market will likely be first‐time homebuyers or older householders looking to downsize, we recom‐
mend that multifamily housing be evenly split between the modest and move‐up price ranges. According to Table D‐7 in the For‐Sale Market Analysis section, there are roughly 326 residential lots available for development in the City. On average, subdivisions in Red Wing have absorbed lots at a rate of roughly two lots per year. Based on the total average annual lot absorption of 36.8 lots per year, the 326 undeveloped lots could take nearly nine years to be developed. This assumption does not take into account the quality and marketability of specific lots. The industry standard for a balanced lot supply is three to five years. As such, it appears that the existing supply of platted lots in Red Wing is adequate to meet demand through the end of the decade. General Occupancy Rental Housing Our competitive inventory identified that the vacancy rates for all types of general occupancy rental product are well‐below market equilibrium (5.0% vacancy rate), indicating that there is substantial pent‐up demand for rental housing in Red Wing. As of November 2014, the vacancy rate for market rate rental properties in Red Wing was 0.9% while the affordable/tax credit and subsidized properties were fully‐occupied. Due to the positioning of much of the existing rental supply, a significant portion of the market rate units are priced at or below guidelines for affordable housing, which indirectly satisfies some demand from households that income‐qualify for financially assisted housing. However, today’s renter base is seeking newer rental properties with additional and updated amenities that are not offered in older developments. Because of the older age of Red Wing’s rental housing inventory, the majority of properties do not provide modern features and amenities. Because of the extremely low vacancy rate in Red Wing, and based on feedback provided by major employers in Red Wing, it appears that there is a need for new rental housing in the community. Based on our analysis, Red Wing can accommodate approximately 128 new market rate rental housing units, 96 shallow‐subsidy units, and 96 deep‐subsidy units through 2025. Deep‐
subsidy projects are no longer being built as available funding is very limited. Rural Develop‐
ment would typically have rental assistance to support very low‐income households. Table I‐3 provides a summary of the recommended mix of general housing rental housing including unit type, monthly rents, and development timing. Because the existing inventory of rental housing currently has vacancy rates that are below equilibrium, we suggest that there is an immediate need for new rental housing in Red Wing. MAXFIELD RESEARCH INC. 151 CONCLUSIONS AND RECOMMENDATIONS TABLE I‐3
RECOMMENDED RENTAL HOUSING DEVELOPMENT
CITY OF RED WING
2014 to 2025
Market Rate Rental Housing
Apartment‐style (move‐up)
Townhomes
Total
Monthly
Rent Range¹
No. of Units
Development
Timing
$800/1BR ‐ $1,300/3BR
$1,200/2BR ‐ $1,500/3BR
50 ‐ 60
30 ‐ 40
80 ‐ 100
2015+
2015+
50 ‐ 60
2015+
40 ‐ 50
90 ‐ 110
2015+
Affordable Rental Housing
Apartment‐style
Subsidized
Total
2
Moderate Income
4
30% of Income
¹ Pri ci ng i n 2014 dol l a rs . Pri ci ng ca n be a djus ted to a ccount for i nfl a ti on.
2 Afforda bl i ty s ubject to i ncome gui del i nes per US Depa rtment of Hous i ng a nd Urba n Devel opment (HUD)

Market Rate Rental – We recommend a new middle‐ to upper‐market rental project with upwards of 60 units that will attract a diverse resident profile; including young to mid‐age professionals as well as singles and couples across all ages. To appeal to a wide target mar‐
ket, we suggest a combination of apartment‐style and townhome‐style units with a mix of one‐bedroom units, two‐bedroom units, and three‐bedroom units. Larger three‐bedroom units would be attractive to households with children. Monthly rents (in 2014 dollars) should range from $800 for a one‐bedroom unit to $1,300 for a three‐bedroom unit. Average rents in Red Wing are approximately $0.77 per square foot, however monthly rents in a new construction project should range from about $1.10 to $1.15 per square foot to be financially feasible. Monthly rents can be trended up by 2.0% annually prior to occupancy to account for inflation depending on overall market con‐
ditions. Because of construction and development costs, it may be difficult for a market rate apartment to be financially feasible with rents lower than the suggested per square foot price. Thus, for this type of project to become a reality, there may need to be a public – private partnership to reduce development costs and bring down the rents or the developer will need to provide smaller unit sizes. New market rate rental units should be designed with contemporary amenities that include open floor plans, higher ceilings, in‐unit washer and dryer, full kitchen appliance package, central air‐conditioning, garage parking, and outdoor recreation (fire pit, grill area, etc.) MAXFIELD RESEARCH INC. 152 CONCLUSIONS AND RECOMMENDATIONS 


Market Rate General Occupancy Rental Townhomes– In addition to the recommended apartment project, we find that demand exists for some larger townhome units for families – including those who are new to the community and want to rent until they find a home for purchase. An additional 30 to 40 rental townhome units could be supported in Red Wing by 2025. We recommend a project with rents of approximately $1,200 for two‐
bedroom units to $1,500 for three‐bedroom units. Units should feature contemporary amenities (i.e. in‐unit washer/dryer, high ceilings, etc.), an attached two car garage, and the development should provide open/green space as well as a playground facility to at‐
tract families with children. Shallow‐Subsidy General Occupancy Multifamily Housing– We estimate that demand exists for about 96 shallow‐subsidy units through 2025. Shallow‐subsidy housing attracts house‐
holds that cannot afford market rate housing units but do not income‐qualify for deep‐
subsidy housing. Shallow‐subsidy projects attract a broad group of tenants based on the unit type. One‐bedroom units target singles and couples, whereas two and three‐bedroom units target families. Some retired seniors would also be attracted to an affordable con‐
cept. Although there is an older supply of market rate apartment units in Red Wing that indirectly services as affordable housing, we recommend a shallow‐subsidy concept that would target residents at 40% to 60% AMI. We recommend a project(s) with one, two‐ and three‐bedroom units. Units should feature central air conditioning, full appliance package, in‐unit washer/dryer, and an attached one/two car garage. Deep‐Subsidy Rental Housing– Subsidized housing receives financial assistance (i.e. operat‐
ing subsidies, rent payments, etc.) from governmental agencies in order to make the rent affordable to low‐to‐moderate income households. Although we find demand for 96 deep‐
subsidy rental housing units through 2025, this housing is very difficult to develop financial‐
ly. A new subsidized or public housing development would have pent‐up demand. But since this housing is challenging to develop today, an alternative to a multifamily structure is to acquire single‐site housing structures to meet a portion of this demand. Through our interview process, it was suggested that there is a need to provide housing for people with disabilities. Through the Section 811 Supportive Housing for Persons with Dis‐
abilities program, HUD provides funding to develop and subsidize rental housing with sup‐
port services available for very low‐ and extremely low‐income adults with disabilities. A Section 811 deep‐subsidy project in Red Wing would meet a stated need by providing housing for this special needs population. We believe the addition of the rental developments suggested above will provide greater housing choices in the City and will continue to serve the needs of households that live and/or currently work in Red Wing. MAXFIELD RESEARCH INC. 153 CONCLUSIONS AND RECOMMENDATIONS Senior Housing As illustrated in Table G‐1, demand exists for a variety of senior housing products in the City of Red Wing through 2020. Development of additional senior housing is recommended in order to provide housing opportunity to these aging residents in their stages of later life. The development of additional senior housing serves a two‐fold purpose in meeting the hous‐
ing needs in Red Wing: older adult and senior residents are able to relocate to new age‐
restricted housing in Red Wing, and existing homes and rental units that were occupied by seniors become available to other new households. Hence, development of additional senior housing does not mean the housing needs of younger households are neglected; it simply means that a greater percentage of housing need is satisfied by housing unit turnover. We found demand for most senior housing product types over the next several years, and vacancy rates among the existing senior housing inventory is well‐below equilibrium suggesting that there is pent‐up demand for additional senior housing units in the Market Area. Based on current and projected excess demand potential, we expect that the market could support a new continuum of care senior housing development in Red Wing. TABLE I‐4
RECOMMENDED SENIOR RENTAL HOUSING DEVELOPMENT
CITY OF RED WING
2020
Purchase Price/
Monthly Rent Range¹
No. of Units
Development
Timing
2
$1,100/1BR ‐ $1,500/2BR
Moderate Income
25 ‐ 30
100 ‐ 110
2015+
2015+
3
$1,500 ‐ $4,000
$3,500 ‐ $5,000
80 ‐ 90
30 ‐ 40
250 ‐ 290
2015+
2015+
Senior Housing (i.e. Age Restricted)
Active Adult Market Rate Rental
2
Active Adult Shallow‐Sub. Rental
Catered Living
4
Memory Care
Total
¹ Pri ci ng i n 2014 dol l a rs . Pri ci ng ca n be a djus ted to a ccount for i nfl a ti on.
2 Al terna ti ve devel opment concept i s to combi ne a cti ve a dul t a fforda bl e a nd ma rket ra te a cti ve a dul t i nto mi xed‐i ncome s eni or communi ty
3 Ca tered l i vi ng i s a hybri d concept of congrega te a nd a s s i s ted l i vi ng s ervi ce l evel s .
4 Memory ca re hous i ng coul d be a component of a n a s s i s ted‐l i vi ng or s ervi ce‐i ntens i ve bui l di ng.
MAXFIELD RESEARCH INC. 154 CONCLUSIONS AND RECOMMENDATIONS 
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Market Rate Active Adult – Demand was projected for about 39 market rate active adult rental units in Red Wing in 2020. Currently, there is one active adult ownership property and one active adult rental property in the City. It is likely there are seniors who currently reside in general occupancy housing that would consider a newer active adult rental prod‐
uct. In addition, there may be seniors who no longer want the burden of the maintenance of homeownership and would like the choice of additional active adult rental products. Shallow‐Subsidy and Deep‐Subsidy Senior Rental – Demand was calculated for 135 shal‐
low‐subsidy active adult units through 2020. While there are a number of deep‐subsidy senior housing units in the Market Area, there are no moderate income projects. Many candidates for shallow‐subsidy senior rental may be residents at older market rate rental properties. These older properties would have similar rents that would be considered af‐
fordable for these seniors. The lack of shallow‐subsidy senior housing may be due to the cost and funding associated with this type of development. Therefore any shallow‐subsidy senior housing project could best be incorporated into a mixed‐income building to be feasi‐
ble. We recommend a shallow‐subsidy senior housing development in either a stand‐alone building or incorporated within a mixed‐income development. While the study shows pent‐up demand for deep‐subsidy units in Red Wing, the develop‐
ment of deep‐subsidy senior housing can be challenging. Financing subsidized senior hous‐
ing is difficult as federal funds have been shrinking. Therefore, a new development would likely rely on a number of funding sources; from low‐income tax credits (LIHTC), tax‐exempt bonds, Section 202 program, Rural Development 515 program, Rural Development rental assistance, among others. Service‐Enhanced Senior Housing – We find demand for a total of 198 service‐enhanced units in Red Wing through 2020 (104 congregate units, 48 assisted living units, and 46 memory care units). This level of demand will likely best be satisfied with a continuum of care project, so a resident can change their level of care as they age without having to relo‐
cate from the facility. Congregate Service Level The monthly fees should include the base monthly rent, utilities, and some assisted living services, including: social, health, wellness and educational programs; 24‐hour emergency call system; and, regularly scheduled van transportation. In addition, meals and other sup‐
port and personal care services should be made available to congregate residents on a fee‐
for‐service basis. When their care needs increase, residents should be provided the option of receiving assisted living services in their existing units, either in bundled packages or a‐la‐
carte. MAXFIELD RESEARCH INC. 155 CONCLUSIONS AND RECOMMENDATIONS Assisted Living Service Level The fees should include the base monthly rent, utilities, and assisted living services, such as: three meals per day plus snacks; weekly housekeeping and linen service; professional activi‐
ty programs and scheduled outings; nursing care management; and 24‐hour on site staffing. Additional services should also be available either in service packages or a la carte for an extra monthly charge. Memory Care Component We suggest that any memory care units be located in a separate, secured, self‐contained wing located on the first floor of the building with its own dining and common area ameni‐
ties including a secure outdoor patio and wandering area. Fees should include the base rent, utilities and services such as; medication reminders, medication administration, and personal care assistance, with other service packages available a‐la‐carte. Challenges and Opportunities Tables I‐2 to I‐4 identified and recommended housing types that would satisfy the housing needs in Red Wing through 2025. The following were identified as the greatest challenges and opportunities for developing the recommended housing types (in no particular order).  Affordability. Approximately 27% of all owner households in Red Wing are considered to be cost burdened, while 51% of the existing renter households in the City are considered cost burdened. Based on current home prices, over 81% of existing owner households in the Red Wing PMA could afford to purchase a single‐family home sold at the median sale price ($125,000 in 2013). Roughly 53% of existing renter householders could afford to rent a one‐bedroom unit at an existing market rate rental project; however and 37% could afford monthly rents at a new rental development. Because the cost to own a modestly‐priced home is similar to the cost to rent a new market rate rental unit, some households may choose owning over renting in Red Wing. However, the purchasing affordability factor will decrease with continued price appreciation, and there is a growing segment of the population that is choosing rental housing over owner‐
ship housing. These households are referred to as “lifestyle renters”, those with busy pro‐
fessional lives and people who prefer to spend their free time in leisure pursuits rather than on the upkeep and maintenance of a home.  Residential Development Costs. Developing land is generally considered to be a profitable segment of the housing industry, yet it is also risky if the lot inventory goes unsold. Due to raw land costs, entitlements, and the cost to develop infrastructure, developers will be MAXFIELD RESEARCH INC. 156 CONCLUSIONS AND RECOMMENDATIONS 
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cautious given achievable lot prices. Many subdivisions in Red Wing take years to sell out and developers have carrying costs (property taxes, financing) on improved lots. The value of building lots is often benchmarked against the value of the completed retail housing package (sales price). Target ratios for builders show that the cost of sales should be held to 70% of the purchase price; 50% for construction hard costs and 20% for the land (raw land, improvements, financing costs, etc.) However, these ratios vary considerably based on builder, product, topography, lot type, etc. An improved single‐family lot should generally cost from 18% to 25% of the projected retail price of the home. Based on average lot costs of $40,000 to $60,000 in the active subdivisions in Red Wing, the retail price for a new single‐family home would range from $200,000 to $300,000 based on a 20% lot‐to‐home ratio. Approximately 80% of the homes sold in Red Wing since 2012 have been priced below $200,000 and 60% of the sales were priced less than $150,000, suggesting that there is strong demand for modestly‐priced housing in the City. As such, a public‐private partnership should be explored to help alleviate the carrying costs for devel‐
opers, which could bring down lot costs and stimulate the production of more moderately‐
priced housing units. Multifamily Development Costs. It may be difficult to construct new multifamily product with amenities today’s renter’s desire given market rents and development costs. Accord‐
ing to RS Means construction costs data, construction costs in Red Wing (utilizing construc‐
tion averages in the Twin Cities area) will likely average about $149 per square foot (gross), or upwards to $167,500 per unit to develop based on a 40‐unit three‐story concept. Devel‐
opment costs of this scale will likely require rents per square foot significantly higher than the existing product in Red Wing. Based on these costs, it will be difficult to develop stand‐
alone multifamily housing structures by the private sector based on achievable rents. As a result, a private‐public partnership or other financing programs will likely be required to spur development and potentially reduce rent levels to bridge some of the gap between existing older product and new product. Job Growth/Employment. Low unemployment often generates demand for both existing home purchases and new‐home purchases. Red Wing and Goodhue County have historical‐
ly maintained a lower unemployment rate than the rest of the United States. Red Wing’s unemployment rate of about 3.8% as of September 2014 was below equilibrium (generally considered to be 5.0%) and lower than the United States (5.7%). Today’s unemployment rate has come down from a high of 8.2% in 2009. It appears that the decline in Red Wing’s unemployment rate in recent years can be partially attributed to a declining labor force. Red Wing’s labor force contracted roughly ‐6.3% from 2010 to 2013 while resident dropped ‐4.4% during that same time period. Because the labor force has declined at a faster pace than the number of employed residents, the unemployment rate has decreased. Low un‐
employment in combination with a shrinking labor force can restrain economic expansion in a community, as it becomes difficult for employers in the area to hire workers and increase production or services. MAXFIELD RESEARCH INC. 157 CONCLUSIONS AND RECOMMENDATIONS 
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Despite the economic recession, industry employment increased 3.9% in Red Wing from 2008 to 2013 as over 500 jobs were added in Red Wing during that time period. The expan‐
sion of jobs in Red Wing compared to flat labor force and resident employment growth in the City indicates that Red Wing employers have attracted workers from outside the City in recent years. As such, it appears that Red Wing is a strong “importer” of workers. With over 6,600 workers commuting into Red Wing daily, many coming from over 50 miles, there appears to be an opportunity to provide housing options for a portion of these workers. Land Supply. Table D‐8 inventoried active subdivisions with undeveloped lots. Based on our research there are 326 platted lots available. Based on this lot supply and the recent construction activity, there is an excess supply of platted lots in the community. Because of this, it is unlikely that developers will plat lots in the short‐term until additional inventory has been absorbed, especially given development and infrastructure costs. Housing Programs. The Red Wing Housing and Redevelopment Authority offers a number of programs to promote and preserve the existing housing stock in Red Wing. Some of the key programs that are offered include: The Home Buyer Assistance Program assists low‐ and moderate‐income families with the purchase of affordable housing in Red Wing and is available to households with in‐
comes at or below 80% AMI (funding was not available at the time this report was pre‐
pared); – The Single Family Housing Rehabilitation Loan Program provides low interest loans for homeowners to rehabilitate their homes for households with incomes at or below 80% AMI (funding was not available at the time this report was prepared); – The Community Investment Project is utilized to purchase homes in need of repair, re‐
pairing the home, and then placing them on the market at affordable prices; and, – The HRA provides Housing Quality Standards (HQS) inspection services. However, there are other programs the City could consider to aid and improve Red Wing’s housing stock. The following is a sampling of potential programs that could be explored. – Remodeling Advisor – Partner with local architects and/or builders to provide ideas and general cost estimates for property owners. – Construction Management Services – Assist homeowners with local building codes, re‐
viewing contractor bids, etc. Typically provided as a service by the building department. – Historic Preservation – Encourage residents to preserve historic housing stock in neigh‐
borhoods with homes with character through restoring and preserving architectural and building characteristics. Typically funded with low interest rates on loans for preserva‐
tion construction costs. – Home‐Building Trades Partnerships – Expand partnership between local Technical Col‐
leges or High Schools that offer building trades programs. Affordability is gained through reduced labor costs provided by the school. New housing production serves as the “classroom” for future trades people to gain experience in the construction industry. –
MAXFIELD RESEARCH INC. 158 CONCLUSIONS AND RECOMMENDATIONS –
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Mobile Home Improvements – Offer low or no‐interest loans to mobile home owners for rehabilitation. Establish income‐guidelines based on family size and gross incomes. Foreclosure Home Improvement Program – Low‐interest loans to buyers of foreclosed homes to assist home owners with needed home improvements while stabilizing owner‐
occupied properties. A portion of the loan could be forgivable if the occupant resides in home at least five years. Eligibility should be based on income‐guidelines (typically 80% AMI or lower). Townhome/Condo Association Improvements – Offer associations low‐interest loans for common‐area improvements. Unit owners repay the loan through property taxes. Many townhome/condo associations have been unable to secure financing due to de‐
pressed real estate pricing; this program assists with improving housing stock with older properties that may have deferred maintenance. Rent to Own ‐ Income‐eligible families rent for a specified length of time with the end‐
goal of buying a home. The HRA saves a portion of the monthly rent that will be allocat‐
ed for a down payment on a future house. Rental Collaboration – Host meetings on a regular basis (quarterly, bi‐annually, or annu‐
ally) with rental property owners, property management companies, Realtors, etc. to discuss key issues and topics related to the rental housing industry in Red Wing. Rental Rehabilitation – Red Wing has a large supply of older renter‐occupied housing units that could be enhanced through renovation, and many local rental owners may have difficulty investing in their rental properties if market demand and market rents remain in the affordable range. Grant funding such as the Small Cities Development Program HOME funds may be available. The HOME Program is funded through the U.S. Department of Housing and Urban Development (HUD) and is a primary source for funds for rental rehabilitation. Home Fair – Provide residents with information and resources to promote improve‐
ments to the housing stock. Typically offered on a weekend in early spring where home owners can meet and ask questions of architects, landscapers, building contractors, lenders, building inspectors, etc. Greater Minnesota Housing Fund ‐ The Greater Minnesota Housing Fund (“GMHF”) pro‐
vides numerous programs, financing mechanisms, technical support, and research to support production of affordable housing across Greater Minnesota. Minnesota Housing Finance Agency ‐ Minnesota Housing is a housing finance agency whose mission is to finance affordable housing for low‐ and moderate‐income house‐
holds across Minnesota. The organization provides numerous products and services for both the single‐family and multifamily housing sectors. The organizations five strategic priorities are as follows: Preserve federally‐subsidized rental housing; Promote and sup‐
port successful homeownership; Address specific and critical needs in rental housing markets; Prevent and end homelessness, and; Prevent foreclosure and support commu‐
nity recover. MAXFIELD RESEARCH INC. 159

information. - Red Wing Housing and Redevelopment Authority

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