Once you have collected the relevant information, it is necessary to put this information in the proper perspective. Often this entails comparing your community’s situation to that of neighboring communities, the county, or the state. The following provides suggestions on what to look for in determining local need.
Affordable rental housing need
Not all of these indicators have to be in place for a need to exist, but where the need is strongest for affordable rentals, a majority of these indicators are present.
Age of population
- An increasing population, especially of younger residents 18 to 34 years old, or increasing senior population
- A current unemployment rate below 5 percent, or a significant increase in service-related employment, indicating the need for additional rental housing opportunities
- A significant increase in local jobs, especially jobs in the retail and service sectors
- Rental housing constitutes less than 25 percent of the community’s housing stock
- More than 20 percent of renters in single-family homes, indicating limited multi-family options
- Little or no multi-family rental housing production in the past decade, or more than two-thirds of the rental housing built before 1960 (Older housing stock may indicate a need to renovate properties rather than build new properties.)
- A vacancy rate below 5 percent, a decline of more than 2% in the vacancy rate over past two years, or limited rental availability at a point-in-time count, indicating that a tight rental market exists
- Other significant changes in the existing rental stock over the past several years, such as the expiring use of an existing affordable rental development. For more information, see the Community Economic Development Assistance Corporation's (CEDAC) Housing Preservation web page, which includes the state's list of expiring use properties.
- A closed waiting list or a waiting list for subsidized family rental housing that is at least equal to the number of units offered
Rental costs and renter income
- An increase of more than 50 percent in median market rents between the 2000 and the most recent ACS data available
- The median-cost rental in the community costs more than 30 percent of the community’s average-wage job
- When comparing community’s average wage for local jobs to that of the state and community’s median gross rent to that of the state: If the community’s comparative median rent is higher than its comparative average wage, it may indicate that local workers are less able to afford to live in the community.
- Non-elderly renters earning less than 30 percent of Area Median Income (AMI) is twice the number of subsidized family rental units in the community
- Non-elderly renters earning less than 50 percent of AMI is more than three times the number of subsidized family rental units in the community
- The number of families living in poverty is more than twice the number of subsidized family rental units in the community
- More than 50 percent of renters paying at least 30 percent of their income for rent or more than 25 percent of renters paying more than 50 percent of their income for rent
Affordable homeownership need
This section includes typical indicators that a community is experiencing a need for increased affordable home-ownership. Not all of these have to be in place for a need to exist, but where the need is strongest for affordable homeownership, a majority of these indicators are present.
- Less than 15 percent of the owner-occupied housing stock is something other than single-family homes.
- Less than 20 percent of owner-occupied homes have fewer than three bedrooms, suggesting limited options for singles, empty nesters, and starter homes.
- Median home value is more than 10 percent higher than in at least half of neighboring communities.
- 150 percent of the average local wage (this provides for 1.5 average workers per household) is not enough to purchase a local home in the lowest 25 percent of housing prices.
- The number of residents working in town fills less than half of the local jobs in the community.
Senior housing need
This section includes typical indicators that a community is experiencing a housing need for its elderly residents. Not all of these have to be in place for a need to exist, but where the need is strongest,, a majority of these indicators are present. Note that housing needs for seniors are not necessarily only met through age-restricted housing; as long as smaller and multi-family unit options exist that have accessibility modifications, these units can be appropriate for many seniors.
Number of seniors
- The number of households with a householder 75 and over is more than 150 percent of the number of subsidized independent elderly units in the community.
- The number of senior renters who earn less than 50 percent of AMI is more than the number of subsidized senior housing units in the community.
- The number of older resident renters (age 65 and over) who pay more than 30% of their income for rent is more than the number of subsidized senior housing units in the community.
- The number of local seniors on the waiting list for senior housing is more than the number of subsidized senior housing units in the community, or if the estimated time on the waiting list is more than one year
- The number of seniors who live in market-rate rental housing is more than twice the number of subsidized senior housing units in the community. (In many communities, the issue is less the total number of subsidized senior housing units than the age and quality of those that do exist. It is important to interview the management of senior housing developments to determine what housing improvements they recommend to serve the existing demand for senior housing.)
This section lists key indicators of housing need for special populations that may be more difficult to identify.
- A long waiting list for housing to serve those with physical disabilities, as reported by the local public housing authority, independent living centers, and service providers
- A number of handicap accessible units owned or managed by the local or regional housing authority that is less than 5% of the number of residents reporting a physical disability
Other housing challenges
This section discusses indicators of unique housing challenges that affect some communities more than others and may indicate a need for more specialized solutions.
- Is the community’s foreclosure activity higher than that of the county or the state?
Note that data on foreclosures can be difficult to obtain at the community level. There is a paid service called The Warren Group that does collect data on foreclosures at the state and local level, and provides access to data sets for a fee. Your municipality may also track this information through their Community Development, Planning, Housing, or Assessor’s Office.
- Is there a concentration of abandoned, blighted, or sub-standard properties that affect the marketability of surrounding neighborhoods?
- Do these areas coexist with other negative conditions, such as increased rates of foreclosure or a higher crime rate than surrounding communities?
Neighborhood organizations and local community development corporations (CDCs) are a good place to start to talk about concentrations of concern, as well as make good partners in starting to address them. Tackling these drivers of disinvestment can be the best way to provide safe, decent and affordable market-rate housing for your community.
Seasonal housing needs
- Does your community experience unique housing challenges based on its attractiveness to vacationers?
- Are 30 percent or more of all residential units occupied seasonally or used as second homes?
- Are there at least 30 percent more local jobs in July than in February?
- Is there a rental cost fluctuation of more than 25 percent between the peak and off seasons?
Communities with these characteristics may find it difficult to provide affordable, year-round housing, given the high value housing has in the summer season and the low-paying, seasonal work available to its residents.