New Normal14
Naligating the
New Normal
About ULI MN
Urban land
Institute
ULI Minnesota actively
engages public and private
sector leaders to foster
collaboration, share
knowledge and join in
meaningful strategic action
to create thriving,
sustainable communities.
' cit of Mayors
10
• Minneapolis, Saint Paul
and 48 other
municipalities, in the
developed and
developing suburbs, are
represented in RCM.
• Collaborative, non-
partisan, solution -
oriented
10/2/2012
1
10/2/2012
Our Strategic Issue Areas
IRAN Unu
�.•t h�f ■rr 1
Demographics
i
Energy!, Preferences
Commodities i
s '
Jobs/income
ts"
"These things usually creep along at the speed of a
glacier. Not so with aging. In demographic
terms, this is a tsunami. It doesn't get much
bigger than this...... "
Thamas Gillaspy, MN State Demographer
Projected Minnesota population
ages 65+
1,399,950
1 .299,402
x,133,920
941,020
191,090
9®,241
1006 2010 2010 2020 2020 1030 2036
PA --t9 819% D—g-ph a Gnter pro)sctbna
10/2/2012
Growth in # - Older Households
600,000
77% net gain
soo,000 +91,964
400,000
300,000 2004
■ 2010
200,000
100,000
p
Under35 35 to 54 55 to 74 7S+
1,126,039 - Occupied Housing Units (2010) in 7 -Co. Area
+120,139 — Net Household Change (2004-2010)
Decline of households Househdrs wh -.—
with children, 1960-2025 A Hwsohdas -- O.W-
1960 ¢ A 1&&&&&521
2025 Ir♦������72i'
Population characteristics are changing
Older, more singles, more immigrants, fewer households wM d"ren.
Overall, it is estimated
that Gen Y influences
`as much as half of all
Over
spending in the U.S.
$Omillion
economy
Gen Ys today (1979-96)
Over 35% of Gen Ys
households eam
ab°"x$75,000
illi
75ink
Ba6
trillion
Gen Y represents the greatest magnitude and spending power
Represents almost 30% of today's population
Where is the younger age cohort
living?
Households Usage Under Age 35
2010 7 -county metro total
RentalApt
TriDl,n
37.9°.6 34.3% 11.1% 6.1% 5.5% 4.0% 1.01,
munV21d5 thB /
V7n
Haw IM„�le
A
'�°
CC d m
�ap�e
Maw A",
'�
a ar em unrrvrn
,a
a . e,
M b,-
t
• l ^ \/
Baby Boomers seeking active hfestyl-
ri.�rF uaFr,,rt��,l
Boom. is 1,
,
/COI
Yc
W
2
CD
2
•�GenGen Yv.Y.. VI_
� nl. iii ii..i,
Gen Y seeks diversity. walk ability. and proximity to j t
10/2/2012
51
Change in Housing Choice
Awrya9prp iwta Pioa/uHIn IMw slnps«dry Fae�.cwpNtN
2.a00
2A00
Q
In a national
survey, 6 out of
10 prospective
homebuyers
chose a higher -
density, mixed
use community.
marsG—
Amerka 6 Manoul
Ass«ugon of Peall«s
Change in Housing Choice
Falling Homeownership Rates Reflect a Sharp
Turnaround In Owner and Renter Household Growth
Housing Supply/Demand Mismatch
Attached
25,914
25,715
199
Townhome
5,973
16,771
(10,798)
Smaller Lot (<1/6- ac)
14,717
41,368
(26,651)
Larger Lot (>1/6ab ac)
65,201
27,951
37,250
Total
111,805
111,805
National figures in thousands
of occupied residential unds. "Supply" based on A—,— Housing Sprvey (2010).
Saure. ArMurf. Nelson, Prevdendal Profess« and Oire<tw, Mebopolitan
UniveMryol Utah. Adapoetl koro AdM1ur G Nelson, "L<adersM1ip
geaeard Center,
in a New Fra ;
J. e/Me Amelmn 12-). updated,
2011
10/2/2012
5
Built Environment is a Direct
Reflection of the Underlying Economy
Changes In Household Income vs.
Cost oJLlv/ng 2000.2008—Gas Casts
Rose 6 x Faster than Income 6
3 x Faster than Housing
U.S. Household Spending:
Walkable, Average & Drivable
Walkable Urban Average US Drivable Sub -urban
NOW
Get rid of one carfrom the household fleet: >$100 K increase in
mortgage carrying capacity
10/2/2012
C:�
The Problem: Capital Market
Typical Commercial Loan Breakout
$100 $1,00,000 Project
$90
$80 0
$70
$60
$50
$40 34%
$30 7__
$20 19% 21%
$10
$0
2007 2009 TODAY
—Return on Equity
■ Equity
■ Loan
Market View of MSP Region
Emerging Trends 2011
Price Waterhouse Coopers & ULI, Nov. 2010
875 Top Investors & Developers
Favor Infill over Fringe Workforce Accessibility is
TOD & Green Building Key
Development will be where
Mixed -Use
young workers want to be
24-hour markets Infrastructure Investment in
Buy Land light rail & public amenities
Less Retail is positive
MSP—diversified economy
Potential Impacts to
Cities
gT. Y
Shifts in demand for
z --
localgoods/services
Shrinking local tax
bases/ school impact
Job markets impacts &
.ems
transportation systems
Demand for New
Housing Types
10/2/2012
7
Hopkins Community Change
Household Distribution
Hopkins Households by Age
3000
Ay,
2000
7 1 (24
1000 Age 75+ 19°5 I
Under Age 25(4%) 3%
-18%
0
2004 2005 2006 2007 zoos 2009 2010
Total Household Change 04-10 1%
Hopkins Resident Diversity
Percent People of Color (2010 Census)
Plymouth HOOAIIISme
r� Median Lake
t 1 Less man 5% Golden VAIPy
5% to 9.9% L
10% to 19.9% UnreapL
-20%to 29.9% i Sl LOl➢S Pa 'K
_ 30% to 39.9% M�Y18(Orlk3 ,.1}76
- 40% or more
t�' t01 Fon SM
1 RIOPf eld
10/2/2012
i
What Type of Homes do Hopkins Residents Live in?
('0'0l
®� Comparison Owner/Renter
All HH/Young HH
27% 33% 75%
27% 16%
■ RR A1,35
46% 51%
OWM! R.Mer
Side by Side Breakdown by Housing Type
Hopkins Residents All and Younger HH's
42%2-1
46%
2%
59%
�x
al Owned SFD
■ Rental SFD
■ Duplex/Triplex
All Households Owned MF Households <Age 35
■ Rental MF
+Rental Apt
Hopkins Compared to Other Cities/County
Percent Households Owner/Renter Occupied
Hopkins
St. Louis Park
Hennepin County ■ Renter
® ■ Owner
Golden Valley t
:t
New Hope
0 20 40 60 s0 100
41
10/2/2012
CEJ
Where did Hopkins Residents Move?
City
%
3,701 residents moved
Hopkins
24%
(bet. -2004-2010)
26%
Minnetonka
9%
Minneapolis, St. Louis Park, Eden Prairie
7-8% each
Plymouth
4%
Brooklyn Park, Bloomington, St. Paul, Shakopee
2-3% each
Where did HH's come from that moved to Hopkins?
City
3,850 households moved to
Hopkins
(between 2004-2010) Hopkins
26%
Minneapolis
13%
St. Louis Park, Minnetonka
9%
Plymouth, Eden Prairie
4% each
Edina, Bloomington, St. Paul
3% each
Hopkins Single Family Home Tax Values
All Households - 2010
< $200,000 $200,000 -
$249,000
$250,000 - > $300,000
$299,000
87% Built Before 1960
10/2/2012
10
4
Hopkins Single Family Home Tax Values
Under age 35 - 2010
19
&I
it
I
<$200,000
$200,000 -
$Zs0,000 - > $300,000
$249,000
$299,000
93% Built Before 1960
Median Home Sale Price Compared to Area
Median Income (2oio)
$250,000
police oHicerlpart
time restaurant $219,000
worker (i child):
$200.000 -
$169,120
n. power line
$150,000 '$'� installer
school counseior (married/no
(singie/3 kids): kids): Wage
$100.000 Wage $38.500 S83.9001yr
$76,M
$W00o
Hopkin MAN MAN 100%AMI
Hopkins
Residential Future
Land Use
i
Low Density
p
]e
� eKk ae 69%
o.anee
Med. Density
High Density
15%
10/2/2012
11
Hopkins — Change in Primary Jobs
12,000
11,796
u,soo � 11,188
11,054
11.00° 11,159
10,500 10,179
10,000
9,806
9,500
2005 2006 2007 2008 2009 2010
61.E1�4f4e46Abyovn.vOo..e.orzW230J9,
City of Hopkins
2010 - Top 5 Major Industry Sectors —
% share
% change
(05-10)
Health Care and Social Assist.
24%
135%
Retail Trade
14%
-23%
Manufacturing
13%
-22%
Education Services
12%
-190
Other Svs (Excludes Public Admin)
5%
35%
Hopkins —Labor Force/Resident Workers
IMowlOutti— Job count. In 7010
40
� 9.563. Em Clayee n Se r Area. � e G�2s we
7.164. n Se
6� 614 - Em ioyc
Surae: U.S. f®Brer,, nnTMN.r AypLcww MLFHn CmpmUaviwim fi,plo» inu Sww�.+
. ®ep�m,e(QwM Fwylo.wvo..W ouuw of3002.2uJ91
10/2/2012
12
8,398 residents working Minneapolis 21%
j Minnetonka, St.
Louis Park 8-9%
.�' Hopkins7%
r R Edina, Eden Prairie, Bloomington, St. Paul 5-6% each
Hopkins working residents
Where Hopkins Employees Come From
Age Distribution: (2010)
& Residents Work
Under Age 30 30%
cky
r3
10,179JObs Minneapolis
9%
Minnetonka
7%
i.w7L1rt"r�
Hopkins
6%
$1,251-$3,333 per mo 35%
St. Louis Park, Eden Prairie, Plymouth, Brooklyn Park,
> $3,333 per mo 46*4
31 %
St. Paul
3-4% each
8,398 residents working Minneapolis 21%
j Minnetonka, St.
Louis Park 8-9%
.�' Hopkins7%
r R Edina, Eden Prairie, Bloomington, St. Paul 5-6% each
Hopkins working residents
Age Distribution: (2010)
Under Age 30 30%
30-54 54%
Over 54 16%
100
Hopkins
working resident wages under 30
<$1,251per mo 19%
29%
$1,251-$3,333 per mo 35%
40
> $3,333 per mo 46*4
31 %
100%
100%
Impact of the New Normal
How will Hopkins Respond?
• Changing demographics and housing preferences
will impact the supply and demand for new housing
choices.
• Future residents will likely desire walkability, access
to services closer to home and less time driving.
• Difficulty in accessing private capital increases the
complexity of (re)development.
10/2/2012
13
City of Hopkim
_�
Partnering with the connnunil i to enhattce the quality o(li(e.
Inspire 0 Educate f Involve w Communicate
®Urban Land
Institute
ws.wn
Industry Leader
Panel Discussion
ii[1MM1TO
14