residential demand analysis

Residential Demand Analysis: Franklin County, Kansas PREPARED FOR: FRANKLIN COUNTY DEVELOPMENT COUNCIL 1428 S. MAIN STREET, SUITE 2 OTTAWA, KANSAS 66067

PREPARED BY: DEVELOPMENT INITIATIVES 4501 Fairmount Avenue Kansas City, Missouri 64111 PHONE: 816-916-3664 PREPARED:

JUNE 18, 2021

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Limiting Conditions

The reported analyses, opinions, and conclusions contained herein are limited only by the reported assumptions and limiting conditions, and are Development Initiatives’ unbiased professional analyses, opinions, and conclusions. Information provided and utilized by various secondary sources is assumed to be accurate. Development Initiatives cannot guarantee information obtained from secondary sources. Such information and the results of its application within this analysis are subject to change without notice. The nature of real estate development is an unpredictable and often tumultuous. The natural course of residential development is difficult to predict and forecast. Development Initiatives deems our projections as reasonable considering the existing market and various obtained information. It should be understood that fluctuations in local, regional and/or national economies could have substantial effects on the particular findings and recommendations contained within this document.

Copyright Statement This document was prepared for the intended use of Franklin County Development Council and/or its assignees. With the exception of the unlimited use by the Franklin County Development Council and/or its assignees, no part of this document may be reproduced, duplicated, or transmitted by mechanical, digital or other means without permission in writing from Development Initiatives. Development Initiatives retains all copyrights to the material located within this document and the material located herein is subjected to the U.S. Copyright Law found in the United States Code, Title 17, Chapter 1-13.

June 18, 2021 Mr. Paul Bean Executive Director Franklin Councy Development Council 1428 S. Main Street, Suite 2 Ottawa, Kansas 66067 Subject: Residential Demand Analysis – Franklin County, Kansas Dear Mr. Bean: It is our pleasure to present this residential demand analysis for your use related to the possible

development of various multi-family and single-family housing projects within Franklin County,

Kansas.

The purpose of this analysis is to conduct a residential demand analysis for Franklin County, Kansas.

The intent of this report is to assist County stakeholders in their efforts to grow its residential market

by analyzing possible demand for multi-family and single-family housing in the near future.

We have identified the following key characteristics.

The Market Area for this analysis is comprised of Franklin County, Kansas. Sub-market

data for the City of Ottawa and Wellsville was also utilized in certain demand

calculations.

Renter-occupied housing:

Franklin County: 23.0%.

City of Ottawa: 33.0%.

City of Wellsville: 17.6%

Owner-occupied housing:



City of Wellsville: 73.8%.

Vacant housing stock:



City of Wellsville: 8.6%.

Total number of renter households:

Franklin County: 2,642.

City of Ottawa: 1,867.

City of Wellsville: 131.

Total number of owner households:

Franklin County: 7,628.

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City of Ottawa: 3,186.

City of Wellsville: 551.

Population growth for Franklin County and the City of Ottawa, is projected to stagnate

and decline slightly over the course of the next five years (-0.07% and -0.09%

respectively). However, these estimates are based purely on Census and ACS data and

projections. At the same time, population growth for the City of Wellsville is projected to

increase slightly (0.06%).

Estimated Capture Rate, Renter-Occupied:

Table 1 - Estimated Capture Rates.

Market Area Units Estimated Capture

Rate range

Franklin County 10 Units

20 Units

30 Units

1.08% to 1.60%

1.43% to 2.13%

2.15% to 3.19%

City of Ottawa 10 Units

20 Units

30 Units

2.19% to 3.31%

2.92% to 4.42%

4.39% to 6.63%

City of Wellsville 10 Units

20 Units

30 Units

11.28% to 34.15%

22.57% to 45.37%

33.85% to 68.31%

Estimated Penetration Rate:

Table 2 - Estimated Penetration Rate.

Planned Units in the PMA Renter For-sale Renter For-sale Renter For-sale

The Proposed Project 0 0 0 0 0

Other Planned Projects 52 20 47 6 5 6

Total Planned Projects 52 20 47 6 5 6

Total Planned Units at 93% Occupancy 48 19 44 6 5 6

Total Existing Units available due to estimated Attrition (12%) 6 2 5 1 1 1

Total Units to be Occupied (Market) 54 21 49 6 5 6

Percentage of Units to be Occupied from PMA 90% 90% 90% 90% 90% 90%

Total Units to be Occupied from the PMA (a) 49 19 44 6 5 6

Estimated number of Income-Qualifying Households 450 787 373 469 20 47

Less: Existing Inventory of Available Comparable Units -20 -35 -10 -20 -5 -10

Estimated number of Income-Qualified Households (b) 430 752 363 449 15 37

Net Market Penetration Rate (a / b) 11.34% 2.49% 12.14% 1.25% 31.25% 15.20%

Franklin Co. Ottawa Wellsville

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Total estimated demand for the Market Area is difficult to determine and speculative, and

we estimate demand to vary depending upon population and housing trends. Demand

estimates are outlined in the executive summary and Section 5 of this report.

To summarize this study, it is our opinion that there continues to be a marginal demand for quality,

housing targeting mid-level income households within the Franklin County and Ottawa Market

Areas. Demand is for both rental and for-sale product. We have also identified a specific demand

for income-restricted rental units as part of this analysis and previous analyses completed for the City

of Ottawa and Franklin County.

Competitive supply for rental and for-sale product is limited. Existing supply is antiquated/outdated

and in some cases lacks modern conveniences (i.e. current up-to-date HVAC, electrical, plumbing,

technology systems, design layout, etc.). We do feel that the community will support the construction

of the additional multi-family rental products as well as single-family owner-occupied residential

units. However, quantifying the exact number of units is difficult. Current estimates indicate Franklin

County and surrounding market area population is declining, albeit at a very small pace.

Recommendations

The following are recommendations that resulted from stakeholder interviews, demand analysis calculations and project observations. Topics are general in nature and apply to Franklin County and its sub-markets (Ottawa and Wellsville).

Emphasis on “shovel-ready” single-family and multi-family projects which may be further

along in the development pipeline.

Continued encouragement of single-family residential development on existing subdivision

platted lots with utility infrastructure in place (City of Ottawa).

Note: We would not recommend larger scale subdivision development due to anticipated

population stagnation. Promotion of large scale subdivision development would pose risks

to both the viability of the development entity and potentially the City if said development

fails. Having said that, it appears that new home permits are increasing for the year

beginning 2019. According to the City, sixty-nine new single-family permits have been

issued for years 2019 and 2020.

Development of an infill rehab program to upgrade vacant/abandoned residential properties

which have the potential for continued habitation. Based on Census data approximately

10.6% of the existing housing stock within the County is vacant. In particular, City of Ottawa

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permit data shows almost 193 residential demolitions since 2006. Even if a small portion of

these units were rehabilitated for habitation that would certainly impact the overall residential

supply in Ottawa. While Ottawa has taken steps to initiate an infill rehab program, it’s our

opinion that other municipalities should also undertake similar programs (particularly

Wellsville).

Incentives. We would encourage the County and local municipalities to continue to pursue

the implementation of various incentive programs. Formulate a structured incentive program

to encourage both infill development as well as new subdivision development. Such

programs would address demand in both the for-sale and rental markets. Incentives should

be targeted towards property owners, housing developers and builders. Home ownership

programs could be considered for home buyers, but ideally they would need support of the

local lending community. Incentives may include but not be limited to;

o Property tax rebates,

o Utility rebates,

o Utility fee waivers, or reductions,

o City fee waivers,

o Special assessment waivers for a short period of time,

o Continued promotion of the RHID/MHID program. These programs go a long way

in supplementing developer funding towards infrastructure improvements.

Affordable Housing. At the time of report issuance, it is our understanding that a local Low

Income Housing Tax Credit (LIHTC) project is proposed for the City of Ottawa. However this

project only accounts for thirty two (32) units. Based on data from ECKAN it is estimated

that actual demand for 60% or less AMI households. We would recommend continued

development of housing for these 60% AMI or less households. Funding would be via KHRC

through the LIHTC program, and availability is limited, but if the City could obtain an

allocation every two to three years it would go a long way to fulfill this demand County-wide.

Additionally, our analysis indicated that approximately 495 households were income eligible

renter households (40%-60% AMI) and total demand for housing for these income cohorts is

estimated to be approximately 637 units through 2025.

Governmental Coordination and Marketing. Due to its proximity to the Kansas City

Metropolitan Area, Franklin County possesses many attractive qualities which may be

attractive to relocation opportunities, both from business and individual perspectives. These

include: great highway accessibility, small town/rural feel, and generally a lower cost of

living. It would be our recommendation to increase programming opportunities which

coordinate between the County and various communities to attract businesses and

individuals to consider relocating to Franklin County.

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Please feel free to contact us if you have any questions regarding any aspect of the following report.

We appreciate the opportunity to present this material to you.

Sincerely,

Jim Potter development initiatives

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TABLE OF CONTENTS

1: Introduction 1a Objective 1b Qualifications of the Surveyor 1c Surveyor Certifications 1d Assumptions and Data Sources 2: Executive Summary 3: Market Analysis 3a General Description and Location 3b Municipal Description 3c Definition of Market Area 3d Economic & Demographic Analysis 3e Tax Climate 3f Incentive Opportunities 3g Permit Data 4: Housing Market 4a Stakeholder Interviews 4b Rental Housing Market 4c For-Sale Housing Market 5: Demand Analysis 5a Assumptions 5b Demand Projections 6: Sample Project Outline 6a Multi-family Rental 6b Single-family for-sale. 7: Opportunities EXHIBITS

Exhibit A: Demographic Data- Included Under Separate Cover Exhibit B: Development Initiatives Corporate Info. Exhibit C: Certification, Assumptions and Limiting Conditions, Qualifications

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1 Introduction 1a. Objective Development Initiatives (DI) has been retained by The Franklin County Development Council

(FCDC) to conduct a residential demand analysis for Franklin County, Kansas. The intent of this

report is to assist the County in its efforts to attract and grow investment not only from a business

attraction perspective, but also from a residential growth perspective.

This analysis, recommendations, or opinions will include the following:

A review of previous housing market studies;

Identification of the Franklin County Market Area;

Identification of Ottawa Sub-Market Area;

Discussion of the Wellsville Sub-Market Area;

Identification of existing housing inventory and competitive locations; Demographic

analysis for the area;

Economic profile of the market;

Opinion of present and future housing demands.

As part of this analysis, Development Initiatives personally toured the County, the City of Ottawa

and the surrounding areas. We identified various housing developments and interviewed local

stakeholders and municipal officials. Additionally, Development Initiatives has analyzed the

current housing condition and trends in Franklin County and Ottawa, Kansas; reviewed and

analyzed demographic trends relating to the overall market area that influence future demand

for housing; studied adjacent communities; researched proposed new projects; and projected

current market rates; anticipated future housing demands and expected absorption of any future

projects.

1b. Qualifications of the Surveyor This demand analysis has been prepared by Mr. Jim Potter of Development Initiatives.

Company information for Development Initiatives is located in Exhibit B of this report.

1c. Surveyor Certifications

Exhibit C of this report contains a complete list of certifications, assumptions, and limitations for

this demand analysis.

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1d. Assumptions and Data Sources

In preparing this report and any recommendations, or opinions, the analyst has relied on various

physical, economic, and demographic data and information from various sources that the

consultant believes to be credible and reliable. The use of information obtained from the various

sources; including but not limited to:

ESRI

Kansas Department of Labor,

Kansas Department of Commerce,

Kansas Department of Transportation,

Kansas Department of Revenue,

U.S. Census Bureau,

U.S. Bureau of Economic Analysis,

American Community Survey (ACS),

Kansas City Regional Association of Realtors®

Heartland Multiple Listing Service (MLS),

Kansas League of Municipalities,

Existing community housing reports and analysis provided by the City,

Franklin County Development Council,

Franklin County, and

The City of Ottawa, Kansas.

It is critical to the preparation of the report and the analyst believes that the information

has resulted in a credible analysis.

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2. Executive Summary

The purpose of this study is to quantify the potential residential demand in Franklin County,

Kansas in the immediate near future. This study includes a demographic and economic analysis

of the community and a demand analysis of the surrounding housing markets. The analysis will

focus on the potential demand for both multi-family and owner-occupied housing. A review of

existing housing conditions, patterns of growth and decline, and any projected change in

influencing economic variables helps to determine if housing is currently underserved in the

market and estimating the number of units needed to meet any future demand.

Project Assumptions

Based on the supply and demand projections, we have developed the following general

conclusions for this analysis:

The Market Area utilized in this analysis for owner-occupied housing incorporates one

primary area; the County limits of Franklin County.

When referencing multi-family rental market, the Market Area has utilized the boundaries

of Franklin County.

The County is conveniently located, and for the most part within a 30-minute drive from

the Metropolitan Kansas City area.

The subject analysis is focused on proposed newly constructed multi-family residential

projects as well as newly constructed single-family for-sale units. Additionally, we do

touch on income-restricted multi-family rentals.

All data utilized has been obtained through ESRI Data Services and includes U.S. Census

Bureau data, as well as various forecasts and projections.

Population is projected to remain stable, if not declining slightly, within the Franklin

County Market Area through 2025.

The number and size of households is also projected to decline slightly within the Franklin

County Market Area through 2025.

The potential for a significant added population is available through the daily influx of

workers into Franklin County. It is estimated that approximately 4,600+ individuals enter

the County on a daily basis for work. It’s reasonable to consider that new housing

projects within the City could capture 1% to 3% of that daily influx. This conservatively

estimates another 46-138 households which potentially can be captured.

Incentives. Our analysis does not take into account any public incentives which may be

requested or required as part of proposed projects. However, we have identified certain

incentive tools which may be applicable for varying housing projects. The utilization of

incentives is a political issue the County and City will have to ultimately determine. Local

stakeholders can (it’s happened in other markets) decide to incentivize the housing

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market for an indefinite time period. This determination should be guided by the long-

term goals and objectives of area planning initiatives.

For the purposes of this demand analysis, the Primary Market Area (PMA) is defined as Franklin

County, Kansas. Sub-market areas also identified in this analysis include the cities of Ottawa

and Wellsville. Within the PMA, the total population is currently estimated to be 26,438. Total

households within the PMA are currently estimated to be 10,269 and an average household size

is 2.53.

Conclusions/Findings

Overall, the Franklin County housing market (and sub-markets) currently shows a minimal

growth in development and construction. Single-family home development and construction is

minimal and only one new project is proposed (a 32 unit income-restricted LIHTC project

located in Ottawa). All multi-family market rate rentals are at capacity and single-family home

inventory is tight. Sales have increased year-over-year (+8.1% 2019-2020), but lack of

inventory appears to be prohibiting additional growth.

Population growth for Franklin County, and surrounding areas, is projected to be stagnant, if

not declining slightly through 2025. However, population estimates are based purely on

Census data and often times do not reflect true market and municipal housing initiatives.

Data shows that net demand within the Franklin County Market Area is anticipated to outweigh

supply. Estimated annual demand for rental housing is estimated to be fifty-six (56) units over

the next five (5) years. In that same time period we estimate owner-occupied housing demand

(for-sale) at forty-nine (49) units. These figures equate to an annual demand of 11 units and 10

units, respectively.

It appears that Franklin County has a significant amount of daytime population. According to

Census estimates, the daily influx of workers is considerably high at approximately 4,698

individuals who are employed within the County, but currently live outside. Estimated daytime

population and employment-residence ratios were obtained from the US Census Bureau and

based on the 2018 Census estimates. It would be reasonable and conservative to consider that

one to three percent (1% to 3%) of these imported workers would live in Ottawa if the

opportunity existed. We conservatively estimate this to impact the overall household demand

factor at an additional 46 to 138 households.

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3a. General Description & Location

Franklin County is generally located southwest of the Metropolitan Kansas City Region (KCMSA),

midway between KCMSA and Emporia, Kansas to the southwest. Franklin County also resides

just south of the City of Lawrence and southeast of Topeka, the Capital of the State of Kansas.

The closest large airport is the Topeka Regional Airport located in south Topeka. Smaller,

regional air traffic is serviced by the Ottawa Municipal Airport four miles south of Ottawa. The

airport serves smaller business airplanes and jets.

Figure 1 – Location Map, Franklin County, Kansas.

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The County is well located with an excellent highway system linking it regionally. Interstate 35 (I-

35) bisects the County northeast to southwest, providing multiple access points. The City of

Ottawa is centrally located within the County. Old US Highway 59 bisects the County and City

running north and south. State Route 68 bisects the County and City running east and west.

Figure 2 - Regional Location Map. Courtesy Google Maps.

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Figure 3 – City of Ottawa Map. Courtesy Google Maps.

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3b. Municipal Description

The City of Ottawa is located in, and is the county seat of Franklin County, Kansas. The City

has a population of approximately twelve thousand eight hundred (12,800) according to 2020

estimates. Ottawa is located approximately thirty (30) miles southwest of the Kansas City

Metropolitan Area and approximately fifty-five (55) miles northeast of Emporia, Kansas.

Figure 4 – City of Ottawa, regional proximity.

Access

As previously mentioned, regional access to and from the Franklin County Market Area is

considered excellent due to the presence of Interstate 1-35, as well as Old US Highway 59 and

State route 68. Locally, there are numerous arterials providing easy access throughout the Area.

23 Miles

37 Miles

26 Miles

57 Miles

30 Miles

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Schools

Franklin County is served by four (4) Unified School Districts:

USD 287 – West Franklin,

USD 288 – Central Heights,

USD 289 – Wellsville, and

USD 290 – Ottawa.

USD-290 is the largest, accommodating 2,500+ students grades K-12. The District employs

approximately 160 staff members and enjoys a Student to Teacher Ratio of 12.81.

The City is also home to Ottawa University. Founded in 1895, the University has grown into an

institution that serves over 4,000 students through various campuses, including the home

campus in Ottawa.

Additionally, Ottawa also have a satellite campus for Neosho County Community College

(NCCC). According to NCCC, enrollment is approximately 750 full and part-time students.

3c. Definition of Market Area

A market area is defined as the smallest geographic area that is expected to generate the

greatest demand. The size and scope of each market area depends upon a number of different

factors, these include; geographic distance, travel time, natural barriers (lakes, rivers, open

space, undeveloped land), constructed barriers (railroads, freeways, large institutional uses), and

general accessibility. For the purposes of this analysis, an overall market area was not

determined, because we anticipate some demand to come from outside the market area and

that demand is difficult to determine. In order to make generalized projections in relation to this

analysis, market data for both the County and City was utilized.

It should be noted that population projections are quantitative in nature and are highly

influenced by local economies and growth trends. Overall Census projections often do not

convey local growth trends and are usually based on standard growth trends. Having said that,

the most accurate and standard population data is that which is provided thru Census

projections.

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Figure 5 – Primary Market Area: Franklin County, Kansas.

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Figure 6 – Ottawa Sub-Market Area.

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Figure 7 – Wellsville Sub-Market Area.

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3d. Economic & Demographic Analysis

Demographic Characteristics and Population

The following tables show population within the Franklin County and the Ottawa/Wellsville Sub-

Market Areas as previously defined.

Table 3 - Population & Household Data.

Franklin County, Kansas

Census 2010

Estimate 2020

Projection 2025

2020-2025 Change

2020-2025 Annual Rate

Population 25,992 26,438 26,346 -92 -0.07%

Households 10,104 10,269 10,229 -40 -0.08%

Housing Units 11,147 11,489 11,665 176 1.5%

Avg. Household Size

2.53 2.53 2.53 0.0 0.0%

Source: Esri: Market Profile 2021.


City of Ottawa, Kansas

Census 2010

Estimate 2020

Projection 2025

2020-2025 Change


Population 12,644 12,813 12,753 -60 -0.09%

Households 4,997 5,054 5,027 -27 -0.11%

Housing Units 5,517 5,659 5,742 83 1.44%

Avg. Household Size

2.45 2.46 2.46 0.0 0.0%


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City of Wellsville, Kansas

Census 2010

Estimate 2020

Projection 2025

2020-2025 Change


Population 1,857 1,934 1,940 +6 0.06%

Households 722 747 747 0.0 0.00%

Housing Units 780 817 831 14 1.68%

Avg. Household Size

2.52 2.55 2.56 n/a n/a


Figure 8 - Household Trends-Franklin County: 2020-2025.

Figure 9 - Household Trends-City of Ottawa: 2020-2025.

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Household Growth

Generally speaking, the primary source of demand for new housing is the formation of new

households from population growth. However, due to the rural nature of the housing market in

Franklin County, this demand could also equally be net in-migration, i.e. relocations into the

County from outside the market. The following tables show the household growth, average

household size, and the percentage of renters for the Franklin County and are Sub-Markets.

Table 6 - Household Composition: Franklin County.

2010 Census

2020 Estimate

% change 2010-2020

2025 projection

% change 2020-2025

Population 25,992 26,438 0.16% 26,346 -0.07% Households 10,104 10,269 1.60% 10,229 -0.08% Avg. HH Size 2.53 2.53 0% 2.53 0% Housing Units

11,147 11,489 2.9% 11,665 1.5%

% Owners 64.4% 66.4% 65.4% % Renters 26.2% 23.0% 22.3% % Vacant 9.4% 10.6% 12.3% Source: ESRI, Market Profile, 2021.

Table 7 - Household Composition: City of Ottawa.

2010 Census

2020 Estimate

% change 2010-2020

2025 projection

% change 2020-2025

Population 12,644 12,813 1.31% 12,753 -0.09% Households 4,997 5,054 1.12% 5,027 -0.11% Avg. HH Size 2.45 2.46 0.4% 2.46 0% Housing Units

5,517 5,659 2.5% 5,742 1.44%


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Table 8 - Household Composition: City of Wellsville.

2010 Census

2020 Estimate

% change 2010-2020

2025 projection

% change 2020-2025

Population 1,857 1,934 3.98% 1,940 0.06% Households 722 747 3.34% 747 0.0% Avg. HH Size 2.52 2.55 1.17% 2.56 0.0% Housing Units

780 817 4.52% 831 1.68%


The overall percentage of renters for the Franklin County market is average. Typically, it would

be anticipated that 20 to 25 percent of all housing units be renter-occupied. The renter

percentage is average for this market. However, the City of Ottawa is slightly higher than

surrounding “out-county” areas. This is an indication of a more dense population base (to be

expected as the County seat, as other residual factors). Overall, for all data sets, the

percentage of renter population is decreasing gradually on an annual basis. This might be

attributable to the significant amount of mature residential housing stock existing in the market

area, and renter households converting to owner-occupied households.

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Population by Age

In Franklin County, based on Census data and population projections, presently approximately

62.9 percent of the population within Ottawa was between the ages of 25 and 65. This is

projected to change slightly (to 60.5%) by 2025. The City of Ottawa exhibited similar

projections (63% to 61.6%) between 2000 and 2025. Generally population can be broken

down into cohorts identifying age, economic status and spending habits, in this case real estate

preferences.

Figure 10 – Population by Age: Franklin County: 2020-2025.

Figure 11 – Population by Age: City of Ottawa: 2020-2025.

Millennials whom are defined as those born between 1981 and 1996 currently number an

estimated 72 million nationally. Within the Franklin County Market we estimate that figure at

approximately 12 percent of the population. Generally, as it relates to real estate, Millennials

(also known as Gen Y) are less interested in homeownership than their parents were when they

were young adults. Gen Y mentality is that they will be renters by necessity or choice for the next

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few years. However, recent studies show that the millennial market will be the greatest impact

to the housing market in the next five years.

Gen X (typically born between mid1960’s and early 1980s). There are no precise dates or ages

for Generation X. Members may not be making as large of an impact on real estate as

Millennials, but Gen X was the cohort which bought more homes in 2017 than any other age

group. Gen X was also the cohort which suffered the greatest impact of the last recession,

entering homeownership at the peak and suffered the greatest job losses. But currently with the

stronger economy, housing values rebounding and an active job market, Gen X is in the prime

earning years of all age groups.

Younger Baby Boomers (ages 46-54 years old) are now entering their prime earning years, but will lack home equity and unlike older members of their generation, they won’t be able to purchase second homes.

Aging Baby Boomers (ages 55-64 years old) are experiencing longer professional careers and will likely be forced to stay in their homes until real estate values recover. Those households who are able to move will likely choose mixed-age living environments that cater to active lifestyles and minimize property maintenance.

Due to its location, impact of age on the Ottawa, Kansas market is difficult to estimate.

Generally as it relates to out-state, rural settings, many younger generations leave rural

communities for higher education and tend to stay away. However, a smaller segment of that

“move-away” group does seek out a rural lifestyle when raising children and tend to move back

to their “roots”. This provides a lifestyle which is near family and friends, and more stable when

compared to larger urban areas.

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Table 9 - Estimated Population by Age Franklin County, 2010-2025.

2010 2020 2025

Percent Number Percent Number Percent Number

Total 25,992 26,438 26,346 0-4 7.1% 1,845 6.4% 1,692 6.4% 1,686 5-9 7.5% 1,949 6.5% 1,718 6.4% 1,686

10-14 7.1% 1,845 6.8% 1,797 6.6% 1,738 15-24 13.1% 3,404 12.9% 3,410 12.6% 3,319 25-34 11.7% 3,041 12.1% 3,198 12.0% 3,161 35-44 12.2% 3,171 11.9% 3,146 12.1% 3,187 45-54 15.5% 4,028 11.9% 3,146 11.2% 2,950 55-64 11.6% 3,015 14.1% 3,727 12.6% 3,319 65-74 7.7% 2,001 10.2% 2,696 11.6% 3,056 75-84 4.5% 1,169 5.0% 1,321 6.1% 1,607 85+ 2.0% 519 2.2% 581 2.3% 605 18+ 74.0% 19,234 76.5% 20,225 76.6% 20,181

Median Age 37.9 39.2 39.8 Source: Esri: Market Profile 2021.

As evident from the Franklin County data, the median age of area residents is approximately 39

years of age and a significant amount of the population (24%) is between the ages of 25 and

44. This indicates a mid-age, professional, more demographic population.

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Table 10 - Estimated Population by Age City of Ottawa, 2010-2025.

2010 2020 2025


Total 12,644 12,813 12,757 0-4 8.3% 1,049 7.4% 948 7.4% 944 5-9 8.1% 1,024 7.0% 896 7.0% 892

10-14 6.8% 859 6.7% 858 6.5% 829 15-24 15.2% 1,921 15.2% 1,947 15.1% 1,926 25-34 14.2% 1,795 13.3% 1,704 13.4% 1,709 35-44 11.3% 1,428 12.7% 1,627 12.5% 1,594 45-54 13.0% 1,643 10.0% 1,281 10.3% 1,313 55-64 10.0% 1,264 11.8% 1,511 10.3% 1,313 65-74 6.4% 809 8.6% 1,101 9.7% 1,237 75-84 4.5% 568 4.6% 589 5.3% 676 85+ 2.4% 303 2.5% 320 2.4% 306 18+ 73.0% 9,230 74.9% 9,596 75.1% 9,580


Data from the City of Ottawa indicate the median age of area residents is approximately 35

years of age and a significant amount of the population (over 25%) is between the ages of 25

and 44. Again, this might be an indication of mid-age, professional, more demographic

populations.

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Table 11 - Estimated Population by Age City of Wellsville, 2010-2025.

2010 2020 2025


Total 1,857 1,936 1,942 0-4 8.0% 148 6.6% 127 6.7% 130 5-9 8.3% 154 7.0% 135 6.9% 133

10-14 7.4% 137 7.1% 137 7.3% 141 15-24 11.1% 206 12.6% 243 12.0% 233 25-34 14.6% 271 13.0% 251 14.5% 281 35-44 14.7% 272 13.0% 251 12.8% 248 45-54 13.9% 258 14.1% 272 12.4% 240 55-64 8.7% 161 12.9% 249 11.6% 225 65-74 6.5% 120 7.7% 149 9.0% 174 75-84 4.4% 81 4.0% 77 4.7% 91 85+ 2.4% 44 2.0% 38 2.0% 38 18+ 72.2% 1,340 75.1% 1,453 75.2% 1,460


Data from the City of Wellsville indicate the median age of area residents is approximately 37

years of age and a significant amount of the population (over 38%) is between the ages of 25

and 44. This might be an indication of a more aging population in a smaller rural setting

when compared with the rest of the count.

29

Figure 12 - Franklin County Population by Age: 2020-2025.

Figure 13 - Ottawa Population by Age: 2020-2025.

Figure 14 - Franklin Co. Household Income Distribution.

Figure 15 - Ottawa Households Income Distribution.

30

Household Income

Household income data shows some interesting trends within the Franklin County Market Area.

According to Census data, approximately 67.5% of households have an annual income less

than $75,000. Average household income is also estimated at $66,843 and rising to $72,356

by 2025 (7.61% increase, 1.52% annually). Figures show that median household income is

significantly lower within that market area when compared to the national average ($78,500)1

which is about 32% higher.

Table 12 - Total Household Income: Franklin County: 2020-2025.

Income of:

2020 Estimate

% 2022 Projections

%

Less than $15,000 1,047 10.2% 957 9.3% $15,001 - $24,999 924 9.0% 823 8.0% $25,000 - $34,999 1,139 11.1% 1,094 10.7% $35,000 - $49,999 1,643 16.0% 1,605 15.7% $50,000 - $74,999 2,177 21.2% 2,209 21.6% $75,000 - $99,999 1,540 15.0% 1,585 15.5% $100,000-$149,000 1,191 11.6% 1,278 12.5% $150,000 - $199,999 379 3.7% 450 4.4% $200,000 or Greater 225 2.2% 235 2.3%

Avg. Household Income $66,843 $72,356

Median Household

Income $52,947 $55,204

Source: ESRI, Market Profile, 2021

1 www.huduser.gov/datasets/median 2020.

31

Table 13 - Total Household Income: City of Ottawa: 2020-2025.

Income of:

2020 Estimate

% 2022 Projections

%

Less than $15,000 646 12.8% 608 12.1% $15,001 - $24,999 490 9.7% 447 8.9% $25,000 - $34,999 641 12.7% 638 12.7% $35,000 - $49,999 980 19.4% 980 19.5% $50,000 - $74,999 975 19.3% 1,015 20.2% $75,000 - $99,999 631 12.5% 643 12.8% $100,000-$149,000 495 9.8% 492 9.8% $150,000 - $199,999 141 2.8% 140 2.8% $200,000 or Greater 60 1.2% 55 1.1%

Avg. Household Income $58,666 $61,386

Median Household

Income $45,489 $46,684

Source: ESRI, Market Profile, 2021

32

Household Tenure

Household tenure identifies a basic feature of the housing inventory; whether a dwelling unit is

owner occupied or renter occupied. Data for household tenure within the Franklin County and

Ottawa markets indicates total renter occupied housing at 23% and 33%, respectively for 2020.

These figures are lower than the overall Kansas City Metropolitan figure (35%2) and higher than

the U.S. national average of 34.7%3.

Table 14 - Household Tenure, Franklin County.

Census 2010 2020 Estimate 2025 Projection

Number Percent Number Percent Number Percent

Total Housing Units 11,147 100.0% 11,489 100.0% 11,665 100.0%

Occupied 10,098 90.6% 10,270 89.4% 10,229 87.7%

Owner 7,178 52.3% 7,628 66.4% 7,628 65.4%

Renter 2,920 38.2% 2,642 23.0% 2,601 22.3%

Vacant 1,047 9.4% 1,217 10.6% 1,434 12.3%

Source: Esri, Market Profile, 2021.

Table 15 - Household Tenure, City of Ottawa.

Census 2010 2020 Estimate 2025 Projection

Number Percent Number Percent Number Percent

Total Housing Units 5,517 100.0% 5,659 100.0% 5,742 100.0%

Occupied 4,992 90.5% 5,053 89.3% 5,029 87.6%

Owner 2,885 52.3% 3,186 56.3% 3,186 55.5%

Renter 2,107 38.2% 1,867 33.0% 1,843 32.1%

Vacant 518 9.4% 605 10.7% 717 12.5%


2 United States Census Bureau, Census Reporter, ACS 2019 1 year update. 3 US Census Bureau, Demographic Characteristics for Occupied Housing Units.

33

Household Size

Historical data indicates a stabilization of household size in both the Franklin County and

Ottawa market areas between 2010-2020. This figure is projected to continue to stabilize

through 2025.

Table 16 - Household Size, Franklin County.

2010 Census

2020 Estimate

% change 2010-2020

2025 projection

% change 2020-2025

Avg HH Size 2.53 2.53 0.0% 2.53 0.0% Source: Esri, Market Profile, 2021.

Table 17 - Household Size, Ottawa, Kansas.

2010 Census

2020 Estimate

% change 2010-2020

2025 projection

% change 2020-2025

Avg HH Size 2.45 2.46 0.4% 2.46 0.0% Source: Esri, Market Profile, 2021.

Housing Units

Housing units within the Franklin County and Ottawa Market Areas totaled 11,489 and 5,659

respectively for 2020. There was a distinct increase in units between 2010 and 2020. That

trend is projected to continue, albeit at a smaller pace.

2010 Census

2020 Estimate

% change 2010-2020

2025 projection

% change 2020-2025

Households 10,104 10,269 1.60% 10,229 -0.08% Housing Units 11,147 11,489 2.97% 11,665 1.50% Source: Esri, Market Profile, 2021.

Table 18 - Housing Units: Franklin County.

2010 Census

2020 Estimate

% change 2010-2020

2025 projection

% change 2020-2025

Households 4,997 5,054 1.12% 5,027 -0.11% Housing Units 5,517 5,659 2.50% 5,742 1.44% Source: Esri, Market Profile, 2021.

Table 19 - Housing Units: City of Ottawa.

34

Table 20 - Housing Unit Summary, Franklin County: 2000-2025.

Housing Unit Summary

2000 Census 2010 Census 2020 Estimate 2025 Projection

Number Percent Number Percent Number Percent Number Percent

Housing Units 10,229 11,147 11,489 11,665

Owner-Occ. 6,945 67.9% 7,178 64.4% 7,628 66.4% 7,628 65.4%

Renter-Occ. 2,506 24.5% 2,920 26.2% 2,642 23.0% 2,601 22.3%

Vacant 777 7.6% 1,047 9.4% 1,217 10.6% 1,434 12.3%


Table 21 - Housing Unit Summary, City of Ottawa: 2000-2025.

Housing Unit Summary

2000 Census 2010 Census 2020 Estimate 2025 Projection

Number Percent Number Percent Number Percent Number Percent

Housing Units 5,121 5,517 5,659 5,742

Owner-Occ. 3,006 58.7% 2,885 52.3% 3,186 56.3% 3,186 55.5%

Renter-Occ. 1,736 33.9% 2,107 38.2% 1,867 33.0% 1,843 32.1%

Vacant 378 7.4% 518 9.4% 605 10.7% 717 12.5%


Vacancy

The vacancy rate is the fraction of dwelling units available for habitation which are not being

occupied. Overall vacancy for all housing units within the Franklin County and Ottawa Market

Areas is currently estimated at 9.4% (see previous Tables 20 and 21). Owner-occupied vacancy

rate is difficult to determine due to the scattered nature of product, however, based on

stakeholder interviews, we can conclude that the owner-occupied market is at full capacity or

close to it. Upon canvasing of competitive projects/properties within the market, as well as data

provided by the City, we have come to the conclusion that overall vacancy for market rate rental

units is dramatically lower. Overall, we estimate a realistic vacancy rate to be +/- 5%.

35

Local Demographic Summary

Census data, projection and estimates indicate a clear stagnation and even a decrease in

population and household figures. Within the next five years population is expected to decrease

-0.07% and households -0.08%. These figures shouldn’t be a call for alarm, but could

possibility be attributed to any of the following; aging population, lack of in-migration of new

households, or younger generations moving away from the market for employment

opportunities.

Figure 16 - Demographic Trends: Franklin County.

Figure 17 - Demographic Trends: City of Ottawa.

However, within that same time period, we do see an increase in median household income.

This should be anticipated due to the rebound in employment since the recession, as well as

standard salary inflation.

36

Employment4

Franklin County and the City of Ottawa enjoy excellent access to the Interstate 35/NAFTA trade

corridor. Drive-time to Downtown Kansas City, Kansas/Missouri is approximately 55 minutes

and the Logistics Park Kansas City (LPKC) is an approximate 25 minute drive-time to Edgerton,

Kansas accessible via Interstate 35. Ottawa, Kansas is home to multiple large

industrial/distribution businesses including Walmart which operates a 1.3 million square foot

warehouse operation immediately East of the community, American Eagle Outfitters with a 1.1

million square foot warehouse located in the Northeast Ottawa Industrial Park and Kalmar-

Ottawa, a large terminal tractor manufacturing company started in Ottawa currently employing

approximately 300 workers. Ottawa is also home to multiple commercial and retail businesses

including multiple restaurants and retail businesses located downtown and multiple national

chain and restaurant retailers including Applebee’s, Maurices, Walmart Supercenter, Price

Chopper, Orscheln Farm and Home and multiple family owned businesses.

Employment and Unemployment Trends

The following chart outlines the employment and unemployment trends for Franklin County,

Kansas from 1990 to present.

Figure 18 - Unemployment Rate, Franklin County, Kansas. Updated April 28, 2021.

4 Courtesy Ottawa Area Chamber of Commerce., 2018.

37

Employment and Unemployment trends for Franklin County, Kansas have fluctuated within the

past decade. Franklin County continues to trend at lower unemployment percentages, but is still

higher when compared to the State of Kansas as a whole. Franklin County Unemployment rates

peaked at 10.6% in 2009, but as of March 2021 have dropped to 3.8%. As of January 2021

the State of Kansas had a 3.4% unemployment rate.

Major Employers

Due to the rural nature of the market area and its convenient highway access, it is anticipated

that major employers are oriented and related to the distribution and service industries. The

Franklin County Development Council provided information on major employers within the

Ottawa and Franklin County market area.

Table 22 – Major Employers, Ottawa, KS.

Employer Industry Est. Employment Level

Walmart Distribution/Logistics Distribution/Logistics 750

American Eagle Outfitters Distribution 851

USD 290 Education 425

AdventHealth-Ottawa Health Services 346

Kalmar Manufacturing 340

Walmart Supercenter Retail 300

Franklin County, KS Government 230

Ottawa University Education 178

City of Ottawa, KS Government 148

Ottawa Retirement Village Retirement Housing 145

Schuff Steel Manufacturing 161

Midwest Cabinet Co., Inc. Manufacturing 104

COF Training Services, Inc. Employment Training 100

ECKAN Social Services 89

MAC Fasteners, Inc. Manufacturing-Aerospace 65

Source: Franklin County Development Council, February 2021.

38

Wages by Industry

Table 23 below, identifies the top industries with the greatest estimated employment in Franklin

County in the Third Quarter, 2020 Annual Wage Census, and the average annual wage paid in

each occupation. 2020 data is the most current data available by the State of Kansas.

Table 23 – Employment Classifications, Franklin County, Kansas.

The above data illustrates the job sectors with the greatest estimated employment in Franklin

County, Kansas in the third quarter of 2020. Service, trade/transportation and education

represent the largest industries within Franklin County.

Commuting Patterns

The City of Ottawa and Franklin County are typically rural in nature and it could be assumed

that most commuting is anticipated to be relatively short in nature. However, 51.7% of all job

related commuting ingress is coming into the County from outside. Within the County, 40.3%

of those employed live and work within Franklin County. The primary question is, if 51% of the

workforce is coming into the market area on a daily basis for work…“would these individuals

live/rent within the market area (Franklin County and Ottawa) if the right residential living

39

opportunity presented itself?” It would be reasonable and conservative to consider that one to

three percent (1% to 3%) of these imported workers would live in Ottawa if the opportunity

existed. We conservatively estimate this to impact the overall household demand factor at an

additional 46-138 households.

40

Figure 18 - Estimated Daytime Population (Inflow-Outflow, 2018).

Figure 20 - Work to Home.

41

Figure 19 - Home to Work.

42

Figure 20 - Travel Time to Work.

Figure 21 - Commute Times.

The previous Figures 20 and 21 above, indicate that employees in the Franklin County/Ottawa

market have a shorter commute time (23.6) minutes than the normal US work (26.9 minutes)5.

Additionally, 1.6% of the Ottawa workforce has “super commutes” in excess of 90 minutes.

Longer commute times can be anticipated due to the close proximity to area municipalities

(Lawrence & Kansas City Metro).

Local Economic Summary

In Kansas and most of the Country, the economy over the last few years has been challenging,

irrespective of the pandemic. However, Franklin County and the Ottawa sub-market have been

fortunate to have many businesses that held strong and some even thrived in the last few years.

The business base in Franklin County is diversified and core industries have focuses on

transportation/distribution, government, healthcare, and manufacturing. As industries expand

and invest in the community, the available workforce continues to shrink. The current

unemployment rate for the County is 3.2%. Employers draw people daily from Franklin, Miami,

Osage, Anderson and Douglas Counties. But as businesses grow they are finding it more and

5 DATAUSA, Census Bureau, 2015-2019 ACS 5-year Estimate.

43

more difficult to fill vacant positions. Available housing is a major component of this concern.

Generally, the Franklin County, Kansas employment climate appears to be out-performing the

national climate in terms of employment and employment growth. The County has experienced

steady growth and as previously mentioned the economy is diverse.

44

3e. Tax Climate

One repeated theme which arose as part of this analysis and our stakeholder interviews was the

continued commentary of the tax climate in Franklin County and the City of Ottawa. Many

stakeholders indicate that the high level of taxes, particularly within Ottawa drive business and

development to other municipalities or to out-county locations.

Based on information obtained from the Kansas Department of Revenue and the Kansas League

of Municipalities, this perception seems to be confirmed. As of 2017, the County was higher

than its peer Counties. Ottawa had a higher assessed valuation6 figure than Olathe, Lawrence,

Gardner, Spring Hill, Paola, Louisburg, Topeka, Osawatomie and Kansas City. The only

municipality which has a higher assessed valuation is Garnett. Granted there may be

extraneous circumstances for which these levels have occurred, but a simple comparison with

other peer cities in Franklin, Johnson and Miami Counties reveals how high Ottawa’s tax burden

is. It should also be noted that Franklin County is also higher than its peer counties in the same

area.

Table 24 - Average Tax Burden, Ottawa and Surrounding Areas, 2017.

6 2016 Average rate (Per $1,000 of Assessed Value).

45

3f. Incentives

Many local, State and Federal incentive programs are available which can promote investment

in businesses and real estate, particularly housing projects. Some programs are available at the

County and/or municipal level. These include, but are not limited to;

Neighborhood Revitalization Program.

Authorized by KSA 12-17, 114-12-17, 120,

the Neighborhood Revitalization Act (NRA)

gave local governments and citizens in

Kansas the power to improve their

communities. This program promotes

revitalization and the increased health,

safety, welfare and prosperity in specific

areas of the City of Ottawa by stimulating

new construction and rehabilitation. By

issuing a property tax rebate as an incentive

to make improvements to property within

certain areas of the City. The City, County

and USD-290 taxes rebated are based on

the amount taxes have increased due to the

improvements made to either an existing

structure or property.

Rural Housing Incentive District (RHID). Authorized by KSA 12-5241, the RHID Act

provides cities and counties a program to assist developers to build housing in rural

communities by assisting in the financing of public improvements. The program allows

developers to pay for the cost of infrastructure improvements (like roads, water, sanitary

sewer, etc.) using the increase in taxes (tax Increment) associated with the development.

Moderate Income Housing (MIH) Program. The MIH program serves the needs of

moderate-income households, those families that cannot afford market-rate housing; yet

don’t qualify for federal housing assistance. MIH grants and/or loans are awarded to

cities and counties to develop multi-family rental units, single-family for-purchase homes

and water, sewer and street extensions in communities with populations fewer than

60,000 people. MIH awards also help finance construction costs, rehabilitate unsafe

or dilapidated vacant housing, and offer down-payment and closing-cost assistance to

home buyers. The program was created in 1991 and administered by the Kansas

Housing Resource Corporation (KHRC).

46

Improvement Benefit Districts , Also known locally as “Specials”, Improvement Benefit

Districts allow property owners to petition the City Commissions to make public

infrastructure improvements according to the Improvement District Procedures outlined in

Kansas Statutes (KSA 12-6a et seq.). Within Ottawa Administrative Guidelines for

Special Improvement Projects administer guidelines for the program. Should the City

Commission choose to accept such a petition to create a benefit district, the City of

Ottawa will assume design and construction responsibilities, allocating expenses

according to the petition. Staff will assist developers/property owners with this process.

General Observation: In multiple markets we are seeing tremendous demand in workforce/attainable housing projects. Whether it’s rural or urban, the cost of developing and constructing housing has increased, most recently due to sharp increases in the costs of materials and labor. In order to spur increased investment in housing development, many municipalities have

dramatically underwritten private development costs to varying extents. This could include,

but is not limited to:

Land contribution,

Tap fee waivers,

Expedited entitlement approvals,

Expedited permitting processes,

Annual municipal contribution to keep rental units affordable (+60% AMI to 120%

AMI).

47

Case Study: Winter Park, CO

Where: Winter Park, CO Problem: Significant demand in workforce/attainable housing. Idea: Utilize public resources to effectuate housing development. Project Size: 50 units or 60 beds. Project Budget: $14,300,000.

Municipal Contributions: -Land Contribution -Tap Fee Waiver -Tax Abatement -Sales Tax Exemption on Construction Materials. -Annual appropriate from Affordable Housing Fund (10yr max)

Solution: Town partnered with private development firm to develop and construct 50 workforce/attainable dwelling units oriented towards 120% AMI for the County. Utilizing considerable Town resources to write down overall development budget and mid-term operating expenses, the public/private partnership fulfilled a short-term gap in the local housing demand.

Case Study: Harlen, IA

Where: Harlan, Iowa Problem: Localized demand for workforce housing. Idea: Town land contribution to spur housing development. Project Size: 45 duplex units. Project Budget: $7,400,000. Municipal Contributions: -Land Contribution -Tap Fee Waiver -Tax Abatement -Sales Tax Exemption on Construction Materials. -Annual appropriate from Affordable Housing Fund (10yr max) Solution: The Town developed lots for single family homes and donated those lots to builders to underwrite the overall development costs.

48

3g. Permit Data

The City of Ottawa provided residential permit data for the City Limits of Ottawa. Data

indicated the number of residential demolitions, number of residential permits and valuation of

permits. Only data from 2006-2020 was available.

Total residential permits have risen sharply in the past two years (2019-2020), surpassing the

historical high from 2006 (26). The demolition data is interesting in that in many years

demolition outpaced new construction, indicating negative total number of housing units

available. However, since 2016-17 this has reversed trend and in 2020 it appears that

demolitions are gradually nearing the level of total new residential permits.

Total demolitions indicate 193 residential demolitions since 2006. This is an concerning figure

for a municipality the size of Ottawa. Considering if ½ of these structures were salvageable and

rehabilitated before property deterioration occurs, then that would significantly bolster the

existing housing stock within the City.

Table 25 - City of Ottawa Residential Permits & Demolitions, 2006-2020.

Permit Type 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006

Single-Family Residence 39 30 19 8 3 4 2 3 1 3 4 7 23 24 26

Duplex/Multi-Family 2 1 18 1 0 0 2 0 0 0 1 2 1 2 4

Manufactured Home/Parks/MHS 4 6 3 4 2 8 5 2 4 6 4 6 1 8 7

Avg. SF Valuation $135,572 $184,333 $203,033 $176,945 $163,466 $166,434 $168,253 $90,644 $136,353 $176,284 $188,510 $152,559 $143,068 $179,989 $150,223

Avg. Duplex/MF Valuation $235,000 $280,000 $258,000 $370,000 $0 $0 $166,054 $0 $0 $0 $270,480 $283,621 $252,176 $140,677 $77,502

Avg. Manufactured Valuation $21,313 $4,250 $15,033 $33,912 $25,792 $30,149 $28,138 $36,096 $29,388 $16,667 $29,524 $19,545 $43,991 $15,867 $25,252

Demolitions-Residential 20 14 7 6 3 17 18 15 16 15 11 18 10 15 8

Source: City of Ottawa, 2021

Attempts to obtain similar permit data County-wide were undertaken as part of this analysis. As

of the issuance of this report, no County-wide data was available.

49

4. Housing Market

The housing market within Franklin County and the City of Ottawa spans two primary sectors;

for-sale and for-rent unit types. Each is differentiated further by income variables and age-

restrictions. This section will address each accordingly.

4a. Stakeholder Interviews

As part of this analysis interviews of various stakeholders were performed to gauge the overall

conditions within the housing market for the Franklin County/Ottawa market area. The

following general conditions were identified as a result of the stakeholder interview process:

Possible decreased level of residential for-sale supply within the market.

180+ buildable lots currently exist within the City Limits.

Buildable lots are presently owned by several different builder entities and are being

slowly built upon.

There is currently little rental supply within the market. All existing rental properties

(single-family and multi-family) are at capacity.

Definite demand for the $180,000 to $225,000 for-sale product.

144 households currently on the extremely low income waiting list within Franklin County.

Many larger Ottawa employers have employee base which lives out-side the market.

Property tax burden is high for the County and City of Ottawa.

Regarding Ottawa permitting process, some City building regulations and requirements

are burdensome to the building community. Builders indicate that requirements increase

the learning curve by builders build and do business in the City.

Marketing: Collectively, the County and City could do a better job at marketing itself.

The community is a “hidden-gem” and with its location, should be attracting more

people, business, investment.

50

4b. Current and Anticipated Rental Housing

As part of this analysis, we have reviewed a number of competitive multi-family rental facilities

within the analysis area. Multi-family rentals included those which are oriented towards market-

rate households, as well as those with income restrictions. This analysis did not account for

single-family rentals due to the difficulty in quantifying that market. All competitive facilities are

located within the Ottawa Sub-Market.

Market Rate Facilities

Market-rate competitive projects are a mix of historic multi-family to low-rise multi-family. Many

of the competitive projects are already newly constructed facilities are more efficient than

historical properties. We would anticipate newer projects to be more attractive and conversely

maintain occupancy at a continued high level. Comparable properties were examined on the

basis of physical characteristics, i.e. building type, age/quality, and level of common amenities.

In this analysis we attempted to compare competitive properties to the subject property to

provide a “snap-shot” of the depth and available supply of the market.

Presently in the Franklin County/Ottawa Market Areas, we identified three (3) competitive multi-

family rental projects which are currently placed in service. No proposed, new-construction

market-rate projects were identified. These projects account for approximately one hundred

forty-three (143) multi-family market-rate housing units. Existing and proposed competitive

property information was determined through interviews with City and community officials, local

apartment managers and developers, as well as a market area investigation. We identified

many competitive projects, but certainly there are likely additional facilities that have been

omitted. However, this selection should provide a good representative sample.

Table 26 - Market Rate Apartments-Ottawa, KS.

Phone # units Type Age Occupancy

1 The Oaks at Canterbury Apts 913-393-9414 72 Market 1970 100%

2 Sienna South Apartments 785-242-3554 48 Market 2004 100%

3 KensingtonApts 785-248-9525 23 Market 1967 100%

143

Address

1-27 W. Canterbury Crt

907-913 W. 17th St.

744 S. Cedar St.

Based on our investigations, it appears that the market-rate multi-family rental market is at

capacity. All properties surveyed indicated a 100% occupancy rate and several had waiting

lists.

51

Market Rate unit sizes and rents

Based on our investigations, most market rate unit types are 1 and 2 bedroom. There are a

small number of three bedroom units existing within the market. Average unit sizes and average

unit rents are identified below.

Table 27 - Market Rate Rental Sizes and Rents.

Unit Type Avg. Size

(square feet)

Avg. Rent

(monthly rent)

1bedroom 705 $671

2bedroom 1,018 $768

3bedroom 1,158 $1,206

Income-Restricted Facilities

In addition to market-rate rental facilities, we have also canvased income-restricted multi-family

facilities. These range from Section 8 apartments (<30% qualifying median income

households) to Low Income Housing Tax Credit (LIHTC) apartments (30% to 60% qualifying

median income households).

Table 28 - Income Restricted Apartments, Ottawa, KS.


1 Ottawa Plains 785-242-9333 48 1141 W. 17th St. LIHTC 2006 100%

2 Courthouse Square Apartments 785-242-2235 26 235 S. Main St. LIHTC 1992 100%

3 Mission Woods 785-242-2188 36 1617 S. Osage Dr. Incom-Rest. n/a 100%

4 Pine Manor 785-242-2188 30 1677-1699 S. Osage Dr LIHTC n/a 100%

5 Hidden Meadows 785-242-7001 80 1601 S. Hickory St. LIHTC 1995 100%

6 Prairie View Estates 785-241-9885 34 928 E. Prairie View St. LIHTC 2019 100%

7 Walnut Plaza 785-883-4044 24 317-325 Walnut St., Wellsville HUD 1975 100%

8 Gardenwalk of Wellsville 785-883-2726 24 833 Main St., Wellsville LIHTC 2011 100%

302

Address

Our investigations indicate there are eight (8) income-restricted facilities located in the Franklin

County market. These run the gamut from Section 8 housing to LIHTC facilities. Similarly to

market-rate product, the occupancy rates for income-restricted housing were very high. It

should be noted that a prospective thirty-two (32) unit LIHTC project has been proposed in

Ottawa, but further information on the project was unavailable. It should be noted that this 32-

unit project is single-family in nature.

52

Previous analysis indicated an overall

moderate demand for income-restricted

housing within Ottawa and Franklin County.

This demand has been confirmed by the East

Central Kansas Economic Opportunity

Corporation (ECKAN) who serves as the

community action agency for low-income

households within Franklin County. As of June

1, 2018 ECKAN has 144 households on the

waiting list for affordable housing within

Franklin County.

This is an additional indication that there is a

definitive demand for income-restricted

housing within the Ottawa and the Franklin

County market.

Age-restricted Rental Housing

Our investigations also reviewed age-restricted housing options within the Franklin County

market area. We identified four (4) different housing options for senior households. These were

a mix of market-rate senior rentals and income-restricted senior rentals. The four properties

accounted for approximately two hundred (200+) units and indications were that these were at

full capacity. This housing cohort mimics all other rental housing trends, identifying a definitive

demand for additional rental housing.

Table 29 - Age Restricted Rental Housing Options, Ottawa, KS.


1 Washburn Towers 785-242-9444 45 506 S. Main Street Sr. LIHTC n/a 100%

2 Sunflower Plaza Tower 785-242-6655 60 701 S. Poplar St. Sr. Income Rest. 1978 100%

3 Cedar Square 785-242-8110 48 1550 S. Cedar St. Sr. 1986 100%

4 Park Place of Ottawa 785-242-2004 48 1519 E. Elm St. Sr. LIHTC 1992 100%

201

Address

53

4c. For-Sale Housing Market

Investigations into the for-sale housing market proved challenging to quantify an actual demand

number and the potential availability of supply. Data provided by the local Realtor, lender and

appraiser communities has been considered in order to attempt to quantify supply and demand

factors.

Franklin County Real Estate Sales

Data from the Kansas City Regional Association of Realtors (KCRAR) and the Heartland Multiple

Listing Service (MLS) was obtained for years 2019 thru 2020. It should also be noted that while

2020 was greatly impacted by Covid-19 pandemic issues, the real estate sales market showed

dramatic growth. Year to date sales indicate a sales level of approximately 30 closings per

month, or 360 total for 2020 a slight increase from 2019 (28 closings per month). Average

sales prices also increased from $158,649 in 2019 to $189, 956 in 2020, a 16.4% increase.

Additionally, the total number of closed sales was up 8.1% from 2019. However, days on

market (DOM) also decreased possibly indicating more demand and a shrinkage in supply.

Data for 2021 indicates that these same metrics continue to trend upwards for the near-term.

Figure 22 - Key Real Estate Metrics, Franklin County, KS. 2019-2020. Data courtesy Ellis-Lantis Group, 2021.

Buyer Profiles: Typically most home buyers who are now buying can be segmented to one of the

following:

Moving from a home they already own in the area.

Moving up into larger home, although some (mostly empty nesters positioning for

retirement) are downsizing.

54

Buying homes for the first time. After very few sales to this segment of the market since

the recession, about 15% of local residents who are now purchasing home are doing so

for the first time.

Figure 23 - Historical Average Sales, Franklin County, KS. Data courtesy Ellis-Lantis Group, 2021.

Statistical market analysis indicates a monthly supply of housing at 1.2 months (down from 2.4

in 2019). Overall data also trends towards higher home values between 2019 and 2020,

(+19.7% increase in average sales price). Additionally, a higher days-on-market (DOM) shows

a sharp drop (-18.2%) in home listings staying unsold on the market. This is another indication

of a tighter for-sale demand within the County.

Anecdotally, interviews with the realtor community repeatedly stated there was a definite lack of

product within both the County and the City of Ottawa. Often many sales are occurring prior to

listing on the MLS. Additionally, stakeholders indicated a lack of supply within the $185,000 to

$250,000 price point. This again is shown by the sharp increase of average sales prices within

the County.

55

Buildable Lots: Ottawa

The number of buildable lots (i.e. those which are platted, zoned and with utilities.) appears to

be scattered and numerous. Larger scale subdivision development opportunities do exist within

the City and are currently being marketed and in some cases developed. Subdivision locations

mentioned below have only been referenced due to the fact that they have undergone some type

of preliminary or final plat process.

Table 30 - Existing Subdivision/Developments.

Subdivisions/Developments

Name # lots

Homes

Constructed?

Infra-

structure Zoned? Platted?

Available

Lots

The Coves 55 11 Yes Yes Yes 42

Crowell 2 1 Yes Yes In Process 1

Cuttings 59 58 Yes Yes Yes 1

Fairway Vista 67 59 Yes Yes Yes 8

Fieldstone 56 0 No Yes Prelim pending

Heartland 18 14 Yes Yes Yes 4

Jones on Milner 18 0 No Yes No pending

Juniper 8 0 No Yes Yes 8

Lakeside 22 6 (8 lots) Yes Yes Yes 2 (rest park)

Markley on Funston

(6dup/4

single) 0 No Yes No 10

Rooney-LIHTC 32 0 No Yes No 32

Sugar Creek 42 8 No Yes Yes 34

Sunrise Estates 5 1 Yes Yes Yes 4

Tallgrass 311 0 No Yes No pending

Cottage Project 25+ 0 No Yes In Process 25

Westwood 1/2 59 59 Yes Yes Yes 0

Westwood 3A 12 11 Yes Yes Yes 1

Westwood 4 15 0 No No In Process 15

Westwood Replat 4 0 Yes Yes Yes 4

785 222

Total Available today (May '21) 21

Available 2021 later 61

Available 2022 68

Source: City of Ottawa, KS 2021.

All subdivisions mentioned above are in various stages of completion or need to have final plat

approved by the City to begin development. By our calculations between the nineteen (19)

areas, approximately 189 buildable lots are, or could be easily developed for single-family

56

residential through 2022. It appears that there is plenty of capacity, as approximately 33.57%

of the available lots are unbuilt.

Housing Market Conclusion

Overall, the Franklin County/Ottawa housing market currently shows slow growth in

development and construction. Single-family home development and construction is minimal

and only one new project is proposed (a 32 unit income-restricted LIHTC project configured in

single-family residences). There are some infill developers constructing single-family homes on

infill lots, but supply to the market is limited to a handful of units (5-10 per year).

All multi-family market rate rentals are at capacity and single-family homes inventory is tight.

The University is obviously an impact to local rental housing with student population occupying

rental inventory. With increasing student population projections, added thought should be given

to the development and construction of student-only housing alternatives. This might free up

additional inventory for regular rental demand.

On the sales side, overall sales have stabilized, but there appears to be a definite lack of supply.

Sales across all price points are needed, but stakeholder feedback indicates an increasing

demand in the $180,000+ sales market.

Another focus should be on “shovel-ready” projects which are, or have been planned or are in

varying entitlement phases. These projects are likely to be further along in the overall

development schedule and may be closer to eventual completion than similar projects in earlier

stages of the development process.

57

5. Demand

5a. Assumptions

Determining segmented demand for the Franklin County/Ottawa housing market is difficult.

Population growth projections estimate a relatively stable population growth for the next 5 years.

Demand for home sales is up and market rate rental opportunities are limited. In order to

determine some type of income eligible households for the area, we have utilized several basic

assumptions, as well as comparable market product sales and rental rates. As previously

mentioned, a standard 35% affordability factor was utilized to determine the anticipated number

of households within each particular Market Area. This figure takes into account rent and

utilities on a monthly basis and compares household affordability to income.

Income-Restricted Rental Households

Assumptions:

Market Area: Franklin County.

15, 20and 30 total projected unit count.

Calculations anticipated all units oriented towards 40% and 60% AMI households.

Income limits: $22,760 to $42,660.

LIHTC submission through KHRC.

Based on these parameters, we calculate that 2,191 households within the Franklin

County market are income-eligible for affordable rental product. Of these

households, 495 are renter households.

Market-Rate Rental Households

Market-rate rental households are difficult to determine based on income eligibility. One

theory is that those households are renter by choice, renters because of lack of housing

options, or renting due to lack of income to purchase. Identifying this segment is nearly

impossible due to lack of quantifiable factors.

For-Sale Households

Assumptions: Calculations relating to quantifying income eligible households the for-sale

housing market within Franklin County required a number of different financing assumptions

as they relate to housing affordability. These include;

Three different purchase price scenarios were calculated based on demand feedback

from stakeholder interviews. Participants identified a possible for-sale demand

between $190,000 and $250,000.

Interest Rate: 3.5%

Calculations were made for 30 Yr term.

58

Calculations included Principal Interest Taxes Insurance (PITI).

Table 31 - For Sale Assumptions.

30 Year Term Loan Amount*

Payment (PITI)

Monthly Utilities

Annual Income Required

Purchase Price $190,000 $152,000 $832.55 $180 $42,752 $210,000 $168,000 $904.40 $200 $45,147 $225,000 $180,000 $958.28 $220 $46,943 $250,000 $200,000 $1,048.09 $240 $49,936 Note: All figures estimates only. *Assumes a 20% down payment.

Based on these parameters, we calculate that 787 households within Franklin County are income-eligible for owner-occupied for-sale product within the parameters outlined in Table 31 above.

59

5b. Demand Analysis

Occupancy

Presently, housing units within the Franklin County Market Area is estimated to number approximately 11,489 and projected to rise to 11,665 by 2025 (1.5% increase). While the ratio of rental to owner-occupied housing is moderate for Franklin County, we anticipate the ratio will remain relatively unchanged though 2025. Interestingly, the ratio of owner- and renter-occupied housing is projected to remain relatively stable; all the while the overall level of vacant housing units is projected to increase. Vacancy is projected to increase by 1.7% in the next five years. This equates to an estimated 97 total dwelling units or 19.4 units/year which are turning vacant. We have a difficult time believing this due to the overall housing demand within the County. We would anticipate these vacancies to quickly turn and either is re-rented or re-sold. This might provide another opportunity for a infill/rehab program oriented to promote rehab of these structures for additional housing stock. Our estimation is that the ratio of owner- and renter-occupied dwelling units would remain relatively stable.

Table 32 – Estimated Tenure of Occupied Housing Units: Franklin County, 2021.

2010 Census

Percent

2020 Estimate

Percent

2025 projection

Percent

Housing Units 11,147 11,489 11,665 % Owners 7,178 64.4% 7,628 66.4% 7,628 65.4% % Renters 2,920 26.2% 2,642 23.0% 2,601 22.3% % Vacant 1,047 9.4% 1,217 10.6% 1,434 12.3% Source: ESRI, Market Profile, 2021.

Table 33 – Estimated Tenure of Occupied Housing Units: City of Ottawa, 2021.

2010 Census

Percent

2020 Estimate

Percent

2025 projection

Percent

Housing Units 5,517 5,659 5,742 % Owners 2,885 52.3% 3,186 56.3% 3,186 55.5% % Renters 2,107 38.2% 1,867 33.0% 1,843 32.1% % Vacant 518 9.4% 605 10.7% 717 12.5% Source: ESRI, Market Profile, 2021.

Table 34 – Estimated Tenure of Occupied Housing Units: City of Wellsville, 2021.

2010 Census

Percent

2020 Estimate

Percent

2025 projection

Percent

Housing Units 780 817 831 % Owners 531 68.2% 602 73.8% 604 72.7% % Renters 190 24.4% 143 17.6% 142 17.2% % Vacant 57 7.4% 70 8.6% 83 10.1% Source: ESRI, Market Profile, 2021.

60

Pent-Up Demand

Pent-up demand represents the requirement for additional housing in a market that is not

operating in equilibrium with the current supply. It could be estimated based on the number of

households or families waiting to rent or to buy a dwelling when they have an opportunity. Due

to some economic circumstances, those households or families have been living in housing

conditions not suiting their needs or their aspirations. Calculations are presented for both rental

and for-sale households. Several proposed developments are currently rumored for Franklin

County, namely within Ottawa, but specifics of programming for those projects is unavailable

and have not been incorporated into this analysis. The Franklin County Market Area can expect

to capture a small percentage of renters and buyers in addition to new households and

turnover, as discussed later in this document.

Presently within Franklin County and according to demographic data, renter households are

approximately 23% of overall households and owner-occupied households are 66.4%. All

Market Areas have seen the percentage of renters drop moderately since 2000. As previously

discussed, these figures will continue to decline slightly within the next five years.

Table 35 – Estimated Pent-Up Demand, Renter & Owner Households.

Pent-Up Demand

Franklin County City of Ottawa City of Wellsville

Renter Owner Renter Owner Renter Owner Percentage of Households 23.0% 66.4% 33.0% 56.30% 17.60% 73.8% Households 2,642 2,642 1,867 1,867 143 143 Pent-up Demand of Households 2,054 3,389 1,011 1,668 149 247

Proportion of Income Qualified Households

19.03% 7.66% 22.38% 9.29% 14.95% 6.27%

Income Qualified New Households from Pent-up Demand

391 391 226 155 22 15

Capture Rate of Pent-up Demand 25% 25% 25% 25% 25% 25% Estimated Capture of Pent-up Demand 98 91 57 39 6 4 Source: DI, Esri Housing Profile, 2021.

Demand from Household Growth

An additional source of demand for new residential projects is the formation of new households

from population growth. However; due to the relative stabilization of both population and

households through 2025, the Market Area’s capture rate of this source is limited. For this

calculation, we have estimated a decrease in growth of total households in the Market Area thru

2025. While Census and ACS data indicates a slight household decrease of 0.08 percent

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through 2025, we’ve factored in a more optimum forecast considered by the Census data.

We believe a one percent County-wide adjusted household growth over the next 5 years is

plausible, but conservative. Utilizing this calculation, we still only estimate minimal demand

from household growth across the market area.

Table 36 – Estimated Demand from Household Growth.

Demand from Household Growth


Renter Owner Renter Owner Renter Owner Income Qualified Household Turnover 435 151 214 154 27 103 Percentage of Income Qual. Households 19.03% 7.66% 22.38% 9.29% 14.95% 6.27% Est. Income Qualified New Households -1 -1 -1 0 0 0 Capture Rate for New Households 40% 40% 40% 40% 40% 40% Estimated Capture of New Households 0 0 0 0 0 0 Source: DI, esri Housing Profile, 2021.

Demand in Turnover

Concerning the multi-family rental market only, in general it represents a very transient

population of households, typically realizing a turnover rate of 33 percent per year. While this is

certainly extreme for the Franklin County/Ottawa market area, there is definitely an impact on

demand from turnover. We estimate that turnover in the Market Areas would show a negligible

impact. The Market Area provides little to no demand number based on current Census

population growth. Generally, we would anticipate the substantial portion, if not all, of growth

to be derived from demand in turnover; however we do estimate that some demand will come

from outside the market area, but quantifying this demand is difficult.

Overall, we would anticipate Franklin County/Ottawa Demand to result in higher numbers.

However all projections are based off of Census growth projections which show little to no

growth. In this case we would discount these projections, but they clearly show a nominal

demand for additional housing within the market. This could be realistic as tenants/home-

buyers would likely opt for a newer residence rather than the older housing stock as evidenced

by the relative high occupancy and demand rates of comparable properties.

We can also estimate the demand in turnover from the for-sale, owner-occupied market as well.

Due to the more stable nature of owner-occupied housing, this estimate is more difficult to

quantify, however using Census and ACS data and projections we can calculate a conservative

number.

62

Table 37 – Demand from Turnover.

Demand from Turnover


Renter Owner Renter Owner Renter Owner Turnover 1,585 1,585 1,120 1,120 86 86 Percentage of Income Qual. Households 19.03% 7.66% 22.38% 9.29% 14.95% 6.27% Est. Income Qualified New Households -1 -1 -1 0 0 0 Capture Rate for New Households 60% 60% 60% 60% 60% 60% Estimated Capture of Turnover -1 -1 0 0 0 0 Source: DI, esri Housing Profile, 2021.

Market Area Demand 5yr Projection


Renter Owner Renter Owner Renter Owner (Total units captured, Pent-up Demand, Demand from Household Growth and Demand from Turnover)

56 49 32 15 5 3

Estimated Annual Demand 11 10 6 3 1 1

Actual absorption levels are difficult to estimate, but based on Census Data, we anticipate an

annual demand of approximately 56 total rental units and 49 for-sale units within the next 5

years. This equates to 11 unit and 10 units per year respectively. Note that these calculations

are generated by Census and ACS data and projections. Actual local housing and population

trends would significantly impact these calculations. For instance, actual sales data from the

Kansas City Regional Association of Realtors and Heartland MLS indicate total sales for Franklin

County at 36 closed sales (up 44% from 2019). If that trend continues that would significantly

outpace estimated stated above in Table 37.

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Capture Rate

The Capture Rate is the percentage of income qualified renter households in the Market Area

that the property must capture to achieve the Stabilized Level of Occupancy.

Table 38 – Multi-Family Rental Capture Rate: Franklin County.

Demand Calculation 15 units 20 units 30 units Number of Households in 2020 10,269 10,269 10,269 Increase in Number of Households (2020-2025) -40 -40 -40 Estimated Households (2025) 10,229 10,269 10,269 Existing Demand Income Qualified Households 19.03% 19.03% 19.03% Percentage of Total Households Renter/Owner-Occupied

66.40% 66.40% 66.40%

Number of Income Qualified Households 1,298 1,298 1,298 Percentage of Rent/Price Overburdened 35% 35% 35% Existing Income-Qualified Demand 454 454 454 Existing Demand from Household Turnover Occupied Households (2020) 7,628 7,628 7,628 Income Qualified-Percentage 19.03% 19.03% 19.03% Income Qualified Households 1,452 1,452 1,452 Percentage of Turnover from Occupied units 30% 30% 30% Existing Income-Qualified Household Turnover 435 435 435 New Income-Qualified Demand, Annually Annual Increase in Households (estimated) -8 -8 -8

Income Qualified 19.03% 19.03% 19.03% Percentage Renter/Owner-Occupied 66.40% 66.4% 66.40% New Income Qualified Households-Annually -1 -1 -1

Capture Rate Analysis New Proposed Units 15 20 30 Occupied Units in Subject Area (with vacancy rate 7%) 14 19 28 Pre-Leased/sold Units 2 5 8 Sub-Total Demand (Turnover & Growth) originating from Market Area

889 889 889

Portion originating from Area 100% 100% 100% Total Demand (Turnover & Growth) originating from Market Area

889 889 889

Number of Competitive Units available 15 15 15 Total Demand after Competition (Turnover and Growth) 874 874 874 Annual Capture Rate of Available Demand (2020) 1.60% 2.31% 3.19%

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Table 39 – Multi-Family Rental Capture Rate: City of Ottawa.

Demand Calculation 15 units 20 units 30 units Number of Households in 2020 5,054 5,054 5,054 Increase in Number of Households (2020-2025) -27 -27 -27 Estimated Households (2025) 5,027 5,027 5,027 Existing Demand Income Qualified Households 22.38% 22.38% 22.38% Percentage of Total Households Renter/Owner-Occupied

56.30% 56.30% 56.30%

Number of Income Qualified Households 637 637 637 Percentage of Rent/Price Overburdened 35% 35% 35% Existing Income-Qualified Demand 223 223 223 Existing Demand from Household Turnover Occupied Households (2020) 3,186 3,186 3,186 Income Qualified-Percentage 22.38% 22.38% 22.38% Income Qualified Households 713 713 713 Percentage of Turnover from Occupied units 30% 30% 30% Existing Income-Qualified Household Turnover 214 214 214 New Income-Qualified Demand, Annually Annual Increase in Households (estimated) -5.4 -5.4 -5.4 Income Qualified 22.38% 22.38% 22.38% Percentage Renter/Owner-Occupied 56.30% 56.30% 56.30% New Income Qualified Households-Annually -1 -1 -1


436 436 436


436 436 436


65

Table 40 – Multi-Family Rental Capture Rate: City of Wellsville.

Demand Calculation 15 units 20 units 30 units Number of Households in 2020 747 747 747 Increase in Number of Households (2020-2025) 0 0 0 Estimated Households (2025) 747 747 747 Existing Demand Income Qualified Households 14.95% 14.95% 14.95% Percentage of Total Households Renter/Owner-Occupied

73.8% 73.8% 73.8%

Number of Income Qualified Households 82 82 82 Percentage of Rent/Price Overburdened 35% 35% 35% Existing Income-Qualified Demand 29 29 29 Existing Demand from Household Turnover Occupied Households (2020) 602 602 602 Income Qualified-Percentage 14.95% 14.95% 14.95% Income Qualified Households 90 90 90 Percentage of Turnover from Occupied units 30% 30% 30% Existing Income-Qualified Household Turnover 27 27 27 New Income-Qualified Demand, Annually Annual Increase in Households (estimated) 0 0 0 Income Qualified 14.95% 14.95% 14.95% Percentage Renter/Owner-Occupied 73.8% 73.8% 73.8% New Income Qualified Households-Annually 0 0 0


56 56 56


56 56 56


66

Capture Rate percentages can also be calculated utilizing a secondary method as follows: Capture Rate = (A x B) / (C+D)

A=Stabilized level of occupancy. B=Number of units in subject area. C=Number of existing qualified households. D=Estimated new qualifying households.

Franklin County

Renter Capture Rate Calc., 15 Units: (93% x 15)/(1298-1) = 0.01076 or 1.08%



City of Ottawa




City of Wellsville

Renter Capture Rate Calc., 15 Units: (93% x 15)/(82+0) = 0.11284 or 11.28%



Based on the two previous capture rate calculations we can estimate a capture rate range for

the following market areas. We estimate this capture rate range to be:

Table 41 - Estimated Capture Rates.

Market Area Units Estimated Capture

Rate range

Franklin County 10 Units

20 Units

30 Units

1.08% to 1.60%

1.43% to 2.13%

2.15% to 3.19%

City of Ottawa 10 Units

20 Units

30 Units

2.19% to 3.31%

2.92% to 4.42%

4.39% to 6.63%

City of Wellsville 10 Units

20 Units

30 Units

11.28% to 34.15%

22.57% to 45.37%

33.85% to 68.31%

67

Indications are that multi-family rental demand within Franklin County and Ottawa appear more

attractive when compared to Wellsville. Typically industry standards consider Capture Rates to

be below 10 percent. Estimated rates for Wellsville are considerably higher, an indication that

multi-family demand is weak within that sub-market.

Penetration Rate

Penetration rates help measure the degree to which a market is either underserved or saturated.

Simply put, what percentage of the qualified market must be captured to achieve stabilized

occupancy? Different types of penetration rates give insights into various stages of a area’s

development. Net market penetration is calculated by dividing the number of available dwelling

units in the Market Area by the number of income-qualified households in the Market Area.

Available units include planned and proposed units within the area and units becoming

available due to attrition. This calculation is particularly significant when more than one project

is entering the market during the same time frame. Calculations are based on demographics

interpolated for the year the project would be available for occupancy. The following table

presents an example of a net market penetration rate calculation.

Table 42 - Market Penetration.

Planned Units in the PMA Renter For-sale Renter For-sale Renter For-sale

The Proposed Project 0 0 0 0 0

Other Planned Projects 52 20 47 6 5 6

Total Planned Projects 52 20 47 6 5 6

Total Planned Units at 93% Occupancy 48 19 44 6 5 6

Total Existing Units available due to estimated Attrition (12%) 6 2 5 1 1 1

Total Units to be Occupied (Market) 54 21 49 6 5 6

Percentage of Units to be Occupied from PMA 90% 90% 90% 90% 90% 90%

Total Units to be Occupied from the PMA (a) 49 19 44 6 5 6

Estimated number of Income-Qualifying Households 450 787 373 469 20 47

Less: Existing Inventory of Available Comparable Units -20 -35 -10 -20 -5 -10

Estimated number of Income-Qualified Households (b) 430 752 363 449 15 37

Net Market Penetration Rate (a / b) 11.34% 2.49% 12.14% 1.25% 31.25% 15.20%

Franklin Co. Ottawa Wellsville

Standard industry acceptance prefers project penetration rates below five percent and market

saturation rates above 15 percent. If the penetration rate falls above the 75th percentile, the

market may be saturated and have a more difficult time filling units. Some markets, though,

may have a higher acceptance of certain product and may support higher penetration rates.

Even with higher penetration rates, if the majority of the competitors have high occupancies with

active waiting lists, this could be an indicator of demand for additional product.

68

Market Demand Conclusion Demand Analysis for the Franklin County Market Area and sub-market areas closely parallel

population and household growth patterns in some ways. Population and households are

projected to decrease. Single-family home development and construction is minimal and only

one new project is proposed (a 32 unit income-restricted LIHTC project constructed as single-

family units). We calculated demand from three different aspects: pent-up demand; demand

from household growth; and demand from turnover. With all three scenarios under

consideration, we calculate the five year demand projection within the Franklin County Market

Area to be approximately 56 units of rental housing and 11 units of for-sale single-family

homes. Please note that these numbers are approximate and are calculated utilizing Census

and ACS population data and projections.

We anticipate the majority of growth to be derived from either the Pent-up-Demand segment or

the Demand from Household Growth. However quantifying overall demand is difficult due to

stagnating population and household figures. As previously mentioned, it should be noted that

our estimates do not take into account any qualitative variables when it comes to the selection

of housing. It is well known that qualitative elements in construction can affect housing choice. If

future housing is of the highest quality construction with amenities that cater to the lifestyles of

professionals, it is very likely that demand will be even higher than estimated.

69

6. Sample Project

This section identifies some general project assumptions for a typical multi-family project.

Information is for illustrative purposes only. Many inputs have been assumed, but overall the

information should provide a good context for development costs and constraints.

Assumptions are for a shovel ready 18 unit duplex project immediately adjacent to an existing

Low Income Housing Tax Credit (LIHTC) previously approved, constructed and placed-in-

service. These assumptions take into account the following:

Land acquisition costs of $50,000.

Development site 4 acres.

Development anticipated slab-on-grade, stick built construction.

18 units total.

Attached garage, surface and street parking.

Standard unit types: 2-bedroom and 3-bedroom units.

Tenant pay all utilities.

Project could be phased based on actual demand.

Proposed site is located within an Opportunity Zone, as well as a previously

approved RHID.

Note: Similar information for single-family development was requested, but unavailable at the

time of this report issuance.

70

Figure 24 - Sample Site Plan. Illustrative Purposed Only.

71

Figure 25 – Proposed front elevation.

72

Project SummaryThis document contains preliminary estimates only. The final proforma will be based on final input and verifications.

Document Version 1/14/20

Document Status Final Draft

Project Name Ottawa Moderate Income

Location Franklin County

Kansas

Product Type

New Construction Yes

Type Freestanding

Existing Bldg. Purchase No

Land Purchase No

Building Square Feet 20,510

Timeline

Site Identification 01/01/20

Site Contract Yes

Financing Commitment 2 current LOI's

Design Complete

Close and Start Construction 04/01/20

Certificate of Occupation 01/01/21

Lease Start 10/01/20

Site Characteristics

Purchase Price 50,000

Acreage 4.000

Square Feet 174,240

PP/Acre 12,500

PP/SF 0.2870$

Zoning R2

Utilities

Water City

Sewer City

Electric City

Development Budget

Acquisition 103,000

Soft Costs 252,000

Hard Costs 2,875,000

Developer Fee 60,000

Total Budget 3,290,000

Projections

Figure 26 - Sample Project Summary.

73

Development Budget Project: Ottawa Moderate Income

This document contains preliminary estimates only. The final proforma will be based on final input and verifications.

DEVELOPMENT COST COST % TOTAL

COSTS PER UNIT PSF - GROSS COST

1000 Land and Building Acquisition

1010 Acquisition - Land 100,000 5,556 4.88 3.0%

1020 Acquisition - Building - - 0.00 0.0%

1030 Closing Costs 3.0% 3,000 167 0.15 0.1%

1040 Other: - -

TOTAL ACQUISITION COSTS 103,000 5,722 5.02 3.1%

2000 SITE WORK AND HARD CONSTRUCTION

Total Hard Costs 2,500,000 138,888.89 121.89 0.0%

2310 Municipal Permits and Fees 24,000 1,333 1.17 0.7%

2320 Sewer & Water Fees 18,000 1,000 0.88 0.5%

2330 Builders Risk 8,000 444 0.39 0.2%

2340 Remodel Tax - - 0.00 0.0%

2350 Warranty - 0.00 0.0%

2360 Bond - - 0.00 0.0%

2370 General Conditions 5.00% 125,000 6,944 6.09 3.8%

2380 Builders Profit 3.00% 75,000 4,167 3.66 2.3%

2390 Contingency 5.00% 125,000 6,944 6.09 3.8%

Total Hard Costs + Contingency 2,875,000 159,722 140.18 11.4%

3000 Soft Costs

Professional Fees

3010 Architectural Design 25,000 1,389 1.22 0.8%

3020 Architectural Supervision - - 0.00 0.0%

3020 Civil Engineering 30,000 1,667 1.46 0.9%

3030 Environmental 1,500 83 0.07 0.0%

3030 Land Survey/Topo 5,000 278 0.24 0.2%

3040 Real Estate Attorney Fees 2,500 139 0.12 0.1%

3040 Accounting/Cost Certification/Audit 2,500 139 0.12 0.1%

3050 M/E/P - - 0.00 0.0%

3050 Consultant Fee - - 0.00 0.0%

Construction Interim & Financing Fees

3060 Bridge Loan Interest - 0.00 0.0%

3070 Bridge Loan Fee - 0.00 0.0%

3080 Construction Insurance 5,000 278 0.24 0.2%

3070 Construction Loan Interest 90,000 5,000 4.39 2.7%

3080 Origination Fees 33,000 1,833 1.61 1.0%

3080 Inspection Fees/Processing Agent - 0.00 0.0%

3090 Legal Fees - 0.00 0.0%

3090 Title & Recording 20,000 1,111 0.98 0.6%

3100 Real Estate Taxes (during construction) - 0.00 0.0%

Permanent Financing Fees

3110 Title & Recording 5,000 278 0.24 0.2%

3120 Permanent Loan Fee 25,000 1,389 1.22 0.8%

3130 Bank Due Diligence Fees 5,000 278 0.24 0.2%

Other Soft Costs

3140 Market Study - 0.00 0.0%

3150 Property Appraisal 2,500 139 0.12 0.1%

3160 Soft Cost Contingency - 0.00 0.0%

Other Soft Costs

3170 Debt Reserves - - 0.00 0.0%

3180 Operating Reserves 10,000 556 0.49 0.3%

3190 Lease Up/Marketing - - 0.00 0.0%

Total Soft Costs 262,000 14,556 12.77 7.94%

4000 Developer Fee

4010 Developer Fee - 0.00 0.0%

4020 Developer Overhead 60,000 3,333 2.93 1.8%

Total Developer Fee 60,000 3,333 2.93 1.8%

TOTAL PROJECT COST AND BASIS 3,300,000 183,333 160.90 24.2%

Total Acquisition + Hard Costs (Finance) 2,978,000 90.2%

Total Soft Cost 322,000 9.8%

Figure 27 - Sample Project: Estimated Development Budget.

74

Revenue and Expense AssumptionsThis document contains preliminary estimates only. The final proforma will be based on final input and verifications.

Unit Identification # of Units Avg SF Mo Rent $/PSF Total Mo Rent

2 BR

2 BR + 14 1,095 1,300.00$ 1.19$ 18,200.00$

3 BR + 4 1,295 1,500.00$ 1.16$ 6,000.00$

TOTAL 18 1,195 24,200.00$

Other Income Per Unit Total Monthly

Security Deposit Forfeiture/Late Fee - -

Laundry Income - -

Cable/Internet - -

Garages/Carport - -

Vending - -

Other - -

TOTAL OTHER INCOME - -

TOTAL MONTHLY INCOME 24,200

TOTAL INCOME PER YEAR 290,400

Vacancy Assumption 7.0% (20,328)

# Units 1.26 REVENUE AFTER VACANCY 270,072

Income Growth Rate After 2 yrs 3.00%

OPERATING EXPENSES Budget Cost Per Unit Cost Per Sqft Total

Maintenance and Repair 10,000 555.56 0.06 10,000

Repairs - - -

Maintenance 10,000 555.56 0.06 10,000

Custodial - - - -

Exterminating 2,000 111.11 0.01 2,000

Grounds Upkeep 10,000 555.56 0.06 10,000

Elevator Maintenance - - - -

Misc/Decorating - - - -

Subtotal 32,000 1,777.78 0.18 32,000

Administrative

Accounting/Audit 1,500 83.33 0.01 1,500

Legal - - - -

Advertising 2,000 111.11 0.01 2,000

Telephone - - - -

Payroll 5,000 277.78 0.03 5,000

Other Fees - - -

Other Fees - - -

Misc. Admin - - -

Subtotal 8,500 472.22 0.05 8,500

Utilities

Electric - - - -

Heating/Hot Water - - - -

Water/Sewer - - - -

Internet / TV - - - -

Trash Removal 3,000 166.67 0.02 3,000

Other Electric - - - -

Subtotal 3,000 166.67 0.02 3,000

Management Fee 5,000 277.78 0.03 5,000

Property Taxes 5,000 277.78 0.03 5,000

Property Insurance 3,600 200.00 0.02 3,600

Total Operating Expenses 57,100 3,172.22 0.33 57,100

Replacement Reserves 2,000 200.00 0.01 2,000

TOTAL EXPENSE 59,100 3,372.22 0.34 59,100

Expense Growth Rate after 2 yrs 2.00%

Figure 28 - Sample Project: Revenue and Expense Projections.

75

Financing Assumptions Project: Ottawa Moderate Income


Construction Loan Calculation

Interest Rate 4.25%

Origination Fee 1.00% 33,000

Term (In Months) 12

Construction Period 9

Loan Value 3,300,000

Construction Loan Amortization

Month 1 2 3 4 5 6 7 8 9 10 11 12

% Draw 5.0% 10.0% 10.0% 10.0% 10.0% 10.0% 15.0% 15.0% 5.0% 5.0% 5.0% 0.0%

Beg Bal - 165,584 497,340 830,270 1,164,379 1,499,672 1,836,152 2,339,408 2,844,446 3,020,105 3,196,385 3,373,290

Draw 165,000 330,000 330,000 330,000 330,000 330,000 495,000 495,000 165,000 165,000 165,000 -

Interest 584 1,755 2,930 4,109 5,293 6,480 8,256 10,039 10,658 11,281 11,905 11,947

End Bal 165,584 497,340 830,270 1,164,379 1,499,672 1,836,152 2,339,408 2,844,446 3,020,105 3,196,385 3,373,290 3,385,237

Permanent Loan Calculation Debt Service Coverage 1 Loan to Value 2 Loan to Cost 3

Select Sizing Requirement (Enter 1 or 2): 3 Interest Rate 4.00% Cap Rate 7.00% Total Development Cost 3,300,000

Loan Amount 2,640,000 Amortization Period 30.00 Equity Requirement 20.00% Hard Cost + Acquisition 2,978,000

Equity Requirement 660,000 Debt Coverage Ratio 1.25 Property Valuation 3,096,857 Soft Costs 322,000

Debt Service Coverage Ratio 1.25 Cash for Debt Service 173,424 Equity Requirement 20.00%

Amortization Period (Yrs.) 30

Interest Rate 4.00%

Origination Fee 1.00% Max Loan Amount 3,027,134 Max Loan Amount 2,477,486 Max Loan Amount 2,640,000

Total Mo Debt Service 12,604 Total Dev Cost 3,300,000 Total Development Cost 3,300,000 Total Development Cost 3,300,000

Total Annual Debt Service 151,245 Equity Requirement 272,866 Equity Requirement 822,514 Equity Requirement 660,000

Permanent Loan Amortization

Year 1 2 3 4 5 6 7 8 9 10 11 12

Beg Bal 2,640,000 2,593,509 2,545,123 2,494,766 2,442,358 2,387,814 2,331,049 2,271,970 2,210,485 2,146,494 2,079,897 2,010,586

Principle 46,491 48,385 50,357 52,408 54,544 56,766 59,079 61,485 63,990 66,598 69,311 72,135

Interest 104,754 102,860 100,888 98,837 96,702 94,479 92,167 89,760 87,255 84,648 81,934 79,110

Payment 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245

End Bal 2,593,509 2,545,123 2,494,766 2,442,358 2,387,814 2,331,049 2,271,970 2,210,485 2,146,494 2,079,897 2,010,586 1,938,451

Other Assumptions

Revenue Growth Rate 3.00%

Expense Growth Rate 2.00%

Figure 29 - Sample Project: Financing Assumptions.

76

Profit and Loss Assumptions Project: Ottawa Moderate Income


2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

Construction

Revenue

Lease Payment 290,400 299,112 308,085 317,328 326,848 336,653 346,753 357,155 367,870 378,906

Other Income - - - - - - - - - -

Vacancy 5.0% (14,520) (14,956) (15,404) (15,866) (16,342) (16,833) (17,338) (17,858) (18,394) (18,945)

TOTAL Net Revenue 275,880 284,156 292,681 301,462 310,505 319,821 329,415 339,298 349,477 359,961

Expenses

Maintenance and Repair 32,000 32,640 33,293 33,959 34,638 35,331 36,037 36,758 37,493 38,243

Administrative 8,500 8,670 8,843 9,020 9,201 9,385 9,572 9,764 9,959 10,158

Utilities 3,000 3,060 3,121 3,184 3,247 3,312 3,378 3,446 3,515 3,585

Management Fee 5,000 5,100 5,202 5,306 5,412 5,520 5,631 5,743 5,858 5,975

Property Taxes 5,000 5,100 5,202 5,306 5,412 5,520 5,631 5,743 5,858 5,975

Property Insurance 3,600 3,672 3,745 3,820 3,897 3,975 4,054 4,135 4,218 4,302

Replacement Reserves 2,000 2,040 2,081 2,122 2,165 2,208 2,252 2,297 2,343 2,390

Other - - - - - - - - - -

TOTAL Expenses 59,100 60,282 61,488 62,717 63,972 65,251 66,556 67,887 69,245 70,630

NET Operating Income (NOI) 216,780 223,874 231,193 238,744 246,534 254,569 262,859 271,410 280,231 289,331

Debt Service 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245

NOI After Debt Service 65,535 72,629 79,948 87,499 95,288 103,324 111,614 120,165 128,986 138,086

NET Cash Flow to Owner 65,535 72,629 79,948 87,499 95,288 103,324 111,614 120,165 128,986 138,086

Cumulative Cash flow 65,535 138,164 218,112 305,611 400,900 504,224 615,838 736,003 864,989 1,003,075

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Revenue Expense NOI

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2023

2025

2027

2029

2031Net Cash Flow Cumulative Cash Flow

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

Est Value Loan Bal Equity

Figure 30 - Sample Project: P&L Assumptions.

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Investor Analysis Detail Project: Ottawa Moderate Income


2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

1 Cash Flow Analysis Construction

2 Gross Revenue 290,400 299,112 308,085 317,328 326,848 336,653 346,753 357,155 367,870 378,9063 Expenses 59,100 60,282 61,488 62,717 63,972 65,251 66,556 67,887 69,245 70,6304 Net Operating Income (NOI) 231,300 238,830 246,598 254,611 262,876 271,402 280,197 289,268 298,625 308,2765 Debt Service 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,245 151,2456 Debt Principle 2,593,509 2,545,123 2,494,766 2,442,358 2,387,814 2,331,049 2,271,970 2,210,485 2,146,494 2,079,8977 Net Cash Flow 80,055 87,585 95,353 103,365 111,631 120,157 128,951 138,023 147,380 157,0318

9 Retainage 0.00% 0 0 0 0 0 0 0 0 0 010 Net Cash Flow Available for Distribution 80,055 87,585 95,353 103,365 111,631 120,157 128,951 138,023 147,380 157,03111

12 Investor Carried Interest 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00%13 Initial percentage of the deal 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00%14 After investment is paid back 50.00% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a15

16 Waterfall Distribution of Cash17 Investor(s): 660,000 660,000 627,636 587,695 539,622 482,832 416,703 340,579 253,766 155,528 45,09018 Minimum ROI Rate 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%19 Minimum ROI Payment 39,600 37,658 35,262 32,377 28,970 25,002 20,435 15,226 9,332 2,70520 Other Distribution 0.00% 0 0 0 0 0 0 0 0 0 021

22 Carried Interest Remaining in the Waterfall 40,455 49,927 60,091 70,988 82,661 95,155 108,517 122,797 138,048 154,32623 Investor(s) 32,364 39,941 48,073 56,790 66,129 76,124 86,813 98,238 110,438 123,46024

25 Sale or Refi Event Sale/Refi26 Estimated Value CAP Rate: 7.00% 3,304,286 3,411,857 3,522,825 3,637,293 3,755,372 3,877,172 4,002,808 4,132,401 4,266,071 4,403,94527

28 3,523,15629 Potential Year of Event: 2030 10 Corresponding Sale Price: 4,403,94530 Debt at Sale: 2,079,89731 Equity at Sale: 2,324,04932 Distribution Payment from Sale, Refi, or Other Refinance Adjustor: 272,866 6.20% Based on DCR/NOI33 Investor(s) 80.00% 1,605,714 Less Closing Costs: 44,039 1.00%34 PFDG 20.00% 401,42935 Ownership Group Distribution: 2,007,14336

37 Equity Investor(s) Potential IRR: 19.4%38

39 Year of Sale/Refi >>> TOTAL 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 203040

41 Year of Sale or Refi Event: 203042 Construction

43 Initial Investment -660,000 -660,00044 Interest Payments 246,567 39,600 37,658 35,262 32,377 28,970 25,002 20,435 15,226 9,332 2,70545 Carried Interest 738,371 0 32,364 39,941 48,073 56,790 66,129 76,124 86,813 98,238 110,438 123,46046 Return of Capital 0 0 0 0 0 0 0 0 0 0 0 047 Sale /Refi Proceeds 1,605,714 0 0 0 0 0 0 0 0 0 0 1,605,71448 Pre-Tax Totals 1,930,652 -660,000 71,964 77,600 83,334 89,168 95,099 101,126 107,248 113,463 119,770 1,731,88049 Pre-Tax IRR 19.36%50 Cash on Cash Return 10.90% 11.76% 12.63% 13.51% 14.41% 15.32% 16.25% 17.19% 18.15% 262.41%

Figure 31 - Sample Project: Investor Analysis Summary.

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7. Opportunities

A number of different opportunities have come to light as a result of our analysis, stakeholder

interviews and overall market growth rates. These include;

Multi-family rentals (market-rate & age restricted). Based on our analysis there was a

clear demand for added multi-family market-rate rentals within the Franklin County

Market Area and sub-market areas. All competitive multi-family rentals are at or near

capacity, several with waiting lists. A significant number of stakeholders interviewed also

indicated a continued need for age-restricted (senior, 55+ years of age) maintenance

provided housing. Presently there is little to no product of this type within the market and

numerous stakeholders indicated there could be a demand for this product type.

Projections show an increase in this cohort of the population, and a move to

maintenance provided housing from existing dwelling units might provide a “move-up”

opportunity for other households within the market to “back-fill” these homes.

Multi-family rentals (income-restricted). Our analysis, along with previous analysis

completed for the Ottawa and Franklin County markets indicate a clear need for

additional income-restricted housing. Income restricted households focused on 40%

Average Median Income (AMI) and 60% AMI households within Franklin County.

Income guidelines for each were assumed to be:

40% AMI Households: $22,760 to $28,440.

60% AMI Households: $34,140 to $42,660.

Analysis indicated that approximately 495 households were income eligible renter households. Demand for 40%-60% AMI households within Franklin County were estimated to be approximately 637 units. We estimate that the income-restricted housing market within the market area is currently being unfulfilled. We definitely see an opportunity to develop and construct additional income-restricted housing units in Franklin County. This is substantiated by waiting list data from ECKAN also included in this report.

For-sale, Owner-Occupied Housing. Based on feedback from the local REALTOR®

community, there is currently a lack of supply within the Franklin County/Ottawa markets.

Our analysis somewhat confirms this, but in our opinion this is more of a stabilization.

Actual closings are up and sales prices have increased from 2019 to 2020. However,

days-on-market and available supply have decreased. Our demand analysis shows a

need for an additional 49 housing units over the next five years (or 10 per year).

However, this is based solely on Census and ACS data and projections. There is a

chance that given the right housing alternative, that demand number could be greater.

79

Exhibit A: Demographic Data

109

Exhibit B: Development Initiatives Company Profile

119

Exhibit C Certification I certify that, to the best of my knowledge and belief…

1. The statements of fact contained in this report are true and correct.

2. The reported analysis, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial and unbiased professional analysis, opinions and conclusions.

3. I have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved.

4. Development Initiatives and none if its employees have no present or prospective interest in the property that is the subject of this report, and I have no personal interest with respect to the parties involved.

5. Development Initiatives and none of its employees has no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.

6. Our compensation for the preparation of this study is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use of, this report.

7. Development Initiatives has personally inspected the market area, including various proposed redevelopment projects and each of the competitive properties.

James Potter, aicp, leed ga development initiatives

120

Exhibit C Assumptions and Limiting Conditions This demand analysis and associated economic analysis is subject to the following limited conditions and assumptions:

1. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are Development Initiatives’ unbiased professional analyses, opinions, and conclusions.

2. Information provided and utilized by various secondary sources is assumed to be accurate. Development Initiatives cannot guarantee information obtained from secondary sources.

3. In the formulation of this analysis, the consultant has relied extensively upon data which was provided by the client. Such information may have included; legal description, building plans, title policy and/or survey. All information supplied by the client is assumed to be correct and the consultant assumes no responsibility for legal matters, and renders no opinion of property title, which is assumed to be good and merchantable.

4. All exhibits incorporated within this report are strictly for the purposes of assisting the reader in visualizing the property. The Consultant has made no property survey and assumes no liability concerning such matters. Additionally, it is assumed that there is no property encroachment issues or trespass issues unless noted within the report.

5. This analysis report is made as of a certain date. Due to the principles of change and the anticipation of value, the value estimate is only valid as of the date of the report or valuation. The nature of real estate development is an unpredictable and often tumultuous. In particular, the natural course of residential development is difficult to predict and forecast. Development Initiatives deems our projections as reasonable considering the current and obtained information.

6. Development Initiatives has considered and analyzed the economic conditions in the market areas, and we have considered these conditions while making our projections. However, it should be understood that fluctuations in local, regional and/or national economies could have substantial effects on our projections.

7. The possession of this analysis report shall adhere to all applicable copyright statutes which are in effect as of the date of issuance.

8. The Consultant is not required to give testimony or attendance in legal or other proceedings relative to the data and analysis derived within this document without the

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specific written notification of the Client.

9. The opinions contained within this analysis report are those of the Consultant and no responsibility is accepted by the Consultant for the results of actions taken by others based upon the information contained within said report.

10. Our analyses, opinions and conclusions were prepared in conformance with the requirements and guidelines of the Code of Professional Ethics and Standards of the American Institute of Certified Planners.

11. Acceptance of and/or use of this analysis report constitutes acceptance of all assumptions listed within the document and the previously mentioned conditions.

residential demand analysis

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