News

The Michigan State Housing Development Authority (MSHDA) announced the submission deadline for its first round of competitive funding for 2013 Low Income Housing Tax Credits as August 15, 2012 at 5:00 p.m.

The Colorado Housing and Finance Authority (CHFA) will be hosting two public hearings to receive input from the public for developing its QAP for 2013.

The Pennsylvania Housing Finance Agency (PHFA) released a draft of its 2013 Qualified Allocation Plan (QAP). Notably, PHFA plans to accept applications in two cycles.

The National Council of Housing Market Analysts (NCHMA) has adopted a new white paper that offers guidance and methodologies for providing a functional scope of work as a component of multifamily rental housing market studies.

The National Council of Housing Market Analysts (NCHMA) has separate definitions of overall market demand and project specific demand Market demand is the total number of households in a defined market area that would potentially move into any new or renovated housing units. Market demand is not project specific and covers all renter households and income levels. Components of demand vary and can include household growth; turnover, substandard dwelling units, rent over-burdened households, and demolished housing units.

Several important differences between rural and urban market studies include market area definitions, evaluation of comparables, and consideration of demand. On the surface, it seems like defining a rural market area might be purely a matter of opinion, but well-established analytic tools are available to assist market analysts. Evaluating comparables, understanding how the proposal would fit into the market, and understanding what the demand calculations really mean are more a matter of experience.

The definition of a market area sets the context and tone of the entire market study. While a somewhat subjective judgment, a market area’s size and density has a profound impact on an analysis in terms of understanding demographic trends, demand estimates and the competitive environment.

Comparable properties are used for several purposes within a market study. They are used to help evaluate the market, they are used to evaluate the subject’s position within a market, and they are used to determine market rents. The more similar the comparable properties are to the proposed property, the more reliable the conclusions that may be drawn. The purpose of this paper is to investigate the concepts involved in selecting comparable properties, and to identify some of the ways comparable properties are used in a study.

A market analysis for income properties, that is that includes rental units, requires an estimate of market rent. Depending on the purpose of the study, it could be an average market rent for all units in a defined market area, a weighted average market rent for all units, or for various unit types, ie., studios, one or two bedrooms, etc.

An estimate of demand is a measure of the number of income-qualified households with the propensity to move to the subject property. Demand estimates can vary significantly based on the components used and the variables applied to measure propensity to move. The components of demand are often based on the goal of the report’s end-user. The goal of NCHMA’s demand model is to provide a base estimate of income-qualified renter households. Refinements to this demand model can be made to address a more discrete target population on a case-by-case basis. The intention of this demand model is to provide a consistent methodology for comparison purposes.

The rate that tenants move from one unit to another affects the length of time a project needs to achieve full occupancy. It also influences a project’s annual revenues and operating expenses. This paper identifies factors to be considered, highlights red flags and recommends best practices for analyzing turnover.

Market analysis for age- and income-restricted rental housing, referenced here as “senior housing market analysis”, differs significantly from the analysis of general occupancy rental communities. The tendencies, incomes, needs and wants of senior renter households differ, at times significantly, from younger and/or family households. The demand for age-restricted rental housing should be evaluated with an understanding of these differences. This white paper identifies specific factors to be considered in conducting senior housing market analysis, proposes best practices, and suggests red flags that warrant particular attention when encountered in this type of study.