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Chapter 06. Housing Scandia 2040 Comprehensive Plan Housing Prepared by: Bolton & Menk, Inc. Page 44 VI. HOUSING As part of the 2040 Comprehensive Plan update, the Metropolitan Council provides housing estimates for each community in the seven-county metropolitan area, based on the 2010 Census and the number of permitted units between 2010 and 2015. However, this level of analysis is only meant to provide a framework, and typically works best in larger communities. Given the small size of the City of Scandia, it can be difficult to obtain accurate data for housing units. To provide a more accurate picture of current housing conditions in Scandia, data for occupied housing units from the 2011-2015 American Community Survey (ACS) was used to provide a baseline for current housing conditions in Scandia. This was determined to be the most appropriate data to use, as it most closely aligned with Washington County property assessments in Scandia and focused solely on occupied units. There are a number of seasonal dwelling units in Scandia (i.e. cabins), but there is no consensus between data sources (US Census/ACS, Washington County, and the Metropolitan Council) as to how many seasonal “vacant” units there are in Scandia. This can be misleading, as seasonal units are counted as “vacant” even though they are owned and occupied for varying lengths throughout the year. Based on community experiences, the City of Scandia has very low to no vacancy rates for permanently occupied units. To help guide effective, community focused policies pertaining to housing in the City of Scandia, the city presumes there to be low/no vacancies within city limits. Seasonal housing units may or may not become permanently occupied in the future; this is the decision of the property owner, not the city. The City of Scandia will plan for and consider policies that do not assume any conversion of seasonal units into permanent residences, meaning development or redevelopment is assumed to be needed to accommodate all future households. This will ensure that enough land is reserved for residential uses in areas that are close to or are connected to existing residential areas and service, supporting orderly residential growth. Any conversion of seasonal units to permanent housing would ultimately decrease the number of new housing units and amount of land needed in Scandia to accommodate projected population growth. Housing Goals and Objectives Goal: Support a variety of housing types and densities for residential uses in and surrounding the Village Center and other areas where appropriate. Objectives: • Encourage residential development in areas where sufficient infrastructure capacity can be provided. • Offer density bonuses for development providing senior housing, lifecycle housing, or work with property owners on the transfer of development rights. Goal: Expand life-cycle housing opportunities for residents at all points of life. Objectives: • Encourage residential buildings to be designed for accessibility in order to meet the needs of current and future owners. • Continue to work with the Washington County Community Development Agency to identify opportunities for providing additional affordable senior housing in the Village Center. Goal: Encourage a range of housing choices that fit with the character of the community Objectives: • Review current development ordinance for districts to allow smaller lot sizes or Scandia 2040 Comprehensive Plan Housing Prepared by: Bolton & Menk, Inc. Page 45 higher densities while respecting the rural character and land uses. • Encourage Open-Space Cluster housing development and Lot Averaging development. • Continue to monitor the general condition of the housing stock, with a special focus on the physical condition of the older housing. Existing Housing As of 2015, Scandia contained approximately 1,518 occupied-housing units, 98% of which are single family and 2% or which are multi-family. About 90% of the households (1,367 units) in Scandia are owner-occupied, compared to 10% renter-occupied units (151 units). About 37% of homes in Scandia are affordable to households with incomes at or below 80% Area Median Income (AMI). However, about 30% of households in Scandia experience cost burden. There are 40 subsidized units in Scandia, all of which are designated as senior housing. These and other housing conditions are outlined in Tables VI-A and VI-B. Table VI-A – Housing Conditions Housing Units Number of Units Percent of Total Total Occupied Housing Units 1,518 100% – Owner Occupied 1,367 90% – Rental 151 10% Single Family Homes 1,488 98% Multi-family Homes 30 2% Publicly Subsidized – Senior Housing 40 3% – Housing for People with Disabilities 0 0% – All Other Publicly Subsidized Units 0 0% Affordable Housing Housing Units affordable to households with incomes at or below 30% Area Median Income (AMI) 16 1% Housing Units affordable to households with incomes between 31 and 50% Area Median Income (AMI) 137 9% Housing Units affordable to households with incomes between 51 and 80% Area Median Income (AMI) 416 27% Source: Metropolitan Council Tabulation of American Community Survey Data, 2011-2015 Table VI-B - Households Experiencing Cost Burden Existing households experiencing housing cost burden with incomes below 30% AMI 83 5% Existing households experiencing housing cost burden with incomes between 31 and 50% AMI 114 8% Existing households experiencing housing cost burden with incomes between 51 and 80% AMI 22 1% Source: Metropolitan Council Tabulation of American Community Survey Data, 2011-2015 Scandia 2040 Comprehensive Plan Housing Prepared by: Bolton & Menk, Inc. Page 46 Housing affordability is an issue every community needs to address. In Scandia, about 30% of all households spend 30% or more of the household income on housing and are considered to experience housing cost burden (shown in Figure VI-A). About half of all cost-burdened households have incomes at or below 80% AMI; the other half have incomes higher than 80% AMI. Housing affordability has become a growing concern in Scandia, detailed in Appendices D and E. Only 15% of all households experienced housing cost burden in 1990; in 2015, that percentage doubled to 30%. High housing costs can make it difficult for young families to move into the community or for older residents on fixed-incomes to age in their community. Figure VI-A – Housing Cost Burden Source: US Census and American Community Survey 1. Housing Units Housing in Scandia is predominantly single family detached, which is characteristic of rural communities. Approximately 94% of the occupied housing stock in Scandia are detached single family, compared to 4% attached single family residences. There is a limited amount of multifamily housing in Scandia. Multifamily units make up roughly 2% of the city’s housing stock with 0.6% of being duplexes, triplexes, and quads and 1.4% being larger, five units or more buildings. These data are noted in Table VI-C. Table VI-C – Household Type Household Type Units Percentage Single-Family Detached 1,428 94% Townhomes (single-family attached) 59 4% Duplex, triplex and quad 9 0.6% Multifamily (5 units or more) 21 1.4% Total Households 1,518 Source: American Community Survey, 2011-2015 As shown in Figure VI-B, over 70% of the city’s housing stock has been built since 1970 with almost a quarter of all units built between 1970 and 1979. About a third of Scandia’s housing units were built in the last 25 years (1990-2015). The proportion of the city’s 15%16% 27%30% 14%15% 25% 30%33% 28% 48% 27% 0% 10% 20% 30% 40% 50% 60% Census 1990 Census 2000 ACS 2006-2010 ACS 2011-2015 Percent of Households Experiencing Cost Burden in Scandia All households experiencing cost burden Owners experiencing cost burden Renter households experiencing cost burden Scandia 2040 Comprehensive Plan Housing Prepared by: Bolton & Menk, Inc. Page 47 oldest housing units built in 1939 or earlier, has decreased from 19% of the city’s total stock in 2000 to 12% in 2015. Figure VI-B – Age of Housing Source: American Community Survey, 2011-2015 There has been little housing development in Scandia since 2010, though the pace of development has increased in 2015 and 2016, shown in Figure III-C. Most development since 2000 has been in single family, detached homes. Figure VI-C – Residential Building Permits Source: Metropolitan Council 2. Housing Demographics Table VI-D illustrates the distribution of owner-occupied and renter-occupied households in Scandia by age. The largest cohort of owners is the 55 to 64-year old range, making up about 34% of all homeowners in Scandia. This cohort also makes up the largest share of renter households, representing 42% of all renters. About 60% of all households in Scandia are owned or rented by residents age 55 or older. In contrast, approximately 6% of all 0% 5% 10% 15% 20% 25% Year Structure Built by Tenure Owner Renter 0 20 40 60 80 100 120 140 160 2000-2004 2005-2009 2010-2014 2015-2016 New Housing Units Permitted by Scandia Duplex, triplex and quad Multifamily (5 units or more) Single-Family Detached Townhomes (single-family attached) Scandia 2040 Comprehensive Plan Housing Prepared by: Bolton & Menk, Inc. Page 48 households are headed by persons under the age of 35, and about 20% of all household are headed by persons under the age of 45. Table VI-D – Age Distribution of Owners and Renters Householder Age Owners Renters 15-24 10 0 25-34 53 28 35-44 132 23 45-54 342 20 55-64 448 63 65-74 311 17 75 or Older 71 0 Total Households 1,367 151 Source: American Community Survey, 2011-2015 Scandia has a high rate of homeownership; 90% of all housing units are owner occupied. Figure VI-D shows historical homeownership rates in the city; the current homeownership rate in Scandia is estimated to be the lowest rate the city has seen in 25 years. Figure VI-D – Housing Ownership Source: US Census, American Community Survey 3. Housing Values Housing values in Scandia are higher compared to other areas in the region. Scandia has higher values than both Forest Lake and Washington County, as shown in Figure III-E. Scandia’s median housing value is $293,700, compared to $230,100 in Forest Lake and the County average of $243,600. About 13% of the city’s housing market is valued below $200,000 while about 23% are valued above $400,000. While high home values can be beneficial to homeowners and the city, they can price out young families, lower-wage workers like teachers and health care assistants, and seniors on fixed-incomes. 94%94%92%90% 6%6%8%10% 0% 20% 40% 60% 80% 100% 1990 2000 2010 2015 Housing Tenure Renter Owner Scandia 2040 Comprehensive Plan Housing Prepared by: Bolton & Menk, Inc. Page 49 Figure VI-E – Housing Values 0% 5% 10% 15% 20% 25%Percentage of UnitsForest Lake Scandia Washington County Source: Metropolitan Council Tabulation of American Community Survey Data. Scandia 2040 Comprehensive Plan Housing Prepared by: Bolton & Menk, Inc. Page 50 Figure VI-F - Owner Occupied Units by Value Scandia 2040 Comprehensive Plan Housing Prepared by: Bolton & Menk, Inc. Page 51 Projected Housing Needs The City of Scandia is anticipated to see modest population and household growth by 2040. Exact housing needs and demand for new housing development will be influenced by the actual population growth and average household size. The amount of land needed to accommodate new housing units will be influenced by several factors, including the desire for accessory dwelling units and the location of new units. Most of the city’s housing growth is anticipated to take place in the Village Neighborhood designation, which permits higher density residential development than General Rural or Agricultural. Accessory dwelling units on existing lots can also accommodate the city’s projected population growth without greatly increasing the demand for developable land. Figure VI-G – Household Projections Appendix A details the housing needs and gaps identified by respondents to the 2017 Community Survey. Residential development was noted as one of the top priorities for the city for the next 20 years. Most survey respondents expressed a desire for mid-range, single-family homes on larger lots. When asked to identify gaps, the most common response was about the lack of senior or assisted living (45% of survey responses). As noted in Appendix B, focus group participants also expressed a desire for housing north of Highway 97, north/west of the current village center and around Big Marine Lake. There was interest in senior housing options, which ranged from care facilities to varying house sizes (smaller single family, townhomes) and lot configurations, such as accessory dwelling units. To accommodate projected housing needs, the Future Land Use plan expands the Village Neighborhood designation north and west, a reflection of both public comments and orderly, contiguous residential expansion. This designation accommodates smaller homes and smaller lot sizes, blending into the historical character of the Village Center. The zoning ordinance also includes density bonuses for the development of life-cycle housing, where the housing units are designated for residents age 55 or older or are affordable to households with incomes less than 120% of AMI. Large lot, single family homes are the primary housing type permitted in General Rural, Agricultural Core, and the St. Croix River zoning districts to preserve the city’s rural character. 408 851 1,060 1,294 1,498 1,518 1,700 1,910 2,100 1970 1980 1990 2000 2010 2020 2030 2040 Household Projections in Scandia Number of Households Scandia 2040 Comprehensive Plan Housing Prepared by: Bolton & Menk, Inc. Page 52 Affordable Housing Allocation The Affordable Housing Allocation reflects the region’s forecasted population that will need affordable housing. According to the Metropolitan Council’s affordable housing allocation, Scandia’s share of affordable housing need is zero units, noted in Table VI-E. Table VI-E – Affordable Housing Allocation At or below 30 AMI 0 From 31 to 50 AMI 0 From 51 to 80 AMI 0 Total Number 0 While the City of Scandia does not have an affordable housing allocation, residents have expressed a concern about the lack of affordable housing in the city. High housing costs were identified in the Community Survey as one of the top three challenges facing Scandia. About 37% of existing housing units are affordable to households with incomes at or below 80% AMI. As mentioned in the previous section, Scandia offers a density bonus for the development of affordable housing (up to 120% AMI) in the Village Neighborhood zoning district. The City will work with developers and Washington County to inform residents of available programs and identify opportunities for implementation. Housing Implementation Plan There are a variety tools that aid the development of affordable housing. Table VI-F lists several of the tools available to the City of Scandia. The City of Scandia will consider the following tools on a case-by-case basis, as development occurs. Scandia 2040 Comprehensive Plan Housing Prepared by: Bolton & Menk, Inc. Page 53 Table VI-F – Housing Implementation Housing Goal/Need Available Tool Opportunity and Sequence of Use Potential Partners Multi- Generational Community Living Start-Up Loan Program Assist first-time homebuyers with financing a home purchase and down payment assistance through a dedicated loan program Minnesota Housing Home Improvement Loans Assist homeowners in financing home maintenance projects to accommodating a physical disability Washington County CDA, Minnesota Housing ADU Ordinance The City will continue to support ordinances permitting the construction of accessory dwelling units or guest homes in specific zoning districts Planning Commission and City Council Planned Unit Development (PUD) The City would consider a PUD application for senior housing in the Village Mixed Use district. Planning Commission and City Council Program or Framework The City will work with groups and stakeholders to develop guiding principles, frameworks, and action plans to consider and incorporate the needs of older residents into development decisions Senior advocacy groups or networks, residents Maintaining Existing Housing Units Home Improvement Loans Assist homeowners in financing home maintenance projects like roof repair, plumbing and electrical work, accommodating a physical disability, or select energy efficiency improvement projects Washington County CDA, Minnesota Housing Subsurface Sewage Treatment System Repair Grant/Loan Assist homeowners with noncompliant subsurface sewage treatment systems Washington County New Housing Construction Tax Increment Financing The City would consider the creation of a TIF district to encourage development of new housing units, redevelopment and/or infrastructure improvements affordable at or below 80% AMI Washington County CDA Site Assembly The City would consider assembling a site for senior housing. This may include acquiring and holding land as well as sub-allocating such monies to a qualified developer approved by the City Council. City Council/Developer Housing Bonds The City would consider housing bonds to support the new construction of affordable and/or senior housing affordable at or below 80% AMI. Washington County CDA Tax Abatement The City would consider tax abatement to support the new construction of affordable Washington County CDA Scandia 2040 Comprehensive Plan Housing Prepared by: Bolton & Menk, Inc. Page 54 Table VI-F – Housing Implementation and/or senior housing affordable at or below 80% AMI. MN Housing Consolidated RFP The City would consider supporting an application to support the new construction of senior housing. Washington County CDA, Minnesota Housing GROW Fund Provide gap financing for new or redevelopment projects affordable to owner or renter households at or below 60% AMI Washington County CDA Maintaining Homeownership Home Buyer Education The City will consider partnering with the CDA and other agencies to offer resources to homeowners pre- and post-purchase. Washington County CDA Homeowner Counseling The City will consider partnering with the CDA and other agencies to offer counseling and foreclosure prevention to homeowners. Washington County CDA Community Land Trust The City will consider supporting the addition of appropriate single-family homes into the Two Rivers Community Land Trust to increase affordable housing options. Washington County CDA Other City Ordinances The City will review zoning and subdivision ordinances to identify the potential opportunities for cluster development and flexible development that will encourage affordable housing. Planning Commission and City Council The City will review its zoning and subdivision ordinances to identify any regulations that inhibit the housing priorities in this document. This effort is slated for completion by 2020. Local Fair Housing Policy The City will consider developing a Fair Housing Policy.