2023 Year End Report REV 5-14-24 r'
H' RA
HUTCHINSON HOUSING AN
REDEVELOPMENT AUTHORITY
2023 Annual
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PARK TOWERS
CITY CENTER OFFICE 0 APARTMENT' S
111 Hassan Street SE 133 Third Ave. SW
Hutchinson, MN 55350 Hutchinson, MN 55350
(320) 234-4251 (320) 587-2168
Fax (320) 234-4240 FAX (320) 587-3748
Website a,buutbisbf° a,
Hutchinson HRA 2023 Annual Report Page 1 of 9
ExecutiveSummary:
The Hutchinson HRA (HHRA) is a public body politic formed by the Hutchinson City Council in
1969 according to MN State Statue. The HHRA was created to address a shortage of housing for
low to moderate income families and to address substandard areas in Hutchinson. The HHRA owns
and manages Park Towers Apartments. In addition, the HHRA administered other housing rehab
programs throughout the city to preserve housing stock and improve neighborhoods. Yearly the
HHRA collects housing data to help identify changing community housing needs and then
administer/develop housing programs that will provide a positive impact on the community.
2023 Hutchinson Yearly Comparisons:
• Low Apartment Vacancy Rates
• Median Home Sale of$246,250
• Home mortgage interest rates hit a 2-decade high
• 20 Single-family new construction units
• 18 Multifamily new construction units (started construction)
• 4 Foreclosures
Summary of HHRA Activities and Accomplishments:
Park Towers:
• 16 move-ins, and 13 move-outs in 2023
• Updated/Repaired/Installed: updated the security camera system, replaced the laundry room
exhaust motor, multiple boiler system repairs, 71h floor Fireside room Mini Split replacement,
repaired water softener system, installed a mail room parcel cabinet system, installed vinyl
planking in 11 units, installed water saver power flush toilets in 11 units, replaced 1 H/C unit
range, replaced 1 refrigerator, replaced 2 A/C units, installed 57 Federal Pacific Electric
Panels
City Center:
• 4 City Home Improvement Program Grants (TIF) (5 approved in 2022 but completed in 2023)
• Began the 1831 Island View Circle Home Move Project: CUP process, multiple contractor
bidding, awards of contracts, applied for City permits, Notice to Proceeds issued,
construction started in late fall 2023.
HHRA Priorities:
• Staff training
• Marketing of available HHRA programs
• Implement HUD Multifamily, Section 8 Project Based Rental Assistance Program (PBRA)
policy changes at Park Towers
• Continue with asset preservation and energy conservation improvements at Park Towers
• Continue to administer City Home Improvement Program Grants and Minnesota Housing's
Home Improvement Programs
• Explore the availability of housing programs and projects that will address identified housing
needs of Hutchinson
Hutchinson HRA 2023 Annual Report Page 2 of 9
Hutchinson ea.rl.y "���ni���, �, ��,��,
Rental Data from the December 2023 Apartment Survey:
Market Rate General Occupancy Vacancy Rate
16.00% ..... ......... ......... ......... .....14.90%
14.00/ I .... .... .... .... .... .... .... .... ....
12.00% ^` 10.31%
10.00% """9.0094 9.00% 7.54% 8.38%
8.00% ... .... .... .... .... .... ....
6.00% 4 0 4.07% , ufts4i,
® 3.60%
2.00% 2 12%� .851°76%1.7 /° °1��IIYYIYYIY8YY 3%
4.00/ I .. a 11 �Nlllllll f)°/1.00%
0.00%
OL O3 O� O< OfO 01 00 0o y0 y� ,,1, y'' yt. ti� do tit yR' do
LO y0 ti0 ti0 y0 LO y0 ti0 ti0 y0 LO ti0 y0 LO LO ti0 ti0 y0 -& 110 ti0
*July/Aug.2022 Survey of 30 General Occupancy properties of 12 or more units.
Hutchinson 2023 Vacancy Rates Average Hutchinson
8.95/°
Market Rate General Rents*
10.00% Occupancy(860 units) Studio $486
7.07%
1 Bedroom $731
°
°° IIIIIIII Subsidized (Non Market 2 Bedroom $866
/„ 3.90% Rate)General Occu Occupancy v 3 Bedroom $983
4.00%
(283 units) * October 2023 Survey.
2.00% IIIIIIII Senior Rental Housing
Market Rate (190 units)
0.00%
2023 Vacancy Rates
Home Resales Data from McLeod County Assessor's Office:
Home Resales
City of Hutchinson
2011 through 2023
Year 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Price Range No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct.
Under$50,000 2 0.8% 2 0.7% 4 1.1% 7 2.0% 1 0.3% 7 1.9% 9 2.7% 10 3.0% 15 4.2% 18 5.7% 29 10.2% 44 15.3% 30 12.4%
$50,000 to$74,999 3 1.1% 4 1.3% 5 1.3% 10 2.9% 5 1.6% 11 3.1% 10 3.0% 15 4.6% 26 7.3% 17 5.4% 35 12.3% 33 11.5% 31 12.8%
$75,000 to$99,999 11 4.2% 11 3.7% 13 3.5% 10 2.9% 8 2.5% 15 4.2% 22 6.6% 38 11.6% 39 11.0% 34 10.8% 36 12.7% 62 21.6% 46 19.0%
$100,000 to$124,999 6 2.3% 7 2.3% 10 2.7% 19 5.5% 27 8.6% 46 12.8% 46 13.8% 54 16.4% 58 16.3% 59 18.7% 49 17.3% 52 18.1% 48 19.8%
$125'000 to$149,999 7 2.7% 12 4.0% 29 7.8% 49 14.4% 50 15.9% 67 18.7% 70 21.0% 76 23.1% 68 19.1% 68 21.5% 59 20.8% 41 14.3% 33 13.6%
$150,000 to$174,999 12 4.5% 21 7.0% 34 9.1% 51 14.9% 64 20.3% 70 19.5% 73 21.9% 55 16.7% 60 16.8% 51 16.1% 29 10.2% 16 5.6% 22 9.2%
$175,000 to 199,999 22 8.3% 30 10.0% 58 15.5% 55 16.0% 59 18.7% 55 15.3% 39 11.8% 23 7.0% 27 7.6% 21 6.6% 16 5.6% 13 4.5% 9 3.7%
$2011 11 201 76.1% 212 70.9% 220 59.0% 142 41.4% 101 32.1% 88 24.5% 64 19.2% 58 17.6% 63 17.7% 48 15.2% 31 10.9% 26 9.1% 23 9.5%
Total 264 100.0% 299 100.0% 373 100.0% 343 100.0% 315 100.0% 359 100.0% 333 100.0% 329 100.0% 356 100.0% 316 100.0% 284 100.0%12871100.0%12421100.0%
Median 1 $246,250 1 $244,000 1 $215,400 1 $186,000 1 $175,000 1 $161,900 1 $153,500 1 $140,000 1 $138,750 1 $133,500 1 $121,000 1 $101,400 1 $109,950
Sources: McLeod County Assessor's Office
Hutchinson HRA 2023 Annual Report Page 3 of 9
2023 Q8ut1hinson Home Sale Price Ranges
i.g
iiiiiii W-icker$50,000:-.8C➢r>
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l
2.71 `�11111 50,000 kra 74,999:- .b...b.r'r>
r 11��1 m$75,000 Lo 99,999 '=4.2%
$1 00,000 Lo 1 24,999 =2.3Cy�>
$1.23,000 Lo 1.49,999 '=2.7%
r
$1.50,000 Lo 1.74,99 -4.rzz%
®$1.75,000 Lo 1.00,000.=8.:3%
mms�V�6!6ni�ViVl�l�l, mo $200,000 Lo 224,999.=1.4.4.%
nmrrlC6V 1�6!6n�4!B�I�Iw!w!V!V!V!V!V!V!VI`!V!V!V!V!V�9N1�
1 mo $225,000 Lo 249,999:'=1.2.5%
m $250,000 Lo 274,999:'=:b 1.4.%
�u$275,000 Lo 299,999.=9.8%
$300,000 Lo 399,999:'=1.7.8%
m $400,000 Lo 499,999:'=8.3%
$500,000 pllus='1.9%
$300,000.00 1,,,,lutchinson Median ian Sales Price
$246,250.00
$244,000.00
5250,000.00 �I
215,400.00
$200 000 00 86,000.00
$175,000.00
$161,900.00
$153,500.00
b m30 000 00 ���������� $140,000$00 8 750. p
°�n' uuuuuuuuiimmuuu f133,500.00
ioi 121,000.00 $121,600.00
uumi ioX0000000i $101,400$00 9,950.00
$.�.00,000.00
$50,000.00
2023 2022 2021. 2020 201.9 201.8 201.7 201.6 201.5 201.4 201.3 201.2 201.1. 201.0
Year End Hutchinson Home Resales Data from the Minneapolis Area Association of Realtors:
2023 2022 2021 2020 2019 2018 2017
Median Sales Price $261,750 $262,900 $236,250 $200,000 $181,000 $170,000 $161,000
# of Sales 236 265 317 324 315 330 318
• 10.9% less home sales in 2023 than in 2022.
• 38 days on the market in 2023 vs. 27 in 2022.
2023 Home Mortgage Rates:
Early in 2023, the 30-year fixed home mortgage rate was 6.48% and ended at 6.61% according to
Freddiemac.com.
Hutchinson HRA 2023 Annual Report Page 4 of 9
New Construction Units (the following 3 charts are based on information from the Department of Planning,Zoning and Building Department):
Number of New Construction Single-Family Dwelling Units
80 73
60 5$
40 3 14 36 35
.... 19 23 20 30 27 23 24 20
12
0 .... I I I I liiii I 11 1111 I I Y ...I
2005 2006 2007 2008 2009 2010 20112012 2013 2014 2015 2016 2017 2018 2019 2020 20212022 2023
Number of Certificate of Occupancy for General Occupancy Multi-Family Dwelling Units
200
100 .......................................................
Ilu
18
0 II ry .... ��� ...rv� ..,,, II ry .. r II... ....ry II .����1d17 �> II .... 3 ....I @PMM... ....Ii
1994 1996 1999 2017 2018 2019 2020 2021 2021 2022 2023
Ridgedale Deer Park Century Highfield Highfield Highfield Century Century Highfield 101 Park Michel Ct
Square Court TH Court west Court west Place Apts. NW
East
Residential Lots Available
i Jlk7lrf r,<�,��,,III(IIlJlllllllll �f11llVi 1117p,��Irjr�Y��� d��IJ�1D���Ir����IIVy��I 11J1�1 fiNf)l��lllllJr� rll�t 1//�1(/f�OINU��flA'1111'�u»I/Dllllll// I!��Illio II l++
° �" �ti �, oh o6 o� o� oq 10 1 l 11 \ � o �� titi ti�
do ti� „o ,ya 10,11 ,yo „o ,�a ,�� ,ya ,�� „a , <1„o� ,�a ,�� ,yab ti� „o ,yoa
Lod]I onvs'nhwN (n.f'111inu)rl'i')I❑ille Ibyianniun�f I'Iar.Irlule l�rlrrl,p and I`urldiva Ibyiaunicli l
4 ra�arrticl"('Iim rith III Ilmchrirl=,cn
d uifl IoI -'fid-roil w nrl-d I R;r d� ''lopilr ern a1 IIII=time'.
Alrlrroullnat k �01nt ar amrlad hr hndd+rs d r lop,t s.
A110111 r_I,Ian;w mvrl d hr indnulnal=IPisa mar(,I mar iim hey la,ad<rllxtc s:11.
1aIIIIIII'a C'anI11I11=;rcn In=1 r ('amen IId d appm,i,i 11 ad'arI addtumral I"1rn;rI cur Nmllmood=N ark
• AJilr ar;tc b ahann a" u w=npplr ad tan,a,iailahl Im d' 1o1nn+Zit
Hutchinson Foreclosures:
250
200 McLeod County and Hutchinson iiiiiiiiiiiiiiiiiiiiiillillilillillillilI McLeod County
200 ..7.,____Foreclosure Conn
159 150 11111111111111 Hutchinson
142... .... 1.._.
93
100
2
50 0 E
. 0 . i45i
If39
53;]� j5 18 44
11 7 14 5 1910 114
������L. IIIII .. �IIIIIIIIII ....1,lllll 2I ....IIIIIIIIIIIIIIIhIIIII IIIIIIII ... (IIIIII MI.I"I.L....
f 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2 23
-50
*In 2020 there was a Moratorium on all pending and future foreclosures when the foreclosure arises out of a substantial decrease in income or substantial out of pocket
medical expenses caused by the COVID-19 pandemic,or any local,state,or federal governmental response to COVID-19(State of Minnesota Emergency Executive Order
20-79)
Hutchinson HRA 2023 Annual Report Page 5 of 9
Summa of FIFIRA 2023 .Accom.1 I.ishments:
................................................................ ............................................................................................................................................................................................... ................................................................................
Park Towers Apartments Management - Multifamily,
Section 8 Project Based Rental Assistance Program (PBRA):
A�
Park Towers Property Management ,
0 16 move-ins, and 13 move-outs and one transfer to a H/C 4
unit in 2023.
Reasons for move outs:
I Abandoned unit
4 Death of sole family member
I Owner initiated for nonpayment of rent
2 Owner initiated other than nonpayment of rent
5 Tenant initiated
0 November 2023, annual unit inspections.
0 Multiple staff trainings for changing &new HUD policies.
Asset Preservation, Property Improvements and Energy Conservation
0 Updated the security camera system.
0 Replaced laundry room exhaust fan motor.
0 Replaced the 7 1h floor Fireside room Mini Split.
0 Boiler system (heat and water heater) repairs.
0 Repaired water softener system.
0 Installed 57 unit, Federal Pacific Electric Panels.
0 Instituted a tenant text messaging system for snow removal and other important messages for the
tenants.
0 Installed a mail room, secure parcel cabinet system.
0 New vinyl planking was installed in 11 units at turns.
0 Water saver power flush toilets were installed in 11 units to save water and reduce toilet plugs.
0 1 H/C unit range, I refrigerator, and 2 A/C units were replaced.
Tenant Demographics
• Average age of head of household is 56.
* 46 Sixty-two or older
* 47 Disabled
• Income Categories:
* 27.5% Extremely Low (i.e. 1-person household $19,750 or less than)
* 71.4% Very Low (i.e. 1-person household $19,751 - $32,900)
* 1.1% Low (i.e. 1-person household $32,901 - $52,650)
Tenant Services
• Hosted National Night Out and a Christmas Dinner for the tenants.
• Park Towers continued as a Senior Dining Program Site through a lease with Lutheran Social
Services. Meals are prepared at the Evergreen Senior Dining kitchen, then delivered to Park
Towers Monday through Friday.
Hutchinson HRA 2023 Annual Report Page 6 of 9
City Center Operations:
Operations:
Marketing all the Hutchinson HRA programs has been a priority.
Owner Occupied Rehabilitation Programs Available:
1. City Home Improvement Program Grants (TIF): This program was added in 2015 as a flexible
tool for rehab of single-family, owner occupied housing throughout the city. It has multiple
divisions to target different community needs.
Program Division Accomplishments:
• City Home Repair Grant Program—4 projects closed in 2023 (5 approved in 2022 but
completed in 2023)
Ten past City of Hutchinson Owner Occupied Rehab Program projects were completely forgiven
in 2023.
2. Minnesota Housing Rehab Loan Program (RLP)—Zero project in 2023 but 2 application
processed. One will be moving forward in 2024.
2023 Grants Approved
Address Amount Details of Protect Approved Status
746 5th Ave SW $ 10,000.00 City HILP siding,soffit,fascia,gutters 4/18/2023 Complete 8/2/2023
555 Franklin St SW $ 3,999.98 City HILP replace furnance&a/c unit 7/18/2023 Complete 7/26/2023
705 Grove St SW $ 5,075.00 City HILP roof 10/17/2023 Waiting to complete
606 Main Street S $ 2,875.00 City HILP replace furnace 10/17/2023 Complete 11/20/2023
$ 21,949.98
Grants Closed in 2023 that were started in 2022
Address Amount Project Details of Project Approved Status
625 Oak St NE $ 10,000.00 City HILP roof,siding,gutters 8/16/2022 Complete 11/16/23
32 Century Ave SE $ 5,000.00 Live&Work walls,subfloor,window,electrical 12/20/2022 Complete 2/14/2023
** $ 2,962.50 City HILP hvac,electrical 12/20/2022 Complete 2/14/2023
659 2nd Ave SW $ 5,000.00 Live&Work major repairs 9/20/2022 Completed 8/1/2023
** $ 10,000.00 City HILP major repairs 9/20/2022 Completed 8/1/2023
$ 32,962.50
Rental Rehabilitation
Ongoing Annual Recertifications of other City of Hutchinson Rental Rehab Program projects.
House Move to Island View Heights Lot
The Hutchinson HRA moved a 2-bedroom one-bathroom rambler ,
that was donated by the City of Hutchinson/EDA to an HHRA
owned vacant lot. It has an unfinished full basement with egress
i windows for expansion space. An attached two-stall garage
YJlfflflJ%�i / ���i
was added on to the home. The house is scheduled to be
completed spring 2024. The home is to be owner-occupied and will be sold to a ��yy
homebuyer that has a gross household income at or below the McLeod County Area
Median Income.
i�
Hutchinson HRA 2023 Annual Report Page 7 of 9
What do you see for the housing market for Hutchinson in 2024? I think the housing market in
2024 will be very similar to 2023. I believe we will continue to see low inventory with more buyer
demand than seller demand. If rates improve it may bring more sellers in to the market who are
willing to give up there existing low rate to upgrade in to their next home.
What are the most influential factors affecting housing in Hutchinson? I think low inventory
and lack or affordable housing. The median sales price is $265k. This combined with high rates is
slowing overall sales.
What do you think will happen to new housing construction in 2024? Hutchinson has struggled
for the past decade to effectively produce new affordable construction housing. Although we've seen
tremendous appreciation since 2012, it has not kept pace with new construction costs. I think this
will still be the case. The vast majority of our new construction has been one-level patio homes with
cash buyers who are not dependent upon appraisals or influenced by the elevated interest rate.
Local Mort(ya(ye Lender 2023 11ousin(y Market Predictions:
What do you see for the Hutchinson housing market in 2023?
I think this year will bring a continuation ofweak inventory and competition from buyers to win
purchase agreements. Maybe slightly better than in the past couple years, but not much. There
continue to be more buyers than sellers. Sellers have a lot of dynamics that are de-incenting selling
keeping their lower interest rate, the availability ofremote work reduces the need to sell/buy to be
near employment, buying the next house at a higher rate and higher price means choosing to
increase housing costs significantly....etc.
What are the most influential factors affecting housing in Hutchinson?
The biggest issue facing most home buyers is affordability. Prices are high. Rates are
high. Incomes have not kept pace. And other areas offamily life have affected the income available
for housing...namely gas and groceries (and car payments). Despite this, there continue to be more
buyers than sellers, which keeps demand high (and therefore home prices). This dynamic is
expected to continue through 2032. I amusing MHFA for down payment assistance more than I
have in years to help people with down payment needs.
What do you think will happen to new housing construction in 2023
I've seen an uptick in new construction demand...and have seen more people look at new
construction as a way to get the home they want. New construction remains expensive to pursue, but
some buyers are frustrated with the inventory available to choose from, so are considering new
builds as away to get the home they want. I think Hutchinson has used a portion of the available
lots we used to have a significant inventory of from 10 years ago or so....perhaps you know this
better than I Atone point there were in excess of 150 lots that were build ready in Hutchinson. I
think that number has dwindled over the past number ofyears.
Do you think our community will benefit from any of Minnesota Housing new programs or
revised homebuyer programs?
MHFA is offering a new incentive for "First in the Family history" buyers. For those buyers that
will be first in their historical family to buy a home, the state is offering an additional program. I'm
not certain this will benefit many...may be more valuable for marketing purposes than anything
else. We will see.
Hutchinson HRA 2023 Annual Report Page 8 of 9
Park Towers Apartments Mana,-ement.
• Administer the RAD Multifamily, Section 8 PBRA program at Park Towers.
• Staff training for RAD Multifamily, Section 8 PBRA program and new HUD program changes
such as AFFH rule, HOTMA, VAWA and NSPIRE inspections.
• Housing Specialist getting a Minnesota Department of Labor and Industry issued Special
Engineer boiler license.
• Continue to install vinyl planking and power flush water saver toilets at unit turns.
• Possible improvements: new door card entry system, roof repairs to the building & detached
garage, and common areas flooring replacement.
• Follow legislation that may require sprinklers in high rise residential buildings.
• Support the Tenant Council activities.
City Center Operations, Owner Occupied Rehab:
• Administer the City Home Improvement Grant Program (TIF available funds), Minnesota
Housing Rehab Loan Program and the Fix Up Fund Home Improvement Loan Program.
• Follow rollout of new State housing programs and determine interest/need in Hutchinson.
• Market available programs throughout the community.
• Identify and determine interest of potential SCDP owner occupied rehab project.
City Center Operations,SCDP Rental Rehab Prog-ram:
• Identify and determine interest of potential SCDP rental rehab projects.
City Center Operations, Housinz Development
• Follow new innovative home building concepts, such as panel components and modular systems.
• Explore other housing resources available to address the housing needs identified in the Maxfield
Comprehensive Housing Study/Market Analysis for the City of Hutchinson
o Determine best use of the HHRA Island View Heights lots.
December 31, 2022 HousingF'unei Balances
SCDP City Revolving Local Income Balance** $197,502.36
SCDP City Revolving Program Income Balance** $51,873.89
TIF Available Balance $170,000.00
Total Funds Availablc: $419,376.25
HRA Notes Receivable f1HPOP $9,245.56
Total Balancc of HRA Loans Rcccivablc $9,245.56
**As of 9/30/2023 DEED Report
"Without access to housing, nothing else in your life works. Not your job, your
health, your education, or your family."Senator Tina Smith, March at a Glance newsletter
G4 57kWw
Executive Director (320)234-4451 �f1F�zro�r zz�ro(l.ln�a;t lniz�.or roi,r,,,ovv(City Center)
(320)587-2168 (Park Towers)
Hutchinson HRA 2023 Annual Report Page 9 of 9