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2017 Year End Report
fL
HRA
HUTCHINSON HOUSING AND
REDEVELOPMENT AUTHORITY
1 1 1 Hassan Street SE
Hutchinson, MN 55350
(320) 234-4251
Fax (320) 234-4240
www.hutchinsonhra.com
HRA2017 YEAR END REPORT
HUTCHINSON HOUSING AND
REDEVELOPMENT AUTHORITY
The Hutchinson HRA is a public body politic formed by the Hutchinson City Council in 1969
according to MN State Statue. The HRA was created to address a shortage of housing needs for
low to moderate income families and to address substandard areas in Hutchinson. In November
2017, the first phase of Highfield Apartments consisting of 29 units opened. The HRA
completed the SCDP downtown rental rehab program for a total reinvestment in downtown
rental housing of $668,271.00. The HRA also administered owner occupied rehab programs
throughout the city and owned and managed Park Towers Apartments.
Why does Housing matter?
Housing matters because:
• Decent, affordable housing is shown to stabilize families. Studies have shown that children
who have stable housing do better in school.
• Housing Programs help improve neighborhoods and maintain property values.
• Housing Programs provide economic stimulus for the local economy by providing work for
local contractors and businesses.
In 2017, the HRA worked on the following housing objectives:
• Continue to maintain strong emphasis on property management, property improvements, and
energy conservation at Park Towers.
• Support rehabilitation of housing to preserve housing stock and improve neighborhoods.
• Monitor housing data to identify housing needs.
• Offer relevant housing programs that provide a positive impact on the community.
Summary of 2017 Activities:
Park Towers Apartments:
The Park Towers HUD inspection score on December 6, 2017 was 90/100, a designated
HUD high performer.
Asset preservation, property improvements and energy conservation remains a Priority at
Park Towers
Over $200,000 in building improvements included: converted an existing unit to a
handicapped accessible unit, replaced first floor lobby file and painted corridors, replaced
five front load washers and dryer, dyed laundry room grout, replaced range in apartment 612,
re -upholstered first floor lobby furniture, replaced four panels of federal pacific main floor
2017 Hutchinson HRA Year End Report 2/14/2018 Page 1 of 10 Pages
breakers, installed garbage room security camera, replaced corridor kick plates, replaced
living room smoke detectors, replaced unit air conditioners in apartments 508 and 604,
completed 95% of the LED conversion project.
The LED project is estimated to provide a decrease in electrical consumption and a decrease
Park Towers Property Management
I . Park Towers turns an average of 20 units per year. With a short waiting list, most eligible
applicants are typically housed in less than three months from time of application.
2. Achieved a 99.5% average occupancy for 2017.
3. Park Towers continues to be a needed source of subsidized rent based on 30% of income for
one -bedroom apartments with a preference for the elderly and disabled, or low income
workforce. The current demographic report shows the average household income is
$15,870 and the average tenant rent is $298 including utilities.
Tenant Services
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 and served
at Park Towers Monday through Friday. 3346 meals were served at Park Towers in 2017
City Center Operations:
Owner Occupied Rehabilitation
In 2015, City of Hutchinson TIF owner occupied housing rehab funds (HILP) was added as a
flexible tool for single family owner occupied housing rehab to continue owner occupied rehab
efforts throughout the city. The City HILP Deferred Grant program and Minnesota Housing
Rehab Loan Program are "full service" programs that are HRA labor intensive, requiring home
inspections, work write ups, procurement and bidding, loan closing with the owner(s),
construction oversight, and disbursement of loan proceeds to the contractor.
The Minnesota Housing Fix Up Loan Program, Community Fix Up Loan Program, City
Accessibility Deferred Grant and City HILP Streamlined Deferred Grant requires that the owner
submit contractor quotes and that the owner meets loan underwriting criteria to obtain home
improvement loan proceeds. However, HRA inspection and construction management is not
required.
2017 Hutchinson HRA Year End Report 2/14/2018 Page 2 of 10 Pages
Owner Occupied Rehab Programs
City Funds MHFA Funds
Outside Funds
2017 City HILP Deferred Grants 3 of the 5 were Streamline
$29,582.52
2017 City HILP Leverage — personal funds - 2
$9,664.41
2017 City HILP Leverage — 1% Rd Loan - 1
$7,499.00
2017 City HILP Leverage funds MHFA hn act - 2
$17,001.50
2017 MHFA Rehab Loan (RLP) Program - 1
$26,988.00
2017 Fix up Fund Loan Unsecured - 2
$9,500.00
Totals
$29,582.52 $53,489.50
$17,163.41
2017 Total for 8 projects $100,235.43
Owner Occupied Loans Available:
1. City HILP Deferred Grant Program — Two loans closed in 2017. One of the projects
addressed drainage issues around the house, installed gutters & downspouts, did
miscellaneous carpentry, HVAC and electrical items too for a total project cost of
$13,970.02. The 2nd project shown below had a total project cost of $19,493.
furnance, electrical updates and lead-based paint stablization.
City HILP Streamlined Grant Program — Three loans closed in 2017.
Two streamlined projects were for roof replacements and the other
was for a roof and furnace replacement. This had a roof and furnace
replaced for a total project cost of $12,161.37.
3. Minnesota Housing (MHFA) Rehabilitation (RLP) Program - The MHFA Rehabilitation
Program is a 0% deferred loan forgiven after fifteen years that stresses safety, livability,
and accessibility for families with very low incomes who own their homes.
One Loan closed - Total Project Cost $26,988
Roof, Windows/Doors,
Radon Mitigation
System, Water Heater,
Gutters & Downspouts,
Bathroom repairs,
Miscellaneous
Plumbing, and Lead
Hazard Stabilization on
Garage
4. Minnesota Housing (MHFA) Fix Up Loan and Community Fix Up Loan
Home Improvement Programs — Two unsecured Fix Up Loans closed. One loan was for
a new boiler and the other loan was for a new furnace.
Allocation for Community Fix Up loans at 3% available January 2017 as owner matches
to the City HILP Deferred Loan/Grant Program for homeowners with incomes at or
below 80% AMI.
2017 Hutchinson HRA Year End Report 2/14/2018 Page 3 of 10 Pages
5. Minnesota Housing (MHFA) Impact Deferred Loan Program - owner match funds at 0%
for City HILP Deferred Grant Program available January 2017. The two City HILP
Deferred Grant Loans mentioned above used this program for their owner match.
Rental Rehabilitation
In 2015, the HRA was awarded $364,359 Small Cities Development Program funds for an
approved $771,501 downtown area rental rehab project. Unit goals were: 3 single family units, 8
units of duplexes and 24 units of 3+ unit complexes for a total of 35 units. The project was
successfully completed in 2017 assisting 39 units in the target area with a total project cost of
$668,272.
Property Address
# of Units Completed
# of Units Completed
Total Units
OMI3o%I
2016
2017
Completed
1939 2-3BR
$27,832
$14,328
12/31/2017
Single Family / 1 Unit
1
1
2
above Commercial
$17,510 Windows
D#3 46 Jefferson SE
apt. above
Duplex / 2 Units above
4
4
8
Commercial
1-1BR
3+ Unit Complexes
0
29
29
1900 1-2BR
$20,000
Total
39
Property Address
Type
Built Units
SCDP# 170%I
OMI3o%I
Total Main Improvement
D#1 815-817 Main Street S
Duplex
1939 2-3BR
$27,832
$14,328
$42,160 Bedroom windows for egress
D#2 106 2nd Avenue SW
apt. above
1980 2 - 2 BR
$12,257
$5,253
$17,510 Windows
D#3 46 Jefferson SE
apt. above
1901 1 - 2BR
$10,000
$4,986
$14,986 Heater
1-1BR
D#4 8 Main Street North
apt. above
1900 1-2BR
$20,000
$10,255
$30,255 Roof
1-1BR
D#5 628 Main Street South
Duplex
1900 1-2BR
$30,000
$22,220
$52,220 Windows, bathroom
1- Eff
3-1BR
Roof, Tuckpoi nti ng, windows & fire hazards in
D#6 11 Glen Street NW
Bldg
1900 13-2BR
$210,013
$90,006
$300,019 mechanical room
1 -IBR
D#7 325 Jefferson St. SE
Bldg
1960 11-2BR
$98,288
$42,123
$140,411 Windows & boiler
D#8 245 Monroe Street
SF
1900 1-3 BR
$11,306
$4,845
$16,151 Roof
Units 39
$419,696
$194,016
$613,712
Admin
$54,560
Total
$668,272
2017 Hutchinson HRA Year End Report 2/14/2018
Page 4 of 10 Pages
Rental Rehab Project Funding
$57,096
$187,6
$25,714
moommi$175,000
$168,302
Trends:
1. Rental Housing
Market Rate General Occunancv Rental
a MIF
J PI
I SCDP
J Other leverage funds:
City Loan
The market rate general occupancy rate in September of 2017 was 1.76%. A 5.0% vacancy
rate is considered a healthy vacancy rate to allow for turnover and consumer choice. A
vacancy rate of greater than 5.0% indicates a soft demand or mismatch between supply and
demand. Since 1999, the rental vacancy rate has fluctuated from 1.00% to a high of 14.9% in
2009 due to area layoffs. Highfield Apartments is expected to relieve the shortage of general
occupancy apartments in October 2017. The first phase of 27 units of Highfield Apartments
opened November 2017. Currently, there are seven two bedroom apartments available for
rent in the first phase. Construction for the second phase of 27 units will be complete in
May of 2018. The third phase is scheduled for groundbreaking in the winter of 2018.
Market Rate General Occupancy Vacancy Rate
September 2017
14.90%
15.00
110.31%
10.00% .00%9.00% 7.54/° ° 8.38%
fb:2-
.68% 5.30%
5.00% 4. °° 4
% 1.89% X76% 1.76%
0.00%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Non -Market Rate General Occupancy Rental
The vacancy rate of non -market rate general occupancy projects in the fall of 2017 was
3.85% Vacancies in subsidized developments should typically fall around 2.0% - 3.0%.
Senior Housing
The 2017 vacancy rate for market rate, apartment style senior housing for the Oaks & Pines
and Prince of Peace Retirement Living, (not including memory care) was 4.92%.
2017 Hutchinson HRA Year End Report 2/14/2018 Page 5 of 10 Pages
The 2017 vacancy rate for affordable/subsidized senior housing was 0.00%. Vacancies in
subsidized developments should typically be around 2.0 -3.0%.
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2017 Vacancy Rates
■ Market Rate General
Occupancy
■ Subsidized General Occupancy
■ Senior Market Rate Rental
Housing
Senior Subsidized Rental
Housing
2. Homeownership
Foreclosures declined in 2017. Interest rates are currently low; low interest rates and an
affordable median sales price provide opportunities for buyers who have good credit and are
mortgage ready. The interest rate in January 2018 for a first time homebuyer MHFA Start
Up loan for an RD or FHA/VA loan was 4.25%.
According to information from the Minneapolis Area Association of Realtors, the median
sales price rose 9.9% in 2017, a robust increase in the for sale housing market. Looking at
data for Hutchinson, the 2017 median sales price was $161,750 compared to $147,200 in
2016. There were 318 sales in 2017 compared to 315 sales in 2016. As of December 2017,
there were 65 homes for sale compared to 73 homes for sale in 2016.
According to information from McLeod County, in 2017 there were 333 sales in Hutchinson
with a median sales price of $153,500.
The 2017 median family income for Hutchinson is $60,286.00. Based on a household being
able to afford a home priced at 3.0 times their income, not factoring in savings or debt that
they may have, a household would need an income of $53,916 to afford a home priced at
$161,750, the MLS 2017 median sales price of a house.
2017 Hutchinson HRA Year End Report 2/14/2018 Page 6 of 10 Pages
HOME RESALES
CITY
OF HUTCHINSON
2007throng 20 T7
Year
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
Price Ranee
No.
Pry_
N0-
Pet-
Nom-
isl-
Nom-
Pct_
N0-
Pct_
No-
Pct_
Nn-
Pct_
No.
Pet-
NL- Pet-
Nom- P't,
Nom- Pct -
ct_Under$50,000
2.7%
3.0%
4.2%
Under $ 50,000
9
10
15
18
5.7
29
10.2
44
15.3
30
12.4
24
ill
9
4.2
6 2.7
5
18
$50,000 to $74,999
10
3.0%
15
4.6%
26
7.3%
17
5.4
35
12.3
33
115
31
12.8
16
7.4
27
12.5
11 4.9
6
22
$75,000to $99,999
22
6.6%
38
116%
39
110%
34
10.8
36
12.7
62
2L6
46
19.0
32
14.8
36
16.7
23 10.2
17
6.
$100,000 to $124,999
46
13.8%
54
16.4%
58
16.3%
59
18.7
49
17.3
52
18.1
48
19.8
38
17.6
47
218
43 19.0
39
14.0
$125,000 to $ 149 999
70
210%
76
23.1%
68
19.1%
68
215
59
20.8
4
14.3
33
13.6
38
17.6
46
213
34 15.0
63
22.6
$150,000 to $174,999
73
219%
55
16.7%
60
16.9%
5
16.
29
10.2
16
5.6
22
9.
23
10.6
20
9.3
51 22.6
59
21
$175,000 to $199,999
39
117%
23
7.0 %
27
7.6 %
2
6.6
16
5.6
)3
4.5
9
3.7
12
5.6
12
5.6
22 9.7
36
12.9
$200,000+
64
19.2%
58
17.6%
63
17.7%
48
]5.2
31
10.9
26
9.1
23
9.5
33
15.3
19
8.8
36 15.9
54
19.4
otal
333
100.0%
329
100.0%
356
100.0%
316
100.0
284
100.0
287
100.0
242
100.0
216
100.0
216
100.0
226 100.0
279
100.0
Median
$153,500
$140,000
$135,750
$133,500
$ 121,000
$ 101,400
$ 109,950
$121,600
$ 117,750
$ 146,750
$157,900
Sources:
Peterson -Paulsen Associates hrc.Realty
Maxfield
Research hie.
McLeod Coun
Assessor's Office
The 2017 median family income for Hutchinson is $60,286.00. Based on a household being
able to afford a home priced at 3.0 times their income, not factoring in savings or debt that
they may have, a household would need an income of $53,916 to afford a home priced at
$161,750, the MLS 2017 median sales price of a house.
2017 Hutchinson HRA Year End Report 2/14/2018 Page 6 of 10 Pages
2017 Hutchinson Home Sale Price Ranges
2.7% 3,0% 6.69yo
13.8
21.0%
Total 2017 Hutchinson Yea
$170,000 Hutchinson Median Sales Price
3. Housing Construction in Hutchinson
According to the City of Hutchinson, Planning/Zoning/Building Department, there were 27
new construction dwelling units built in 2017 and as of 12/31/2017 there were 216 lots
available. The lot supply benchmark for growing communities is a three to five year lot
supply. A three to five year lot supply allows adequate consumer choice but minimizes
developer's carrying costs.
500
400
300
200
100
0
Residential Lots Available
318 331
7q7 292
224 26
v
314 314 309
299 284 279
242
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Number of New Dwelling Units Construction
100 93
80 73
58
60
40 32 30
20 19 12 23 20 27
7 4 5
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
The above charts are based on information from the Department of Planning, Zoning and Building
2017 Hutchinson HRA Year End Report 2/14/2018 Page 7 of 10 Pages
4. Foreclosure Update: Foreclosures in 2017 were lower than in 2004 when foreclosure data
was initially tracked.
200 1,
100
4
McLeod County and Hutchinson
Foreclosure Counts
0
McLeod
4L
T1 37
L6 LJ
18
11
2007
2008 2009
2010 2011 2012 2013
2014 2015
2016
2017
Number of Foreclosures in McLeod Countv and Hutchinson
■ McLeod County
■ Hutchinson
Year
McLeod
Hutchinson
2001
37
2002
43
2003
48
2004
48
14
2005
56
2006
72
2007
142
40
2008
159
42
2009
135
50
2010
200
62
2011
176
77
2012
135
45
2013
93
39
2014
75
28
2015
53
25
2016
44
18
2017
34
11
2017 Sheriff Sales Cancelled In Hutchinson
7
2018 Predictions from Local Realtors:
Q. What do you see for the housing market for Hutchinson in 2018? Are there any factors that
will be most influential in 2018?
A. The shortage of inventory will continue to be the most influential factor in 2018. We expect
2018 to look much like 2017.
Q. The number of permits for new housing construction was 27 in 2017. (23 in 2014, 20 in
2015, and 30 in 2016). What do you think will happen to new housing construction in
2018?
A. I think we will see the new housing starts to be in line with 2017.
2017 Hutchinson HRA Year End Report 2/14/2018 Page 8 of 10 Pages
Q. It appears that the median resale price increased in 2017. Do you expect this trend to
continue and will this help to spur listings in 2018?
A. Yes, again the shortage of inventory will continue to push up the prices.
Q. How does the continued increase in baby boomers and retirements affect the housing
market?
A. There will continue to be a good demand for "retirement" type homes, but because the cost of
building has gone up as much as it has, many boomers are choosing to stay in their homes
longer because it costs so much to make a move.
Q. Has the opening of Highfield Apartments in November 2017 impacted the housing market?
A. Not that we have seen.
Q. Will the new federal tax law impact the housing market?
A. Not in our area.
Hutchinson HRA Priorities for 2018:
HRA Park Towers:
• Using 2017 CFP funds, caulk the building exterior including exterior windows and air
conditioner sleeves.
• Purchase new air conditioners, refrigerators, or ranges using 2018 CFP funds.
• A new HUD rule called the AFFH (Affirmatively Furthering Fair Housing) has been
finalized; monitor the timeline to submit the report.
City Center Operations, Rental Rehab Program:
• Research the need for another SCDP Rental Rehab application.
City Center Operations, Owner Occupied Rehab:
• Administer the City Deferred Home Improvement Grant Program (TIF available funds) for
owner occupied rehab.
• Administer Minnesota Housing Impact Funds, Fix -Up Loans, and Community Fix -Up Loans
as leverage funds to the City Deferred Grant Program.
• Administer the Minnesota Housing Rehab Loan Program for owner occupied rehab.
City Center Operations, Rental Development
• Projected job expansion will likely spur the need for additional rental development after
Highfield Apartments is filled.
Workforce Housing
• Work on a Cooperatively Developed Plan, if needed for workforce housing funding.
• Housing affordability is typically calculated at 30% of monthly gross household income. For
example, a rent of $750 per month will be affordable for a household gross wage rate of
$14.42 per hour or $30,000 per year. A $30,000 income could afford generally three times
their income to purchase a house at $90,000.00.
2017 Hutchinson HRA Year End Report 2/14/2018 Page 9 of 10 Pages
December 31, 2017 Housing Fund Balances
SCDP City Revolving Local Income Balance $124,936.29 ($41,636.81 allocated for other programs)
SCDP City Revolving Program Income Balance $0.00
SCDP Income Received from 9-30-17 to 12-31-17 $24,647.44
TIF Available Balance $373,000.00
Total Funds Available: $522,583.73
City SCDP New Construction $234,450.00
City SCDP Rehab (Owner & Rental) $730,889.69
City TIF Owner Rehab $33,484.02
Total Balance of City SCDP Loans Receivable $998,823.71
HRA Notes Receivable HHPOP
$55,246.56
HRA Notes Receivable Rehab
$18,195.12
Total Balance of HRA Loans Receivable
$73,441.68
HRANear End Report/2017 HRA Year End Report
2017 Hutchinson HRA Year End Report 2/14/2018 Page 10 of 10 Pages
I ow I �lvoAk I
HUTCHINSON HOUSING AND
REDEVELOPMENT AUTHORITY
2017 Year End by the Numbers
General Occupancy Vacancy Rates
September 2017
A healthy vacancy rate is 5.0% to allow for unit turnover and consumer choice
Market Rate General Occupancy Vacancy Rate
16.00% 14.90%
14.00%
12.00% 10.31%
10.00% 9.00%9.00% 0 8.38%
8.00%
7�
6.00% 4.60% 4.07%4.68% .30°/4.080
4.00% °
2.00%
0.00%
1.89%1.85%1.76%1.76%
r�,
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2017 Vacancy Rates
Market Rate General Occupancy
■ Subsidized General Occupancy
■ Senior Market Rate Rental Housing
■ Senior Subsidized Rental Housing
2017 Home Resales Source McLeod County
The 2017 McLeod County median resale was $153,500 compared to the MLS median of $161,750
The MLS median showed a robust 9.9% increase from the previous year
HOME RESALES
CIrfY OF HUTCHINSON
2007 through 2017
Year 2017 1 2016 1 2015 1 2014 2013 1 2012 2011 2010 2009 2008 2007
Price Range
Under $ 50,000
No.
9
Pct•
2.7%
13.0%
Lg.
10
Pct•
3.0%
No.
15
Pct•
4.2%
No.
18
Pct•
LjL�
29
Pct•
Lo.
44
Pct•
No.
30
Pct•
No. Pct•
24 11.1
No. Pct•
9 4.2
LjL� Pct•
6 2.7
No. Pct
5 1.8
5.7
10.2
15.3
12.4
$ 50,000 to $ 74,999
10
15
4.6%
26
7.3%
17
5.4
35
12.3
33
11.5
31
12.8
16 7.4
27 12.5
11 4.9
6 2.2
$ 75,000 to $ 99,999
22
6.6%
38
11.6%
39
11.0%
34
10.8
36
12.7
62
21.6
46
19.0
32 14.8
36 16.7
23 10.2
17 6.1
$100,000 to $124,999
46
13.8%
54
16.4%
58
16.3%
59
18.7
49
17.3
52
18.1
48
19.8
38 17.6
47 21.8
43 19.0
39 14.0
$125,000 to $149,999
70
21.0%
76
23.1%
68
19.1%
68
21.5
59
20.8
41
14.3
33
13.6
38 17.6
46 21.3
34 15.0
63 22.6
$150,000 to $174,999
73
21.9%
55
16.7%
60
16.9%
51
16.1
29
10.2
16
5.6
22
9.1
23 10.6
20 9.3
51 22.6
59 21.1
$175,000 to $199,999
39
11.7%
23
7.0%
27
7.6%
21
6.6
16
5.6
13
4.5
9
3.7
12 5.6
12 5.6
22 9.7
36 12.9
$200,000+
64
1
19.2%
581
17.6%
631
17.7%
48
15.2
31
10.9
26
9.1
23
9.5
33 15.3
19 8.8
36 15.9
54 19.4
Co tal
333
100.0%
3291
100.0%
3561
100.0%
316
100.0
284
100.0
287
100.0
242
100.0
216 100.0
216 100.0
226 100.0
279 100.0
Median $ 153,500 1 $ 140,000 1 $ 138,750 1 $ 133,500 1 $ 121,000 1 $ 101,400 1$109,950 1$121,600 1$117,750 IS 146,750 IS 157,900
Sources: Peterson -Paulsen Associates Inc.Realty
Maxfield Research Inc.
McLeod Count Assessor's Office
2017 Home Resales
Source: McLeod County
2017 Hutchinson Home Sale Price Ranges $170,000 T Hutchinson Median Sales Price
21.9%
oft ME
$160,000t-5153,500
■ Under $50,000 $150,000
0 $50,000 to $74,999 $140,000
■ $75,000 to $99,999
$130,000
■ $100,000 to $124,999
$125,000 to $149,999 $120,000
■ $150,000 to $174,999 $110,000
■ $175,000 to $199,999 $100,000
0$200,000+ I $90,000
Total 2017 Hutchinson Year End Home Resales = 333
$157,900
X140,000 $146,750'
8138.750
$133,500 _
$121,600
$121,000 $109,959Z/0'
$117.750
$101,400
$80,000 ---r ------ r-
2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007
Median Sales Price
Residential Lots Available
• According to the City of Hutchinson Building Department, as of
12/31/2017 there were 216 lots available. Construction of 30 homes per
year equates to a 7 year lot supply. The lot supply benchmark for growing
communities is a three to five year lot supply. A three to five year lot supply
allows adequate consumer choice but minimizes developer's carrying costs.
Number of New Dwelling Units Construction
Rolling Meadows East starter home construction contributed to increased numbers during 2004,2005,2006. The HRA
had $20,000 in affordability gap to help purchase a starter home in 2006 priced at $150,0004160,000. In 2017, a starter
home costs upwards of $200,000 to construct, a 25% increase.
100
Roff
Wei
20
0
2004 2005 2006
T
2007
19
4 7 4 5 12
2008 2009 2010 2011 2012 2013
30
23 20
2014 2015 2016
27
Foreclosures
Foreclosures in 2017 were at the lowest point since 2004
McLeod County and Hutchinson McLeod County
Foreclosure Counts ■Hutchinson
200 142 159 200 176
3
100 62 7711111111 ftbb� 3 53 44
40 39 25 18 11
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2017 Hutchinson Housing Highlights
• Opening of 1St phase, 29 units, Highfield Apartments, TIF assisted project November 1,
2017. Rents are $750-1BR, $850-2BR, $950-3BR, rents affordable to the Hutchinson
workforce. 20% restricted income at 50% AMI with $100 less in rent. 2nd phase projected
to open April or May 2018. The third phase is projected for groundbreaking in the winter of
2018. This project will be a great source of Workforce Housing: Rent of $750/month will
be affordable for a wage rate of $14.42/hour; rent of $850/month will be affordable for a
wage rate of $16.34/hour and $950/month will be affordable for a wage rate of
$18.26/hour, estimating 30% of gross income for housing.
• Completion of SCDP Downtown Rental Rehab Project 12/31/2017 with $668,271.00 re-
investment in rental housing in the downtown target area.
2017 Hutchinson Housing Highlights
• Park Towers Apartments achieved high performance status in the 2017 HUD inspection. Invested over $200,000 including the following:
handicapped accessible apartment, renovation of the first floor entrance, painting corridors, LED lighting conversion project, and laundry
room renovation.
• Owner occupied rehab/home improvement funding continued to be a priority with the HRA assisting 8 properties for a total of $100,235.00
• According to the Minneapolis Area Association of Realtors the median sales price in Hutchinson rose 9.9% in 2017, from $147,200 to
$161,750, a robust increase in the for sale housing market.
• The 2017 median family income for Hutchinson is $60,286 or wage rate of $29.00 per hour. Based on a household being able to afford a
home priced at 3.0 times their income, not factoring in savings or debt that they may have, a household with a household income of $60,286
could afford a house priced at $180,860.
• Based on a household being able to afford a home priced at 3.0 times their income, not factoring in savings or debt that they may have, a
household would need an income of $53,916 or hourly wage of $25.92 to afford a home priced at $161,750, the MLS 2017 median sales price
of a house. A family income of $53,916 could afford at 30% of their monthly gross income, a rental payment up to $1350 per month.
• Affordability is determined on a case by case basis, primarily by household income and debt. Secondarily, an acceptable credit score also
determines eligibility for a mortgage and often for leasing an apartment.
• Eleven foreclosures in Hutchinson for 2017, was the lowest number since the HRA began monitoring in 2004.
2018 Priorities
• Continue improvements at Park Towers Apartments, a source of housing for the
elderly, disabled and workforce housing for low income households.
• Administer Rehab/Home Improvement funds for owner occupied properties,
including new 2018 Live and Work in Hutchinson program for first time
homebuyers.
• Research the need for another SCDP Rental Rehab application.
• Research the need for a Cooperatively Developed Plan for a growing workforce, if
needed for funding applications.
• Promote housing affordable to a growing workforce.
Realtors predict....
2018 Realtor Trends
Q. What do you see for the housing market for Hutchinson in
2018? Are there any factors that will be most influential in 2018?
A. The shortage of inventory will continue to be the most influential
factor in 2018. We expect 2018 to look much like 2017.
Q. The number of permits for new housing construction was 27 in
2017. (23 in 2014, 20 in 2015, and 30 in 2016). What do you
think will happen to new housing construction in 2018?
A. I think we will see the new housing starts to be in line with 2017.
Realtors predict...
2018 Trends
Q. The median resale price increased in 2017. Do you expect this
trend to continue and will this help to spur listings in 2018?
A. Yes, again the shortage of inventory will continue to push up the prices.
Q. How does the continued increase in baby boomers and retirements affect the
housing market?
A. There will continue to be a good demand for "retirement" type homes, but
because the cost of building has gone up as much as it has, many boomers
are choosing to stay in their homes longer because it costs so much to make
a move.