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Home My WebLink About2025-03-13 HRA Packet Meeting location: Edina City Hall Community Room (2nd Floor) 4801 W. 50th St. Edina, MN Housing & Redevelopment Authority Meeting Agenda Thursday, March 13, 2025 7:30 AM 1. Call to Order 2. Roll Call 3. Meeting Topics 3.1. Edina's Changing Demographics and Affordable Housing Needs 4. Adjournment Page 1 of 41 d ITEM REPORT Date: March 13, 2025 Item Activity: Discussion Meeting: Housing & Redevelopment Authority Agenda Number: 3.1 Prepared By: Stephanie Hawkinson, Affordable Housing Development Manager Item Type: Other Department: Community Development Item Title: Edina's Changing Demographics and Affordable Housing Needs Action Requested: Discussion Only Information/Background: The 2024-2025 Budget Work Plan contains two items under the budget pillar "Livable Communities." One of these is "Advance progress to affordable housing goals, including increasing housing options and developing a long-term strategy." This is the first of three work sessions to begin defining the preferred strategy for addressing this work plan item. During the February 13, 2025 work session, Staff presented multiple City policies and plans that intersect and guide housing development. The plans and policies were often developed by teams of Edina residents serving on committees that met multiple times over many months. Often the City invested financially in consultants to guide staff and the volunteers through the plan and policy development process. Further, in aggregate, there were hundreds of public meetings to review the Plans and Policies prior to adoption. In this work session we will review Edina demographics and housing data. We will review who lives in Edina now; how is housing changing in Edina, and see if the current housing stock addresses the housing needed by current residents. In the third work session we will discuss future direction for affordable housing in the context of existing policies, plans, and data. Resources/Financial Impacts: Relationship to City Policies: - 2024-2025 Budget Work Plan- Budget Values - Comprehensive Plan - Housing Strategy Task Force Implementation Plan - Policy for New Multifamily Housing - Various Small Area Plans and Design Guidelines - Transportation Chapter of the Comprehensive Plan - Climate Action Plan - Tree Ordinance Budget Pillar: Page 2 of 41 Livable City Values Impact: Engagement Affordable housing fosters a sense of belonging by providing stable, inclusive communities where all residents feel valued and connected. Sustainability Affordable housing and climate action are closely related because the way homes are built and where they are located contributes to community greenhouse gas emissions. Building sustainable, dense housing can reduce the carbon emissions from the built environment while also creating more affordable housing options that are walkable, have lower utility costs and are resilient to climate change. Health Safe and affordable housing is one of the most basic and powerful social determinants of health. Quality housing improves the health of vulnerable populations and is a cornerstone of a strong and healthy community. Stewardship Investing in affordable housing ensures responsible management of resources to create sustainable, long-term housing solutions for community stability. Equity Access to affordable housing in different phases of life creates opportunities to minimize housing disparities that disproportionately impact people of color, seniors, and people with disabilities. Supporting Documentation: 1. Presentation Page 3 of 41 Edina’s Changing Demographics and Affordable Housing Needs HRA Work Session March 13, 2025 Page 4 of 41 Meeting Presenters Thomas Brooks –Diversity, Equity, and Inclusion Manager Anna Dhennin –GIS Coordinator Stephanie Hawkinson –Affordable Housing Development Manager MJ Lamon –Community Engagement Manager Addison Lewis –Community Development Coordinator Other Contributors: Marisa Bayer –Sustainability Manager Jeff Brown –Community Health Administrator Matthew Gabb –Sustainability Specialist Mallory Jensvold –Financial Analyst MJ Lamon –Community Engagement Manager Bill Neuendorf –Economic Development Manager Luther Overholt –City Forester Cary Teague –Community Development Director Page 5 of 41 2024-2025 Budget Work Plan Livable City: Ensuring a vibrant city requires forward thinking and preparation. Affordable, walkable neighborhoods that foster mobility and interconnectedness improve the quality of life for current and future residents. Reducing the community’s greenhouse gas emissions and responding to climate change through adaptive management of natural assets such as trees, greenspace, and water is critical to the health of future generations. Workplan: Advance progress to affordable housing goals, including increasing housing options and developing a long-term growth strategy. Page 6 of 41 Meeting Goal Meeting 1 –City Policies •Are the existing policies still relevant as they relate to Affordable Housing? •Are modifications to the policies needed? •What is the vision behind the budget work plan in the context of City policies? Meeting 2 –Demographics •How is the city changing? •Who are we serving? •How does current housing inventory serve the current population? •Who do we want to attract/retain? •What type of housing does the City want to support in light of this information? Meeting 3 –Direction •What does council want to do? •What can the City’s control? •Where should we focus time and resources? •What kid of housing aligns with the City’s Plans and Policies? •How does future housing correlate with demographics? Goal: Setting the direction for affordable housing in Edina Page 7 of 41 Grounding Definitions •Affordable Housing – Housing costs that require no more than 30% of gross income. More specifically rental housing that serves households with incomes at or below $60 of Area Median Income and ownership housing that serves households with incomes at or below 80% of AMI adjusted for family size. •Teardown and Rebuild – This refers to Residential Redevelopment, specifically when single family houses are acquired, demolished and new homes are constructed. •Housing Tenure – The type of housing; either rental or ownership. Page 8 of 41 Who Lives in Edina Page 9 of 41 Age Breakdown of Occupied Housing Edina Trends Older than Hennepin County Source: American Community Survey, 2023 13.1% 15.6% 15.7% 20.1% 18.3% 10.7% 6.7% 25.1% 18.3% 15.9% 16.3% 14.5% 6.9% 2.9% 0.0%5.0%10.0%15.0%20.0%25.0%30.0% Under 35 years 35 to 44 years 45 to 54 years 55 to 64 years 65 to 74 years 75 to 84 years 85 years and over Hennepin County Edina Page 10 of 41 Age Breakdown of Edina Residents Overall Relative to County Source: American Community Survey, 2023 24.5% 13.2% 12.9% 12.1% 14.7% 11.8% 6.7% 4.0% 23.8% 21.6% 14.9% 11.6% 11.9% 9.7% 4.7% 1.9% 0.0%5.0%10.0%15.0%20.0%25.0%30.0% <19 years 20-34 years 35-44 years 45-54 years 55-64 years 65-74 years 75-84 years > 85 years Hennepin County Edina Page 11 of 41 Occupied Housing Type in Edina Within Age Source: American Community Survey, 2023Page 12 of 41 Edina Households with Children Comprise 27.17% of Population Source: Metropolitan Council; American Community Survey 2019-2023 Page 13 of 41 Family Income: Edina Compared to Hennepin County 0.0%10.0%20.0%30.0%40.0%50.0%60.0% <25,000 25,000-49,999 50,000-74,999 75,000-99,999 100,000-149,999 150,000-199,999 >200,000 Edina Families County Families Source: American Community Survey, 2023 Page 14 of 41 Race and Ethnicity: Edina Compared to Hennepin County 78.81% 65.61% 3.54% 13.23% 0.17% 0.63% 8.99%7.60% 3.74%7.67% 0.01%0.03%0.43% 0.48%4.31%4.76% 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% Edina County White Black or African American American Indian/Alaskan Asian Hispanic/Latino Native Hawaiin or Pacific Islander Other Two or more races Source: Decennial CensusPage 15 of 41 Housing Type Within Race/Ethnicity Source: American Community Survey, 2023Page 16 of 41 What Areas of Edina Are the Most Diverse Most diverse areas are also the most affordable Page 17 of 41 What Type of Housing do Current Residents Need Page 18 of 41 What can Existing Edina 4-person Households Afford (Median Rent: $1757; Median Home Value: ~ $700,000) If a 4-person household earns… $37,260 $62,100 $74,520 $99,360 $124,200 $149,040 <30% AMI 31-50% AMI 51-60% AMI 61-80% AMI 81-100% AMI 101-120% AMI Maximum rent they can afford^ $931 $1,552 $1,863 $2,484 $3,105 $3,726 Maximum home price they can afford^** $111,109 $194,966 $238,683 $326,116 $404,597 $490,137 ~ % Edina Households 14.2%7.2%11.4%9.3%14.9% Typical housing type Subsidized apartment Existing or subsidized new apartment or condo Existing or subsidized new apartment or condo New apartment or condo, or existing small home New apartment or home New apartment or home ^Based on spending 30% of income on housing costs **Based on Zillow mortgage calculation Page 19 of 41 Edina Four Person Households Summary (Median Home Value: ~ $700,000) A 4-person household with an income in the 50-60% AMI income range could afford an apartments with the median monthly rent of $1700. 21.6% of 4-person households cannot afford the median rent*. 57.1% of 4-person households cannot afford a median priced home*. A 4-person household would need to have a household income of roughly over 150% of AMI, or ~$200,000, to afford a median priced home. 42.9% of 4 –person households can affordable a median priced home. *Without being housing cost burdened Page 20 of 41 What can Existing Edina Senior Household Afford? (Median Rent: $1757; Median Home Value: ~ $700,000) If a 2-person household earns… $29,820 $49,700 $59,640 $79,520 $99,400 $119,280 <30% AMI 31-50% AMI 51-60% AMI 61-80% AMI 81-100% AMI 101-120% AMI Maximum rent they can afford^ $746 $1,243 $1,491 $1,988 $2,485 $2,982 Maximum home price they can afford^** $73,900 $142,200 $176,400 $244,700 $313,000 $381,400 ~ % Edina Households 15%19%6%25%7% Typical housing type Subsidized apartment Existing or subsidized new apartment or condo Existing or subsidized new apartment or condo New apartment or condo, or existing small home New apartment or home New apartment or home ^Based on spending 30% of income on housing costs **Based on Zillow mortgage calculation Page 21 of 41 Income Demographics According to census data, 71% of seniors and 51% of households of child-bearing ages have a household income of less than $150,000, which is less than what is needed to buy a median priced home. •26% of seniors have incomes less than $50,000 and qualify for affordable rental options. 19 15% 11% 17% 14% 7% 6% 29% Seniors <25,000 25,000-49,999 50,000-74,999 75,000-99,000 100,000-124,999 125,000-149,000 >$150,000 2% 5% 7% 8% 16% 13% 50% Edina Families <25,000 25,000-49,999 50,000-74,999 75,000-99,999 100,000-149,999 150,000-199,999 >200,000 Page 22 of 41 Senior Slide Summary •Over 40% of Edina seniors have incomes less than what is needed to afford an apartment charging the median rent of $1700/mo. •Over 65% of Edina seniors have incomes that are insufficient to purchase a house or condominium priced at $313,000. •The Metro area has the highest percentage of seniors who are housing cost burdened: 65%* •The Metro also has the largest shortage of affordable available rental units for extremely low-income households.* *Minnesota Housing Partnership 65% 35% Senior Renters Cost Burdened Not Cost Burdened Page 23 of 41 Edina Owners and Renters are Housing Cost Burdened 50% 21% 46% 29% 0% 10% 20% 30% 40% 50% 60% Renters Owners Edina Hennepin County Source: Metropolitan Council; American Community Survey 2019-2023Page 24 of 41 People Commute into Edina for Work (2021) Source: Metropolitan Council; US Census Data Top ten residences of people who work in Edina Residence # Workers % Minneapolis 4,712 13.8% Edina 2,279 6.7% Bloomington 2,203 6.5% St. Paul 1,696 5.0% Eden Prairie 1,477 4.3% Richfield 1,021 3.0% Plymouth 1,008 3.0% St. Louis Park 999 2.9% Lakeville 985 2.9% Minnetonka 971 2.8% Other 16,768 49.1% 34,119 Page 25 of 41 Local Workforce Wages Insufficient to Live in Edina without being Housing Cost Burdened* $43,347 $31,928 $24,606 $30,576 * DEED Data for Metropolitan Region Page 26 of 41 The Current Housing Situation Page 27 of 41 Single Family Homes Less than $500,000 Decreasing 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Single Family Residential (Standalone) Percentage of Parcels in the City of Edina by Amount <$0.3mm $0.3mm-$0.49mm $0.5mm-$0.69mm $0.7mm-$0.99mm > $1M Source: City of Edina 25 SF House <$500K: 2014: ~65% 2020: ~41% 2023: ~16% Page 28 of 41 Median Single Family Housing Prices are Increasing Requiring Higher Household Salaries 26 $- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Median Housing Values in Edina Compared to Income Required to Buy Interest= 6.5%, 30-years, 30% of income on Mortgage without Escrow for taxes and insurance Median House value: Edina Annual Salary Needed 2030: $1,012,400 2030: $258,423 2020: $551,300 2020: $140,724 Source: Home values - City of Edina Assessing; Income - Zillow estimates Page 29 of 41 Growth in Rents far outpacing Growth in Income Change in Rent Expense vs. Household Income Minneapolis/ St. Paul MSA - Minnesota 27 318 146 100 150 200 250 300 1986 1990 1994 1998 2002 2006 2010 2014 2018 2022 CPI Rent of Primary Residence (MSP)Median Household Income (MN) Source: Federal Reserve Economic Data, Real Median Household Income in Minnesota (CPI adjusted), Consumer Price Index for All Urban Consumers – Rent of Primary Residence in Minneapolis/St. Paul MSAPage 30 of 41 Housing Variety in Edina Source: 2023 American Community Survey Page 31 of 41 Example: Chowen and Strachauer Park have experienced multiple homes replaced with new builds. Median Home Price by Neighborhood Page 32 of 41 30Source: City of Edina Year # Teardowns Year # Teardowns 2014 115 2020 64 2015 109 2021 57 2016 91 2022 55 2017 88 2023 55 2018 68 2024 40 2019 65 TOTAL 2014 thru 2025 = 807 2023* Average cost of teardown: $613,273 Average value of rebuild: $2,045,465 *2024 rebuilt data not available. Houses demo-ed may not be completed. Reduced Supply of Moderate Priced Homes due to Teardown and Rebuilds Source: City of Edina AssessingPage 33 of 41 Households Experiencing Poverty Aqua is high levels of seniors/low levels of poverty Pink is low levels of seniors/high levels of poverty Pale/white is low levels of seniors/low levels of poverty Dark blue is high levels of seniors/high levels of poverty Poverty rate = 10.64% Percentage of seniors = 20.55% Poverty rate = 0%; Percentage of seniors = 15.23% Page 34 of 41 Residential Taxes Relative to Land Use 0%20%40%60%80%100%120% Residential Land Use Residential Taxes Single Family Multifamily Source: Land Use – Comprehensive Plan; Taxes – Hennepin County Page 35 of 41 Other Contributing Factors Page 36 of 41 U.S. Households Page 37 of 41 How Housing Impacts Student Enrollment Source: “Resident Enrollment Projections,” Hazel Reinhardt, 2022. Different housing types bring a different numbers of school-age kids •Single-family homes have the most kids per unit. •Townhomes have fewer kids than single-family homes. •Apartments have the fewest kids per unit. Newer single-family homes tend to have more school-age kids than older ones •New homes attract families with kids. •Older single-family homes see fewer kids over time. When single-family homes are resold, student numbers change •Younger families moving in could increase school-age kids. •In older homes, usually they are fewer kids and numbers go down. Home prices impact the number of school-age kids •Mid-to-high priced homes tend to have more kids. •Lower-priced homes often have fewer school-age children. Senior and age-restricted housing won’t add students to the schools •More homes are being built specifically for older adults (55+), which won’t increase school enrollment Page 38 of 41 2023 Quality of Life Survey •Overall, a majority of respondents felt there was somewhat too little or far too little housing for lower-income singles and families. •Among the lowest rated community characteristic items were availability of affordable quality housing and variety of housing options. •About two-thirds of respondents said that it was essential or very important for the City to encourage preservation of small starter homes (homes with fewer rooms or other amenities that are affordable for first-time buyers). Page 39 of 41 Moving Forward: Housing Type Matrix Single Family Duplex/ Triplex+ Townhomes Low-rise Multifamily Mid-rise Multifamily Ownership Rental New Construction NOAH Preservation Page 40 of 41 Meeting Goal Meeting 2 – Demographics •How is the city changing? •Who are we serving? •How does current housing inventory serve the current population? •Who do we want to attract/retain? •What type of housing does the City want to support in light of this information? Goal: Setting the direction for affordable housing in Edina Page 41 of 41