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CC Resolution No. 2847 RESOLUTION NO. 2847 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, ADOPTING THE FINDINGS AND FACTS OF THE BAYTOWN HOUSING NEEDS ASSESSMENT OF 2023; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. ****************************************************************************** BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,TEXAS: Section 1: That the City Council of the City of Baytown,Texas(the "City Council")has reviewed the City of Baytown Housing Needs Assessment of 2023 ("Assessment"). Section 2: That the City Council hereby adopts the findings and facts in the Assessment to be used to prepare City plans in accordance with state law or City ordinance. The Assessment is attached hereto as Exhibit "A" and incorporated herein for all intents and purposes. Section 3: This resolution shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the City of Baytown, this the 22nd day of June, 2023. Z;4z� OB POWEL , Mayor Pro em ATTEST: YT rf= °� ' T - ° <n e ANGEL CK ,CAN', City Clerk 3 ° a � e° t� y' APPROVED ASTy St-OTT LodOND, City Attorney RAKaren Anderson\RESOLUTIONS CITY COUNCIL\2023\2023.06.22U.Way HousingNeedsAssessment.docx 5 � 1 Baytown Housing: Affordability Challenges and Market Assessment, 2023 - 2032 June 2023 Atria Planning 1 City of Baytown • Study 2023 Table of Contents I. EXECUTIVE SUMMARY.................................................................................2 II. INTRODUCTION..........................................................................................5 III. THE CITY IN CONTEXT...............................................................................6 IV. DEMOGRAPHIC PROFILE..........................................................................9 TENURE............................................................................................................10 HOUSEHOLD TYPES............................................................................................10 HOUSEHOLD INCOME..........................................................................................11 EDUCATION.......................................................................................................11 RACE&ETHNICITY.............................................................................................12 AGE.................................................................................................................13 V. THE ECONOMY AND WORKFORCE..........................................................14 VI. HOUSING PROFILE................................................................................. 18 VII. HOUSING SUPPLY.................................................................................20 RENTAL MARKET................................................................................................20 HOMESFOR SALE..............................................................................................25 VIII. UNDERSTANDING"AFFORDABLE" HOUSING......................................26 IX. WORKFORCE HOUSING NEEDS.............................................................27 X. HOUSING CHALLENGES..........................................................................29 KEYFINDINGS:..................................................................................................29 XI. HOUSING DEMAND ANALYSIS...............................................................33 XII. CONCLUSION........................................................................................35 APPENDIX- HOUSING CHALLENGES............................................................36 1 © City of .wn Housing Study i. Executive Summary This study comes at a time of great change in the Houston housing market. The Covid-19 pandemic accelerated growth trends,and between 2019 and 2022,the region added 1.1 million people, representing an unprecedented migration of companies and households into the area. Demand for housing surged, increasing home prices by 40%to 50%and rents by 23%. Baytown, as one of more than 100 jurisdictions within the metro area,shared in the growth, adding an estimated 6,680 new residents,a 9% population jump in three years. Growth has slightly cooled in 2023 but is still expected to be strong in the coming years,with an additional 121,000 households in Harris County alone. Developers have kept pace with growing demand, and there are now more than 75,000 units under construction or in the pipeline in the region. Based on population and job growth forecasts, demand is expected to keep up with supply in the next couple of years. Nevertheless, some communities are justifiably concerned about the rapid pace of new development.The City of Baytown initiated this housing study to assess overall housing needs of the community and take a "pulse check" on market conditions before approving proposed large developments. To summarize the findings of this study-the city is expected to grow as part of the region's economic and population expansion. Forecasts indicate that this growth will predominantly be among middle-and higher-income earners, with 80%of new households earning above$100,000 per year.This growth will fuel demand for more market rate units(for rent and for ownership). Conversely,there is an oversupply of dated apartment buildings(Class B and Class C)that are functionally obsolete and will not meet the demand of new renters. At the same time, existing residents who earn less than 50%of Area Median Income(roughly$30,000 for an individual and $45,000 for a family of four) struggle to afford housing in Baytown despite its relative affordability. Many of these residents are in occupations important for the economy.Workers in retail,food service,janitorial services, and home health care,for example, are paying too much of their income on housing and face the greatest risk of eviction or foreclosure. Following are the key highlights of this report: Baytown Is an Industrial suburb of Houston that has had a slp ficant renter populatlon for the last flfty years. Nearly half of all households (46%) rent their homes.Two out of three renters live in smaller complexes between 2 and 19 units and 19% live in complexes with 50 units or more. 2 City of •wn Housing Study Homes are older.The city's housing stock is older than the region,with a median age of 1980(compared to 1990 for the Houston MSA). Most of the older homes were built before 1990(65%). Housingis diverse.Because the housing stock was built over decades,there is a wide range of housing types, including"middle housing,"that includes smaller multi-family structures integrated throughout older neighborhoods. Rents are lowfor the reglon.The typical rent for a one-bedroom is$1,025, approximately 20%less than the regional average. A large portion of the rental stock Is dated and functionally obsol There is a glut of rental complexes built before 1990 - Class B and Class C multi- family properties-that do not have the amenities and features today's renters are looking for. Issues like low ceilings, no in-unit laundry,tiny closets, and lack of secured parking, result in significantly lower prices than more modern apartments.These units rent for approximately 40%less than new buildings. There Is a shortage of Class A apartment bulldIngs On ly 15%of Baytown's multi-family units were built in the last decade,compared to 23%for the county. Homeownersh/p Is affordable for moderate Income househoir The average sale price is $220,000,affordable for moderate and middle income households, and 39%lower than the regional average. Forecasts Indicate demand for hlglrer priced units ESRI Business Analyst's projections forecast a shift in household income,with a net loss of 2,317 households earning less than $50,000 per year,and a net gain of 2,941 households earning more than $50,000 per year. 80%of household growth will be among households earning above$100,000 per year.This translates into an increased demand for higher end rental units and higher priced homes. However,affordabillty Is a critical Issue for very low Income households, particularly renters.Roughly 75%of renters earning less than$40,000 per year struggle with housing costs.Of particular concern, 70%of renters earning less than $25,000 per year pay more than half their income on housing and are most at risk of eviction and homelessness. Half of all homeowners earning less than $25,000 per year spend more than half their income on housing.This includes seniors on fixed incomes.These homeowners are most at risk of foreclosure and in need of emergency repairs and utility assistance. Strongreglonalgrowth wlllfueldemandfornewunits Harris County is forecasted to add 121,000 households over the next ten years,and a portion of those households will live in Baytown. Based on a household demand 3 analysis, Baytown is anticipated to need an additional 463 to 842 new rental units and an additional 1,560 to 2,952 units for purchase. C The information provided in this report is based on research from the U.S. American Community Survey, Department of Housing and Urban Development(HUD), Bureau of Labor Statistics, a review of local and state housing reports and plans and data from private sources, including Esri and Zillow. It is complemented with qualitative data derived from a windshield survey and input from city staff. 4 11. Introduction In February 2023 the City of Baytown,Texas contracted with Atria Planning to conduct a housing needs assessment.The general purpose of the study is to assist the city plan for future development and understand the housing needs of existing and future residents. The study includes the following: • An estimate of demand for homeownership and rental housing over the next ten years(2023 - 2032). • A profile of demographic characteristics and economic trends • A summary of housing indicators (age,size,and type of units) • An assessment of existing market conditions for rental units and homes for sale • A summary of affordability challenges current Baytown residents experience The analysis relies on quantitative data, input from city staff, and a windshield survey conducted in May 2023,and is analysis is supported with research from public sources and market research firms. Data sources include the U.S.Census American Community Survey;the U.S. Census Longitudinal Employer Household Dynamics; HUD Comprehensive Housing Affordability Strategy data; market research from national brokerage firms;and ESRI's Business Analyst.The reports used as reference include retail and commercial trend reports and consumer preference surveys published by the Urban Land Institute, National Association of Home Builders, Zillow Inc.,Old Dominion University,Jones Lang LaSalle, and Colliers International. The findings of this report are based on market conditions as of 2022 and the first quarter of 2023 and are subject to change based on new data and unanticipated changes in the market.The results of this study were presented to City staff and elected officials in June 2023. [Note:A secondary purpose of this study is to support land use and permitting decisions specific to large-scale multi-family housing development. Baytown currently has a temporary moratorium on multi-family housing of 300 or more units due to community concern over market saturation and risk of oversupply.] 5 City of •wn Housing Study III. The City In Context The City of Baytown is located on the eastern outskirts of the Houston metro area,one of 113 distinct jurisdictions in America's fifth most populous metro area with 7.34 million people.While the region has steadily grown over the past two decades, it experienced a boom during the Covid-19 pandemic that is expected to continue in the coming years. In 2022, it was the second fastest growing region in the U.S., adding roughly 300,000 new residents. Baytown,too, experienced rapid growth over a short period of time,According to U.S. Census estimates, Baytown added 7,132 new residents from 2019 to 2022,a growth of 9%. The city's strategic location adjacent to the Houston Ship Channel influenced its development as an industrial city in the early 20th century with the construction of oil refinery operations. Currently, Exxon Mobile, Chevron and Covestro have three of the largest oil refining and plastics manufacturing facilities in the U.S., comprising over 5,000 acres and employing approximately 10,000 workers.The largest of the three, Exxon Mobile, is the 9th largest refinery in the world.The omnipresence of the refineries is a defining characteristic of Baytown, cementing its identity as an industrialized suburb of Houston rooted in the oil and gas industry. k i Photo:Exxon Mobile petrochemical plant and refinery.Baytown Texas Many refinery workers are employed by multiple companies and travel for work, hence there is a significant temporary workforce that fuels demand for short-term housing and rental units. It also has a substantial Hispanic population (roughly 50%) many of whom work in construction and extraction for the oil and gas industry. Households in Baytown tend to have moderate income;the percentage of households in poverty is relatively low(less than 20%)and yet there are few 6 City of •wn Housing Study high-income households(6%of households earn more than $200k per year compared to 12%in the region).This has manifested in a comparatively affordable housing stock and more accessible homeownership for moderate income families. Despite exceptional increases in home prices since the Covid-19 pandemic, Baytown continues to attract residents for its affordable homeownership opportunities and supply of naturally affordable(i.e. not subsidized) rental units. However, according to socio-economic forecasts, household income is expected to shift upward in the next five years,fueling demand for higher priced homes for sale and rental units. The county is expected to add more than 120,000 new households over the next ten years, and developers have been building new homes at a rapid pace to meet demand. Baytown and areas just outside city boundaries have ample greenspace to develop large projects.Goose Creek and Baytown Crossing are two examples of proposed large, master planned communities with 1,514 units collectively. t U M1 rY _ :a Photo:Sterling Point at Baytown Crossing 7 City of Baytown Housing Study 2023 Chart 1: Housing Typology s �: 2. •u. • ,. .� M .qL " , -. j — ( AL - IV. Demographic Profile This housing study includes an assessment of area demographics and socio-economic indicators useful for understanding market dynamics and housing needs.We predominantly use data provided by the US.Census Bureau's 5-Year American Community Survey(ACS) 2017 - 2021 and ESRI Business Analyst data effective May 2023. Based on this analysis,following are our key findings: Baytown is a family-oiiented community.The city has more families with children than the regional average, and more large families(five or more related households)than county or state figures. 62%of all households are family households,compared to 56%for the state. The majority of households are homeowners Roughly 57%of households are homeowners,which is higher than the county(55%) but less than the state figure of 63%. The city has more children than the national average.Like much of Texas, Baytown has experienced an influx of younger families while existing families are having children at a higher rate than the national average. 15%of the population is under ten years old, compared to 11% in the U.S. Educational attainment is low.Only 15%of residents over 25 years old have a college degree,compared to roughly 30%for the county,state and nation. Despite low educational attainmen4 Baytown is not a high poverty community. Half of all households earn a "moderate" or "middle" income between $50,000 and $150,000 per year and the poverty rate is less than 20%. In the next five years,household income will shift upward.Accord i n g to forecasts, by 2027 there will be 2,317 fewer households earning less than $50,000 per year,and 1,443 more households earning above $150,000 per year. Baytown will experience an increase in the senior population,but to a lesserdegree than national average.As Baby Boomers age into their senior years,the city will see a slight increase in residents 75 and older, but this shift will be offset by more families with children than average. Baytown will experience an estimated increase of roughly 1,000 residents aged 75 and older, and an increase of 630 children under 15 years old. 9 City of Baytown • Study 2023 Despite popular belief that Baytown has a disproportionately high percentage of renters, it is in fact a homeownership community,with 57%of all households owning their homes (compared to 55%for the county and 63% for the state).Additionally,there is a significant homeownership rate among low-and moderate- income households.Among households earning less than median income, 28%are homeowners in Baytown compared to 23%in Harris County and 26% in the state. Chart 2: Household Tenure Texas 62.Y 37.3% Harris Co 45.5% Baytown 42.9% 0% 20% 40% 60% 80°/ 100% ■Owner ■Renter Source:American Community Survey 2017-2021 Household Types Baytown is a family-oriented community,with 62%of households consisting of small families(two to four related persons living together)and large families (five or more related persons living together).This is higher than the county(58%)and state(56%). Conversely, it has fewer single-person households or households with non-related persons living together(27% compared to 32%and 31%for the county and state, respectively)and slightly fewer senior households. Chart 3: Household Types 50% 45% 40% 35% -- 30% 25% 20% 15% 10% 5% 0% ENE Senior Family Small Family Large Family Senior Living Non-Senior Alone or Living Alone or w/Roommates w/Roommates ■Baytown ■Harris County ■Texas Source:HUD Comprehensive Housing Affordability Strategy 2022 release 10 11 City of Baytown Housing • 023 Household Income Baytown is a moderate income community,with a median household income of$63,000,which is 9%less than the county and 12% less than the state. This difference is not due to a high poverty rate,with three out of four households earning more than $35,000 per year. Rather,the difference in median income can be attributed to substantially fewer"high earning" households(defined as households who earn more than $150,000 per year), indicating that more high income families live outside of Baytown. Table 1: Low-and High-Wage Households Earn i . less tha n$3 5,000 24.9% 23.7% 23.0% Earning •• - 150,000. 12.5% 18.2% 17.4% Source:American Community Survey 2017-2021 However,this differential is expected to narrow over the next five years. Forecasts show an income shift upward over a five year period,and by 2027, 17%of Baytown households will be high earners. Chart 4: Income Distribution for Baytown Households, 2022&2027 $200,000+ $150,000-$199,999 $100,000-$149,999 $75,000-$99,999 $50,000-$74,999 $35,000-$49,999 $25,000-$34,999 $15,000-$24,999 <$15,000 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 142027 ■2022 Source:ESRI BAO 2022 Education The residents of Baytown have,on average, less education than county, state,or national figures,with 15% having a bachelor's degree or higher and 23%not completing high school.This is reflective of the local economy,which relies on a substantial number of immigrants who work in the oil and gas industry. 11 12 City of •wn Housing Study Chart 5: Educational Attainment I Baytown city,Texas 23.2'k 53.8% % 17 1, Harris County,Texas Texas United States 0% 20% 40% 60% 80% 100% ■No High School ■High School or some college, no degree ■Associates ■Bachelors *Graduate or professional Source:American Community Survey 2017-2021 Race & Ethnicity While Baytown residents' income is expected to increase, its population will become slightly more diverse.As of 2022,the majority(50.6%)of residents identify as being White Hispanic. Over the next five years,we will also see an increase in people who identify as "Two or More Races"which is a demographic shift we will see on a national scale. Table 2: Race& Ethnicity for Baytown Residents White • . - 41.9% 41.1% 37.5% Black ne7 16.9% 16.4% 16.6% American IndianAlone. 1.2% 1.2% 1.3% • - 1.8% 1.8% 1.8% IslanderPacific - 0.1% 0.1% 0.1% • - Other Race Alone. 18.8% 19.3% 20.5% o or More-Races 19.3% 20.2% 22.2% Hispanic • Racer, 49.5% 50.6% 51.7% Source:ESRI BAO 2022 12 City of •wn Housing Study Age Because Baytown draws families with children,the city will not experience as significant an increase in the senior population like many communities in the U.S.As Baby Boomers age into their retirement years,the area will continue to attract younger families. However, it should be noted that Baytown's population will grow,and a part of that growth will include more older adults, reflecting a larger national trend of households moving to warmer climates when they retire.According to forecasts, Baytown will have an additional 1,000 residents 75 years and older due to natural growth (existing residents who turn 75 in the next five years)and new residents moving to the area. Based on forecasted income changes,older residents who move to the area will likely be middle income homeowners. Chart 6:Age Distribution in Baytown,2022 and 2027 18.0% 16.0% — 14.0% — 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% under 5 to 10 to 15 to 20 to 25 to 35 to 45 to 55 to 65 to 75 to 85+ 4 9 14 19 24 34 44 54 64 74 84 02022 2027 Source:ESRI BAO 2022 13 14 City of •wn Housing Study V. The Economy and Workforce The economy of Baytown developed through its relationship with the oil and gas industry. In 1920, Exxon Mobile opened operations along the Houston Ship Channel and through several expansions, is now the second largest oil refinery in the U.S., employing more than 7,000 workers within 3,400 acres. In 1963, Chevron also began operations at the Cedar Bayou Plant,which is now Chevron's largest operation in the U.S. It is an 1,800 acre site and currently employs roughly 2,000 workers and contractors. In 1971, Bayer began chemical manufacturing operations at its Baytown site,and currently employs over 1,000 workers under Covestro, a German chemical manufacturing company.Covestro is planning to invest$1.7 billion in the facility to expand polyurethane production as part of its portfolio of sustainable materials. Demand for carbon neutral materials is expected to increase globally, indicating strong economic growth for the region. The Chevron, Covestro,and Exxon Mobile facilities are the main economic drivers in Baytown. Other large employers - hospitals,the school district, and large retailers-serve the existing population and will expand as the petrochemical industries expand. Industries that rely on port activity will be further protected from an economic downturn which bodes well for Baytown. In 2022,the port system of southeastern Texas increased container traffic 20%, reflecting the diverting shipping traffic from the west coast to the Gulf of Mexico.This trend is expected to continue over the next decade. While there is growing concern over a potential recession on the horizon, Houston's economy is slated to continue adding new firms and workers, with expected job growth of 4.5%annually over the next five years. Chart 7: Houston MSA Employment 3.5 3.0 - - Energy Bust I a 2.5 C Energy .2 Bust 11 Fracking Bust g 2.0 Global COVID 9t1/Enron Financial 1.5 Crisis 1.0 W 12 '84 '86 U '90 '92 194 '96 '98 '00 '02 W '06 '08 10 '12 L14 '16 '18 '20 '22 Source:Texas Workforce Commission 14 15 City of •wn Housing Study rw NA Baytown is a hub for the"upmarket"portion of the oil and gas industry, petrochemical manufacturing. This subsector is increasingly focused on lowering emissions through carbon capture and storage,advanced recycling,and use of biomass and recycled products. IF A disproportionately high number of Baytown residents work in the Construction (14.2%)and Oil &gas industries(13.8%)as well as service industries like retail and food service. In contrast,a disproportionately low number of Baytown residents work in Finance, IT or Professional Services. This reinforces the categorization of Baytown as a "blue collar"community. Nevertheless, household income indicates that the city's construction and refinery jobs pay well.Wages are expected to increase significantly over the 15 16 City of •wn Housing Study next five years, particularly for households earning more than $100,000 per year. Chart 8: Residents Employed by Industry Public Administration Other Services .2% Arts,Entertainment,Recreation, Accommodation and Food Service 10.2% Professional/Scientific/Management 19.6% Finance/Insurance/Real Estate Information Transportation,Warehousing,Utilities Retail Trade 7. Wholesale Trade 10.3% Manufacturing .1 Mining 3.8% Construction 14.2% Agric/Forestry/Fishing/Hunting/Mining .0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% ■Texas ■Houston MSA ■Harris County ■Baytown Source:American Community Survey 2017-2021 Migration Patterns Most Baytown's workers (80%) live outside the city and are widely disbursed throughout southeastern Texas.The city of Houston and Pasadena,Texas are the only two places where more than 1,000 Baytown workers reside; all other places have fewer than 1,000 residents. Conversely, most Baytown's residents(81%)commute to other cities for work,with 26%working within Houston and another 13%working in Pasadena, Deer Park, and Laporte. 16 City of •wn Housing Study This results in significant in-and out-migration,with roughly 25,000 workers commuting into the city,and another 28,000 residents leaving the city on a daily basis during the work week.(This does not account for those who work from home or those who live in Baytown temporarily but claim their residence outside the city. Table 3:Where Baytown Workers Live(2019) Where Baytown Percent - e Workers All Places(Cities, CDPs, - 32,636 100.0% Baytown city,TX 6,554 20.1% Houston city,TX 4,442 13.6% Pasaden1,086 3.3% -.. - 681 2.1% . Porte 593 1.8% Channelview ' TX 472 1.4% Highlands ' 469 1.4% Mont Belvieu 449 1.4% Deer Park city,T 406 1.2% • 400 1.2% All Other17,084 52.3% Source:Longitudinal Employer Household Dynamics Table 4:Where Baytown Residents Work(2019) Where Percent . . Baytownll Residents All - 35,092 100.00% Houston city,Tj 9,200 26.20% Baytown city,TX 6,554 18.70% Pasadena 1,887 5.40% eer Park city,T 1,616 4.60% La Porte city,TX 1,280 3.60% Mont Belvieu 790 2.30% Channelview D' 581 1.70% League 454 1.30% • 1 346 1.00% Webster city,T) 318 0.90% All Other Locationl-7 12,066 34.40% Source:Longitudinal Employer Household Dynam- 17 is City of •wn Housing Study • VI. Housing Profile The housing stock in Baytown is very diverse compared to other areas,with a range of housing types built at various times over the last century.There are historic districts with bungalow-style cottages and twin homes;older suburban neighborhoods with traditional brick ranches; newer subdivisions of single-family development;and a range of multi-family buildings mostly built before 2000.This housing diversity is an asset to the community, providing a greater range of housing types for future development.This includes "middle Baytown has lagged in housing," described as a range of housing types of different scales and unit residential construction mixes that can blend into traditional neighborhoods. activity in the past ten But much of Baytown's housing stock is aged and in need of rehabilitation or years. Both Harris County reconfiguration.This is especially true of the older rental properties, many of and Texas had twice as which are 30 to 50 years old,and have not experienced significant much building activity renovations since construction. since 2010 than Baytown. Housing Age Housing in Baytown is older compared to the county and state,with a median construction date of 1980 compared to 1986 for Harris County and 1988 for Texas.This is readily apparent in field surveys of the area, with much of the housing stock dating from 1970s and 1980s.Significantly, Baytown lags behind the county and state in new development. In both Harris County and Texas, 31%and 33%of all housing was built after 2000, markedly higher than Baytown, with 25%of units built in the last 21 years.The difference is more pronounced for homes built since 2010 - the county and state had twice as much building activity than Baytown in the last decade. Chart 9:Age of Housing Stock in Baytown 20.0% -- 18.0% — 17,2A 17.4% 16.0% -1 14.0% 12.0% 1.10 11.3% ° 0:3/o 10.0% 8.0% 7.6% —7.0% 6.0% 4.0% 3.5% 2.0% 0- 0.0% Built Built Built Built Built Built Built Built Built Built 2020 or 2010 to 2000 to 1990 to 1980 to 1970 to 1960 to 1950 to 1940 to 1939 or later 2019 2009 1999 1989 1979 1969 1959 1949 earlier Source:American Community Survey 2017-2021 18 119 City of •wn Housing Study Housing Type Baytown has a diversity in housing types,especially in its smaller multi-family structures,with 20%of all housing units located in structures with two to 19 units.Conversely, it has fewer units in larger multi-family developments(20 or more units)than market demand would indicate,with 10%of all units compared to 16%for the county.This makes sense given Baytown's lag in construction activity over the past two decades. Chart M Housing Types 70.0% 60.4% 60.0% 50.0% 40.0% 30.0% 20.0% i5.996 10.0 0% 0 1 in 10 homes in Harris 10. 2.o°ro 5:3 5:9% County and in Texas are 0.0% valued above $500,000; in Single Family Townhome 2 to 4 units 5-19 units 20+units Mobile Home Baytown it is 1 in 100 a Baytown Harris Co ■Texas Hoare Value&Gross Average Rent Homes are much more affordable in Baytown than in the county or state,with an average value of$157,000 compared to$282,000 and $260,000, respectively. With an average home value 80%less than Harris County, Baytown was and remains to be an attractive option for affordable homeownership. This discrepancy is not indicative of severe blight and vacancy, however. It is due to the very low number of homes valued above$500,000,which greatly reduces the average figure. In Harris County and Texas, 10%of homes are valued above$500,000; in Baytown,that figure is 1%. Average reported gross rent in Baytown is$1,134 per month,which is slightly less than the county($1,262 per month)and state($1,228). It should be noted that these data are from the 5-Year American Community Survey and are self-reported.Therefore,they represent what households claim their homes to be worth or what rent they pay, not what homes on the market are selling for or current asking rents.These price trends will be further discussed in the Housing Supply section of the report. 19 20 City of •wn Housing Study Al. Housing Supply Baytown has experienced weak construction activity compared to the region, increasing its housing stock by 14%over the last ten years.While this is a healthy growth rate by national standards, it does not reflect the substantial growth of the Houston metro area during this time and is much less than Harris County(23%growth in housing stock)or the Houston metro area (20%). The development that has occurred in Baytown leans toward single family development.As previously cited, Baytown has experienced relatively less multi-family development in the past ten years when compared to the county and state. In fact, its recent development patterns have focused on single- family development(66%)despite having a homeownership rate of 56%. Conversely, less than half of new development in Harris County(with a homeownership rate of 54%) is for single family development. Chart 1.1:Single Family Development Compared to Homeownership Rates, 2013-2022 54% Harris Co. 4 5 I° Baytown 6F% 0% 10% 20% 30% 40% 50% 60% 70% a%of Households that are Homeowners ■%of Permits for Single Family Homes,2013-2022 Source:HUD SOCDS Building Permits;:)1)17 -2021 American Community Survey Rental Market Baytown's rental market is experiencing a contraction like much of the U.S. with higher vacancy rates than the previous two years and slight rent decreases.This is due to the combined effect of a)a steady and rapid increase in rental housing supply as Houston builders remained active in 2021 and 2022;and b) economic uncertainty due to fears of a recession which has paused job expansion in the near term. However,this situation is deemed to be temporary.The Greater Houston Partnership anticipates that Houston will continue to experience employment growth even with a 20 i recession impacting finance-sensitive markets. Population forecasts predict an additional 121,000 households in Harris County over the next ten years. The Houston market was second in the nation for new units delivered in 2022(after Dallas),with 18,540 units.The market was also one of the few metro areas with positive absorption rates, reflecting the continued demand fueled by employment and population growth. s Baytown - relative to other submarkets - had occupancy rates slightly below average at 89.5%(compared to 90.6%for the Houston MSA).Although this indicates a high vacancy rate, it is anticipated to stabilize in late 2023 as more employers relocate or expand in the area. This study includes an assessment of rental market saturation due to growing concerns that Baytown's apartment supply will exceed demand, leading to high vacancy rates and disinvestment. From a market perspective, Baytown i is not anticipated to experience high vacancy rates due to new construction activity. The apartment vacancy rate is comparable to regional average; building permits are predominantly for single family development;and employment growth is projected to remain strong in the coming years. Baytown currently has an estimated 59 apartment complexes consisting of 11,207 units. Table 5: Building Permit Activity,2013-2022 Baytown Farris Co %Single Family, % Multi-Family, Baytown Harris Co. Single Family 2,299 180,472 66.2% 54.2% Multi-Fam4 1,172 152,636 33.8% 45.8% Totr3l 3,471 333,108 f Asking rents noticeably increased over the last five years(+27%) but are still affordable compared to regional and national averages.According to Zillow's SOVI data,as of March 2023,the typical observed market rent in Baytown is $1,368,compared to $1,656 in the Houston region,and $1,996 in the U.S. I The rental market in Baytown is divided into two types.There are Class A properties,which represent newer construction properties that have more amenities, higher rents, and higher-earning occupants.There are also a significant number of Class B and Class C properties.Class B properties tend 1 to be older but have had basic renovations in the past decade and are kept in good condition overall. Class C properties are also older(20+years) but need substantial renovation.They may show obvious signs of deterioration or require significant structural work. Class B and Class C multi-family properties are also less expensive. Because of these price and unit differences,the two markets have very limited competition with each other. I 21 I �• City of •wn Housing Study 2023 Regionally, Class A multi-family properties outperformed Class B and C properties in 2022,with positive absorption rates and a forecasted increase in rents,while Class B and C properties had negative absorption rates and rising vacancy rates. Table 6: Rent Price Comparison, Class A and Class B/C $1.85 $1,450 $1.15 $920 Chart 12: Change in Average Market Rent, 2016-2023 $2,200 - - - $2,000 — $1,800 - $1,600 -- $1,400 $1,200 $1,000 Baytown -Houston City -Houston MSA -US Source:Zillow SOVI March 2023 Chart 13: Rents by Number of Bedrooms, Q12023 $1,600 $1,395 $1,400 -— $1,205 $1,200 $1,025 $1,000 $800 $600 $400 -- $200 $0 1 BR 2 BR 3 BR Source:RentCafe using data from Yardi Matrix 22 Market Examples-Class A Multi-Farr The Standard at East Point 7447 Eastpoint Blvd. �r Number of Units Vacancy Rate Building Type Year Built N 283 6% 3-story 2016 UnrtDescription "A" 18 Unit Type Size Asking Rent Pnce/sq ft($) "• ' 1BR 763-800 $1,270-$1,431 1.76 k 2 BR 1,078-1,260 $1,480-$1,760 1.40 3 BR 1,409-1,700 $1,951 -$2,256 1.34 The Vic at Southwinds 1900 Kilgore Pky. Number of Units Vacancy Rate Building Type Year Built 265 7% 3-story 2020 ; �. Unit Description Unit Type Size Asking Rent Price/sq.ft.($) 1 BR 617-806 $1.297-$1,475 2.00 2 BR 1 A 16-1.219 $1.770-$1,828 1.55 3 BR 1,371 $2,256 1.65 Sapphire Bay Apartments 99 West Cedar Bayou Lynchburg Rd. Number of Units Vacancy Rate Build:ng Type Year Budt i5 - _ 384 2% 3 story 2017 Unit Description f "Y Unit Type Size Asking Rent Price/sq.ft.($) r� 1 BR 691 731 $1,071 $1,431 2.00 2 BR 903-1,180 $1-770-$1,828 1.65 3 BR 1,363 $2,160 1.58 Aria at Rollingbrooks- - 1700 Rollingbrook Drive ■ Number of Units Vacancy Rate Budding Type Year Built 240 4% 3-story 2015 § m i Unit Description Unit Type Size Asking Rent Price/sq.ft.($) - 1 BR 633-812 $1,109-$1,270 1.69 2 BR 1,033 $1,695 1.64 3 BR 1,306 $1,785 1.37 23 24 City of •wn Housing Study Market Examples - Class B and C Multi-Family Park at Aviano 1500 East James Ave. , --- _ Number of Units Vacancy Rate Building Type Year Built '�� a . 308 2% 2-story 1973 Unit DescriptionIW Unit Type Size Asking Rent Price/sq.ft.($) 2BR 916-955 $985-$1,195 1.15 3 BR 1,232-1,260 $1,195-$1,526 1.10 The Park at Sorrento 3400 Shady Hill Drive Number of Units Vacancy Rate Budding Type Year Built i 179 7% 2-story 1976 Unit Description _. r Unit Type Size Asking Rent Price/sq ft($) 1 BR 686 $777 1.13 — 2 BR 956-1,294 $953-$1,094 0.95 3 BR 1,371 $2.256 1.65 Providence at Baytown 1711 James Bowie Drive Number of Units Vacancy Rate Budding Type Year Built 186 7% 2-story 1969 Unit Description Unit Type Size Asking Rent Price/sq.ft.($) 1 BR 715 $730 1.02 2 BR 950 $795 0.84 3BR 1,380 $1,125 082 Marina Club 1200 Missouri St. - Number of Units Vacancy Rate Budding T ype Year f 148 23% 2-story 1969 f Unit Description Unit Type Size Asking Rent Price/sq.ft.($) Studio 450 $701 1.56 1 BR 525-720 $626-$751 1-15 2 BR 880.1,046 $877-$927 095 3 BR 1,363 $1,166 086 24 Homes for Salp Home prices in Baytown spiked during the Covid-19 Pandemic(+49%) like much of the country(+56%),fueled by increased demand and halted construction. Even with a jump in sales prices, Baytown remains a relatively affordable homeownership market.The current average home sale is $220,000 as of March 2023, 28%less than the regional average and 34% less than the average home price in the U.S. Chart 14:Average Home Sale Price, 2010-2023 5400,OW Even though home prices increased by 49%since $350,000 2020, Baytown remains a relatively affordable city $300°0° for homeownership, with an average sale price of $250,000 - - - — $220,000. $zoo,000 - - - - - $150,000 - - $100,000 $10,000 - 0 0 H .a N N rn rn O V 0 0 10 W n n 00 CO 01 01 0 0 It It N N m 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 \N NN \N e\1 ei e1 e1 ei � .� ei ei ei e/ ei .i rl ei ei e1 e\I �I ei ei e\i e\i e1 ei ei ei —Baytown —Highlands —Deer Park —LaPorte —Houston —Houston MSA —United States Even though most markets in the U.S.experienced a slight decline in home prices over the last year as interest rates have increased, Baytown experienced a year-over-year price increase of 2.2%. Market indicators show a healthy market for homeownership. In March 2023,there were 680 homes on the market(4%vacancy rate). Properties are on the market an average of 21 days with a sale to list ratio of 0.98. 25 1'� �Y'.:� I♦�ll\"H�SI"f�l•..'l l�J11�1��� �� Vill. Understanding "Affordable" Housing "Affordable housing" is a relative measure.The U.S. Department of Housing and Urban Development(HUD) has established a standard on what is "affordable" housing for any household, regardless of income. Considering other necessary expenses like food, health care and transportation, HUD deems that households who pay more than 30 percent of their income on housing expenses do not have affordable housing and are considered "cost How much ' ' you burdened." For renters,this includes monthly rent and utility costs. For need to earn owners,this includes monthly mortgage payments plus taxes and insurance. to . . . -Bedroom ApartmentIn real terms,this means an individual earning$30,000 per year would need to spend less than $750 a month on rent to have "affordable" housing. It Houston - $61,300 also means that if an individual earns$100,000 per year and rents an Baytown apartment for$3,000 a month,they will not have "affordable" housing ($100,000 divided by 12 months times 30 percent equals$2,500 per month). Affordable housing policy and programs tend to use income categories based on HUD definitions relating to "Area Median Income" or"AMI."This is the ,'middle point" of annual earnings for all families within a given area. To describe affordable housing needs, HUD categorizes households into varying income brackets based on AMI and household size. It is based on metro area wages. Table 7:Affordable Housing by Income Category 0 Affordable IndiWidua)- mily of 4 iRentl HUD Income rejgi Mortgage Range Income Range me Range Payment <30%AMI <$19,000 <$465 <$26,000 <$664 30%-50%AMI $19,000-$31,000 <$776 $26,000 $44,000 <$1101 50%-80%AMI $31,000-$50,000 <$1242 $44,000-$71,000 <$1772 Source:HUD Income Limits 2022 for Houston MSA 26 27 City of •wn Housing Study IX. Workforce Housing Needs To understand the housing needs of future workers,we analyze the median wages and home affordability for the top growing occupations in the region from 2021 to 2030 forecasted by Texas Labor Analysis.We highlight the occupations forecasted to add at least 500 new workers over this period, along with the pricing of homes (for rent or for sale)they can afford. Affordability is defined as paying no more than 30%of household income on housing expenses. We provide two variations for each occupation,one representing a single- earner household, and the other representing a two-earner household where Workers with occupations both workers have comparable pay. in lower-payingjobs like Table 8: Forecasted High-Growth Occupations in South East Texas food service, retail,and home health care, willHousehold struggle to afford rent and • • Mean Maximum Maximu Maximum Maximu will havedMiculty Annual Home m Rent Home m Rent becoming homeowners Wage Price Price (2021) • $37,224 $111,672 $781 $223,344 $1,561 . $27,662 $82,986 $542 $165,972 $1,083 Fast ... $27,662 $82,986 $542 $165,972 $1,083 WorkerConstruction $36,210 $108,630 $755 $217,260 $1,511 Laborer Co. $27,418 $82,254 $535 $164,508 $1,071 RestaurantSales Rep $63,907 $191,721 $1,448 $383,442 $2,895 Wholesale and Manufacturin Supervisor, $71,707 $215,121 $1,643 $430,242 $3,285 Construction and Extracting Refinery $78,467 $235,401 $1,812 $470,802 $3,623 Operators $30,316 $90,948 $608 $181,896 $1,216 . .- - $52,080 $156,240 $1,152 $312,480 $2,304 Plumber $60,810 $182,430 $1,370 $364,860 $2,741 .- - $57,514 $172,542 $1,288 $345,084 $2,576 • $38,874 $116,622 $822 $233,244 $1,644 Driver Home Health $21,754 $65,262 $394 $130,524 $788 Aide .A�Ilffiiill Source:Texas Labor Analysis,Top 25 Forecasted Growth Occupations,500 or more workers, 2021 to 2023. Home prices were determined using an assumed 5%interest rate 30-year mortgage. 27 28 City of •wn Housing Study As of early 2023,the average home price in Baytown is$220,000 and the average rent for a one-or two-bedroom unit is$1,000 and $1,300.According to the affordability chart below, no occupation can access homeownership as a single-earning household except for those working in refineries.When we account for two-income households,several of these positions have access to homeownership(e.g.truck drivers, electricians,etc.). However,workers with occupations in lower-paying jobs will struggle to afford rent and will have difficulty becoming homeowners.This includes people working in the food service industry, home health aides, retail workers, and janitorial workers. Preservation of existing affordable rental stock(subsidized or unsubsidized)and affordable homeownership opportunities (like Habitat for Humanity)can support the housing needs of future workers living in Baytown. Note: Oftentimes housing-related jargon will define "workforce housing" as housing for moderate and middle-income households.This does not account for the fact that a very large share of job growth, regionally and nationally,will be in service industry jobs with earnings well below 80%of AMI.Southeast Texas can expect to add 2,200 food service workers and 1,800 retail workers in the next decade. 28 X. I lousing ChaIiamges HUD provides extensive data to help housing providers and government understand their jurisdiction's housing needs through their Comprehensive Housing Affordability Strategy(CHAS)dataset.This data is published annually using the existing American Community Survey(ACS)data and quantifies the housing challenges families and individuals face based on race/ethnicity, income,tenure,and household size. It is based on self-reported survey There are approximately responses, and although lags real-time reporting(the data reflects 2015- 3,500 households in 2019 5-Year ACS data),the detail of the information provides a better Baytown who earn less understanding of what populations struggle to find decent,affordable than$25,000 peryear housing. and pay more than half their income on housing We use this data to identify key housing challenges among households living costs These households in Baytown relative to the region. are most o t vulnerable eviction and foreclosure.toe. The data represented here illustrates the number and percentage of households who are "cost burdened,"defined as paying more than 30%of their household income on housing costs;and "severely const burdened", defined as paying more than 50%of their income on housing costs. It should be noted that the figures illustrated here do not estimate the number of new housing units needed to meet growing demand;these families and individuals already live in the community and have a housing unit. It does, however, illustrate the needs for more affordable housing solutions, repair and maintenance needs, and the needs for more diverse housing stock. Key Findings: Renters • Similar to national trends, roughly 75%of renters earning less than 50%of AMI (-less than $40,000 per year) pay more than a third of their income on housing. • Alarmingly, 70%of renters who earn less than 30%of AMI ( less than $25,000 per year) pay more than half their income on housing expenses and are considered extremely cost burdened.This includes low wage workers(in occupations like food service and home health care)and many those on a fixed income(persons with disabilities and many seniors). • The renters earning less than 30%of AMI are also most at risk of eviction and homelessness. • Renters earning above 80%of AMI have an easier time affording rental housing in Baytown's market, helped by a large supply of older, more affordable rental stock. Only 9%of renters earning above $50,000 to $65,000 pay more than 30%of their income on housing, compared to 23%and 19%for the county and state, respectfully. 29 JL City of •wn Housing Study Owner! • Overall,there are roughly 1,800 homeowners who are experiencing extreme housing affordability challenges, 70%of whom earn less than 50%of AMI. • Programs to assist low income homeowners include utilities assistance,foreclosure prevention and mediation programs, and home repair programs for very low income homeowners. • A slightly smaller share of homeowners struggles with housing costs (18%)than the county(20%)or state(19%). • However, more than half of all very low income homeowners pay more than 50%of their income on housing expenses and are considered extremely cost burdened using HUD definitions.This represents over 1,000 households.This includes seniors on fixed incomes,and homeowners who may live in mobile homes. • Comparatively, Baytown homeowners earning between 50%and 100%of AMI are less likely to struggle with home prices(44% compared to 53%in the county and 49% in the state).This affirms Baytown's reputation for affordable homeownership. 30 Baytown31 City of ■ 2023 Table 9:Cost Burden, Homeowners in Baytown cost Extreme Cost Percentage L-All Burden Cost Burden or Extreme 16 Burden Severe Cost Cost L L.L' Burden Burden r 30% 2,230 458 1,169 73.0% 52.4% AMI 30% L 2,525 553 423 38.7% 16.8% 50%AMI 50"A- 3,670 978 189 31.8% 5.1% 80%AMI 80% - 2,875 297 40 11.7% 1.4% 100%AMI >10O% 14,975 563 0 3.8% 0.0% AMI All 26,275 2,849 1,821 17.8% 6.9% Source:HUD CHAS 2022 Table 10:Cost Burden, Homeowners in Harris County 'W cost Extreme %Cost Percentage All Burden Cost Burden or Extreme Burden Severe Cost Cost - .. : Burdeni E 30% 66,430 10,826 36,032 70.5% 54.2% AMI 30% - 80,533 21,714 20,950 53.0% 26.0% 50%AM[ 50% . 128,827 33,418 10,731 34.3% 8.3% BO%AMI 80% 86,488 13,111 2,899 18.5% 3.4% 10O%AMI ' >100% 514,218 22,242 3,199 4.9% 0.6% j AMI All 876,496 101,311 73,811 20.0% 8.4% Source:HUD CHAS 2022 Table 11:Cost Burden, Homeowners in Texas Percentageg All Cost Extreme Percentage Burden Cost Cost Extreme Burden Burdened Cost BurdenIF wr 30"/� AMI 478,088 88,778 239,472 68.7% 50.1% 30%- 50%AMI 556,403 147,343 117,168 47.5% 21.1% - 80%AMI 898,617 210,266 66,288 30.8% 7.4% 80 7U- 100%AMI 594,659 92,909 15,822 18.3% 2.7% >100% AMI 3,477,183 152,682 17.636 4.9% 0.5% �I 6,004,950 691,978 456,386 19.1% 7.6% Source:HUD CHAS 2022 31 32 City of •wn Housing Study Table 12: Cost Burden, Renters in Baytown Percentage Burden Severe Cost Cost 0.p Burden%--Burde� Cost Burden or Extreme - � 3p � A 3,420 188 2,374 74.9% 69.4% 30% 50%AMI 2,270 1,301 398 74.8% 17.5% so%- 80%AMI 2,879 879 30 31.6% 1.0% 80%- AMI . 1,380 123 0 8.9% 0.0% 0% A 3,815 0 0 0.0% 0.0% 13,764 2,491 2,802 38.5% 20.4% Source:HUD CHAS 2022 Table 13: Cost Burden, Renters in Harris County 11 Cost Extreme %Cost Percentage Burder� -"-- Cost Burden or Extreme Burden SeveCost BurdenBurden< 30% AMI 166,931 18,343 11� 80.3% 69.3% 30% - AMI 131,329 68,778 39,135 82.2% 29.8% FIM °la- AMI 152,524 58,449 6,598 42.6% 4.3% 80%- 100%AMI 74,107 12,629 972 18.4% 1.3% >100% , 4 AMA 203,963 7,836 536 4.1% 0.3% 728,854 166,035 162,882 45.1% 22.3% Source:HUD CHAS 2022 Table 14: Cost Burden, Renters in Texas ExtremeCost Percentage Percentage All Burden Cost Cost Extreme Burden Burdened Cost 7 0&'k- .. Burden < 30% AMI 813,406 99,768 521,173 76.3% 64.1% 30%- 50%AMI 646,286 326,375 180,872 78.5% 28.0% 50%- 80%AMI 792,767 299,485 36,261 42.4% 4.6% Bo% - AMI 395,359 57,801 4,679 15.8% 1.2% 0% AM4 1,039,073 31,854 2,815 3.3% 0.3% 3,686,891 815,283 745,800 42.3% 20.2% Source:HUD CHAS 2022 32 A Housing Demand Analysis The estimated potential for new housing(either new construction or substantial rehabilitation) is based on two factors: 1) housing supply and 2) projected housing demand. Housing supply is defined as the number of housing units that are currently available or will soon be available in the market area.This is based on current available housing(determined by vacancy rates in the for-sale and rental market) plus any new homes that will be added over the next two years.This information is estimated using building permits data. Housing demand is defined as the number of households who will be in the market for a new home between 2023 and 2032.This includes the net change in households over these ten years (including in-and out-migration i.e., households moving into the area or leaving it;and internal changes which can include one household becoming two households and natural deaths).This is adjusted to achieve "healthy" vacancy rates(7%for renters and 3%for owners),and an assumed obsoletion rate of 0.5%. The net change in households is forecasted by ESRI Business Analyst using their population and household forecasts published in 2023. The primary housing market area is the city of Baytown.The secondary market area is defined as Harris County. Market Demand Methodology Housing demand is based on how many households who move to the region over the next ten years will move to Baytown.We use the population forecasts for Harris County developed by the Texas Demographic Center in 2020 and updated in 2022.The analysis applies the average household size (2.76)to estimate household growth in the county over a ten-year period. Accordingly, Harris County can anticipate adding 121,000 households over the next ten years. The housing demand model categorizes the estimated demand into a low, moderate,and high-growth scenario representing three different absorption rates.The low growth model assumes household growth will follow Baytown's share of building permits issued in Harris County in the past ten years(1.0%). The moderate growth model assumes household growth will follow Baytown's share of all units in the county(1.7%).The high growth model assumes Baytown will absorb 2.5%of all units developed in Harris County. Numbers are adjusted for obsolescence(0.4%annually)and building permits issued in 2022.They do not account for developments in the planning stages. Demand for affordable units is based on the estimated income of future households provided by ESRI Business Analyst and estimated loss of naturally affordable units due to obsoletion. 33 34 City of •wn Housing Study Data Sources • Household projections are provided by Texas Demographic Center • Building Permit data provided by HUD Residential Building Permit Database • Income Distribution for 2027 households from ESRI Business Analyst • Obsoletion Rates from Urban Institute Um/tations The projected housing demand model uses industry standards for estimating the number of housing units the city can anticipate based on the assumptions provided above and the data available at the time of the analysis(March 2023).Several components of data are projections based on information provided by third party public and private entities, notably the forecasted household projections and income of future households. Many factors and influences can alter these projections, including but not limited to an economic downturn or natural disaster.Additionally,future local events, changes in the real estate market, new investment or disinvestment,and public sentiment will influence market potential (in a positive or negative way) over time. Because the market demand forecast period is ten years,there is greater potential for unforeseen changes in the marketplace that will influence housing demand. Table 15: Estimated Housing Demand, 2023 - 2032 Low Growth Moderate Growth High Growth Rental Units 463 638 842 rA7ordable Rentals(E80 o AMI) 159 183 211 Marker Rate Rentals 304 455 631 Homeownership 1,560 2,203 2,952 Moderotely Priced(r80Y AMI) 262 313 371 1,298 1,890 2,581 Sources:Atria Planning using data provided by Texas Demographic Center Population Forecasts;ESRI Business Analyst;and HUD CHAS 2022 34 City of •wn Housing Study XII. Conclusion Based on projections, Harris County is expected to grow by 121,000 households over the next ten years and Baytown will absorb a portion of that (estimated at 1%to 2.5%). Factoring in obsolescence and construction activity, Baytown can expect to need between 463 and 842 new rental units and 1,560 and 2,952 homes for sale over the next ten years. Ultimately,where people who move to the area choose to live will be determined by employer locations, neighborhood and school conditions, and choice of available housing stock.This presents an opportunity for Baytown to attract a greater share of new residents by providing more diverse homeownership opportunities and high-end rental housing. According to ESRI Business Analyst, Baytown is expected to lose roughly 2,300 households earning less than $50,000 per year and gain 2,900 households earning more than $50,000 per year; 80%of these households will earn six figures annually.The majority will likely purchase a home,while an estimated 20%to 30%will choose to rent. Most of these new renter households will not be in the market for Baytown's older rental stock but will rather rent in newer developments or rent a single family home. Based on future demand in comparison with existing units, Baytown has a shortage of Class A multi-family properties and a surplus of older, Class B and Class C properties. The increased housing demand presents several opportunities for Baytown. For one,there is potential to revitalize homes in the historic East End neighborhood to attract younger buyers,who(based on the annual National Realtors Association survey) prefer smaller homes in walkable neighborhoods over larger homes removed from neighborhood amenities.Second,there is greater potential for mixed use development combining retail, entertainment, and housing options.This targets higher income renters and owners interested in condos or townhomes. Finally,there is an opportunity to increase the supply of new rental housing in a way that integrates energy efficiency,design,technology,and amenities to attract younger professional renters. A significant concern with these changing demographics is the risk of displacement,where existing residents are "priced out" of the market. Households earning less than 50%of AMI - which includes much of the workforce and seniors on fixed income - are already struggling to afford housing in the current market. If prices go up,they do not have cheaper options to move into and are at a greater risk of eviction and foreclosure. Programs targeting eviction prevention,emergency housing assistance,and preservation of affordable housing will be needed to mitigate displacement risk. 35 36 City of •wn Housing Study Appendix - Housing Challenges Source:HUD CHAS 2022(from 5-Year 2015 - 2019 ACS.) 7AII - Paying Paying %Cost %Extreme 30%-50% more than Burden Cost on 50%on Burden housing housing e 0 AIMI 279 65 109 62.4% 39.1% C}; AMI 574 109 115 39.0% 20.0% rPqWMI V 585 139 24 27.9% 4.1% 809-T.AMI --" 544 38 0 7.0% 0.0% 1.11 AMI 1,825 70 0 3.8% 0.0% All 3,807 421 248 17.6% 6.5% -Elderly farrllly-Renter All Paying Paying %Cost %Extreme 30; -50% more than Burden Cost on 50%on Burden housing housing f <30%AMI 63 0 48 76.2% 76.2% C 30%-50%AM 1 115 45 25 60.9% 21.7% �50%-80%AMI 55 10 0 18.2% 0.0% 80%-100%AMI 105 0 0 0.0% 0.0% y 100%AMI 215 0 0 0.0% 0.0% All 553 55 73 23.1% 13.2% Elderly Famlly...All Households All Paying Paying %Cost %Extreme 30%-50% more than Burden Cost on 50%on Burden housing housing <30%AMI 342 65 157 64.9% 45.9% 30%-504Y,AMI 689 154 140 42.7% 20.3% 501Y.-801.AMI; 640 149 24 27.0% 3.8% i80"A-100%AMI 649 38 0 5.9% 0.0% [1110GI/o AMI 2,040 70 0 3.4% 0.0% All 4,360 476 321 18.3% 7.4% *Elderly Family defined as two or more related household members where one or more member is 65 years old or older 36 Small Family-Owner All Paying 30% Paying %Cost %Extreme 50%on more than Burden Cost housing 50%on Burden housing MI 578 49 324 64.5% 56.1% °f AMI 835 180 255 52.1% 30.5°% 50,X,-80",,AMI 1,675 460 140 35.8% 8.4°1 so%- looW,AMI 1,323 109 30 10.5% 2.3% a 100%,AMI 8,790 234 0 2.7% 0.0% All 13,201 1,032 749 13.5% 5.7% [Small Family-Renter IL All Paying 30% Paying %Cost %Extreme -50%on more than Burden Cost housing 50%on Burden housing <30%AMI 864 10 620 72.9% 71.8% f. 30%-50`,"AMI 900 509 119 69.8% 13.2% 50%-80%AMI 1,289 480 0 37.2% 0.0% 80%u-100":,AMI 653 19 0 2.9% 0.0% >100°Io AM] 1,975 0 0 0.0% 0.0% j All 5,681 1,018 739 30.9% 13.0% I Small Family-All Households All Paying 30% Paying %Cost %Extreme 50%on more than Burden Cost housing 50%on Burden housing <30IA AMI 1,442 59 944 69.6% 65.5% I j 30%-501A AMI 1,735 689 374 61.3% 21.6% 1 j ! 50`Ya-80`>�AMI 2,964 940 140 36.4% 4.7% 80% -1003i AMI 1,976 128 30 8.0% 1.5% I >100'I,AM 1 10,765 234 0 2.2% 0.0% 18,882 2,050 1,488 18.7% 7.9% *Small Family defined as two to four related household members 37 38 City Baytown • Large Family-Owner All Paying 30% Paying %Cost %Extreme -50%on more than Burden Cost Burden housing 50%on housing ,!3'0 AMI 265 60 140 75.5% 52.8% AMI 379 115 0 30.3% 0.0% 572 173 0 30.2% 0.0% 1 463 20 0 4.3% 0.0% l >10W%AMI 2,395 190 0 7.9% 0.0% l All 4,074 558 140 17.1% 3.4% rge Family-Renter All Paying 30>;, Paying %Cost %Extreme -50%on more than Burden Cost Burden housing 50%on housing I <30%AMI 448 20 353 83.3% 78.8% f 3fl°/°-50%AMI 364 304 0 83.5% 0.0% L 50'%-80%AM 1 458 115 0 25.1% 0.0% t 80%-1001�°AMI 145 0 0 0.0% 0.0% l >100°/°AMI 334 0 0 0.0% 0.0% i All 1,749 439 353 45.3% 20.2% Large Family.All Households All Paying 30% Paying %Cost %Extreme -50%on more than Burden Cost Burden housing 50%on housing <36�AMI 713 80 493 80.4':�, 69.1% WM 7 = AMI 743 419 0 56.4% 0.0% 50%-80%AMI 1,030 288 0 28.0% 0.0% j 80':5-100%AMI 608 20 0 3.3% 0.0% >100%AMI 2,729 190 0 7.0% 0.0% f All 5,8� 997 -- -- 493 ,��5.6 6- *Large Family defined as five or more related household members 38 I _ J 4 Elderly Non-Family-Owner 1 All Paying 30% Paying %Cost %Extreme -50%on more than Burden Cost Burden housing 50%on housing K30`Y AMI 565 89 284 66.0% 50.3% AMI 629 114 45 25.3% 7.2% IFIK -80%AMI 515 102 25 24.7% 4.9% BO%-10'0%,AMI 213 45 10 25.8% 4.7% Ors AMI 580 4 0 0.7% 0.0% All 2,502 354 364 28.7% 14.5% Elderly Non-Family-Renter44WL. - All Paying 30% Paying %Cost %Extreme -50%on more than Burden Cost Burden housing 50%on housing 0°4 AM[ 808 59 574 78.3% 71.0% 30% 50%AMI 333 123 85 62.5% 25.5% 5,_ U i-80`Ytu AM} 238 94 0 39.5% 0.0% 15 15 0 100.0% 0.0% A 85 0 0 0.0% 0.0% All 1,479 291 659 64.2% 44.6% Non-Family-All Households All Paying 30% Paying %Cost %Extreme -50%on more than Burden Cost Burden housing 50%on housing �30`o 1,373 148 858 73.3% 62.5% I 962 237 130 38.1% 13.5% 753 196 25 29.3% 3.3% 80% 100%AMI 228 60 10 30.7% 4.4% ?100%AMI 665 4 0 0.6% 0.0% CAN 3,981 645 1,023 41.9% 25.7% *Elderly Non-Family defined as one or more non-related persons living together where one resident is at least 65 years old.Often represents seniors living alone 39 40 City of •wn Housing Study L7 on-Family-Owner I All Paying Paying %Cost %Extreme 30%-50% more than Burden Cost on housing 50%on Burden housing MI 559 195 312 90.7% 55.8% r67_50%AMI 98 35 8 43.9% 8.2% 50%,-80%AMI 319 104 0 32.6% 0.0% �p0%AMI 304 85 0 28.0% 0.0% AMI 1,399 65 0 4.6% 0.0% All 2,679 484 320 30.0% 11.9% LNon-Elderly Non-Family-Ranter All Paying Paying %Cost %Extreme 30%-50% more than Burden Cost on housing 50%on Burden housing ra3 AM1 1,230 99 779 71.4% 63.3% 30%-50Vo AMI 545 320 169 89.7% 31.0% L 50%-8010 AMI 839 180 30 25.0% 3.6% L 80%- 1000A,AMI 480 89 0 18.5% 0.0% 100%AMI 1,204 0 0 0.0% 0.0% 4,298 688 978 38.8% 22.8% Non-ElderlyNon-Family-All Households All Paying Paying %Cost %Extreme 30%-50 ! more than Burden Cost on housing 50%on Burden housing AMI 1,789 294 1,091 77.4% 61.0% (39�=50°4 AMI 643 355 177 82.7% 27.5% 150%-80%AMI 1,158 284 30 27.1% 2.6% ig. -100%AMI 784 174 0 22.2% 0.0% > 00%,AMI 2,603 65 0 2.5% 0.0% All 6,977 1,172 1,298 35.4% 18.6% *Non-Elderly Non-Family defined as one or more non-related persons living together where no one is 65 years old or older. Often represents persons living alone 40