Analysis and Forecast of Housing Needs in the State of Iowa
Client: Iowa Finance Authority
The Iowa Finance Authority ("IFA") engaged the consulting team of Gruen Gruen + Associates ("GG+A") and RDG Planning and Design ("RDG") to prepare a comprehensive statewide assessment and forecast of housing needs in Iowa. The intent of the comprehensive assessment and forecast was to provide an information base that the IFA could use to adequately plan for its use and allocation of resources over the next 10 years. A related purpose of the study was to inform the decision-making of local governments and housing agencies as they consider how to effectively respond to housing needs likely to arise over the next decade.
Because the historical growth experiences of Iowa's rural and urban areas have varied considerably, GG+A first subdivided the state into eight regional assessment areas. The regional delineations were made consistent with existing regional planning areas and councils of government; Core Based Statistical Areas defined by the Federal Office of Management and Budget; and the geographies at which American Community Survey results from the U.S. Census Bureau are most frequently released. Upon subdividing the state into eight regions, GG+A prepared an extensive analysis of patterns that emerged over the 2000-2010 decade covering:
• Economic, employment, and unemployment conditions;
• Patterns of migration between regions of the state;
• Population change (aging, natural growth and decline, ethnicity, etc);
• Household change, formation, and dissolution;
• Household composition, size, and income;
• Supply, cost, and condition of existing housing;
• Jobs-to-housing balances; and
• Indications of housing affordability and cost-burden.
The analysis provided a historical context and identified emerging patterns to which the IFA and local entities should be increasingly prepared to respond.
Based on a forecast of nonfarm employment by industry sector, prepared by the Labor Force & Occupational Analysis Bureau of the Iowa Workforce Development department, GG+A developed a 10-year forecast of workforce housing demand for each region of Iowa. Using Public Use Microdata Samples (PUMS) from the 2010 American Community Survey, the workforce housing forecast was conditioned upon the characteristics of existing workforce households in Iowa (including their composition, size, housing tenure, housing type, and income or ability to pay for housing). This approach, rather than a traditional "housing wage" methodology, provided a current and detailed depiction of the linkage between employment growth in different industry sectors, workforce growth, and the consumption of housing by type, tenure, price, and location in Iowa.
Given the sheer volume of baby boomers expected to enter their senior years over the decade, GG+A also prepared a detailed forecast of senior housing demand by region. This forecast drew on a projection of population by age in Iowa and it's regions and also incorporated an analysis of the living arrangements and housing absorption and release patterns of older-age households Iowa (the data for which was also collected and analyzed from 2010 PUMS). The senior housing forecast provided estimates of (1) senior household growth, (2) senior housing turnover, (3) group quarters living arrangement needs, and (4) the net release of existing housing units by older-age households; all of which were incorporated and analyzed to predict the demand for new construction units oriented to the needs and preferences of senior households. GG+A also conducted a review of applicable surveys and studies to identify and describe the stated lifestyle preferences and housing expectations of baby boomers in order to discipline the quantitative analysis and forecast of housing needed to accommodate Iowa's aging population base.
To better understand how the Great Recession and housing collapse affected the statewide and local housing markets of Iowa, GG+A also completed an assessment of foreclosures in Iowa. The analysis and research articulated the negative destabilizing affects of foreclosures, strategies for prevention and mitigation, and the scope of the foreclosure problem in Iowa.
Each component of the analysis and research completed - historical trends and emerging patterns, workforce housing needs, senior housing needs, and foreclosure problems - was synthesized in order to provide a clear and concise understanding of housing needs in Iowa that are unlikely to be addressed by the private sector and how the IFA should plan to distribute its funding throughout the state. More explicitly, the Final Report and final presentation to the IFA Board of Directors identified:
• How housing needs have changed;
• How well the existing housing stock is meeting those needs;
• The needs of specific demographic groups that are mostly likely to require public subsidies/assistance;
• Locations that are most likely to lack market incentives necessary to stimulate new housing delivery;
• How employment growth can be expected to influence future housing needs and demand;
• How the aging of population will affect the type, price, and location of housing demanded and the supply of housing available in Iowa's regions; and
• Challenges associated with housing maintenance and reinvestment.
GG+A synthesized the research and analysis to provide strategic policy recommendations to the IFA concerning its use and allocation of funding. Read here.