This Housing Assessment was conducted and presented by Brian Hoffman, the Executive Director at the time. She since left her position in 2011. This is the housing assessment that presented at that time. I believe the date was 7/2009.

1. Deuel County Housing Assessment Let’s take a look at housing in Deuel County and unlock the details together. Data Analysis + Observations + Insights by Deuel Area Development & the Rural Learning Center

2. Housing Road Map homes for sale affordability infrastructure projections renters quality of life movers building permits key learnings

3. Survey overview 61% Return Rate 696 Surveys Distributed, 428 Returned Businesses & organizations surveyed: Good Samaritan Society, Technical Ordinance, Deuel School, EMPI, ITC, Supreme MMT/ Pork Sanford Deuel County Hospital, H-D Electric, EMS, Deuel County National Bank American Family Insurance, Ardy’s Bakery, Aunt Sally’s Attic, Birdie’s Beauty Nest, Cenex C-Store, City of Clear Lake, City of Gary, Clear Lake Building Center, Clear Lake Chiropractic, Clear Lake Courier, Clear Lake Vet Clinic, Conservation Office, Deuel County, Deuel County Abstract Company, Deuel County Cenex, Deuel County Extension, Deuel County Hwy Department, Deuel County Pharmacy, Fritz Chevrolet, FSA Office, Gunderson Law Office, Hall’s Machine, Joyce’s, Kathy’s Corner, Kids In Motion, Lundberg Electric, Maynards, Mel’s Hardware, Melvees, Midwest Converter, Olson DDS, Pizza Shack, Post Office, Pronto Auto Parts, Swenson Ford, The Cowboy, The Lanes, Wells Fargo survey overview

4. Here’s afew things that we learned about housing in Deuel County… We’ll go through the main conclusions of the study first, and then provide all the details so you can see just how we got there. So, let’s get started!... Survey conclusions key learnings

7. Are our expectations higher than we can afford?key learnings

8. What people believe to be affordable housing: Less than $100,000. $60,000 – $80,000 had the highest response. Average cost of a modest new construction ranch style home: $135/sq. ft. ($190,000 for 1400sq. ft. home) There is a gap between the cost of new construction and what people consider to be affordable.This gives great potential to a purchase-rehab-resell program. The Affordability Reality #2 key learnings

9. This gap between new construction and affordable home prices raises the question of whethernew home construction is the best solution for affordable housing in Deuel? There are a few other options for affordable housing that may fit well with our needs and our local housing market… What is the Best Solution for Affordable Housing? key learnings

10. With a Purchase – Rehab – Resell Program. The data shows that there are very affordable homes selling on the market. Let’s investigate how these very affordable homes (that are likely in need of repair) can provide a housing solution that people with low- to moderate- income can afford. Let’s Get Resourceful #3 key learnings

11. #4 Down Payments are an Obstacle Many people cannot afford a Down Payment. They either have other significant debt, or don’t have enough savings built up. So…what can we do to help? Here are some recommendations… key learnings

13. Mutual Self-Help ‘Sweat Equity’ Housing

14. Gap Financing

15. Weatherizationkey learnings

17. Lump sum / Forgivable loan from the employer, or

18. CD pledge (bank loans money as CD security, equity to borrower, when CD matures bank gets investment back)Dakota Dreams Savings Fund This ICAP fund will match 2-to-1 savings for income eligible families to contribute towards a home purchase. key learnings

19. Affordability Assistance Programs: Self-Help Mutual Housing Self-Help Mutual Housing a.k.a. ‘Sweat Equity’ housing is a program offered through ICAP and USDA Rural Development to get income eligible families into home ownership. 3 local qualified income eligible families needed for a project. Families work together to build their homes. Contractor hired through ICAP to supervise the project and teach homeowners skills needed to build their homes. Virtually no labor costs results in savings on new home construction. Nice homes. In recent project in Brookings, homes appraised for $135,000 and cost home owner approximately $95,000. key learnings

21. Bad credit

22. Can’t afford a down paymentHowever, given the current economic times, it is not the greatest time for gap financing. key learnings

23. Affordability Assistance Programs: Weatherization & Energy Audits Energy Audits. Some local electric co-ops may offer free advice for increased / improved energy efficiency, known as an energy audit. We could potentially conduct an energy audit on the more affordable homes for sale on the market and identify energy efficiency measures prior to the sale. This may be a tool to increase sales and make homes on the market more attractive to potential buyers. The audit may also point out grant resources available for weatherization. key learnings

24. Turn Faces into Neighbors #5 key learnings Let’s satisfy people who are already here, rather than focusing completely on people attraction. What would make you want to stay? How can our organizations help in retaining people?

25. Retaining Residents... Defined. The University of Nebraska Lincoln recently did a study on important tactics in retaining new residents, and found the following #1. Open-minded community attitude toward new residents / new ideas #2. Individual job and career enhancement #3. Clear, positive community vision #4. Opportunities to participate in community #5. New resident networking opportunities #6. Opportunities for leadership development #7. Community social functions key learnings

26. Self-investment. Our Community needs to decide to invest in itself. Why would anyone invest in us if we aren’t? There is no free money $$. Take this information and do your best to serve your community with it. #6 Invest in Yourself First key learnings

27. Housing Road Map homes for sale affordability infrastructure projections renters quality of life movers building permits key learnings

28. What those surveyed believe to be an affordablehome % of Surveyed Prices of Homes affordability

29. Income ranges Survey options for Annual Household Income: Less than $10,000 $40,000-49,999 $10,000-19,999 $50,000-90,000 $20,000-29,999 $90,000+ $30,000-39,999 The midpoint of each range was used to calculate the following slides. affordability

30. *Annual Household Income % of Surveyed **MHP Based on 28% of Annual Household Income *$15,000 *$10,000 affordability An affordable monthly housing payment calculated from Annual Household Income (including taxes & insurance)

31. Comparison of calculatedand actual housing monthly payments Monthly Housing Payment* *MHP Based on 28% of Annual Household Income Annual Household Income affordability

33. If they had no other significant debt, the blue bar is what they could afford.

34. Debt load changes what an individual has available to pay for housing costs.? affordability

35. How does debt in South Dakota compare to the nation? According to Money Central on msn.com… 43% of American families spend more than they earn each year. The national average of household debt is $11,224 per household, not including mortgage debt. The average personal debt of a South Dakotan is $6,638.

36. Income of those hoping to build or purchase a home within the next two years % of Those Hoping to Build or Purchase Annual Household Income affordability

37. …And the cost of a home they can afford based on their income (cost of home calculated) Number of Houses Needed Price of House affordability

38. …Andthe down payment they can afford % of Those Hoping to Build or Purchase Down Payment affordability

40. To help with down payment and closing costs, we could create, in conjunction with area employers, an Employer Mortgage Assistance Program.? affordability

41. Housing Road Map homes for sale affordability infrastructure projections renters quality of life movers building permits key learnings

42. The survey showed 90 current renters, and this is the type of rental housing they live in. % of Those who Currently Rent Type of Rental Housing renters

43. Of the 90 current renters, 34 hope to move to… % of 34 Current Renters Who Hope to Move Hope to Move Location renters

44. Current renters who hope to build or purchasea home within the next 2 years 15 hope to own a home within 2 years. 12 hope this home will be in Deuel County. - - This is good retention!! - - Affordability is important. renters

45. 59% of renters plan to move to one of the following rental units within 2 years. % of Current Renters Who Hope to Continue Renting Rental Preference renters

46. Housing Road Map homes for sale affordability infrastructure projections renters quality of life movers building permits key learnings

47. Of the 428 people surveyed, 84 hope to move to… % of Those Surveyed Who Hope to Move Hope to Move Location movers

48. What does the desire for acreages mean to our cities? Everyone wants their own piece of heaven in rural Deuel County Quality of life is important Land use planning is important Can we incorporate acreages into the outskirts of city limits? Homes on the outskirts of town could be laid out far enough from each other that gives the illusion of larger space. Acreages results of loss of tax income for cities, but is good for the county. ? movers

49. Of those hoping to move, 24 hope to move out of Deuel County. They currently live in… % of Those Surveyed Who Hope to Move Current Residence Location movers

51. Quality of life is key

52. Is housing really the most significant priority in Clear Lake?? movers

53. Of the commuters, 11 hope to move to the following Deuel County locations. % of Commuters Who Hope to Move Current Residence Location movers

54. Those hoping to move to Clear Lake are interested in the following types of homes. All make below $90,000 per year. 60% make less than $50,000 per year. % of Those Who Hope to Move to Clear Lake Type of Home movers

55. Housing Road Map homes for sale affordability infrastructure projections renters quality of life movers building permits key learnings

56. Here are the Clear Lake building permits from 2007 – 2008. building permits

58. How can we encourage development?

59. Fences are popular!

60. The ‘Other’ Category includes: concrete pad, demolition of building, sign, storefront remodel, wheelchair ramp, variance, roof, and track. ? building permits

61. Housing Road Map homes for sale affordability infrastructure projections renters quality of life movers building permits key learnings

62. What are the top 5 reasons you choose to live in Clear Lake? % of Those Who Responded quality of life

63. The reasons why people choose to live Clear Lake… The expanded version % of Those Who Responded quality of life

65. Many people have always lived here.

66. ‘Quietness’ was chosen by more renters than owners.

67. Small size / Rural is important to everyone.... quality of life

68. Housing Road Map homes for sale affordability infrastructure projections renters quality of life movers building permits key learnings

69. What would improve your housing situation? % of Those Who Responded infrastructure

70. Housing Road Map homes for sale affordability infrastructure projections renters quality of life movers building permits key learnings

71. Supply and Projected Demand of Housing We wanted to know if the number of homes being sold on the market per year (i.e. supply) would meetthe projected demandof homes-for-sale needed given the number of people who wanted to build or purchase a home within two years. So, we crunched a few numbers, and… homes for sale

72. …We found the total number of those who hope to build or purchase a home in Clear Lake in the next 2 years. (18) Then took this total for 2 years (18) and divided it by 2 to get the total number per year. (9) To find out the projected total for the Clear Lake population, we took 9 x 3.1 (extrapolation for Clear Lake…but we’ll go over that later…) (28) The final number of homes needed turned out to be 28.We then compared this to the average numberof homes sold per year in Clear Lake in the past 5 years… homes for sale

73. Comparison to Actual Homes for Sale in Clear Lake homes for sale

74. Open Market Home Sales from 2004 - 2008 We also looked at historical home sales in Deuel County withinthe last 5 years. All home sales we considered were open market sales (by realtor, for sale by owner, or auction) & fit within three categories: Clear Lake homes for sale. Rural Town within city limits of any other community. Acreageswithin 3 – 30 acres, anywhere in Deuel. homes for sale

76. May be sold by owner, auction, or realtor

77. Non-open market home sale would be a sale not open to the public. For example, this could be a sale between relatives or a transfer of property. ? homes for sale

78. History of Open Market Home Sales 2005 – 2008 homes for sale

79. Absorption Rate Absorption rate: number of weeks it takes to sell the current inventory at the present rate of sales Absorption rate formula (Clear Lake) # listings on market= 14 # sold last month= 1 # sold (1) x 12 months= 12 divide 12/52 weeks = .23 units per week Divide .23 units per week into 14 (number of active listings) 14/.23= 60.9 60.9weeks is Absorption Rate homes for sale

80. Cost of Open Market Homes Sold from 2004 – 2008 # Homes Sold homes for sale

81. Comparison to other communities for 2007-2008Price of Home homes for sale

82. Age of Homes Sold in Deuel County # Homes Sold Year Home was Built homes for sale

83. Comparison to other communities for 2007-2008Age of Home homes for sale

84. Rehab Opportunities: Purchase-Rehab-Resell A few ideas: Older lower price homes that are in need of improvements are good candidates for a Purchase-Rehab-Resell (P-R-R) program. Purchase-Rehab-Resell more likely to reach the ‘affordable’ market than new construction. ICAP offers an income-based program for homeowners to Rehab their homes. How much needs to be invested in these homes for rehab? We could potentially raise funds for P-R-R (keeping in mind that money is likely to be lost or break even) ... homes for sale

85. Clear Lake has affordable homes! Seems as though there is the perception in Clear Lake that there aren’t many affordable homes on the market. But… the data shows that there are… What is it about this that people are not considering this affordable homes? Average age of homes (2000 census) which is 10 years old ... homes for sale

86. Compare to expectations… So… If there are affordable homes on the market in Clear Lake, why is there a perception that there aren’t any? Is it that the homes aren’t meeting peoples’ expectations? Is that why homes have not been considered affordable? ? homes for sale

87. Housing Road Map homes for sale affordability infrastructure projections renters quality of life movers building permits key learnings

88. Now… to extrapolate the data Next we ‘extrapolated’ the data to look at the numbers as if the survey results wereappliedto the entire population of Clear Lake. Extrapolating looks at the data on a community-wide level. Your guess is as good as ours if 32% of the people in Clear Lake would be representative of the entire population. So here we go… projections

89. Here’s how we did it… 428 Sample Size (Survey Respondents) 1335 Clear Lake Population 3.1yield ratio (1335/428 = 3.1) Multiply 3.1x data = extrapolation value projections

90. Current renters who hope to move Based on this extrapolation, there are 279 current renters and 103 hope to move. 47 hope to own a home within 2 years. Of 47 who plan to own, 37 hope this home is in Deuel County. # of current renters who hope to move 24% Type of home projections

91. Hoping to move out of Deuel CountyBased on this extrapolation, those who hope to move out of Deuel County currently live in… # of those who hope to move out of Deuel 67% Current Residence Location projections

92. Move to locationBased on this extrapolation, here are the locations they hope to move to… # of people who hope to move 31% 12% Hope to Move Location projections

93. Commuters interested in living in Deuel CountyBased on this correlation, those who live out of Deuel County, but want to move into Deuel County would like to live in... # of people who hope to move Hope to Move Location projections

94. Preferred housing types in Clear LakeBased on this correlation, here are the preferred housing types for those who hope to move to Clear Lake… # of people who hope to move 44% Preferred Housing Type projections

95. Projecting the housing need in Clear Lake… The following are projections of the future housing need in Clear Lake. These projections are based off of the 2000 Census andactual population growth in Clear Lake since 1950. Since 1950, Clear Lake’s growth rate averages 4% per decade, which translates to an increase of .4% per year. projections

96. Projecting the housing need in Clear Lake… Based on the historical growth rate of .4% per year, we estimated future housing growth needs for the next 10 – 12 years(until 2020). Theseprojections look at the number of housing units needed to accommodate population growth in Clear Lake. The need is shown on a household basis rather than total housing units, as this will provide a more accurate picture for housing unit demand. In 2020 the average household size is projected to be 2.1. Based on these factors, here’s what Clear Lake’s projected housing need looks like… projections

97. Clear Lake’s Projected Need for Single Family Homes until 2020TotalOwner Occupied: 50 Units (=24 households) # of Units Price Level of Homes Needed projections

98. Clear Lake’s Projected Need for Single Family Homes until 2020, continued… This graph shows the Clear Lake’s additional housing need until 2020 to be… Fewer than 1 additional home per year per category, and… A total of 2 – 3 additional homes per year. ... projections

99. Clear Lake’s Projected Need for Rental Units until 2020Total Renter Occupied: 20 (=9 households) # of Units Rent Payment Threshold projections

100. Housing Road Map homes for sale affordability infrastructure projections renters quality of life movers building permits key learnings

101. #1 Healthy Housing Market #2 The Affordability Reality #3 Let’s Get Resourceful #4 Down Payments are an Obstacle #5 Turn Faces Into Neighbors #6 Invest in Ourselves First key learnings

102. Housing Programs Here are some housing programs available through State (South Dakota Housing Development Authority) and Federal sources. Nearly all of these programs cater to very-low income, low-income, elderly, and disabled persons, which makes community investment even more probable if our housing needs do not fit within these programs. resources

103. Single Family Housing Programs (South Dakota Housing Development Authority) First Time Homebuyer – Provides low-interest loans to first-time homebuyers. Mortgage Assistance Program – Provides down payment and closing cost financing assistance to qualified mortgagors. In the form of a second mortgage to homebuyers employed with a participating employer. Loan amounts: $600 – 6,000 depending on household income. Loan Assistance Program – Provides down payment, closing cost, and gap financing in connection with a home purchase financed by a 1st mortgage loan through a participating lender . (SDHDA) resources

105. 3.9% (max income $46,000)

106. 5.9% (max income $54,625)resources

107. Multifamily Housing Programs Low Income Housing Tax Credit Program – Provides incentives for private developers to develop and maintain rental housing for low income renters. Tax credits offer a reduction in federal tax liability to owners/investors in eligible low income new construction, rehab, or existing housing development. (SDHDA) Multifamily Bond Financing Program – Provides sponsors of selected multifamily housing developments with mortgage loans through the sale of tax-exempt or taxable revenue bonds. Developers apply to SDHDA for financing of new construction or acquisition and rehab of rental properties. (SDHDA) resources

109. 40% conventional loan

111. Must start home constructions within 12 months of site development

112. Restrictions to keep resale of homes ‘affordable’ for 15 years.resources

114. Acquisition

115. Purchase / rehab for sale

116. Below market-rate loans to members with long-term financingFunds used in combination with other funding sources such as the Low-Income Housing Tax Credits and Community Development Block Grant. resources

117. Community Development Block Grant Community Development Block Grant (CDBG) is not often used in South Dakota for housing development, but there may be a slight possibility if used for infrastructure only. CDBG – HUD Program works to ensure decent affordable housing. An annual CDBG appropriation is allocated to States through “entitlement” jurisdictions (metropolitan areas), entitlement jurisdictions then distribute CDBG funds to other communities. The process works like this: HUD determines the amount of each grant by community need, population, age of housing, population growth lag in relationship to other metropolitan communities. Over a 1, 2 or 3 year period, no less than 70% of the funds must be used for activities that benefit low- and moderate-income persons, prevention of slums or blight, or address other urgent community development needs that pose a serious threat to the health or welfare of the community for which funding is not available. resources

118. Wells Fargo Homeownership Grant Program Wells Fargo Home Ownership Grant Program – The Wells Fargo Housing Foundation Mission is to provide sustainable homeownership opportunities for low-to moderate income people. The Grant Program provides financial resources to nonprofit local housing organzations to create sustainable homeownership opportunities for low- to moderate-income people. Wells Fargo Grant Program covers the following activities: Construction / Rehab for the development and redevelopment of construction or rehab of owner-occupied homes Homebuyer education, counseling, and prevention Subsidies for down payment and closing costs, interest rate buy downs and other susbsidies that help homebuyers purchase a home Essential home repairs, purchases and modifications Applications are reviewed 3x/year resources

119. Rural Site Development Programs Rural Site Development Programs can be used to stimulate the development of new affordable housing subdivisions in rural communities. SDHDA: Rural Site Development Loan SDHDA partners with local bank for 50% of the loan (local lender needed, must evidence to lender how project will cash-flow) 1/3 of the homes need to sell at the ‘affordable’ price ($160,000 for house, lot) Loans cover infrastructure development USDA Rural Development: Rural Housing Site Loan Program Site development loans bust be paid off in 2 years, or when lots are sold Loans cover infrastructure development resources

121. Projects must be completed in 5 years

122. Challenges:Finding a local lender Generating & showing cash-flow Lots need to move fast so that a large enough increment is generated to pay off the cost of the infrastructure. resources

123. Self-Help Mutual Housing Self-Help Mutual Housing is a program offered through ICAP and USDA Rural Development to get income eligible families into home ownership. A.K.A. ‘Sweat Equity’ housing – a minimum of 3 local income eligible families must be identified to qualify for a project. ICAP hires a contractor, and the families work together to build their homes. No labor cost results in great savings for new housing construction for the homeowner, and valuable skills are learned throughout the process. In a recent project in Brookings, cost to the home owner was approx. $95,000, and assessed value of the home was approx. $135,000 – homeowner receives this equity. resources

124. USDA Rural Development Programs Guaranteed Rural Housing Loans – 100% home financing for qualified low- and moderate-income eligible individuals. Home Ownership Loans – Homeownership loan funds that may be used to buy, build, improve, repair, or rehab rural homes to provide adequate water and waste disposal systems. Funds may also be used to modernize homes (add bathrooms, central heating, kitchens, etc). Eligible for low- to moderate-income eligible families. Section 504 Rural Home Repair Loans and Grants – loans/grants restricted to very low-income individuals to modernize and improve home (grants eligible for income eligible people 62 years of age & higher. Section 538 Guranteed Rural Rental Housing Loans – loans to organizations intending to produce new affordable rental housing by inviting qualified lenders and eligible housing providers to propose rental complexes that will serve rural residents with low- and moderate-incomes. resources

125. HUD Programs HUD Section 202 Program – Provides capital advance to non-profit developers for development of elderly housing for either independent living or congregate (frail elderly) living. The program provides 100% financing, with a capital advance, no repayment loan and operational subsidy as long as it serves very-low income elderly for 40 years. HUD Section 811 Program – Provides a capital advance to non-profit developers for the development of housing for persons with disabilities. 100% financing with an operational subsidy. Also provides rental assistance. resources

126. Paint-South Dakota Paint-South Dakota is a program offered through the SDHDA (South Dakota Housing Development Authority) SDHDA will purchase the paint and primer needed The selected parties will need to provide a volunteer group to perform labor and organize equipment to paint the house. Guidelines for the program include… The home must be a single family, owner-occupied residence in need of painting The owner should be physically or financially unable to paint their home.

127. Come on, you know you have a question! Raise that hand! ? questions

128. Looking at existing housing stock in Clear Lake… windshield survey

129. Deuel County demographic information… everything you might want to know! demographics

130. the survey document

131. Thanks to ITC for help with survey development and data analysis! Thank you, Jeff Rogers! the raw data