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HomeMy WebLinkAboutChapter IV Housing Market Analy IV. HOUSING MARKET ANALYSIS AND NEEDS ASSESSMENT INTRODUCTION This section analyzes the City's housing market and affordable housing needs. The analysis reviews the City's housing availability, affordability, adequacy and accessibility. It also focuses on the housing supply and demand factors and any market imbalances. The housing market analysis and needs assessment provide a review of the affordable housing needs, and housing problems particularly as they relate to low-income populations within the City. The housing data sources for this analysis come primarily from the 2000 Census. In addition, other data sources used come from federal, state and local sources that are more recent than 2000 such as the 2003 American Community Survey (Census Bureau) and City-wide appraisal studies. A. ASSESSMENT METHODOLOGY The methodology for this analysis and assessment examined the following overall market conditions and characteristics: housing demand factors; housing supply factors; socioeconomic and development trends; housing availability, adequacy, affordability, and accessibility; HUD- specific market characteristics such as low- and moderate-income concentrations, as well as ethnic and minority concentrations; and local real estate data and stakeholder surveys. The methodology used was quantitative and qualitative research. Specific methods included reviewing and utilizing the following: secondary federal, state and city data; approved local plans such as the Housing Element and the Regional Housing Allocation Plan; socioeconomic and development trend data; housing stakeholder meetings; and geographical information systems 1. History and Economic Climate of Bakersfield Bakersfield is located in Kern County. The county is California's third largest county in land area (behind San Bernardino and Inyo counties). It covers more than 8,000 square miles and is larger than the states of Hawaii, Massachusetts, or New Jersey. Bakersfield was settled in 1858 by a handful of families who had trekked northward through the EI Tejon Pass seeking home sites rather than gold. The town was named by an early settler, Colonel Thomas Baker, who invited the weary travelers through the valley to rest overnight. These travelers would plan in advance to meet and rest in "Colonel Baker's field." Baker formally laid out the town in 1869, and within two years the city had a telegraph office, two stores, a newspaper, two boarding houses, one doctor, a wagon shop, a harness shop, one attorney, a saloon, and fifty school pupils. The Bakersfield Centennial Garden and Convention Center rests on part of the original Colonel Baker's field as well as the Centennial Plaza community park. The City of Bakersfield was first incorporated in 1873, and in the same year, the County seat was moved from the booming little town of Havilah to Bakersfield. Three years later, Havilah decided to disincorporate. It was not until 1898 that the community incorporated again. In 1910, the City of Kern, formerly the Town of Sumner (East Bakersfield), annexed to the City of Bakersfield. In 1915, the citizens of the City of Bakersfield adopted a charter calling for the city to operate under the council-manager form of government. This charter provides that the governing body of the city shall be the city council composed of seven members, City of Bakersfield Consolidated Plan 2010 IV-1 May 2005 one to be elected from each of the seven wards of the city for four years, overlapping terms, with a mayor elected from the council. In 1957, the charter was amended to elect a mayor at large. Bakersfield was one of the first cities in the United States to adopt the council-manager form of government. This type of government provides that the city council adopts ordinances; appoints members of various committees, boards, and commissions; and establishes general policies for the city. Final determination of all city policies rests with the seven members of the city council. The council also appoints a city manager to implement council policies. The changes have been many since Colonel Baker's time, but Bakersfield still retains the hospitality originally extended by the Colonel. The City of Bakersfield for 2003 boasted a population of over 267,000 people (the 13th largest city in California) and covers more than 117 square miles. The City of Bakersfield enjoys a healthy and robust business environment. In addition to its relatively low cost of living, it is easy to do business in Bakersfield. With its big city conveniences and advantages, Bakersfield still manages to maintain an atmosphere of small town hospitality, friendship, cooperation, compassion, and optimism. In 1990, the citizens of Bakersfield received the National Civic League's stamp of approval through the designation of an "All-America City" for proactively dealing with the needs of its citizens. Hallmarks of the Bakersfield community continue to be a high quality of life, a strong family orientation, and the fact that people volunteer and care. Bakersfield, rated the fifth most popular city in California in which to do business by California CEO Magazine, has experienced tremendous growth in recent years. A community rich in agriculture, oil, and the service industry, Bakersfield offers a healthy business environment and a place its work force can afford to live, raise a family and still be just a short drive away from California’s larger cities, the ocean and the mountains. The median price of a home in December 2004 was $205,000+/-. Less than 1/3 of the population earning the median income could afford to buy median priced housing in 2004. Bakersfield and Kern County have long been national leaders in the production of agriculture and petroleum-based products. The area produces 250 different crops, with Kern County alone outranking the agricultural production of 20 states. Kern’s number one crop is grapes. The county is also the largest carrot producer in the world. The county’s copious oil fields produce about 70% of the oil production in California. In fact, Kern is the leading oil and mineral-producing county in the lower 48 states. The area is also the world’s largest producer of wind-generated electricity. One-third of California’s 16,000 wind turbines are located just east of Bakersfield in the Tehachapi Mountains. Corporate service businesses, food processors, distribution facilities and manufacturing plants, including businesses such as Frito-Lay, State Farm, IKEA, Target, Nestlé USA, and United States Cold Storage have all moved into the Bakersfield area. Finally, Kern County Meadows Field airport has two runways that can accommodate both commercial and military traffic and the city is also conveniently located near three major freeways, including Interstate 5, Highway 99, and Highway 58. City of Bakersfield Consolidated Plan 2010 IV-2 May 2005 2. Housing Demand a. Population and Demographics The City of Bakersfield has the largest population of the ten incorporated cities in Kern County. According to the 1990 and 2000 Census, Bakersfield’s population increased from 174,820 to 247,057 and the County’s population increased from 543,477 to 661,645 respectively. Since 1990, the State population has grown from 29,760,021 to 33,871,848. Kern County has eleven incorporated cities within its boundaries of which Bakersfield is one. In 2000, Bakersfield represented 37.3% of the Kern County population. Between 1990 and 2000, Bakersfield experienced the largest numerical gain in population in Kern County. In 2000, Bakersfield ranks first among Kern County cities with a total population of 247,057 persons, while ranking sixth in proportional gain between 1990 and 2000. Also, Bakersfield experienced 61.1% of the total numerical change in population for Kern County between 1990 and 2000. City annual growth rate from 1990 to 2000 has been about 3.5%. The City’s 2000 population equates to about 37% of the County’s population. Additional Bakersfield maps depicting socioeconomic information are contained at the end of this section. The 2000 Census estimates the population of Bakersfield grew at an average annual rate of 4.1% between 1900 and 2000. This population growth rate is somewhat higher than the County rate of 2.2%. Over one-third of all population growth which occurred in Kern County for the period 1990 to 2000 was within the City of Bakersfield. The table below reflects this information. Smaller cities located within a Bakersfield and Immediate Surrounding Areas 30-mile radius of Bakersfield Avg. Annual Population: 1990-2000 include the following cities and Growth Rate their January 2004 Jurisdiction 1990 2000 1990-2000 populations: Shafter (13,700), Arvin 9,286 12,956 3.9% Wasco (22,850), McFarland Bakersfield 174,820 247,057 4.1% (11,150), Delano (43,200), Shafter 8,409 12,736 5.1% and Arvin (14,500) to the McFarland 7,005 9.618 3.7% southeast. Additionally, Delano 22,762 38,824 7% according to the California Department of the Finance, Wasco 12,294 21,263 7.2% for 2004 the City’s population Kern County 543,447 661,645 2.2% was estimated to be 279,700 Sources: 1990 & 2000 Census and the County’s was 751,766. b. Projected Housing Needs Future Kern County population is projected by the California State Department of Finance, Demographic Research Unit and 2000 Census. Kern Council of Governments (KernCOG) has disaggregated county-wide projections into small area population projections. The smallest geographic unit used for this analysis is the Transportation Analysis Zone or “TAZ.” Past growth, current growth and anticipated growth are analyzed for each small area. Past growth rates are obtained from observed counts, such as those published by the City of Bakersfield Consolidated Plan 2010 IV-3 May 2005 Bureau of the Census. Current growth is taken from building permits issued by the responsible jurisdiction (either the City or the County) over the last year. Anticipated growth is assumed by an examination of approved subdivisions or tracts, specific plan designations or major infrastructure projects that are either under construction or in the "pipeline" for funding. Housing growth is a function of population growth. Population per occupied housing unit at the TAZ level is assumed to be constant over the projections period, unless population growth is occurring in a previously vacant or unpopulated area. In such a case, average population per occupied housing unit for Kern County is assumed for new housing units. Note that the total Bakersfield Metro Area consists of Urban Bakersfield and Rural Bakersfield. Since the TAZs used in creating these projections do not distinguish between city and county jurisdictions, the population, housing units, and area for Urban Bakersfield are larger than the incorporated city at the time of the 2000 Census. However, KernCOG population and housing estimates for "Urban Bakersfield" represent the best available approximations for the City of Bakersfield. According to KernCOG projections for population growth in "Metro Bakersfield," there will be an expected increase of approximately 87,991 persons between 2000 and the year 2010. Average annual population increase would therefore be approximately 8,800 persons per year over this ten year period. The metro-northeast, one of five Bakersfield Regional Statistical Areas (RSA), is expected to be one of the fastest growing regions of the Bakersfield Metro Area. The following table summarizes KernCOG housing projections for 2010 and 2020. According to the 2000 Census, the City's low moderate income Metro Bakersfield 1990 2000 population (up to 80% of Census Census the median income) was Metro - Central 20,516 22,662 26,050 28,223 about 96,277 which is Metro - N. o. R. 41,436 47,559 59,295 69,640 approximately 39% of the Metro - Northeast 62,835 69,329 75,034 90,835 City's total 2000 Metro - Southeast 21,678 31,224 52,429 61,786 population. In 1990, the Metro-Southwest 52,860 61,037 74,749 82,298 City's low moderate Total 276,043 397,645 485,636 591,249 income population was Source: 1990 and 2000 Census and Kern Council of Governments, only 33%. A map at the Projected Socioeconomic Data, June 2004. back of this chapter depicts the City's 2000 low-and moderate income population by census tract. For a block group to be considered low-income by HUD standards, at least 51 % of the block group population cannot exceed 80% of the median income. According to the 2000 census, the median family income for Bakersfield was approximately $38,700, and the area median household income was $39,982. For 2003, the area median family income was $42,800, and the area median household income was $45,791. Years 2010 and 2020 Projections 2010 2020 c. Age Composition The age structure of a population is an important factor in evaluating housing needs and projecting the direction of future housing development. Based on the 2000 Census, the median age in Bakersfield was 30 years, comparable to the County median age of 31 years, and the State median age of 33 years. As compared to the 1990 Census, the City, County and State has grown slightly older in median age over the past ten years. City of Bakersfield Consolidated Plan 2010 IV-4 May 2005 Age Bakersfield has a large proportion (19%) of school age population as well as persons between the age of 20 and 44 (over one-third of the population). This age composition typically reflects a community with young families. The City’s past quality affordable housing and opportunities for homeownership is a major factor for attracting an influx of young families. As reported in the 2000 Census, 29.9% of the population in the City of 35 Bakersfield is between the ages of 30 25-44. The 5-14 age groups experienced the largest numeric 25 growth between 1990 and 2000 with a growth of 16,313 persons. In the 20 same time period, the 45-54 age 198019902000 Year group increased by 14,156 persons. CITYCOUNTYSTATE Some of the largest proportionate growth from the last census has been in the 45-54 and the 75 plus age groups. The median age in 2000 is 30.1 years, compared to the current national median age of 35.4 years in the Figure. d. Race and Ethnicity There has been a very significant increase in the number of persons of Hispanic Heritage in the City of Bakersfield over the ten years between the 1990 and 2000 Census. This factor may also explain the increase in household size over the last two Census reporting years from an average 2.75 persons per household in 1990 to 2.92 at the present time since culturally it is not unusual for Hispanic households to be multigenerational. Three, even four, generations often share the same home. This could also be one of the reasons for the increase in overcrowded units over the last two Censuses reporting years, from 7.4% to 11.7% of all households. Another factor to consider is the secondary cultural impact with the increase in Asian families, who also tend to keep the older generations with them at home. The table below reflects 61.9% of the racial breakouts numbers as “White”, and 18.7% for “some other race” as the second largest number of residents. In addition, about 32.5% of the City’s population is identified as either Hispanic or Latino. Population by Race and Hispanic Heritage (1990-2000) 1990 2000 Change Race Number Percent Number Percent Number Percent White 127,018 72.6% 152,849 61.9% 25,086 19.7% Black 16,509 9.4% 22,641 9.2% 5,677 34.4% Native American 2,005 1.1% 3,454 1.4% 1,200 59.8% Asian/Pacific Isl. 6,247 3.6% 10,708 4.3% 4,720 75.5% Other 23,041 13.2% 46,151 18.7% 23,529 102.1% Two or More Races Not collected in 1990 10,956 4.4% Cannot be compared TOTALS 174,820 100% 247,057 100% 72,565 41.5% Hispanic 35,854 20.5% 80,170 32.5% 44,060 122.9% *Persons of Hispanic Heritage can be of any race; the number listed is the aggregate number Source: 1990 – 2000 Census City of Bakersfield Consolidated Plan 2010 IV-5 May 2005 According to the 2003 American Community Survey there were 267,000 residents - 132,000 (49%) females and 135,000 (51%) males. The median age was 29.6 years. Thirty percent of the population were under 18 years and 7% were 65 years and older. This is an overall increase of 8% (19,843 persons) from the 2000 census Bakersfield population of 247,057. e. Areas of Racial and Ethnic Concentration/Disproportionately Greater Need An area of ethnic and racial concentration is defined as any census tract or group of census tracts where minorities account for more than 1.5 times the County average. A map at the back of this chapter shows these concentrations. In addition, to the extent that any racial or ethnic group has disproportionately greater need for any income category in comparison to the needs of that category as a whole, Bakersfield must complete an assessment of that specific need. For this purpose, disproportionately greater need exists when the percentage of persons in a category of need who are members of a particular racial or ethnic group is at least 10 percentage points higher than the percentage of persons in the category as a whole Only Asians had a disproportionate need as measured by housing problems. By income level, the percentage of households with a housing problem was 8.4% of extremely low- income households, 85% of low-income households, and 61% of moderate income households. Approximately 95% of low-income Asians and 100% of Native American households had a housing problem. However, the total numbers for these groups was extremely small. f. Disability/Special Needs Population According to the 2000 Census, total residents with some type of disability in Bakersfield amounted to about 81,077 which was one-third of the City population. For people 5 to 15 years it was 3,887, for people 16 to 64 it was 57,021, and for people over 64 it was 20,169. The population age with greatest disabilities was 16 to 64 years which accounts for 70% of total disabled City residents. The greatest common disability within the 16 to 64 years group is employment disability (20,737 persons) which accounts for 26% of the disabled population. Sensory disability includes blindness, deafness, or severe vision or hearing loss. Physical disability is a condition that substantially limits one or more basic physical activity. Mental disability is an emotional, physical or mental disability that last six months or longer and makes it difficult to learn, remember, or concentrate. Self-care disability is a physical, mental, or emotional condition lasting six months or more that limits one ability to dress, bathe, or get around the inside of a house. Going outside the home disability is a condition that is physical, mental, or emotional ailment lasting six months or more that makes it difficult to go outside the home alone or shop. Lastly, employment disability is a physical, mental, or emotional condition that lasts six months or more and makes it difficult to work at a job or business. The 2003 American Community Survey identified about 60,184 persons with disabilities (5 years and over – civilian non-institutionalized population). This is about 20% of the population. A revised table of the estimated number of persons with disabilities by income group for 2003 is reflected in the table below. Also see the map at the end of this Chapter for Transit and Affordable Housing Projects. City of Bakersfield Consolidated Plan 2010 IV-6 May 2005 Estimated Number of Persons with Disabilities Extremely Low Moderate Middle Type Low Income Totals 30-50% 51-80% 81-95% 0-30% AIDS/HIV 358 90 47 32 527 Disabled 10,142 5,966 24,459 19,090 59,657 Source – 2003 ACS (Census)/Kern County Public Health g. Household Characteristics and Tenure For 2000, out of 88,262 housing units, approximately 58% (50,502) of the housing units in Bakersfield were owner occupied or for sale and about 37% (32,939) were renter occupied or for rent. Large housing units with three or more bedrooms were more prevalent in the City's ownership than rental housing stock and better suited to the City's large family households. For 2000, the overall vacancy rate in Bakersfield was 5.5%. In 1990, it was 5.9% overall. Vacancy among ownership units (1.6%) was much lower than that among rental units (6.8%). Vacancy rates have dropped slightly from 1990, evidencing a 5.5% average in 2000 (2% for homeowners and 6.2% for renters). The City’s 2000 homeownership of 58% is greater than the State 55% and the County’s 57%. The City’s homeownership rate for 2003 was about 55%, which indicates an 8% increase in 3 years from 2000. In 1970, 23,073 households resided in the City of Bakersfield and that number more than tripled over the last thirty years. Between 1980 and 1990, the City of Bakersfield added 22,844 households. In 2000, there were 83,441 households, an increase of 20,941 households since 1990. The City increased by approximately 2,094 households a year since 1990, while increasing its land area from 61,244 acres to 73,026 acres. Household growth rate is the primary factor in determining housing needs. Even during periods of fairly static population growth, there may be an increase in households due to: 1) young people leaving home, 2) divorce, 3) aging of the population and, 4) other social activities that cause people to occupy a new residence. Conversely, the population may increase in fairly static household growth periods. This relationship between population and households is illustrated below by the difference in proportionate change. Between 1970 and 1980, household growth far Population Change versus Houshold Change exceeded population growth, while in more 80.0% recent times; population 71.9% 57.6% 70.0% has been slightly greater 60.0% 41.3% 52.8% than household growth. 50.0% The difference between 40.0% 30.0% population and 39.6%33.5% 20.0% household growth rates 198019902000 has resulted in a fluctuating household HouseholdPopulation size over the years (figure below). The City of Bakersfield average household size has consistently remained smaller than Kern County and the State until the 2000 Census, which was slightly higher. At the same time, the State average household size has consistently remained less than the City of Bakersfield Consolidated Plan 2010 IV-7 May 2005 County’s, except in 1980. For example, the City average household size was 2.75 persons per household in 1990, while the County average household size was 2.91 and the State average household size was 2.81. In 1990, more than half of Average Household Size (1980-2000) the Bakersfield population was in a one or two person 3.1 household, which was Household Size comparable to the County. Average 2.9 Between 1990 and 2000, two and four person 2.7 households recorded the largest numeric increases. 2.5 CityCountyState However, the larger 2.662.812.95 1980 households (five or more 2.752.912.81 1990 person) were the largest 2.923.032.87 2000 proportionate gainers between 1990 and 2000. Seven or more person households had the largest proportional increase over the time period with an increase of 109%. This is a reflection of the increase in Hispanic and Asian families moving to Bakersfield with cultures that tend to favor multigenerational households. In 2000, the five or more person households represent 16.01% of all households. The three and four person households represent 34.1% of the total households. With an increase in larger households, there will be a greater demand for three plus bedroom units. However, the demand for studio, one and two bedroom units should continue to use since 1 to 2 person households constitute 49.7% of all households. The persons per household trends for Bakersfield and the County are reflected in the table below with the City having the largest percentage increase in every category. Household 1990 2000 CHANGE Trends Number Percent Number Percent Number Percent CITY OF BAKERSFIELD 1 person 14,314 22.9% 17,962 21.5% 3,648 25.5% 2 person 18,632 29.8% 23,492 28.2% 4,860 26.1% 3 person 11,040 17.7% 14,431 17.3% 3,391 30.7% 4 person 10,280 16.4% 14,045 16.8% 3,765 36.6% 5 person 5,095 8.2% 7,517 9.0% 2,422 47.5% 6 person 1,887 3.0% 3,377 4.0% 1,490 79.0% 7 person 1,252 2.0% 2,617 3.1% 1,365 109.0% TOTAL 62,500 100.0% 83,441 100.0% 20,941 33.5% KERN COUNTY 1 person 36,501 20.0% 42,379 20.3% 5,878 16.1% 2 person 54,445 29.9% 59,384 28.5% 4,939 9.1% 3 person 30,862 16.9% 34,284 16.4% 3,422 11.1% 4 person 29,947 16.4% 33,462 16.0% 3,515 11.7% 5 person 16,995 9.3% 20,050 9.6% 3,055 18.0% 6 person 7,283 4.0% 10,056 4.8% 2,773 38.1% 7+ persons 6,083 3.3% 9,037 4.3% 2,954 48.6% TOTAL 182,116 100.0% 208,652 100.0% 26,536 14.6% Source: 1990, 2000 Census City of Bakersfield Consolidated Plan 2010 IV-8 May 2005 In 1980, 44.5% of the households were renters in the City. In 1990, the percent of renters increased slightly to 44.9% of the households, accounting for 45.6% of the household growth between 1980 and 1990. As a result of a concentrated effort on the part of the City to make homeownership affordable to all income levels, the increasing renter trends have been reversed and in 2000 renters represented only 39.5% of all households. It is estimated that 14,746 households occupy a unit in an apartment building with five or more units in the structure. That represents 44.7% of the renters in the City. The remainder occupies units in smaller buildings, duplexes, single family homes, or mobile homes. In addition, about 75% of seniors were home owners in 2000 versus 72% in 1990. In 2000, the City of Bakersfield had a higher renter rate than the County but less than the State. In 1990, the County renter rate was 41.8% and the State renter rate was 44.9%, compared to 44.9% for the City. In 2000, the City exceeds the County renter rate by roughly 1.6%. According to the American Community 44.5% Survey (Census 46.a% Bureau), in 2003 44.a% there were 91,000 42.0'10 households in LkJ.O'Io Bakersfield (an 33.0'10 increase of 7,559 33.0'10 households since 2000). The average household size was 2.94 people. Families made up 71 % of the households in 2003. This number includes both married-couple families (50%), and other families (21 %). Nonfamily households made up 29% of all households in Bakersfield. Most of the nonfamily households were people living alone, but some were comprised of people living in households in which no one was related to the householder. Renter Rate Carpa"ison (19Ð-aro) 1æJ 1 ffi) ::mJ ImOly IColrty r:lStåe I h. Large Families A large family is defined as a household consisting of five or more persons. In some cases, the needs of larger families are not targeted in the housing market, especially in the multifamily market. The availability of larger housing units in Bakersfield for large families is a perquisite for a balanced housing market. In the 2000 Census, 16.2% of the households in the City of Bakersfield consisted of five or more persons. At the same time, households consisting of five or more persons in the County were 18.8% and for the State it was 16.0%. In the City, the proportion of five or more person households has been increasing over time. For example, 10.8% (4,261 households) of the persons were in five or more person households in 1980 and 13.2% (8,234 households) of the population were estimated to reside in five or more person households in 1990. City of Bakersfield Consolidated Plan 2010 IV-9 May 2005 Between 1980 and 1990, the City of Bakersfield experienced an increase of 3,973 large family households while 13,835 three or more bedroom housing units were built during the same time period. As a result, a surplus of 9,862 larger housing units was measured for the 1980-1990 period. i. Large Housing Unit and Large Family Comparison Single-mother families (children under 18 years) experience poverty at a rate dramatically higher than single-father families. Of the 9,014 families below poverty, about 45% (4,024) were female headed households with children. Additionally, of the total number of single female headed families in 2000 which was 8,238, approximately 49% (4,024) were below the poverty level. Overcrowding is defined by the Census as more than one person per room living in a housing unit. Generally, a room is defined as living room, dining room, kitchen, bedroom(s) and finished recreation room. In 1990, 7.4% of the households in the City were considered overcrowded, by 2000 that percentage increased to 11.7%. That represents 9,751 overcrowded units. The situation is even more critical for rental households where almost 19% live in overcrowded conditions. Approximately 3,491 renter households and 1,102 owner households were overcrowded in 1990, but in 2000 there were 6,179 renter households and 3,572 owner households overcrowded. This situation is affected by large renter households unable to afford the larger ownership housing and a lack of larger rental housing units. Of the total renter households that are overcrowded (6,179) in 2000, about 18% of this amount was large family households (about 1,000 households). In addition, the need for housing for single persons, elderly, and disabled residents due to overcrowding is also great since half of the overcrowded renters are smaller households. These unit types are considered more versatile in the housing market, and consequently are built more frequently. The number of large families has been increasing in Bakersfield and consequently demand will increase for larger homes with more bedrooms. Although the supply of larger housing units has met the demand in the past, overcrowding is gradually increasing and occurring in the larger families. Bakersfield developers are encouraged to offer a balance of bedroom types with many rental sizes and ownership programs. j. Elderly Households The senior population of Bakersfield is defined as persons over the age of 65 years. Since 1990, the senior population growth rate has exceeded the City’s general population growth rate. In the 2000 Census there were 13,494 senior households estimated in the City, constituting 16.2% of the total City households. Comparatively, 16.1% of the City’s households were 65 plus in 1990, while the County’s and State’s proportion of senior households was 18.8% and 19.3%, respectively. Most likely, the demand for senior housing options will increase as the baby boom generation ages. In 1990, 28.2% of the senior households were renters, resulting in 2,842 senior renters. In the State, 27.7% of senior households were renters and 21% were renters in Kern County. Change in the proportion of senior renters is dependent on the quantity of City of Bakersfield Consolidated Plan 2010 IV-10 May 2005 housing options and the propensity to convert from ownership. In 2000, the proportion of senior renters had decreased to 25.2% or 3,400 households. In the 2000 Census, a slight majority of the senior population (48.1 %) lived in family households, which are defined as a householder living with one or more persons related by birth, marriage or adoption. Senior Households by Tenure (1990-2000) 80.0% 60.0% 40.0% 20.0% 0.0% 1990 2000 I¡¡¡¡Owner ¡¡¡¡Renter I The remainder of the senior population was composed of non-family households (43.1 %) or group quarters (8.8%). Non-family households are persons living alone or with non-relatives only. Most seniors in group quarters (74.6%) are institutionalized in skilled nursing, intermediate care or congregate care facilities while 16.3% are in non- institutionalized group quarters. In 1990, 40% of all senior citizen households (with the householder age 65 plus) had incomes below $15,000. By the time of the 2000 Census that percentage declined to 27% Institutionalized Group and actual Non-institutional Group numbers Total declined as well. Source: 1990 - 2000 Census The greatest gains were in the upper incomes. In 1990 just 11 % of all senior households had annual incomes over $50,000. At the time of the 2000 Census that income category increased to almost 24%. Over 3,300 senior households are considered above low-income. Number 5,405 4,674 1,185 11 ,268 Percent 48.0% 41.5% 10.5% 100.0% Number 7,126 6,388 1,324 14,818 Percent 48.1% 43.1% 8.8% 100.0% Eligibility for federal programs is based on the area median family income (MFI) of the community in which the project or program is located. In this case, eligibility will be based on the HUD Median Income of $39,982 for 2000. Using that as the basis, Extremely Low Income (~ 30%) are households with annual incomes ~ $13,980 - they represent 25% of all senior households. Low Income (30% ~ 50%) households have incomes greater than $11,994 ~ $19,991 - they represent 21% of all senior households. Moderate Income (50% ~ 80%) households have annual incomes between $19.991 and $31,985 - 21 % of senior households meet that criteria. Middle Income (80% ~ 95%) households have annual incomes between $31,985 and $37,983 - 23% of senior households meet that criteria. The median senior household income of $29,345 is 36% lower than the City-wide median of $39,982. This difference puts the lower-income senior households at a significant disadvantage when considering market rate housing City of Bakersfield Consolidated Plan 2010 IV-11 May 2005 choices since general households have the ability to pay higher housing prices and rents, which then leads to increasing housing prices and rents. The need for housing, affordable and suitable to extremely low and low-income seniors is great due to the scarcity of decent smaller units. There are several types of services and facilities available for senior citizens: Subsidized Housing: Bakersfield has four subsidized independent living housing complexes specifically targeted for seniors. These are: the Plaza Towers, Plaza Towers Annex, Sunny Lane Village, and Saint John’s Manor. These complexes contain 318 housing units. Licensed Residential Care Facilities: According to the California Department of Social Services, there are 46 licensed residential care facilities located in Bakersfield. These facilities have a total capacity of 1,002 beds. Some of the larger facilities include: Rosewood with 220 beds, Laurel Springs with 150 beds, Redwood Village with 99 beds, and Hearthstone with 87 beds. Adult Day Care: Another care option for seniors is the use of adult day care facilities. In the City, there are nine facilities with a capacity of 724 persons that provide this service. k. Household Income Understanding household assets is important for analyzing Bakersfield’s household ability to pay for various types of housing. According to the 2000 Census, total income distribution for Bakersfield amounted to $4,312,295,400. About 76.1% was derived from wage or salary income, 6.3% of income from self-employment income, 14% of income from retirement, SSI, or from investments, and .6% from public assistance income. For Kern County, this income distribution totaled $9,835,251,000. About 72.9% was derived from wage or salary income, 6.9% of income from self-employment income, 16.1% of income from retirement, SSI, or from investments, and .7% from public assistance income. Per capita income for Bakersfield was $17,678, and for the County it was $15,760. As previously noted, according to the 2000 Census, the City’s low moderate income population (up to 80% of the median income) was about 96,277 which is approximately 40% of the City’s total 2000 population. In 1990, the City’s low moderate income population was only about 33%. For a block group to be considered low-income by HUD standards, at least 51% of the block group population cannot exceed 80% of the median family income. Approximately 60 City block groups of 177 satisfied this condition. Based on the distribution of income for the 2000 Census, about 33,739 HH’s (40% of all HH’s) were at 80% or less of the median family income for Bakersfield. Some additional income distribution highlights from the 2000 Census for Bakersfield, Kern County, and the State are listed in the figure below. City of Bakersfield Consolidated Plan 2010 IV-12 May 2005 Bakersfield Income Distributions by Household (Census 2000 – SF3) In 1990 almost Less than $10,000 9,154 $10,000 to $14,999 5,960 30% of all $15,000 to $19,999 5,830 households in $20,000 to $24,999 5,600 Bakersfield had $25,000 to $29,999 5,195 incomes less $30,000 to $34,999 5,041 than $30,000 a $35,000 to $39,999 5,037 year, and while $40,000 to $44,999 4,531 the actual $45,000 to $49,999 4,417 numbers in that $50,000 to $59,999 7,370 category have $60,000 to $74,999 8,378 increased $75,000 to $99,999 8,704 slightly, the $100,000 to $124,999 4,169 percentage of $125,000 to $149,999 1,762 all households $150,000 to $199,999 1,258 has declined to $200,000 or more 1,195 25%. 0.01.02.03.04.05.06.07.08.09.010.0 Households with Thousands of Households incomes over $75,000 per year almost tripled between the two Census years and fully 40% of all households in Bakersfield have incomes in excess of $50,000 a year. Over the ten-year reporting period (see table below), the median income increased by 24.3% (about 2.5% annually). Households by Income (2000-2010) Income 1990 20002010* Groups No. % No. % No. % = $9,999 9,029 14.4% 9,154 10.9% 11,259 10.9% $10 K- $19,999 10,063 16.1% 11,790 14.1% 14,500 14.1% $20K- $29,999 9,608 15.4% 10,795 12.9% 13,385 12.9% $30K- $39,999 9,174 14.7% 10,978 12.1% 13,277 12.1% $40K-$49,999 7,721 12.4% 8,948 10.7% 11,006 10.7% $50K-$74,999 10,609 17.0% 15,748 18.8% 19,370 18.8% = $75,000 6,286 10.1% 17,088 20.4% 21,018 20.4% Total 62,500 100.0% 83,601 100.0% 102,829 100.0% $32,154$39,98249,177 Median Income * Assumes a 23% median income population increase from 2000 to 2010 per KernCog Population Projections: 2000-2020 Urban Bakersfield According to the 2000 Census, approximately 43,781 (16.5% of the total population) individuals residing within the City were below the federal poverty line. The family type with the highest poverty rate was “Female – No Husband – Children Under 5 years and 5 to 17 years” (about 1,264 or 61% of the families in this category were under the poverty line). The race with the highest poverty rate was Black (37% were under the poverty line). Additionally, according to the 2000 Census, 25% of individuals under 18 years old were under the poverty line. City of Bakersfield Consolidated Plan 2010 IV-13 May 2005 According to the American Community Survey (Census Bureau), in 2003 there were 12% of Bakersfield residents that were in poverty (a decrease of 5% since 2000). Fifteen percent of related children under 18 were below the poverty level, compared with 8%of people 65 years old and over. Ten percent of all families and 35% of families with a female householder and no husband present had incomes below the poverty level. I. Employment (Outlook) Trends According to the California Employment Development Department (EDD), the Kern County labor force consisted of 200,100 persons in 1990 and was estimated at approximately 245,600 persons in 2000. This represents an annual average increase of 2.3% or 45,500 jobs. In 2000 the largest employment sectors were Services and Professional (52%), Government (18%) and Farm and Agricultural Services (17.9%). According to the 2000 Census, the three industries combined for 88.1 % of the County labor force. Between 1980 and 1990, the City and County had fairly comparable job to household ratios, but in more recent years the County's job to household ratio continues to increase slightly while the City's is decreasing. Since 1990, the City's job per household ratio has decreased from 1.33 jobs per household in 1990 to 1.09 in 2000 (less than 1.0 (per household) means negative job growth). Job creation is more important now than it was ten years ago. According to the 2000 Census, 66.1 % of the labor force that lived within the City actually worked there as well. A total of 97% of all employed persons worked in the County. A strong majority of these workers are commuting alone by car (76.6% in 2000) but their commute is generally less than 30 minutes each way. For the City, approximately 102,001 persons (civilian population 16 years and older) were employed. About 55,229 were male, and 46,772 were female. The table below identifies labor trends which accounted for approximately 89,556 workers within the City's labor force. Generally, the unemployment rate has decreased since 1992 in the City and the County with the City unemployment rate consistently remaining lower than the Kern County rate. Between 1990 and 2000, employment in the City of Bakersfield increased at an average of 1.2% per year. 1990 90,290 83,090 I 1991 I 91,600 I 83,660 I I 1992 I 93,490 I 82,770 I I 1993 I 93,680 I 82,960 I I 1994 I 92,680 I 82,350 I I 1995 I 94,860 I 85,100 I I 1996 I 96,810 I 87,710 I I 1997 I 97,670 I 88,830 I I 1998 I 97,820 I 89,080 I I 1999 I 101,000 I 93,000 I I 2000 I 100,340 I 92,020 I I Source: Employment Development Department 7,200 7,940 I 10,720 I 10,720 I 10,330 I 9,760 I 9,100 I 8,840 I 8,740 I 7,930 I 8,320 I 8.0% 8.7% I 11.5% I 11.4% I 11.1% I 10.3% I 9.4% I 9.0% I 8.9% I 7.9% I 8.3% I I City of Bakersfield Consolidated Plan 2010 IV-14 May 2005 From 2001 to 2003, the City’s unemployment rate has averaged about 3% less than the County’s. Additionally, during this same period, the City’s labor force has averaged about 35% of all employed persons in the County. Listed below State EDD Annual Unemployment Figures are the top Labor Unemploy % YearArea NameEmployment ForceNumberRate employers in 2001 Kern County 288,200 257,400 30,800 10.7% Kern County 2001 Bakersfield 101,000 93,070 7,930 7.9% and the top 2002 Kern County 296,400 261,600 34,800 11.7 employment 2002 Bakersfield 103,530 94,570 8,960 8.7% industries for 2003 Kern County 302,300 265,200 37,100 12.3% the City. Five 2003 Bakersfield 105,440 95,870 9,570 9.1% have more than 2,000 employees. Kern County is the largest employer in the City. A map at the end of this chapter reflects spatially the location of major employers with transit service. Major Employers in the County Number of Name Industry Employees Kern County Government 7,475 Guimarra Farms Agriculture 4,200 Grimmway Farms Agriculture 2,500 Dole Bakersfield, Inc. Food Processing 2,300 William Bolthouse Farms Inc. Agriculture 2,000 Bakersfield Memorial Hospital Medical 1,400 City of Bakersfield Government 1,300 Bear Creek Productions Petrochemical 1,250 Mercy Healthcare-Bakersfield Medical 1,200 Texaco Exploration & production Petroleum 1,100 Chevron Texaco Petroleum Production 1,000 State Farm Insurance Insurance 1,045 Aera Energy LLC Crude Petroleum & Natural Gas 870 Cal State University Bakersfield Education 800 Source: Bakersfield Chamber of Commerce – 2002 In addition, according to the American Community Survey, the figure below identifies Bakersfield’s Distribution of Employment by Industry for 2003. According to the American Community Survey, in 2003 76% of Bakersfield City workers drove to work alone,11% carpooled, 3% took public transportation, and 7% used other means. The remaining 3% worked at home. Among those who commuted to work, it took them an average of 19 minutes to get to work. Overall, there is a need to City of Bakersfield Consolidated Plan 2010 IV-15 May 2005 create more higher paying jobs to keep up with the burgeoning population and housing cost increases. 3. Supply a. Existing Housing Inventory/Residential Construction The City's housing inventory as of 2003 included about 96,000 residential housing units and over half of these parcels were developed after 1979. The largest number of houses built in a ten year period occurred during the 1990's (about 23,000). Below is a table depicting the number of occupied housing units built by decade for the City and County. In addition, about 9,082 housing units were also built between the period of 2001 to 2003. The trend indicates a very aggressive housing development market with about 3,700 built units in 2003, an average of about 3,000+ units per year. 1990 - 2000 23,087 1980 - 1989 21,380 1970 -1979 18,108 1960 - 1969 9,679 1950 - 1959 8,081 1949 and earlier 7,927 Source: 1990, 2000 Census *Note: Of the 231,564 units built in the County during this time period about 38% (88,262) occurred in the City of Bakersfield. 26.2% 24.4% 19.3% 10.9% 10.3% 8.9% 32,928 58,346 43,617 31 ,165 34,864 30,644 14.2% 25.2% 18.8% 13.5% 15.1% 13.2% Between 1990 and 2000 the City had an estimated increase of over 2,500 multi-family (two or more units per structure) dwelling units. In 2000, 69% (19,683 units) of the housing in the City were single-family units. Proportionally, single-family construction increased by 47.8% for 1990 to 2000, while multi-family new construction increased by 11.4%. During the same time period, single-family units in Kern County increased by 20.2% and multi-family units increased by 9.6% proportionally. Proportionally single- family development is over twice the average for the City than the County. Single-family 2-4 Units 5+ Units Mobile Home Total Single-family 2-4 Units 5+ Units Mobile Home Total Number Percent City of Bakersfield 41,207 62.7% 8,888 13.5% 13,568 20.6% 2,052 3.1% 65,715 100.0% County of Kern 133,482 67.7% 19,820 10.0% 20,708 10.5% 23,210 11.8% 197,220 100.0% 60,890 10,130 14,884 2,358 88,262 160,440 20,798 23,637 26,689 231,564 Percent 69.0% 11.5% 16.9% 2.6% 100.0% 69.3% 9.0% 10.2% 11.5% 100.0% b. Residential Construction Trends From 1991 to 2003, a total of 27,315 new housing units were permitted in the City of Bakersfield. Almost 92% of the new homes were standard single family units, about 7% were multi-family units in large complexes containing five units or more and the remainder was in smaller projects with two to four rental units. As reflected in the table above, there have been only 306 additional mobile homes placed on permanent foundations in the City over the same period of time. This is probably due, in large part, to the relative affordability of standard single family homes and the availability of low mortgage interest and first time home buyer programs. Additionally, according to the City Development Services Department, 2004 housing permit City of Bakersfield Consolidated Plan 2010 IV-16 May 2005 performance from January to October reflected 3,215 single family housing permits were pulled which averages 357 permits per month for new housing construction starts. According to building permit data, on an average 1,948 new housing (one to four) units were permitted in Bakersfield over a thirteen year period (1991 to 2003). During this same period, about 153 multi-family 5+ units per year were permitted. This was sufficient to meet the previous Regional Housing Needs Assessment (RHNA). The RHNA (from 2002-2007) requires the City to generate approximately 13,805 units. This equates to 2,751 permits annually over five years or 230 units per month. Based on the trend and the 2004 housing permit performance (January to October), Bakersfield should be able to meet the new 2002-2007 RHNA goals. According to the 2002 Bakersfield Housing Element the City has zoned sufficient land to meet, or exceed, the RHNA targets at all income levels. c. Historical Building Permits by Year – City of Bakersfield Vacancy Trends 2 - 4 5+ Single Family Vacancy trends in Year Multifamily Multifamily Units Units Units housing are analyzed 1991 1,046 8 136 using a “vacancy rate” 1992 1,767 14 380 which establishes the 1993 1,696 20 169 relationship between 1994 1,432 2 181 housing supply and 1995 1,567 2 380 demand. For example, 1996 1,336 0 141 if the demand for 1997 1,436 2 163 housing is greater than 1998 2,045 6 133 the available supply, 1999 1,869 2 75 then the vacancy rate is 2000 1,994 10 122 probably low, and the 2001 2,432 13 80 price of housing will 2002 2,947 18 14 most likely increase or 2003 3,626 35 16 remain stable. Total 1991-2003 25,193 132 1,990 Additionally, the Source: City of Bakersfield Building Permit records to January 2004 vacancy rate indicates whether or not the City has an adequate housing supply to provide choice and mobility. According to the 1990 Census, the total vacancy rate was 5.6% (3,708 vacant units) in the City of Bakersfield, compared to 8.6% for Kern County and 7.7% for the State. These figures are skewed by the number of seasonal and other types of vacancies. According to the 2000 Census, the vacancy rate for the City was 5.5%, 9.9% for the County and 5.8% for the State. In the Census, there are four “vacant” categories: 1) for rent, 2) for sale only, 3) for seasonal, recreational, or occasional use and, 4) all other vacant. The “other” vacant category includes everything that has not already been classified, such as units held for occupancy by a caretaker or janitor, or units held for personal reasons of the owner. In the 1990 and 2000 Census, a large majority of the vacant housing units in the City were in the for rent category. City of Bakersfield Consolidated Plan 2010 IV-17 May 2005 Vacancy by Type City of Bakersfield Kern County Type of Vacant 1990 2000 1990 2000 Units # % # % # % # % For Rent 2,039 55.0% 2,187 48.5% 5,206 30.3% 7,029 32.3% For Sale Only 556 15.0% 1,018 22.6% 2,185 12.7% 3,409 15.7% For Seasonal, Recreational, or 186 5.0% 268 5.9% 4,973 29.0% 5,738 26.4% Occasional Use Other 927 25.0% 1,036 23.0% 4,792 27.9% 5,267 24.2% TOTAL 3,708 100% 4,509 100% 17,156 100% 21,743 100% Source: 1990, 2000 Census d. 2004 Sales and Rental Activity The following housing sales and price table includes market conditions by zip code for rd the 3 quarter from 2003 to 2004. This quarterly report was compiled by Affiliated Appraisers using a hybrid of Multiple Listing Service (MLS), Public Records, and Appraiser Gary Crabtree’s (SRA) housing database. The table reflects not only MLS, but new construction information and FSBO’s. Bakersfield Market Conditions rd 3 Quarter 2004 2003 ZipCode# Sales$ PriceSize$/Sq.ft# Sales$ PriceSize$/Sq/ft. 93301 39 190,038 1,447 131.33 40 165,577 1,638 101.08 93304 238 150,718 1,225 120.09 202 106,195 1,264 84.02 93305 186 142,224 1,220 116.58 140 106,381 1,190 89.40 93306 252 187,522 1,469 127.65 201 141,587 1,537 92.12 93307 263 143,942 1,213 118.67 145 113,313 1,294 87.57 93308 259 183,007 1,387 131.94 158 149,172 1,488 100.25 93309 280 208,834 1,582 132.01 282 171,103 1,708 100.18 93311 183 313,718 1,936 162.04 167 232,502 1,934 120.22 93312 357 277,709 1,832 151.59 240 200,588 1,748 114.75 93313 252 227,401 1,607 141.51 196 167,928 1,631 102.96 93314 92 356,494 2,281 156.29 79 266,151 2,239 118.87 Volume 2401 Mean Totals 216,510 1,566 138.23 165,500 1,606 103.02 New Construction 281,468 2,069 136.04 190,904 2,087 91.47 According to Affiliated Appraisers, because of a hot housing market the average selling prices in 2003 and 2004 were exceeding listing prices. The average selling price in the rd 3rd quarter of 2003 rose from $165,500 to $216,510 in the 3 quarter of 2004, an average increase of about $51,000 in 1 year. Additionally, the cost per square foot for new construction went up by $44.57 from 2003 to 2004 ($91.47 to $136.04). However, the market is showing signs of softening and the overall market is expected to cool somewhat through the end of the 2004 year with fewer homes selling and home prices rising, but at a slower pace. Because of the increased prices in 2004, entry-level priced homes are creating a challenge for homeownership by first time home buyers. City of Bakersfield Consolidated Plan 2010 IV-18 May 2005 As of Fall 2004, there were about 725 single family (non-mobile) units listed for sale in Metro-Bakersfield ranging from a $65,000 one bedroom/one bath fixer-upper home to a $3.6 M 6 bedroom/5 bath home with pool. The apartment market survey of the Greater Bakersfield Metropolitan area was conducted by Kern Appraisal Company in Spring 2004 which provides additional supplemental information to the Census 2000 Bakersfield housing profile. The Kern Appraisal survey contained 7,286 apartment units or approximately 18%, of an estimated 40,000 apartment units. The historical vacancy trend over a five year period from 1999 to 2004 is shown in the figure below. The April 1, 2004 citywide vacancy of 3.3% is a decrease from the October 2003 survey of 4.1%. Over the last five years, historical vacancy peaked at 5.9% in April of 2001, and then declined to 3.1%, its lowest point, in April of 2002. Citywide vacancy has been under 5% for two and half years. Historical Vacancy Rate Despite the April Metropolitan Bakersfield Apartment Market 3.3% vacancy, 5.9% 5.5% several managers 6.0% 5.1% stated vacancy was 5.0% 4.2% 4.1% 3.9% much higher during 3.5% 4.0% 3.3% Percentage 3.1% 3.1% the winter months, 3.0% as move outs 2.0% (buying homes) 1.0% increased. Coupled 0.0% with typically slow Oct-99Apr-00Oct-00Apr-01Oct-01Apr-02Oct-02Apr-03Oct-03Apr-04 winter traffic, there were limited opportunities to fill the vacancies. But with the spring weather, income tax refunds, and temporary increases in promotions, vacancies filled. The results of the survey are organized according to the eight major submarkets in the metropolitan area as shown in the table below Apartment Market Vacancy Survey Total Units Number of Physical Promotional Rental Rate SurveyedVacant UnitsVacancy RateVacancyRange Southwest 2,682 101 3.8% 0-8.1% $400-1,125 Far Southwest 1,652 69 4.2% 0-10.8% $590-1,070 South 558 9 1.6% 0-7.6% $432-700 Central 489 13 2.7% 0-5.6% $345-795 North 269 2 0.7% 0-2.3% $300-870 Northeast 1,037 32 3.1% 0-7.8% $425-920 East 27 2 7.4% 0% $350-500 Northwest 572 16 2.8% 0-5.6% $710-1,400 Metropolitan 7,286 244 3.3% 0-10.8% $300-1,400 Bakersfield Source: Kern Appraisal Company – April 1, 2004 Since October of 2003, physical vacancy declined in the Central, North, East and Northwest, and marginally increased in the Southwest, Far Southwest, South and Northeast. The North and South submarkets reported the lowest physical vacancy rates at 0.7% to 1.6%. The Far Southwest and East submarkets reported the highest vacancy City of Bakersfield Consolidated Plan 2010 IV-19 May 2005 rates at 4.2% to 7.4%. The sample size in the East submarket is small, reducing the reliability of the result. In reality, actual is near the other submarkets. A significant decrease in the Northwest, from 11.8% in October of 2003 to 2.8% in April of 2004, is largely due to absorption of a new complex. Promotional vacancy consists of concessions and/or promotions used to attract and retain tenants. This affects the actual rent collected and is primarily used in the upper end complexes, in conjunction with a lease. Of the complexes in the April 2004 survey, 15% offered a promotion, unchanged from the October 2003. Promotional vacancy, being used in all submarkets, is most often offered in the Far Southwest, Northeast, and Northwest submarkets and when vacancy levels temporarily increase. The primary purpose of promotional vacancy is to reduce turnover, or when a larger than typical number of tenants move out, a temporary tool to draw new tenants. In addition to overall vacancy, Kern Appraisal analyzed the market by unit type (number of bedrooms). Lofts, studios, and one bedroom units have been included in the one bedroom category. The vacancy and rental rates by submarket and unit type are outlined as follows: 1,151 4.3% $430- 750 499 3.4% $590- 780 306 2.6% $432-525 225 3.1% $345-570 55 0.0% $300- 770 219 3.7% $425-690 18 11.1% $350-400 187 2.7% $710-900 2,660 3.6% $300-900 1,321 3.4% $400-1,125 987 4.3% $600-1,070 214 0.5% $450-600 216 2.8% $390- 700 213 0.9% $475-870 600 3.3% $518-830 9 0.0% $400-500 285 2.8% $795-1,250 3,845 3.2% $390-1 ,250 9 7 3.3% $625-1 ,090 10 6.0% $750-1,050 0 0.0% $695- 700 0 0.0% $435- 795 0 0.0% $650 4 1.8% $595-920 0 0% $0 3 3.0% $975-1,400 24 3.1% $435-$1,400 City of Bakersfield Consolidated Plan 2010 IV-20 May 2005 Citywide, the one-bedroom apartment unit physical vacancy rate was virtually unchanged at 3.6% in April 2004 versus 3.7% in October 2003. The two-bedroom unit apartments decreased significantly from 4.4% in October 2003 to 3.2% in April 2004, three-bedroom apartment units report a physical vacancy of 3.1 %, which is a decrease from 3.7% in October 2003. The decline in vacancy in three bedroom units is a reverse from prior surveys, when the April number typically increases from the October survey. This could be due to more home buyers, those between homes, becoming a bigger portion of the market. The most common reasons given for vacancies continue to be new home purchases, with the second employment relocation. Most new tenants continue to be obtained through employment relocation and referrals. Of the survey respondents, 73% reported no change in traffic, 19% reported an increase in traffic, and 7% reported a decline in traffic. Since October 2003, the number with no change has increased, those with an increase were up, and fewer were experiencing a decrease in traffic. This is consistent with spring weather, income tax refunds, and temporary increase in promotions generating an increase in traffic. A significant change since October 2003 is a decline in the number of rent increases. Only 26% of the respondents reported increases, a decline from 51% in October 2003. Increases typically ranged from 2 to 10%, with the majority 2 to 5%. About 7% reported a decrease and 44% no change. The submarket rent trend results indicates the Northwest and Far Southwest have the highest average rent per unit at about $800 to $950/month, the Northeast and Southwest follow at $650 to $700/month, the South, North, and Central, are clustered at $550 to $600/month, and the East is at the low end at $400-$450/month. The majority of low- income block groups exist in the downtown, south and east parts of town. Of note, is a leveling trend in the northwest and far southwest markets, but continued increasing trend in the southwest, northeast, north, and south submarkets. The increased supply of investor owned homes for rent, which start at the $800 to $1,000 per month rent level, is having an adverse effect upon the upper end rental ranges. The following two charts display the historical average rent trends by unit type and submarket. The Rent Trends chart indicates a recent downturn in the one bedroom, upturn in the two bedrooms, and level trend in the three bedroom units, over the last six months. Competition from an increasing number of three bedroom homes, purchased as investments and rented, could be slowing the upward trend in the three bedroom unit. $900.00 Rent Trends By Unit Type City of Bakersfield $800.00 $700.00 $600.00 " ~ :Ê $500.00 " 0 :;; ~ $400.00 ~ « $300.00 $200.00 $100.00 $0.00 Oct-99 Apr-OO Oct-OO Apr-01 Oct-01 Apr-02 Oct-02 Apr-03 Oct-03 Apr-04 I-+-O"e Bedroom ---Two Bedroom -tr-Three Bedroom 1 City of Bakersfield Consolidated Plan 2010 IV-21 May 2005 e. Residential Absorption, Foreclosures, and Defaults Residential building absorption refers to the net change in building occupancy levels within a local market from year to year. Hot real estate markets will have high absorption rates while declining markets will have low and even negative absorption rates. Although construction and absorption of housing units are not synonymous, under recent housing market and financial conditions, very few residential units are constructed without adequate market demand to assure relatively rapid absorption. Therefore, we can examine construction trends as a proxy for absorption (occupancy) of housing units. The City's inventory of undeveloped and agricultural land, combined with an aggressive annexation policy, has provided the land resources to support dramatic residential growth. Although the mid-1950's were a period with relatively little new housing construction, building permit records indicate that between 1979 and 2000, about half of the City's housing stock was constructed. Between 2000 and 2003, new residential housing permits in Bakersfield totaled about 9,181 units and of these units at least 12% (110) were multi-family apartments (Bakersfield housing units accounts for 38% of the County's housing market). The residential growth from 2000 to 2003 indicates the City had an average annual absorption rate of nearly 4.5 million square feet of residential space per year which translates into an annual average of 3,020 new housing units (average size of 1,500 sq.ft.) during this period. Because of a constrained housing inventory, the average days for sales units to be on the market (DOM) in 2003/2004, was approximately 32 days. Additionally, of the multi-family units constructed during this same three year period at least 600 units were earmarked for affordability housing clientele (0% to 30% and 31 % to 60% of the median income). These affordable multi-family units normally had a conservative 25 to 30 units per month absorption rate, and with a Metro Bakersfield 2004 (April) average physical vacancy rate of 3.3%, demand for affordable rental housing units will probably not subside in 2005 but continue to remain strong. Finally, construction data does not reflect the total pent-up demand for affordable rental housing. Construction of "assisted" housing (e.g. units affordable to lower income households and to persons with disabilities) requires substantial financial subsidies in order to create units that are both affordable and financially feasible. They are built not in response to market demand, but rather in response to the availability of financial subsidies required to achieve feasibility. Existing housing stock that is affordable to lower income households tends to be older, and located in the central city rather than the developing suburban areas. Because rents tend to be low in some older neighborhoods, there is less incentive on the part of owners to repair and reinvest in the properties; therefore, market rate units with low rent may also be in substandard condition. Newer market rate units tend to be built in areas where they can achieve higher rents to support the cost of new construction. As the affordability gap widens for Bakersfield from 2005 to 2010, the pent-up demand for affordability housing (rental and sale) is expected to increase proportionately. According to Marketwatch.com, Inc., Bakersfield lead the state last year with a 30.5% housing price appreciation. According to DataQuick, a real estate information service, foreclosure activity in California stayed flat at a low level during the first quarter of 2004, the result of robust home sales and strong appreciation rates. City of Bakersfield Consolidated Plan 2010 IV-22 May 2005 Lending institutions started foreclosure California Foreclosures Stay Low proceedings on 15,031 homeowners in California during the January-to- March period. That was up 0.2% from 14,955 for the prior three months, and down 25% from 20,035 for last year's first quarter, according to DataQuick Information Systems. However, Foreclosure activity in California stayed flat at a low level during the first quarter of this Tulare, Madera and Kern year, the result of robust home sales and strong appreciation rates. ( by DataQuick 2004) counties had the highest loan-by-loan foreclosure risk. According to DataQuick, more than 85% of the homeowners who found themselves in default were able to stop the foreclosure process by bringing their mortgage payments current, or by selling their home and paying the mortgage off. In the mid-1990s only half of all distressed homeowners were able to do that. While foreclosure properties tugged property values down almost 10% in some areas eight years ago, the effect on today's California market is negligible. st For Kern County, notice of default activity during the 1 quarter decreased about 14% from 2003 to 2004 probably partly due to the increased housing appreciation and the robust resale real estate market. Over a one quarter period about 600 residential defaults occurred or about 200 per month for Kern County. Considering the City has about 38% of the total housing stock, if allocated proportionately based on units, this would account for about 228 per quarter or 76 per month which is a relatively low rate of default (amounts to about 1% per year of the city housing stock). f. Overall Trends and Activity According to Kern Appraisal, the supply and demand factors affecting apartment vacancy are population and employment growth or decline (demand generators), and the amount of new construction or increased competition (supply). Employment growth has continued to steadily increase and as evidenced by new home construction, population growth has significantly increased, increasing demand for housing. Most of the new resident purchasers are from larger metropolitan areas. They are attracted by the large price differential between nearby larger metropolitan markets and the Bakersfield market. Demand for apartments is from job transfers to the area, homeowners between homes (sold the prior residence and waiting for the new one to be completed), formation of new households, or dissolving of old households, that cannot afford a home. The apartment supply is beginning to indicate signs of expanding. The first large apartment complex, constructed in nearly 10 years, the 138 unit Pollo Villas at Jewetta Avenue and Hageman Road, reached full occupancy late last year. The 24-lot four-plex subdivision on Allen Road, south of Rosedale Highway has been completed and is about 65% rented up. A second four-plex subdivision in Riverlakes, off Coffee Road, is in process. Another 116 unit complex in Riverlakes will come on line late this year. In City of Bakersfield Consolidated Plan 2010 IV-23 May 2005 ? planning is another 400 units. All are located in the northwest submarket and will adversely affect the vacancy in the Northwest submarket over the next year. In the concept stages for 2004, are 1,500 to 2,000 new apartments. These do not include ?? the remodel of 105 Padre Apartments located downtown and 258 apartments on Bernard Street (East Bakersfield). Both should come on line later this year. Another source of competition is from houses. Rapid home price appreciation has attracted many investors, increasing the supply of homes for rent. Investor purchases of homes continue to result in increased competition for apartments, having the most effect upon the upper end rental ranges. Eventually, this will filter down to all rental rates. A significant number of new apartments being constructed or renovated will come on line in 2004-05. In view of the current trends, physical vacancy is forecast to increase, temporary promotions will increase and rent increases are forecast to slow. According to Affiliated Appraisers, increases in “for sale” entry-level prices raises concern over chances for first time-homebuyers (Bakersfield Californian article dated October 16, 2004). Traditional entry-level neighborhood home prices increased an average of $37,000 from the third quarter of 2003 to the third quarter of 2004. Home prices have risen in Bakersfield about 3% each month from 2003 to 2004. Average process for new and resale homes shot up from $165,500 in 2003 to $216,510 to 2004 which maybe the highest Bakersfield appreciation rate (34.2%) in 40 years according to Affiliated Appraisers. According to the City’s Planning Division, the number of active tentative tract maps for October 2004 showed that the City had approximately 95 active tract maps with a remaining 4,678 acres and 14,503 lots undeveloped. The City is experiencing substantial interest from the construction community for buildable lots which will be needed for the expanding City population. The current level of interest for housing is also coming from outside investors and folks emigrating from high priced California cities such as Los Angeles and costal communities. Out of towners may account for as much as 20% to 75% of the buyers according to realtors (Bakersfield Californian Article dated July 20, 2004). According to Affiliated Appraisers, the housing market is slightly out of balance (average selling prices are exceeding listing prices). However, based on the increased construction activity in single family dwellings, relatively low interest rates (about 5.7% 30-year-fixed for October 2004), and the buildable lots coming on line, it appears there should be a sufficient supply of residential units to accommodate the anticipated future demand for housing. B. HOUSING AFFORDABILITY Affordability is defined as a household spending 30% or less of household income for shelter. Shelter is defined as gross rent or gross monthly owner costs. Gross rent is the contract rent, plus utilities. In most cases, the contract rent includes payment for water, sewer and garbage. “Gross monthly owner costs” includes mortgage payments, taxes, insurance, utilities, condominium fees, and site rent for mobile homes. One of the major barriers to housing affordability for a community is the cost of housing (purchase or rental). City of Bakersfield Consolidated Plan 2010 IV-24 May 2005 According to the 2000 Census, a total of 27,784 households, which is just over 35% of all households, in the City of Bakersfield pay in excess of 30% of their income (considered cost burdened paying more than 30% of their total household income towards their mortgage) for shelter. As expected, Households by Income by Overpayment (2000) renter households had Renters Owners a higher percentage of Income Range % of all % of all households who over # of # of Of Households Renter Owner Households Households pay with 45.9%. Households Households However, almost a third Less than $10,000 5,395 16.3% 1,586 3.4% of home owners (28%) $10,000-$19,999 6,369 19.3% 2,343 5.1% $20,000-$34,999 3,006 9.1% 3,564 7.8% also overpay. The $35,000-$49,999 360 1.1% 3,129 6.8% overpayment situation > $50,000 38 0.1% 1,994 4.3% is particularly critical for Total 15,168 45.9% 12,616 27.5% renters with annual Source: 2000 Census incomes less than $20,000 where almost 12,000 households (35.6%) are cost burdened. 1. Homeownership Affordability As previously noted, the U.S. Department of Housing and Urban Development (HUD) estimates area Median Family Income (MFI) for each jurisdiction in the United States. Many housing funding programs, such as Community Development Block Grant (CDBG), HOME Investment Partnership Program (HOME) and Low-Income Housing Tax Credit (LIHTC), utilize some form of the income groups to establish eligibility and affordability. According to the 2000 Census, the median price for a Bakersfield single family house was $106,500 and the income required to qualify for the median priced house was $30,094. For Kern County, the 2000 median price for a single family house was $94,000 and the income required to qualify for the median priced house was $26,364. Additionally, the median family income for Bakersfield in 2000 was $38,700 which suggests that the typical median income family could afford the median priced house. The table below suggests 100% affordability in 2000 for the 51% to 80% (Low) MFI owner’s HH group. In addition, the 2000 Census data indicates that only 63% of the 0%-50% (Extremely Low and Very Low) area MFI household groups were able to afford owner- occupied housing. Overall, there were 1,695 owner units in excess of owner households (51,620 – 49,925). According to the Bakersfield Owner Units Affordable to Lower Income HH California Number of Units Potential % Number of Affordability Affordable to with Association of HH in Income Category % Income Affordable Realtors (CAR), Category Category Housing the December 0=50% Area MFI 3,705 5,682 63% 2004 median 51=80% Area MFI 21,490 5,319 100% housing price for > 80% Area MFI 26,425 38,924 68% * Bakersfield was Total 51,620 49,925 1.04 Index ** about $205,000 Source: 2000 Census/HUD 2000 CHAS Table (an increase of * For 2000 the affordability factor for this HH income group was constrained by an 99% since 2000), overall housing stock supply imbalance of about 1695 units. and for the ** A total index of 1 indicates overall affordability for all households (owners). County of Kern it was approximately $190,000 (an increase of 102% since 2000). These statistics reflect an exceptionally hot real estate market since the 2000 census. City of Bakersfield Consolidated Plan 2010 IV-25 May 2005 According to HUD, the Bakersfield FY 2004 median family income was $46,600. A monthly housing affordability index measures the percentage of households that can afford to purchase a median-priced home. The index is the most fundamental measure of housing well-being in a community. According to CAR and the City of Bakersfield Economic and Community Development Department (EDCD), the percentage of Bakersfield households that could afford to purchase a median-priced home in September 2004 was approximately 32%, or about one out of three residents, which is slightly higher than the Central Valley at 26% (Bakersfield is part of the Central Valley’s housing market), and California at 19%. Based on CAR statistics, the minimum household income needed to purchase a $200,000 Bakersfield median-priced home in September 2004 was about $58,000 ($11,400 more than the actual median income) as opposed to $107,000fora median-priced home of $465,000 in California. For 2004, the housing affordability index for all Bakersfield income and tenure groups is substantially less than the percentages reflected in the 2000 Census (for 2000 Census the housing affordability index was 1.51 or 151%). In order to provide housing to all economic levels in the community, a wide variety of housing opportunities at various prices should be made available. The following table describes the ideal maximum monthly payment (30% or less of the household’s total income) and typical loan costs for a household of four in the four major Consolidated Plan income groups: Extremely Low (= 30% of the area MFI), Low (> 30% but = 50% of the area MFI), Moderate (> 50% but = 80% of the area MFI), and Middle Income (> 80% but = 95% of the area MFI). It assumes 20% down payment plus closing costs, a 30 year conventional loan at 5.7% fixed interest rate with a Tier 1 credit rating and an area MFI of $49,000 (family of four) in 2005 for Bakersfield. Example of Income Groups by Affordability for Purchase Estimated 2005 Bakersfield Monthly Mortgage Costs – Four Person Household) ( Maximum affordable mortgage qualification 30% or less of 50% or less of 80% or less of 95% or less of for a family of four at Extremely Low, Low, the area MFI the area MFI the area MFI the area MFI Moderate, & Middle Income Limits * Max Sale Price $42,000 $73,000 $111,000 $131,000 Loan Amount $33,600 $58,400 $88,800 $111,350 Annual Household Income $14,750 $24,550 $39,300 $46,668 Loan Type (Conventional) Fixed Fixed Fixed Fixed Loan Rate 5.7 5.7 5.7 5.7 Loan Term 30 yr 30 yr 30 yr 30 yr Monthly Mortgage Payment $243 $423 $644 $903 Other Monthly Housing Costs $127 $191 $335 $339 Total Monthly Housing Cost** (30% = HH $370 $614 $979 $1,242 Income) Remaining Monthly Income $859 $1,432 $2,296 $2,647 20% Downpayment $8,400 $14,600 $22,200 $26,000 Estimated Closing Costs $1,646 $2,778 $4,471 $4,600 Total Cash Required at Closing $10,046 $17,378 $26,671 $30,600 Source: Federal Ginnie Mae/City of Bakersfield * FHAMortgage (Purchase/Value) maximum as of October 2004 for Bakersfield One-Family Residential Dwellings was $160,176 (FHA 203 (b) maximum limit). ** A household paying more than 30 percent of their total income towards their rent or mortgage is considered by HUD to be cost burdened. City of Bakersfield Consolidated Plan 2010 IV-26 May 2005 As summarized in the above table for Current Sales Listings for Single Family Homes, only 27% (194) of the total homes “for sale” (725) in Bakersfield during October 2004 were at or below the median housing price of $200,000. Of the 194 homes at or below the median price, about 58 housing units (or only 8% of the total October 2004 “for sale” housing stock) were affordable to Low (1 HH), Moderate (15 HH), and Middle Income (42 HH) groups using conventional financing with a 20% down payment plus closing costs. For October 2004 there was 0% affordability for Extremely Low (= 30%) area MFI groups. Types of potential available government or non-profit assisted housing financing for low- income buyers are: the American Dream Downpayment Initiative (ADDI) which was signed into law on December 16, 2003; State of California Department of Housing and Community Development (HCD) CalHome Program; California Housing Finance Agency (CalHFA) Homeownership Program; Downpayment Loan Program through the California Housing Loan Insurance Fund (CaHLIF); Federal National Mortgage Association Start-up Mortgage Program; California Rural Home Mortgage Finance Authority’s Rural Gold 1st Time Buyer Program; California Rural Home Mortgage Finance Authority’s Rural California Gold Lease Purchase Program; Habitat for Humanity Homeownership program; HUD’s Section 8 Housing Assistance (Housing Certificate Fund) Payments Program; City of Bakersfield’s Downpayment Assistance Program; and the Women with Vision’s Forward Housing program. The City of Bakersfield over the past five years through its Southeast Infill Housing Program assisted two minority households in purchasing homes. The two homes in the Southeast Redevelopment Project Area varied in price from $87,500 to $90,000. The amount of assistance was $5,000 each. In addition to the City’s American Dream Downpayment Initiative (ADDI) program which is geared towards first time home buyers and may not exceed $10,000 or 6% of the purchase price of the home, whichever is greater, the City is also in the process of increasing their down payment assistance program to $35,000 which will increase affordable homeownership among low-income family applicants and create more housing choices. Based on the estimated income purchase figures previously noted, very little housing stock is available for homeownership that would allow buyers below the median income to become homeowners without potentially being “cost burdened” (paying more than 30% of their total household income towards their mortgage) or “severely cost burdened” (paying more than 50% of their total household income towards their mortgage). Because of the increasing scarcity of affordable housing stock to choose from, the typical low-income household buyer (particularly 0% to 50% of the area MFI) will be at risk of being “cost burdened” with conventional home loan financing, and have the added financial burden of coming up with a 20% down payment plus closing costs. Based on the 2000 Census and the 2003 American Community Survey information, the Bakersfield median house appreciation from 2000 to 2003 was about 7% per year and the median income inflation was approximately 5% per year which implies a minimum 2% cumulative gap per year between median income inflation and median housing appreciation which further adversely impacts the housing affordability index. Unless real estate prices stabilize and interest rates remain exceptionally low or innovative government or non-profit housing assisted programs are made available to low-income households, low-income home buyers in Bakersfield will continue to experience a rising affordability gap in home purchasing over the next five years. City of Bakersfield Consolidated Plan 2010 IV-27 May 2005 2. Rental Affordability As noted, almost 46% of renter households pay in excess of 30% of their income for shelter (with the majority of the households being extremely low and some low-income. According to the 2000 Census, the Bakersfield median gross rent was $564 and for Kern County it was $518. In addition, the 2000 census data also revealed that 23% of Bakersfield renter households spend more than 50% of their household income in gross rent as opposed to 21% for the County of Kern (table below). The 2000 Census table below indicates Gross Rent as a Percentage of Household 100% renter affordability for the 31% to Income 80% (Low and Moderate Income) area MFI 2000 Census Bakersfield (HH) renter’s HH groups. In addition, the 2000 Total: % 33,018 Census data shows only 27% affordability Less than 10 percent 1,540 for the 0% to 30% (Extremely Low) area 10 to 14 percent 3,261 MFI. This indicates that the brunt of the 15 to 19 percent 4,507 household cost burden in 2000 was within 20 to 24 percent 4,039 the “extremely low” income household 25 to 29 percent 3,039 group. 30 to 34 percent 2,561 35 to 39 percent 2,085 The apartment market survey of the 40 to 49 percent 2,918 Greater Bakersfield Metropolitan area 50 percent or more 7,604 (does not include public housing stock) Not computed 1,464 which was conducted by Kern Appraisal Company in Spring 2004 contained 7,286 apartment units or approximately 18%, of an estimated 40,000 apartment units. Using their sample data reconfigured for analysis of rental affordability for Renter Units Affordable to Lower Income HH 2004, and with a median Number of Units Potential % family income of Number of HH Affordability Affordable to with $46,600, table below in Income Category % Income Affordable shows sample estimates Category Category Housing of the Area Median 0=30% Area MFI 2,109 7,791 27% Family Income 31=50% Area MFI 7,305 6,350 100% “affordability range” and 51=80% Area MFI 19,155 5,885 100% “affordability gap” for > 81% Area MFI 6,745 12,603 54% * Bakersfield’s low-income Total 35,314 32,629 1.08 Index ** renters. Source: 2000 Census/HUD 2000 CHAS Table * For 2000 the affordability factor for this HH income group was constrained by an overall housing stock supply imbalance of about 2,685 units. ** A total index of 1 indicates overall affordability for households (renters) City of Bakersfield Consolidated Plan 2010 IV-28 May 2005 SPRING 2004 APARTMENT AFFORDABILITY* (Renter Income Group Affordability Range) Column A Column B Column C Column D Columns A-D Median Extremely Modest Low Income Middle Income Rental Rental Low Income Income Affordability Affordable Affordable Unit Size Monthly Affordable Affordable Gap Cost Cost Cost CostCost Area MFI 0=30% 31=50% 51=80% 81=95% A. $250 1 B. $17 = 250 600 <$350 $350 = $583 $583 = $932 $932 = $1107 Bedroom C. 0 = $17 D. None A. $324 2 B. $91 = 324 674 <$350 $350 = $583 $583 = $932 $932 = $1107 Bedroom C. 0 = $91 D. None A. $568 3 B. $335 = 568 918 <$350 $350 = $583 $583 = $932 $932 = $1107 Bedroom C. 0 = 335 D. None Note: Affordability means not “cost burdened”. The table above suggests that there is an overall affordability gap for 0% to 80% of the area MFI rental household groups for Bakersfield in 2004. The most severe rental affordability gap lies with the “extremely low” and “low” income rental household groups for all rental unit sizes. However, the “moderate income” rental household group does have a progressing affordability gap for 3 bedroom units. Additionally, the same Table suggests no affordability gap for middle income rental households in 2004 which may be due to the ample availability and diversity of rental housing stock and modest rental rates. In conclusion, assuming Bakersfield real estate prices for purchase and rental continue to increase more swiftly than previous decades, and if household median income increases remain below median housing price appreciation, the housing affordability index for Bakersfield will continue to decrease for household income groups between 0% to 80% of the area median income. More households in this income group will be cost burdened or priced out of the homeownership and rental market. A Bakersfield Californian article dated December 21, 2004 and entitled “Report Bleak for Renter’s” is included as Appendix which, support the pending housing rental crisis. The article state that in Kern County, a person has to earn $11.62 an hour to afford to rent a modest two-bedroom home, which means the minimum wage worker must work 69 hours a week to afford a two-bedroom unit. 3. Housing Availability Housing availability is one of the most critical determinants of the quality of life. While some people place greater emphasis on location, size, and various internal amenities than do others, availability to housing units affects nearly every other factor of daily living. Based on the 2000 Census and the 2000 CHAS (HUD) Tables, there is no shortage of available units for households of three and four persons. However, in 2000 Bakersfield did reflect a shortage of available units for 0 to1 and 4+ bedroom size dwellings. This housing inventory imbalance indicates a scarcity of single family dwellings for very small and large families. For large families (5+), this scarcity could lead to overcrowding conditions. City of Bakersfield Consolidated Plan 2010 IV-29 May 2005 As previously noted in the housing demand section, for Bakersfield the total number of residents with some form of disability in 2000 was about 81,077 which amounts to about one-third of the City population. According to the Bakersfield Independent Living Center, many persons with disabilities are on a fixed income (extremely low to low-income range). In many instances, existing housing is ill suited for persons with disabilities. Architectural barriers and housing afford ability are the two main reasons according to the Bakersfield Independent Living Center. As previously noted in the rental affordability section, for 2000 there were only 27% of renter units affordable to extremely low-income households. Many disabled households are lower income (such as those between 0% and 30% area MFI) and are financially challenged from obtaining suitable affordable housing. <25,653> 7,854 22,636 <88> 4,748 1-2 41,454 I 3 I 14,431 I I 4 I 14,045 I I 5+ I 13,511 I I Total I 83,441 I I Source: 2000 Census/CHAS Tables With an overall rental vacancy of 3% to 4%, and based on the increased construction activity in single family dwellings and apartments for 2004, there should be a sufficient supply of residential units over the next five years to accommodate the anticipated future demand for rental and for sale housing. However, the current real estate market indicates a housing imbalance mix and an unmet demand for affordable real estate products for small, elderly, large low-income families, and persons with disabilities (0 -1 and 3+ bedrooms). 4. Housing Accessibility Public transit should link lower income households, which are often transit dependent, to major employers where many lower income persons may work and where job opportunities may exist. If an integral relationship between public transit, major employers, and lower income housing does not exist, housing choice is impeded because persons who depend on public transit are limited in their choice of where they can live. The Kern Council of Governments (KernCOG) and other major transit providers have worked very closely with agencies such as the County Department of Human Services and the Independent Living Center to ease transportation problems for those in transition from welfare to work. Public and assisted housing in the City of Bakersfield is very well served by the bus system. About 90% of City affordable housing projects are within on-quarter mile of a transit route (2004 City of Bakersfield Analysis of Impediments by CBA). The remaining 10% of affordable housing projects could be better served by existing bus routes (see end of this chapter for map depicting a spatial analysis of transit and affordable housing). More information on accessibility to employment from underserved households within Bakersfield as well as accessibility to affordable housing by various types of households can be found in the City's Analysis of Impediments for 2004. Additionally, areas of ethnic concentration where minorities account for more than 1.5 times the county average can be found in a map at the back of this section which shows these concentrations. City of Bakersfield Consolidated Plan 2010 IV-30 May 2005 5. Housing Conditions a. Age of Housing Stock The age of a community's housing stock provides insight into the condition of housing, and potential need for upgrading. As an older, well-established community, Bakersfield has a significant number of older housing units. In the Housing Supply section, indicated the average age of the City's housing stock. In 2004, about 36% of the current housing stock was built prior t01975 which means that about 34,795 housing units are at least 30 years or older. Given that the accepted standard for major rehabilitation need is units over 30 years old, the age of the City's housing stock indicates the potential need for rehabilitation and continued maintenance of a significant portion of the City's housing. For purposes of this survey, the City had approximately 63,979 residential parcels with sufficient survey housing information (out of a total of 93,821 residential parcels in 2003). Of these parcels, the digital property survey concluded that 53,125 (83%) are standard (i.e., well maintained no obvious problems), 7,380 (11.2%) need minor rehabilitation (i.e., some peeling, exposed wood, need painting), 1,834 (3%) need moderate rehabilitation (i.e., roof needs replacement, outdated doors/windows), 1,110 (2%) need major rehabilitation (i.e., missing stucco/siding, bad peeling, structural problems, decaying exterior), and 530 (.8%) are candidates for demolition (see map at the back of this section). The housing analysis also indicates that the majority of residential units needing rehabilitation are concentrated in low-income areas. Housing condition maps shows that the correlation between majority rental areas and poor housing condition areas is not as high as the correlation between majority low-income areas and poor housing conditions areas. b. Survey Methodology Determining housing conditions for a community is traditionally done through windshield surveys that rate the condition of housing according to a set of criterion. For the metropolitan Bakersfield, the availability of three existing data sets has allowed for a suitably accurate and less expensive method. The first data set is from the Kern County Assessor's Integrated Property System (KIPS). The system contains the assessed valuation and square footage of residential structures, by parcel, county-wide. The second data set is a product of the Valley-Wide Geographic Information System (VWGIS). This contains a digital map of parcels in the entire San Joaquin Valley, including all of Kern County. The third data set was the Census Bureau's Topologically Integrated Geographic Encoding and Referencing (TIGER) file with neighborhood block group boundaries. Through a multi-step process, these data sets were combined to determine the housing conditions by census block group for all of Metropolitan Bakersfield and Kern County. The following criteria were defined to determine housing condition: 1) Residential structures with an assessed valuation of $0 to $9 per square foot would most likely require demolition; 2) Residential structures with an assessed valuation of $9.01 to $16 per square foot would require major rehabilitation; 3) Residential structures with an assessed valuation of $16.01 to $22 per square foot would require moderate rehabilitation; 4) Residential structures with an assessed valuation of $22.01 to $34 per City of Bakersfield Consolidated Plan 2010 IV-31 May 2005 square foot would require minor rehabilitation; and 5) Residential structures with an assessed valuation above $34 per square foot would normally be considered standard. Applying these condition ranges to each parcel and summarizing them by block group produce an indicator of housing condition. Analysis of the data indicates that about 83% of Kern County's housing condition is considered standard and about 17% is substandard. The following tables summarize the results of the housing conditions survey conducted. Most of the housing units built 1978 or earlier and requiring rehabilitation and demolition are predominantly concentrated in lower income areas of the City. At the end of this chapter are "maps" which illustrate the distribution of housing units that require major rehabilitation, as well as housing units identified for potential demolition due to their dilapidated conditions. Additionally, based on the 2000 Census, there were about 968 housing units lacking complete kitchen facilities, and 446 units lacking complete plumbing facilities. 2003 -It"\1""inn Conditions 3u, yçy c:, Y I' /1.Qf}j/"",I:LY;;; iiilNl(ji'j iiipêctifi No. of Demolitions ($ 0 to $ 9 /sq. ft.) - assessed valuation 530 .68% No. of Major Rehabs ($ > 9.01 to $ 16 /sq. ft.) - assessed valuation 1,110 2.22% No. of Moderate Rehabs ($ > 16.01 to $ 22 /sq. ft.) - assessed valuation 1,834 5.99% No. of Minor Rehabs ($ >22.01 to $ 34 /sq. ft.) - assessed valuation 7,380 5.82% No. of Standard Units (> $ 34 /sq. ft.) - assessed valuation 53,125 53.47% No. of parcels with housing condition information 63,979 68% No. of parcels with incomplete housing condition information 29,842 32% Total Parcels 93,821 100% Number of Housing Units Built in 2001 2,463 27.12% Number of Housing Units Built in 2002 2,919 32.14% Number of Housing Units Built in 2003 3,700 40.74% Total Housing Units Built in 2001, 2002, & 2003 9,082 100% Conditions No. of households occupied by Owners No. of households occupied by tenants Number of Total Households No. of total residential units built1978 or earlier No. of residential units built1978 or earlier that are predominantly occupied by low-income households No. of residential units built1978 or earlier that are estimated to have LBP contamination * Average percentage for city low income block groups is about 65%. ** National average is 75% for units containing LBP built1978 or earlier. Source: Metropolitan Bakersfield Housing Conditions Analysis - April, 2004 by Information Technology (City of Bakersfield) 65%* 44,384 75%** City of Bakersfield Consolidated Plan 2010 IV-32 May 2005 C. LEAD-BASED PAINT HAZARDS 1. Health Hazard of Lead Lead poisoning is the number one environmental health hazard to children in America today. With 10 to 15 percent of all preschoolers in the United States affected, lead poisoning is at epidemic proportions. Lead's health effects are devastating and irreversible. Lead poisoning causes: IQ reductions; reading and learning disabilities; decreased attention span; and hyperactivity and aggressive behavior. While lead was banned from residential paint in 1978, more than three-fourths of pre-1978 homes (national average) may contain lead-based paint. And the older the property, the more likely it has lead-based paint. Lead hazards are most severe in dilapidated older housing; the worse the condition of the home, the greater the risk of lead exposure to children. Sources of lead-based paint hazard include: ? Lead dust is the most common source of lead exposure. ? Lead is released from paint as a result of: - Deterioration (e.g., on exterior walls) - Abrasion (e.g., on windows, floors, stairs) - Impact (e.g., from doors) - Disturbance (e.g., during painting or rehabilitation). ? Unsafe rehabilitation and demolition practices increase lead hazards. 2. Title X Requirements The Residential Lead-Based Paint Hazard Reduction Act of 1992 focuses on the reduction of hazards, risk assessment, and prevention. Virtually all HUD programs are covered by Title X which mandates that jurisdictions address the following areas of concern when using federal assistance for housing activities: Hazards : “Hazards” means any condition that causes exposure to lead from lead- contaminated dust, soil, or paint that is deteriorated or present in accessible or friction surfaces. Contaminated dust is considered the most common pathway of childhood exposure to lead. Lead-based paint hazards do not include intact lead-based paint which is not on a chewable, impact or friction surface. Risk assessment and interim controls: Risk assessment requires on-site analysis to determine existence, nature, severity, and location of lead hazards. Interim controls are put into place and focus on measures that reduce human exposure to contaminated dust associated with the presence of lead-based paint. Clearance Testing: Clearance involves testing settled dust for lead contamination after hazard control work; it ensures that fine particles of lead in dust have been cleaned up. Prevention, as well as treatment: Reduction of hazards before a health problem occurs is critical. The age of housing stock is an acceptable basis for estimate in the location of dwellings with lead-based paint. Title X does not rely on children with elevated blood-levels (EBLs) as a means of locating dwellings in need of abatement. HUD has issued regulations for cities to follow to protect young children (under the age of six) and pregnant mothers from lead-based paint hazards in housing that are financially assisted by federal government or being sold by the government. The requirements which took effect on September 15, 2000 applies to housing built before 1978; the year lead-based City of Bakersfield Consolidated Plan 2010 IV-33 May 2005 paint was banned nationwide for consumer use. According to HUD the most common sources of childhood exposure to lead are deteriorated lead-based paint (LBP) and lead- contaminated dust and soil in the residential environment. A large portion of these children are in families of low-income and are living in old homes with heavy concentrations of LBP. City staff estimates that up to 44,384 residences in the City that were built before 1978 may contain the presence of LBP and of these units about 38,466 are occupied by low-income residents. Because of the LBP regulations, new requirements for housing acquisition and rehabilitation are followed depending on whether the housing is being disposed of or assisted by HUD funds, and also on the type and amount of financial assistance, the age of the structure, and whether the dwelling is renter or owner-occupied. HUD has developed the following risk assessment guidelines for LBP: Building Age: ? maximum risk from paint applied before 1950 ? severe risk from paint applied between 1950 and 1960 ? moderate risk from paint applied between 1960 and 1970 ? slight risk from paint applied between 1970 and 1977 ? very low to no risk from paint applied after 1977 Condition of the Painted Surfaces: ? maximum risk from flaking or heavily chalking paint ? moderate risk from chipped but otherwise undamaged paint ? slight risk from sound and undamaged paint 3. Incidence of Lead Hazards In light of the State legislative mandate and in accordance with the public health implications, the County Public Health Officer is responsible for the overall implementation of the lead poisoning prevention program. Under the direction of the Health Officer, the Maternal, Child, and Adolescent Health (MCAH) Program of the Kern County Health Department (KCHD) will have the primary responsibility of coordinating the Kern County Lead Poisoning Prevention Program along with Kern County Environmental Health Services, California Children Services, local housing agencies, and approved laboratories. In 1991 the Centers for Disease Control established the blood lead level of concern to 10 micrograms per deciliter (µg/dL) of human blood. Blood lead levels in children over 10 µg/dL are considered to be elevated. A child with a blood lead level greater than or equal to 20 µg/dL requires a full medical evaluation and public health follow-up. A child with a blood lead level in the 15 to 19 µg/dL range is at high risk for lead poisoning. Such children are followed closely by their health care provider. When this blood lead level persists for two consecutive tests, three to four months apart, public health intervention to identify sources of lead exposure is recommended if resources permit, and the family is followed until the child’s blood level has returned to normal. Through the Kern County Lead Prevention Program, the County identifies elevated levels of lead in blood, provides case management to lead burdened children in lead-poisoning Levels 1 through 4, and educates families in lead poisoning and prevention. The overriding City of Bakersfield Consolidated Plan 2010 IV-34 May 2005 goal of the Program is to prevent neurological damage from chronic exposure. The table below illustrates the Kern County Health Department guidelines for follow-up blood test. Guidelines for Follow-up Blood Test by Health Assessment Provider Venous Blood Venous Blood Lead Retest Frequency Lead Level <10 µg/dl If 12 months of age and low risk, retest at 24 months of age. If 12 months of age and high risk, retest every 6 months until 2 subsequent specimens with <10 µg/dl or 3 specimens at <15 µg/dl, then retest in 1 year. 10-14 µg/dl Retest in 3-4 months until 2 tests show <10 µg/dl or 3 tests at <15 µg/dl, then retest in 1 year from last specimen. 15-19 µg/dl Retest in 3-4 months if 2nd test remains in this range. Retest until 2 subsequent tests show <10 µg/dl or 3 tests show <15 µg/dl. Referral to Public Health for environmental investigation if 2 test results show lead blood of > 15 µg/dl. 20-44 µg/dl Immediate retest to confirm results. Referral to Public Health for environmental investigation. Referral to the California Children Services for evaluation. 45-69 µg/dl Referral to Public Health for environmental investigation. Urgent referral to the California Children Services for evaluation. >70 µg/dl or Referral to Public Health for environmental investigation. symptomatic Immediate referral to the California Children Services for evaluation and immediate hospitalization. Since March 1993, the Kern County Health Department has been keeping records of children with blood leads of 10-19 micrograms per deciliter (µg/dl) of human blood. Among the 32 children who were reported as lead poisoning cases for the period July 2003 through June 2004, approximately 17 of them reside in central and east Bakersfield where there are concentrations of Hispanic and Black persons and lower income households, as well as the City's older housing stock. Ten were reported in Southeast Bakersfield which has been noted for the high level of substandard housing. However, it should be emphasized that lead-poisoning may come from several sources: lead-based paint, contaminated water, home made remedies, candy made in Mexico, and contaminated soils. Kern County Department of Public Health reports adult cases as well as childhood cases. Incidence of Childhood Lead-poisoning: 2004 (Metro Bakersfield) Number Number Number General Location by Census Tract of Casesof Cases of Cases 1/03-6/03 7/03-12/03 1/04-6/04 CT’s 7, 9.02 0 0 1 CT’s 8, 10, 11.02, 14, 17, 18.01, 19.01, 24 , 31.14, 0 0 0 31.15, and 31.21 CT 11.03 1 1 0 CT 12 4 2 1 CT 13 0 0 2 CT 15/16 0 4 1 CT 19.02 1 3 0 CT 20 2 0 0 CT 21 1 0 1 CT 22 2 5 0 CT’s 23.01 and 23.02 0 1 1 CT 25 0 1 0 City of Bakersfield Consolidated Plan 2010 IV-35 May 2005 Number Number Number of Casesof Cases of Cases CT 26 26 0 0 CT 28.03, 28.05, and 28.10 1 1 1 CT 29 0 2 0 CT 30 1 0 0 CT 31.12 0 1 0 Total 15 22 10 Source: Kern County Health Department, Census tracts with high number of elevated blood leads, January 2003-June 2004. The table below contains a list of the local, state, and federal agencies concerned with the childhood lead-poisoning problem and their services/resources (i.e. education, prevention, detection, treatment, abatement). Childhood Lead Poisoning Agencies and Resources Agency/Program/Position Services/Resources Local/County A. Kern County Health Department Oversee Program; Implementation of Lead Poisoning 1. Lead Poisoning Prevention Program Prevention Program; PbB Report Intake/Referral and • County Public Health Officer Response Condition; Lead Poisoning Education; Lead •Maternal, Child, and Adolescent Poisoning Follow-up; Childhood Lead Case Management; Health Program Medical Treatment; Environmental Case Management; • Public Health Nurse and LBP Inspection • Environmental Health Specialist State/Federal A. California Dept. of Health Local CHDP Coordination Policy Development Services 1. Child Health and Disability Reports status LBP Cases on a Countywide Basis Prevention Program • Director 2. Childhood Lead Poisoning Information clearinghouse; CHAS Technical Assistance; Prevention Branch and LBP inspection research • Information Coordinator B. National Center for Lead-Safe Housing • Director 4. Estimating Number of Housing Units with LBP The age of the housing stock is the key variable for estimating the number of housing units with lead-based paint. Starting in 1978, the use of all lead-based paint on residential property was prohibited. It is estimated that nationally, 75% of all residential property built 1978 or earlier may contain lead-based paint, older properties having the highest percentage of LBP. Local data has confirmed the national survey results that the percentage of units containing lead increases with the age of the structure. Certain areas in Bakersfield have an older housing stock. Over 80% of the housing units in census tracts 7, 8, 9.02, 14, 16, 17, 19.01, 19.02, 21, 25, 26, and 27 are over 30 years old. A substantial portion of these units may contain lead-based paint. In assessing the potential LBP hazard of these older structures, several factors must be considered. First, not all units with lead-based paint have lead-based paint hazards. Only testing for lead in dust, soil, deteriorated paint, chewable paint surfaces, friction paint surfaces, or impact paint surfaces provides information about hazards. Properties more at risk than others include: deteriorated units, particularly those with leaky roofs and plumbing; and rehabilitated units City of Bakersfield Consolidated Plan 2010 IV-36 May 2005 where there was not a thorough cleanup with high-phosphate wash after the improvements were completed. As previously noted, based on the statistics identified in the table 2003 Housing Conditions Survey Summary (Tenure/Income) and using the national average of 75% of all residential property built in 1978 or earlier are candidates for LBP contamination, the estimated total number of City housing units with LBP is approximately 44,384. D. SUMMARY OF AFFORDABLE HOUSING NEEDS AND PROBLEMS The City's general affordable housing needs and problems are summarized in the section below. Specific housing needs dealing with public and assisted housing, homelessness, special needs populations and fair housing can be found in the following chapters. In addition, Con Plan Housing Priority Needs Table identifies the housing accomplishments expected for renters (small, large related, elderly, other, owners and special needs households). 1. Community Deve/opment Survey As a means to gauge resident input and feedback on their perception of City community development needs, a bilingual (English/Spanish) community opinion needs survey was distributed over a five month period. The results (170 responses) of the survey dealing with general affordable housing needs were tabulated Fall 2004 and are listed below: " . , ,~ 'H IIII J"" VI"'Ç~ .. .~...~ Level of .w_"'~~ Down Payment Assistance High Single Family Housing Rehab High New Construction for Homeowners High Multi-Family Housing Rehab High Lead Based Paint Testing/Abatement Low Energy Efficiency High New Construction for Renters High Homeownership Counseling High Residential Property Maintenance/Code Enforcement High Asbestos Removal Low Historic Housing Preservation Low Except for LBP testing, asbestos removal, and historic housing preservation, the housing needs received high ratings. In the eyes of the respondents, the remaining housing needs were considered a low need. The surveys were randomly distributed and since the total household population for 2003 was about 91,000+, the survey is not considered a statistical valid survey but rather a point in time glimpse of some resident opinions which are subjective. 2. Comprehensive Housing Affordability Strategy Data and Housing Needs HUD's Comprehensive Housing Affordability Strategy (CHAS) tables provide communities with additional data on housing problems. HUD's CHAS tables are from the U.S. Census Bureau a special tabulation of Census 2000 data that are largely not available through standard Census products. These "special tabulation" data are used by local governments for housing planning as part of the Consolidated Planning process. HUD also uses some the data in allocation formulas for distributing funds to local jurisdictions. The appendices contains Bakersfield related CHAS Tables (Housing Problems Output for All Households, City of Bakersfield Consolidated Plan 2010 IV-37 May 2005 Affordability Mismatch Output for All Households, and Housing Problems Output for Mobility & Self Care Limitation - see Special Needs section for discussion of the Mobility Table. 3. Housing Problems/Cost Burden As previously noted, affordable housing is defined as units that a low-income family can afford without incurring housing cost burden and without being "overcrowded." Rooms that are generally considered in the CHAS Table analysis include bedrooms, living rooms, kitchens, dens, home offices and other finished rooms. This calculation excludes bathrooms and laundry rooms. Households that are considered severely cost burdened are at high risk of homelessness. Any break in the flow of income or unexpected expenses, such as loss of employment or hospitalization, would severely jeopardize the household's ability to continue to meet the rental or mortgage payments. In 2000, the number of severely cost burdened households out of 83,398 households reached approximately 12,258 (these were more renters than owners severely cost burdened - see appendices for complete CHAS Tables that reflect this information). The "tables" indicate that about 55% of all renters and about 31% of all owners in 2000 had a housing problem (cost burden greater than 30% of income and/or overcrowding (1.01 or more persons per room) or lack of plumbing/kitchen facilities). Cost burden greater than 30% for all renters was about 44% and for all owners was about 27%. Lastly, about 22% of all renters and approximately 10% of all owners had a severe (>50%) cost burden. The results from the CHAS Tables also indicate that approximately 40% of all households (renters and owners) had a housing problem (such as overcrowding or physical deficiency) and at least 1/3 of all households (renters and owners) had some sort of cost burden. Additionally, affordability mismatch for extremely low, low, moderate rental income groups had some type of housing problem (35%, 62% and 55%, respectively). For owners affordability mismatch was less. It was 13% for low, and 2% for moderate income groups. Even though extremely low was not CHAS calculated it is assumed to be generally higher than the other income groups for owners. The housing need by income group is also expressed as a housing need by household type for elderly, small, large, and other households (see Housing Problems Output for All Households (CHAS) Table for a complete description). Lastly, based on the housing conditions survey, the number of housing units having a physical defect and therefore a potential housing problem are summarized below. With 12% of the 2003-04 housing units (11 ,000:t) in need of some type of repair, housing rehabilitation is a priority community need. In conclusion, the percentage of Bakersfield households that could afford to purchase a median- priced home in September 2004 was approximately 32% which is a 68% drop from 2000. Since the difference between the recent Bakersfield median house appreciation and the median income inflation is a minimum 2% cumulative gap per year the housing affordability index is being compromised and Bakersfield is slowly catching up with the rest of the central valley housing affordability dilemma. The need for standard (suitable) affordable housing for the three low income groups and household types for one to two and three + bedroom sizes has significantly increased since the last Con Plan (2000) for Bakersfield. For a discussion of the barriers to affordable housing in Bakersfield see the Strategy Section of the Con Plan. City of Bakersfield Consolidated Plan 2010 IV-38 May 2005 City of Bakersfield Consolidated Plan 2010 IV-39 May 2005 -.-. Bakersfield City Limits 2000 Census Tract Percentage of Minority Population 0% - 20% Median Family Income Level V////~ Low and Moderate 1,':'::,.,:,:",":::,:':.:-:',:1 Middle 21% - 50% 51% - 80% ¡ 81% - 100% ~-----------------. I ~';~~~~, Ij/ì 1.1 .~)[>' I 1.- 'L..s"".. ~ I I '""1 ,-ric' '/.c,kc;] l 'i- IB o-CJ L--/ "( o'~ L ; /j":3fl of) 'ê-."-1¿-;..:::....l ; cd-~ ; '. 'j:cr- ; l__:L~~~- -----_J ~ Source: 2000 U,S. Census Figure Minority and Income levels City of Dakersfield (Consolidated Plan 2010) City of Bakersfield Consolidated Plan 2010 IV-40 May 2005 -.-. Bakersfield City Limits 2000 Census Tracts i'"------------f-:-:--~ ,/ I, ,=.' ~-'I.~ :' _/~ h~J ~I ~ ') "c,_..J I I ~ ..J I ....r:' l ..0 I ¿". -,': I - I ". I Iin c~ I ~----~~--~ ------ L ,:::P Low and Moderate Income Areas (Greater than 51 % Low and Moderate Income Population) Figure Low and Moderate Income Areas City of Bakersfield (Consolidated Plan 2010) City of Bakersfield Consolidated Plan 2010 IV-41 May 2005 City of Bakersfield Consolidated Plan 2010 IV-42 May 2005 City of Bakersfield Consolidated Plan 2010 IV-43 May 2005 ~-----------------. I r'd_II'~ I ~- -.J1> %-'1 J I V"l Fl - ..J ... !.~~ ~..J I .rJ-:; ..c I J-:'jl~. I ~ . I I ¿ -. I "- I ! "l, C~~' I ~----~~-- ------ L- -.-. Bakersfield City Limits I I 2000 Census Tracts Housing Conditions ( þ Demolition Major Rehabilitation Figure Demolition and Major Rehabilitation City of Bakersfield (Consolidated Plan 2010) Low and Moderate Income Areas (Greater than 51 % Low and Moderate Income Population) City of Bakersfield Consolidated Plan 2010 IV-44 May 2005