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Demographics & Housing Market Conditions

Cost Burden

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Cost Burden 2018 Cost Burdened Owner vs. Renter Households 2016

Source: ACS 2018 Source: CHAS 2016

Owner Households

Cost Burdened

Y R 74% 16% 10%
4 enter
1 oO ao v

H 0 U se h 0 I d S Not Cost Burden 90% -49.9% / Severe Cost

Less than 30% : ,/ Burden: >50%

¢

MANY RENTER HOUSEHOLDS IN NASHUA ARE CONSIDERED COST BURDENED. are aa We

HUD considers a household to be cost burdened if they are spending
more than 30% of their monthly income on housing costs. In Nashua, Renter Households
about 41% of all renter households are cost burdened which is in line with

US averages.

The challenge for households spending more than 30% of their income on RENTERS IN NASHUA ARE MORE LIKELY T0 BE COST BURDENED COMPARED

housing costs is it leaves less money for spending on other necessities TO OWNERS
such as food, transportation, education, healthcare, and childcare. Finding .
ways to build more housing that is affordable to renters is one way of
helping to keep cost burdening down.

According to data from HUD, 41% of renters were spending more than
30% of their income on housing costs compared to only 26% of
homeowners. 18% of those renters were spending more than 50% of the
income compared to only 10% of homeowners.

Nashua Housing Study - 29

Issues and Opportunities

ISSUE & OPPORTUNITY AREA 1
ACCOMMODATING FUTURE GROWTH

RKG

Nashua Housing Study - 30

Issues and Opportunities

Accommodating Future Growth

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Total Population Change 2013-2030, City of Nashua

Source: ACS 2013, 2018, EMS!

The population of Nashua is projected to grow by 7,434 new

residents between 2018 and 2030, an 8.4% increase. To 100,000
accommodate this new population growth, RKG Associates —Nashua
developed a methodology for calculating the number of new 98,000
households that population would result in and therefore the new
number of housing units needed to accommodate the growth in 96,000 96,040
households. RKG used a trends extrapolated approach based on
the change between 2013 and 2018 in average household size and 94.000
how those households break out into owner and renter households ‘
by household size.

92,000
To accommodate the population increase projected for 2030, RKG
estimates the city may need to produce an additional 4,769 90,000
housing units above what exists today. This assumes current
housing vacancy rates continue to hold steady. RKG also assumed 88,000
that the split between owner and renter households drops slightly
from a 54/46 percent split to 52/48 percent. 86,000
Under these assumptions, RKG projects the city would need to add 84.000
another 2,480 owner-occupied housing units and 2,289 renter-
occupied units. Between 2013 and 2018, the city added 1,600 new 32.000
units. At that pace, the city would fall short of the target needed to ‘
accommodate the projected population and household counts if 80.000

current trends held steady through 2030. This is particularly true for
households at or below 50% of AMI, which currently experiences a
shortage of affordable housing.

2013 2018 2025 2030

Nashua Housing Study - 31

Issues and Opportunities

Accommodating Future Growth 2030 Projections if 2018 Household

Composition Held Constant
Source: EMSI, ACS 2013, 2018, RKG Associates

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The tables to the right show two different scenarios for allocating projected
household growth to households by size. The first scenario uses Nashua’s 2018 HH Size HHs % of Total
household composition and assumes that will remain constant out to the year
2030. For example, in 2018, 30.3% of all households were 1-person and 34.6%

were 2-person. These percentages are applied in the same way to the total 1-person 1,446 30.3%
households projected for 2030 which results in 3,094 additional 1- and 2-person 2-person 1,648 34.6%
households over the next ten years. Since 3, 4, and 5+ person households

comprise a lower percentage of Nashua’s household composition those 3-person 723 15.2%

ercentages are lower than 1- and 2-person households.

P 9 P 4-person 604 12.7%
The second scenario accounts for the trends in household composition between 5-or-more person 348 7.3%
2013 and 2018 which saw 1- and 2-person households increase, and larger °
households decrease. This is not a trend unique to Nashua. Across the United Total 4,769 100%

States, smaller households are increasing at a faster rate driven by younger
residents living alone for longer periods of time and older adults living longer and
increasingly in 1- or 2-person households.

2030 Projections if Trends Continued
Using the trends over the last five years and extrapolating them out to 2030, there
is a large increase in 2-person households and a slight increase in 1-person Based on Changes from 201 3-201 8
households. Larger households do grow, but at much more limited rate than is Source: EMSI, ACS 2013, 2018, RKG Associates
projected in the first scenario. If the trends from 2013-2018 continue in Nashua,

the city will need to consider how to increase the production of smaller units to HH Size HHs % of Total

accommodate the increase in 1- and 2-person households. While smaller owner-

occupied households are projected to grow, most of the growth in smaller 1-person 1710 35.9%

households is projected to occur with renters. ,
2-person 3,148 66.0%

With Nashua’s remarkably low vacancy rate, the city will need to encourage the °

production of new housing. This may point to the continued strategy of promoting 3-person “329 “6.9%

Downtown Nashua and the designated TOD Overlay Districts as places for 4-person 199 4.2%

housing investment over time. Part of the city’s housing strategy will need to

focus on higher intensity multi-family and/or mixed-use development. S-or-more person 42 0.9%
Total 4,769 100%

Nashua Housing Study - 32

Issues and Opportunities

. . . . . . . ASSOCIATES INC
Accommodating Future Growth 2030 Projections if 2018 Household 2030 Projections if 2018 Household
Composition Held Constant Composition Held Constant
Source: EMSI, ACS 2013, 2018, RKG Associates Source: EMSI, ACS 2013, 2018, RKG Associates
The tables to the right show the breakdown R
. . nter
of owner and renter households by HH Size Owner % of Total HH Size ente % of Total
household size for the two projection HHs HHs
scenarios. Under the “household
composition held constant” scenario, there 1-person 969 21.9% 1-person 877 40.4%
is a nearly even split of new households in 2-person 1,046 40.3% 2-person 602 27.7%
the owner and renter categories. Many new
households are skewed toward 1- and 2- 3-person 383 14.7% 3-person 341 15.7%
person households which are the two 4-person 398 15.3% 4-person 206 9.5%
predominant household size categories in
Nashua as of 2018. 5-or-more person 201 7.7% 5-or-more person 147 6.8%
The second scenario, “trends continued”, Total 2,595 100.0% Total 2,173 100.0%
extrapolates the changes between 2013
and 2018 outward by ten years to 2030.
Under this scenario, much of the household
growth occurs with renter households as : . . . 4. . .
those have been growing more quickly than 2030 Projections if Trends Continued 2030 Projections if Trends Continued
owner households. The trends in household Based on Changes from 2013-2018 Based on Changes from 2013-2018
size also continue and are focused on Source: EMS, ACS 201 3, 201 8, RKG Associates Source: EMS, ACS 201 3, 201 8, RKG Associates
growth in the 1- and 2-person households.
The majority of growth in owner households . Owner . Renter
is projected to occur in the 2-person and 4- HH Size HHs % of Total HH Size HHs % of Total
person households, while 1-, 2-, and 3-
person households comprise 97% of renter 1-person -224 4.7% 1-person 1,934 40.6%
household growth.
2-person 1,037 21.7% 2-person 2,111 44.3%
Whether 2018 household composition 3-person -954 -20.0% 3-person 629 13.2%
holds, or trends continue over the next ten , ,
years, it appear Nashua should focus more 4-person 297 6.2% 4-person -100 -2.1%
on smaller households going forward.
going 5-or-more person -108 -2.3% 5-or-more person 147 3.1%
Total 48 100.0% Total 4,721 100.0%

Nashua Housing Study - 33

Issues and Opportunities

Accommodating Future Growth

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Future Employment and Affordability

In addition to the projected increase in population, Source: EMS| 2020-2029, RKG Associates

Nashua’s workforce is also projected to increase by

adding an additional 2,677 jobs through the year 2029 Captured Avg Affordable Affordable

2029. While some of those jobs will be filled by Industry Sector Jobs Jobs Earning Rent Own
existing residents currently living in Nashua, some

portion of new jobs will be held by workers who Health Care and Social Assistance 1,671 508 $73,141 $1,829 $242,000
want to live in Nashua.

Educational Services A411 125 $60,866 $1,522 $201,000
According to data from the US Census’ OntheMap . .
data portal, approximately 30% of all jobs in Accommodation and Food Services 213 65 $25,100 $628 $83,000
Nashua are held by workers who also live in Administrative and Support Services 179 54 $59,651 $1,491 $198,000
Nashua. Said another way, 70% of all jobs in
Nashua are held by workers who live outside Other Services 120 36 $35,978 $899 $181,000
Nashua. To better understand how many future . .

Arts, Entert t, and R t 46 14 24,732 618 81,900
jobs could be held by Nashua residents, RKG ms, emerainment, ana necreanion $ $ $
applied a capture rate of 30% to future jobs in Construction 15 5 $71,689 $1,792 $238,000
highest growing industry sectors. This resulted in a .
potential capture of 814 jobs that would be held by Unclassified Industry 10 3 $56,502 $1,413 $187,000
Nashua residents. Agriculture, Forestry, Fishing and Hunting 6 2 $29,927 $748 $99,000
Of those 814 new jobs held by Nashua residents, Government 6 2 $76,530 $1,913 $253,000

78% fall within the Healthcare and Educational
Services industry sectors. Using average earnings
per job in 2020, RKG calculated what a worker in
each industry sector could afford assuming they
spend no more than 30% of their income on
housing costs. About half of the industry sectors
have an average earnings per job that could cover
rent at Nashua’s current median of $1,287, but none
could afford the City’s current median home sale
price of $321,000.

As the City looks to continue to grow its job base, housing becomes a more critical component to successful and equitable
economic development. If workers cannot afford to live in Nashua, they will need to commute from more affordable
communities further away or may look for jobs in more affordable markets. This could have a direct impact on employers
looking to fill jobs quickly and may also have indirect impacts on the local economy if worker spending is not captured by
Nashua restaurants, retail shops, grocery stores, and other personal service establishments.

Nashua Housing Study - 34

Issues and Opportunities

Accommodating Future Growth

Development Pipeline
Source: City of Nashua, 2020

Permitted, Unit

Not Complete Count % of Total
Detached Single-Family 31 5%
Attached Single-Family 28 5%

3 Units or More 956 90%
Total 615 100%

According to permitting data provided by the City’s Building Safety Department,
there are 615 units of housing at different stages in the development pipeline.
The vast majority of the housing units (90%) are in structures with three or more
units. One of those developments located at 159 Temple Street is permitted for
168 units, another at 41 Central Street (the Bronstein Apartments) is permitted
for 216 units. Within the Bronstein redevelopment, 172 units will be priced to
households at or below 60% of AMI. A considerable addition to affordable
housing in Nashua.

There continues to be demand for detached and attached single-family housing
with 59 units in the pipeline. There are 28 new townhomes proposed along
Innovative Way and 31 units of single-family homes planned throughout the City.
To accommodate future growth in population and households, the City will need
to proactively advance housing development.

Nashua Housing Study - 35

Issues and Opportunities

ISSUE & OPPORTUNITY AREA 2
FINANCIAL RESOURCES OF HOMEOWNERS AND RENTERS

RKG

Nashua Housing Study - 36

Issues and Opportunities

Financial Resources of Homebuyers and Renters

NASHUA HAS VERY DISTINCT BREAKS FOR HOUSEHOLD
INCOME AND HOME PURCHASING POWER.

Based on the data collected and analyzed for Nashua, it
appears there are three distinct groups of home buyers
and renters in the city: upper income buyers and renters,
moderate income, and lower income. The upper income
group accounts for 49% of all households, while the
moderate or middle-income comprise about 27%, with the
lower income households accounting for 24%.

The purchasing power of the top 34% of households is
about $100,000 greater than the bottom 50% of
households. These households can afford purchase prices
starting at $331,000 which is a higher price point than
what most homes in Nashua sell for. This means there are
higher income households purchasing or renting homes at
prices below what they could afford, should they choose to
do so.

Conversely, households in the middle- and lower-income
brackets must compete with greater numbers of
households looking for rental and for-sale product given
the overall lack of supply at the high end.

To put this in perspective, the median sales price of a

housing unit sold in Nashua was $321,300 while the
median gross rent was $1,287.

Nashua Housing Study - 37

Upper

Moderate

Lower

1 |

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Renting and Purchasing Capacity of Nashua Households, 2018

Source: ACS 2018, RKG Associates

Household
Income

$100,000+

$75,000 - $99,999

$50,000 - $74,999

$35,000 - $49,999

$20,000 - $34,999

$0 - $19,999

Households

% #
34% 12,259
15% 5,431
16% 5,816
11% 4,017
12% 4,411
12% 4340

Maximum Affordable

Rent Range

$2,500+

$1,875 - $2,500

$1,250 - $1,875
$875 - $1,875
—_ =p

$500 - $875

$O - $500

Home Purchasing
Power

$331,000 +
$249,000 - $331,000
$166,000 - $249,000
$116,000 - $166,000
$66,000 - $116,000

SO - $66,000

Issues and Opportunities

Financial Resources of Homebuyers and Renters

RECENT HOME SALES ILLISTRATE MARKET DYNAMICS.

Home sale prices vary from neighborhood to neighborhood in Nashua with
the highest home sales prices found in the newest neighborhoods at the
periphery of the city. Homes in these neighborhoods tend to sell for over
$500,000.

For example, homes along Tanglewood Drive on the south side of Nashua
sold for an average of $656,000. These homes were constructed in the
early 2000's and average 4,300 square feet with four or five bedrooms.
These homes are selling for about $300,000 more than the typical average
sales price in Nashua over the last ten years.

Conversely, there are many neighborhoods with more modestly priced
homes particularly those in closer proximity to Nashua’s downtown area.
For example, the streets between Hollis and Kinsley have an average sales
price closer to $180,000. These homes were constructed in the early 1900's
and average 1,500 square feet with three bedrooms. These homes
(including multi-family buildings) are selling for $140,000 less than the
average sales price in Nashua.

Demand for housing in Nashua has trended upward over the last ten years.
In 2012 Average Days on Market for a new home was 94 days, in 2019 that
dropped to 6 days. Average days on market for all homes sold in 2012 was
42 and has since dropped to 10 in 2019.

Nashua Housing Study - 38

Home Sale Prices in Nashua, 2010-2019 source: MLs 2010-2019

MLS Sale Price Range
Less than $200,000

$200,001 - $275,000
$275,001 - $350,000
GED = $350,001 - $500,000

GD More than $500,000

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