EDA Agenda 06-14-2017 (Workshop Meeting)
AGENDA
WORKSHOP- ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Wednesday, June 14, 2017 – 4:30 p.m.
Academy Room, Monticello Community Center
Commissioners: President Bill Demeules, Vice President Bill Tapper, Treasurer Steve
Johnson, Tracy Hinz, Jon Morphew, Council members Lloyd Hilgart and Jim Davidson
Staff: Jeff O’Neill, Angela Schumann, EDA Executive Director Jim Thares, Jacob Thunander
and Wayne Oberg
1. Call to Order
2. Roll Call
3. Consideration of Review of 2017 Housing Study, Kurt Bearinger and Jim Gromberg,
WSB & Associates
4. Adjourn
EDA Workshop Agenda: 6/14/17
3. Consideration of Adoption of the 2017 Housing Study (JT)
A. REFERENCE AND BACKGROUND:
The EDA Workshop is a chance for the consultant to present the 2017 Housing Study in a
setting that allows for questions and feedback. The Housing Report contains information
about the community and market area population demographics, growth trends and pairs
that with information regarding the available housing inventory, trends, occupancy and
affordability measures to arrive at a market demand for several specific housing
categories. Those categories consist of entry level and step-up housing and general
occupancy market rate rental and senior rental products.
The report provides recommendations to fulfill the current and projected unmet demand
as well. WSB staff will be in attendance at the meeting to present the report and answer
questions.
A1. Staff Impact: City staff have been involved in reviewing drafts of the Housing
Study and providing comments and edit suggestions. A rough estimate of time
spent in this role is approximately 40 to 45 hours among three key staff members.
This review work is part of the normal duties of staff as part of oversight of
materials and work products performed by contractors.
A2. Budget Impact: There is no current budgetary impact in completing the Housing
Study by WSB since it was included in the original 2014 and 2015 WSB Market
Matching Contract scope of work and all payments were received by WSB for the
2014 and 2015 contract time periods. Upon learning of this deliverable oversight,
WSB has made a diligent commitment to fulfill the contract’s uncompleted work
item (the Housing Study).
B. ALTERNATIVE ACTIONS:
1. No Motion required.
C. STAFF RECOMMENDATION:
Staff believes the process of reviewing the draft Study is best served by giving the EDA
an opportunity to meet with the consultant author in a workshop setting to have questions
answered about the Study findings and recommendations. The goal would be to have the
Study adopted at the Regular June EDA meeting if that meets the needs of the EDA.
SUPPORTING DATA:
A. 2017 Housing Study, authored by WSB & Associates
MAY 10, 2017
Prepared for
City of Monticello
505 Walnut Street
Monticello, MN 55362
(763) 295-2711
Project No. 2596-34
CITY OF MONTICELLO
HOUSING MARKET
REPORT 2017
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Acknowledgements
We would like to thank everyone who participated in the development of the
Monticello Housing Study, including the Monticello City staff, Wright County
Assessor’s Office and the various realtors in the community.
Completed in coordination with:
WSB & Associates, Inc.
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PURPOSE AND SCOPE OF RESEARCH
Housing is an important component of all communities. Housing quality, availability, affordability and diversity
enhances the quality of life, supports economic development, and contributes to a community’s sense of place.
WSB & Associates, Inc. was engaged by the City of Monticello to conduct a Housing Study to assess the housing
market conditions and provide recommendations for housing needs within the City of Monticello. The market
analysis focused on the housing needs within the City of Monticello including market rate, subsidized, and move-
up housing for various age categories including owner-occupied and renter occupied housing options.
Monticello’s Housing Market Study (“Study”) should be used as a reference to guide planning efforts, financial
initiatives and strategies, and provide direction to the City regarding the approach it should take; the types of
housing opportunities the City should promote, and the roles in providing those opportunities. This Study is
intended to be flexible to meet unforeseen housing needs and future land use decisions. It should be noted that the
findings presented in this report should not be used to determine the market feasibility of any single devel opment
or project; rather, it is designed to be a broad analysis of the entire Monticello housing market and is intended to
guide planning efforts, especially as they relate to future land use designations.
The Study contains data from both primary and secondary research. Primary research includes interviews with
local officials, and the real estate community. Secondary research data includes data from the US Census,
American Community Survey, Department of Employment and Economic Development (DEED), Wright County,
Business Analyst1, and other local planning agencies. Secondary research is always used as a basis for analysis
and is carefully reviewed along with other factors that may impact projections. All the information on pending
developments was gathered by WSB & Associates, Inc. and is accurate to the best of our knowledge.
INVENTORY AND ANALYSIS
DEMOGRAPHIC CHARACTERISTICS
This section looks at the demographic characteristics that underlie the need for various types of housing in
Monticello. The U.S. Census and Business Analyst served as the primary sources for the demographic
overview. While population projections are an effective planning tool when used correctly, their accuracy
is dependent on several factors including assumptions for birth rates, death rates, migration, and economic
conditions. Assumptions are based on past trends and the best information available at the time, but
assumptions do not always remain true, and unexpected changes can occur. Therefore, Monticello should
use the population projections presented in this Market Study as a general guide and not as an absolute
certainty. Moreover, the City should periodically review and update the population projections based
upon new conditions.
WSB & Associates, Inc. determined the Study Area to be used as comparison points. The area was based
on geographic and man-made boundaries, community orientation, our knowledge of the area, and the
dictates of the proposal. Considering these factors, we determined a Study Area to include the cities of
Monticello, Big Lake, Buffalo, Elk River, Becker, and Rogers. In addition, Wright County and the State
1 Business Analyst is a data processing service that uses ESRI technology, U.S. Census data, and American Community Survey data. DRAFT
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of Minnesota are also included as part of the analysis in the report. Though outside the scope of this
report, it is important to note that surrounding communities’ populations and available housing stock may
affect Monticello’s housing market.
HISTORIC POPULATION CHANGE
The total population of Monticello has grown substantially since the 1980s. Between 1980 and 2010, the
City has grown by 597% adding 10,929 new residents, accounting for 18% of the study areas total
growth. During the last U.S. Census period (2000-2010), Monticello saw a 38% growth with the addition
of 4,891 new residents. Please refer to Table 1-A for further details.
Figure 1: City of Monticello, MN DRAFT
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Table 1-A: POPULATION CHANGE 1980-2010
Change
US Census 1980-1990 1990-2000 2000-2010
Place 1980 1990 2000 2010 No. % No. % No. %
Monticello 1,830 4,941 7,868 12,759 3,111 170.0% 2,927 59.2% 4,891 62.2%
Big Lake 2,210 3,113 6,063 10,060 903 40.9% 2,950 94.8% 3,997 65.9%
Buffalo 4,560 6,856 10,097 15,453 2,296 50.4% 3,241 47.3% 5,356 53.0%
Elk River 6,785 11,143 16,447 22,974 4,358 64.2% 5,304 47.6% 6,527 39.7%
Becker 601 902 2,673 4,538 301 50.1% 1,771 196.3% 1,865 69.8%
Rogers 652 698 3,588 11,197 46 7.1% 2,890 414.0% 7,609 212.1
%
Study Area
Total
16,638 27,653 46,736 76,981 11,015 66.2% 19,083 69.0% 30,245 64.7%
Wright County 58,681 68,710 89,986 124,700 10,029 17.10% 21,276 30.90% 34,714 38.50
%
Minnesota 3,806,10
3
4,075,907 4,375,09
9
4,919,47
9
269,804 7.10% 299,19
2
7.30% 544,38
0
12.40
%
Source: U.S. Census Bureau
Monticello’s age distribution has remained relatively consistent from 2000 to 2010 with the largest age
group being 25 to 34 in both census periods. The percentage of people 19 and younger decreased from
33.7% to 32.8% while the percentage of those 65 and older increased from 8.9% to 9.8%. Keeping with
national trends, the median age increased in Monticello from 2000 to 2010 from 29.8 to 31.6. Please refer
to Table 2-A for further details.
Table 2-A: MONTICELLO HISTORIC AGE DEMOGRAPHICS 2000-2010
2000 2010
Number % Number %
Total Population 7,868 100.0 12759 100.0
Under 5 years 799 10.2 1292 10.1
5 to 9 years 725 9.2 1101 8.6
10 to 14 years 610 7.8 969 7.6
15 to 19 years 511 6.5 823 6.5
20 to 24 years 547 7 731 5.7
25 to 34 years 1,571 20 2255 17.7
35 to 44 years 1,215 15.4 1991 15.6
45 to 54 years 719 9.1 1505 11.8
55 to 59 years 271 3.4 490 7.0
60 to 64 years 202 2.6 395 3.1
65 to 74 years 316 4 584 5.0
75 to 84 years 260 3.3 394 3.0
85 years and over 122 1.6 229 1.8
Median age (years) 29.8 (X) 31.4 ( X )
Source: U.S. Census Bureau
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POPULATION ESTIMATES AND PROJECTIONS
Population projections are an effective planning tool when used correctly. They are based upon
assumptions for birth rates, death rates, migration, and economic conditions. In 2010, the U.S. Census
reported Monticello’s population as 12,759. Monticello’s estimated population was 13,568 in 2016, and is
projected to increase to 14,383 in 2021. Again, it is impossible to know with certainty what Monticello’s
future population will be, but it is reasonable to believe that any future population increases resulting
from new housing development or redevelopment in Monticello will be offset (to some extent) by
population trends resulting from an aging population and diminishing household size. However, based on
available data, Monticello’s population will likely see a continued increase through year 2021. It is
anticipated that Monticello will account for 18.8% of the Study Area’s population growth between 2016
and 2021. Monticello’s expected rate of population change is roughly equal to the County and double the
State. Refer to Table 1-B: Projected Population Change: 2010-2021 for additional information.
TABLE 1-B: PROJECTED POPULATION CHANGE: 2010-2021
Change
U.S. Census Bureau 2010-2016 2016-2021
Place 2010 2016 2021 No. % No. %
Monticello 12,759 13,568 14,383 809 6.3% 815 6.0%
Big Lake 10,060 10,629 11,080 569 5.7% 451 4.2%
Buffalo 15,453 16,093 16,699 640 4.1% 606 3.8%
Elk River 22,974 23,984 24,891 1,010 4.4% 907 3.8%
Becker 4,538 4,858 5,253 320 7.1% 395 8.1%
Rogers 11,197 12,675 13,844 1,478 13.2% 1,169 9.2%
Study Area Total 76,981 81,807 86,150 4,826 6.3% 4,343 5.3%
Wright County 124,700 132,801 140,895 8,101 6.5% 8,094 6.1%
Minnesota 4,919,479 5,541,669 5,720,647 622,190 12.6% 178,978 3.2%
Source: U.S. Census Bureau, ESRI forecasts
The City of Monticello has developed its own projections based on building permits and certificates of
occupancy over the past two years. The Minnesota State Demographer’s 2015 Annual estimate was
utilized as base reference point. It indicated the City had 13,311 residents at the end of 2014. During the
2015-2016 time-frame, the City issued permits for 307 additional housing units. Using ESRI’s estimated
household size of 2.72, this yields an estimated population of 14,146 at the end of 2016. In recognition of
the trend of increasing household size and the moderate pace of new residential development and
household formation in the City, the projections for the 2017-2021 period indicate an increase of 893
people (2.74 persons per 326 new units or 65 +/- units per year). The annual population increase of 179 is
sixteen (16) people higher than ESRI’s annual projections based on U.S. Census Bureau data estimates.
Again, ESRI’s figures appear to have under-accounted for the sizeable number of new units in the
community during 2015-2016. Basically, ESRI does not factor in the steady recovery in building permit
issuance in this period and applies its projections to a lower beginning population figure than a more
realistic number. Refer to Tables 1-C and 2-C for more information.
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HOUSEHOLD CHARACTERISTICS AND FORECASTS
In 2010, the US Census reported 4,693 households in Monticello and 3,164 families. A household refers
to a housing unit occupied by at least one person. A household can involve a family living in a housing
unit or it can involve unrelated people sharing an apartment or housing unit. A family refers to a
household consisting of a householder and one or more other people related to the householder by birth,
marriage, or adoption. In the future, it is likely that the percentage of married couples without children
living with them will increase. The percentage of single parent households will also increase. Family
households with no spouse present accounted for approximately 30% of the family households in
Monticello in 2010.
The average household size in Monticello in 2000 was 2.64 persons compared to 2.68 in 2010 according
to the U.S. Census Bureau. These figures were projected to increase, according to ESRI, to 2.72 in 2016
and 2.74 by 2021. According to the American Community Survey 5-Year Estimates, Monticello has seen
a decrease in family households, a decrease in households with children under the age of 18, and an
increase in non-family households (see Table 1-D: Household Occupancy Characteristics for further
details). These trends held true from 2009-2014 aside from an outlying year (2014 – highlighted in gray
on Table 1-D) when there was an increase in family households, an increase in families with children, and
a decrease in nonfamily households. This may have been caused by an increased availability of single-
family housing units. These trends have implications for the demand of future housing types in
Monticello. Since the average household size is projected to decrease and the trend of family households
has been decreasing, a shift in demand will likely occur less for 3-4 bedroom, single-family homes and
more for smaller housing units, and multi-family units.
TABLE 1-C: MONTICELLO HOUSING PERMITS & POPULATION FORECAST CALCULATIONS
Year: Single-Family
Detached
Single-Family
Attached
Multifamily Total
2010 2 0 0 2
2011 2 0 0 2
2012 22 0 0 22
2013 49 3 0 52
2014 70 3 0 73
2015 38 6 136 180
2016 61 0 66 127 Average
Total 244 12 202 458 65.2 per year
POPULATION FORECAST CALCULATIONS
Time-Frame New Housing
Units
Average HH Size New Residents
(Permits x HH Size)
2014 Pop End of 2016 Pop
2015 - 2016 307 2.72 835 13,311 14,146
Time-Frame New Housing
Units
Average HH Size New Residents
(Permits x HH Size)
2016 Pop End of 2021 Pop
2017 - 2021 326 (65.2 x 5) 2.74 893 14,146 15,039
Source: City of Monticello, Minnesota State Demographer
TABLE 2-C: POPULATION PROJECTION DIFFERENCE
2016 2021 Annual Growth
City of Monticello 14,146 15,039 179
ESRI 13,568 14,383 163
Difference 578 656 16
Source: ESRI forecasts, The City of Monticello DRAFT
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TABLE 1-D: HOUSEHOLD OCCUPANCY CHARACTERISTICS – 2009-2014
Family Family with Children Nonfamily 1-person 2-person 3-person 4-or-more-person
2009 72.2% 47.0% 27.8% 22.0% 29.8% 18.8% 29.4%
2010 69.6% 46.4% 30.4% 25.1% 25.8% 18.6% 30.6%
2011 68.5% 45.3% 31.5% 25.8% 26.9% 16.9% 30.9%
2012 66.8% 43.8% 33.2% 26.5% 25.3% 19.1% 29.1%
2013 66.2% 42.3% 33.8% 27.0% 27.0% 16.4% 29.6%
2014 68.8% 43.8% 31.2% 24.9% 29.0% 13.7% 32.4%
Source: American Community Survey 5-year Estimates
Between 2010 and 2016, the number of new households (4,693 and 4,936 respectively) has grown
proportionally to the increase in population (12,759 and 13,568 respectively) suggesting stability in
household size (see Table 1-E: Historic and Projected Households: 2010-2021). The number of
households in Monticello is projected to increase by 5.3% by 2021 accounting for 18.2% of the study
area’s projected household growth.
TABLE 1-E: HISTORIC AND PROJECTED HOUSEHOLDS: 2010-2021
Change
US Census 2010-2016 2016-2021
Place 2010 2016 2021 No. % No. %
Monticello 4,693 4,936 5,199 243 5.2% 263 5.3%
Big Lake 3,377 3,566 3,720 189 5.6% 154 4.3%
Buffalo 5,700 5,872 6,058 172 3.0% 186 3.2%
Elk River 8,080 8,452 8,780 372 4.6% 328 3.9%
Becker 1,526 1,635 1,772 109 7.1% 137 8.4%
Rogers 3,748 4,232 4,610 484 12.9% 378 8.9%
Study Area Total 27,124 28,693 30,139 1,569 5.8% 1,446 5.0%
Wright County 44,473 46,817 49,383 2,344 5.3% 2,566 5.5%
Minnesota 2,087,227 2,176,475 2,258,733 89,248 4.3% 82,258 3.8%
Source: U.S. Census Bureau, ESRI forecasts
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AGE COMPOSITION & IMPACT ON HOUSING
In addition to knowing how many people currently live and will likely live in Monticello, an
understanding of the population’s age composition can help the City plan for and provide necessary and
desired services for its residents. The following provides an overview of the existing age composition of
Monticello’s residents and the anticipated changes in age composition that will occur through the year
2021 (see Table 1-F: Age Composition 2010-2021). Composition will remain relatively consistent outside
of a slight decrease in the 25-34 age category (by 2.1%) and slight increase in the 55-64 age category (by
2.5%) which reflects aging baby boomers and a smaller succeeding generation.
Extrapolating further past year 2021, Monticello can expect a surge of 7,438 residents entering the over-
sixty-five (65) age group as is indicated by the red box in Table 1-F. The age cohort closest to age sixty-
five (65) typically is comfortable downsizing their living situation. This is a substantial number of
households who will be causing the demand in housing types to change in Monticello for future years as
current projections do not have a corresponding offset in future age groups.
TABLE 1-F: AGE COMPOSITION 2010-2021
2010 2016 2021
Age Number % Number % Number %
Age 0 - 4 1,292 10.1% 1,206 8.90% 1,293 9.00%
Age 5 - 9 1,101 8.6% 1,150 8.50% 1,226 8.50%
Age 10 - 14 969 7.6% 1,033 7.60% 1,163 8.10%
Age 15 - 19 823 6.5% 924 6.80% 949 6.60%
Age 20 - 24 731 5.7% 901 6.60% 903 6.30%
Age 25 - 34 2,255 17.7% 1,968 14.50% 2,246 15.60%
Age 35 - 44 1,991 15.6% 2,065 15.20% 2,157 15.00%
Age 45 - 54 1,505 11.8% 1,771 13.10% 1,682 11.70%
Age 55 - 64 885 6.9% 1,240 9.10% 1,353 9.40%
Age 65 - 74 584 4.6% 751 5.50% 836 5.80%
Age 75 - 84 394 3.1% 372 2.70% 404 2.80%
Age 85+ 229 1.8% 185 1.40% 171 1.20%
Median Age 31.6 -- 33.1 -- 32.3 --
Source: U.S. Census Bureau, ESRI forecasts
HOUSING SUPPLY
Number and Types of Housing Units
The US Census indicates that there were 4,693 households in Monticello in 2010: 1,749 more units than
identified in 2000 (2,944). Data describing the household type, as shown below in Table 1-E, was only
available as an estimate. The most recent data is from the 2014 American Community Survey. Roughly,
54.5% of the housing units in 2014 were single-family detached houses: this is considerably lower than
Wright County (76.4%) and lower than the State of Minnesota (67.2%). In 2014, roughly 18.2% of the
housing units in Monticello were single-family attached units (townhouses): this is almost double the
figure for Wright County (9.8%) and much higher than the State (7.5%). In 2014, the City also had a
considerably higher percentage of multi-family housing than Wright County but was consistent with the
State of Minnesota. Refer to Table 1-G: Housing Supply by Type - 2014, for more information. DRAFT
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TABLE 1-G: HOUSING SUPPLY BY TYPE - 2014
Housing Type Monticello
Units
Monticello
%
Wright County
Units
Wright County
%
State
Units
State
%
Single-Family
Detached 2,663 54.5% 37,715 76.4% 1,589,773 67.2%
Single-Family
Attached 889 18.2% 4,863 9.8% 176,173 7.5%
2-4 Unit Multi-
Family 123 2.5% 799 1.6% 104,411 4.4%
5+ Unit Multi-
Family 787 16.1% 3,609 7.3% 410,648 17.4%
Mobile Home 422 8.6% 2,335 4.7% 82,441 3.5%
Other - 0.0% 50 0.1% 703 0.0%
Total Units 4,884 100% 49,371 100% 2,364,149 100%
Source: 2010-2014 American Community Survey 5-Year Estimates
Comparison and Forecast of Owner-Occupied and Renter-Occupied Units
It is important to have a balance of owner-occupied and renter-occupied units. In general, many
communities strive to have roughly 65-70% of their housing units owner-occupied and 30-35% renter
occupied. In 2010, approximately 68% of the housing units in Monticello were owner-occupied; this is
slightly lower than Wright County (75%), and about the same as the State of Minnesota (68%). During
2016, the City of Monticello’s housing occupancy ratio (owner:renter) has changed slightly, with 69% of
the housing units being owner occupied and 25% being renter occupied. In 2021, the housing occupancy
ratio is forecasted to remain consistent with past trends. Refer to Table 1-H: Housing Tenure by Type –
2010, for additional information. Please be aware that there is roughly a 6% gap between owner occupied
housing units and renter occupied housing units; this gap will be addressed in the following section.
TABLE 1-H: HOUSING TENURE - 2010 - 2021
Owner Occupied Housing Units % Renter Occupied Housing Units %
Location: 2010 2016 2021 2010 2016 2021
Monticello 68.2% 68.7% 68.1% 26.2% 25.3% 24.9%
Wright County 75.8% 74.7% 74.7% 14.9% 15.8% 15.9%
State of MN 64.9% 64.0% 63.9% 24.0% 24.8% 24.9%
Source: U.S. Census Bureau, ESRI forecasts
Vacancies
Today, the City of Monticello faces an overall housing vacancy rate of 6.0%, which is 3.4% lower than
the vacancy rate for Wright County, and 5.2% lower than that of the State. Monticello’s vacancy rate has
increased by 0.4% since 2010 and is projected to increase by 1% in 2021 which will still be significantly
lower than the County and State. Both the County and State are projected to remain consistent through
year 2021. The increase of vacant housing units in Monticello can partly be explained by the fact that the
number of housing units in the City increased by nearly 6% from 2010-2016, and the housing market
experienced a significant decline. Please see Table 1-I for further details.
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TABLE 1-I: VACANT HOUSING FORCAST & COMPARISION – 2010-2021
Year City Vacant Units City Percent Vacant County Percent Vacant State Percent Vacant
2010 280 5.6% 9.2% 11.1%
2016 315 6.0% 9.4% 11.2%
2021 391 7.0% 9.4% 11.2%
Source: U.S. Census Bureau, ESRI forecasts
The rental housing vacancy rate is fairly low in Monticello. Table 2-I indicates specific vacancy rates for
eight of the rental properties in the City.
TABLE 2-I: RENTAL APARTMENTS – VACANCIES AND RATES
Vacancy Rates
Ridgemont Apartments 0.0% $566 - $610
River Park View Apartments 0.0% 30% of income
Ridgway Apartments 2.3% $460 - $725
Hillside Terrace 0.0% 30% of income
Cedar Crest Apartments 0.0% 30% of income
Broadway Square 0.0% 30% of income
7th Street Townhomes 6.7% $825
Monticello Crossings 11.0% $925 - $2,535
Source: WSB & Associates
Value of Housing
The median value of owner-occupied housing units in Monticello in 2016 was $179,095 and is projected
to increase by $30,314 in 2021. Most housing in Monticello is valued in the range of $150,000 to
$199,999, which is consistent with the County and State. In comparison to low and moderate valued
housing, there is a relatively limited choice of higher valued housing units in Monticello. Only 16.5% of
owner-occupied housing units have a value of $250,000 or greater compared to 38.8% in the County and
36.7% in the State. The median value of owner-occupied housing in Wright County was $216,395 and
$205,288 in the State of Minnesota. Monticello needs to focus on later-stage housing opportunities to
meet the demand for higher valued housing units. Refer to Table 1-J: Owner-Occupied Housing by Value
-2016 for additional information. Table 2-J illustrates the affect that the Great Recession had on housing
values in Monticello. Note that median sale price fell below median appraised value in mid-2007, then
recovered and surpassed appraised value in 2011to regain a more traditional relationship. Data from
Table 2-J came from the Wright County Assessor.
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TABLE 1-J: OWNER-OCCUPIED HOUSING BY VALUE - 2016
Value City Units City % Wright County % State %
Less than $50,000 411 11.4% 6.5% 6.5%
$50,000 to $99,999 240 6.7% 4.8% 9.4%
$100,000 to $149,999 407 11.3% 11.8% 14.7%
$150,000 to $199,999 1282 35.5% 21.4% 17.9%
$200,000 to $249,999 672 18.6% 16.7% 14.7%
$250,000 to $299,999 269 7.5% 11.5% 10.3%
$300,000 to $399,999 217 6.0% 13.2% 12.2%
$400,000 to $499,99 65 1.8% 6.4% 6.1%
$500,000 to $749,999 18 0.5% 4.5% 4.9%
$750,000 to $999,999 22 0.6% 1.8% 1.9%
$1,000,000 or More 5 0.1% 1.4% 1.3%
Median Value $179,095 $216,395 $205,288
Source: ESRI Forecasts
Owner Monthly Costs as Percentage of Household Income
Housing decisions should not be based solely on the value of housing, but also the cost of housing
expenses in relation to household income. In general, housing costs (taxes, insurance, principal, interest,
etc.) should not exceed 30% of total household income. In 2014, only 19% of homeowners in Monticello
had monthly costs that were more than 30% of their household income, compared to 27% in Wright
County and 29% in the State of Minnesota (see Table 1-K: Owner Monthly Costs as Percent of
Household Income -2014). These figures suggest that housing was more affordable in Monticello than in
Wright County and the State of Minnesota in 2014 possibly due to age and livability of housing units.
This is an important strength for the City is it continues to grow and evolve into a regional center linking
the Twin Cities Metro with the St. Cloud MSA.
Monticello should consider a goal to maintain appropriate amounts of affordable housing to mitigate the
negative impacts of a housing price correction like that seen during the Great Recession (2007-2010).
This will allow for the community to see steady and modestly increasing home values and reduce the
$130,000
$140,000
$150,000
$160,000
$170,000
$180,000
$190,000
$200,000
$210,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
CHART 2-J: MONTICELLO HOUSING VALUES THOUGH THE GREAT RECESSION
Median Sale Median AppraisedDRAFT
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likelihood of rapidly increasing home prices causing homeowners to be required to spend a larger portion
of their income on housing. While the provision of affordable housing is one side of the coin, the City
should also incorporate a plan to encourage the development and attraction of livable wage employment
opportunities in the City.
TABLE 1-K: OWNER MONTHLY COSTS AS PERCENT OF HOUSEHOLD INCOME - 2014
Percent of Household Income City Units* City % County % State %
Less than 20% 1,286 47.0% 39.0% 41.3%
20.0 to 24.9% 611 22.3% 18.9% 17.8%
25.0 to 29.9% 611 11.4% 14.8% 12.3%
30.0 to 34.9% 169 6.2% 7.6% 7.9%
35.0% or More 361 13.2% 19.6% 20.8%
Total 2,738 100% 100% 100%
Source: 2010-2014 American Community Survey *Housing Units with a Mortgage
Contract Rent
In 2014, rental housing units accounted for roughly 25% of the occupied housing units in Monticello. In
2014, roughly 88% of units had a monthly rent of $500 or more, which is higher than Wright County
(87%), and the State of Minnesota (79%). See Table 1-L: Renter-Occupied Housing Units by Gross Rent
– 2010, for additional information.
TABLE 1-L: RENTER-OCCUPIED HOUSING UNITS BY GROSS RENT - 2014
City County State
Monthly Rent Units % Units % Units %
Less than $200 23 2.0% 141 2.0% 24,764 4.2%
$200 to $299 57 4.9% 233 3.3% 31,166 5.3%
$300 to $499 66 5.6% 582 8.2% 68,601 11.6%
$500 to $749 367 31.2% 2136 30.1% 159,802 27.1%
$750 to $999 322 27.4% 2012 28.3% 139,386 23.6%
$1000 to $1,499 306 26.0% 1514 21.3% 105,182 17.8%
$1,500 or more 34 2.9% 188 2.6% 34,297 5.8%
No Rent Paid 0 0.0% 300 4.2% 27,938 4.7%
Median Rent Paid $773 $778
$747
Total Specified Units 1,175 100% 7,106 100% 590,136 100%
Source: 2010-2014 American Community Survey
Renter Monthly Costs as Percentage of Household Income
In 2014, 46.5% of renters paid over 30% of their household income in rent (see Table 1-M: Gross Rent
as Percent of Household Income – 2014). This number is slightly lower than Wright County (47.7%) but
higher than the State of Minnesota (46.1%). This suggests that there is not an abundance of affordable
rental units in Monticello and efforts should be made to decrease rental costs.
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TABLE 1-M: GROSS RENT AS A PERCENT OF HOUSEHOLD INCOME - 2014
Percent of Household Income Units Percent Wright County State
Less than 10% 0 0.0% 3.2% 3.5%
10 to 14.9% 73 6.2% 8.1% 8.2%
15 to 19.9% 205 17.4% 13.6% 12.3%
20 to 24.9% 262 22.3% 13.1% 12.5%
25 to 29.9% 72 6.1% 9.1% 11.4%
30 to 34.9% 194 16.5% 9.7% 8.8%
35 to 39.9% 86 7.3% 8.1% 6.1%
40 to 49.9% 102 8.7% 9.8% 8.1%
50.0% or More 164 14.0% 20.1% 23.1%
Not Computed 17 1.4% 5.2% 6.0%
Total Specified Units 1,175 100% 100% 100%
Source: 2010-2014 American Community Survey
Age and Maintenance of Housing Stock
In 2014, roughly 39% (1,910 units) of the City’s units were constructed before 1990 (greater than 27
years old). Just 5.4% of the housing units in Monticello were built before 1939. Monticello has a
relatively new housing stock in comparison to Wright County and the State of Minnesota, with 60.8% of
housing units being built since 1990 compared with 50.4% for the County and 29.0% for the State.
TABLE 1-N: YEAR STUCTURE BUILT
Year Structure Built Monticello Units Percent Wright County State
2010 or later 0 0.0% 0.7% 0.8%
2000 to 2009 1,697 34.7 32.2% 14.6%
1990 to 1999 1,277 26.1% 18.5% 13.6%
1980 to 1989 748 15.3% 12.2% 13.0%
1970 to 1979 654 13.4% 16.0% 15.6%
1960 to 1969 63 1.3% 4.9% 9.8%
1950 to 1959 96 2.0% 4.1% 10.4%
1940 to 1949 86 1.8% 2.3% 4.8%
1939 or Earlier 263 5.4% 9.2% 17.3%
Total Specified Units 4,884 100.0% 100.0% 100.0%
Source: 2010-2014 American Community Survey
LIFE-CYCLE HOUSING AND PROFILE OF
HOUSEHOLDS
The housing needs of a community relate to the demographic profile of the household. Typically,
households move through several life-cycle stages; including entry-level households, first time
homeowners, move-up buyers, empty nesters/young seniors, and senior citizens.
The following describes each of these household types and the effect that they have on housing demands
in Monticello.
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Entry-Level Households
People in the 18 to 24-year-old age group typically leave their childhood home and establish their own
household. They often rent a house or an apartment because they generally do not have the income and
savings needed to buy a home. In addition, many people in this age group move frequently, so they are
hesitant to buy a house. They are also more likely to share housing with other unrelated people of similar
age.
The entry-level household population in Monticello will fluctuate annually. Many Monticello residents
that graduate from high school move to other communities to attend a university or to pursue other job
opportunities. In the long term, unless current conditions and trends change, Monticello is projected to see
a 0.5% decrease in the 15 to 24-year-old age group by year 2021 (Table 1-F). Job opportunities aimed at
retaining this age cohort need to be strongly considered. Nevertheless, there will always be a strong need
to provide affordable housing for people of all ages.
First-Time Homeowners
First time homeowners are typically in their 20s and 30s. They are usually “move-up” renters, meaning
they “move up” from an apartment to a home. They are often married with young children, but
increasingly, first time homeowners are single. They are prone to moving within several years of buying
their first home for several reasons; including, increased salaries allow them to move to more expensive
housing, children may require larger housing, and job opportunities may require that they move to another
community. Monticello is projected to see a 0.3% increase in the 20-442 age group by year 2021 (Table 1-
F), which could translate into an increased demand for lower-end housing units.
Move-Up Buyers
Move-up buyers are typically in their 30s and 40s. They move up from the smaller, less expensive house
that they had previously purchased. From an economic growth perspective, this is an important age group
of people. Typically, move-up buyers have children in school and an established career. They are less
likely to move to another community and start over. Also, professionals who are moving to a community
to advance their career are generally looking to move to a more expensive house than what they had in
their previous community. Monticello is projected to see a 0.5% decrease in the 25-543 age group by the
year 2021 (Table 1-F). This is 0.3% lower than the study area average of a 0.8% decrease. This may be an
indicator that there is a shortage of available units for move-up buyers. Monticello must continue to
ensure that it has adequate choices for those who are looking for move -up housing that will satisfy their
needs until they are in their 50s and beyond.
Empty Nesters and Young Seniors
Empty nesters and young seniors are generally in their 50s, 60s, and early 70s. Often, their children have
moved out of their house and left them with a larger house than needed. Empty nesters and young seniors
often want to live in a smaller home, like a townhouse or patio home, that has less maintenance.
The baby boom generation in Monticello is projected to increase by 0.6% by year 2021 (Table 1-F). A
notable increase in apartment rentals in Monticello by members of this population segment is likely to
occur. A large portion of these individuals will likely desire higher-end apartment complexes with quality
2 People in their 40s were included due to U.S. Census age groups.
3 People in their 20s and 50s were included due to U.S. Census age groups. DRAFT
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amenities so they can maintain their current lifestyles.
Senior Citizens
This age group is generally in their late 70s and older and are often looking for low maintenance or
assisted living housing. As the population ages, Monticello must continually ensure that it has adequate
housing to meet the needs of seniors. The City is projected to see a 0.1% decrease in the 75 and older age
group by year 2021 (Table 1-F).
Monticello should continue to strive to be a senior-friendly community that values the contributions of
seniors, promotes positive intergenerational interactions, considers the needs of seniors in community
planning, supports the efforts of seniors to live independently, and acknowledges the role that family,
friends, and neighbors play in the life of seniors.
Special Needs
Housing for those with special needs includes housing for those with mental and/or physical disabilities
or health issues and those who need temporary or transitional housing. The number of people with
special housing needs is expected to increase as the population of Monticello continues to age and grow.
Senior Housing Market
Monticello City staff members have identified a need for senior housing market analysis. Based upon
population growth forecasts, household forecasts, and the current age of householders, we can extrapolate
what the senior housing market will require. Table 1-O: Senior Housing Projections 2010-2021 illustrates
how the change in the sixty-five and older population will affect the number of occupied housing units.
By year 2021, Monticello will need 940 units suitable for senior residents to meet demand, which is an
increase of 136 units from 2010. We consider senior housing to be any housing unit (affordable, renter,
duplex, patio house, etc.) that meets the needs of residents sixty-five (65) and older.
TABLE 1-O: SENIOR HOUSING PROJECTIONS – 2010-2021
Year 2010 2016 2021
Total Population 12,759 13,568 14,383
Total Occupied Units 4,693 4,936 5,199
65+ Population 1,207 1,308 1,411
65+ Population Percent 9.5% 9.6% 9.8%
Units Occupied by 65+ Population 804 871 940
Percentage of Units Occupied by 65+ Population 17.1% 17.7% 18.1%
Source: U.S. Census, ESRI Forecasts, WSB & Associates
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AFFORDABLE HOUSING
Affordable housing is important to a strong economy and a healthy community. Increasingly, housing is
not affordable for many working families and the lack of affordable housing for people of all ages and
incomes causes families stress, dampens productivity and stifles job growth. Various organizations define
“affordable housing” in many ways. The Department of Housing and Urban Development (HUD)
generally defines housing as affordable if it costs less than thirty (30) percent of a household’s income.
However, HUD’s Section 8 Income Guidelines are the basis for most affordable housing programs.
Section 8 guidelines define low and moderate incomes on a sliding scale, depending on the number of
persons in the family. For example, a four-person household is considered “moderate income” if their
family income is eighty (80) percent of the area’s median family income.
Most housing affordability programs and data place emphasis on creating owner-occupied units at eighty
(80) percent of the median family income (moderate income) and rental units at fifty (50) percent of the
median family income (low income). Since low income persons are typically renters, the definition of
“low income” is tied to the number of persons in each unit. This study identifies “affordable owner
occupied units” as those affordable for moderate income families (eighty (80) percent of median income).
Affordable rental units are based on fifty (50) percent of the median income and reflected on a per capita
and per family basis.
It is very important to note that the definition of “affordable” in terms of a dollar amount will continue to
change as the cost of living increases and interest rates change. Therefore, the City should periodically
review income/housing statistics and update the definition as warranted. Factors such as interest rates will
impact housing affordability in both a positive and negative manner.
Income by Age of Householder
Looking at income data is also important when predicting future housing demands in the City of
Monticello. In 2010, the median household income in Monticello was $68,135 ($67,963 in the County)
and the largest employment industries were educational, health and social services, manufacturing, and
retail trade. By 2016, the median household income increased significantly to approximately $76,954
($73,798 in the County) and the top employment industries were the same. Monticello’s median
household income is projected to increase to $85,218 by 2021 ($83,257 in the County) according to ESRI
Business Analyst.
Income distributions as reported by the U.S. Census Bureau can be compared to affordability standards to
determine how many households and families in the City of Monticello may require affordable housing.
Table 1-P: Monticello Affordable Housing Units Requirements – 2016 & 2021 depicts the number of
households (renter and owner) that may require affordable housing (based on family income). The gray
shaded area indicates family incomes of 80% or less of the median household income ($61,449 in 2016
and $68,174 in 2021). The red box indicates family incomes of 50% or less of the median household
income ($38,406 in 2016 and $42,609 in 2021). By 2021, 2,214 owner households may require
affordable housing, and 1,629 renter households may require affordable housing.
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TABLE 1-P: MONTICELLO AFFORDABLE HOUSING REQUIREMENTS – 2016 & 2021
2016 2021
Annual Household
Income
Number of Households % of Total Number of Households % of Total
Less than $15,000 378 7.7% 411 7.9%
$15,000 to $24,999 286 5.8% 271 5.2%
$25,000 to $34,999 332 6.7% 316 6.1%
$35,000 to $49,999 543 11.0% 631 12.1%
$50,000 to $74,999 834 16.9% 512 9.8%
$75,000 to $99,999 887 18.0% 937 18.0%
$100,000 to $149,999 1,262 25.6% 1,564 30.1%
$150,000 to $199,999 341 6.9% 472 9.1%
$200,000 and over 74 1.5% 85 1.6%
Total Households 4,937 100% 5,199 100%
Source: U.S. Census Bureau, ESRI forecasts
The following table illustrated the maximum affordable housing costs for renters and owners based on
median income. A direct relationship exists between monthly affordable housing costs and median
income. Steps should be taken in Monticello to keep housing costs affordable as housing values increase
such as maintaining current affordable housing stock and assuring opportunities for the construction of
new affordable housing units.
TABLE 1-Q: MAXIMUM AFFORDABLE HOUSING COSTS (RENTER & OWNER) - 2016 & 2021
Renter Owner
Year 2016 2021 2016 2021
Median Income $76,811 $85,218 $76,811 $85,218
Affordable Income:
50% Renter, 80% Owner $38,406 $42,609 $61,448.80 $68,174.40
30% of Affordable
Income
$11,522 $12,783 $18,434.64 $20,452.32
Monthly Housing Cost $960 $1,065 $1,536.22 $1,704.36
Source: U.S. Census Bureau, ESRI forecasts
OWNER-OCCUPIED HOUSING MARKET
ANALYSIS
This section analyses the City of Monticello’s owner occupied housing market. Analyzed in this section
are single-family home resale trends, home foreclosures, actively marketing subdivisions, pending
subdivisions, interviews with local real estate professionals and others involved in the local housing
market to gain their feedback on existing market conditions and trends. The Wright County Assessor’s
Office provided data on resale trends. The following are key findings regarding the owner-occupied
housing market.
Home Resale Trends
The average resale price of single-family homes in Monticello in 2016 was $202,073 and there were 342
sales. This was an increase in price from 2015 ($169,025 and 266 sales). While some of the price
changes from year to year can be attributed to the age and quality of the homes sold during a year, an DRAFT
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interview with a realty expert indicated the average resale price likely bottomed out in 2011 and slow
price appreciation is expected to continue to bring prices back to a more market-neutral level.
Median sale price is often a more reliable measure of price trends. In Monticello, the median sale price of
single-family homes increased from $171,500 in 2015 to $185,269 in 2016, which reflects an increase of
8% for that period.
TABLE 1-R: RE-SALE TRENDS OF EXISTING SINGLE FAMILY HOMES
Year Number of Sales Median Sale Price Average Sale Price
2015 266 $171,500 $ 169,025
2016 342 185,269 $ 202,073
Source: Wright County Assessor's Office; WSB & Associates, Inc.
Table 1-S shows the number of home sales in 2016 by the decade the homes were built. In 2016, 181 of
the 342 (52.9%) single-family homes sold were built during year 2000 or later. Similarly, Table 1-N
showed that approximately 34.7% of Monticello’s owner-occupied single-family homes were built after
2000. Only 11.7% of the sales in 2016 were homes built prior to 1980. This highlights the relatively
large supply of newer homes available to potential new residents moving to the community.
Table 1-S also highlights how the median sale price decreases as the homes get older. Most homes sold
in Monticello in 2016 for under $170,000 were built before 1980. Homes priced above $180,000 were
generally built since 2000.
TABLE 1-S: HOME SALES BY DECADE BUILT 2016
Decade Number of Sales Percentage Median Sale Price
1970 and Older 27 7.9% $151,509
1971-1980 13 3.8% $166,000
1981-1990 23 6.7% $157,500
1991-2000 98 28.7% $181,467
2001-2010 132 38.6% $193,951
2010-2016 49 14.3% $221,050
Total: 342 100.0% -
Source: Wright County Assessor's Office
Foreclosures
Beginning in the middle of the last decade, home foreclosures began to have a significant impact on
housing markets across the nation. Initially, most foreclosures occurred among buyers with lower credit
ratings who had sub-prime mortgages. Gradually, foreclosure activity increased as jobs plummeted and
home prices sank precipitously. Foreclosures have gradually decreased over the past few years as housing
markets have stabilized. Table 1-T presents foreclosure data for Wright County and Minnesota. The data
are considered “Sheriff’s Sales Foreclosures” and was compiled by the Minnesota Homeownership
Center and published on their website. There were 7,212 foreclosures in Minnesota in 2015. This was
down from 8,313 in 2014 and significantly lower than 11,834 in 2013. Wright County had 205
foreclosures in 2015, down from 240 in 2014 and 372 in 2013.
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Wright County has maintained a higher foreclosure rate than Minnesota. The foreclosure rate, as shown
in Table 1-T, is defined as the number of foreclosed mortgages as a percent of total residential parcels. In
2015, Wright County’s foreclosure rate was 0.49% compared to 0.40% in Minnesota.
Foreclosures have hindered Wright County’s housing market as they have other areas of the State. Out of
87 counties in the State, only 6 had a higher foreclosure count than Wright County. Those counties were
Saint Louis, Washington, Dakota, Anoka, Ramsey, and Hennepin.
Single-Family Listings
Based on a review of various Realtor websites, there were 77 single-family homes actively listed for sale
in Monticello in November 2016. The homes were unevenly distributed by price range; weighted heavier
toward higher priced homes. Only two (2) homes were priced below $120,000 and 68 priced $150,000 or
higher listed for sale. Four (4) homes were listed for sale between $100,000 and $150,000.
The average list price of homes on the market was $271,759 in November 2016. While homes typically
sell for less than the list prices, the current prices suggest that Monticello should continue to see
appreciation in home prices since the low point in 2011.
Existing Lot Supply
There are currently a limited number of lots available to accommodate new single-family homes in
Monticello. The City is experiencing a shortage in buildable lots as bank owned lots have been purchased
and developed. As of the end of 2016, there are a total of 74 single-family lots and sites that can
accommodate up to 101 multi-family units. Permit numbers have steadily recovered from the 2010 and
2011 low point (two single family permits issued each year) to the issuance of 61 single-family permits in
2016. Prior to the recession, the City issued more than 300 permits annually. During that time (2002-
2007) housing lots were selling in the $70,000-$90,000 range. The sale price of lots fell by more than
80% after the recession. Bank foreclosures of developers resulted in existing lots becoming bank owned
and ultimately being developed quickly. Many of the approved single family pre-plats were not
completed due to the diminished demand for new homes. Refer to Table 1-U for full details.
TABLE 1-T: HOME FORECLOSURES WRIGHT COUNTY, 2013 to 2015
Wright County Minnesota
Year Number of Foreclosures Foreclosure Rate Number of Foreclosures Foreclosure Rate
2013 372 0.89% 11,834 0.64%
2014 240 0.57% 8,313 0.46%
2015 205 0.49% 7,212 0.40%
Sources: Minnesota Homeownership Center, HousingLink DRAFT
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TABLE 1-U: AVAILABLE PLATTED & UTILITY SERVICED LOTS
Development Single Family Lots Multi Family Lots
Featherstone 15 0
Hunters Crossing 0 0
Hillside Farm 22 0
Spirit Hills 0 5
Sunset Ponds 21 0
Carlisle Village 7 17
Autumn Ridge 0 79
Eastview 1 0
Club West 7 0
Pine View 1 0
Total 74 101
Source: City of Monticello
In mid-2016, the average price of a lot was about $20,000. As the housing market has improved and lot
prices have increased due to the limited supply, it has allowed for an increase in prices for new single
family lots. The new housing price situation is further aggravated by the limited number of remaining
small home builders which have either closed or changed professions due to the recession and is now
resulting in higher construction costs. According to a Monticello realty expert, another critical factor
impacting the demand for single family homes is the degree to which first-time home buyers are riddled
with college debt and unable to afford the price of a new home.
The interest rate for new home loans has increased slightly from an all-time low of 3.4% during the
depths of the recession to approximately 4.25% in late 2016.
Monticello’s average re-sale price currently sits in the five to seven percent range and is expected to go
up. There are no major complaints or concerns among current homeowners looking to move up into more
expensive homes. However, Monticello currently lacks availability of lots that are attractive for higher
end housing. The community should focus on the development or attraction of a high-end housing
development. The two-major upper-bracket areas (Carlisle Village and Briar Oakes Boulevard) have
limited availability of undeveloped lots and are surrounded by agricultural uses. City-annexed land west
of Monticello provides development opportunities but is unattractive to developers looking to build
higher-market homes due to the lack of natural amenities and features generally associated with high end
housing areas.
Single-family Housing Permits
The City of Monticello issued sixty-one (61) building permits in 2016. This number is up 38.6% from
2015 when forty-four (44) permits were issued (6 attached and 38 detached). To meet demand, the City
will need to continue this trend. Please refer to Table 1-C for additional information.
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RENTAL HOUSING MARKET ANALYSIS
Affordable Rental Housing
This section of the report analyses the affordable rental housing market in Monticello. The analysis
includes data collected from Affordable Housing Online. All the properties in this section are general
occupancy.
As shown in the demographic and housing stock overview sections, there are approximately 1,175 renter
households in Monticello which is down 127 households from 2010. The overwhelming majority of
renters live in larger multifamily properties. There are approximately 2,923 renters (24% of total
population) living in Monticello. As of 2014, 25% of total Monticello households were renter-occupied,
compared to 15.6% for Wright County, and 28% for the State of Minnesota.
Properties that include units assisted by federal programs were surveyed as part of this analysis. In total,
eight (8) properties with 322 units were surveyed. Twenty-six (26) percent of the City’s rental units are
federally subsidized. Monticello’s federally assisted affordable rental housing stock includes properties
financed through the following programs:
TABLE 1-V: FEDERALLY ASSISTED AFFORDABLE RENTAL HOUSING STOCK
Program Properties Units
Section 8 2 74
LIHTC 3 102
RD 515 6 189
Total 9 307
Note: The total does not necessarily equal the sum of each program as some properties may participate in multiple funding programs
Source: Affordable Housing Online
The average number of units per property for affordable rentals in Monticello is 34. The largest federally
assisted affordable rental community in Monticello is Ridgemont Apartments at 48 units and the smallest
is Hillside Terrace II at 12 units. Two apartment properties provide housing for seniors totaling 59 units.
All 307 units include some form of rental assistance (like Section 8) to make rent more affordable for
very low income families. In Monticello, a family of four must earn $42,900 or less to qualify for Section
8 housing. See Table 1-W: Federally Assisted Units by Property for details.
TABLE I-W: FEDERALLY ASSISTED UNITS BY PROPERTY
Name Sec 8 LIHTC RD 515 Senior
Broadway Square - - - 28
Cedar Crest Apartments 38 - - -
Hillside Terrace -- Monticello 36 - - -
Hillside Terrace II - - 12 -
Ridgeway Apartments - - 44 -
River Park View Apartments - 31 31 31
Ridgemont Apartments - - 48 -
Source: Affordable Housing Online
Note: Not all unit counts are available from HUD
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Photographs of Monticello Apartment Buildings
Image 2: River Park View Apartments Image 1: Ridgemont Apartments
Image 5: Broadway Square
Image 4: Cedar Crest Apartments Image 3: Hillside Terrace
Image 6: Ridgeway Apartments DRAFT
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Housing Development Opportunities
There are currently three future housing development sites that have been identified in Monticello. Site A
is an 11.93-acre area located at 506 Territorial Road and is the site of the historic registered Rand House
which was the home of the Minnegasco founders. This site is zoned low density residential (R-1) and
performance-based overlay and may be used for the development of a senior housing apartment complex
with sixty to eighty units (60-80) in addition to forty (40) patio homes. The Rand House would be used
as a community center and guest home for the development. Rezoning this area using the planned unit
development (PUD) process may be the best option to allow for this higher density devel opment. The
uniqueness of the property and the City’s need for additional senior housing units could be used to justify
the PUD. Also, we believe the proposed housing development is consistent with the purpose of the
performance based enhancement district.
Site B is a 6.4-acre area located north of the lake on the corner of Elm Street and 7th Street West. It is
zoned for medium density residential (R-3) and may be used for multifamily, senior, or market-rate
development. It is within proximity to the Cub Food Store and the Community Center. The site’s southern
exposure to the wetland pond offers an attractive natural amenity.
Finally, Site C is located at the corner of Locust Street and 3rd Street West and has already been approved
for the construction of a twenty-three (23) unit three story residential development.
As stated earlier in the “Senior Housing Market” section, from 2010-2021 Monticello will need to
construct 136 new senior housing units to meet the forecasted demand. Sites A and B have both been
identified as ideal locations for senior housing development. Depending on the number of units permitted
on each of these sites, and on how many senior housing units have been constructed from 2010-2016,
Monticello may need to identify more sites suitable for senior housing.
Image 8: 7th Street Townhomes Image 7: Monticello Crossings DRAFT
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Image 9: Site A
Image 10: Site B
Image 11: Site C DRAFT
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DEMAND ANALYSIS AND CONCLUSIONS
This section of the report utilizes data collected in the previous sections to calculate demand for owned
and rental housing in Monticello through 2021.
Housing Demand Analysis
Table 1-X outlines our calculations for owner and rental housing demand in Monticello from 2016 to
2021. Demand for additional housing in Monticello will come primarily from household growth. Pent-up
rental will also be a source of housing demand.
Monticello is projected to add 267 households between 2017 and 2021. This correlates to the need for
267 housing units to accommodate the household growth, or an average of about 53 new units annually.
As discussed above, Monticello will experience strong growth among older adults through the end of this
decade; it will also see strong growth among younger populations (25 to 34), as it did last decade. The
growth of these younger households is creating demand for rental housing and entry-level homes.
TABLE 1-X: POTENTIAL HOUSING DEMAND OVER NEXT 5 YEARS
2017 to 2021
A. Household growth 267
B. Replacement Demand 10
C. Total housing growth (A+B) 277
Range to occur over next 5 years:
D. Percent rental demand 25% to 35%
E. Rental housing demand (C x D) 69 to 97
F. Pent-up rental demand 40 to 60
G. Total rental housing demand (E+F) 109 to 157
H. Percent owner demand 65% to 75%
I. Total owner housing demand (C x H) 180 to 208
Sources: US Census Bureau, ESRI forecasts, WSB & Associates, Inc.
Replacement demand is generated from the loss of housing or the need to replace housing units that are
physically or functionally obsolete. A review of Monticello’s housing stock from the U.S. Census
revealed that there are about 340 housing units built prior to 1950. It can be assumed that these homes’
values are decreasing at a faster rate relative to other types of housing. Most of these homes are in good
condition4, and we estimate that only about one-half percent per year should be removed annually from
the housing supply because of obsolescence, which equates to two units every year or ten units over the
next five years.
A healthy rental market is expected to have a vacancy rate of about 5% to allow for sufficient consumer
choice and unit turnover. With pent-up demand, persons who would normally form their own rental
households, instead decide to move in with other persons in a housing unit, live with their parents, or live
in housing outside of the area. In 2016, Monticello issued a building permit for a 202-unit multi-family
complex indicating pent-up rental demand. Based on past apartments buildings (95 units built in
2000/2001); this newest apartment should meet the pent-up demand for the next fifteen years. The pent-
4 Good condition meaning that these homes do not need renovated or demolished. DRAFT
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up demand range of forty to sixty (40 to 60) in Table 1-X is the result of a 95% occupancy rate and the
average pent up demand caused by all 297 units. We predict an annual pent-up demand of ten (10) units
per year. Over five years, that would be fifty units, giving us the range of forty to sixty units.
Based on demographic and market trends, we project 25% to 35% of the housing demand from household
growth and replacement-need in Monticello between 2017 and 2021 will be for rental housing. There is a
total of demand for approximately 109 to 157 rental units. This demand is for all types of rental housing
– from subsidized to market rate general occupancy housing to senior housing.
An estimate of 65% to 75% of housing demand in Monticello between 2016 and 2021 is projected to be
for owner-occupied housing. This equates to demand for 180 to 208 homes from 2017 to 2021 (45 to 52
homes annually.). This would equate to the projected demand for single-family homes and townhomes.
Please see Table 1-X for more details.
Other Housing Recommendations
Projected demand for new housing products in Monticello through the remainder of the decade from
current and future residents is outlined on the preceding pages. In addition, there are other programs that
Monticello can implement to assist in meeting local housing needs and improving the quality of the
existing stock. The key programs/initiatives that Monticello should pursue are outlined below.
• Monticello should work towards converting vacant housing units into renter-occupied to reach
30-35% of total housing units. In its current state, the rental housing inventory sits at 25% of total
housing units. As seen in Table 1-I, the City is projected to have seventy-six (76) additional
vacancies.
• Monticello needs to maintain its low housing costs and low percentage (19%) of residents paying
more than 30% of their monthly household income on housing to reduce the negative impacts
from another housing correction like 2006-08. This percentage is much lower than county and
state averages (27% and 29% respectively).
• Monticello should make efforts to increase affordable rental housing inventory so they are
available for younger generations of citizens as well as baby-boomers and empty-nesters. The
latter two cohorts of residents are downsizing their living spaces and need affordable places to
live. Combining affordable housing options with job opportunities could lead to an increase in
19-24-year-old residents.
• Monticello should also ensure an adequate amount of higher-end rental units for higher-income
individuals looking to retire and downsize their living quarters. While these individuals are
looking for smaller spaces, they are not willing to surrender the amenities to which they have
grown accustom.
• With the expected increase in the percentage of residents over the age of sixty-five (65),
Monticello needs to increase their stock of senior housing units. Refer to Table 1-O for projected
figures.
• Monticello should consider the development of housing in the downtown area to accommodate
young seniors and millennial residents. Both cohorts share the same preference for areas that are
rich with amenities and walkable, and housing properties that have lower maintenance
requirements. Providing residents with downtown housing options is critical if the city wishes to
achieve population age diversity and a complete life-cycle housing environment.
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