I. Introduction
II. Executive Summary
III. Community Overview and Study Area
IV. Demographic Analysis
V. Economic Analysis
VI. Housing Supply Analysis
VII. Housing Gap Estimates
VIII. Community Input Results and Analysis
Addendum A – Phone Survey of Conventional Rentals
Addendum B – Community Input Results
Addendum C – Qualifications
Addendum D – Glossary
The government of Johnson City, Tennessee retained Bowen National Research in December 2022 for the purpose of conducting a Preliminary Housing Needs Assessment of Johnson City, Tennessee.
With changing demographic and employment characteristics and trends expected overtheyearsahead,itis importantforJohnsonCityanditscitizenstounderstand the current market conditions and projected changes that will influence future housing needs. Toward that end, this report intends to:
• Provide an overview of present-day Johnson City.
• Present and evaluate past, current, and projected detailed demographic characteristics
• Present and evaluate employment characteristics and trends, as well as the economic drivers impacting the area.
• Determine current characteristics of all major housing components within the market (rental housing alternatives and for-sale/ownership).
• Provide housing gap estimates by tenure and income segment.
• Collect input from residents/employees/commuters in the form of an online survey.
By accomplishing the preliminary study’s objectives, government officials, area stakeholders, and area employers can: (1) better understand the city's evolving housing market, (2) establish housing priorities, (3) modify or expand local government housing policies, and (4) enhance and/or expand the city’s housing market to meet current and future housing needs.
The following methods were used by Bowen National Research:
The primary geographic scope of this study, referred to as the Primary Study Area (PSA), focused on the city limits of Johnson City, Tennessee. State and national data was used, when available, as a base of comparison for selected data sets. Maps of the study areas are provided in Section III of this report.
Demographic data for population, households, and housing was secured from ESRI, the 2010 and 2020 U.S. Census, the U.S. Department of Commerce, and the American Community Survey. This data has been used in its primary form and by Bowen National Research for secondary calculations. Estimates and projections of key demographic data for 2022 and 2027 were also provided.
Employment information was obtained and evaluated for various geographic areas that were part of this overall study. This information included data related to wages by occupation, employment by job sector, total employment, unemployment rates, identification of top employers, and identification of largescale job expansions or contractions. Most information was obtained through the U.S. Department of Labor, Bureau of Labor Statistics. Bowen National Research also attempted to conduct interviews with local stakeholders familiar with the area’s employment characteristics and trends.
This study focuses on rental and for-sale housing components Rentals include multifamily apartments (generally five+ units per building) and non-conventional rentals such as single-family homes, duplexes, units over storefronts, etc. Forsale housing includes individual homes, mobile homes, and projects within subdivisions. The focus of the rental housing survey for this analysis was concentrated on conventional rental product.
During December 2022 and January 2023, Bowen National Research conducted telephone research, as well as online research, of the area’s housing supply. The following data was collected on each multifamily rental property:
1. Property Information: Name, address, total units, and number of floors
2. Owner/Developer and/or Property Manager: Name and telephone number
3. Population Served (i.e., seniors vs. family, low-income vs. market-rate, etc.)
4. Available Amenities/Features: Both in-unit and within the overall project
5. Years Built and Renovated (if applicable)
6. Vacancy Rates
7. Distribution of Units by Bedroom Type
8. Square Feet and Number of Bathrooms by Bedroom Type
9. Gross Rents or Price Points by Bedroom Type
10. Property Type
For-Salehousingdataincludeddetailsonhomeprice,yearbuilt,location,number ofbedrooms/bathrooms,priceper-square-foot, andotherpropertyattributes. Data was analyzed for both historical transactions and currently available residential units, as available.
Based on the current demographic data for 2022 and projected data for 2027 and taking into consideration the housing data from our phone survey of area housing alternatives, we are able to project the potential number of new units the PSA (Johnson City) can support. The following summarizes the metrics used in our demand estimates.
• Rental Housing – We included renter household growth, the number of units required for a balanced market, the need for replacement housing, commuter/external market support, and step-down support as the demand components in our estimates for new rental housing units. As part of this analysis, we accounted for vacancies reported among all surveyed rental alternatives. We concluded this analysis by providing the number of rental units that the market can support by different income segments and rent levels.
For-Sale Housing – We included owner household growth, the number of units required for a balanced market, the need for replacement housing, commuter/external market support, and step-down support as the demand components in our estimates for new for-sale housing units. As part of this analysis, we accounted for vacancies reported among all surveyed for-sale alternatives. We concluded this analysis by providing the number of units that the market can support by different income segments and price points
The intent of this report is to collect and analyze significant levels of data for Johnson City Bowen National Research relied on a variety of data sources to generate this report. These data sources are not always verifiable; however, Bowen National Research makes a concerted effort to assure accuracy. While this is not always possible, we believe that our efforts provide an acceptable standard margin of error. Bowen National Research is not responsible for errors or omissions in the data provided by other sources.
We have no present or prospective interest in any of the properties included in this report, and we have no personal interest or bias with respect to the parties involved. Our compensation is not contingent on an action or event resulting from the analyses, opinions, or use of this study. Any reproduction or duplication of this study without the expressed approval of Johnson City or Bowen National Research is strictly prohibited.
The purpose of this preliminary report is to evaluate the housing needs of Johnson City, Tennessee. To that end, we conducted a Housing Needs Assessment that considers the following:
• Demographic Characteristics and Trends
• Economic Conditions and Commuting/Migration Patterns
• Existing Housing Stock (Rental and For-Sale) Costs and Availability
• Quantified Housing Gap Estimates
Based on these metrics, we were able to identify housing needs by affordability and tenure (rental vs. ownership). This Executive Summary provides key findings of our analysis.
This report focuses on the Primary Study Area (PSA), which consists of Johnson City. Additional information, when available, is provided for Tennessee and the United States for comparison purposes. A map illustrating the study area is provided below An enlarged map is included on page III-4 of this report.
This study included the analysis of numerous topics and data sets. The following summarizes some of the key findings from this study.
Johnson City is expected to continue to expand demographically and maintain a relatively even distribution of renter and owner households. Renter household incomes will continue to be primarily concentrated under $50,000 while owner households will primarily earn $50,000 or more through 2027. Household growth projected for several different age segments but will be primarily concentrated among seniors aged 65 and older. Overall, Johnson City has grown andwillcontinuetoexpandfortheforeseeablefutureintermsofbothtotalpopulation and households. Between 2022 and 2027, the Johnson City population is projected to increase by 1,166 (1.6%) while households will increase by 570 (1.9%). Although projected growth rates for the area between 2022 and 2027 will occur at a slightly slower pace than the state of Tennessee, this growth is expected to result in increased demand for housing. Other notable findings of our demographic analysis are as follows:
• More than 20.0% of the Johnson City population is estimated to be living below the poverty line, as compared to approximately 15.0% of the state population.
• Household growth within Johnson City is projected to occur among various age groups, though thelargest growth will occuramonghouseholds aged 75and older and those aged 35 to 44.
• Johnson City households are relatively evenly distributed by tenure (owner vs. renter) as approximately 52.5% of households were renters in 2022 while the remaining 47.5% were renters. Growth is projected to occur among each of these household segments between 2022 and 2027.
• Although the Johnson City median household income is projected to increase by morethan26.0%between2022and2027to $62,681,itisalsoprojectedto remain more than 15.0% lower than the statewide median household income ($74,116) through 2027.
• Household growth among renters is projected to be concentrated among households earning $50,000 or more between 2022 and 2027. However, nearly 60.0% of all renter households are projected to earn less than $50,000 in 2027.
• Similar to renter growth, household growth among owner households is projected to be concentrated among those earning $50,000 or more. Conversely, however, more than three-quarters (76.5%) of owner households are projected to earn $50,000 or more through 2027.
• Johnson City population/household base has potential to increase more rapidly than current demographic projections given the large number of workers that commute to the area from outside of Johnson City. Notably, more than 35,000 workers commute into Johnson City from other surrounding areas. In the event housing which meets the needs of these commuters is built/comes available within Johnson City, it is likely some of these commuters would consider relocating to Johnson City to be near their place of employment.
Lack of available housing, particularly affordable housing, limits growth within Johnson City as households looking to relocate within or to the area have very few options from which to choose. Limited affordable housing availability also contributes to many Johnson City households, particularly renters, being cost burdened (paying more than 30% of their income towards rent). As part of this analysis, we analyzed American Community Survey (ACS) data as it relates to the Johnson City housing stock. Additionally, we conducted a telephone survey of existing area rental properties and obtained data pertaining to recent home sales (July 2022 to January 2023) and homes available for purchase at the time of our analysis. The results of these analyses revealed that the existing Johnson City housing supply is generally more affordable, though older, than housing throughout the state of Tennessee. Additionally, housing availability within Johnson City is very low as the 49 rental properties surveyed report an overall vacancy rate of just 0.7% and a total of just 51 homes were identified as being available for purchase at the time of this report resulting in an availability rate of 0.3%. Summaries of our survey of area rentals and homes identified as available for purchase are illustrated by the following tables.
Source: Realtor.com & Bowen National Research
Notable findings of our housing supply analysis are summarized as follows:
• Existing apartment rental product surveyedis relatively evenly distributedamong affordable (Tax Credit and government-subsidized) product generally serving households earning $53,920 or less, and market-rate rentals serving moderate to higher income households. These segments represent 46.0% and 54.0% of the rental units surveyed, respectively. While vacancy rates are low for each of these segments, it is notable that the vacancy rate reported (0.5%) for affordable rental propertiessurveyedisslightlylowerthantheoverallvacancyrate(0.7%)reported for all properties surveyed. This is reflective of just seven (7) vacant units among the 25 affordable properties surveyed. In comparison, a rental vacancy rate generally between 3.0% and 5.0% is considered healthy and allows for a wellbalanced market.
• Waiting lists containing approximately 114 and 484 households combined for the non-subsidized Tax Credit and government-subsidized properties, respectively, are maintained among the affordable rental properties surveyed.
• More than 45.0% of Johnson City renter households are considered to be rent burdened in that they pay more than 30% of their income towards rent, slightly higher than the 42.4% share reported for the state of Tennessee. Further, more than one-fifth (20.9%) of all renter households are considered to be severe cost burdened (paying 50% or more of income towards rent).
• The median rents of the Tax Credit supply are positioned well below (16.5% to 39.0% depending upon unit type) the median rents reported for similar unrestricted market-rate units surveyed in the area. The value of these units has likely contributed to the strong 100.0% occupancy (0.0% vacancy) rate reported for this rental segment.
• A total of just 51 homes were identified as available for purchase at the time of our analysis while 219 homes were known to be sold within Johnson City between July of 2022 and January of 2023. The 51 homes available for purchase are reflective of an availability rate of 0.3%, much lower than the normal range of 2.0% to 3.0% for a well-balanced for-sale/owner-occupied market. The 219 homes sold during the aforementioned time period yield an average sales rate of approximately36 sales permonthduringthis time period.Basedonthis historical sales data, the 51 homes available for purchase represent an available home inventory of less than two months (51 homes / sales rate of 36 homes per month = 1.4 months).
• More than two-thirds (68.6%) of homes available for purchase within Johnson City are priced $300,000 or more. Comparatively, nearly 38.0% of Johnson City homes which sold during the six-month period evaluated (July 2022 to January 2023) were also priced $300,000 or more. Typically, a home of this price point would require an income of approximately $72,000 to be determined affordable (paying no more than 30% of income towards housing costs) to the purchaser. In comparison, only 16 available homes are considered affordable to households earning less than $72,000 within Johnson City.
• A total of 540 (16.3%) of the 3,307 rental units surveyed and eight (8), or 15.7%, ofthe51availablefor-salehousingunitsidentifiedwerebuiltsince2010. Further, just over 13.0% of Johnson City homes sold between July of 2022 and January of 2023 were built since 2010. Comparatively, approximately 35.0% of all rental housingunitssurveyedandbetween49.0%and63.9%ofrecentlysold andhomes available for-purchase were built prior to 1980.
Johnson City has an Overall Housing Gap of 4,859 Units for Rental and For-Sale Product at a Variety of Affordability Levels - It is projected that the city has a fiveyear rental housing gap of 2,260 units and a for-sale housing gap of 2,599 units. Both the rental and for-sale housing gap is distributed most heavily among moderate priced (rents of $1,349 to $2,259 and homes priced $179,734 to $301,200) product However, it is important to note that Housing Gap Estimates included in this report show a need for rental and for-sale housing product of all affordability levels within Johnson City. Details of this analysis, including our methodology and assumptions, are included in Section VII.
The following table summarizes the approximate potential number of new residential units that could be supported in the PSA (Johnson City) over the next five years.
The preceding estimates are based on current government policies and incentives, recent and projected demographic trends, current and anticipated economic trends, and available and planned residential units. Numerous factors impact a market’s ability to support new housing product. This is particularly true of individual housing projects or units. Certain design elements, pricing structures, target market segments (e.g., seniors, workforce, families, etc.), product quality and location all influence the actual number of units that can be supported. Demand estimates could exceed those shown in the preceding table if the community changes policies or offers incentives to encourage people to move into the market or for developers to develop new housing product.
This report focuses on the housing needs of Johnson City, Tennessee. Recognizedasacityin1856,JohnsonCityislocatedinportionsofWashington, Carter, and Sullivan Counties in the upper northeast portion of Tennessee near the North Carolina border Johnson City is surrounded by portions of the Appalachian, Blue Ridge, and Great Smoky Mountain ranges. The main thoroughfares that serve Johnson City include Interstate 26, U.S. Highway 19W, U.S. Highway 321, and State Routes 36 and 381. Notably, Interstate 26 connects the Johnson City area with nearby Kingsport, Tennessee to the north, as well as the Asheville, North Carolina area approximately 60.0 miles south of Johnson City.
Johnson City contains approximately 43.0 square miles and is home to 71,046 people based on the 2020 Census, an increase of 10.3% from the time of the 2010 Census. Population density within Johnson City is approximately 1,629 people per square mile in comparison to the Tennessee state average of approximately 164.0 people per square mile. The household base within Johnson City is relatively evenly distributed among renters and homeowners, which comprise 44.5% and 55.5% of households in the area, respectively. Households are also relatively evenly distributed by age. The majority of households (both renters and owners) are comprised of two or fewer persons and more than 42.0% of all households earn less than $40,000 annually.
The city’s largest employment sectors include Health Care & Social Assistance (37.3%), Retail Trade (14.8%), and Accommodation & Food Services (9.1%). Because of the variety of outdoor recreation opportunities available, the area is a popular locale for tourism. This tourism contributes significantly to the local economy and helps to support many of the area’s restaurants, retailers, and lodging businesses. Johnson City serves as a cultural center for the three counties in which it falls, with its Appalachian heritage and small-town charm. The city is known for its picturesque views of the Great Smoky and Blue Ridge Mountains. Notable attractions within the area include Farmhouse Gallery and Gardens, WingedDeerPark,RoanMountain, portionsoftheAppalachianTrail, Tipton-Haynes Historic Site, and several additional parks and museums.
Existingowner-occupiedhomesinthePSA(JohnsonCity)haveamedianhome value of $218,546, slightly lower than the state of Tennessee ($237,721), while the average gross rent for the PSA is $808, also lower than the state of Tennessee ($979). Approximately 45.0% of renters and 17.0% of owners in the PSA are considered cost burdened in that they pay more than 30% of their income towards housing costs. A variety of existing rental housing product is offered within the PSA, in terms of affordability levels, all of which are performing well with vacancy rates not exceeding 1.0% for any individual
rental housing segment surveyed. Similarly, for-sale product has limited availability within the PSA as only 51 homes were identified as being available for purchase at the time of this analysis. This is reflective of an availability rate of just 0.3%. The 51 available homes are representative of less than two months (1.4 months) of supply.
Additional information regarding the city’s demographic characteristics and trends, economic conditions, housing supply, and other factors that impact housing are included throughout this report.
Thisreportaddressesthe residentialhousingneeds ofJohnsonCity.Tothis end, we focused our evaluation on the demographic and economic characteristics, as well as the existing housing stock, of the Johnson City area. In order to provide an additional base of comparison, we provided data on the overall state of Tennessee and/or the United States, when applicable.
The following summarizes the study area used in this analysis.
Primary Study Area – The Primary Study Area (PSA) includes the entirety of the established limits of Johnson City, Tennessee. No secondary markets or submarkets were included in this analysis.
Maps delineating the boundaries of the study area are shown on the following pages.
This section of the report evaluates key demographic characteristics for the Primary Study Area (PSA, Johnson City) and Tennessee (statewide). Through this analysis, unfolding trends and unique conditions are often revealed regarding populations and households residing in the selected geographic areas. Demographic comparisons between these geographies provide insights into the human composition of housing markets Critical questions, such as the following, can be answered with this information:
• Who lives in Johnson City and what are these people like?
• In what kinds of household groupings do Johnson City residents live?
• What share of people rent or own their Johnson City residence?
• Are the number of people and households living in Johnson City increasing or decreasing over time?
• How do Johnson City residents and those of the state compare with each other?
This section is comprised of three major parts: population characteristics, household characteristics, and demographic theme maps. Population characteristics describe the qualities of individual people, while household characteristics describe the qualities of people living together in one residence. Demographic theme maps graphically show varying levels (low to high concentrations) of a demographic characteristic across a geographic region.
It is important to note that 2010 and 2020 demographics are based on U.S. Census data (actual count), while 2022 and 2027 data are based on calculated estimates provided by ESRI, a nationally recognized demography firm These estimates and projections are adjusted using the most recent available data from the 2020 Census count, when available. The accuracy of these estimates depends on the realization of certain assumptions:
• Economic projections made by secondary sources materialize.
• Governmental policies with respect to residential development remain consistent.
• Availability of financing for residential development (i.e., mortgages, commercial loans, subsidies, Tax Credits, etc.) remains consistent.
• Sufficient housing and infrastructure are provided to support projected population and household growth.
Significant unforeseen changes or fluctuations among any of the preceding assumptions could have an impact on demographic estimates/projections.
It should be noted that some total numbers and percentages may not match the totals within or between tables in this section due to rounding.
Population bynumberandpercent change(growthordecline)forselectedyears is shown in the following table:
Source: 2010, 2020 Census; ESRI; Urban Decision Group; Bowen National Research
Between 2010 and 2020, the population within the PSA (Johnson City) increased by more than 10.0%, outpacing population growth experienced throughout the state of Tennessee (8.9%) during this same time period. In 2022, the total population of the PSA was estimated to be 72,127, which represented a 1.5% increase in population from 2020. This ongoing population growth is projected to continue through 2027 as the total population within the PSA is projected to increase by 1,166 (1.6%) between 2022 and 2027. The rate of population growth reported between 2020 and 2022, and that projected for between 2022 and 2027, within the PSA is lower than that reported for the state of Tennessee. Nonetheless, the Johnson City area is expected to continue to expand in terms of total population for the foreseeable future.
The following graph compares the percent change in population since 2010 and projected through 2027 for the PSA (Johnson City) and the state of Tennessee.
Johnson City Tennessee
Population by age cohorts for selected years is shown in the following table:
Source: 2010 Census; ESRI; Urban Decision Group; Bowen National Research N/A – Not applicable
In 2022, the median age for the population of the PSA (Johnson City) was 39.0 years. This represents a 5.1% increase over the 2010 median age (37.1 years). In 2022, the median age for Johnson City was slightly lower than that reported for the state of Tennessee (40.0 years) The median age for the PSA is projected to increase to 40.1 years by 2027, remaining similar to the median age for the state of Tennessee.
In 2022, nearly one-third (31.2%) of the PSA population, the largest share of the PSA population, is within the age cohort of less than 25 years of age. This is not surprising considering this cohort encompasses a wide range of ages. Aside from this younger cohort, the distribution of population by age is relatively well balanced among the remaining cohorts. With the exception of the age cohort of 75 years and older (9.3%), all other cohorts have shares between 10.8% and 14.0% of the population. Population shares by age within the PSA are also relatively similar to those reported for the state of Tennessee, which is reflective of the similar median age reported for these two study areas.
Projections for 2027 indicate that population growth within the PSA will occur among several different age cohorts, though the most notable growth is projected to occur among the age 75 and older and age 35 to 44 populations. Given the projected population growth among several age cohorts, population shares by age will remain relatively stable between 2022 and 2027, as will the median age projected for the area.
Thefollowing graphcompares theprojectedchangein population byagecohort between 2022 and 2027 for the PSA (Johnson City).
Population by race for 2020 is shown in the following table:
Source: 2020 Census; ESRI; Urban Decision Group; Bowen National Research
In 2020, 80.7% of residents within the PSA (Johnson City) identified as “White Alone,” which is a notably higher share than the state overall (72.2%).
Approximately 6.7% of residents within the PSA identified as “Black or African American Alone”, whereas nearly 16.0% of residents in the state overall identified as this race. The remaining distributions of population by race in the PSA are relatively similar to those reported for the state overall.
Population by marital status for 2022 is shown in the following table:
Source: ESRI; Urban Decision Group; Bowen National Research
In 2022, nearly half (44.1%) of the population in the PSA (Johnson City) was married, a lower married rate than that reported for the state of Tennessee (52.1%). More than one-third (37.4%) of PSA residents have never married, 11.6% are divorced, and 6.9% are widowed. Unmarried persons, including divorced and widowed persons, are more likely to live in a one-wage-earner household with alowerincomecompared to amarriedhousehold which is more likely to have two sources of income. As more than half (55.9%) of the PSA population is unmarried, this portion of the population is likely to live within a household with a single source of income. It should be noted, however, that there is a high probability that many of the individuals that have never married are between the ages of 15 and 25 and live with a parent or guardian.
The following graph compares the shares of the population by marital status for the PSA (Johnson City) and the state of Tennessee.
Johnson City Tennessee
Population by highest educational attainment for 2022 is shown below:
Source: ESRI; Urban Decision Group; Bowen National Research
Earning capacity generally has a high correlation to educational attainment. This is to say that a low share of post-secondary degrees and/or a high share of individuals lacking high school diplomas can limit the incomes and affect the affordability of housing for the population within a given area.
Within the PSA (Johnson City), the share of individuals with a post-secondary degree (48.2%) is notably higher than the share for the state of Tennessee (39.0%). Additionally, the share of individuals within the PSA lacking a high school diploma (9.1%) is lower than the statewide share (10.7%). While the PSA population has a higher share of educational attainment than the state of Tennessee, it is important to note that more than one-quarter (26.5%) of the population has not obtained a high school diploma or college degree. This population is most likely to be in need of affordable housing options within the market.
The following graph compares the populations of the PSA and state of Tennessee by educational attainment.
Johnson City Tennessee
Population by poverty status is shown in the following table:
Source: U.S. Census Bureau, 2016-2020 American Community Survey; Urban Decision Group; Bowen National Research
Approximately 20.5% of the population in the PSA (Johnson City) suffer from poverty, a higher rate than that reported (14.6%) for the state of Tennessee. The poverty shares reported for the under 18 and the 65 and older populations are similar to those reported for the state of Tennessee. While the population age 18 to 64 reports the highest poverty share within both the PSA and state, this share within the PSA (13.8%) is more than five full percentage points higher than that reported for the state (8.4%). Overall, approximately 12,747 individuals live in poverty in the PSA, more than two-thirds (67.3%) of which are between the ages of 18 and 64
The following graph compares the poverty rates by age/overall for the PSA (Johnson City) and the state of Tennessee.
Johnson City Tennessee
Population by migration (previous residence one year prior to survey) for years 2016-2020 is shown in the following table:
Source: U.S. Census Bureau, 2016-2020 American Community Survey; ESRI; Urban Decision Group; Bowen National Research
As the preceding table illustrates, more than three-quarters (77.5%) of Johnson City residents remain in the same house year over year. This is a lower rate than that reported (85.8%) for the state of Tennessee. Among all Johnson City residents, 10.9% moved within the county, 6.5%moved from a different county within the state, and 5.2% moved from a different state or from abroad. It is notable that the share of individuals in the PSA moving from a different county withinthestateismorethandoublethecorrespondingshareforthestate(3.2%). These statistics indicate a relatively stable housing market with a moderate degree of mobility within the PSA but also demonstrate a higher transiency rate within the PSA as compared to the state. The housing supply of the PSA is examined in detail in Section VI of this report.
Population densities for selected years are shown in the following table:
Source: 2010, 2020 Census; ESRI; Urban Decision Group; Bowen National Research
The population density of Johnson City has increased by nearly 12.0% since 2010. This increased population density is projected to continue as it will increaseby1.6%between2022and2027.Similartrendshavebeenexperienced and are projected to continue statewide, as the population density for the state of Tennessee is projected to increase by 2.6% between 2022 and 2027.
Households by number and percent change (growth or decline) for selected years are shown in the following table:
Source: 2010, 2020 Census; ESRI; Urban Decision Group; Bowen National Research
There are approximately 30,362 households within the PSA (Johnson City) in 2022 The number of households in the PSA increased by 7.7%, or 2,144 households, between 2010 and 2020. Household growth within the state of Tennessee outpaced growth within Johnson City during this time, as the state household base increased by 10.0%. Household growth continued within both the PSA and the state between 2020 and 2022, a trend which is projected to continuethrough2027.Specifically,thetotalnumberofhouseholdsisprojected to increase by 570, or 1.9%, within the PSA between 2022 and 2027. Ongoing household growth within the PSA is expected to increase demand for housing within the area for the foreseeable future. Further, the housing needs of many existing households will likely change in the next five years. This can result from seniors aging in place that choose to downsize, or seniors that relocate to a single-story floorplan due to health considerations. Additionally, some younger households may increase in size which may necessitate relocation to housing with more bedrooms. As such, household composition should be considered along with household numbers.
The following graph compares the percent change in households between 2010 and 2027 for the PSA (Johnson City) and the state of Tennessee:
Household heads by age cohorts for selected years are shown in the following table:
Source: 2010 Census; ESRI; Urban Decision Group; Bowen National Research
With the exception of the under age 25 age group, households are relatively evenly distributed by age within Johnson City. However, household heads between the ages of 55 and 64 comprise the largest age cohort (16.7%), similar to the state of Tennessee. Household heads between the ages of 25 and 34 (16.2%) and 65 to 74 (16.1%) comprise the next largest shares of the overall household base. Senior households (age 55 and older) comprise nearly half (47.3%) of all households within the PSA, while those between the ages of 25 and 54 comprise 45.6% of all households. Household growth between 2022 and 2027 is projected to be greatest among elderly households age 75 and older, though notable growth is also projected for younger households between the ages of 35 and 44. Household growth trends have been and are projected to continue to be similar to statewide trends/projections. The preceding factors demonstrate a good base of potential support for both family and seniororiented housing alternatives within the Johnson City area.
The following graph illustrates the projected change in households by age for the PSA (Johnson City) 2022 and 2027.
Households by tenure for selected years are shown in the following table:
Source: 2010 Census; 2020 Census; ESRI; Urban Decision Group; Bowen National Research
In 2022, slightly more than half (52.5%) of households in the PSA (Johnson City) are owner households, while the remaining 47.5% are renter households. The distribution of households by tenure within the PSA is more even than that reported for the state of Tennessee as more than two-thirds (66.9%) of all households within the state are owner households and approximately 33.0% are renter households. Both the number and share of owner and renter households is projected to remain stable within the PSA between 2022 and 2027. It is important to note that limited available housing inventory can limit future household growth. Therefore, sufficient housing stock in the market is crucial for the PSA to accommodate additional households. Notably, rental product surveyed within the PSA at the time of this report has an overall vacancy rate of just 0.7% while just 51homes were identified as available for purchase. This is detailed in Section VI and demonstrates limited available housing stock within the PSA.
Thefollowing graphillustrateshousehold tenurewithin the PSA(Johnson City) for various years:
Owner-Occupied Renter-Occupied
Renter households by size for selected years are shown in the following table for the PSA (Johnson City) and the state of Tennessee:
Source: 2010 Census; ESRI; Urban Decision Group; Bowen National
With an average renter household size of 2.01 in 2022, one- and two-person households comprise nearly three-quarters (71.2%) of all renter households within the PSA. This is a larger share of such households compared to those within the state (66.2%), which results in the state having a slightly larger average renter household size (2.22 persons). Over the next five years, the overall numberof renter households in thePSAis projectedto remain relatively stable, with some growth projected among three- and five-person households. One- and two-person households will continue to comprise more than 70.0% of all renter households within the PSA in 2027.
The following graph shows the projected change in persons per renter household for Johnson City between 2022 and 2027:
1-Person
2-Persons
3-Persons
4-Persons
5-Persons
Owner households by size for Johnson City and the state for selected years are shown in the following table:
Source: 2010 Census; ESRI; Urban Decision Group; Bowen National
With an average owner household size of 2.31 in 2022, one- and two-person owner households comprise more than two-thirds (68.9%) of the PSA’s owner households. This is a higher share of such households compared to the state (63.1%), which has an average owner household size of 2.42 persons. Over the next five years, owner households in the PSA are projected to increase by 572 households, or 3.6%, overall. This growth is projected to occur among most household sizes, with the exception of three-person households. Considering the growth projected among most household sizes, the average household size among owner households is expected to remain stable through 2027.
The following graph illustrates the projected change in persons per owner household for Johnson City between 2022 and 2027:
1-Person
2-Persons
3-Persons
4-Persons
5-Persons
The distribution of households by income is illustrated in the following table:
Source: 2010 Census; ESRI; Urban Decision Group; Bowen National Research
The PSA (Johnson City) in 2022 has a diverse mix of households by income level; however, there is a notably higher share of households in the PSA (42.3%) earning less than $40,000 annually than that of the state (35.3%). Although the number of lower-income households is projected to decrease by 2027 for the PSA,the share of such households (34.7%) will remain higher than that of the state (24.7%) for this time period. While this may signal a moderate shift in housing oriented toward middle- and higher-income households over the next five years in the county, the need for affordable housing will remain critical as more than one-third of households in the PSA will continue to earn less than $40,000 annually.
Median household income for selected years is shown in the following table:
Source: 2010 Census; ESRI; Urban Decision Group; Bowen National Research
The median household income of the PSA (Johnson City) for 2022 is estimated to be $49,576, which is approximately 20.8% below the Tennessee median income of $62,567 From 2010 to 2022, the median income of the PSA increased by nearly 40.0%. Though notable, this is a smaller increase than the state (48.9%) during the same time period. The median household income for the PSA is projected to increase by an additional 26.4% by 2027, at which time the median household income for the PSA will be $62,681 annually. This projected increase is greater than that projected for the state (18.5%). Nonetheless, the median household income will remain below that projected for the state of Tennessee for the foreseeable future.
The distribution of renter households by income is illustrated in the following table:
Source: 2010 Census; ESRI; Urban Decision Group; Bowen National Research
In 2022, the largest single cohort of renter households by income within the PSA(JohnsonCity)earns between$10,000 and$19,999(18.8%).Additionally, nearly two-thirds (61.2%) of renter households within the PSA earn less than $40,000 annually. This is a higher share of such households compared to that of the state (49.4%). Although the number of renter households earning less than $40,000 annually is projected to decrease within the PSA between 2022 and 2027, the share (52.8%) of such households will remain much higher than thatofthestateoverall(39.4%).Conversely, allincomecohortsinboth the PSA and state earning more than $50,000 are projected to experience renter household growth over the next five years. The continued majority share of lower-income renter households and the increase of higher-earning renter households within Johnson City through 2027 indicates the importance of providing a wide range of rental housing alternatives.
The following table shows the distribution of owner households by income:
Source: 2010 Census; ESRI; Urban Decision Group; Bowen National Research
In 2022, nearly 60.0% of owner households in the PSA (Johnson City) earned $60,000 or more annually Between 2022 and 2027, the PSA is projected to experiencegrowth amongownerhouseholds earning$50,000ormoreannually, with thegreatest growthexpectedto occuramong households earning $100,000 or more All owner household income cohorts under $50,000 in the PSA are projected to experience declines. However, owner households earning less than $40,000 will continue to comprise nearly 20.0% of all owner households in 2027.
The following graph illustrates household income growth by tenure between 2022 and 2027 for the PSA (Johnson City)
<$20,000
$20k-$29,999
$30k-$39,999
$40k-$49,999
$50k-$59,999
$60k-$99,999
$100,000+
In 2022, there were 14,367 senior households (age 55 and older) in the PSA which represent nearly half (47.3%) of the total households in Johnson City While households between the ages of 55 and 64 are projected to decrease in the PSA by 2027, households age 65 and older are projected to increase by 993 households, or 10.7%. Overall, this will result in an increase of 684 households, or 4.8%, among senior households (age 55 and older) between 2022 and 2027. As such, senior households represent a significant share of the demographic base that contributes to the overall current and future housing demand in the PSA. In an effort to better understand the housing needs for senior households, additional analysis follows.
Seniorhouseholds bytenurefor selected years are shownin the following table:
Source: 2010 Census; ESRI; Urban Decision Group; Bowen National Research
In 2022, nearly 70.0% of all senior households (age 55 and older) were owner households while nearly one-third (30.6%) were renter households. In comparison, the PSA (Johnson City) has a higher share of senior renter households as compared to the state of Tennessee (19.9%). These shares for the PSA and state will remain stable through 2027 as the number of both owner and renter households age 55 and older within these geographies is projected to increaseslightlybetween2022and2027.Thesearegoodindicationsofongoing demand for senior-oriented housing alternatives within the PSA, a trend which is also expected to continue throughout the state during this time period.
The following table shows the distribution of senior (age 55+) renter households by income:
Source: 2010 Census; ESRI; Urban Decision Group; Bowen National Research
As the preceding illustrates, more than half (56.0%) of senior renter households (age 55 and older) in the PSA earn less than $30,000 annually. This is not surprising given that a large portion of these households are likely retired and live on a fixed income. This is a slightly higher share of very low-income households compared to that reported for the state of Tennessee (49.5%). While the number of senior renter households earning less than $30,000 is projected to decline by 2027, this income cohort will still comprise 49.3% of all senior renter households in the PSA. Conversely, growth is projected among senior renter households earning $50,000 or more annually over the next five years. The large share of very low-income senior renter households and the projected increase among the higher income cohorts should be considered in future housing needs.
The distribution of senior (age 55+) owner households by income are in the following table:
Source: 2010 Census; ESRI; Urban Decision Group; Bowen National Research
Comparedto seniorrenterhouseholds in thePSA,thedistribution ofsenior (age 55 and older) owner households is much more weighted toward the higher income cohorts. Senior owner households earning less than $40,000 annually comprise less than one-quarter (22.7%) of all senior owner households in the PSA. This is a much smaller share compared to the senior renters in the PSA (56.0%). Between 2022 and 2027, all growth among senior owner households is projected to occur among households earning $50,000 or more annually. This collective income cohort is projected to increase by 1,506 (26.3%) households over the next five years, while senior households earning less than $50,000 are projected to decline by 878 (20.6%).
The following demographic theme maps for the study area are presented after this page:
• Median Household Income
• Renter Household Share
• Owner Household Share
• Older Adult Population Share (55 + years)
• Younger Adult Population Share (20 to 34 years)
• Population Density
The demographic data used in these maps is based on U S Census, American Community Survey (ACS) and ESRI data sets.
The need for housing within a given geographic area is influenced by the number of households choosing to live there. Although the number of households in Johnson City at any given time is a function of many factors, one of the primary reasons for residency is job availability. In this section, the workforce and employment trends that affect the PSA (Johnson City) are examined and compared to the state of Tennessee and the United States
The PSA (Johnson City) has an employment base of over 66,000 individuals within a broad range of employment sectors Industries of significance within the PSA include health care & social assistance, retail trade, accommodation & food service, and manufacturing Each industry within the PSA requires employees of varying skill and education levels. The following evaluates key economic metrics within Johnson City. It should be noted that based on the availability of various economic data metrics, some information is presented only for select geographic areas, which include the PSA (Johnson City), the Johnson City MSA, Washington County and/or the state of Tennessee, depending upon the availability of such data.
The following table illustrates the distribution of employment by industry sector in the PSA (Johnson City) and the state of Tennessee:
*Source: 2010 Census; ESRI; Urban Decision Group; Bowen National Research E.P.E. - Average Employees Per Establishment
Note: Since this survey is conducted of establishments and not of residents, some employees may not live within the study area. These employees, however, are included in our labor force calculations because their places of employment are located within the study area
The labor force within the PSA (Johnson City) is based primarily in four sectors: Health Care & Social Assistance (37.3%), Retail Trade (14.8%), Accommodation & Food Services (9.1%), and Manufacturing (6.7%). Combined, these four job sectors represent over two-thirds (67.9%) of the PSA employment base. Notably, these top four sectors are the same for the state of Tennessee. However, the share of the total employment base among these sectors within the PSA (67.9%) represents a greater concentration of employment within the top four sectors than the state (48.7%). Areas with a heavy concentration of employment within a limited number of industries can be more vulnerable to economic downturns with greater fluctuations in unemployment rates and total employment. While the distribution of employment within the PSA is more concentrated than that of the state, the primary sector (Health Care & Social Assistance) in the PSA is considered a critical service and is typically less susceptible to economic fluctuations.
The following graph illustrates the distribution of the top five employment sectors for the PSA compared with the state.
Johnson City Tennessee
Typical wages by job category for the Johnson City Metropolitan Statistical Area (MSA) are compared with those of Tennessee in the following table:
Most annual blue-collar salaries range from $22,950 to $45,020 within the Johnson City MSA. White-collar jobs, such as those related to professional positions, management and medicine, have an average salary of $75,524. Wages within the area are typically lower (9.4% on average) than the overall state wages. Within the MSA, wages by occupation vary widely and are reflective of a diverse job base that covers a wide range of industry sectors and job skills, as well as diverse levels of education and experience. Because employment is distributed among a variety of professions with diverse income levels, there are likely a variety of housing needs by affordability level. As a significant share of the labor force within the PSA is contained within health care & social assistance, retail trade, accommodation & food service, and manufacturing, many workers in the area likely have typical wages ranging between $20,000 and $75,000 annually This further demonstrates an ongoing need for a variety of housing products, in terms of affordability, within the PSA.
Total employment reflects the number of employed persons who live within the county regardless of where they work. The following illustrates the total employment base for Washington County, the state of Tennessee and the United States for the various years listed.
Source: Department of Labor; Bureau of Labor Statistics *Through November
Total employment within Washington County increased between 2015 and 2019, prior to the impact of the COVID-19 pandemic in 2020. Notably, the county employment base declined by 2,466 jobs, or 4.2%, in 2020 as a direct result of the pandemic. This rate of decline, however, was lower than those reported on the state level (5.3%) and nationally (6.1%) during this same time period. Since 2020, the county employment base has added nearly 3,400 jobs through November of 2022. Notably, this recent growth replaces all jobs lost during the initial impact of the pandemic and the most recent total employment figure (59,924) reported is the highest annual total reported over the past decade within the county. This demonstrates that the county employment base has fully recovered from the initial impact of the pandemic, in terms of total employment.
*Through November
Unemployment rates for Washington County, the state of Tennessee and the United States are illustrated as follows:
Source: Department of Labor, Bureau of Labor Statistics
*Through November
The annual unemployment rate within the county declined each year between 2013 and 2019 but spiked by nearly three full precentage points in 2020 as a direct result of the COVID-19 pandemic. Despite this increase, however, the annual unemployment rate within the county (6.3%) was below both state (7.4%) and national (8.1%) levels. Further, the unemployment rate within the county declined by more than three full percentage points since 2020, to a rate of 3.1% through November of 2022. This is lower than pre-pandemic levels reported for the county and remains below both state and national levels.
Washington Co. Tennessee U.S.
*Through November
In order to get a better sense of the initial impact the COVID-19 pandemic had on the local economy and the subsequent recovery; we evaluated monthly unemployment rates. The following table illustrates the monthly unemployment rate from January 2020 to September 2022 in Washington County.
Source: Department of Labor, Bureau of Labor Statistics
As the preceding illustrates, the monthly unemployment rate within the county spiked by nearly ten full percentage points during the initial impact of the pandemic, reaching a high of 13.5% in April of 2020. While elevated, monthly unemployment rates within Washington County were lower than those experienced in many markets during this time, some of which reported monthly unemployment rates of 20.0% or higher. Further, monthly unemployment rates within the county quickly began to decline starting in May of 2020. Notably, the most recent monthly unemployment rate reported for November of 2022 was just
3.2% and monthly unemployment rates within the county have remained below 4.0% each month since July of 2021. Recent monthly unemployment rates have also been lower than pre-pandemic levels.
WARN (layoff notices):
The Worker Adjustment and Retraining Notification (WARN) Act requires advance notice of qualified plant closings and mass layoffs. WARN notices were reviewed on January 18, 2023. According to the Tennessee Department of Labor & Workforce Development, there have been no WARN notices reported for Johnson City over the past 12 months. This is a good indication of the stability of the local economy.
In-place employment reflects the total number of jobs within the county regardless of the employee's county of residence. The following illustrates the total in-place employment base for Washington County.
Source: Department of Labor, Bureau of Labor Statistics *Through June
The preceding table illustrates in-place employment (people working within Washington County) increased by 5.2%, or 3,032 jobs, from 2013 to 2018. While the greatest single decrease over the past decade occurred in 2020 (3.2%) and can be largely attributed to the COVID-19 pandemic, it is notable that the county experienced a similar rate of decline in 2013 and another slight decline in 2019, just prior to the impact of the pandemic in 2020. Despite the significant decline in 2020, the county experienced an overall net increase of 2,847 jobs, or a 4.7% increase, from 2012 through June of 2022.
The ten largest employers within the Washington County area are summarized in the following table: Employer
Ballad Health
East Tennessee State University
James H. Quillen Veterans Hospital
Citi Group
Advance Call Center
Johnson City School District
AO Smith
Frontier Health
General Shale Headquarters
Mullican Flooring
Source: The Chamber Johnson City; 2022
Six of the top ten employers within the Washington County area are within the healthcare and manufacturing industries, two of the prominent industry segments within the PSA, as detailed earlier in this section. The remaining top employers are within the education, financial, and technology industries. Based on the preceding factors, the area’s largest employers are within industry segments which are generally considered to offer critical services and therefore are expected to contribute to economic stability within the Johnson City/Washington County area.
A map delineating the location of the area’s largest employers is included on the following page.
According to a representative with The Chamber Johnson City, the Johnson City and Washington County economy has been experiencing dynamic growth.
One key driver for growth is East Tennessee State University (ETSU) investing in several projects including the renovation of the student center and the Martin Performing Arts Center, which opened in 2020 as part of a $46 million investment.
The following table summarizes some additional recent and/or ongoing economic development projects within the Johnson City/Washington County area as of the time of this analysis:
Winged Deer Park
Caliber Collision
10
$17.4 million N/A
$2 million N/A
Completed: Opened an entertainment venue in 2022; Within three months of opening, expanded by 3,000 square feet; Also made Johnson City their corporate headquarters
Completed: New 25,000 square-foot location for operations center
Under Construction: New 24,000 square-foot financial center; ECD mid-2024; New Interactive Teller Machine to be completed spring 2024
Under Construction: 40-acre expansion; Plans include adding six baseball fields and an umpire locker room; ECD summer 2023; Estimated economic impact $4 million
Under Construction: Auto body repair shop consisting of 16,345 square feet; ECD early 2023
Under Construction: Plans include adding three new floors for perinatal and neonatal care center and pediatric specialties; ECD 2024 West Walnut Street Redevelopment
Approved: Expansion of existing facility; Manufacturer and developer of high-temperature heat pumps
Under construction: Will include a distillery, brewery expansion and museum ECD 2023 Stone Mountain Technologies (Anesi)
Completed: A 175,000 square-foot building located in Washington County Industrial Park; Expecting to expand again in 2024
Completed: A 375,000 square-foot auto part manufacturing building for General Motors; Positions expected to pay $17/hour; May add a second phase with a $29 million investment which could create 90 new jobs from 2026 to 2027
Under Construction: Began multi-phase project for fiber buildout in 2022; Once completed approximately 61,000 residents/businesses will have access to broadband services
In addition to the preceding economic development projects, East Tennessee State University has several projects planned or under construction. These projects are summarized as follows: Project Name & Address
Integrated Health Services
Brown Hall (Phase 1 & II)
Academic Building
$44 million
$94 million
$52 million
University Innovation Park N/A
ECD: Estimated completion date
N/A: Not available
Under Construction: Renovation of Lamb Hall has begun; ECD fall 2023; Entire project ECD fall 2025
Planned: In design phase; Renovation of existing building
Planned: Campus Center Building to be demolished; New building to consist of 60,000 square feet; ECD fall 2025
Proposed: City board approved master plan of mixed-use research park in 2021; Still in concept stage; Being developed by ETSU and Johnson City; High paying jobs expected to be created; Infrastructure estimated at $10 million
The following summarizes recent and/or ongoing infrastructure projects within the Washington County area. Project Name
Peoples Street
West Walnut Street Redevelopment
Knob Creek Road
University Innovation Park
Added traffic light at four-way intersection; Increased number of right-turn lanes from Greenline Road to Peoples Street; Increased the number of left-turn lanes from Peoples Street to Greenline Road
New power and utility lines, streetscapes, sidewalks, landscaping
Five-lane roadway (two are bike lanes) on State Road to Franklin Road
Demolition of exiting building; Adding roadways and stormwater retention pond
University Innovation Park Additional infrastructure needed for research park
ECD – Estimated Completion Date
N/A – Not available
N/A Completed: In spring 2022
$30 million (All phases) Under construction: ECD 2023
$15-$20 million Under Construction: ECD 2025
$3 million
$350,000
Proposed: Part of the University Innovation Park being developed by ETSU and Johnson City
Approved: City board approved master plan in 2021
The ability of a person or household to travel easily, quickly, safely, and affordably throughout a market influences the desirability of a housing market. If traffic congestion creates long commuting times or public transit service is not available for residents without a vehicle, their quality of life is diminished. Factors that lower resident satisfaction weaken housing markets. Typically, people travel frequently outside of their residences for three reasons: 1) to commute to work, 2) to run errands or 3) to recreate.
The following tables show two commuting pattern attributes (mode and time) for the PSA (Johnson City) and the state of Tennessee:
Mode
Source: U.S. Census Bureau, 2016-2020 American Community Survey
Source: U.S. Census Bureau, 2016-2020 American Community Survey
Noteworthy observations from the preceding tables follow:
The share (90.0%) of commuters in the PSA that either drive alone or carpool is comparable to the share (90.7%) of the same commuting modes in the state of Tennessee. Shares of other commuting modes are also similar between the PSA and state.
Generally, commute times to work in the PSA are shorter than those on the statewide level. Nearly three-quarters (76.4%) of PSA commuters have travel times of less than 30 minutes to work, which is a much higher share of short commute times when compared to the state (60.2%). More than 41.0% of Johnson City residents have travel times of less than 15 minutes and more than one-third (34.9%) have travel times between 15 and 29 minutes. Only 2.9% of PSA commuters have travel times of 60 minutes or more, which represents a smaller share when compared to the state (6.3%).
Based on the preceding analysis, it is clear that a significant share of PSA (Johnson City) residents has relatively short commutes and they rely on their own vehicles or carpools to commute to work. A drive-time map showing travel times from the geographic center of the PSA (Johnson City) follows this page.
According to 2019 U.S. Census Longitudinal Origin-Destination Employment Statistics (LODES), of the 26,383 employed residents of Johnson City, 11,202 (42.5%) stay in the city for work, while the remaining 15,181 (57.5%) are employed outside the city. In addition, 35,547 people commute into Johnson City from surrounding areas for employment. These 35,547 non-residents account for more than half (57.4%) of the people employed in the city and represent a notable base of potential support for future residential development. The following illustrates the number of jobs filled by in-commuters and residents, as well as the number of resident out-commuters.
Source: U.S. Census, Longitudinal Origin-Destination Employment Statistics (LODES)
Characteristics of the Johnson City commuting flow in 2019 are illustrated in the following table.
Johnson City, TN: Commuting Flow Analysis by Earnings, Age and Industry Group (2019, All Jobs)
Source: U.S. Census, Longitudinal Origin-Destination Employment Statistics (LODES)
Note: Figures do not include contract employees and self-employed workers
Based on the preceding data, people that commute into Johnson City for employment are more likely to be middle-aged (30 to 54 years), earn moderate wages, and work primarily in the services industries. Of the county’s 35,547 incommuters, more than half (51.3%) are between the ages of 30 and 54 years, nearly two-thirds (64.0%) earn $3,333 or less per month (less than $40,000 annually), and nearly three-quarters (70.3%) work in the services industries. Resident outflow workers tend to be similar in age as compared to inflow workers, earn comparably more, and are less likely to work in the service industry. By comparison, resident workers have the highest share of workers ages 29 or younger (28.0%), are more likely to earn lower wages (between $15,000 and $40,000 annually), and a vast majority work in the services industries (76.4%).
The following map and corresponding tables illustrate the physical home location of people working in Johnson City, as well as the concentration of jobs within Johnson City and the surrounding region.
Source: U.S. Census, Longitudinal Origin-Destination Employment Statistics (LODES)
Statistics provided by LODES indicate that nearly one-quarter (24.0%) of the Johnson City workforce are residents of the city Kingsport (6.1%), Elizabethton (3.1%), and Bristol (2.4%) contribute the next largest shares of Johnson City workers. This is not surprising given the proximity of these areas from Johnson City. It is of note, however, that more than half (57.3%) of all Johnson City workers commute from areas not listed in the preceding table/figure. This is reflective of the many smaller towns/cities throughout the more rural areas surrounding Johnson City, as the Johnson City area serves as an employment center within the region. In terms of commute distances, nearly half (49.4%) of the Johnson City workforce has commute distances less than 10 miles, while nearly 81.0% have commutes of less than 25 miles. Thus, the majority of Johnson City workers reside within a reasonable commute of their place of employment. However, nearly 9,000 workers commute into the city from 25 miles or more, with the majority (65.3%) of these workers commuting from 50 miles or more to their place of employment. These inflow workers with lengthy commutes represent a base of potential support for future residential development, as it is likely/possible that some of these workers would prefer to
reside more near their place of employment if housing which was affordable to them was available. It should be pointed out that from previous surveys our firm has conducted of commuters in areas similar to Johnson City, it is not uncommon for 20% to 40% of non-residents commuting into a market to have interest in moving to the same market in which they work.
The following map and corresponding tables illustrate the physical work location of Johnson City residents, as well as the commute distances for these workers.
Source: U.S. Census, Longitudinal Origin-Destination Employment Statistics (LODES)
Of the 26,383 employed residents of Johnson City, nearly 43.0% are employed within Johnson City Kingsport (9.3%), Oak Grove (6.1%), and Elizabethton (3.5%) employ the next largest shares of Johnson City residents. As the data illustrates, nearly 80.0% of Johnson City residents commute less than 25 miles to work, with the majority (75.5%) of these residents commuting less than 10 miles to their place of employment. A slightly larger share (16.4%) of Johnson City residents commute more than 50 miles to work as compared to the 12.5% share of inflow workers commuting to Johnson City from areas more than 50 miles from the Johnson City area.
Unlike the preceding section that evaluated workers’ commuting patterns, this section addresses where people move to and from, referred to as migration patterns. For the purposes of this analysis, the Census Bureau’s Population Estimates Program (PEP) is considered the most reliable source for the total volume of domestic migration. To evaluate migration flows between counties (city level data not available) and mobility patterns by age and income at the county level, we use the U.S. Census Bureau’s migration estimates published by the American Community Survey (ACS) for 2020 (latest year available). It is important to note that while county administrative boundaries are likely imperfect reflections of commuter sheds, moving across a county boundary is often an acceptable distance to make a meaningful difference in a person’s local housing and labor market environment. The data provided by the PEP is intended to provide general insight regarding the contributing factors of population change (natural increase, domestic migration, and international migration), and as such, gross population changes within this data should not be compared among other tables which may be derived from alternate data sources such as the Decennial Census or American Community Survey (ACS).
The following table illustrates the cumulative change in total population for Washington County between April 2010 and July 2020. Note that Washington County data was considered as components of population change data is not available on a city (Johnson City) level. However, as Johnson City is the primary population center of Washington County, data presented for Washington County is likely reflective of trends within Johnson City as well.
Estimated Components of Population Change for Washington County, Tennessee April 1, 2010 to July 1, 2020
Source: U.S. Census Bureau, Population Division, October 2021 *Includes a residual (-14) persons unaccounted for it total estimates.
Based on the preceding data, the population change within Washington County from 2010 to 2020 was primarily driven by natural decrease (more deaths than births) and domestic migration. The data illustrates that, without the positive influence of domestic and international migration (net increase of 8,359), the population of Washington County would decline significantly as a result of natural decrease (decrease of 1,041). Natural decrease typically occurs in areas where there is a comparably high share of older population, or within areas where the younger population migrates from the area prior to establishing a family. While domestic migration accounts for more than three-quarters (81.5%) of the total net migration in the PSA, a notable share (18.5%) of the net migration can be attributed to international migration. Regardless, both domestic and international migration are vital to the overall population change
in Washington County. As such, it is important that an adequate supply of income appropriate rental and for-sale housing is available in the future for the area to continue benefiting from positive net migration.
The following table details the shares of domestic in-migration by three select age cohorts for Washington County from 2011 to 2020.
Washington County, Tennessee
Domestic County Population In-Migrants by Age,
Source: U.S. Census Bureau, 2015 & 2020 5-Year ACS Estimates (S0701); Bowen National Research
The previous table illustrates that from 2011 to 2015, 42.0% of domestic inmigrants to Washington County were under the age of 25, while 52.9% of domestic in-migrants were between the ages of 25 and 64. By 2020, the share of in-migrants under the age of 25 increased to 45.0%, while the share of domestic in-migrants between the ages of 25 and 64 decreased to 44.7%. The share of domestic in-migrants ages 65 and older also increased from 5.1% to 10.3% during this same time period. Median age figures for both periods indicate that domestic in-migrants that originated from a different Tennessee county were younger by approximately three to four years than in-migrants that originated from out of state.
To further illustrate Washington County migration patterns, the following table summarizes the top 10 counties from which Washington County both attracts and loses residents. Note that the table only lists regional counties contained within Tennessee and the bordering states. Washington County: County-to-County Net
Source: U.S. Census Bureau, 2019 5-Year American Community Survey; Bowen National Research
As the preceding table illustrates, the top 10 regional in-migration counties account for 62.0% of the total inflow for the county, while the top 10 regional out-migration counties account for 69.7% of the outflow. Notably, the top two counties (Carter County and Sullivan County) for both in-migration and outmigration are adjacent to Washington County and nine of the top ten counties for each segment are located within the state of Tennessee. Mecklenburg County, North Carolina (Charlotte) and the independent city of Winchester, Virginia represent the only two regional out-of-state areas within the top ten in/out migration segments. In total, Washington County experienced a positive net migration of more than 1,100 persons regionally, based on the preceding data. This means that Washington County draws new residents from a number of counties, not only within the state of Tennessee, but also from the surrounding region. In order to sustain these positive migration trends within the county, it is important there is a sufficient supply of housing available in the market at a variety of affordability levels.
Maps illustrating immigration flow by county to Washington County and emigration flow by county from Washington County for 2020 are shown on the following pages.
While the data contained in the previous pages illustrates the overall net migration trends of Washington County and gives perspective about the general location where these individuals migrate to and from, it is also important to understand the income levels of in-migrants as it directly relates to affordability of housing. The following table illustrates the income distribution by mobility status for Washington County in-migrants.
Geographic mobility by per-person income is distributed as follows:
Source: U.S. Census Bureau, 2020 5-Year American Community Survey (B07010); Bowen National Research
According to data provided by the American Community Survey, a significant portion of the population that moved to Washington County earned less than $25,000 per year. Note that this data was provided for the county population (not households) ages 15 and above. It is likely that a significant share of the population earning less than $25,000 per year consists of children and young adults considered to be dependents within a larger family. This population segment also includes those that earned no income.
Specifically, this lower income segment (<$25,000) represented 56.7% of the Washington County population that moved within the county, 69.4% of the people moving to the county from another Tennessee county, and 57.6% of people moving to the county from a different state. A far lower share of the population that moved within the past year earned more than $50,000 annually.
Based on our evaluation of the components of population change between 2010 and 2020, Washington County benefits from domestic and international migration, while natural changes (births vs. deaths) detracts from the county population change. A majority of these in-migrants are between the ages of 25 and 64 years, although there has been a notable recent increase in migrants age 65 and older. The top 10 regional counties account for the majority of both inmigration (62.0%) and out-migration (69.7%). Nonetheless, this indicates that Washington County also benefits from in-migration even beyond the regional area (Tennessee and bordering states) evaluated within this section. Washington County also experiences a net in-migration of more than 1,100 persons, based on data contained within this section. In addition, a vast majority of in-migrants earn low to moderate wages. As such, future housing supply will need to account for both the age and income levels of these migrants.
This housing supply analysis includes a variety of housing alternatives. Understanding the historical trends, market performance, characteristics, composition, and current housing choices provide critical information as to current market conditions and future housing potential. The housing data presented and analyzed in this section includes primary data collected directly by Bowen National Research and secondary data sources including American Community Survey (ACS),U.S.Censushousinginformation,anddata providedbyvariousgovernment entities and real estate professionals.
While there are a variety of housing options offered in the Primary Study Area (PSA, Johnson City), we focused our analysis on the most common housing alternatives. The housing structures included in this analysis are:
• Rental Housing – Rental properties consisting of multifamily apartments (generally with five or more units within a structure) were identified and surveyed.
• For-Sale Housing – For-sale housing alternatives, both recent sales activity and currently available supply, were inventoried. This data includes singlefamily homes, condominiums, mobile homes, and other traditional housing alternatives. It includes stand-alone product as well as homes within planned developments or projects.
For the purposes of this analysis, the housing supply information is presented for the Primary Study Area (PSA, Johnson City) and the state of Tennessee, when available.
Maps illustrating the location of various housing types are included throughout this section.
This section of analysis on the area housing supply is based on secondary data sources such as the U.S. Census, American Community Survey and ESRI, and is provided for the PSA (Johnson City) and the state of Tennessee, when applicable. When possible, data from the 2020 Census is used in conjunction with ESRI estimates to provide the most up-to-date data. Note that some small variation of total numbers and percentages within tables may exist due to rounding.
The estimated distribution of the area housing stock by tenure within the PSA and the state of Tennessee for 2022 is summarized in the following table:
Source: 2020 Census; ESRI; Urban Decision Group; Bowen National Research
In total, there are an estimated 33,447 housing units within Johnson City in 2022. Based on ESRI estimates and 2020 Census data, of the 30,362 total occupied housing units in the PSA (Johnson City), more than half (52.5%) are owner occupied, while slightly less than half (47.5%) are renter occupied This distribution of product by tenure within the PSA is more weighted toward renter-occupied housing than the state of Tennessee (47.5% versus 33.1%), though owner-occupied housing represents the majority in both the PSA and state. More than 9.0% of the total housing units within both the PSA and state are classified as vacant. Vacant units are comprised of a variety of units including abandoned properties, rentals, for-sale, and seasonal housing units. Vacancy status will be examined in more detail later in this section.
The following graph illustrates household share by tenure for both the PSA (Johnson City) and the state of Tennessee.
Owner-Occupied
Renter-Occupied
In an effort to better understand the composition of the vacant housing units in Johnson City, the following table illustrates the shares of vacancies by type for the PSA based on 2020 American Community (ACS) estimates:
Source: American Community Survey (2016-2020)
Astheprecedingtableillustrates,nearlyhalf(46.6%)ofallvacanthousingunits in the city are classified as “Other Vacant”. While the circumstance of these units is unknown, it is likely that some of these units consist of abandoned, blightedanduninhabitableunitsthatcouldserveas adaptivereuseorrenovation projects, or be razed (cleared) for new development. The next largest share (17.8%) of vacant units is those classified as “For Rent”. When considering this share of vacant for-rent units along with the 7.5% share of vacant “For-Sale” units, approximately only one-quarter (25.3%) of all vacant units in the city are considered available for permanent residency. It is likely, however, that many of these vacant units are located within non-conventional rentals or are units which may be for-sale but not actively listed/marketed. This is further evident by the low vacancy rates reported among rental properties surveyed and the limited number of for-sale homes identified as available, as detailed later in this section.
The following table compares key housing age and conditions of Johnson City and the state based on 2016-2020 American Community Survey (ACS) data. Housing units built over 50 years ago (pre-1970), overcrowded housing (1.01+ persons per room), or housing that lacks complete indoor kitchens or bathroom plumbing are illustrated for the PSA and state by tenure. It is important to note that some occupied housing units may have more than one housing issue.
Source: American Community Survey (2016-2020); ESRI; Urban Decision Group; Bowen National Research
Within Johnson City, more than one-quarter (29.4%) of renter-occupied housing was built prior to 1970, similar to the statewide share of 30.1% for the state of Tennessee. Owner-occupied housing within the PSA appears to be comparably older product with more than 41.0% of units built prior to 1970. This is a notably larger share when compared to the state (27.0%). The share of renter-occupied housing within the PSA experiencing overcrowding (3.7%) is similar to that of the state (3.5%) The share of overcrowded owner households is considerably lower within both the PSA (0.4%) and state (1.0%). Incomplete plumbing or kitchens does not appear to be a prevalent issue among owner households within either the PSA or state, as the shares of such housing units within these geographies do not exceed 0.6%. It is of note, however, that the 2.7% share of renter housing units within the PSA with incomplete plumbing or kitchens is slightly higher than that reported for the state (2.0%). Overall, there are nearly 1,000 households in the city living in substandard housing, which may need to be addressed as part of future housing priorities and efforts.
Thefollowingtablecompareskeyhouseholdincome,housingcost,andhousing affordability metrics of the PSA (Johnson City) and the state. Cost burdened households are defined as those paying over 30% of their income toward housing costs, while severe cost burdened households pay over 50% of their income toward housing.
Source: American Community Survey (2016-2020); ESRI
The PSA’s (Johnson City) median home value of $218,546 is approximately 8.1% lower than the state’s estimated value of $237,721 The average gross rent of $808 for the PSA is 17.5% below the state’s average gross rent of $979. Despite the lower housing costs compared to the state of Tennessee, the PSA generally experiences higher shares of cost burdened and severe cost burdened households as compared to the state. This is likely reflective, at least in part, to the lower median household income ($49,576) within the PSA, which is nearly 21.0% lower than that reported for the state of Tennessee ($62,567). Specifically, nearly half (45.4%) of renter households and almost one-fifth (17.3%) of owner households within the PSA are considered to be cost burdened. Further, more than one-fifth (20.9%) of renter households and nearly 8.0% of owner households are considered to be severe cost burdened within the PSA. Overall, there are 2,953 renter households and 1,132 downer households that are severe cost burdened in the city. This illustrates the importance of affordable housing, especially withinthe rental market, for residents of Johnson City.
The following graph illustrates the shares of cost burdened households by tenure within the PSA and state, as well as the median household income for each geography.
Johnson City Tennessee
$10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000
Based on the 2016-2020 American Community Survey (ACS) data, the following is adistributionofall occupiedhousingbyunits instructure bytenure (renter or owner) for the PSA and the state.
Source: American Community Survey (2016-2020); ESRI
Rental units inthePSA(Johnson City)arerelativelyevenly distributedbetween structures with four or less units and structures with five or more units. Combined, these two segments comprise nearly 96.0% of all renter-occupied housing units within the PSA. This is higher than the share (91.7%) of such units reported for the state of Tennessee. As to be expected, owner-occupied housing units within both the PSA and state are primarily comprised of structures containing four or less units. The shares of such units are similar between the PSA (91.1%) and state (90.8%).
The following graphs illustrate housing by units in structure by tenure for both the PSA and state.
Renter-Occupied Housing by Units in Structure (2016-2020) 4 or Less 5 or More Mobile/Other
Owner-Occupied
4 or Less 5 or More Mobile/Other
1. Introduction
Bowen National Research conducted research and analysis of various housing alternatives within the PSA (Johnson City). This analysis includes rental housing and for-sale/owner-occupied housing.
Between Decemberof2022andJanuaryof2023, Bowen National Research surveyed (by telephone) numerous multifamily rental housing projects within the PSA (Johnson City). Data collected during our survey is presented in aggregate format for the PSA. While these rentals do not represent all multifamily rental housing projects in the market, they provide significant insight as to the market conditions of commonly offered multifamily rental product. We believe this survey represents a good base from which characteristics and trends of multifamily rental housing can be evaluated and from which conclusions can be drawn.
Projects that were identified, inventoried, and surveyed operate under a numberofaffordablehousingprogramsincludingtheLow-IncomeHousing Tax Credit (LIHTC), HUD Section 8, HUD Section 202, HUD Section 811, and various other subsidized programs. Such programs are structured to serve households with incomes of up to 80% of Area Median Household Income (AMHI). Market-rate projects were also included. Market-rate properties do not operate with any programmatic income or rent limits and instead, operate on the unrestricted open market. Managers and leasing
agents at each project were surveyed to collect a variety of property information including vacancies, rental rates, design characteristics, amenities, utility responsibility, and other features.
This survey was conducted to establish the overall strength of the rental market and to help identify potential housing needs in the market. Overall, a total of 49 rental properties containing 3,307 units were identified and surveyed at the time of this analysis. These properties report a total of 24 vacant units, resulting in an overall occupancy rate of 99.3%. This is considered a very high occupancy rateand demonstrateslimitedavailability among existing rental properties within Johnson City.
The following table summarizes the surveyed multifamily rental supply within the PSA (Johnson City). Note, some properties operate as mixedincome (e.g. market-rate/Tax Credit) projects that concurrently serve households at various income levels.
As the preceding illustrates and as indicated earlier, a variety of rental product is offered within the PSA (Johnson City) in terms of product type. Notably, all rental housing segments surveyed within the PSA are performing at high levels with overall occupancy rates of 99.0% or higher. The 24 vacant units reported in the market are concentrated among marketrate and government-subsidized properties surveyed, with no more than 17 vacant units reported for either of these segments. The limited number of vacant units and strong occupancy rates are good indications that rental product is in strong demand across numerous affordability levels within the PSA.
Each multifamily rental housing segment is evaluated as follows.
Of the 49 properties surveyed in the PSA, 24 properties exclusively offer market-rateunits,whiletwoadditionalproperties offerbothmarket-rateand government-subsidized units, with 84 market-rate units between the two properties. The following table summarizes the surveyed market-rate units by bedroom/bathroom type
The market-rate units in the PSA are 99.0% occupied, reflective of a total of just 17 vacant units between the 26 properties surveyed. With the exception of the three-bedroom/2.5-bath units, of which only seven (7) are offered, vacancy rates by unit type do not exceed 2.6% among the marketrate properties surveyed. Further, no more than eight (8) vacant units were reported among any of the market-rate unit types surveyed. When considering the variety of market-rate units types offered, the low vacancy rates, and nominal number of vacant units, it is clear that market-rate product is in strong demandamong varioushousehold sizes withinthe PSA.
While a variety of unit types is offered among the market-rate properties surveyed, two-bedroom units comprise more than half (57.6%) of all market-rate units surveyed. One-bedroom units represent the next largest share at 31.5%. The remaining unit types surveyed (studio, three-, and fourbedroom) comprise between 1.1% and 7.6% of all market-rate units surveyed. The large share of one- and two-bedroom units indicates a good base of market-rate supply for smaller household sizes within the Johnson City area. Conversely, the small share (8.7%) of three-bedroom and larger units illustrates a limited supply of market-rate product for families/larger households within the PSA.
Tax Credit housing is housing that is developed under the Low-Income Housing Tax Credit (LIHTC) program. Typically, these projects serve households with income of up to 60% of Area Median Household Income (AMHI), though recent federal legislation allows for some units to target households with incomes of up to 80% of AMHI. A total of nine (9) surveyed multifamily projects in the PSA (Johnson City) offer Low-Income Housing Tax Credit (LIHTC or Tax Credit) units. Three projects operate as mixed-income properties, with government-subsidized units. It is worth noting that seven of the nine properties are general-occupancy (family) projects. This section focuses only on the non-subsidized Tax Credit units
(units that do not have a concurrent subsidy), while the Tax Credit units operating with concurrent subsidies are discussed in the governmentsubsidized section of this report (starting on page VI-11).
The following table summarizes the breakdown of non-subsidized Tax Credit units surveyed within the PSA.
The non-subsidized Tax Credit units are 100.0% occupied and most nonsubsidized Tax Credit properties surveyed maintain waiting lists for their next availableunits (approximately 114combinedhouseholds onwait lists). A variety of unit types is offered among the non-subsidized Tax Credit properties surveyed, though two-bedroom units are most common, comprising more than half (54.8%) of the non-subsidized Tax Credit units surveyed. Conversely, one-bedroom units represent the lowest share (12.3%) of the non-subsidized Tax Credit units surveyed in the PSA. Considering the unit types offered and that all non-subsidized Tax Credit unitsarecurrentlyoccupied(0.0%vacancyrate),it isclearthatsuchproduct is in strong demand among households of various sizes. The lack of availability and waiting lists currently maintained among these properties is evidence of an ongoing need for affordable non-subsidized rental product within Johnson City.
Also note the median rents of the Tax Credit supply as they are positioned well below (16.5% to 39.0%) the median rents reported for similar unrestricted market-rate units surveyed in the area. This demonstrates the value non-subsidized Tax Credit product represents within this market. The value of these units has likely contributed to the strong 100.0% occupancy (0.0% vacancy) rate reported.
The following graph illustrates the median non-subsidized Tax Credit rents in comparison to rents for similar unrestricted market-rate unit types among common bedroom types offered in the PSA.
Market-Rate/Tax Credit Median Collected Rents
Market-Rate Tax Credit
We identified and surveyed 19 government-subsidized projects within the PSA (Johnson City) that operate under the HUD Section 8, HUD Section 202, HUD Section 811, and various other project-based subsidized programs. Generally, these properties have few amenities, are older, and offer small unit sizes (square feet). The government-subsidized units (both with and without Tax Credits) in the PSA are summarized as follows.
The subsidized units, both with and without Tax Credits, are 99.4% occupied overall. It is also of note that the subsidized properties surveyed servevariousdemographicsegmentsincludinggeneral-occupancy(family), senior, and special needs households. Also, a variety of unit types is offered among these properties, as illustrated in the preceding table. Thus, a wide variety of subsidized rental product is offered within the PSA.
All seven (7) vacant units reported are concentrated at one age-restricted property (John Sevier Center). Further, 17 of the 19 subsidized properties surveyed also maintain waiting lists for their next available units (approximately 484 combined households on wait lists), demonstrating pent-up demand for rental product that is affordable to very low-income households within Johnson City.
According to a representative with the Johnson City Housing Authority, there are approximately 793 Housing Choice Vouchers issued within the housing authority’s jurisdiction. However, it was also revealed by housing authority representatives that approximately 70 (8.8%) issued vouchers are currentlygoing unused. This is likely dueto holders ofthesevouchersbeing unable to locate/obtain a quality affordable rental housing unit that will accept the voucher. There is a total of 448 people currently on the waiting list foradditional vouchers. Thewaiting list isopen. Annual turnoverwithin the voucher program is estimated at 96 households. This reflects the continuing need for affordable housing alternatives and/or Housing Choice Voucher assistance within the area.
We also evaluated the potential number of existing subsidized affordable housing units that are at risk of losing their affordable status. A single property in the city operates as a subsidized project under a current HUD contract. Because HUD contracts have a designated renewal date, it is important to understand if this project is at risk of an expiring contract in the near future that could result in the reduction of affordable rental housing stock (Note: HUD contract renewal or expiration dates within five years are shown in red in the following table).
While all HUD supported projects are subject to annual appropriations by the federal government, it appears that there are eight projects with a renewal datein thenearfutureand are at potential riskoflosinggovernment assistance. These particular projects have 248 combined units and would likely have a significant impact on the market if they were to lose their subsidies. Notably, six of the seven projects with contracts expiring in the next five years will expire by the end of 2023. Given the high occupancy rates and wait lists among the market’s surveyed subsidized properties, it will be important for the area’s low-income residents that the projects with HUD contracts be preserved in order to continue to house some of the market’s most economically vulnerable residents.
A map illustrating the location of all multifamily apartments surveyed within the PSA is included on the following page.
Bowen National Research obtained for-sale housing data from the Multiple Listing Service (MLS) for the PSA (Johnson City). The historical and available for-sale data which we collected and analyzed includes the distribution of housing by number of bedrooms, price point, and year built. Note, however, that the number of bedrooms was not available for historic sales. While this sales/listing data does not include all for-sale residential transactions or supply in Johnson City, it does consist of the majority of such product and therefore, it is representative of market norms for for-sale housing product in the city.
The following tables summarize the available and recently sold homes for Johnson City:
Source: Realtor.com & Bowen National Research
*As of January 30, 2023
**Sales from July 25, 2022 to January 19, 2023
Within the PSA (Johnson City), 219 homes were sold between July 25, 2022, and January 19, 2023, at a median price of $235,000 This equates to an average of approximately 36 homes sold per month during this time. The available for-sale housing stock within the PSA consists of 51 units with a median list price of $380,000. Although the number of days on market was unavailable for recently sold homes, the 219 homes sold represent a sales rate of approximately 36 sales per month during this six-month period.
Through the Multiple Listing Service, we identified 219 housing units within the PSA (Johnson City) that were sold between July 2022 and January 2023 The recently sold for-sale product within the city primarily consists of single-family homes (98.2%) while the remaining homes sold during this time period were a combination of condominium and mobile/manufactured homes. While there are likely other for-sale residential units sold during this time period, the product identified in this analysis provides a good baseline for evaluating the for-sale housing alternatives offered in the city.
The distribution of homes recently sold by price point for the PSA (Johnson City) is summarized in the following table
Johnson City Sales History by Price (July 25, 2022 to January 19, 2023)
Source: Realtor.com & Bowen National Research
As the preceding illustrates, more than one-third (37.9%) of homes sold within Johnson City over the past six months sold for $300,000 or more. Homes sold within the remaining pricing segments were relatively evenly distributed during this time period. It is of note that while homes priced $300,000 and above represent the largest share of homes sold over the past six months, nearly 40.0% of these homes were priced between $300,000 and $399,999, with a majority priced at $400,000 or higher. Less than 7.0% of the higher-priced units were priced $750,000 or more, demonstrating that premiums can be achieved.
The distribution of recent (from July 2022 to January 2023) home sales by price point within the PSA (Johnson City) is illustrated in the following graph.
Recent home sales by year built for Johnson City are enumerated below.
Source: Realtor.com & Bowen National Research
The largest share (26.5%) of homes sold during this six-month period were built prior to 1950. As to be expected, these older homes also reported the lowest median sales price ($127,500) and lowest median price per-squarefoot ($119.72) of any year built segment illustrated in the preceding table. Further, more than half (53.4%) of the recently sold homes in Johnson City were built prior to 1970, another indication that older homes represent a large share of for-sale product within this market.
Despite the large share of older homes, nearly one-quarter (24.7%) of the homes sold in the past six months were built since 2000, with more than half (53.7%) of these homes being built since 2010. Thus, modern for-sale product does exist in the Johnson City market, just on a more limited scale. Also note that product built since 2000 reports median sales prices of $372,000 to $400,000 and median price per-square-foot levels of approximately $171 to $197. These price points are well above the overall median sale and median price per-square-foot levels reported in the preceding table, demonstrating that modern for-sale product commands a pricing premium within the Johnson City area.
The distribution of recent home sales by year built within the PSA (Johnson City) is shown in the following graph:
A map illustrating the location of all homes sold between July 2022 and January 2023 within Johnson City is included on the following page.
Utilizing data from the Multiple Listing Service, we identified 51 housing units within Johnson City that were listed as available for purchase as of January 30, 2023. Of the 51 active listings, 48 (94.1%) were listed as singlefamily homes, while the remaining were classified as condominium homes While it is likely that additional for-sale residential units are available for purchase in the city, such homes were not identified during our research due to the method of advertisement or simply because the product was not actively marketed. Regardless, the available inventory of for-sale product identified in this analysis provides a good baseline for evaluating the forsale housing alternatives offered in Johnson City.
There are two inventory metrics most often used to evaluate the health of a for-sale housing market. This includes Months Supply of Inventory (MSI) and availability rate. Overall, based on the monthly sales rate of 36 homes, the 51 homes listed as available for purchase represent less than two months (1.4 months) of supply. Typically, healthy and well-balanced markets have an available supply that should take about four to six months to absorb (if no other units are added to the market). The PSA’s inventory is considered low and indicates limited available supply. When comparing the 51 available units with the overall inventory of 15,931 owner-occupied units, the PSA has a vacancy/availability rate of 0.3%, which is considerably lower than normal range of 2.0% to 3.0% for a well-balanced forsale/owner-occupied market. This further demonstrates limited available for-sale supply within the PSA.
The following table summarizes the distribution of available for-sale residential units by price point within Johnson City:
Source: Realtor.com & Bowen National Research
Notably, more than two-thirds (68.6%) of the 51 homes available for sale within the PSA are priced $300,000 or higher. Typically, for a $300,000 home to be considered affordable, the purchaser of such a home would need to earn at least $80,000. Although nearly half (47.7%) of all owner households in the PSA are estimated to earn an income of this level, the small number/share of available homes priced below $300,000 demonstrates a very limited supply of available homes that would be affordable to the majority of owner households in this market.
The following table further details the availability rate of the for-sale housing inventory by price point based on the number of owner-occupied housing units by estimated value for the PSA.
Johnson City For-Sale Housing Availability Rate by Price (As of January 30, 2023)
Source: Realtor.com, American Community Survey (2016-2020); ESRI; Urban Decision Group; Bowen National Research *2022 estimated homes by value (includes homes for which values could be determined)
Availability rates by price point do not exceed 0.7% ($300,000+), as illustrated in the preceding table. Notably, product priced under $200,000 has an availability rate of just 0.1%, which is reflective of just six (6) total available homes within this price range. The very limited available supply of lower-priced homes in the city likely results in difficulty retaining and attracting lower- to middle-income households, which can limit economic and job growth potential as well as the growth of commercial opportunities within Johnson City.
The distribution of available for-sale housing for Johnson City by price point is illustrated in the following graph:
Johnson City Available For-Sale Housing by Price
The available for-sale housing by bedroom type within Johnson City is summarized in the following table:
Three-bedroom units comprise nearly half (49.0%) of the homes available for purchase within Johnson City. On average, these three-bedroom homes have anaverageof 1,935 square feet andhave an average yearbuilt of 1984, newer than the overall average year built (1975) of all available homes. Three-bedroom homes also report the highest median price per-square-foot ($199.95) among the available homes by bedroom type, which is 7.2% higher than the overall median price per-square-foot ($186.44). Further, the available three-bedroom homes have generally been on the market for less time than most other bedroom types, as the average number of days on market (63) is slightly lower than the overall average of 73 days. This suggests that three-bedroom homes are higher in demand than other bedroom types within Johnson City.
The distribution of available homes by bedroom type within the PSA (Johnson City) is shown in the following graph:
The distribution of available homes by year built within Johnson City is summarized in the following table:
Homes built prior to 1950 represent the largest share (19.6%) of the available homes within Johnson City, while homes built prior to 1970 comprise nearly 40.0% of the 51 available homes. This is similar to the supply of recently sold homes within Johnson City between July of 2022 and Januaryof2023, as detailedearlier in this section,and further illustrates that existing for-sale housing product in Johnson City is relatively old. These older (built prior to 1970) available homes have a median list price of $292,950 and a median price per-square-foot of $178.83. While these older homes may be affordable to some owner households in Johnson City, it is also more likely that these older homes would require some level of repair/updating which would result in added costs for potential buyers.
In comparison, just over one-quarter (27.5%) of the available homes have been built since 2000. These more modern homes have a median list price of $500,450 and a median price per-square-foot of $234.73. It is of note that the newer available homes are larger than the older homes on average in terms of square footage, which contributes to the higher aforementioned price points. Nonetheless, the age and likely overall quality of the newer homes are also likely factors contributing to the higher price point of the newer built product in this market.
The distribution of available homes within the PSA (Johnson City) by year built is shown in the following graph:
A map illustrating the location of available for-sale homes within Johnson City is included on the following page.
In order to assess housing development potential, we evaluated recent residential building permit activity and identified residential projects in the development pipeline within Johnson City. Understanding the number of residential units and the type of housing being considered for development in the market can assist in determining how these projects are expected to meet the housing needs of the area.
The following table illustrates single-family and multifamily building permits issued within Johnson City for the past ten years
Source: SOCDS Building Permits Database at http://socds.huduser.org/permits/index.html
Ofthe3,399housingunitpermitsissuedduringthepast10years,1,783(52.5%) were for single-family homes. On average, the total number of permits issued annually during this time in Johnson City was approximately 340, with singlefamily permits comprising about 178 units (52.4%) annually. The total number of permits issued fluctuated each year over the past decade, with 2013 and 2020 experiencing the largest number of total permits issued on an annual basis during this time period. The number of single-family building permits has increased each of the past three years. While the total number of multifamily building permits declined in 2021, this is likely due to the large number (350) of such permits issued in the year prior.
Based on interviews with planning representatives and extensive online research, it was determined there are several housing projects currently in the development pipeline within the PSA (Johnson City). The known details of these projects are summarized as follows (Note: The status of these projects may have changed since the information was collected):
Project Name & Address
Hub at Mountcastle
207 East Mountcastle Street
Eli’s Place
Market-Rate 57
Universal Development & Construction
3529 West Walnut Street N/A 48 Scott Landy Development
Suncrest Townhouses
Suncrest Drive
Market-Rate 108 Joe Wilson
2644 Knob Creek Road Market-Rate 178 Longbranch Development
Under Construction: Redevelopment of former EconoLodge; ECD 2023
Under Construction: Additional details unavailable
Approved: Moving dirt; Two- and threebedrooms; Estimated rents $1,600 to $1,900; ECD 2024
Approved: Two- and three-bedroom townhomes; Rents estimated in the $1,500 range; ECD early 2024
602 University Parkway
Universal at Gray Station 135 Old Gray Station Road (Gray)* Market-Rate 226 Universal Development & Construction
N/A – Not Available; ECD – Estimated Completion Date; TBD – To Be Determined *Located just outside of Johnson City limits
Proposed: Former Public Housing property (Fairview Apartments 70 units) to be demolished; Johnson City Housing Authority plans to apply for Tax Credits to replace these units (possibly build 96 new units); Subsidy for these new units will be transferred from Keystone Apartments; Keystone Apartments (Public Housing 226 units) will be demolished due to age and condition; Entire process could take a few years
Under Construction: As of late December 2022, 44 units completed; 78% occupancy rate; Remaining units ECD summer 2023
As indicated by the preceding table, three of the six multifamily projects currently in the development pipeline are known to be under construction, while two additional projects have been approved and are expected to move forward with development. Four of these five projects are expected to operate as unrestricted market-rateproperties, whiletheproduct type for the one remaining project (Eli’s Place) was not available at the time of this analysis. However, as there have been no Tax Credit allocations within the city since 2016, this aforementioned project is also likely to operate as market-rate. Combined, the five projects currently under construction/ planned for the market are expected to comprise a total of 617 market-rate units. The one remaining project currently proposed in the PSA is expected to involve the creation of nearly 100 affordable units under the Tax Credit program. However, this project has yet to apply for funding and would also involve the demolition of existing affordable rental product which is older and of lower quality. Thus, this project, if built, effectively would not create any “new” affordable units for the market.
Subdivision Name & Address
Cedar Rock Village Villas 54 Moon Rock Court Townhome 66 Integrity Building Group
Chestnut Cove
Highland Church Road
Clearwater Springs 240 Austin Springs Road
TBD
Indian Ridge Road
Single-Family 70 N/A
Single-Family 77 Gary Phillips
Single-Family 124 N/A
Under Construction: Three-bedrooms; 1,418 square feet; Homes from $250,000 to $259,000
Under Construction: Three- and fourbedrooms; 1,526 to 3,429 square feet; Homes from $300,000 to $800,000; Lots from $60,000 to $100,000
Under Construction: Additional information unavailable
Approved: Construction plans approved January 2022; Average price $250,000; ECD two years
Britton Townhomes 2815 South Roan Street Townhome 29 Scott Britton Approved: Additional information unavailable
Yorkshire Hills Suncrest Drive
Single-Family & Condominium 361 Land Star Partners
Proposed: Annexation recommended for approval; If approved possibly 75 homes would be constructed and completed in 2024; Full build out to take seven years
Landy-Midway Townhomes 3621 West Walnut Street Townhome 38 SJL Properties Proposed: Currently awaiting plans for review
Hubbard Townhomes
Country Club Court and Unaka Avenue Townhome 42 Buddy Hubbard Proposed: Concept plans submitted in 2022 North North Street Townhomes North North Street Townhome 60 Gary Phillips Proposed: Plans currently under review
Myers-Cherokee Townhomes
Cherokee Road and Brook Hollow Road Townhome 16 David Myers Proposed: Applied for rezoning in 2022 N/A – Not Available; ECD – Estimated Completion Date; TBD – To Be Determined
Atotal oftenfor-salehousing projects arecurrently in thedevelopment pipeline withinthePSA(JohnsonCity).Ofthesetenprojects,fiveareknowntobeunder construction/approved and moving forward with development. These five projects will contain a total of 366 units consisting of 271 single-family homes and 95 townhomes. Notably, two of these projects are expected to offer homes priced in the mid $200,000’s, a product type/price point which currently has limited availability within the PSA.
In addition to the preceding, it is also of note that Johnson City is considering rezoning 120 acres near University Parkway and South Roan Street for a possible single-family home development to consist of 302 lots/homes Additional information pertaining to this potential development was unavailable at the time of this analysis.
This section of our report provides five-year housing gap estimates for both rental and for-sale housing within the PSA (Johnson City). The assessment includes demand from a variety of sources and focuses on the housing demand potential of Johnson City, though consideration is given to potential support that may originate from outside the PSA.
Housing to meet the needs of both current and future households in the market will most likely involve multifamily, duplex, and single-family housing alternatives. There are a variety of financing mechanisms that can support the development of housing alternatives such as federal and state government programs, as well as conventional financing through private lending institutions. These different financing alternatives often have specific income and rent/price restrictions, which affect the market they target.
We evaluated the market’s ability to support rental and for-sale housing based on four levels of income/affordability. While there may be overlap among these levels dueto program targetingandrent/pricelevels charged, we haveestablished specific income stratifications that are exclusive of each other to eliminate double counting demand. We used HUD’s published income and rent limits for the Johnson City, Tennessee MSA.
The following table summarizes the income segments used in this analysis to estimate potential housing demand.
– Area Median Household Income
* Based on HUD limits for the Johnson City, Tennessee MSA (4-person limit)
** Assumes full-time employment 2,080 hours/year (Assumes one wage earner household)
*** Based on assumption tenants pay up to 30% of income toward rent
^Based on assumption homebuyer can afford to purchase home priced three times annual income after 10% down payment
While different state and federal housing programs establish income and rent restrictions for their respective programs, in reality, there is potential overlap between windows of affordability between the programs. Further, those who respond to a certain product or program type vary. This is because housing markets are highly dynamic, with households entering and exiting by tenure and economic profile. Further, qualifying policies of property owners and management impact the households that may respond to specific project types. As such, while a household may prefer a certain product, ownership/management qualifying procedures (i.e., review of credit history, current income verification, criminal background checks, etc.) may affect housing choices that are available to households.
Regardless, we have used the preceding income segmentations as the ranges that a typical project or lending institution would use to qualify residents, based on their household income. Ultimately, any new product added to the market will be influenced by many decisions made by the developer and management. This includes eligibility requirements, design type, location, rents/prices, amenities, and other features. As such, our estimates assume that the rents/prices, quality, location, design, and features of new housing product are marketable and will appeal to most renters and homebuyers
Theprimarysources ofdemandfornewrentalhousing includethefollowing:
• Household Growth
• Units Required for a Balanced Market
• Replacement of Substandard Housing
• External (Outside PSA) Commuter Support
• Step-Down Support
Since the focus of this report is on the specific housing needs of Johnson City, we have focused the rental housing demand estimates on the metrics that only impact the PSA (Johnson City).
The first source of demand is generally easily quantifiable and includes the net change in renter households between the baseline year of 2022 and the projection year of 2027
The second demand component considers the number of units a market requires to offer balanced market conditions, including some level of vacancies. Healthy markets require approximately 4% to 6% of the rental market to be available in order to allow for inner-market mobility and encourage competitive rental rates. Markets with vacancy rates below a healthy rate often suffer from rapid rent increases, minimal tenant turnover (which may result in deferred maintenance), and residents being forced into housing situations that do not meet their housing needs. Markets with low vacancy ratesoftenrequireadditionalunits, while markets with high vacancy ratesoftenindicate asurplus ofrental housing.The vacancy ratesbyprogram type and/or affordability level used to determine if there is a deficit or surplus of rental units are based on our survey of area rental alternatives. We used a vacancy rate of 5% to establish balanced market conditions.
Demand for new units as replacement housing takes into consideration that while some properties are adequately maintained and periodically updated, a portion of the existing stock reaches a point of functional obsolescence over time and needs to be replaced. This comes in the form of either units that are substandard (lacking complete plumbing and/or are overcrowded) or units expected to be removed from the housing stock through demolitions. Based on Census demographic data included in this report, approximately 6.3% of renter households in Johnson City are living in substandard housing (e.g., lacking complete plumbing or are overcrowded). Lower income households more often live in substandard housing conditions than higher income households, which we have accounted for in our gap estimates
Market support can originate from households not currently living in the market. This is particularly true for people who work in Johnson City but commute from outside of the city and would consider moving to Johnson City, if adequate and affordable housing that met residents’ specific needs was offered. Currently, there are few available rental housing options in the market. As such, external market support will likely be created if new housing product is developed in Johnson City.
Based on our experience in evaluating rental housing in markets throughout the country, it is not uncommon for new product to attract as much as 30% of its support from outside the city limits. As a result, we have assumed that a portion of the demand for new housing will originate from the 35,547 commuters traveling into the PSA (Johnson City) from areas outside of the city.
It is not uncommon for households of a certain income level (typically higher income households) to rent a unit at a lower rent despite the fact they can afford a higher rent unit. Using housing cost and income data reported by American Community Survey (ACS), we have applied a portion of this stepdown support to lower income demand estimates.
Note: In terms of the development pipeline, we only included residential rental units that are confirmed as planned or under construction. Conversely, we have excluded projects that have not secured financing, are under preliminary review, or have not established a specific project concept (e.g., number of units, rents, target market, etc.). Any vacant housing units are accounted for in the “Balanced Market” portion of our demand estimates.
The following table summarizes Johnson City’s rental housing gaps by affordability level.
*Based on Bowen National Research’s survey of area rentals
**Based on ESRI/ACS estimates of units lacking complete indoor plumbing or are overcrowded
^Based on Bowen National Research proprietary research and ACS migration patterns for Johnson City
Based on the preceding demand estimates, it is clear that there is some level of rental housing demand among all household income levels within Johnson City over the five-year projection period. Overall, there is a housing need for 2,260 additional rental units in the city over the next five years. The housing gaps range from a low of 389 units needed that are priced at $2,260 or higher to a high of 801 units needed with rents positioned between $1,349 and $2,259 Without the addition of new rental product similar to the numbers cited in the preceding table, the area will not meet the growing and changing housing needs of the market.
Based on the demographics of the market, including projected household growth estimates and projected changes in household compositions (e.g., household size, ages, etc.), it appears that approximately one-half to twothirds of the demand for new rental housing could be specifically targeted to meet the needs of area seniors, though a project could be built to meet the housing needs of both seniors and families concurrently. For generaloccupancy projects, a unit mix of around 30% to 40% one-bedroom units, 45%to55%two-bedroomunits,and10%to20%three-bedroomunitsshould be the general goal for future rental housing. Senior-oriented projects should consider unit mixes closer to 50% for both one- and two-bedroom units each. Additional details of the area’s rental housing supply are included in Section VI and may serve as a guide for future rental housing development design decisions.
It is critical to understand that these estimates represent potential units of demand by targeted income level. The actual number of rental units that can be supported will ultimately be contingent upon a variety of factors including the location of a project, proposed features (i.e., rents, amenities, bedroom type, unit mix, square footage, etc.), product quality, design (i.e., townhouse, single-family homes, or garden-style units), management and marketing efforts. As such, each targeted segment outlined in the previous table may be able to support more or less than the number of units shown in the table. The potential number of units of support should be considered a general guideline to residential development planning.
This section of the report addresses the gap for for-sale housing alternatives in the PSA (Johnson City). Like the rental housing demand analysis, the forsale housing analysis considers individual household income segments and corresponding housing price ranges.
Naturally, there are cases where a household can afford a higher down payment to purchase a more expensive home. There are also cases in which a household purchases a less expensive home although they could afford a higher purchase price. The actual support for new housing will ultimately be based on a variety of product factors such as price points, square footages, amenities, design, quality of finishes, and location. Considering these variations, this broad analysis provides the basis in which to estimate the potential demand of new for-sale housing within the PSA (Johnson City)
There are a variety of market factors that impact the demand for new homes within an area. In particular, area and neighborhood perceptions, quality of school districts, socioeconomic characteristics, mobility patterns, demolition and revitalization efforts, and availability of existing homes all play a role in generating newhomesales.Support canbeboth internal (households moving within the market) and external (households new to the market).
Overall, we have considered the following specific sources of demand for new for-sale housing in the PSA (Johnson City)
• Household Growth
• Units Required for a Balanced Market
• Replacement of Substandard Housing
• External (Outside PSA) Commuter Support
• Step-Down Support
In this report, owner household growth projections from 2022 to 2027 are based on ESRI estimates. This projected growth was evaluated for each of the income segments evaluated. It should be noted that changes in the number of households within a specific income segment do not necessarily mean that households are coming to or leaving the market, but instead, many of these households are likely to experience income growth or loss that would move them into a higher or lower income segment. Furthermore, should additional for-sale housing become available, either through new construction or conversion of rental units, demand for new for-sale housing could increase.
Typically, healthy for-sale housing markets should have approximately 2% to 3% of its inventory vacant. Such vacancies allow for inner-market mobility, such as households upsizing or downsizing due to changes in family composition or income, and for people to move into the market. When markets have too few vacancies, housing prices often escalate at an abnormal rate, homes can get neglected, and potential homebuyers can leave a market. Conversely, an excess ofhomescan leadto stagnant ordeclining homeprices, property neglect, or lead to such homes being converted to rentals. For the purposes of this analysis, we have assumed up to a 3.0% vacancy rate for a balanced market and accounted for for-sale housing units currently available for purchase in the market.
Demand for new units as replacement housing takes into consideration that while some properties are adequately maintained and periodically updated, a portion of the existing stock reaches a point of functional obsolescence over time and needs to be replaced. This comes in the form of either units that are substandard (lacking complete plumbing or are overcrowded) or units expected to be removed from the housing stock through demolitions. Based on Census data, approximately 0.5% of owner households in Johnson City live in substandard housing (e.g., lack complete indoor plumbing or are overcrowded). This share has been adjusted among lower and higher income households.
Market support can originate from households not currently living in the market but that commute into it for work on a regular basis. As shown in Section V of this report, approximately 35,457 people commute into Johnson City. These people represent potential future residents that may move to the city if adequate, desirable, and marketable housing was developed in the city For the purposes of this analysis, we have used a conservative demand ratio of up to 20% to estimate the demand that could originate from outside of Johnson City.
It is not uncommon for households of a certain income level (typically higher income households) to purchase a home at a lower price point despite the fact they can afford a higher priced home. Using housing cost and income data reported by American Community Survey (ACS), we have applied a portion of this step-down support to lower income demand estimates.
Note: In terms of the development pipeline, we only included for-sale residential units currently in the development pipeline that are planned or under construction and do not have a confirmed buyer, such as a condominium unit or a spec home, in our demand estimates. Conversely, we have excluded single-family home lots that may have been platted or are being developed, as such lots do not represent actual housing units that are available for purchase. Any vacant housing units are accounted for in the “Balanced Market” portion of our demand estimates.
The following table summarizes the city’s for-sale housing gaps by affordability level.
*Based on MLS inventory of available homes
**Based on ESRI/ACS estimates of units lacking complete indoor plumbing or are overcrowded
^Based on Bowen National Research proprietary research and ACS migration patterns for Johnson City
The overall for-sale housing gap in the city is for approximately 2,599 units over the five-year projection period. While all home price segments and affordability levels have some level of need, the greatest gap (1,250 units) appears to be for housing priced between $179,734 and $301,200. There is also a notable gap for housing priced $301,201 or higher (655 units) The lack of product at all price levels will increase demand for lower priced units, as many buyers may “step down” to a lower price point. This will place greater pressure on the market’s lower priced product and create greater challenges to lowerincomehouseholdsandfirst-timehomebuyerswhoalreadyhavelimited housing alternatives that are affordable to them.
In most markets, if there is support for new housing at a particular price point or concept and such product is not offered in a specific area, households may leavetheareaandseekthishousingalternativeelsewhere,defertheirpurchase decision, or seek another housing alternative. Additionally, households considering relocation to the PSA (Johnson City) may not move to the PSA if the housing product offered does not meet their needs in terms of pricing, quality, product design, or location. As such, the PSA housing stock may not be able to meet current or future demand, which may limit the market’s ability to serve many of the households seeking to purchase a home in the PSA, particularly moderate and higher income households Regardless, we believe opportunities exist to develop a variety of product types at a variety of price points. The addition of such housing will better enable the PSA to attract and retain residents (including local employees), as well as seniors, families, and younger adults.
In terms of product design, webelieve avariety of product could besuccessful in Johnson City. Based on current and projected demographics, as well as the available inventory of for-sale housing, we believe a combination of traditional single-family homes and condominium/townhome style product is supportable within Johnson City. Three-bedroom homes are currently most common among for-sale supply within the PSA (Johnson City) and are likely most commonly desired among homeowners/purchasers in this area. However,offeringsometwo-and/orfour-bedroomhomeswithinnewfor-sale developments would also be beneficial to the Johnson City market and help to house smaller and larger household sizes. The for-sale housing supply of Johnson City is summarized in Section VI and can provide additional details of project concept considerations for future for-sale product in the PSA (Johnson City).
Overall, there is potential support for a variety of residential development alternatives in the PSA (Johnson City). It is important to understand that the housing demand estimates shown in this report assume no major changes occur in the local economy and that the demographic trends and projections provided in this report materialize. As such, our demand estimates should be considered conservative and serve as a baseline for development potential. Should new product be developed, it is reasonable to believe that people will consider moving to Johnson City, assuming the housing is aggressively marketed throughout the region.
The survey of residents/commuters was still underway at the time this draft report was prepared. The pending results will be added to this report at a later date.
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Source: Johnson City Housing Authority Effective: 10/2022
- Incomplete at time of draft -
Bowen National Research employs an expert staff to ensure that each market study includes the highest standards. Each staff member has hands-on experience evaluating sites and comparable properties, analyzing market characteristics and trends, and providingrealisticrecommendations andconclusions. TheBowen National Researchstaff has national experience and knowledge to assist in evaluating a variety of product types and markets.
Patrick Bowen, President of Bowen National Research, has conducted numerous housing needs assessments and provided consulting services to city, county and state development entities as it relates to residential development, including affordable and market-rate housing, for both rental and for-sale housing, and retail development opportunities. He has also prepared and supervised thousands of market feasibility studies for all types of real estate products, including housing, retail, office, industrial and mixed-use developments, since 1996. Mr. Bowen has worked closely with many state and federal housing agencies to assist them with their market study guidelines. Mr. Bowen has his bachelor’s degree in legal administration (with emphasis on business and law) from the University of West Florida and currently serves as Trustee of the National Council of Housing Market Analysts (NCHMA).
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The following individuals provided research and analysis assistance:
Craig Rupert, Market Analyst, has conducted more than 1,000 market feasibility studies throughout the United States since 2010, within both urban and rural markets as well as on various tribal reservations. Mr. Rupert has prepared market studies for numerous types of housing including market-rate, Tax Credit, and various government-subsidized rental product, for-sale product, senior living (assisted living, nursing care, etc.), as well as market studies for retail/commercial space. Market studies prepared by Mr. Rupert have been used for submittal as part of state finance agency Tax Credit and HUD 221 (d)(4) applications, as well as various other financing applications submitted to local, regional, and national-level lenders/financial institutions. Mr. Rupert has a bachelor’s degree in Hospitality Management from Youngstown State University.
ChristopherBunch,Market Analyst,has morethanadecadeof experience in conducting both site-specific market feasibility studies and broader housing needs assessments. He has conducted on-site market research of a variety of housing product, conducted stakeholder interviews and completed specialized research on housing market attributes including the impact of military personnel, heirs and estates and other unique factors that impact housing needs.
DesireéJohnsonistheDirectorofOperationsforBowenNationalResearch.Ms.Johnson is responsible for all client relations, the procurement of work contracts, and the overall supervision and day-to-day operations of the company. Ms. Johnson also coordinates and oversees research staff and activities. She has been involved in the real estate market research industry since 2006. Ms. Johnson has an Associate of Applied Science in Office Administration from Columbus State Community College.
Pat McDavid, Research Specialist, has conducted housing research for housing needs assessments completed throughout the country. Additionally, he is experienced in analyzing demographic and economic data in rural, suburban and metropolitan communities. Mr. McDavid has been a part of the development of market strategies, operational and fiscal performance analysis, and commercial, industrial and government (local, state, and federal) client consultation within the construction and manufacturing industries. He holds a bachelor’s degree in Secondary Earth Science from Western Governors University.
Gregory Piduch, Market Analyst, has conducted site-specific analyses in both metropolitan and rural areas throughout the country. He is familiar with multiple types of rental housing programs, the day-to-day interaction with property managers and leasing agents and the collection of pertinent property details. Mr. Piduch holds a Bachelor of Arts in Communication and Rhetoric from the University of Albany, State University of New York and a Master of Professional Studies in Sports Industry Management from Georgetown University.
Jody LaCava, Research Specialist, has nearly a decade of real estate research experience. She has extensive experience in surveying a variety of housing alternatives, including rental, for-sale, and senior housing. She has experience in conducting on-site research of real estate, evaluating existing housing properties, conducting interviews, and evaluating community services. She has been involved in industry leading case studies, door-to-door resident surveys and special needs housing research.
In-House Researchers – Bowen National Research employs a staff of in-house researchers who are experienced in the surveying and evaluation of all rental and for-sale housing types, as well as in conducting interviews and surveys with city officials, economic development offices and chambers of commerce, housing authorities and residents.
No subconsultants were used as part of this assessment.
Various key terms associated with issues and topics evaluated in this report are used throughout this document. The following provides a summary of the definitions for these key terms. It is important to note that the definitions cited below include the source of the definition, when applicable. Those definitions that were not cited originated from the National Council of Housing Market Analysts (NCHMA).
Area Median Household Income (AMHI) is the median income for families in metropolitan and non-metropolitan areas, used to calculate income limits for eligibility in a variety of housing programs. HUD estimates the median family income for an area in the current year and adjusts that amount for different family sizes so that family incomes may be expressed as a percentage of the area median income. For example, a family's income may equal 80% of the area median income, a common maximum income level for participation in HUD programs. (Bowen National Research, Various Sources)
Available rental housing is any rental product that is currently available for rent. This includes any units identified through Bowen National Research survey of affordable rental properties identified in the study areas, published listings of available rentals, and rentals disclosed by local realtors or management companies.
Basic Rent is the minimum monthly rent that tenants who do not have rental assistance pay to lease units developed through the USDA-RD Section 515 Program, the HUD Section 236 Program and the HUD Section 223 (d) (3) Below Market Interest Rate Program. The Basic Rent is calculated as the amount of rent required to operate the property, maintain debt service on a subsidized mortgage with a below-market interest rate, and provide a return on equity to the developer in accordance with the regulatory documents governing the property.
Contract Rent is (1) the actual monthly rent payable by the tenant, including any rent subsidy paid on behalf of the tenant, to the owner, inclusive of all terms of the lease (HUD & RD) or (2) the monthly rent agreed to between a tenant and a landlord (Census).
Cost overburdened households arehouseholds that pay morethan30%or35%(depending upon source) of their annual household income toward housing costs. Typically, such households will choose a comparable property (including new affordable housing product) if it is less of a cost burden.
Elderly Person is a person who is at least 62 years of age as defined by HUD.
Elderly or Senior Housing is housing where (1) all the units in the property are restricted for occupancy by persons 62 years of age or older or (2) at least 80% of the units in each building are restricted for occupancy by households where at least one household member is55yearsofageorolderandthehousingisdesignedwithamenitiesandfacilitiesdesigned to meet the needs of senior citizens.
Extremely low-income is a person or household with income below 30% of Area Median Income adjusted for household size.
Fair Market Rent (FMR) are the estimates established by HUD of the gross rents (contract rent plus tenant paid utilities) needed to obtain modest rental units in acceptable condition in a specific county or metropolitan statistical area. HUD generally sets FMR so that 40% of the rental units have rents below the FMR. In rental markets with a shortage of lower priced rental units HUD may approve the use of Fair Market Rents that are as high as the 50th percentile of rents.
Frail Elderly is a person who is at least 62 years of age and is unable to perform at least three “activities of daily living” comprising of eating, bathing, grooming, dressing or home management activities as defined by HUD.
Garden apartments are apartments in low-rise buildings (typically two to four stories) that feature low density, ample open space around buildings, and on-site parking.
Gross Rent isthemonthlyhousingcosttoatenant whichequalstheContractRentprovided for in the lease plus the estimated cost of all tenant paid utilities.
Household is one or more people who occupy a housing unit as their usual place of residence.
Housing Choice Voucher (Section 8 Program) is a federal rent subsidy program under Section 8 of the U.S. Housing Act, which issues rent vouchers to eligible households to use in the housing of their choice. The voucher payment subsidizes the difference between the Gross Rent andthetenant’scontribution of30%ofadjustedgrossincome,(or10%ofgross income, whichever is greater). In cases where 30% of the tenant’s income is less than the utility allowance, the tenant will receive an assistance payment. In other cases, the tenant is responsible for paying his share of the rent each month.
Housing unit is a house, apartment, mobile home, or group of rooms used as a separate living quarters by a single household.
HUD Section 8 Program is a federal program that provides project based rental assistance. UndertheprogramHUDcontractsdirectlywiththeownerforthepaymentofthedifference between the Contract Rent and a specified percentage of tenants’ adjusted income.
HUD Section 202 Program is a federal program, which provides direct capital assistance (i.e., grant) and operating or rental assistance to finance housing designed for occupancy by elderly households who have income not exceeding 50% of the Area Median Income. The program is limited to housing owned by 501(c)(3) nonprofit organizations or by limited partnerships where the sole general partner is a 501(c)(3) nonprofit organization. Units receive HUD project based rental assistance that enables tenants to occupy units at rents based on 30% of tenant income.
HUD Section 236 Program is a federal program which provides interest reduction payments for loans which finance housing targeted to households with income not exceeding 80% of Area Median Income who pay rent equal to the greater of Basic Rent or 30% of their adjusted income. All rents are capped at a HUD approved market rent.
HUD Section 811 Program is a federal program, which provides direct capital assistance and operating or rental assistance to finance housing designed for occupancy by persons with disabilities who have income not exceeding 50% of Area Median Income. The program is limited to housing owned by 501(c)(3) nonprofit organizations or by limited partnerships where the sole general partner is a 501(c)(3) nonprofit organization.
Income Limits are the Maximum Household Income by county or Metropolitan Statistical Area, adjusted for household size and expressed as a percentage of the Area Median Income (AMI) for the purpose of establishing an upper limit for eligibility for a specific housing program. Income Limits for federal, state and local rental housing programs typically are established at 30%, 50%, 60% or 80% of AMI.
Low-Income Household is a person or household with gross household income between 50% and 80% of Area Median Income adjusted for household size.
Low-Income Housing Tax Credit is a program to generate equity for investment in affordable rental housing authorized pursuant to Section 42 of the Internal Revenue Code, as amended. The program requires that a certain percentage of units built be restricted for occupancy to households earning 80% or less of Area Median Income, and that the rents on these units be restricted accordingly.
Market vacancy rate (physical) is the average number of apartment units in any market which are unoccupied divided by the total number of apartment units in the same market, excluding units in properties which are in the lease-up stage. Bowen National Research considers only these vacant units in its rental housing survey.
Mixed income property is an apartment property containing (1) both income restricted and unrestricted units or (2) units restricted at two or more income limits (i.e., low-income Tax Credit property with income limits of 30%, 50% and 60%).
Moderate Income is a person or household with gross household income between 40% and 60% of Area Median Income adjusted for household size.
Multifamily are structures that contain more than two housing units.
New owner-occupied household growth within a market is a primary demand component for new for-sale housing. For the purposes of this analysis, we have evaluated growth between2022and2027.The2022householdsbyincomelevelarebasedonESRIestimates that account for 2020 Census counts of total households for each study area. The 2022 and 2027 estimates are also based on growth projections by income level by ESRI. The difference between the two household estimates represents the new owner-occupied households that are projected to be added to a study area between 2022 and 2027. These estimates of growth are provided by each income level and corresponding price point that can be afforded.
Non-Conventional Rentals are structures with four or fewer rental units.
Overcrowded housing is often considered housing units with 1.01 or more persons per room. These units are often occupied by multi-generational families or large families that are in need of more appropriately sized and affordable housing units. For the purposes of this analysis, we have used the share of overcrowded housing from the American Community Survey.
Pipeline housing is housing that is currently under construction or is planned or proposed for development. We identified pipeline housing during our telephone interviews with local and county planning departments and through a review of published listings from housing finance entities such as NCHFA, HUD and USDA.
Population trends are changes in population levels for a particular area over a specific period of time which is a function of the level of births, deaths, and net migration.
Potential support is the equivalent to the housing gap referenced in this report. The housing gap is the total demand from eligible households that live in certain housing conditions (described in Section VIII of this report) less the available or planned housing stock that was inventoried within each study area.
Project-based rent assistance is rental assistance from any source that is allocated to the property or a specific number of units in the property and is available to each income eligible tenant of the property or an assisted unit.
Public Housing or Low-Income Conventional Public Housing is a HUD program administered by local (or regional) Housing Authorities which serves Low- and Very LowIncome households with rent based on the same formula used for HUD Section 8 assistance.
Rent burden is gross rent divided by adjusted monthly household income.
Rent burdened households are households with rent burden above the level determined by the lender, investor, or public program to be an acceptable rent-to-income ratio.
Replacement of functionally obsolete housing is a demand consideration in most established markets. Given the limited development of new housing units in the study area, homebuyers are often limited to choosing from the established housing stock, much of which is considered old and/or often in disrepair and/or functionally obsolete. There are a variety of ways to measure functionally obsolete housing and to determine the number of units that should be replaced. For the purposes of this analysis, we have applied the highest share of any of the following three metrics: cost burdened households, units lacking complete plumbing facilities, and overcrowded units. This resulting housing replacement ratio is then applied to the existing (2022) owner-occupied housing stock to estimate the number of for-sale units that should be replaced in the study areas.
Restricted rent is the rent charged under the restrictions of a specific housing program or subsidy.
Single-Family Housing is a dwelling unit, either attached or detached, designed for use by one household and with direct access to a street. It does not share heating facilities or other essential building facilities with any other dwelling.
Standard Condition: A housing unit that meets HUD’s Section 8 Housing Quality Standards.
Subsidized Housing is housing that operates with a government subsidy often requiring tenants to pay up to 30% of their adjusted gross income toward rent and often limiting eligibility to households with incomes of up to 50% or 80% of the Area Median Household Income. (Bowen National Research)
Subsidy is monthly income received by a tenant or by an owner on behalf of a tenant to pay the difference between the apartment’s contract rent and the amount paid by the tenant toward rent.
Substandard housing is typically considered product that lacks complete indoor plumbing facilities. Such housing is often considered to be of such poor quality and in disrepair that it should be replaced. For the purposes of this analysis, we have used the share of households living in substandard housing from the American Community Survey.
Substandard conditions are housing conditions that are conventionally considered unacceptable which may be defined in terms of lacking plumbing facilities, one or more major systems not functioning properly, or overcrowded conditions.
Tenant is one who rents real property from another.
Tenant paid utilities are the cost of utilities (not including cable, telephone, or internet) necessary for the habitation of a dwelling unit, which are paid by the tenant.
Tenure is the distinction between owner-occupied and renter-occupied housing units.
Townhouse (or Row House) is a single-family attached residence separated from another by party walls, usually on a narrow lot offering small front and back-yards; also called a row house.
Vacancy Rate – Economic Vacancy Rate (physical) is the maximum potential revenue less actual rent revenue divided by maximum potential rent revenue. The number of total habitable units that are vacant divided by the total number of units in the property.
Very Low-Income Household is a person or household with gross household income between 30% and 50% of Area Median Income adjusted for household size.