Part II. Forecasted Housing Needs

Forecast for Housing Growth

 Population.
 Persons in Group Quarters:

 Household Size.

 Vacancy Rate.

 JBLM.

Exhibit 1. Forecast of Demand for New Dwelling Units, Kitsap County, 2019–2036

Source: U.S. Census Bureau, 2013–2017 ACS.

Housing Needs by Tenure

Exhibit 2. Scenarios of Expected New Units by Tenure

Source: ECONorthwest Analysis

Housing Needs by Type

Exhibit 3. Scenarios of Expected New Units by Type

Source: ECONorthwest Analysis

Housing Needs by Price

Exhibit 4. Scenarios of Expected New Units by Income Level

Source: ECONorthwest Analysis

Housing Needs by Location

Exhibit 5. Kitsap County Jurisdictions Producing Disproportionate Housing 2010-2017

Source: 2014-2018 ACS Table DP04

Exhibit 6. Home Price Appreciation, Select Jurisdictions and Kitsap County

Source: Zillow, Median Home Sales Price, Seasonally Adjusted.

Part III. Housing Needs Analysis

This section will discuss the needs of housing from a variety of factors including forecast for Household formation, migration to the South Sound Community and other factors contributing to the lack of supply being developed. In particular, we will use this section to talk about regional demands for housing stock that active duty service member will be competing for and also the anticipated need of Active Duty Service members in the future.

Topics include: - Changing demographics of the South Sounds
o Increasing wages
o Spill-over affect of King County Real Estate market

o Commuting patterns

o Factors limiting the development of housing supply

A. Drivers of Housing Supply

This section will overview the factors influencing supply and demand of housing and how supply is correlated with affordability.

Housing Shortage: Imbalance in Supply and Demand

Exhibit 7. Map of Washington State County Ratios of Household Formation to Unit Production

Source: Up For Growth Research on Housing Underproduction in Washington State, ECONorthwest analysis of data come from U.S. Census Bureau, Washington Office of Financial Management and Moody’s Analytics.

Housing Supply Has Many Constraints

Exhibit 9. Development Fundamentals

Source: ECONorthwest.

 On a parcel of land, for-profit (which are the majority) landowners and property developers will evaluate a site for its highest and best use potential, be that office, residential, commercial, or vacant land.
 Public policies, like land use restrictions or zoning, limit the development allowed in certain parts of the city, usually for aesthetic, health, safety, or economic reasons.
 Market feasibility assesses the demand for development, comparing the expected prices against the costs (e.g. labor and materials), for the desired types of development.
 Capital is necessary to pay for the costs of development and influences market feasibility due to the expected return on investment. Capital seeking return on investment can flow to other sectors – stocks, bonds, etc. – when development cannot meet return requirements.

Land: Natural and Artificial Constraints

  1. Natural Constraints.
  2. Regulatory Land Use Constraints.

Public Policy: Development Regulations

Market Feasibility: Limited by Increases in Development Costs

RISING CONSTRUCTION COSTS HURT AFFORDABILITY

Exhibit 10. Seattle and National Construction Cost Index Q1 2009 to Q3 2019

Source: Mortenson Q1 2019 Construction Cost Index Report for the City of Seattle. (January 2009 is indexed to 100) LIMITED AVAILABILITY OF CONSTRUCTION LABOR INCREASES COSTS

Exhibit 11. Seattle Construction Employment Growth Year-over-Year, Q1 2009 to Q3 2019

Source: Mortenson Q1 2019 Construction Cost Index Report for the City of Seattle. (January 2009 is indexed to 100) Capital: Development Has Numerous Constraints

Exhibit 12. Some Capital Constraints Affect Developers Differently

B. Drivers of Housing Demand

Part IIII. Methods and Approach

This section will be an overview of the methods and approach that was used to conduct this analysis. A list of data sources will be provided.

Data Used in this Analysis

Assumptions/Caveats