richmond region market value analysis€¦ · real estate markets. it is an objective, ... evaluate...

Richmond, Chesterfield, and Henrico Counties 2017

Richmond Region Market Value Analysis

Reinvestment Fund

Reinvestment Fund builds wealth and opportunity for low-wealth communities and low and moderate income individuals through the promotion of socially and environmentally responsible development.

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Knowledge. Information and policy analysis

Innovation. Products, markets, and strategic partnerships

We achieve our mission through

City of Philadelphia MVA

The Market Value Analysis

The Market Value Analysis (MVA) is a tool to assist residents and policymakers to identify and understand the elements of their local real estate markets. It is an objective, data-driven tool built on local administrative data and validated with local experts.

With an MVA, public officials and private actors can more precisely target intervention strategies in weak markets and support sustainable growth in stronger markets.

How Cities are Using the MVA

▪ Component of a local land banking strategy (Phila., NOLA)

▪ Guide capital budget (Detroit)

▪ Focus code enforcement (Phila., Baltimore, Indianapolis, NOLA)

▪ Benchmark quality of life measures (Phila.)

▪ Transportation planning (St. Louis)

▪ Target statewide Strong Neighborhoods Revolving Loan Fund (DE/DSHA)

▪ Inform LIHTC QAP (DSHA)

▪ Develop CDBG ConPlan / Comprehensive plan (Detroit, Wilmington, St. Louis)

▪ Assess changes in the market over time (Phila., Baltimore, Pittsburgh)

▪ Evaluate development opportunities (Pittsburgh, Phila., Houston, Detroit, St. Louis, cities in NJ)

▪ Target demolition and acquisition activities (Baltimore, Phila., Detroit, NOLA)

▪ Select transformative tipping point projects (Phila., Baltimore, Pittsburgh, NOLA)

▪ Engage partners – philanthropic, non-profit, government – in coordinated efforts to rebuild

neighborhoods (Baltimore, Milwaukee, NOLA)

▪ Guide federal Neighborhood Stabilization Program Investment (States of

PA & NJ, Houston, Detroit)

Our Normative Assumptions

When analyzing markets we begin with these principles:

• Public subsidy is scarce; acting alone, subsidies cannot create a market

• Public policy and subsidy must leverage private investmentor create conditions for investment to occur

• In distressed markets, build from strength by investing near strong assets

• All residents are customers with an expectation of quality public services and amenities

• The best decisions are based on the sound and objective analysis of quantitative and qualitative data

Who is Using the MVA

MVAs have been funded by government agencies, local foundations, and financial institutions in cities and counties around the country:

• Philadelphia, PA

• Washington, DC

• Baltimore, MD

• San Antonio, TX

• Camden, NJ

• Newark, NJ

• Selected (8) NJ regions

• Kansas City, MO

• New Orleans, LA

• State of Delaware

• Detroit, MI

• Houston, TX

• Milwaukee, WI

• Pittsburgh, PA

• St. Louis, MO

• Atlantic City, NJ

• Allegheny County, PA

• Reading Area, PA

• Jacksonville, FL

• Wilmington, DE

• Prince George’s County, MD

• Indianapolis, IN

• Selma, AL

• Dallas, TX

• Bethlehem, PA

10,068,000

3,981,000 3,969,000

5,984,000 5,945,000

4,074,473

1,454,000 1,498,0001,247,933

1,648,000 1,804,0001,539,171

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Grant Year

CDBG Allocation History of Richmond, Chesterfield and Henrico Counties, 1975-2017

RICHMOND CHESTERFIELD COUNTY HENRICO COUNTY

CDBG Allocation History

1,954,630

2,165,036

1,229,168

1,036,354

467,707520,845

405,940 389,959

822,467

923,758

657,051 623,810

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HOME Allocation History of Richmond, Chesterfield and Henrico Counties, 2007-2017

RICHMOND CHESTERFIELD COUNTY HENRICO COUNTY

Home Allocation History

The MVA Process

Lessons from 15+ years of experience

Acquire local administrative data and geocode to Census block group geographies.

1

Manually inspect areas for conformity with local experts to assess fit.

4

Manually inspect and validate data layers by driving the area.

2

Alter parameters; re-solve and re-inspect until model accurately represents area.

5

Use statistical cluster analysis to identify areas with common attributes.

3

Summarize and describe the characteristics of each market.

6

Iterative

Validating Data Is Critical.

Researchers must systematically visit and observe neighborhoods in the city to understand the data and final model.

One Size Does Not Fit All.

MVA components and models share some similarities across cities but must be customized to the unique traits of each city.

Integrate Local Knowledge.

All models are tested with local experts to incorporate qualitative feedback from each geography.

Geographic Scale Matters.

MSA and Census tract geographies are too large to accurately reflect the nuances of local real estate markets.

Incorporating Local Knowledge and Expertise

The Local Steering Committee works with the Reinvestment Fund team to help adapt the MVA methodology to the local context, review interim findings, and affirm final results.

Tasks and Responsibilities

Help Team Secure Local Housing Data

Advise on Data Issues and Limitations

Contribute Local Knowledge of Markets

Help Validate Models and Methods

Support Dissemination to the Community

Recommend Strategic Actions for Public & Private Actors

Organizations on the Steering Committee

• Better Housing Coalition• Bon Secours Richmond

Health System• Bonner Center for Civic

Engagement at the University of Richmond

• Chesterfield County Manager's Office

• Federal Reserve Bank of Richmond

• Henrico County Manager’s Office

• Henrico County Planning Dept.

• Housing & Development Advisors

• Housing Opportunities Made Equal of Virginia

• Partnership for Housing Affordability

• Richmond Citizens Advisory Board

• Richmond City Health District

• Richmond City Office of Community Wealth Building

• Richmond Dept. of Economic and Community Development

• Richmond Dept. of Planning and Development Review

• Richmond Redevelopment and Housing Authority

• Richmond Regional Planning District Commission

• U.S. Dept. of Housing and Urban Development

• Va. Dept. of Housing and Community Development

• Va. Housing Development Authority

• Va. Local Initiatives Support Corporation

I. Market Characteristics

Analyzing the characteristics of the residential real estate markets

▪ City Overview

▪ Market Indicators

Market Value Analysis Sources and Definitions

Variable DefinitionSource

Property Values and Investment

Median sales price 2015-2017q1, altered for condominiums

Median Sales prices were calculated both with and without Condominiums and the higher of the two values is used in the

model.

Multiple Listing Service

data

Sales price variance 2015-2017q1

The coefficient of variance of homes used in the calculation above (Average Value ÷ Standard Deviation)

Multiple Listing Service

data

Percent of residential properties with building permits

Number of all residential parcels with building permit applications 2015-2017q1 as a percent of all residential parcels

County and Municipal parcel files and permit

offices

Percent of residential properties built/developed 2008-2016

Number of residential parcels with a built date from 2008-2016 as a percentage of all residential parcels

County and Municipal parcel files

Market Value Analysis Sources and Definitions

Housing Characteristics

Residential density Residential housing units per residential land area

County and Municipal

parcel files, ACS 2011-

2015

Percent owner occupied households

Percent of households that reported owning their homeACS 2011-

2015

Percent of Rentals with a Public Subsidy

Percent of all rental units with a subsidy (e.g., Housing Choice Voucher, Public Housing, etc.)

HUD, RRHA & ACS

2011-2015

Variable Definition Source

Blight, Distress, and

Vacancy

Average percent of vacant residential properties 2015-

2016

Average percent of all residential addresses that were vacant in each quarter 2015-2016. Percentage calculated as the number of

residential addresses that were vacant, divided by the total number of valid postal addresses, including vacant and no-stat

addresses. Vacant postal addresses are those where mail has not been collected for at least 90 days,

Valassis Lists

Percent bank sales 2015-2016 Percent of residential properties sold by banks 2015-2017Multiple

Listing Service data

Working with city officials and a local steering committee we identified a core set of 8 indicators that describe the characteristics and vitality of residential real estate markets.

Property Value and Investment

▪ Sales Price

▪ Sales Variance

▪ Building Permits

▪ New Construction

Blight, Distress, and Vacancy

▪ Bank Sales

▪ Vacancy


▪ Tenure

▪ Residential Density

▪ Percent of Rentals with a Public Subsidy

Available Indicators of Residential Market Strength


▪ Sales Price

▪ Sales Variance




▪ Bank Sales

▪ Vacancy


▪ Tenure


▪ Percent of Rental with a Public Subsidy

Property Values provide important information about how the private market values the properties and amenities in different areas of the city.


Median Residential Sales Price 2015-2017q1

Sales Price Variance 2015-2017q1

Percent of Residential Properties with Permits 2015-2016

Percent of Residential Parcels Built 2008-2016


▪ Sales Price

▪ Sales Variance




▪ Bank Sales

▪ Vacancy

HousingCharacteristics

▪ Tenure



Blight, Distress, and Vacancy measures describe the level of distress in different areas of the city, indicating areas that may require additional investment or support.


Percent Vacant Residential Properties

Percent Bank Sales 2015-2017q1


▪ Sales Price

▪ Sales Variance




▪ Bank Sales

▪ Vacancy


▪ Tenure



Housing Characteristics describe the housing stock and tenure of residents living in different areas of the city.


Percent Owner Occupied 2011-2015

Percent Built Subsidized Rental

Residential Density

II. Market Value Analysis Results

Characterizing the strength of residential real estate markets

▪ Interpreting the MVA

▪ Market Characteristics

▪ Maps

Summary of Market Characteristics

Average Characteristics for Market Types

Number of Block Groups

Median Sales Price 2015-2016

Sales Price

Variance

Percent Bank Sales

Owner Occupancy

Percent Subsidized

Rental

Percent Vacant

Residential

Housing Units per

Acre

Percent Residential

Parcels Built 2008-

up

Percent Residential

Parcels with

Permits 2015-2016

A 32 $501,292 0.39 3% 90% 0% 0.4% 1.9 5.9% 11.6%

B 23 $425,851 0.47 3% 33% 10% 1.5% 17.2 4.7% 5.0%

C 82 $274,479 0.34 6% 83% 3% 0.6% 3.2 2.7% 7.2%

D 53 $195,175 0.35 9% 29% 7% 1.2% 9.8 3.4% 5.7%

E 103 $182,686 0.32 13% 80% 3% 0.9% 2.8 2.6% 5.5%

F 30 $140,358 0.38 21% 48% 77% 1.8% 4.0 2.5% 4.0%

G 62 $117,611 0.39 29% 59% 7% 3.0% 4.2 2.7% 4.9%

H 31 $ 63,465 0.61 33% 41% 12% 8.5% 5.6 1.9% 3.7%

I 18 $ 53,597 0.60 37% 30% 89% 3.2% 7.2 2.0% 2.0%Split 10

Non residential or rental

14

Subsidized rental

3

Richmond Region MVA 2017

Market Overview: A, B, and C

• Highest prices in the region

• Lowest level of bank sales• A & B have the highest

percent of properties built in the last 10 years

• A & C have the highest level of building permits filed

• B has the highest residential density of all categories

• These markets combined represent 102,838 (34%) of all households, including 75,457 (42%) of all owner occupied households in the region


Median Sales Price 2015-

2016

Sales Price Variance

Percent Bank Sales

Owner Occupancy

Percent Subsidized

Rental

Percent Vacant

Residential

Housing Units per

Acre

Percent Residential

Parcels Built 2008-up

Percent Res. Parcels with Permits 15-

16

A 32 $501,292 0.39 3% 90% 0% 0.4% 1.9 5.9% 11.6%

B 23 $425,851 0.47 3% 33% 10% 1.5% 17.2 4.7% 5.0%

C 82 $274,479 0.34 6% 83% 3% 0.6% 3.2 2.7% 7.2%

Market Overview: D and E

• Prices near regional average

• E has the 3rd highest level of owner occupancy, D has the lowest

• D comprises nearly ¼ of the region’s rental households

• Low level of subsidized rental availability

• D has the second highest level of residential density





Percent Bank Sales

Owner Occupancy

Percent Subsidized

Rental

Percent Vacant

Residential

Housing Units per

Acre

Percent Residential



16

D 53 $195,175 0.35 9% 29% 7% 1.2% 9.8 3.4% 5.7%

E 103 $182,686 0.32 13% 80% 3% 0.9% 2.8 2.6% 5.5%

Market Overview: F and G




Percent Bank Sales

Owner Occupancy

Percent Subsidized

Rental

Percent Vacant

Residential

Housing Units per

Acre

Percent Residential



16

F 30 $140,358 0.38 21% 48% 77% 1.8% 4.0 2.5% 4.0%

G 62 $117,611 0.39 29% 59% 7% 3.0% 4.2 2.7% 4.9%

• Prices ~30-40% below regional average

• Markedly higher levels of bank sales than A-E

• F & G have significant levels of owner occupancy

• In F, of the properties that are renters, the majority of them are subsidized

• G has the 3rd highest percentage of vacant properties


Market Overview: H and I




Percent Bank Sales

Owner Occupancy

Percent Subsidized

Rental

Percent Vacant

Residential

Housing Units per

Acre

Percent Residential



16

H 31 $ 63,465 0.61 33% 41% 12% 8.5% 5.6 1.9% 3.7%

I 18 $ 53,597 0.60 37% 30% 89% 3.2% 7.2 2.0% 2.0%

• Lowest values in the region; roughly 70% lower than the regional average

• Highest levels of bank sales in the region

• Highest price variance• Lowest level of permit

activity and percent of properties built in the last 10 years

• I has the highest level of subsidized rental housing


Market Summary


Total Population Residential Parcels HouseholdsOwner Occupied

HouseholdsRenter Occupied

Households

Number Percent Number Percent Number Percent Number Percent Number Percent

A 32 8,848 8.8% 22,023 8.4% 23,926 7.9% 20,628 11.3% 3,298 2.8%

B 23 41,700 5.3% 9,419 3.6% 20,252 6.7% 6,307 3.5% 13,945 11.7%

C 82 155,458 19.9% 55,065 21.1% 58,660 19.5% 48,612 26.7% 10,048 8.4%

D 53 92,974 11.9% 15,435 5.9% 39,877 13.2% 11,171 6.1% 28,706 24.0%

E 103 178,048 22.8% 65,949 25.3% 65,175 21.6% 52,179 28.7% 12,996 10.9%

F 30 53,482 6.8% 14,465 5.5% 20,978 7.0% 9,878 5.4% 11,100 9.3%

G 62 90,655 11.6% 28,593 10.9% 35,626 11.8% 19,659 10.8% 15,967 13.4%

H 31 32,453 4.1% 9,987 3.8% 11,640 3.9% 4,759 2.6% 6,881 5.8%

I 18 26,112 3.3% 4,774 1.8% 9,401 3.1% 2,780 1.5% 6,621 5.5%

Split BGs 10 19,295 2.5% 6,928 2.7% 7,821 2.6% 5,591 3.1% 2,230 1.9%

Other (Rental/Nonres) 14 18,561 2.4% 28,465 10.9% 6,773 2.2% 369 0.2% 6,404 5.4%

Subsidized Rental BG 3 4,456 0.6% 43 0.0% 1,353 0.4% 9 0.0% 1,344 1.1%

Total 461 782,042 261,146 301,482 181,942 119,540

Richmond Region MVA 2017 Validation Routes

III. Supplemental Analyses

Contextualizing social, economic ,and public health outcomes with housing market characteristics

▪ Point-level Analyses

▪ Geographic-level Analyses

Compared to Chesterfield and Henrico Counties, Richmond Has a Smaller Middle Market and Larger Stressed Market Share of Residents

1.3%

3.4%

21.0%

62.3%52.4%

42.7%

35.6% 36.6%28.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Chesterfield Henrico Richmond

Perc

ent

of

Are

a's

Pop

ula

tio

nPercent of Area's Population by Market Category

OtherH ID E F GA B C

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

A B C D E F G H I

Richmond City Chesterfield Henrico

Percent of Area’s Population by Market Type

Richmond and Pittsburgh are Very Similar in Population Distribution Across Market Types; A Much Smaller Share in Stressed Areas than Akron

41.0%

22.0% 21.0%

36.0%

48.0%43.0%

20.0%22.0%

28.0%

Akron Pittsburgh Richmond

Per

cen

t o

f C

ity'

s Po

pu

lati

on

City

Population Distribution Across Market Types for Selected Cities

OtherStressed MiddleStrong

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0%

10%

20%

30%

40%

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60%

70%

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90%

100%

A B C D E F G H I

Per

cen

t o

f P

op

ula

tio

n

Percent White Percent Black Percent Hispanic

Race/Ethnicity Composition by Market Type

MVA Markets and Race/Ethnicity

Richmond Region MVA 2017 with Built Subsidized Rentals

Richmond Region MVA 2017 with All Assisted Housing

Significant Portions of Owners and Renters are Cost-Burdened; Especially in Middle and Stressed Markets

0%

10%

20%

30%

40%

50%

60%

A B C D E F G H I

Per

cen

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f O

wn

ers/

Ren

ters

Co

st B

urd

ened

MVA Market Category

Percent of Owners and Renters Who Are Cost-Burdened by MVA Market Category

Percent Owners Cost Burdened Percent Renters Cost Burdened

Richmond Cost Burdens Are High Compared to Other Cities

74.9%

48.1%

28.3%

6.9%

83.5%

39.9%

12.5%

2.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Under $35k $35-$50k $50-$75k $75k+ Under $35k $35-$50k $50-$75k $75k+

Owners Renters

Perc

ent

of

Ho

use

ho

lds

Tenure / Household Income

Percent of Households Cost Burdened (Spending 30%+ of Income on Housing) by Tenure and Household Income Level, 2011-2015

Akron Pittsburgh Richmond

Areas Affordable at up to 50% Median Household Income

Median household income in 2011-2015 for Richmond Metro Area $59,919. Visible MVA areas had average sales prices (2015/2016) less than 3x 50% of median.

Areas Affordable at up to 50% AMI in Pittsburgh

Median household income in 2015 for Pittsburgh Metro Area $54,080. Visible MVA areas had average sales prices (2013/2015) less than 3x 50% of median.

Richmond Region MVA 2017 with Limited Supermarket Access

Reinvestment Fund Policy Solutions

Ira Goldstein, [email protected]

Al Parker, Research [email protected]

Emily Dowdall, Associate [email protected]

Contact: 215-574-5800

Making Sense of Markets: Using Data to Guide Reinvestment Strategies

Chapter on the MVA in What Counts: Harnessing Data for America’s Communities, outlining opportunities and challenges for the strategic use of data to reduce poverty, improve health, expand access to quality education, and build stronger communities.

A Data-Based Approach to Understanding Urban Housing Markets

Chapter on the MVA by Reinvestment Fund’s Ira Goldstein in Putting Data to Work: Data-Driven Approaches to Strengthening Neighborhoods, by the Board of Governors of the Federal Reserve System. The chapter highlights how the MVA approach can inform citywide strategies and decision-making.

Market Value Analysis: Understanding Where and How to Invest Limited Resources

Article by Ira Goldstein and Sean Closkey on using the Market Value Analysis (MVA) to prioritize investments for “Bridges,” the quarterly publication of the St. Louis Federal Reserve Bank.

Maximizing the Impact of Federal NSP Investments through the Strategic Use of Local Market Data

Chapter by Reinvestment Fund’s Ira Goldstein for the book REO & Vacant Properties: Strategies for Neighborhood Stabilization, discussing the MVA as a means to strategize the targeting of resources under the federal Neighborhood Stabilization Program.

On the Edge: America’s Middle Neighborhoods

Book edited by Paul C. Brophy on ways that policymakers and community development professionals can support “middle neighborhoods,” communities on the edge of decline or improvement.

Additional MVA Publications

mailto:[email protected]

mailto:al.parker@




http://www.whatcountsforamerica.org/portfolio/making-sense-of-markets-using-data-to-guide-reinvestment-strategies/

https://www.federalreserve.gov/communitydev/files/data-driven-publication-20111212.pdf

https://www.stlouisfed.org/publications/bridges/summer-2006/market-value-analysis-understanding-where-and-how-to-invest-limited-resources

http://www.bos.frb.org/commdev/REO-and-vacant-properties/65-Goldstein.pdf

http://americanassembly.org/publications/edge-americas-middle-neighborhoods

richmond region market value analysis€¦ · real estate markets. it is an objective, ... evaluate...

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