Alice Jim Wells EDC housing report final

Alice - Jim Wells County Housing Demand Study

Prepared for:

Alice – Jim Wells County EDC January 2014

Prepared by:

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Table of Contents Table of Contents ............................................................................................................................................................................................................ i Table of Exhibits ............................................................................................................................................................................................................. iii Introduction ................................................................................................................................................................................................................... 1 Executive Summary and Recommendations ................................................................................................................................................................. 2 Key Points - Market Demand and Opportunities .................................................................................................................................................... 2 Rental Market ................................................................................................................................................................................................... 2 For-Sale Market ................................................................................................................................................................................................ 3 Strategic Recommendations ................................................................................................................................................................................... 4 Study Area ...................................................................................................................................................................................................................... 6 Map of Extended Study Area................................................................................................................................................................................... 7 Study Area Summary...................................................................................................................................................................................................... 8 Population and Households .................................................................................................................................................................................... 8 Area Economic / Demographic Trends .......................................................................................................................................................................... 9 Demographic Trends ............................................................................................................................................................................................... 9 Age Groups........................................................................................................................................................................................................ 9 Alice Independent School District Enrollment ................................................................................................................................................. 11 Education ........................................................................................................................................................................................................ 12 Income Trends ................................................................................................................................................................................................. 14 Total Housing Stock ............................................................................................................................................................................................... 16 Age of Housing Stock ............................................................................................................................................................................................. 17 Tenure of Occupied Housing Units .................................................................................................................................................................. 19 Single Family Permits............................................................................................................................................................................................. 20 Household Projections .......................................................................................................................................................................................... 22 Employment .......................................................................................................................................................................................................... 23 Employment Projections ....................................................................................................................................................................................... 26 i

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Economic Impact of the Eagle Ford Shale ....................................................................................................................................................... 28 Recent Investment in the Study Area .............................................................................................................................................................. 29 Realtor Focus Group Summary .................................................................................................................................................................................... 31 Key Takeaways ...................................................................................................................................................................................................... 31 Developer/Builder Interviews ...................................................................................................................................................................................... 31 Key Takeaways ...................................................................................................................................................................................................... 32 Single-Family Developments ................................................................................................................................................................................. 33 Housing Market Trends – Single Family ....................................................................................................................................................................... 35 Existing Home Market ........................................................................................................................................................................................... 35 Days on Market (DOM) ................................................................................................................................................................................... 35 Sales Price Trends............................................................................................................................................................................................ 36 Sales Price to List Price .................................................................................................................................................................................... 36 Conclusions – Single-Family Market ...................................................................................................................................................................... 37 Housing Market Trends –Multifamily and Rental Housing .......................................................................................................................................... 38 Existing Property Performance.............................................................................................................................................................................. 39 Newest Developments .......................................................................................................................................................................................... 40 Conclusions – Multifamily Market......................................................................................................................................................................... 40 Single Family Rental Market .................................................................................................................................................................................. 41 Housing Demand Analysis ............................................................................................................................................................................................ 42 Historical Inputs..................................................................................................................................................................................................... 42 Trends in Tenure.................................................................................................................................................................................................... 43 Analysis and Projections ........................................................................................................................................................................................ 44 Assumptions .................................................................................................................................................................................................... 44 Impact on Alice................................................................................................................................................................................................ 45

ii

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Table of Exhibits Map of Jim Wells County ............................................................................................................................................................................................... 6 Population and Households ........................................................................................................................................................................................... 8 Population by Age .......................................................................................................................................................................................................... 9 Population by Age ........................................................................................................................................................................................................ 10 Population by Educational Attainment - 2013 ............................................................................................................................................................. 12 Educational Attainment - 2000 .................................................................................................................................................................................... 13 2013 Estimates - Household Income ........................................................................................................................................................................... 14 2000 Estimates - Household Income ........................................................................................................................................................................... 15 Housing Stock by Structure Type ................................................................................................................................................................................. 16 Age of Housing Stock – 2013 Estimates ....................................................................................................................................................................... 17 Housing Unit Profile – 2012 5-Year American Community Survey .............................................................................................................................. 18 Tenure of Occupied Housing Units .............................................................................................................................................................................. 19 Single Family Permits ................................................................................................................................................................................................... 20 Household Type ........................................................................................................................................................................................................... 22 Jobs by Industry Sector ................................................................................................................................................................................................ 24 Industry Sector Wage Levels ........................................................................................................................................................................................ 25 Employment 2012-2013............................................................................................................................................................................................... 26 Employment Projections 2013-2023............................................................................................................................................................................ 26 Employment 2013-2023............................................................................................................................................................................................... 27 Days on Market ............................................................................................................................................................................................................ 35 Sales Price .................................................................................................................................................................................................................... 36 Alice Multifamily Properties ........................................................................................................................................................................................ 38 Alice Multifamily Properties ........................................................................................................................................................................................ 39 Jim Wells County Historical Household ....................................................................................................................................................................... 42 And Housing Statistics .................................................................................................................................................................................................. 42 Jim Wells County Household and Jobs Comparison .................................................................................................................................................... 42 iii

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Changes 2000 - 2013 .................................................................................................................................................................................................... 43 Jim Wells County Housing Demand Estimate .............................................................................................................................................................. 44 Alice Housing Demand Estimate .................................................................................................................................................................................. 45

iv

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Introduction The Alice-Jim Wells County Economic Development Corporation (AEDC), the economic development entity for the Jim Wells County area, believes that lack of available housing is acting as an impediment to the area growth. There has been recent growth in the area employment and projections for continued growth are abundant. The Eagle Ford Shale play, while not the only area of expansion, is a large one and is the primary driver towards recent and future growth in the area’s employment base. The housing problem has become noticeable enough that it is feared to potentially affect overall economic growth by constricting the ability of employers to expand their workforce. In response, the AEDC brought CDS Market Research to Alice, TX to examine the housing market and identify the critical issues and strategies that could improve its functionality.

This report represents the results of CDS’ examination and analysis. CDS focused on the following principal issues: 

Is the Alice-area economy generating demand for additional housing development?



What are the market conditions regarding the existing local supply of housing?



What are the quantities, types, and price ranges of new housing that are most needed?



What conditions or forces, if any, are preventing new supply from being added to the market?



What actions and strategies can the Alice community take to help increase new housing development?

In conducting its research, CDS received considerable assistance from numerous members of the local business and real estate community, as well as public officials. CDS is grateful for everyone’s cooperation, as it made much of analysis presented in this report possible.

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Executive Summary and Recommendations Key Points - Market Demand and Opportunities There are positive signs in the Alice area for growth in demand for housing at several different levels of the market, for both rental and for-sale properties. The local and regional economies are growing, with projected increases in employment over the next ten years. Making the situation a bit more urgent is that 63% of these 10-year employment projections will occur over the next five years (by year-end 2018). This makes this current economic upswing different from past “booms” in that they were typically seen as being more short-lived. City officials believe that because of past expectations that any “boom” was temporary, housing needs have never “caught up” to where the market requires them to be. CDS believes that the increased employment levels are likely to be sustained.

In the vast majority of housing markets employment is the key driver of residential demand. This is the primary driver for Alice and Jim Wells County as well. Furthermore, the area’s low unemployment rate (currently 4.7%) necessitates the import of workers from outside the county to fill jobs, making this correlation between employment and housing more direct than when coming out of the recession in 2009. There are nowhere near enough people in the current region to fill the immediate, near-term, and intermediate-term employment demands.

Rental Market Strong base demand for market-rate rentals. Many of the current jobs filled over the past couple years represent higher income levels than previously seen in this market. These have been heavily represented in the oil and gas, manufacturing, and wholesale trade industry sectors.

There is a growing percentage of the market that can afford higher rents. Helping to facilitate this pent up demand is the absence of any new market-rate multifamily construction over the last 30 years. Renters are unable to find market-rate options as the market is replete with no vacancies and long waiting lists. Also, the high rates for “step up” options where renters are seeking single family detached homes, and are willing to pay twice the rental rate for current market-rate apartments, is further evidence of the need for more market-rate units. Also, as Alice seeks to attract new workers from other markets that had more Class A level multifamily options, it is expected that these newcomers may be more amenable to consider higher-quality apartment options.

Strong base demand for affordable rentals. While many of the current jobs filled recently are at higher income levels, a number of the current and projected jobs in Jim Wells County in the intermediate-term are for relatively low or working-class wages. Health care, education, and retail trade are some industry sectors represented heavily in the region with modest average wages. Jim Wells’ median household income is estimated to be below $40,000 while Alice’s is under $35,000. Thus Alice currently has, and will continue to have, a substantial and strong rental market for affordable and mid-priced rentals (monthly rent under $600).

Limited multifamily supply relative to demand. All of Alice’s existing multifamily rental properties, both affordable and market, are at full occupancy. All of them except two publicly subsidized properties (San Diego Creek and Easterling Village) were built prior to ten years ago and most were built before the 1990’s. Unfortunately, the tightness of the market means that renters who might normally consider a newer, more 2

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

upscale complex are forced to choose from the older affordable properties, thereby competing with renters whose income levels limit them to such properties.

Large role of single family rentals, larger demand pressure. The multifamily properties are only one segment of the rental market in the Alice area. While specific data on this market is not readily obtainable on a regularly updated basis, the reports CDS obtained indicate the single family rental market consists of smaller, older homes which rent for rates well above multifamily apartments. In some cases, companies are turning single family homes into “corporate dormitories” for housing employees. This part of the rental market is evidently under demand greater than that experienced by the multifamily properties as there are literally no listings for single-family rentals and rents have been rising to levels exceeding $1,400 per month.

Principal demand opportunities: both affordable and upscale multifamily. The quantitative analysis in this report indicates that at a minimum it would be reasonable to add 350 total rental units to the market over the next two years. The market could likely support more, as renters appear to be “doubled up” with other renters, or stacked into “corporate dormitories”, and would choose to leave if appropriate rental options were available. CDS believes that adding 150 units of affordable multifamily housing over the next two years should be easily absorbed in the market. Any area of Alice could work for a high-quality affordable multifamily development provided there is community support. CDS also believes that adding 200 units of market-rate multifamily housing over the next two years should be easily absorbed as well. To capture the higher end of the market-rate rental market, an upscale and amenitized multifamily complex of 80-100 units, with monthly rents of $900 to $1,100, should be supportable. The demand after that should be 300 more market rate units from 2016 to 2019.

For-Sale Market Single family also pressured by demand. CDS obtained some quantitative and anecdotal evidence that demand is increasing in the single family housing market. The market metrics are not as drastic as evidenced in the rental market, but per data from the Alice Board of Realtors, days on market has decreased slightly and prices are noticeably higher over the last two years. The mix of strong recent job growth, low mortgage rates, and the near absence of new construction has created a slight imbalanced supply-demand relationship for single family housing. Additionally, the consistent message from realtors was that the market is improving and that they are getting more inquiries than in years past. Furthermore the Texas Workforce Commission’s job projections cannot be ignored. Of the thousands of projected jobs and the thousands of people who will fill them, some will seek single family options.

Principal demand opportunities. The quantitative demand analysis indicates that 145 additional for-sale homes are needed in Alice by 2016; The vast majority of these homes would be typical single family detached houses on half-acre lots or smaller.

Some of the remaining demand may not be able to be satisfied with new for-sale housing because the buyers are unable to adjust expectations about the physical housing product that can be feasibly produced at the price they can reasonably afford to pay.

New homes would likely need to be sized from a minimum of 1,500 square feet to a maximum of about 2,000 square feet. Virtually all new housing will be in the range of $130,000 to $180,000. CDS believes from Alice Board of Realtors sales data over the past four years, that there 3

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

are two targeted price ranges, $130,000 to $150,000 and $150,000-180,000 and that the market is fairly evenly split between the two ranges.

The market should be able to reasonably absorb 65-75 single family units in each of the two ranges over the next two years, and another 65-75 units of each range in two to five years.

While not specifically quantified in research data, CDS believes that demand exists for development of certain niche products in limited quantities. There are townhome and quad-plex developments in the planning stages. These could provide attractive alternatives to those moving from multifamily to a single family product.

Strategic Recommendations While some market factors are beyond the control of the local governments and organizations in and around the City of Alice (oil and gas prices, Eagle Ford activity, the quality of competing school districts), there are some policies which could encourage faster and better residential development to address existing and potential demand identified in this study.

1. In general, the City of Alice should ensure that its regulatory and infrastructure policies are aligned with the practicalities of housing development. While CDS is not commenting on existing practices per se, it is good practice to frequently self-check whether housing development projects which meet quality standards are having minimal difficulties passing through the approval process and not incurring unwarranted delays or excessive costs.

2. To the extent that fiscal resources allow, consider policies to share cost or reimburse residential developers for public infrastructure provision such as through streets, water, wastewater, and drainage facilities. Developments which provide public amenities, such as parks, should also be considered for cost sharing or reimbursements. A variety of policy structures can be used for deploying infrastructure reimbursement and cost sharing; any structures which allow for faster payback will be the most attractive to developers. The City can also invest in infrastructure extensions proactively to areas where new housing growth is desired, though this is a riskier policy for local taxpayers, as growth may not be guaranteed at that location in a near term time frame.

3. Improving quality of life will be critical for attracting a larger number of single family developers, particularly those who would target home prices at the upper end of the ranges identified in this report, or beyond. To address this, the City of Alice should implement the activity and recreation center currently planned for the west side of the city. This facility will make a strong statement about the City’s commitment to quality healthful living, which is becoming more important for educated home buyers. In addition, the City should work to improve its existing parks and consider recreation / wellness amenities which can be located throughout the area such as improved walking / biking trails. Finally, the City should commit to improving and enlivening its downtown / Main Street area; walkable town centers with familyfriendly social programming have increasingly become desirable amenities for more affluent residents. Market conditions may limit what’s possible downtown in the near term, but improvements can be made even at small scales (street festivals, pop-ups, etc.).

4. The change which could make the biggest positive difference in the for-sale market would be an improvement in the image of the local school districts. This is hardly easy and involves a different set of actors from regular economic development (most notably the students and 4

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

their families themselves), but home buyers of higher educational attainment tend to place heavy emphasis on the quality of public schooling, assuming they are not choosing to spend extra personal funds on private schooling. The importance is great enough that home buyers will often trade a substantial commute distance in order to place their children in desirable schools. The City of Alice is currently at a disadvantage compared to other locations (Calallen, etc.) in this regard; becoming more competitive perception-wise in public school quality would almost certainly have a positive demand impact.

5. The community (the Alice – Jim Wells County EDC, the City, others) should actively market Alice to market-rate (and possibly affordable) multifamily developers, who already likely have many opportunities for projects in healthy markets. This should happen after area entities have made any development policy revisions related to the above recommendations have been enacted and a package of quality-of-life amenities can be touted. The EDC could consider holding a “road show” presentation to highlight those policies and amenities, and discuss the positive results of this study, to a group of invited multifamily developers in Corpus Christi, San Antonio, and other locations where a critical mass of such developers could be found.

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Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Study Area For the Housing Study, we have examined economic and demographic data covering the city of Alice and Jim Wells County. Alice is the county seat and the largest city in Jim Wells County. The Alice MSA includes the entire county. Alice is adjacent to numerous counties such as Live Oak County (north), Nueces and Kleberg Counties (east), San Patricio County (northeast), Brooks County (south), and Duval County (west). While parts of these counties can be considered part of Alice’s trade area, CDS has identified that for the housing study, focusing on data within Alice and Jim Wells County is the most applicable and appropriate. Occasionally data will exclusively cover Alice, due to the potential lack of available data at the county level as well as times when Alice needs to be evaluated in isolation. Regarding trends in housing, CDS will often be evaluating a Study Area that captures all geographic areas where a majority of people who work in the area live. This will encompass all of Jim Wells County, along with a majority of certain school districts: Calallen ISD, West Oso ISD, Tuloso-Midway ISD and London ISD. This unique study area is comprised of the following Census Tracts: 9501, 9502, 9503, 9504, 9505, 9506, 9507, 58.01, 58.02, 35, 36.01, 36.02, 36.03, 37, 58.01, 58.02, 54.06, and 8, all of which are within Jim Wells and Nueces Counties. Based on our research, this Study Area is the best geographic representation of where area workers choose to live, and/or have been migrating to over time.

Map of Jim Wells County

6

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Map of Extended Study Area

7

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Study Area Summary

Population and Households Alice, TX

Jim Wells County, TX

Study Area

2018 Projection

20,397

44,224

88,743

2013 Estimate

19,549

41,920

84,471

2010 Census

19,199

40,838

82,580

2000 Census

19,230

39,326

77,102

Growth 2013-2018

4.34%

5.50%

5.06%

Growth 2010-2013

1.82%

2.65%

2.29%

Growth 2000-2010

-0.16%

3.84%

7.10%

2018 Projection

7,160

15,312

30,552

2013 Estimate

6,810

14,421

28,909

2010 Census

6,638

13,961

28,102

2000 Census

6,435

12,961

25,092

Growth 2013-2018

5.14%

6.18%

5.68%

Growth 2010-2013

2.59%

3.29%

2.87%

Growth 2000-2010

3.15%

7.72%

12.00%

Population and Households As shown in the table to the right, the population within Alice was flat (decreased by .16%) between 2000 and 2013. Jim Wells County and the extended Study Area, during the same period, saw population increase 3.84% and 7.1%, respectively.

Looking into a shorter period between 2000 and 2013, specifically between 2010 and 2013, we see more dramatic changes in the city and county. Alice grew its population by approximately 2% and Jim Wells grew 2.6% (or 42% of its growth since 2000).

Projections stretching to 2018 are more aggressive. Alice is projected to see population growing over 4%, with the county and the Study Area projecting to grow between 5-5.5%.

Household growth has been growing at a rate higher than population growth. For example, Alice population was flat from 2000 to 2013, but households grew by over 3%. Jim Wells and the Study Area had similar discrepancies with households growing at rates nearly double the percentages in population growth.

These wide discrepancies between population and household growth narrow, but still are projected to grow at different paces by 2018. City, County and Study Area are projected to see household growth of 5.1%, 6.2% and 5.7%, respectively, by 2018.

Housing Study

Population

Households

Source: PCensus for Map Info, Tetrad Computer Applications 2013

8

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Area Economic / Demographic Trends

Housing Study

Population by Age 2013 Estimated Population by Age

The economic and demographic trends affecting Alice and Jim Wells County are critical in the assessment of market demand for housing. The economic climate impacts the income and lifestyles of area residents and the nature of demand for several types of housing. Demographic trends shape the type and makeup of the city’s population, determining demand for housing.

Total Population

Alice

Jim Wells Co.

19,549

41,920

Study Area 84,471

Age 0 to 4

1,746

8.9%

3,511

8.4%

6,627

7.9%

Age 5 to 9

1,528

7.8%

3,174

7.6%

6,295

7.5%

Age 10 to 14

1,462

7.5%

3,231

7.7%

6,530

7.7%

Age 15 to 17

888

4.5%

2,000

4.8%

4,061

4.8%

Age 18 to 20

812

4.2%

1,850

4.4%

3,666

4.3%

Age 21 to 24

1,130

5.8%

2,334

5.6%

4,484

5.3%

Demographic Trends

Age 25 to 34

2,555

13.1%

5,024

12.0%

10,290

12.2%

Age 35 to 44

2,295

11.7%

4,834

11.5%

10,144

12.0%

Age Groups

Age 45 to 54

2,246

11.5%

5,243

12.5%

11,394

13.5%

The chart to the right portrays the most current breakdowns in population by age in Alice, Jim Wells and the Study Area. The chart on the next page shows the same, but for 2000.

Age 55 to 64

2,167

11.1%

4,925

11.8%

10,189

12.1%

Age 65 to 74

1,439

7.4%

3,243

7.7%

6,215

7.4%

Age 75 to 84

898

4.6%

1,860

4.4%

3,328

3.9%

Age 85 and over

383

2.0%

691

1.7%

1,248

1.5%

Age 16 and over

14,497

74.2%

31,330

74.7%

63,641

75.3%

Age 18 and over

13,925

71.2%

30,004

71.6%

60,958

72.2%

Age 21 and over

13,113

67.1%

28,154

67.2%

57,292

67.8%

Age 65 and over

2,720

13.9%

5,794

13.8%

10,791

12.8%

2013 Estimated Median Age

33.64

34.67

35.28

2013 Estimated Average Age

36.15

36.55

36.58

We see the mean and median ages within all three areas per the last two decennial censuses. In 2000, Alice and Jim Wells County had mean ages of 35.23 and 34.71 respectively, with median ages at 32.9 and 32.78. In 2013, mean ages rose one year in Alice and almost two years in Jim Wells and the Study Area.

Also in 2013, median ages rose similarly. Alice increased almost one year, while the other two both increased just below two years.

Source: PCensus for Map Info, Tetrad Computer Applications 2013

9

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

The population is growing, but also getting older

Population by Age 2000 Estimated Population by Age Total Population

Alice

Jim Wells Co.

19,230

39,326

Study Area 77,102

Age 0 to 4

1,614

8.4%

3,230

8.2%

5,772

7.5%

Age 5 to 9

1,610

8.4%

3,350

8.5%

6,359

8.3%

Age 10 to 14

1,618

8.4%

3,559

9.1%

7,036

9.1%

Age 15 to 17

1,009

5.3%

2,215

5.6%

4,502

5.8%

Age 18 to 20

839

4.4%

1,701

4.3%

3,465

4.5%

Age 21 to 24

960

5.0%

1,843

4.7%

3,528

4.6%

Age 25 to 34

2,487

12.9%

4,840

12.3%

9,478

12.3%

Age 35 to 44

2,547

13.2%

5,598

14.2%

12,144

15.8%

Age 45 to 54

2,354

12.2%

4,747

12.1%

10,151

13.2%

Age 55 to 64

1,604

8.3%

3,375

8.6%

6,373

8.3%

Age 65 to 74

1,358

7.1%

2,667

6.8%

4,603

6.0%

Age 75 to 84

874

4.5%

1,622

4.1%

2,713

3.5%

Age 85 and over

356

1.9%

579

1.5%

978

1.3%

Age 16 and over

14,068

73.2%

28,460

72.4%

56,470

73.2%

Age 18 and over

13,379

69.6%

26,972

68.6%

53,433

69.3%

Age 21 and over

12,540

65.2%

25,271

64.3%

49,968

64.8%

Age 65 and over

2,588

13.5%

4,868

12.4%

8,294

10.8%

2000 Median Age

32.9

32.78

33.32

2000 Average Age

35.23

34.71

34.44

The biggest growth segments when evaluating Population by Age across all three areas are the 35 to 44 and the 55 to 64 ranges. They both claim greater than 3% more of the population than they claimed in 2000.

Looking at wider age ranges, we see growth in the Age 21 and Older as well as Age 18 and Older.

Literally, this is showing that working age people, above the youngest and oldest brackets are being added to the population. The numbers in the lowest age brackets are noticeably lower (small exception being 0-4 years). It is not a dramatic difference, but in the Study Area, the decrease in most of the younger ranges is less severe, suggesting that some are tending to move outside the County to put their school-aged children in different school districts.

Source: PCensus for Map Info, Tetrad Computer Applications 2013

10

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Alice Independent School District Enrollment One indicator of healthy economic growth is consistent growth in enrollment in the area school district. Alice ISD has been mostly growing, albeit slightly, since 2009: 

Since 2009 the district shows an increase in enrollment of almost 100 students (96), or a 1.8% increase.



2013 shows the second largest increase from the previous year (+37 students), with 2011 having the largest (+66 students).

Alice ISD Annual Enrollment Year

Enrollment

Change

% Change

2009

5,383

2010

5,389

+6

0.1%

2011

5,455

+66

1.2%

2012

5,442

(13)

(.2%)

2013

5,479

+37

.6%

Source: AISD Superintendent

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Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Education Educational attainment is represented in the two tables below. The first table shows a snapshot from 2013 and the one on the following page shows the same categories from 2000.

Alice saw the following breakdowns in 2013:

Population by Educational Attainment - 2013

 32% were not High School graduates  63.2% had no College education  14.6% had an Associate Degree or higher

Alice 2013 Estimated Population Age 25

Jim Wells

11,983

25,820

Study Area 52,808

-Less than 9th grade

1,894

15.8%

3,842

14.9%

6,285

11.9%

Some High School, no diploma

1,914

16.0%

3,768

14.6%

6,739

12.8%

 29.5% were not High School graduates.

High School Graduate (or GED)

3,757

31.4%

8,425

32.6%

15,559

29.5%

 62% had no College education

Some College, no degree

2,663

22.2%

5,694

22.1%

13,556

25.7%

 15.9% had an Associate Degree or higher

Associate Degree

565

4.7%

1,340

5.2%

3,049

5.8%

Bachelor's Degree

788

6.6%

1,805

7.0%

4,974

9.4%

Master's Degree

302

2.5%

700

2.7%

2,008

3.8%

Professional School Degree

83

0.7%

207

0.8%

431

0.8%

 54.2% had no College education

Doctorate Degree

17

0.1%

39

0.2%

207

0.4%

 20.2% had an Associate Degree or higher

Source: PCensus for Map Info, Tetrad Computer Applications 2013

Jim Wells County had the following in 2013:

The Study Area had the following in 2013:  24.7% were not High School graduates

So we generally see the education levels slightly increase when comparing outward, City to County, and County to Study Area.

12

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Alice had the following breakdowns in 2000:

Educational Attainment - 2000

 35.7% were not High School graduates  66.3% had no College education

Housing Study

Alice

Jim Wells

2000 Population Age 25+

11,580

Less than 9th grade

1,921

16.6%

4,101

17.5%

6,507

14.0%

Some High School, no diploma

2,213

19.1%

4,195

17.9%

7,231

15.6%

 35.4% were not High School graduates.

High School Graduate (or GED)

3,544

30.6%

7,553

32.2%

14,223

30.6%

 67.6% had no College education

Some College, no degree

2,089

18.0%

4,224

18.0%

9,808

21.1%

 14.4% had an Associate Degree or higher

Associate Degree

412

3.6%

825

3.5%

2,167

4.7%

Bachelor's Degree

956

8.3%

1,677

7.2%

4,581

9.9%

Master's Degree

303

2.6%

573

2.5%

1,356

2.9%

Professional School Degree

113

1.0%

182

0.8%

404

0.9%

Doctorate Degree

29

0.3%

98

0.4%

163

0.4%

 15.8 had an Associate Degree or higher Jim Wells County had the following in 2000:

The Study Area had the following in 2000:  29.6% were not High School graduates.  60.2% had no College education  18.8% had an Associate Degree or higher

23,428

Study Area 46,440

Source: 2000 Census

Similar to 2013 conditions, all geographies in 2000 trended mostly parallel in relation to one another. There were many positive trends regarding educational attainment. In Alice, Jim Wells County and the Study Area, the percentage of population without a High School diploma dropped. Alice dropped 3% while the County and Study Area dropped 5%. Those never attending College saw a similar change with Alice dropping 3.3% and the other areas dropping between 5.5-6%.

The Associate Degrees and higher segments slightly dropped in Alice but rose in the other two areas.

The biggest area of improvement is within the Some College classification. Each of the areas increased the percentage of people with Some College greater than 4%. Alice gained almost 600 people, Jim Wells gained 1,400, and the Study Area gained over 3,700. The biggest takeaway from analyzing educational attainment is that all these populations are generally better educated and in theory, should be filling jobs with a higher income potential and desiring nicer housing options.

13

Alice-Jim Wells County Economic Development Corporation– Alice, TX

2013 Estimates - Household Income

Income Trends The next two pages show income levels in 2013 and 2000. This table to the right breaks out different income levels at the Household level. Here are some important statistics to note: 







37.5% of families in Alice have annual incomes below $25,000. All levels below $25,000 drop as you compare city to county and then county to region. (Jim Wells has 35.8% and the Study Area has 28.2%) Income ranges from $25,000 to $75,000 tend to be relatively flat when comparing city to county and county to region Income ranges from $75,000 to $150,000 grow fairly dramatically as you compare similarly indicating that many with higher incomes are choosing to live outside of the city and county Mean incomes are similar between Alice and the County but jump over $10,000 in the Study Area. Median incomes drop substantially across all areas as the highend salaries obviously are skewing the mean incomes.

Housing Study

2013

Alice

Jim Wells Co. 14,421

Study Area

2013 Estimated Households

6,810

28,909

Less than $15,000

1,496

22.0%

3,113

21.6%

4,474

15.5%

$15,000 to $24,999

1,058

15.5%

2,045

14.2%

3,673

12.7%

$25,000 to $34,999

867

12.7%

1,809

12.5%

3,269

11.3%

$35,000 to $49,999

905

13.3%

2,051

14.2%

4,081

14.1%

$50,000 to $74,999

1,198

17.6%

2,275

15.8%

4,993

17.3%

$75,000 to $99,999

562

8.3%

1,299

9.0%

3,054

10.6%

$100,000 to $124,999

368

5.4%

884

6.1%

2,798

9.7%

$125,000 to $149,999

91

1.3%

300

2.1%

912

3.2%

$150,000 to $199,999

133

2.0%

459

3.2%

1,023

3.5%

$200,000 to $249,999

42

0.6%

73

0.5%

266

0.9%

$250,000 to $499,999

63

0.9%

85

0.6%

302

1.0%

$500,000 or more

27

0.4%

28

0.2%

64

0.2%

Average Household Income

$51,132

$51,932

$62,080

Median Household Income

$34,815

$36,781

$46,168

Source: PCensus for Map Info, Tetrad Computer Applications 2013

14

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Comparing 2000 income levels to current ones, some interesting takeaways are:

2000 Estimates - Household Income Alice

Jim Wells

2000 Estimated Households

6,431

Less than $15,000

1,788

27.8%

3,539

27.3%

5,329

21.2%

$15,000 to $24,999

957

14.9%

2,162

16.7%

3,733

14.9%

$25,000 to $34,999

998

15.5%

2,036

15.7%

3,333

13.3%

$35,000 to $49,999

1,008

15.7%

2,061

15.9%

4,223

16.8%

$50,000 to $74,999

974

15.2%

1,893

14.6%

4,487

17.9%

$75,000 to $99,999

402

6.3%

724

5.6%

2,259

9.0%

$100,000 to $149,999

196

3.1%

375

2.9%

1,279

5.1%

$150,000 to $249,999

89

1.4%

146

1.1%

340

1.4%

$250,000 to $499,999

16

0.3%

30

0.2%

98

0.4%

3

0.1%

5

0.0%

40

0.2%

$500,000 or more 2000 Average Household Income 2000 Median Household Income

12,971

Study Area 25,121

$38,411

$37,225

$45,442

$29,714

$28,853

$35,588

 Average and median household incomes have not increased substantially from 2000 to 2013. Both have not grown at a rate comparable to inflation.  Household incomes in 2013 represented similar trends seen in 2000 incomes - lower income households chose to live in Alice or Jim Wells County while households earning higher incomes chose to live outside the county  However, in 2013, this income disparity was more dramatic as incomes between $100,000 and $200,000 were more likely to reside in the wider Study Area relative to 2000.

Source: 2000 Census

15

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Total Housing Stock According to the 2013 revised census figures, total housing units in Alice are estimated to be 7,548. This table displays the composition of the entire housing stock.  A majority of total housing units are single-unit, detached (>75%).  Of the multi-unit structures, a majority come from structures with less than 20 units (53%).  There are not too many differences between the housing stock comparisons between the different areas. Minus mobile homes in the county outside the city, the breakdown of structures is very comparable and consistent.

Housing Study

Housing Stock by Structure Type Alice 2013 Estimated Housing Units

Jim Wells Co.

7,548

16,690

Study Area 32,510

1 Unit Attached

57

0.8%

112

0.7%

339

1.0%

1 Unit Detached

5,675

75.2%

12,216

73.2%

23,663

72.8%

2 Units

361

4.8%

441

2.6%

733

2.3%

3 or 4 Units

228

3.0%

292

1.8%

913

2.8%

5 to 19 Units

405

5.4%

701

4.2%

1,792

5.5%

20 to 49 Units

38

0.5%

74

0.4%

329

1.0%

50 or More Units

112

1.5%

122

0.7%

371

1.1%

Mobile Home or Trailer

672

8.9%

2,732

16.4%

4,346

13.4%

0

0.0%

0

0.0%

24

0.1%

Boat, RV, Van, etc.

Source: PCensus for Map Info, Tetrad Computer Applications 2013

16

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Age of Housing Stock

Age of Housing Stock – 2013 Estimates Alice 2013 Estimated Housing Units

Jim Wells Co.

7,548

16,690

Study Area 32,510

2005 or later

258

3.4%

748

4.5%

1,949

6.0%

2000 to 2004

360

4.8%

1,065

6.4%

2,313

7.1%

1990 to 1999

635

8.4%

2,365

14.2%

4,723

14.5%

1980 to 1989

1,020

13.5%

2,484

14.9%

6,395

19.7%

1970 to 1979

1,388

18.4%

3,179

19.1%

6,609

20.3%

1960 to 1969

1,008

13.4%

1,942

11.6%

3,681

11.3%

1950 to 1959

1,560

20.7%

2,252

13.5%

3,242

10.0%

1940 to 1949

874

11.6%

1,461

8.8%

1,973

6.1%

1939 or Earlier

445

5.9%

1,194

7.2%

1,625

5.0%

Median Year Structure Built

1969

Source: PCensus for Map Info, Tetrad Computer Applications 2013

1975

1979

Per 2013 figures, here are some notable statistics regarding the age of the housing stock:  Only 3.4% of structures in Alice have been built since 2005 (4.5% in the county and 6% in the study area)  Only 16.6% of housing units are have been built since 1990 (25.1% in the county and 27.6% in the study area)  51.6% of structures in Alice are built in or before 1969.

Compared to 41% in the County and 32% in the Study Area  Over 38% of structures in Alice are built in or before 1959. Over 29% in County and 21.1% in the Study Area  The estimated median year built gets more current as you widen your analysis – 1969 is the estimated median year built in Alice, County is 1975 and Study Area is 1979

17

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Housing Unit Profile – 2012 5-Year American Community Survey Subject Total housing units HOUSING OCCUPANCY Occupied housing units Vacant housing units Homeowner vacancy rate Rental vacancy rate UNITS IN STRUCTURE 1-unit, detached 1-unit, attached 2 units 3 or 4 units 5 to 9 units 10 to 19 units 20 or more units Mobile home YEAR STRUCTURE BUILT 2010 or later 2000 to 2009 1990 to 1999 1980 to 1989 1970 to 1979 1960 to 1969 1950 to 1959 1940 to 1949 1939 or earlier

Jim Wells County # % 16,124

Alice, Texas # % 7,471

13,515 2,609 1.7% 6.5%

83.8% 16.2%

6,640 831 2.3% 6%

88.9% 11.1%

11,680 118 415 297 443 222 227 2,722

72.4% 0.7% 2.6% 1.8% 2.7% 1.4% 1.4% 16.9%

5,736 59 349 278 345 222 214 268

76.8% 0.8% 4.7% 3.7% 4.6% 3.0% 2.9% 3.6%

15 1,965 2,236 2,349 3,159 2,146 2,032 1,257 965

0.1% 12.2% 13.9% 14.6% 19.6% 13.3% 12.6% 7.8% 6.0%

0 636 359 1,025 1,578 1,188 1,295 894 496

0.0% 8.5% 4.8% 13.7% 21.1% 15.9% 17.3% 12.0% 6.6%

To assure of getting the most accurate account of what the current housing stock in Alice actually is, CDS pulled data from an additional source. The two tables on this page are from the American Community Survey DP04, which has figures averaged over a 5-year period of 2008-2012. Typically they have a slightly higher margin of error than the 2013 PCensus estimates and obviously are going to lag somewhat behind as the data averages out at 2-3 years older.

The years built and units in structure are very similar to data table two pages earlier. The only noticeable differences are in mobile home count.

Source: DP04: Selected Housing ACS 08-12 5Yr

18

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Tenure of Occupied Housing Units Examining the tenure of occupied housing units, there are a few trends that are notable:

Housing Study

Tenure of Occupied Housing Units 2013

Alice

Jim Wells Co.

Study Area

 Currently, the percentage of housing units that are owner-occupied are 64.5% in Alice. This is substantially lower than the same figure in 2000. Alice has 200 fewer owner-occupied units in 2013 than in 2000, while the total number of occupied housing units has grown by over 300. The percentage of owner-occupied vs. renter-occupied was 70.3% in 2000 and currently is 64.5%.

2013 Tenure of Occupied Housing Units

6,810

Owner-Occupied

4,392

64.5%

10,518

72.9%

20,952

72.5%

Renter-Occupied

2,418

35.5%

3,903

27.1%

7,957

27.5%

2000 Tenure of Occupied Housing Units

6,498

 At the county level, there has been a similar trend, as there is currently a larger percentage of renter-occupied relative to 2000 figures. The percentage is 3.6% higher, but unlike Alice, there is at least a gain in the quantity of owneroccupied which has seen growth of about 600 units (compared to 863 new renter-occupied units).

Owner-Occupied

4,592

70.3%

9,921

76.5%

18,790

75%

Renter-Occupied

1,906

29.7%

3,040

23.5%

6,302

25%

 The wider Study Area is very similar to the county, seeing the number of owner-occupied units grow, but seeing the percentage of renteroccupied units grow faster. The net change has been that renter-occupied units now represent 27.5% of the market vs having been 25% of the market in 2000.

2013 Average Household Size 2000

2000 Average Household Size Difference Tenure of Occupied Housing Units

14,421

2.83

28,909

2.88

Alice

2.88

Jim Wells Co. 12,961

2.93

25,092

2.98

Alice

2.98

Jim Wells Co.

312

Study Area

1,460

Study Area 3,817

Owner-Occupied

(200)

-5.8%

597

-3.6%

2,162

-2.5%

Renter-Occupied

512

5.8%

863

3.6%

1,655

2.5%

Average Household Size

-0.10

-0.10

-0.10

Source: PCensus for Map Info, Tetrad Computer Applications 2013, Census 2000

19

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Single Family Permits SF Permits

2004 36

2005 72

2006 46

2007 31

2008 29

2009 9

2010 14

2011 17

2012 31

2013 26

Total $ Amt

$ 2,520,708

$ 4,948,451

$ 5,015,480

$ 5,538,127

$ 3,024,800

$ 1,168,968

$ 1,602,383

$ 1,946,138

$ 3,386,662

$ 3,234,054

Avg $ Amt

$

$

$ 109,032

$ 178,649

$ 104,303

$ 129,885

$ 114,456

$ 114,479

$ 109,247

$ 124,387

70,020

68,728

1 Yr Growth

-

-1.8%

58.6%

63.9%

-41.6%

24.5%

-11.9%

0.0%

-4.6%

13.9%

2 Yr Growth

-

-

55.7%

159.9%

-4.3%

-27.3%

9.7%

-11.9%

-4.6%

8.7%

3 Yr Growth

-

-

-

155.1%

51.8%

19.1%

-35.9%

9.8%

-15.9%

8.7%

4 Yr Growth

-

-

-

-

49.0%

89.0%

5.0%

-35.9%

4.7%

-4.2%

5 Yr Growth

-

-

-

-

-

85.5%

66.5%

5.0%

-38.8%

19.3%

6 Yr Growth

-

-

-

-

-

-

63.5%

66.6%

0.2%

-30.4%

7 Yr Growth

-

-

-

-

-

-

-

63.5%

59.0%

14.1%

8 Yr Growth

-

-

-

-

-

-

-

-

56.0%

81.0%

9 Yr Growth

-

-

-

-

-

-

-

-

-

77.6%

Source: City of Alice Permitting Department

Single Family Permits CDS evaluated single-family permit data over the last ten years in the city of Alice. The table above shows the volume of permits has heavily decreased since 2005. Even with the population and job growth over the past four years, the city is averaging just over 20 new single-family permits per year. Besides the drop or lack of activity in the volume of permits, there is a decent increase in the dollar value of permits. The chart above shows the increases in values of permits. Over the last year there has been a 13.9% increase in average value per permit.

Compared to five years ago, the average value is up almost 20%, and up >80% relative to 2005. While the increases are not dramatic, it does indicate that supply might be a bit tight as costs are trending up at the same time as number of permits is declining. On the next page, the trends in single-family permits in volume and average annual dollar amount are graphically shown.

20

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Single-Family Permits 80 70 60 50 40

SF Permits - Avg $ Value

30 20

$200,000

10

$180,000

0 2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

$160,000 SF Permits

$140,000

3 yr moving average

$120,000 $100,000 $80,000 $60,000 $40,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Avg $ Amt

3 yr moving average

21

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Household Projections

Household Type 2000

Alice

Jim Wells County

2000 Households

6,435

Family Households

4,962

77.1%

10,102

77.9%

19,836

79.1%

Non-family Households

1,473

22.9%

2,859

22.1%

5,256

21.0%

2013

12,961

Study Area

Alice

25,092

Jim Wells County

2013 Households

6,810

Family Households

5,050

74.2%

10,832

75.1%

21,989

76.1%

Nonfamily Households

1,760

25.8%

3,589

24.9%

6,920

23.9%

2000 vs 2013 Gains

14,421

Study Area

Alice

28,909

Jim Wells County

Study Area

Households

375

5.8%

1,460

11.3%

3,817

15.2%

Family Households

88

1.8%

730

7.2%

2,153

10.9%

Nonfamily Households

287

19.5%

730

25.5%

1,664

31.7%

Difference in Nonfamily Growth and Family Growth

199

0

(489)

% new HH (family)

23.5%

50%

56.4%

% new HH (nonfamily)

76.5%

50%

43.6%

Source: PCensus for Map Info, Tetrad Computer Applications 2013

To help towards forecasting growth in households, we look at the growth over the past two decennial censuses.  In the city of Alice since 2000, Households have grown by 375, or 5.8%. Jim Wells County has grown by 1,460 (11.3%) and the wider Study Area has grown by 3,817 (15.2%).  More significantly, when comparing family vs. nonfamily households, we see larger differences between the different areas. o

Alice- Family HH increases by 1.8%

o

County- Family HH increases by 7.2%

o

Study Area- Family HH grows by 10.9%

 Nonfamily households saw much higher percentage growth than family households o

Alice- Nonfamily HH increases by 19.5%

o

County- Nonfamily HH increases by 25.5%

o

Study Area- Nonfamily HH grows by 31.7%

 Nonfamily growth in all areas was higher than family growth, but was very different regarding its percentage growth o

Alice- Over ¾ of HH growth was nonfamily

o

County- Half of HH growth was nonfamily

o

Study Area- 44% of HH was nonfamily

22

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Employment

8.0% 6.0% 4.0% 2.0%

Jim Wells

Nueces

3Q 2013

1Q 2013

3Q 2012

1Q 2012

3Q 2011

1Q 2011

3Q 2010

1Q 2010

0.0% 3Q 2009

Jim Wells County had the biggest hit from the recession in 2008, but recovered quite well. Neighboring Nueces County and the state of Texas have trended in the same direction since 2009, but Jim Wells County has witnessed the most dramatic turnaround, seeing unemployment cut by more than half (10.4% to 4.8%). Unemployment figures in Nueces County and Texas have dropped to 5.2% and 6.4%, respectively.

10.0%

1Q 2009

For the purpose of comparison, we look at Jim Wells County unemployment along with Nueces County and also statewide figures.

12.0%

3Q 2008

Job growth in this region has been phenomenal over the past few years. In Jim Wells County, unemployment hit a high of over 10% in 3Q 2009. It has since precipitously dropped to a rate of 4.8%. Refer to the table on the right to see the rate fluctuations since 2008.

Unemployment Rate

1Q 2008

Generally, the local employment base is the most important factor in analyzing the demand for housing in a community, as well as the principal driver of population and household trends. Furthermore they are a good base for initial analysis and indicator of future needs.

Texas

Source: Federal Reserve Economic Data

According to the latest monthly figure, which is not calculated into the quarterly number, Jim Wells County unemployment has dropped to 4.7%.

23

Alice-Jim Wells County Economic Development Corporation– Alice, TX

In the table on the right, jobs in Jim Wells County are identified according to NAICS Industry Sector.

The two largest current sectors are Mining, Quarrying, Oil & Gas Extraction and Health Care and Social Assistance both representing over 4,000 jobs.

Retail Trade, Accommodation and Food Service, Wholesale Trade, and Educational Services are the next four largest sectors each with over 1,200 jobs.

Mining, Quarrying, Oil & Gas Extraction, Manufacturing, Wholesale Trade, and Professional and Technical Services are the sectors showing the most percentage growth in number of jobs added over the past five years.

Transportation and Warehousing has shown high percentage growth over the past three years.

Since 2009, there have been nearly 4,000 new jobs created.

Approximately 2,300 of those jobs are in Mining, Quarrying, Oil & Gas Extraction.

Manufacturing and Wholesale Trade have added about 400 jobs each.

Housing Study

Jobs by Industry Sector NAICS Industry Sector Agriculture, Forestry, Fishing & Hunting

2008

2009

2010

2011

2012

2013

278

267

270

260

234

215

Mining, Quarrying, Oil & Gas Extraction

4,124

2,486

2,775

4,013

5,052

4,822

Utilities

79

77

69

66

56

68

Construction

541

484

495

609

538

483

Manufacturing

410

339

466

656

795

754

Wholesale Trade

1,031

868

1,090

1,318

1,502

1,318

Retail Trade

1,666

1,583

1,601

1,622

1,635

1,668

Transportation and Warehousing

936

802

637

897

935

820

Information

89

80

62

64

75

88

Finance and Insurance

376

376

412

409

404

422

Real Estate and Rental and Leasing

528

402

424

534

521

579

Professional and Technical Services

237

282

306

381

375

338

Administrative and Waste Services

251

257

285

350

351

296

Educational Services

1,296

1,323

1,317

1,300

1,255

1,294

Health Care and Social Assistance

4,145

4,301

4,392

4,298

4,252

4,135

Arts, Entertainment, and Recreation

95

97

80

91

94

95

Accommodation and Food Services

1,295

1,299

1,331

1,360

1,393

1,442

Other Services, Ex. Public Admin

358

296

290

330

359

342

Public Administration

486

483

503

501

504

515

-

2

-

10

10

4

18,234

16,111

16,960

19,255

20,569

19,896

Unclassified Total, All Industries Source: Tracer2, Texas Workforce Commission

Jobs By Industry Sector 6,000

5,000

24

Alice-Jim Wells County Economic Development Corporation– Alice, TX

In the table to the right, average weekly wages according to NAICS Industry Sector in Jim Wells County are listed.

Housing Study

Industry Sector Wage Levels NAICS Industry Sector

2008

2009

2010

2011

2012

2013

Agriculture, Forestry, Fishing & Hunting

$536

$559

$600

$700

$734

$730

Mining, Quarrying, Oil & Gas Extraction, Utilities, Wholesale Trade, Real Estate, Manufacturing, and Transportation and Warehousing represent the highest average wages per industry sector.

Mining, Quarrying, Oil & Gas Extraction

$1,418

$1,246

$1,508

$1,655

$1,652

$1,654

Utilities

$941

$857

$1,758

$869

$956

$1,198

Construction

$553

$554

$595

$807

$672

$707

Manufacturing

$881

$647

$912

$1,077

$1,021

$1,049

Wholesale Trade

$871

$853

$1,264

$1,146

$1,091

$1,128

Retail Trade

$419

$413

$455

$493

$514

$528

Those same six industries have shown the biggest percentage gains in average wages along with Administrative and Waste Services.

Transportation and Warehousing

$877

$776

$847

$1,001

$1,030

$954

Information

$555

$543

$672

$652

$606

$600

Finance and Insurance

$738

$726

$704

$773

$751

$831

Real Estate and Rental and Leasing

$1,049

$962

$1,162

$1,049

$990

$1,101

Professional and Technical Services

$661

$1,249

$727

$834

$880

$971

Administrative and Waste Services

$516

$467

$566

$707

$696

$850

Educational Services

$753

$634

$650

$673

$665

$651

Health Care and Social Assistance

$398

$420

$436

$455

$422

$440

Arts, Entertainment, and Recreation

$307

$298

$333

$317

$302

$328

Accommodation and Food Services

$231

$220

$233

$245

$241

$242

Other Services, Ex. Public Admin

$448

$448

$517

$592

$802

$633

Public Administration

$670

$686

$673

$766

$748

$793

-

$502

-

$571

$423

$825

$755

$647

$753

$870

$902

$905

Though 2013 does not show an increase in wage levels for Mining, wages are very high averaging over $80,000 per year. As stated previously, this sector has also shown the greatest growth since 2008 and is also the largest single industry sector in terms of total employment.

Overall, all industries are seeing notable increases in wage levels over the past several years. The average wage has grown from $647 in 2009 to over $900 in 2013, more than a 39% increase.

Unclassified Total, All Industries Source: Tracer2, Texas Workforce Commission

25

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Employment Projections

Employment 2012-2013

Year 2012 2013

Jim Wells County 26,810 27,153

Change 343

% 1.3%

Coastal Bend 324,376 333,277

Change 8,901

% 2.7%

Texas 15,035,360 15,465,210

Change 429,850

% 2.9%

Source: Texas Workforce Commission

The projections for the Jim Wells County, as well as regional and statewide are positive. 





Over the next year, Jim Wells is expecting 4.7% growth, more than 60% above the already aggressive rate for Texas (almost 1,300 jobs).

CDS Market Research has analyzed the forecasted job growth for Jim Wells County as well as the Coastal Bend Region which includes Aransas, Bee, Brooks, Duval, Jim Wells, Kenedy, Kleberg, Live Oak, McMullen, Nueces, Refugio, and San Patricio Counties. The table to the left shows employment growth between 2012 and 2013. Jim Wells did see modest growth, while the region and state saw even higher growth.

Employment Projections 2013-2023 Year

Jim Wells

Change

%

Coastal Bend

Change

%

Texas

Change

%

2013

27,153

343

1.3%

333,277

8,901

2.7%

15,465,210

429,850

2.9%

2014

28,429

1,276

4.7%

342,132

8,855

2.7%

15,909,667

444,457

2.9%

Over the next five years, Jim Wells percentage job growth is more than 50% above regional and state percentage projections (over 4,400 jobs)

2015

29,472

1,043

3.7%

349,693

7,561

2.2%

16,295,591

385,924

2.4%

2016

30,352

880

3.0%

356,350

6,657

1.9%

16,640,485

344,894

2.1%

2017

31,112

760

2.5%

362,341

5,991

1.7%

16,954,984

314,499

1.9%

2018

31,564

452

1.5%

366,617

4,276

1.2%

17,190,119

235,135

1.4%

Over the next ten years, Jim Wells is projected to add over 7,180 jobs, or greater than 26% of the current work force

2019

32,246

682

2.2%

372,810

6,193

1.7%

17,497,985

307,866

1.8%

2020

32,857

611

1.9%

378,543

5,733

1.5%

17,786,159

288,174

1.6%

2021

33,406

549

1.7%

383,862

5,319

1.4%

18,056,553

270,394

1.5%

2022

33,898

492

1.5%

388,810

4,948

1.3%

18,310,920

254,367

1.4%

2023

34,340

442

1.3%

393,429

4,619

1.2%

18,550,892

239,972

1.3%

Source: Texas Workforce Commission

26

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

 Over the next five years, Jim Wells is expecting growth >60% above the region’s projections and 45% above the state’s

Employment 2013-2023 Region Jim Wells

2013 27,153

2018 31,564

2023 34,340

5 yr gain 16.2%

10 yr gain 26.5%

Coastal Bend

333,277

366,617

393,429

10.0%

18.0%

15,465,210

17,190,119

18,550,892

11.2%

20.0%

State

Source: Texas Workforce Commission

 Over the next ten years, Texas is outpacing the United States in job growth projections by 50% and Jim Wells County is outpacing Texas’ and regional projections by over 30% and 40%, respectively  The basis points differential for Jim Wells percentage job growth is as follows: Over three years – 700 points over US and 400 points over Texas

There are very impressive numbers regarding employment projections in Jim Wells County. Some important takeaways to note are:  Jim Wells County alone is forecasted to gain 3,200 jobs in 3 years or by the end of 2016 (11.7% jobs gain)  Jim Wells County alone is forecasted to gain 4,411 jobs by the end of 2018 (16.2% jobs gain)  Jim Wells County is forecasted to gain an additional 2,776 jobs between 2018 and 2023 (9% gain for those five years, <26.5% gain for the entire ten year period)  The unemployment rate is currently at 4.7% and the most recent count of the county’s civilian work force was 24,879.

36,000

Jobs - Jim Wells County

34,000 32,000 30,000 28,000 26,000 24,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Source: Texas Workforce Commission

27

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Economic Impact of the Eagle Ford Shale A study was performed by the Center for Community and Business Research at The University of Texas at San Antonio’s Institute for Economic Development. In 2010, this study was initiated to quantify the economic impacts of Eagle Ford Shale on the region and forecast future impacts through 2020. It has been updated in each year since with the most recent coming in March 2013 to show the actual impacts on the region in 2012 and forecast other benefits through 2022.

This study has been adjusted to focus specifically on the impacts of 14 producing counties that are the most active in the Eagle Ford Shale development area: Atascosa, Bee, DeWitt, Dimmit, Frio, Gonzales, Karnes, La Salle, Live Oak, Maverick, McMullen, Webb, Wilson, and Zavala. In addition, significant activity beyond exploration and drilling is occurring in six adjacent counties and are included in the analysis: Bexar, Jim Wells, Nueces, San Patricio, Uvalde and Victoria.

The latest report includes a 2012 update of direct, indirect and induced economic impacts by county in the 14-county and 20-county regions of the Eagle Ford Shale. For the 14-county region, the 2012 economic impact was estimated to be over $46 billion, supporting 86.000 jobs. For the larger 20-county area, Eagle Ford Shale activity generated over $61 billion in economic impact and supported 116,000 jobs in 2012. Looking ahead to 2022, the 14-county area is expected to generate approximately $61 billion in economic impact and support over 89,000 jobs. In the 20-county area, the economic impact in 2022 is projected to be over $89 billion, supporting 127,000 jobs.

Besides the $61 billion dollar total economic impact in the 20-county region, other impact highlights include:  116,508 full-time jobs supported  $4.69 billion in payroll  $28.43 billion in Gross Regional Product (value added)  $1.01 billion in total local revenues  $1.24 billion estimated state revenue Some important excerpts from the 2013 report: Impacts on Jim Wells County 2012 Alice, Texas is preparing to reclaim its status as the “Hub City of South Texas”. In the 1920’s, due to its convenient location triangulated in the middle of Corpus Christi, Laredo, and San Antonio, Alice benefitted greatly from the oil and gas boom of the 1900s. Due to the emergence of the Eagle Ford Shale, Alice is again well positioned to benefit greatly from oil and gas extraction activities. In September 2012, Alice saw a $6 million surplus, allowing the city to put aside $4 million in order to build a new civic center. Due to increased oil and gas extraction activity, Jim Wells County has seen a total output of $67.65 million and a gross county product of $33.77 million. Activities related to Eagle Ford have brought 230 full-time employment positions with a total payroll of $10.39 million to Jim Wells County.

28

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

There is a footnote in the report that notes the following regarding calculated impacts to Jim Wells County specifically: The IMPLAN database relies on oil and gas sector linkages that may not reflect current relationships among different industrial sectors.

Something similar occurs with linkages among counties – some of these linkages may or may not reflect current developments in the area. In the case of the indirect impacts on Jim Wells County, there appears to be a very important underestimation of the impacts.

Based on some regressions measuring the impacts of sales from the 14-county area on Jim Wells County sales, and other regressions measuring the impacts on commuter workers from Jim Wells, it is clear that these impacts underestimate the observable effects of Eagle Ford in this county. We estimate that the impacts could be between three to six times higher than those presented here.

Impacts on Jim Wells County 2022 As Alice, Texas begins the updates on their airport and plans to construct a $4 million civic center, it’s clear that the city does not see the benefits of the Eagle Ford Shale halting any time soon. With the estimated total output for 2022 being $87.68 million, it’s easy to see they know what they’re doing. Even ten years later, the Eagle Ford will create 285 new jobs in Jim Wells County, with a payroll total of $13.12 million. The gross county product estimated for 2022 will be slightly under $43 million, roughly a 27% increase in value added to the economy since 2012.

It is important to note that 2022 Impacts on Jim Wells County contain a similar footnote to the 2012 Impacts that all impacts are likely underestimated and could be between three to six times higher than presented.

The full report can be accessed at http://ccbr.iedtexas.org/efs-economic-impact-2013.

Recent Investment in the Study Area There have been some remarkable local investments in infrastructure and quality of life improvements in the city of Alice. 

$5.4 million capital improvement project at Alice International Airport, including partial reconstruction of two taxiways and reconstruction of the fuel apron. It also includes placing a seal coat on all full strength pavements, re-grading of drainage ditches, replacement and installation of runway and taxiway lighting systems, approach aids, wind cones, and electrical vault and installation.



$15 million capital investment in a mixed-use quality of life investment on the West side of town (W of US 281, S of State Highway 44). o

Development and Training Center

29

Alice-Jim Wells County Economic Development Corporation– Alice, TX



o

o



Upscale Hotel with up to 105 guestrooms



Lobby restaurant, pool, fitness center and a business center

Natatorium Swim Center

Interactive water features, water slides, deck space, shade features, splashpads, wading areas, lazy river, water toys and structures

Alice Amphitheater 

o

28,560 square feet (eight-lane pool, diving well, moveable bulkhead, spectator seating, offices restrooms, locker rooms, classroom, storage)

Leisure Pool 

o

20,000 total square feet (ballroom, meeting rooms, board room, common pre-function space, kitchen, storage and outdoor gathering area)

Select-Service Hotel (Attached to Development Center)



o

Housing Study

Live music and entertainment venue

Future Recreational Facilities

This is going to be a state of the art facility which is the first local investment of its type in Alice. It is aiming to be a destination on the west side of town. The aerial of the finished product is below with a couple recent pictures taken of the project currently under construction.

30

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Realtor Focus Group Summary CDS met with three realtors initially in a focus group setting. Beyond that, at least six other realtors were consulted and some of their comments are blended into the takeaways below.

Key Takeaways 

There is strong current demand for for-sale single-family housing and rental housing, especially for rentals. All in the focus group along with other realtors contacted claim to have buyers/renters “lining up”.



Oil and gas industry is a major force driving the demand but there are plenty other industries represented by buyers (Education, Health Care, Government)



In Alice, the rental market is scarce as there are zero current listings. Several examples were given of companies essentially turning homes into dorms in order to house up to ten employees. Standard single family rentals can draw high rates due to lack of availability ($1,200-1,500 per month).



In Alice, the range of prices buyers are willing to pay varied between the realtors. Ranges of the market’s “sweet spot” were listed as $100-$180K, $130-$150K, $125-$165K. Buyers expect 1,500 sq ft minimum with 1,800-1,900 sq ft being ideal. The ideal floor plan is 3 bed/2 bath. Outside the initial focus group, other realtors often cited the ideal price range being $140-$175K in Alice. Anything over $190-$200K will have a hard time selling.



Orange Grove and Calallen were cited as alternatives to Alice that had been drawing away home buyers for some time. Higher quality of schools was the primary issue for their attractiveness (Calallen ISD, Tuloso-Midway ISD were mentioned in particular).



In Calallen, which was cited by most realtors as the most attractive suburban housing market, the ranges of the market’s sweet spot for pricing were slightly higher than in Alice. $125-$175K and $150-$175K were two specific ranges stated and two others claimed anything under $200K would be in demand.

Developer/Builder Interviews CDS met with numerous developers/builders in Alice to get their opinions regarding the local housing market. Will Ochse, Newell Atkinson III, Matt, HJ, and Connie Moser, Larry Martinez and Pete Soliz were among those interviewed. Several other builders gave opinions but asked to remain anonymous.

31

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Key Takeaways 

A strong majority of people are bullish about the housing market in Alice.



A couple individuals believe that the rental market is the only hot market, but a few others believe demand is there for buyers too.



There are challenges to building homes based on someone always being able to undercut on price.



Some viewed the city as giving inconsistent messages and not following though regarding incentives to develop.



A couple individuals cited that there is a major drug problem in Alice that keeps many from wanting to live in the city. In their opinions, no serious growth will ever come to Alice until this problem is eradicated.



There is a disconnect between buyers’ perceptions and the market rate of single-family housing. Buyers want more house than can be reasonably obtained at their budget. People in Alice are typically not open to spending much for housing.



As a developer, it is almost impossible to make money unless you already own the land.



Some thought that construction costs in Alice were excessively high.



Schools in Alice are fair. They are not a draw, but also not a complete deterrent.



There are certain challenges for qualified buyers getting loans because of appraisal issues. This was said to arise from bad comparisons or in cases of new homes, absence of comparisons.

32

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Single-Family Developments After evaluating at the current housing stock, CDS evaluated some single-family developments in Alice and Calallen to gauge what might be coming to the market in the near and intermediate term.

Alice        

Northwest corner of Goliad and Main. 11 of 15 lots have been sold. The lots range in size from 52’x214’ to 63’x214’. Their asking price is $27,500 to $31,500.

Mesquite Estates – Phase 1 is to include 27 lots, with the entire development eventually offering 160 lots. Lot sizes range from 68’x125’, 70’x125’, and 75’x125’. This is located at Sea Breeze St and Stadium Rd. Prices for lots range from $27,000-$29,500. The developers are getting a lot of calls and expect to have all 160 lots sold within 2.5 years.

Deer Meadow Estates – Formerly a large lot development (1-5 Acres), 40 lots were sold with approximately 10 homes now built, one under construction, and six more to come soon. 43 lots are in the process of being approved (all half acre lots) and 47 more half acre lots are possibly to be developed in future phases.

Green Acres – South of Alice, just north of Ben Bolt. 70 half acre lots potentially are to be developed. They will be on city water and have septic systems.

At the corner of Cecelia and Business 281, there is a plan to build 67 townhomes, in phases of 22, 22, and 23 units. The owners are still working through some site plan issues, and construction has not started.

North of the Alice Municipal Golf Course is the approximate location for a quad-plex development with 24 buildings or 96 living units. It was to be developed on the west side of town at Goliad and Easterling, but the deal fell through. The new location is thought to be one year away from development.

East of US 281, between Easterling and 116, there are 284 acres owned by Enrique Guzman. There are plans for this to be a large residential housing development along with retail/commercial pads on US 281. Currently utilities do not reach the site.

On the west side of town, west of US 281, bordered on the south by FM 2507 and the north by SH 44, there are 380 acres owned by CHW-Lattas Creek LP, represented by Mr. Will Ochse. Some acreage was donated to the city, and some acreage was purchased by the city. This is the location for Alice’s new $15million multi-use center that includes a natatorium, an amphitheater, etc. No specific plans exist regarding single-family or multifamily development, but there will likely be portions designated for such uses in the future. There are 132 acres north of SH 44 owned by the same group. There are no announced plans for this site yet.

33

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Calallen  Wood Oaks – Developed by Fox. Most homes in Wood Oaks are built by Fox while some are built by Braselton Homes. Currently 60 foot lots are being developed and built on. The last phase of 20 homes is almost sold out and another 20 homes are coming this year.

Current listings range from $180-$240K and sales have been approximately three to five per month.  Northwest Crossing – Developed by Hogan Development Company, all homes here are built by Hogan Homes. Approximately 500 lots have been sold since 2007 with about 80-100 lots coming in the future. Current listings range from $166-$202K and sales have been approximately three to seven per month.

34

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Housing Market Trends – Single Family Existing Home Market CDS was able to compile sales data from Alice Board of Realtors with the help of K. Stewart Realty, LLC. Data was retrieved for all of Jim Wells County, of which over 93% of sales were in Alice, TX. Annual sales data goes back as far as 2009. There are a number of takeaways from the data, particularly over the past 24 months.

Days on Market (DOM)

Days on Market

DOM is a telling statistic in evaluating the level demand in an area’s housing market.

200 180



In 2011, Average DOM was 184 - In 2013, it was 153 (17% drop).

160



The average and median DOM in Alice has been dropping the last 3 years, albeit slight. Average is down 13%, Median is down just over 7%.



Over the past year the DOM stats are flat.

140 120 100

80 60 2009

2010

Avg DOM

2011

2012

Med DOM

2013

Coming out of the recession, DOM shot up to an unusually high level of over 180 days by 2011 as the unemployment rate was just recovering from its peak of around 10% in 2010. Currently, realtors in the area claim that the seemingly high DOM is not indicative of true demand and that it is partially skewed by some high outliers.

Source: Alice Board of Realtors

35

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Sales Price Trends

Sales Price

Sales prices in general have been rising in the local market. Refer to the chart to the right to see average and median prices over the past four years  In the last year, median sales prices have risen by 12% and average prices have risen 9%  In the last three years, median prices are up 52% and average prices have are up 46%

$150,000 $140,000 $130,000 $120,000 $110,000 $100,000 $90,000

 The median and average increases over the entire course of our data rose by 42% and 23%, respectively

$80,000 $70,000

$60,000

Similarly to DOM analysis, discussions with brokers claim this data to be lagging and not indicative of how hot the market is. Some believe that numerous housing units being converted to rentals is dramatically underselling the demand in the singlefamily housing market.

2009

2010 Average Sales $

2011

2012

2013

Median Sales $

Source: Alice Board of Realtors

Sales Price to List Price One more statistic to measure a particular real estate market is the Sales Price to List Price ratio.

96.0% 95.0%

 From 2010 to 2012, the ratio of sales to list price rose from just under 93% to almost 95%

94.0%

 Over the past year, however, the ratio of sales to list price has gone down a full percentage point (94.7% to 93.7%)

93.0% 92.0% 2009

2010

2011 Sales $/List $

2012

2013

 Since the market started recovering in 2010, the ratio is up almost a full percentage point

Source: Alice Board of Realtors

36

Alice-Jim Wells County Economic Development Corporationâ&#x20AC;&#x201C; Alice, TX

Housing Study

Conclusions â&#x20AC;&#x201C; Single-Family Market Factoring in the low activity of building over the past ten years, combined with the fact that Alice and Jim Wellsâ&#x20AC;&#x2122; current housing stock is old, and taking into account the future employment projections for the region, it does seem obvious that the area is ripe for new single-family development.

While there are needs for this type of housing, there are a few things to consider first; most importantly, currently planned expansions to supply.

According to CDS field research, there are over 400-600 lots forecasted to be possibly coming to the market over the next few years. Obviously not all planned developments will come to fruition, but there are plenty of planned developments currently in motion, and one should be aware of what will be hitting the market and when will it be delivered. If a couple of the bigger plans bring 100+ lots to the market, even with the current and future growth projections, it could take a while for a small market to absorb.

Realtors, though optimistic about the current market, still say the market currently averages 4-6 sales per month and the current housing inventory is approximately 8-10 months. So again, while demand is projected to be high, anyone looking to deliver future lots to the market should be aware of the current activity.

Pricing for single-family housing is very price sensitive in this market, and should be kept under $200,000. All signs point to this market typically desiring houses in the $130,000 to $180,000 price range.

37

Alice-Jim Wells County Economic Development Corporationâ&#x20AC;&#x201C; Alice, TX

Housing Study

Housing Market Trends â&#x20AC;&#x201C;Multifamily and Rental Housing CDS was able to meet with three property managers and spoke with many others to learn the current state of the multifamily market. Some were unavailable or were not willing to share certain information.

Alice Multifamily Properties #

Complex

Address

1

Alice Village

123 Terrell St

2 3 4 5 6 7

Alician Manor Arlington Arms Bordeaux Cameron Village Easterling Village Guadalupe Hacienda

110 S Duval St 1201 Arlington St 110 S Stadium Rd 2555 S Cameron St 1455 Easterling 2015 S Cameron St

8 9 10 11 12

Manor Sagewood San Diego Creek Sunset Terrace Townhouse Apartments

2619 N Texas Blvd 1300 Josephine Dr 1499 Easterling 901 Sunset Dr 1110 Woodworth

13

Village Green

1111 Woodworth Drive

38

Alice-Jim Wells County Economic Development Corporationâ&#x20AC;&#x201C; Alice, TX

Housing Study

Alice Multifamily Properties

Complex

Subsidized / Market

Price Range

Market

$425-$575

112

Market

$520-$610

4

32

Market

$515-$695

Yr Built

Occ

Total Units

Arlington Arms

1973

100%

36

Bordeaux

1981

100%

192

80

100%

36

Manor

1BR

2BR

3BR

Sagewood

1971

100%

52

28

24

Market

$650-$770

Sunset Terrace

1978

100%

72

25

47

Market

$480-$585

100%

64

32

32

Market

1980/2005

100%

12

-

8

4

Market

$795

Alician Manor

1973

100%

48

14

24

10

Subsidized

$550-$720

Alice Village

1980

98%

50

10

40

Subsidized

$443-$636

Cameron Village

2002

95%

78

8

70

Subsidized

Guadalupe Hacienda

1971

100%

74

74

San Diego Creek

2006

100%

Easterling Village

2008

100%

Village Green Townhouse Apartments

Subsidized

$300-$665

60

Subsidized

$525-$725

60

Subsidized

$525-$725

Existing Property Performance The multifamily market in Alice is currently characterized by high occupancy rates. Market rate units and subsidized units in Alice all are at capacity. The overall occupancy rate is approximately 97%. All report to be at 100% with occasional occurrences where units are between renters or undergoing maintenance. Both subsidized and market rate properties are doing extremely well with regard to not only occupancy but also rent levels. ď&#x201A;ˇ

The multifamily properties in this market are spread across the city, not concentrated in a particular region, and with no part of town seeming to have occupancies or rates highly different from other parts of town.

39

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study



Occupancy rates are typically 95-100%, with waiting lists. No property claimed to have immediate vacancies and all claimed to have waiting lists, some as long as 4-6 months.



All property managers claimed to be constantly receiving calls inquiring about availability of units.



Surprisingly, with the demand so high, rental rates have not increased much over the past couple years. Several property managers cited that rents have gone up in the last year, but the increases were all in the modest 5%-7% range.



Interviews with apartment complex representatives reveal that the tenant profile at these moderately-priced properties includes a diverse mix of renters. The oil and gas industry was consistently sited as a factor, but never was viewed as an isolated driver.



When asked if the city needs more multifamily units in the marketplace, every property manager answered positively.



Some property managers at the subsidized multifamily complexes, while experiencing 100% occupancies, cited that more of the newer renters are higher income and cannot qualify for their complexes. They claimed that looking forward, the need for market-rate complexes would be much more of a long-term need for the multifamily market than subsidized complexes.

Newest Developments The newest developments in the Alice multifamily market are the San Diego Creek Apartments and Easterling Village. San Diego Creek was built in 2006 and Easterling Village was built in 2008. They are both low-income tax-credit properties, and supply 120 rooms. They are currently at a level of 100% occupancy with a waiting list. The only recent addition to the market-rate multifamily market was the addition of two units to the Townhouse Apartments in 2005.

Conclusions – Multifamily Market Analysis of the current multifamily market in Alice reveals not only market acceptance of the current stock of units, but an unmet demand as well. Most property managers of current complexes stated that their properties have waiting lists for tenants, both for those seeking a market rate or subsidized apartment unit. This factor coupled with healthy rent levels currently seen in the marketplace illustrates a current demand for more units in the market.

Continued growth in the local job market is the largest source of demand for new multifamily units. Prospects included in this group could include younger individuals or families that may not be currently interested in or qualified to buy a single family dwelling. In the short to middle term, especially over the next two years with over 2,300 new jobs projected in Jim Wells County, CDS Market Research believes that Alice could support other market-rate and subsidized multifamily properties. Looking over the next five years (4,500 projected jobs) and ten years (7,000 jobs), the demand only continues to grow for additional properties.

40

Alice-Jim Wells County Economic Development Corporationâ&#x20AC;&#x201C; Alice, TX

Housing Study

Additionally, with a majority of the recent and future job projections coming from the oil and gas sector, which has the highest average salary per the last few yearsâ&#x20AC;&#x2122; workforce data, CDS believes the higher-end multifamily rentersâ&#x20AC;&#x2122; market is underserved, and that Class A units could be introduced and absorbed into the local market over the next few years.

Single Family Rental Market The single family rental market consists of smaller, older homes which rent for well above the current rents for apartments. Since there are zero listings for single family rental properties, all research derived has been anecdotal. From talking with local realtors occupancies on single family rental are at 100%. The demand for single family rentals is so high that rental rates are consistently ranging from $1,200 to $1,600 per month, or almost double the average market rates for multifamily. This is a dramatic swing from several years ago, where single family rental rates were much more in line with multifamily rates.

The demand for this type of rental is only expected to grow. CDS believes that while this demand would be somewhat relieved by new multifamily units in the market, there is also room for other types of single family rentals. Developments that include quad-plex or townhomes could be absorbed into the market with attractive rental rates.

41

Alice-Jim Wells County Economic Development Corporationâ&#x20AC;&#x201C; Alice, TX

Housing Study

Housing Demand Analysis

Jim Wells County Historical Household

A basic demand estimate for additional new housing can be formulated from the historical and current information available from external sources, such as the Census. CDS has formulated an analysis to project demand for additional housing in Alice and Jim Wells County.

Historical Inputs The table to the right provides statistics for Alice and Jim Wells County. The number of jobs created outnumbers the population and household growth due to the reduction in unemployed persons already in Jim Wells. The number of renter-occupied units as well as rentersâ&#x20AC;&#x2122; share of occupied units increased relative to owner-occupied units. This was a county-wide occurrence, but was even greater in Alice (5.8% difference)

And Housing Statistics Jim Wells

2000

2013

Change

2000

2013

Change

Total population

39,300

41,920

2,620

19,230

19,549

319

Total Jobs

15,649

19,896

4,247

Households

12,971

14,421

1,450

6,431

6,810

379

Housing Units

14,800

16,690

1,890

7,096

7,548

452

Owner-occupied

9,921

10,518

597

4,529

4,392

-137

Renter-occupied

3,040

3,903

863

1,906

2,418

512

Owner

76.5%

73.0%

-3.5%

70.3%

64.5%

-5.8%

Renter

23.5%

27.0%

3.5%

29.7%

35.5%

5.8%

12%

13%

1%

10%

10%

-

Share of households

Vacant

Jim Wells County Household and Jobs Comparison

Alice

Source: Census 2000, PCensus for Map Info, Tetrad Computer Applications 2013

Jim Wells Owner-Occupied

2000

2013

Change

9,921

10,518

597

Renter-Occupied

3,040

3,903

863

Total Jobs

15,649

19,896

4,247

Owner-Occupied Household/Job

0.634

0.529

-0.105

Renter-Occupied Household/Job

0.194

0.196

0.002

This table to the left provides data covering Jim Wells County employment, household units, and household tenure in 2000 and 2013. Additionally it tracks the households by tenure growth per job during that period. The owner-occupied household/Job dropped from .634 in 2000 to .529 in 2013.

The renter-occupied household/Job stayed fairly constant at .196 compared to .194 before.

Source: Census 2000, PCensus for Map Info, Tetrad Computer Applications 2013, Texas Workforce Commission

42

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Housing Study

Trends in Tenure In the table to the right, tenure growth per job growth is tracked from 2000 to 2013 in order to calculate the household formation rate Jim Wells County has had with regards to converting new jobs into new households.

There has been a great degree of lost opportunity for housing growth in Jim Wells County over the past 13 years. For the 4,247 new jobs created since 2000, only 597 new owner-occupied households have been formed. That ratio, 0.141:1 is noticeably low. Especially when considering in 2000, the ratio of owner-occupied households to total jobs was 0.634:1. Part of this low figure can be attributed to high unemployment rates decreasing to the current 4.7%. As local unemployed people fill jobs, there would not be a subsequent impact on housing absorption.

For comparative purposes, the same calculations are used in Nueces County. Comparing their changes in households and jobs over the same years, their rate of owner-occupied households to new jobs is 0.306:1. This rate is more than twice that of Jim Wells County (117% higher). It should be noted that Nueces has had a similar impact of a high unemployment rate coming down in recent years as well.

Changes 2000 - 2013 Jim Wells County

Nueces County

Households

1,450

17,593

Total Jobs

4,247

33,170

597

10,134

863

7,459

0.141

0.306

0.203

0.225

Owner-Occupied Households Renter-Occupied Households Owner-Occupied Households / Add’l Job Renter-Occupied Households / Add’l Job Projected Jobs in 2 years

2,300

Projected Jobs in 5 years

4,411

Projected Jobs in 10 years

7,187

Source: Census 2000, PCensus for Map Info, Tetrad Computer Applications 2013, Texas Workforce Commission

Renter Occupied households in Jim Wells have grown during this period by a count of 863 or at a 0.203:1 ratio to new jobs. This rate is consistent with the ration of renter households to jobs in 2000 and just below the same calculations for Nueces County.

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Alice-Jim Wells County Economic Development Corporation– Alice, TX

Analysis and Projections Assumptions Using factors produced from the historical data, CDS estimated and projected additional demand for housing in the City of Alice.

Using Census numbers since 2000 for households and tenure data, factoring in the trends in that data between 2013 and 2000, then applying it to Texas Workforce Commission employment projections for the county, household projections are made for two-year, five-year, and ten-year periods.

Housing Study

Jim Wells County Housing Demand Estimate Jim Wells Households

Household Forecasted Households Formation Rate

Owner Occupied HH/Job - 2 Year (2016)

.141:1

323

Owner Occupied HH/Job - 5 Year (2019)

.141:1

620

Owner Occupied HH/Job - 10 Year (2024)

.141:1

1,010

Renter Occupied HH/Job - 2 Year (2016)

.203:1

467

Renter Occupied HH/Job - 5 Year (2019)

.203:1

896

Renter Occupied HH/Job - 10 Year (2024)

.203:1

1,460

Source: CDS Market Research, Texas Workforce Commission, 2000 Census, PCensus for Map Info, Tetrad

Keeping with the most recent household Computer Applications 2013 formations rates for the 2000-2013 period (.141 for owner-occupied and .203 for renter-occupied), there would be demand for 323 owner-occupied housing units and 467 renter-occupied units over the next two years (using Texas Workforce Commission’s projections from the last page). Over the next five years, owner-occupied demand would be 620 units with renter-occupied demand being 896 units. Stretching to meet the ten-year Texas Workforce Commission’s projections, the demand for owner-occupied and renter-occupied units would be 1,010 and 1,460, respectively.

With the local unemployment rate being a very low 4.7%, job growth will necessitate a greater rate of population growth. This should help the area to improve on the household formations rates of 0.141:1 for owner-occupied and 0.203:1 for renter-occupied.

44

Alice-Jim Wells County Economic Development Corporation– Alice, TX

Impact on Alice Looking at the table to the right, and taking the forecasted households for Jim Wells County, CDS applied “capture rates” that help project what the city of Alice can expect in terms of demand for owner-occupied and renteroccupied housing within the city.

Housing Study

Alice Housing Demand Estimate Jim Wells Forecasted Households

2013 Rate

Alice Capture Rate

Demand in Alice

Owner Occupied HH/Job - 2 Year (2016)

323

41.7%

45%

145

Owner Occupied HH/Job - 5 Year (2019)

620

41.7%

45%

279

Owner Occupied HH/Job - 10 Year (2024)

1,010

41.7%

45%

455

Households

It is reasonable to predict that Alice Renter Occupied HH/Job - 2 Year (2016) 467 62.0% 75% 351 can improve on its percentage of Renter Occupied HH/Job - 5 Year (2019) 896 62.0% 75% 672 household formation rates relative to the county. Due to the low Renter Occupied HH/Job - 10 Year (2024) 1,460 62.0% 75% 1,095 unemployment rate, the investments made by the city in Source: CDS Market Research, Texas Workforce Commission, 2000 Census, PCensus for Map Info, Tetrad Computer Applications 2013 quality of life projects, maxed out occupancies in the rental market, positive signals in the single family resale market, and higher income jobs coming to the area, Alice should be able to capture more new renters and owners than before.

In 2013, owner-occupied households in Alice comprised 41.7% of the owner-occupied units in the county. Going forward, it is reasonable to predict that Alice could capture 45% of future forecasted owner-occupied households in the county. The two-year demand for owner-occupied housing in Alice is 145 units. The five-year and ten-year forecasts are 279 and 455, respectively.

In 2013, renter-occupied households in Alice comprised 62% of the renter-occupied units in the county. As renter-occupied units have been showing increasingly high demand recently, it is reasonable to predict that Alice could capture 75% of future forecasted renter-occupied households in the county. The two-year demand for renter-occupied housing in Alice is 351 units. The five-year and ten-year forecasts are 672 and 1,095, respectively.

45

Alice-Jim Wells County Economic Development Corporationâ&#x20AC;&#x201C; Alice, TX

Housing Study

Results Going forward, an unconstrained market would begin constructing new housing, both for-sale and rental. The analysis indicates that due to future employment growth the countyâ&#x20AC;&#x2122;s housing stock should grow by 800 units by 2016. It is important to note that these forecasts, while representing a quantitative analysis, are meant to only indicate a general level of new housing demand, not an exact prediction, since there are numerous assumptions built into the analysis that have an impact on the analysis output. That said, it seems very reasonable based on this analysis that Alice and Jim Wells County should be able to support at least several hundred more units of housing, mostly renter-occupied, during this period of employment growth.

According to virtually all quantitative data along with anecdotal evidence from interviews and focus groups, the greatest demand for for-sale housing is likely to be in the $130,000 - $180,000 price range. Even in the suburban areas of Corpus Christi covered in the Study Area, prices for new construction homes were rarely over $200,000. Unless a developer is able to offer large acreage or a highly amenitized community, new housing communities could offer two price programs, $130,000 - $150,000 and $150,000 -$180,000.

While there are needs for this type of housing, there are a few things to consider first; most importantly, currently planned expansions to supply.

According to CDS field research, there are over 400-600 lots forecasted to be possibly coming to the market over the next few years. Obviously not all planned developments will come to fruition, but there are plenty of planned developments currently in motion, and one should be aware of what will be hitting the market and when will it be delivered. If a couple of the bigger plans bring 100+ lots to the market, even with the current and future growth projections, it could take a while for a small market to absorb. CDS projects there will be demand for 150 owneroccupied units over the next two years.

CDS does believe there to be some opportunity for multifamily offerings to demand a higher rent than current market rates. According to the recent wage trends and based on the highest wage-earning sectors having a majority of positions coming available, there should plenty of demand to pay $800-$1,100 rental rates for newer units. These rates would allow the construction of more modern apartment complexes similar to high-quality properties found in suburban locations within larger metropolitan areas, usually garden apartments with surface parking and a reasonable set of on-site amenities. It is reasonable to predict that the market could absorb 100 Class A units over the next year and another 100 within two years. At the same time, the market could absorb over 150 subsidized units.

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CDS Market Research 1001 S. Dairy Ashford, Suite 450 Houston, TX 77077 713- 465-8866 (Phone) 713-465-6975 (Fax) www.cdsmr.com