DEMAND MODEL This section describes the data and methodology of the demand model which can be used to guide predictions about housing needs in Muskogee.
A demand model gazes into the future and tries to predict the need for housing in the City of Muskogee later. The model presented here does not differentiate between different types of housing units, it only tries to predicate an overall demand. The model is based on A Housing Gap Analysis for Lander County, Nevada by Thomas R. Harris and Brian Bonnenfant at the University Center for Economic Development at the University of Nevada, Reno.1 It has been enhanced in three ways. First, it has been expanded to include additional factors for determining demand recommended in a white paper developed for the National Council of Housing Market Analysts entitled Recommended Practices for Determining Demand by John Prior, Bob Rogers, Tad Scepaniak and Scott Allen.2 Second, it has been extended to predict housing demand for the next ten years. It is a waterfall model. The predicted housing gap in Year 1 is based on current data like the Lander, Nevada study. First year data is fed into the second year, second year data into the third year, and so forth through the tenth year. The housing demand calculation for each year is cumulative and reflects the total demand for housing through that year. Third, the number of housing units in need of replacement has been added to the total housing gap. This number reflects the need for replacing units lost to age and obsolescence and does not represent new demand due to job growth, increased capture rate, or increased penetration rate. Several variables are adjusted by entering rates of change into the model based on market conditions. These assumptions allow the model to simulate various future market conditions. As with any model, users should be cautious to not rely on it as an absolute predictor of future results. It was not developed by the researchers as a guaranteed method for estimating demand, rather it is to be used to test various scenarios. When it is used to predict market demand its assumptions should reflect targets or goals where policies and practices are changed to adjust market conditions. The assumptions should also be regularly updated to reflect changes to policies and programs, as well as external market forces that may affect its outcomes. In other words, the model can be used to track changes to city policy and programs and to see if actual outcomes match predicted outcomes. The model is in spreadsheet form. The calculation of the housing need consists of 26 entries. Some entries are reference data; other entries are the result of simple arithmetic operations. As mentioned above the first year uses current data and the future years use data modified by nine assumptions. The next section describes the basic calculation for Year 1.
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A Housing Gap Analysis for Lander County by Thomas R. Harris and Brian Bonnenfant at the University of Nevada Reno. Technical Report UCED 2008/09-01. Published by the University Center for Economic Development and the Nevada Small Business Development Center, Reno NV: July 2008. Recommended Practices for Determining Housing Demand by John Prior, Bob Rogers, Tad Scepaniak, and Scott Allen. A white paper published by the National Council of Housing Market Analysts, October 2008.
