Manufactured Home Feasibility Study December 2009 Presented To: Provincial Housing Policy Branch Ministry of Housing and Social Development Submitted By: Darren Kitchen The Co-op Housing Federation of BC Dale McClanaghan McClanaghan & Associates 4150 West 14th Ave Vancouver, B.C. V6R 2X5 Phone: (604) 644-9844 The Project Team gratefully acknowledges the financial support of the Province of British Columbia through the Housing Endowment Fund on this project. TABLE OF CONTENTS Page Executive Summary 1 Background 5 Context 6 Analysis of Local Market Conditions 9 The Current Inventory of Manufactured Home Units 9 The Cost to Purchase an Existing Manufactured Home Unit 11 Constructing the Analysis 12 The Social Benefits of the Existing Stock 13 Constructing the Alternatives 14 New Park – Pad Rental Only 17 New Park – Pad Rental + Modest Rental Dwelling Unit 18 New Park – Entry-level Ownership 20 Acquisition and Conversion of an Existing Park 23 Conclusions 30 Appendix A About the Inventory of Manufactured Home Units 31 Appendix B Socio-Demographic Data 37 Appendix C Housing Costs and Market Data 42 Manufactured Home Feasibility Study Executive Summary This study was commissioned by the Housing Policy Branch in the Ministry of Housing and Social Development in partnership with the Coop Housing Federation of B.C. to examine the financial feasibility of using a coop based approach to assist in the preservation or expansion of this form of housing. Across British Columbia, manufactured homes account for approximately 3% of the total housing stock. The operating context for manufactured homes is complicated in that this form of housing includes both ownership and rental tenure on the same site. Manufactured housing represents an important housing resource in many communities, particularly in smaller communities on the edges of larger urban centres and in rural settings. Typically manufactured homes are a successful and affordable source of ownership housing with only a small proportion of the stock being rental. In recent years, there have been concerns about the potential loss of this stock through redevelopment pressures. This study used a pro-forma based analysis to evaluate the project economics for establishing a new manufactured home park or acquiring and converting an existing park. In undertaking this research, the study focused on three central questions: • Whether there would be any benefit in creating new MHPs or acquiring and managing an existing MHP as an affordable rental housing project using a coop management model to build a sense of community as well as keep costs down. • Whether the use of Provincial Rental Assistance programs such as SAFER and RAP could help to provide a way to improve the overall affordability and ensure that important social outcomes could be achieved. • Whether this model could help to provide a way to assist families and individuals who have been displaced from an existing park because of redevelopment pressures. To answer these questions, the study relied on an analysis of MLS data, Census data, assessment data as well as transaction-based data for parks which had recently sold. Manufactured Home Feasibility Study Page 1 This analysis relied on the use of a pro-forma based approach to model different scenarios to understand the break-even rent and housing payment required to carry the housing cost. The results of the analysis was back-mapped against the current profile of manufactured home residents including seniors, single parent families and other households to test the potential benefits of the different interventions contemplated. The study evaluated four (4) different scenarios: • New park—pad rental only; • New park—pad rental + modest rental dwelling unit; • New park—entry-level ownership, strata title tenure; • Acquisition and conversion of an existing park. In looking at the acquisition and conversion of an existing park, recent transaction data for six (6) different parks were analyzed including: • 2 parks in Surrey; • 2 parks in Hope; • 1 park in Parksville; • 1 park in Kelowna. Baseline Cost Estimates of the Scenarios Table 1 shows the housing costs under various scenarios (either rental or ownership). It also shows the incomes that would be required to meet that level of housing cost. The first scenario modeled is the new manufactured home park with pad rental only. This scenario has a break-even rent of $900 per month. The break-even rent of $900 per month applies only to the cost of the pad rental and does not take into consideration any costs associated with the actual dwelling unit. Under a coop model, the pad rental costs of $900 per month would be amortized over 30 years at an interest rate of 5%. Under this scenario each household would have to assume a capital cost of $112,258. In the current marketplace, pads typically rent for between $350 and $400 per pad and naturally there is no debt associated with the tenant. Thus, if one were to create a new pad rental equity coop, each member would have to finance $112,258 to live on a site that they could have previously secured for a rental cost of $350 to $400 per month. Manufactured Home Feasibility Study Page 2 The second scenario makes provisions for the installation of a modest dwelling unit on the site. The break-even rent under this scenario is $1,441 per month and the households would require an annual income of approximately $57,640 to carry the cost of this housing. Under a coop model, each household would need to finance $195,878 to live on a site with a pad rental and modest dwelling. There are two important observations related to this scenario: (a) $57,640 is well above the income of most manufactured home owners; and, (b) In most markets where manufactured home parks are common, this level of income would be sufficient to obtain a modest single family home or a 2 to 3 bedroom apartment condo unit –both of which are typically considered to be strong housing alternatives to options available in a manufactured home park. Under the third scenario (an entry-level ownership model - strata title tenure), a household would have monthly housing costs of $1,336 per month as well as a monthly condo fee of $300 per month. Similarly, the household would require an annual income of $51,240 to carry the cost of this housing (assuming a down payment of 5%). The same constraints as discussed under scenario two would apply to this scenario, namely, the income is outside of the range of a typical manufactured home owner and in many cases there are other housing choices available to these households. The final scenario models the acquisition and up-grade of an existing manufactured home park. In the examples analyzed in this report, the average monthly cost would be between $1,100 and $1,400 per pad and would not take into consideration any of the existing debt that a household may have. Similar to the first scenario, the household that was previously paying $350 to $400 per month would now have to increase their payments by $700 to $1,050 per month simply to convert to an equity co-op model with no appreciable improvement in the housing services received. Manufactured Home Feasibility Study Page 3 Table 1: Break Even Rent and Income Threshold Park/unit alignment Break-even rent/housing cost Entry-level income threshold New park-pad rental only $900 $36,000 New park-pad rental + $1,441 $57,640 modest dwelling unit New park-entry level Purchase price of $203,713 ownership $1,336 + $300 condo fees Equity coop purchase of $1,100-$1,400 $51,240 1 $44,000-$56,000 existing MHP Conclusions The general income and social mix of households living in manufactured home units suggests that the income capacity from a site is relatively low. The data modeled in this study also suggests that a new site would typically require a significant equity contribution or subsidy to make the project economically viable. In examining the alternatives, the study concluded that the cost profile and the attendant income thresholds are generally higher than the typical income demographic of households living in manufactured home parks. Moreover, at these housing costs, many communities in British Columbia are able to offer a superior range of housing choices, whether in single family homes, townhouses, condominiums, or conventional rental housing. 1 The scenario modeled assumed a 5% down payment, 5% interest rate and amortization period of 30 years. Manufactured Home Feasibility Study Page 4 Background Manufactured homes provide an affordable form of ownership and rental housing. Across British Columbia, manufactured homes account for approximately 3% of the total housing stock. In recent years, there have been concerns about the potential loss of this housing through redevelopment pressures. This study was commissioned by the Housing Policy Branch in the Ministry of Housing and Social Development in partnership with the Coop Housing Federation of B.C. to examine the financial feasibility of using a coop based approach to assist in the preservation or expansion of this form of housing. The study examined a number of different elements including: (a) Analysis of local market conditions and the affordability profile associated with various options ranging from acquiring an existing park to establishing a new park; (b) Evaluation of the project economics for different scenarios ranging from pad rental only through to the rental of a pad and modest dwelling unit. The study also evaluated the potential opportunities of developing an entry-level ownership model through using strata-title tenure. In undertaking this research, the study considered the following questions: • Whether there would be any benefit in acquiring a site and managing the site as an affordable rental housing project using a coop management model to help build a sense of community as well as help keep costs down; • Whether the use of Provincial rental assistance programs such as SAFER and RAP could help to provide a way to improve the overall affordability of this housing and ensure that important social outcomes could be achieved; and, • Whether this model could help to provide a way to assist families and individuals who have been displaced from an existing park through redevelopment pressures. Manufactured Home Feasibility Study Page 5 As part of the analysis, the study looked at different management structures from the use of a conventional management model through to conversion to a housing coop. Alternatives Evaluated In considering the alternatives, the study used a pro-forma based approach to determine the cost of acquiring and converting an existing park as well as the cost of establishing a new park. In evaluating the project economics for the different scenarios, the following factors were taken into consideration: • Site acquisition and servicing costs; • Installation and hook-up fees including the cost for a modest dwelling unit; and, • Determination of a break-even rent and monthly carrying cost. In modelling the economics related to new supply, the study looked at the potential costs and benefits of the following scenarios: a) Pad rental only; b) Pad rental plus rental of a modest dwelling unit; c) Entry-level ownership. The study also examined the potential role that the coop housing sector could play in helping to facilitate or support this type of housing as well as the type of equity or subsidy required to facilitate the purchase of an existing park and operate it as a coop in order to prevent the further erosion or loss of this form of housing. Context The manufactured home stock represents some of the more affordable housing stock in the Province. In recent years, the combination of growth pressures and rising housing prices has resulted in a situation where some of the existing manufactured home parks face redevelopment pressures. This study was initiated to look at what, if any actions could be taken by the Coop Housing Federation of BC to preserve or expand this source of housing. This research builds on previous work done by McClanaghan & Associates for the Province of BC which looked at the potential redevelopment pressures on Manufactured Home Feasibility Study Page 6 manufactured home parks. In this research, it was noted that the operating context for manufactured homes is complicated in that this form of housing includes both ownership and rental tenure on the same site. Park owners and operators have also expressed concern that the long term rent controls in place under the Residential Tenancy Act have limited the ability of existing parks to recover the costs of maintaining and up-grading the sites. As well, many park owners have seen escalating expenses and have limited reserves set aside for capital improvements. This has created additional pressure on the stock, either in the form of redevelopment (where permitted) or in the form of deferred maintenance. The mix of ownership and rental on a single site has also resulted in some challenges. In particular, owners of manufactured home units which are located on the site and which typically pay a pad rental fee have limited mobility for their units (especially those living in older units). As a result, many manufactured home owners can face a precarious situation in cases where their park is sold or where the park may be under consideration for redevelopment. Furthermore, this challenging situation may be further intensified in cases where an owner is unable to find a new rental pad for their unit. The development economics are also biased toward the owners of the manufactured home parks, in cases where a park is facing potential sale and redevelopment. For example, in these cases it is likely that the park owner will see an appreciation in value while the tenant base is vulnerable to a significant loss of equity. Some of the park residents have also expressed the concern that they have only limited choices in terms of the alternatives available to them for relocating their unit. This can be tied to the age and condition of their unit as well as an inability to find a suitable site. There is also the potential financial burden of relocation including the costs associated with moving their unit to a new site as well as the cost associated with having services and hook-ups installed. In addition to the disruption, many manufactured home owners are also unable to find a suitable rental pad for their unit at a cost that is comparable to their current pad rental fee. As shown in the analysis completed to support this study, newer sites typically have higher pad rental fees than older established sites. Therefore, while alternative sites may be available to a manufactured home owner who has been Manufactured Home Feasibility Study Page 7 displaced, it is possible that they could still face a significant increase in their housing costs. This report examines some of the costs associated with establishing a new park, as well as the costs of acquiring and converting an existing park. In looking at the cost profile for the different alternatives modeled, it is clear that the costs fall well outside the range that would be affordable to a typical manufactured home owner. In examining the alternatives, the study concluded that the cost profile and the attendant income thresholds are generally higher than the typical income demographic in manufactured home parks. Moreover, at these housing costs, many communities have superior housing choices available, whether in single family homes, townhouses, condominiums, or conventional rental housing. Based on data reported in CMHC’s Housing in Canada data base, the income profile of manufactured home residents across the Province is also lower than that of many other households. This suggests that many households currently living in this form of housing have limited financial resources that they can draw upon. Based on the data reported by CMHC through the Housing in Canada database 2000, manufactured home owners across the Province reported an average annual income of approximately $38,000.1 An income of this level is above the median income reported across renter households but is below the median income for most owners. The data from the Housing in Canada data base also showed that 29% of all residents living in manufactured homes reported an annual income of $20,000 or less. An annual income of $38,000 means that a household could afford a monthly rent of approximately $950. Similarly, an annual income of $38,000 means that a household could afford to purchase a dwelling that costs approximately $147,400 assuming a downpayment of 5% and an interest rate of 5% over a 25 year amortization period. These households also have to carry a monthly pad rental fee of $250 to $350 in addition to their mortgage costs. However, this form of housing helps to provide them with an opportunity to build equity and realize the benefits of ownership including a heightened sense of financial security. 1 While this data is from the 1996 Census, it is important to note that while there have likely been some improvement in income, this group still fits well within the income level considered to be low-to-moderate. Manufactured Home Feasibility Study Page 8 It should also be noted that, while this might work for younger households who are just embarking on their housing careers, the same choices might not be available to older households living in existing manufactured home parks who are likely to be in a situation where they are living off their savings and may not have the same access to financing that might be available to other household types.1 Analysis of the Local Market Conditions One challenge for policy makers and decision makers to evaluate when considering this form of housing is to assess the other housing options that might be available in the community. As a result, in addition to looking at the income profile of manufactured home owners, this analysis also looked at local market conditions in order to gain a better sense of where manufactured home units fit within the full continuum of housing choices available. In evaluating the different alternatives, this study relied on a number of potential data sources including information on: • The current inventory of manufactured home units; • Changes in the inventory over time; • Income and shelter cost data; • MLS market data; and, • Family and household data. While this section provides an overview of the high level results, additional sociodemographic and economic data is available in Appendix A and B for the different regional districts across the Province. As well, specific community level data for a selected sample of communities has also been included in Appendix C. The Current Inventory of Manufactured Home Units The 2006 Census data shows that there are 43,265 manufactured home units across B.C. This represents approximately 3% of the total housing stock. Comparative data for the 2001 and 2006 Census shows that the inventory of manufactured homes has remained relatively constant between these two census periods2. 1 The 2006 Census shows that, Province-wide, approximately 39% of households who own a manufactured home carry a mortgage. 2 Data from 2001 shows 43,440 manufactured home units Province-wide. total of 43,265 units reported. Manufactured Home Feasibility Study In 2006 there was a Page 9 Analysis of differences across the different sub-regions in the Province shows that, while, in aggregate, the inventory of manufactured home units has remained relatively constant, there is significant variation in the profile of the stock across different regions.1 The data also shows that between 2001 and 2006, 15 out of the 28 Regional Districts across the Province reported a net decrease in the number of manufactured home units including: • the Fraser Fort George Region (loss of 915 units) • the Thompson Nicola Regional District (loss of 800 units) • Mount Waddington Regional District (loss of 415 units) • Nanaimo Regional District (320 units). At the same time, twelve2 of the 28 regional districts reported a net increase in units between 2001 and 2006 with the largest increase in units occurring in: • the East Kootenay Regional District (increase of 1,640 units) • the Central Okanagan Region (increase of 1,070 units) • the Fraser Valley Regional District (increase of 495 units) • the Central Kootenay Regional District (increase of 290 units) • the Greater Vancouver Regional District (increase of 170 units) Needs Met Through the Manufactured Home Stock The majority of manufactured home units are ownership units (36,380). This represents 84% of the total inventory and approximately 3% of the ownership stock across the Province. In looking at the role that manufactured home units play in the broader housing continuum, it is clear that they represent an important point between entry-level ownership and rental housing. As well, there is no doubt that this housing represents one of the most affordable sources of ownership housing on the continuum. 1 Table A1 in Appendix A shows the total inventory of manufactured home units across B.C. including changes in the inventory between 2001 and 2006. This information is reported for each of the different regional districts. Table A3 also provides information on the absolute change (net increase or decrease in units). 2 There were no manufactured home units in the Stikine Region. Manufactured Home Feasibility Study Page 10 The Cost to Purchase an Existing Manufactured Home Unit MLS data for both existing manufactured home units and entry-level ownership options was gathered for a total of 38 communities across the Province. Information for these 38 communities can be found in Appendix C. This includes information on: • the median household income; • average shelter costs; • the value of existing dwellings as reported in the Census; • the number of manufactured home units listed for sale on the MLS; • the median asking price for a unit on the MLS; • the qualifying income needed to purchase a unit; and, • the monthly carrying cost. Data included in Appendix C also examines the income and price threshold for entrylevel ownership opportunities in the selected communities. In looking specifically at the MLS data for existing manufactured home units, the market data showed that, as of April 2009: • 68% of the communities examined reported a median asking prices of $100,000 or less for an existing manufactured home unit on the MLS listings; • an additional 13% of communities reported a median asking price of between $100,000 and $130,000; • approximately 1 in 5 communities (18%) reported a median asking price of $130,000 or more. In calculating the qualifying income needed to purchase this unit1, the data suggests: • for a median asking price of $100,000 or less, a household would require an annual income of $28,893 and would have monthly housing costs of $770; • for a median asking price of between $100,000 to $130,000 a household would require an annual income of between $28,893 and $35,311 and would have monthly housing costs of $770 and $942; • for a median asking price of more than $130,000 a household would require an annual income of more than $35,311 and would have monthly housing costs of more than $942. 1 This is based on a 5% down payment, a 5% interest rate, a 25 year amortization period, and monthly costs of approximately $200. Manufactured Home Feasibility Study Page 11 The background research for this study also found that the purchase of a new modest sized manufactured home unit (without pad rental or installation) is approximately $77,500. This is discussed in greater detail in the following section. Constructing the Analysis This section provides a more detailed analysis of the different cost and revenue assumptions associated with establishing a new park. This includes the costs associated with acquiring and servicing a site as well as the costs associated with installing a modest dwelling unit. In evaluating the financial feasibility of a new park, the pad rental fee represents an important part of the equation as the revenue generated through the pad rental fee will determine the debt servicing and equity requirements for the site. The amount of the pad rental fee can vary significantly across different parks. For most parks, the pad rental fee tends to be between $250 to $350 per month. However, for some parks (often newer parks) the pad rental fee can be in the range of $450 or more. The amount of the pad rental fee is determined by the park owner and is based on a number of factors including the costs associated with managing and operating a park. For existing parks, a number of owners and operators have expressed concerns about the fact that the Residential Tenancy Act limits the amount of rent increase that can be passed on to the tenants, with the cash flow generated through the rents having an impact on the revenue available to cover the operational and financial costs (repairs and upgrades) associated with the maintenance of an aging park. This pattern, in turn, has contributed to increased redevelopment pressure within the existing stock and has meant that some owners have also had to put off making improvements to their site. As well, because the baseline rents are so low, applying the guideline increase allowed under the Residential Tenancy Act is not enough to generate the capital required to complete the necessary repairs. For example, applying the current guideline increase of 3.2% to a baseline rent of between $250 and $350 per month would only translate into an increase of between $8.00 and $11.20 per month or an annual increase of between $72 and $134 per Manufactured Home Feasibility Study Page 12 rental pad.1 Recent changes to the legislation governing manufactured home units now allow manufactured home sites to pass through costs for changes in local government levies (taxes) and utility fees. This is called a proportional amount as it is divided across all rental pads. While it is possible that a coop housing management model could help to keep the day to day operating and management costs down, the break-even analysis completed for this study shows that many of the costs such as taxes, utilities, as well as basic maintenance and up-grades are fixed and that, in many cases, these costs exceed the revenue generated through the pad rental. As a result, some of the older parks have reached a point in their economic life where they require significant up-grades which cannot be carried by the revenue generated under the existing cash flow. The findings for this study also suggest that the costs associated with establishing a new site are more likely to be in the range of $900 per month if calculated on a breakeven basis. This is almost twice the level of the existing pad rental fees (at the high end) and is well above the level that is considered affordable. Social Benefits of the Existing Stock This section examines the social benefits of the existing manufactured home stock including the households that are assisted through access to this housing. This section also looks more closely at the types of opportunities this housing provides. The 2006 Census shows that, while only 3% of all households across the Province live in manufactured home units, almost 4 in 10 units are occupied by seniors 65+ while 1 in 10 are occupied by seniors 75 or older. These are individuals who would have worked hard to invest in their unit on the belief that this housing, and their investment in it, would help to see them through their retirement years. For these households, the prospect of potential displacement from their unit or the thought of having to relocate their unit to another park could create significant emotional and financial hardship. The data also shows that young families with children accounted for approximately 1 in 5 households currently living in the manufactured home units. This includes a large 1 This rent increase in based on information published by the Residential Tenancy Branch and takes effect in September 2010. Manufactured Home Feasibility Study Page 13 percentage of single parent family households. For these households, living in a manufactured home unit represents an affordable form of ownership. In particular, this housing helps to provide these families with an opportunity to acquire an asset, and to build economic independence and self-reliance. For these households the potential sale of their park could result in a certain level of dislocation and could mean significant disruption in established social and support networks. For children living in this housing, the sale or redevelopment of their park could also mean that they have to move to a new school and establish new friendships and a new social network. The data in Appendix B includes information on the general socio-demographic profile of households living in the manufactured home stock across the Province including information on: • the general tenure profile of residents (Table B1); • the general age profile of residents (Table B2); • differences in family and household size (Tables B3 and B4); • the prevalence of seniors (Tables B5 and B6). The 2006 Census data also shows that, in terms of the current ownership of manufactured homes, approximately 17,310 (45%) are owned without a mortgage, 14,215 (39%) are owned with a mortgage. The remaining units are rented. Constructing the Alternatives This section examines the project economics associated with acquiring and renovating an existing manufactured home park as well as the costs associated with establishing a new park. The analysis includes an estimate of the cost of acquiring a site along with a discussion of the capital costs and financial structure associated with different alternatives. The pro-forma on the following page sets out the baseline costs associated with establishing a new park. The analysis in this section also begins to model a number of the different possible scenarios including: 1. Pad rental; 2. Pad rental plus modest dwelling unit; 3. Entry-level ownership. Manufactured Home Feasibility Study Page 14 In looking at the different scenarios which are modeled, the analysis begins to look more closely at the three key research questions which included: • Consideration of the benefits of managing the site as an affordable rental housing project using a coop management model to help build a sense of community as well as help keep costs down; • The potential use of Provincial Rental Assistance programs such as SAFER and RAP to help provide a way to improve the overall affordability and ensure that important social outcomes can be achieved; and, • Whether this model can help to provide a way to assist families and individuals who have been displaced from an existing park because of redevelopment pressure. Site and Project Characteristics The analysis set out in this section assumes a site of approximately 40 units completed in 2 phases (20 units per phase) with the following cost structure: Manufactured Home Feasibility Study Page 15 Modeling the Project Economics - Scenario 1 - Establishing a New MHP (Pad & Dwellings) Phase 1 20 units $760,000 $20,000 $17,000 $10,000 $807,000 Total Cost 40 units $760,000 $20,000 $17,000 $10,000 $807,000 Per Unit $139,118 $2,857 $54,286 $47,619 $49,590 $4,762 $9,524 $3,810 $2,857 $23,810 $9,524 $3,810 $437,143 $9,524 $0 $19,048 $817,280 20 $278,236 $5,714 $108,571 $95,238 $99,181 $9,524 $19,048 $7,619 $5,714 $47,619 $19,048 $7,619 $874,286 $19,048 $0 $38,095 $1,634,559 40 $6,956 $143 $2,714 $2,381 $2,480 $238 $476 $190 $143 $1,190 $476 $190 $21,857 $476 $0 $952 $40,864 Phase 1 Phase 2 20 units 20 units Water mains $113,095 $31,150 Sanitary sewers $122,952 $89,950 Storm Sewers $103,571 $50,250 Road works $158,667 $54,575 Underground Hydro, Tel, cable & $130,952 Streetligthing $33,600 $629,238 $259,525 Total Infrastructure 40 units $144,245 $212,902 $153,821 $213,242 $164,552 $888,763 $3,606 $5,323 $3,846 $5,331 $4,114 $22,219 $120,000 $120,000 $3,000 $80,000 $80,000 $2,000 Land Acquisition Legal PPT Contingency Total land SOFT COSTS Project Management Architectural Coordinator Interest during Construction Architecture & Design Civil Engineer Survey Fees Appraisal Accounting Consultant Disbursements Legal - tenure & agreements Legal Legal Closing DCC's Property Tax HPO & Warranty Insurance Total Soft Costs Units $139,118 $2,857 $54,286 $47,619 $49,590 $4,762 $9,524 $3,810 $2,857 $23,810 $9,524 $3,810 $437,143 $9,524 $0 $19,048 $817,280 20 Phase 2 20 units HARD COSTS Infrastructure: Off-sites Common areas, Amenity & Signage, Manufactured Home Cost Landscaping GST allowance on soft & Homes (@ 3.2%) Contingency Total Hard Costs Hard Cost per unit $19,000 $500 $425 $250 $20,175 Per Unit $1,700,000 $1,700,000 $3,400,000 $85,000 $40,000 $108,593 $135,461 $4,437,571 $221,879 $20,000 $88,858 $111,872 $2,997,535 $149,877 $60,000 $189,546 $247,333 $7,427,202 $185,680 $1,500 $4,739 $6,183 $185,680 Manufactured Home Feasibility Study Page 16 Scenario 1: Pad Rental Only As discussed in the previous section, the general income and social mix of households living in manufactured home units suggests that the income capacity from a site is relatively low. The data modeled in this section suggests that a new site would typically require a significant equity contribution or subsidy to make the project economically viable. The initial scenario modeled in this section considers the project economics of establishing a new site. The benefit of this approach is a net increase in the overall supply of this type of housing. However, there are significant constraints in keeping the housing affordable without some external sources of funding. The addition of new supply would help to offset some of the pressures created through the redevelopment of the existing stock as well as help to provide increased choice to households seeking this form of housing. The creation of new supply, particularly in the form of rental pads could also help provide potential assistance to households that have been displaced through redevelopment. Table 2 on the following page shows the monthly break-even rent for land and servicing costs for a 40 unit park. As shown in Table 2, the monthly break-even rent for a new park is $900 per month based on the scenario that was modeled. Included in this break-even rent is a basic cost of $600 per month for the financing and debt servicing costs associated with acquiring and servicing the site. The break-even rent calculation also includes approximately $300 per month in operating costs including basic taxes, utilities and management fee. One of the pressures associated with this housing cost profile is the overall affordability. Applying the standard definition of affordability1 to a rent of $900 per month translates into a basic income requirement of $36,000 per year just to maintain or carry the cost of the pad rental. If a household was also carrying a mortgage2 for their unit, on top of this pad rental fee, it would begin to push the cost of the housing out of the range that is typically considered to affordable for households with low or low to moderate incomes. 1 Affordability is defined as housing that costs no more than 30% of a household’s gross income. 2 Data from the 2006 Census shows that approximately 39% of manufactured home residents have a mortgage while 45% do not have a mortgage. The remaining 16% are renters. Manufactured Home Feasibility Study Page 17 It should also be noted that an annual income of $36,000 also falls outside of the income ceiling allowed for families under the RAP (Rental Assistance Program) where the maximum income allowed in $35,000. As well, it is above the income ceiling allowed for single seniors or couples under the SAFER program. It should also be noted that the scenario modeled includes only the costs for the pad rental. The inclusion of a modest dwelling unit (rental) or entry-level ownership were also modeled. In these cases, the monthly rent or housing costs increase to between $1,441 and $1,666 per month (including a monthly condo fee of $300). Table 2: Monthly Break-even Rent PAD & HOME RENTAL SCENARIO Land Soft Cost Hard Costs Infrastructure @ $77,500 per unit Dwellings Rent-up & Placement Install $10,000 Legal & mkt'g $5,000 Closing Cost $1,000 Other $1,500 $17,500 Sub-total PHASE 1 $807,000 $817,280 $990,891 $0 Total Cost PHASE 2 $817,280 $357,855 $0 TOTAL $807,000 $1,634,559 $1,348,746 $0 $200,000 $100,000 $20,000 $30,000 $350,000 $200,000 $100,000 $20,000 $30,000 $350,000 $400,000 $200,000 $40,000 $60,000 $700,000 $10,000 $5,000 $1,000 $1,500 $17,500 $2,965,171 $1,525,135 $4,490,306 $112,258 Payment Amount monthly $24,029 Annual $242,236 $601 40 units $24,029 40 units $288,348 $100 $100 $100 $300 $4,000 $4,000 $4,000 $12,000 $48,000 $48,000 $48,000 $144,000 $901 $36,029 $432,348 Financing Scenarios 100% Fully Rented Income and Operating Statement - at Breakeven Break even financing Cost (econ. rent) Operating Cost: Operating & management exp. Property Tax Utilities Total Operating costs (Breakeven Rent Level) Scenario 2: per unit PER UNIT $20,175 $40,864 $33,719 $0 Pad Rental + Modest Rental Dwelling Unit (Managed as a Rental Co-op) Under this scenario, the analysis calculates the basic break-even rent for a pad rental plus the rental of a modest dwelling unit. As set out in this section, the monthly break-even rent under this scenario is approximately $1,441. This includes a monthly cost of $1,141 per month to cover the financing costs associated with preparing the site as well as the cost associated with the installation of a modest dwelling unit. Manufactured Home Feasibility Study Page 18 In comparing this scenario with the pad rental only scenario, the additional monthly carrying costs associated with adding a modest dwelling unit is approximately $540 per month. This brings the total monthly costs to $1,441 per month to operate the site (pad rental and dwelling unit on a break-even basis). To carry the monthly cost of $1,441 per unit, a household would require an annual income of almost $58,000 assuming that the housing costs include the cost of the rental pad as well as the cost of a modest dwelling unit. In analyzing the results it is evident that this financial arrangement is not viable for a number of renter households which typically have lower incomes. Furthermore, a monthly income at this level would mean that the household would not be eligible for assistance under existing Provincial rental assistance programs as an income of this level falls well outside the established rent ceilings.1 Table 3: Scenario—Pad Rental + Rental of Dwelling Unit PAD & HOME RENTAL SCENARIO Land Soft Cost Hard Costs Infrastructure @ $77,500 per unit Dwellings Rent-up & Placement Install $10,000 Legal & mkt'g $5,000 Closing Cost $1,000 Other $1,500 $17,500 Sub-total Total Cost PHASE 1 $807,000 $817,280 $1,113,291 $1,550,000 PHASE 2 $817,280 $480,255 $1,550,000 TOTAL $807,000 $1,634,559 $1,593,546 $3,100,000 $200,000 $100,000 $20,000 $30,000 $350,000 $200,000 $100,000 $20,000 $30,000 $350,000 $400,000 $200,000 $40,000 $60,000 $700,000 $10,000 $5,000 $1,000 $1,500 $17,500 $4,637,571 $3,197,535 $7,835,106 $195,878 Payment Amount monthly $45,658 Annual $547,896 per unit $1,141 40 units $45,658 40 units $547,896 $100 $100 $100 $300 $4,000 $4,000 $4,000 $12,000 $48,000 $48,000 $48,000 $144,000 $1,441 $57,658 $691,896 Financing Scenarios 100% Fully Rented Income and Operating Statement - at Breakeven Break even financing Cost (econ. rent) Operating Cost: Operating & management exp. Property Tax Utilities Total Operating costs (Breakeven Rent Level) PER UNIT $20,175 $40,864 $39,839 $77,500 1 Under the Provincial SAFER program (Shelter Aid for Elderly Renters), the income ceilings are set at between $28,000 and $30,000 depending on whether the household is a single or a couple. Under the Provincial RAP program (Rental Assistance for Working Families), the income ceiling is $35,000. Manufactured Home Feasibility Study Page 19 Scenario 3: Entry-level Ownership This scenario explores whether a potential ownership initiative using strata title tenure would improve the outcome. Under this scenario, rather than being treated as rental, it is assumed that the unit could be purchased. Table 4: Entry-level Ownership PAD & HOME SCENARIO Land Soft Cost Hard Costs Infrastructure Dwellings @ $77,500 per unit Rent-up & Placement Install $10,000 Legal & mkt'g $5,000 Closing Cost $1,000 Other $1,500 Sub-total $17,500 PHASE 1 $807,000 $817,280 $1,113,291 $1,550,000 Total Cost PHASE 2 $817,280 $480,255 $1,550,000 $200,000 $100,000 $20,000 $30,000 $350,000 $200,000 $100,000 $20,000 $30,000 $350,000 $4,637,571 $3,197,535 Ownership Scenarios - data Purchase Price inc. 4% transaction costs Operating (Strata) Cost: Operating & management exp. Property Tax Utilities Income and Social Mix - Revenue Assumptions Purchase Price TOTAL PER UNIT $807,000 $20,175 $1,634,559 $40,864 $1,593,546 $39,839 $3,100,000 $77,500 $400,000 $200,000 $40,000 $60,000 $700,000 $7,835,106 $195,878 monthly Annual $203,713 $100 $100 $100 $300 $4,000 $4,000 $4,000 $12,000 $203,713 Based on the pro-forma which was developed, the unit plus the rental pad could be acquired for a purchase price of $203,713. This includes all of the hard and soft costs associated with acquiring and servicing the site including the costs associated with the preparation, installation and hook-up of the dwelling unit. Assuming a down payment of 5% and an interest rate of 5%, the cost associated with the mortgage financing and operation of the site is approximately $1,366 per month.1 1 There is an estimated strata fee of $300 per month which would include costs for day to day management as well as the amount required to be set aside as replacement reserves. Manufactured Home Feasibility Study $10,000 $5,000 $1,000 $1,500 $17,500 Page 20 $48,000 $48,000 $48,000 $144,000 In looking at the general project economics of this scenario, it is clear that, while this approach may help to address some of the issues related to security of tenure, it is not able to address issues related to affordability. This scenario would also have limited effectiveness in meeting the needs of seniors1—a group which has often relied on this form of housing. With a purchase price of $203,713 and monthly condo fee of $300, the analysis suggests that a household would require an annual income of $51,240 to move into this unit assuming a 5% down payment and a 5% interest rate amortized over 25 years. Discussion and Analysis In evaluating the potential strengths and weaknesses of the different scenarios that were modeled, it should be noted that: • This approach recognizes that the manufactured home stock is an important source of housing within the broader continuum of housing choices; • This scenario provides a potential alternative for owners of manufactured home units who have been displaced from an existing park and who need to find a place where they can relocate their unit; • The basic project economics for new supply can be challenging with the economic analysis completed to support this scenario suggesting that the monthly costs are between $900 and $1,441—an amount well above the pad rental fees and monthly housing costs in existing parks; • The higher costs associated with establishing a new park can be attributed to higher land costs as well as increased competition for available sites. It can also be attributed to the significant growth pressures that some communities are experiencing. While this model has the potential to provide an alternative site for manufactured home owners who have been displaced from their existing park, the cost of relocating and reestablishing their unit at a new site can be expensive. This is particularly true for seniors living on a fixed income, as well as single parent family households who may not be able to afford this additional cost.2 A secondary question which was examined within the context of this study looked at potential benefits or opportunities arising from the use of a coop housing model. This 1 Seniors would not have the income needed to carry the cost of a mortgage for 25 years. 2 The age and condition of their existing unit might also be a factor in preventing them from moving. Each of these factors, however, would have to be evaluated on a case by case basis. Manufactured Home Feasibility Study Page 21 section begins to look more closely at the potential opportunities and constraints related to this question. In terms of the potential opportunities, it is clear that the acquisition and development of a new site would help to address some of the issues related to the general security of tenure. At the same time, without some outside assistance in the form of a grant or equity from some external source, it would not be possible to fully address the on-going issues of affordability. In particular, under the scenario that was modeled, the break-even rent for the basic pad rental alone was calculated to be $900 per month. In order for this to be affordable, a household would require an annual income of $36,000 simply to carry the cost of the pad rental without spending more than 30% of its income on its housing costs. This also assumes that the household does not have any additional costs related to their dwelling unit. If the household had a monthly mortgage of even $300 per month, they would need an annual income of almost $48,000 to simply carry their housing costs. Under the current lower pad rental fee structure of $250 to $350 per month which is typical of existing parks, a household would require an annual income of $26,000 or less to carry the full cost of their housing—both the monthly pad rental fee and the cost of their mortgage. Therefore, while the existing manufactured home stock clearly represents a lower cost, more affordable alternative, this same cost profile cannot be replicated on a new site. Furthermore, as the price point under the different scenarios moves higher, there will be increased competition with other housing choices including other forms of rental housing as well as entry-level ownership options such as strata condo apartment units1. In particular, the data set out in Appendix C shows that, in some communities other forms of ownership are almost as affordable as the scenarios modeled here.2 It should also be noted that the pursuit of the entry-level ownership market may be outside of the mandate of the Coop Housing Federation of BC and more closely aligned with an organization such as Habitat for Humanity. 1 Table C3 provides information on the median asking price for apartment condo stock in the 38 selected communities. These prices can be compared with the median asking price for manufactured home units as set out in Table C2. 2 The one caveat that applies is that this scenario is related to new supply while the results in Appendix C are based on resale units. Manufactured Home Feasibility Study Page 22 Alternative B: Acquisition and Conversion of an Existing MHP This section examines the project economics related to the acquisition and conversion of an existing park. To complete this analysis, recent transaction data (July 2009) was obtained for six manufactured home parks across the Province which were for sale or which had recently been sold. The project economics of the various transactions for the different sites was analyzed to determine the potential of acquiring the site and operating it as a equity coop. The six sites which were analyzed included two sites in Surrey, one in Parksville, two in Hope and one in Kelowna. The information set out on the table below provides the basic project and site data including: • The park name and location; • The asking price; • The size of the park, • The number of rental pads available; and, • The basic pad rental fee. Tables 5 and 6 provide a general overview of the park characteristics including the average site size, price and monthly pad rental fee. Table 6 also includes information on the basic cap rate which is calculated by taking the net operating income divided by the purchase price. Table 5: Park Characteristics MHP Name Newton MHP Parksville MHP Silver Ridge Estates MHP Horseshoe MHP The Cedars MHP Trail Park MHP Community Price Pad Rental Acres Surrey $ 3,000,000 $350 Parksville $ 2,000,000 $255 Hope $ 1,500,000 $313 Surrey $ 1,387,000 $437 Hope $ 775,000 $270 Kelowna $ 6,900,000 $380 $ 2,593,667 $334 Manufactured Home Feasibility Study 4.79 10.00 10.00 2.98 4.93 11.85 7.43 # of Pads 42 72 44 26 32 98 52 Page 23 Table 6: Average Price per Acre and Average Cost per Pad MHP Name Newton MHP Parksville MHP Silver Ridge Estates MHP Horseshoe MHP The Cedars MHP Trail Park MHP Community Price Cap Rate Surrey $ 3,000,000 4.50% Parksville $ 2,000,000 8.40% Hope $ 1,500,000 7.00% Surrey $ 1,387,000 7.40% Hope $ 775,000 7.50% Kelowna $ 6,900,000 4.80% $ 2,593,667 $/Acre $/Pad $ 626,305 $ 71,429 $ 200,000 $ 27,778 $ 150,000 $ 34,091 $ 465,436 $ 53,346 $ 157,201 $ 24,219 $ 582,278 $ 70,408 $ 349,080 $ 49,878 Based on the data set out in Tables 5 and 6: • The average park size was 7.43 acres and included an average of 52 rental pads; • The average cost per pad was $49,878, although the actual costs varied from an average of $24,219 per pad in Hope to an average of $71,429 per pad in Surrey; • The average pad rental fee was $334 per month which would generate an annual revenue stream of $4,008 per unit. • The pad rental fee of $334 per month is equal to approximately one-third of the cost of the monthly pad rental for a new site. Financing Options and Debt Servicing Requirements In assessing the economic viability of an existing park, the first step is to examine the amount of debt that can be carried by the existing rent structure. This is referred to as the debt servicing capacity of the site. Table 7 shows the amount of debt that could be financed through the current cash flow. The difference between the debt servicing capacity and the purchase price is the amount of equity or subsidy required to purchase the site. In an ideal scenario (especially for the purposes of carrying the site as a housing coop), it is necessary to find ways to have the project rents carry the majority of the cost of the site with only minimal equity required. Table 7: Debt Servicing Capacity MHP Name Community Price Newton MHP Parksville MHP Silver Ridge Estates MHP Horseshoe MHP The Cedars MHP Trail Park MHP Surrey Parksville Hope Surrey Hope Kelowna Manufactured Home Feasibility Study $ $ $ $ $ $ 3,000,000 2,000,000 1,500,000 1,387,000 775,000 6,900,000 $ $ $ $ $ $ Mortage 5% 1,608,797 2,008,092 1,168,842 1,231,800 696,283 3,978,709 Mortgage 6% $ 1,443,454 $ 1,801,711 $ 1,048,715 $ 1,105,202 $ 624,723 $ 3,569,799 Mortgage 7% $ 1,303,668 $ 1,627,231 $ 947,156 $ 998,173 $ 564,224 $ 3,224,096 Page 24 Based on the estimated mortgage cost for the sites that were evaluated, the average mortgage amount per rental pad is between $19,253 for the Cedars, MHP (Hope) and $42,508 for the Horseshoe MHP (Surrey). These are the amounts that can be financed through the pad rental fees and the amount that the coop could afford to finance to fund the acquisition. Table 8: Average Mortgage Amount MHP Name Community Price Newton MHP Parksville MHP Silver Ridge Estates MHP Horseshoe MHP The Cedars MHP Trail Park MHP Surrey Parksville Hope Surrey Hope Kelowna $ $ $ $ $ $ 3,000,000 2,000,000 1,500,000 1,387,000 775,000 6,900,000 Average Mortgage Per Pad 5% $ 38,305 $ 27,890 $ 26,565 $ 47,377 $ 21,759 $ 40,599 Average Mortgage Per Pad 6% $ 34,368 $ 25,024 $ 23,834 $ 42,508 $ 19,523 $ 36,427 Average Mortgage Per Pad 7% $ 31,040 $ 22,600 $ 21,526 $ 38,391 $ 17,632 $ 32,899 Assuming a 6% interest rate and a 30 year amortization period, the loan to value ratio for the different parks ranged from 90% for the Parksville site to 48% or 52% for the sites in Surrey and Kelowna1. For the purposes of managing the park as a housing coop, it is important to identify the parks/sites which have a greater debt servicing capacity based on the existing rent revenue. This means that parks like the Parksville MHP or Horseshoe MHP in Surrey or the Cedars in Hope have a more favourable loan to value ratio than the other parks. It also means that these parks would have a lower equity requirement to acquire and finance the site than the Newton MHP and Kelowna MHP. Table 9: Loan to Value Ratio MHP Name Community Price Newton MHP Parksville MHP Silver Ridge Estates MHP Horseshoe MHP The Cedars MHP Trail Park MHP Surrey Parksville Hope Surrey Hope Kelowna 1 $ $ $ $ $ $ 3,000,000 2,000,000 1,500,000 1,387,000 775,000 6,900,000 LTV 5% LTV 6% 54% 100% 78% 89% 90% 58% 48% 90% 70% 80% 81% 52% LTV 7% 43% 81% 63% 72% 73% 47% This assumes an interest rate of 6% and an amortization period of 30 years. Manufactured Home Feasibility Study Page 25 For the purposes of this analysis, it is assumed that the equity required to purchase the site would be contributed by the individual coop members. This would be in addition to their monthly pad rental fee and any mortgage payments that they may have. Table 10 shows the basic equity calculation for the different transactions analyzed while Table 11 shows the average equity required per rental pad. Table 10: Equity Required MHP Name Community Price Newton MHP Parksville MHP Silver Ridge Estates MHP Horseshoe MHP The Cedars MHP Trail Park MHP Surrey Parksville Hope Surrey Hope Kelowna $ $ $ $ $ $ 3,000,000 2,000,000 1,500,000 1,387,000 775,000 6,900,000 $ $ $ $ $ $ Equity 5% 1,391,203 (8,092) 331,158 155,200 78,717 2,921,291 Equity 6% 1,556,546 198,289 451,285 281,798 150,277 3,330,201 Equity 7% $ 1,696,332 $ 372,769 $ 552,844 $ 388,827 $ 210,776 $ 3,675,904 Average Equity/Pad 6% $ 37,061 $ 2,754 $ 10,256 $ 10,838 $ 4,696 $ 33,982 Average Equity/Pad 7% $ 40,389 $ 5,177 $ 12,565 $ 14,955 $ 6,587 $ 37,509 $ $ $ $ $ $ Table 11: Average Equity per Pad MHP Name Community Price Newton MHP Parksville MHP Silver Ridge Estates MHP Horseshoe MHP The Cedars MHP Trail Park MHP Surrey Parksville Hope Surrey Hope Kelowna $ $ $ $ $ $ 3,000,000 2,000,000 1,500,000 1,387,000 775,000 6,900,000 Average Equity/Pad 5% $ 33,124 $ (112) $ 7,526 $ 5,969 $ 2,460 $ 29,809 While adopting an equity coop model would mean a higher level of security of tenure for the park residents, it would also mean that they face higher monthly carrying costs for their unit. Table 12 calculates the basic income threshold and monthly carrying costs for a manufactured home unit assuming different mortgage amounts.1 Based on the different mortgage values and assuming a 5% down payment, the monthly carrying costs are between $485 and $599 per month in addition to the monthly pad rental fees. The analysis also shows that units at this price point are affordable to households with annual incomes of $18,000-$22,500 depending on the cost of their unit and the amount of 1 The mortgage amounts shown in Table 12 include estimated monthly carrying costs and income requirements for a household with a $50,000, $60,000 and $70,000 mortgage. Manufactured Home Feasibility Study Page 26 their mortgage. These income levels are consistent with the general income profile of households living in manufactured home units. Table 12: Monthly Housing Cost and Income Requirement MHP Name Community Price Income Threshold Mortgage Amount Newton MHP Parksville MHP Silver Ridge Estates MHP Horseshoe MHP The Cedars MHP Trail Park MHP Surrey Parksville Hope Surrey Hope Kelowna $ $ $ $ $ $ 3,000,000 2,000,000 1,500,000 1,387,000 775,000 6,900,000 Monthly Housing Cost $18,197 $50,000 $ 485 $ 485 $ 485 $ 485 $ 485 $ 485 Monthly Monthly Housing Cost Housing Cost $20,336 $22,475 $60,000 $70,000 $ 542 $ 599 $ 542 $ 599 $ 542 $ 599 $ 542 $ 599 $ 542 $ 599 $ 542 $ 599 Table 14 shows the average cost per dwelling unit once the costs of the equity required to finance the acquisition and operation of the site are factored into the analysis. Similarly, Table 13 shows the potential increase in the amount of debt that a household would have to assume once the equity requirements are included. Table 13: Percentage Increase in Debt Requirements MHP Name Community Price Newton MHP Parksville MHP Silver Ridge Estates MHP Horseshoe MHP The Cedars MHP Trail Park MHP Surrey Parksville Hope Surrey Hope Kelowna $ $ $ $ $ $ 3,000,000 2,000,000 1,500,000 1,387,000 775,000 6,900,000 Monthly Monthly Monthly Housing Cost Housing Cost Housing Cost $50,000 $60,000 $70,000 66% 62% 58% 0% 5% 7% 15% 17% 18% 12% 18% 21% 5% 8% 9% 60% 57% 54% Table 14 shows the basic monthly carrying cost for households with an existing mortgage of between $50,000 and $70,000 combined with the increase in cost arising from the required equity contribution. This does not include the cost of the monthly pad rental fee or the costs associated with the day to day management and operation of the site. For parks with a lower equity contribution requirement, the increase in the costs would be lower than for those which had a higher equity contribution requirement. However, regardless of the scenario, the move to an equity coop would mean increased housing costs for park residents. Manufactured Home Feasibility Study Page 27 Table 14: Monthly Housing Costs Including Equity Requirements MHP Name Community Price Newton MHP Parksville MHP Silver Ridge Estates MHP Horseshoe MHP The Cedars MHP Trail Park MHP Surrey Parksville Hope Surrey Hope Kelowna $ $ $ $ $ $ 3,000,000 2,000,000 1,500,000 1,387,000 775,000 6,900,000 Monthly Housing Cost $50,000 $ 674 $ 485 $ 528 $ 519 $ 499 $ 655 Monthly Housing Cost $60,000 $ 754 $ 558 $ 601 $ 604 $ 569 $ 736 Monthly Housing Cost $70,000 $ 830 $ 629 $ 671 $ 685 $ 637 $ 813 If one were to include the monthly pad rental fee plus a basic provision of $300 per month for the day to day maintenance and operation of the site (as well as future replacement reserves), the estimated monthly cost is even higher with the net effect being reflected in the calculations set out in Table 15. Table 15: Monthly Housing Costs—Pad Rental and Management MHP Name Community Price Newton MHP Parksville MHP Silver Ridge Estates MHP Horseshoe MHP The Cedars MHP Trail Park MHP Surrey Parksville Hope Surrey Hope Kelowna $ $ $ $ $ $ 3,000,000 2,000,000 1,500,000 1,387,000 775,000 6,900,000 Monthly Housing Cost $50,000 $ 1,324 $ 1,040 $ 1,141 $ 1,256 $ 1,069 $ 1,335 Monthly Housing Cost $60,000 $ 1,404 $ 1,113 $ 1,214 $ 1,341 $ 1,139 $ 1,416 Monthly Housing Cost $70,000 $ 1,480 $ 1,184 $ 1,284 $ 1,422 $ 1,207 $ 1,493 As shown in Table 15, the different costs required to acquire and convert an existing site are factored in, the estimated cost profile moves to between $1,100 and $1,400 per month. This basic cost profile is consistent with the general break-even scenario for establishing a new park. At the same time, it is out of reach for many of the existing park residents. The analysis also shows that for households that have existing mortgages, the housing costs for the owners are likely to range from $1,100 to $1,400 once all of the additional costs are considered. This compares with the estimated housing cost of $800 to $1,100 per month prior to becoming a coop. Moreover, each member would be required to contribute $5,000 up to $30,000 in equity to assist in the initial acquisition. No upgrades or major repairs were included in this model. Manufactured Home Feasibility Study Page 28 In cases where a household may not be carrying any mortgage costs, the equity coop model would still result in an increase of their baseline rent from an average of $334 per month to $634 per month plus their equity contribution of between $5,000 and $30,000. This would represent a significant challenge for many of the existing park residents including aging senior who saw this form of housing as security in their retirement. The Cap Rate The differences in the cap rates are also an important measure. In evaluating alternatives for investment purposes, an investor will frequently use the cap rate as a means of determining the potential return on investment. The cap rate is determined by taking the net operating income divided by the purchase price. On an investment property, the investor is looking for a cap rate of 7% to 8.5%. A lower cap rate may, in turn, be a signal that there is potential to increase the revenue currently generated from the site. This could be in the form of increased density or in the form of increased revenue. A lower cap rate could also be a signal that the site may have some potential for redevelopment. While most of the sites included in the sample have cap rates in the range that one would expect for this asset class, the Horseshoe Park site in Surrey and the Trail Park site in Kelowna have cap rates of 4.5% and 4.8% respectively. These sites also have a similar cost profile with an average per unit cost of $70,400. For the Surrey site, it is clear that the average cost per unit is well above the cost per unit in the other parks including the other Surrey location.1 An average cost per unit at these levels suggests that the price is potentially being set on another mechanism other than a manufactured home park use, and that these sites may be at increased risk of redevelopment. Table 16: Cap Rates MHP Name Newton MHP Parksville MHP Silver Ridge Estates MHP Horseshoe MHP The Cedars MHP Trail Park MHP Community Price Cap Rate Surrey $ 3,000,000 4.50% Parksville $ 2,000,000 8.40% Hope $ 1,500,000 7.00% Surrey $ 1,387,000 7.40% Hope $ 775,000 7.50% Kelowna $ 6,900,000 4.80% $ 2,593,667 $/Acre $/Pad $ 626,305 $ 71,429 $ 200,000 $ 27,778 $ 150,000 $ 34,091 $ 465,436 $ 53,346 $ 157,201 $ 24,219 $ 582,278 $ 70,408 $ 349,080 $ 49,878 1 The average cost per unit for the Horseshoe Manufactured Home Park is $53,346 per unit, while the average cost per unit for the Newton Manufactured Home Park is $71,429. Manufactured Home Feasibility Study Page 29 Conclusions While there is general agreement that manufactured home units have an important role to play within the current continuum of housing choices, in recent years there have been concerns raised with respect to redevelopment pressures and the potential on-going economic viability of this form of housing. In evaluating potential alternatives, it is clear that the existing inventory of manufactured housing represents an important source of affordable housing—one that may be difficult to replace once it is gone. The analysis of the socio-demographic and economic profile of those living in this housing also shows that this stock has provided access to homeownership opportunities for a number of vulnerable groups across the Province including low income seniors, single person households and single parent families. One of the challenges that many communities are facing is redevelopment pressure on the existing stock. While finding ways to address these pressures is important, the analysis showed that, without a significant equity contribution from government or some other body, it would be difficult for the coop housing sector to successfully step in and relieve these pressures. In addition, the study showed that entry-level ownership is also fraught with some challenges with the project economics for a new park typically falling at a price which is no longer affordable to households with low or low-to-moderate incomes—the groups that have typically benefitted from this form of housing. Furthermore, while it is clear that there are no easy answers, the analysis showed that between 2001 and 2006 the number of manufactured home units which were lost has started to level off and that almost half of all of the regions across the Province reported a net increase in supply during this time period. This is an important measure which the Province should continue to monitor as a way of gauging the general health of this sector. The analysis also showed that local governments continue to have an important role to play in encouraging this form of housing as well as in working to prevent the on-going loss of this housing through redevelopment pressures. Manufactured Home Feasibility Study Page 30 APPENDIX A: ABOUT THE INVENTORY OF MANUFACTURED HOME UNITS Manufactured Homes – Issues and Opportunities Page 31 Table A1: Distribution of Manufactured Home Units By Region Table A1 shows the distribution of manufactured home units across the Province. The data in Table A1 shows the changes in the stock between 2001 and 2006 including the contribution that manufactured home units make to the total inventory of housing choices across the Province. British Columbia - All Dwelling Units (2001) Mobile Home Units (2001) % of the Housing Stock (2001) All Dwelling Units (2006) Mobile Home Units (2006) % of the Housing Stock (2006) 1,534,335 43,440 2.83% 1,643,145 43,265 2.63% A Fraser Valley Regional District 86,070 1,950 2.27% 94,625 2,435 2.57% A Greater Vancouver Regional District 758,715 5,115 0.67% 817,225 5,285 0.65% A Capital Regional District 142,135 1,730 1.22% 152,530 1,875 1.23% A Cowichan Valley Regional District 28,850 1,275 4.42% 31,260 1,250 4.00% A Nanaimo Regional District 54,260 2,400 4.42% 59,870 2,080 3.47% A Central Okanagan Regional District 59,875 2,595 4.33% 67,000 3,665 5.47% B Okanagan-Similkameen 33,880 2,040 6.02% 35,240 1,830 5.19% B Comox-Strathcona Regional District 39,405 1,880 4.77% 42,975 1,995 4.64% B Squamish-Lillooet Regional District 12,565 675 5.37% 13,990 645 4.61% B Thompson-Nicola Regional District 47,645 3,710 7.79% 50,375 2,910 5.78% B North Okanagan Regional District 29,760 1,210 4.07% 31,875 1,270 3.98% C East Kootenay Regional District 22,955 1,900 8.28% 23,420 3,540 15.12% C Central Kootenay Regional District 24,205 1,790 7.40% 24,685 2,080 8.43% C Kootenay Boundary Regional District 13,650 475 3.48% 13,630 605 4.44% C Sunshine Coast Regional District 11,090 515 4.64% 12,185 450 3.69% C Columbia-Shuswap Regional District 19,910 1,920 9.64% 21,185 1,515 7.15% C Cariboo Regional District 25,310 2,575 10.17% 25,225 2,475 9.81% C Fraser-Fort George Regional District 35,960 3,195 8.88% 36,460 2,280 6.25% D Alberni-Clayoquot Regional District 12,505 560 4.48% 12,870 645 5.01% D Powell River Regional District 8,485 515 6.07% 8,775 270 3.08% D Mount Waddington Regional District 5,090 635 12.48% 4,690 220 4.69% D Central Coast Regional District 1,350 170 12.59% 1,185 40 3.38% D Skeena-Queen Charlotte Regional District 8,225 315 3.83% 7,805 120 1.54% D Kitimat-Stikine Regional District 14,605 875 5.99% 14,370 695 4.84% D Bulkley-Nechako Regional District 14,830 1,230 8.29% 14,550 1,050 7.22% D Peace River Regional District 20,405 2,105 10.32% 22,335 1,795 8.04% D Stikine Region 565 20 3.54% 495 10 2.02% D Northern Rockies Regional District 2,015 50 2.48% 2,305 240 10.41% Manufactured Homes – Issues and Opportunities Page 32 Table A2: Concentration of Manufactured Home Units Table A2 shows the general distribution of manufactured home units across the Province including the regions which tend to have a larger concentration of manufactured home units. It also shows the changes in the profile of the stock between 2001 and 2006. British Columbia - All Dwelling Units (2001) Mobile Home Units (2001) 1,534,335 43,440 1,643,145 43,265 86,070 1,950 94,625 2,435 817,225 5,285 152,530 1,875 31,260 1,250 59,870 2,080 67,000 3,665 35,240 1,830 42,975 1,995 13,990 645 50,375 2,910 31,875 1,270 23,420 3,540 24,685 2,080 1% 1% 4% 6% 7% 1% 1% 1% 0% 13,630 605 12,185 450 21,185 1,515 25,225 2,475 36,460 2,280 1% 2% 3% 5% 0% 0% A Fraser Valley Regional District A Greater Vancouver Regional District 758,715 5,115 A Capital Regional District 142,135 1,730 A Cowichan Valley Regional District 28,850 1,275 A Nanaimo Regional District 54,260 2,400 A Central Okanagan Regional District 59,875 2,595 B Okanagan-Similkameen 33,880 2,040 B Comox-Strathcona Regional District 39,405 1,880 B Squamish-Lillooet Regional District 12,565 675 B Thompson-Nicola Regional District 47,645 3,710 B North Okanagan Regional District 29,760 1,210 C East Kootenay Regional District 22,955 1,900 C Central Kootenay Regional District 24,205 1,790 C Kootenay Boundary Regional District 13,650 475 C Sunshine Coast Regional District 11,090 515 C Columbia-Shuswap Regional District 19,910 1,920 C Cariboo Regional District 25,310 2,575 C Fraser-Fort George Regional District 35,960 3,195 D Alberni-Clayoquot Regional District 12,505 560 D Powell River Regional District 8,485 515 D Mount Waddington Regional District 5,090 635 D Central Coast Regional District 1,350 170 D Skeena-Queen Charlotte Regional District 8,225 315 D Kitimat-Stikine Regional District 14,605 875 D Bulkley-Nechako Regional District 14,830 1,230 D Peace River Regional District 20,405 2,105 D Stikine Region 565 20 D Northern Rockies Regional District 2,015 50 Distribution of Units (2006) 4% 12% 4% 3% 6% 6% 5% 4% 2% 9% 3% 4% 4% All Dwelling Units (2006) Mobile Home Units (2006) 12,870 645 8,775 270 4,690 220 1,185 40 7,805 120 14,370 695 14,550 1,050 22,335 1,795 495 10 2,305 240 Source: Statistics Canada, 2001 and 2006 Census Manufactured Homes – Issues and Opportunities Page 33 Distribution of Units (2006) 6% 12% 4% 3% 5% 8% 4% 5% 1% 7% 3% 8% 5% 1% 1% 4% 6% 5% 1% 1% 1% 0% 0% 2% 2% 4% 0% 1% Table A3: Change in the Inventory of Manufactured Home Units Table A3 shows the change in the inventory of manufactured home units between 2001 and 2006 including the regions reporting a net increase or decrease in units. British Columbia - All Dwelling Units (2001) All Dwelling Units (2006) Net Increase or Decrease in Units Mobile Home Units (2001) Mobile Home Units (2006) Net Increase or Decrease in Units 1,534,335 1,643,145 108,810 43,440 43,265 -175 A Fraser Valley Regional District 86,070 94,625 8,555 1,950 2,435 485 A Greater Vancouver Regional District 758,715 817,225 58,510 5,115 5,285 170 A Capital Regional District 142,135 152,530 10,395 1,730 1,875 145 A Cowichan Valley Regional District 28,850 31,260 2,410 1,275 1,250 -25 A Nanaimo Regional District 54,260 59,870 5,610 2,400 2,080 -320 A Central Okanagan Regional District 59,875 67,000 7,125 2,595 3,665 1,070 B Okanagan-Similkameen 33,880 35,240 1,360 2,040 1,830 -210 B Comox-Strathcona Regional District 39,405 42,975 3,570 1,880 1,995 115 B Squamish-Lillooet Regional District 12,565 13,990 1,425 675 645 -30 B Thompson-Nicola Regional District 47,645 50,375 2,730 3,710 2,910 -800 B North Okanagan Regional District 29,760 31,875 2,115 1,210 1,270 60 C East Kootenay Regional District 22,955 23,420 465 1,900 3,540 1,640 C Central Kootenay Regional District 24,205 24,685 480 1,790 2,080 290 C Kootenay Boundary Regional District 13,650 13,630 -20 475 605 130 C Sunshine Coast Regional District 11,090 12,185 1,095 515 450 -65 C Columbia-Shuswap Regional District 19,910 21,185 1,275 1,920 1,515 -405 C Cariboo Regional District 25,310 25,225 -85 2,575 2,475 -100 C Fraser-Fort George Regional District 35,960 36,460 500 3,195 2,280 -915 D Alberni-Clayoquot Regional District 12,505 12,870 365 560 645 85 D Powell River Regional District 8,485 8,775 290 515 270 -245 D Mount Waddington Regional District 5,090 4,690 -400 635 220 -415 D Central Coast Regional District 1,350 1,185 -165 170 40 -130 D Skeena-Queen Charlotte Regional District 8,225 7,805 -420 315 120 -195 D Kitimat-Stikine Regional District 14,605 14,370 -235 875 695 -180 D Bulkley-Nechako Regional District 14,830 14,550 -280 1,230 1,050 -180 D Peace River Regional District 20,405 22,335 1,930 2,105 1,795 -310 D Stikine Region 565 495 -70 20 10 -10 D Northern Rockies Regional District 2,015 2,305 290 50 240 190 1 Source: Statistics Canada, 2001 and 2006 Census 1 Zones A and B represent the existing urban and emerging suburban areas. Manufactured Homes – Issues and Opportunities Page 34 Table A4: Tenure Profile of Manufactured Home Units Table A4 shows the number of manufactured home units which are owned compared to those which are rented. Total Households British Columbia - Owned Rented Band housing 43,265 36,380 6,685 590 A Fraser Valley Regional District 2,435 2,090 330 15 A Greater Vancouver Regional District 5,285 4,330 950 0 A Capital Regional District 1,870 1,685 165 25 A Cowichan Valley Regional District 1,245 1,130 115 0 A Nanaimo Regional District 2,080 1,750 325 0 A Central Okanagan Regional District 3,665 3,340 325 0 A Okanagan-Similkameen 1,830 1,660 155 15 B Comox-Strathcona Regional District 1,995 1,670 320 10 B Squamish-Lillooet Regional District 645 515 120 10 B Thompson-Nicola Regional District 2,910 2,415 485 0 B North Okanagan Regional District 1,270 1,070 195 0 B East Kootenay Regional District 3,535 3,105 430 0 C Central Kootenay Regional District 2,085 1,625 455 0 C Kootenay Boundary Regional District 610 505 100 0 C Sunshine Coast Regional District 445 340 105 10 C Columbia-Shuswap Regional District 1,515 1,155 360 0 C Cariboo Regional District 2,475 1,975 430 65 C Fraser-Fort George Regional District 2,280 1,935 350 0 C Alberni-Clayoquot Regional District 640 515 130 0 D Powell River Regional District 270 220 45 0 D Mount Waddington Regional District 225 195 20 0 D Central Coast Regional District 40 20 15 10 D Skeena-Queen Charlotte Regional District 125 100 25 0 D Kitimat-Stikine Regional District 695 510 185 0 D Bulkley-Nechako Regional District 1,050 850 195 10 D Peace River Regional District 1,795 1,495 275 25 D Stikine Region D Northern Rockies Regional District 0 10 0 0 235 170 60 0 Source: Statistics Canada, 2006 Census Manufactured Homes – Issues and Opportunities Page 35 Table A5: The Age Profile of the Stock Table A5 shows the general age profile of the manufactured home units across the Province. This includes information on the number of units constructed prior t 1980 as well as the number of units constructed in more recent years. Total Prior to Prior to 1980 to 2001 to Inventory 1960 1980 2000 2006 British Columbia - 43,250 1,550 23,320 17,340 2,550 Fraser Valley Regional District 2,435 85 1,195 1,090 155 A Greater Vancouver Regional District 5,285 295 2,890 2,095 305 A Capital Regional District 1,870 65 805 1,000 65 A Cowichan Valley Regional District 1,245 60 725 455 70 A Nanaimo Regional District 2,080 55 1,245 695 145 A Central Okanagan Regional District 3,665 75 1,680 1,720 260 A Okanagan-Similkameen 1,830 75 1,095 565 165 B Comox-Strathcona Regional District 1,995 40 1,175 740 75 B Squamish-Lillooet Regional District 645 25 350 275 20 B Thompson-Nicola Regional District 2,910 120 1,665 1,135 110 B North Okanagan Regional District 1,270 40 670 510 95 B East Kootenay Regional District 3,535 110 1,840 1,420 275 C Central Kootenay Regional District 2,085 155 1,330 675 70 C Kootenay Boundary Regional District 610 25 380 185 30 C Sunshine Coast Regional District 445 30 230 195 35 C Columbia-Shuswap Regional District 1,515 40 945 435 140 C Cariboo Regional District 2,475 55 1,105 1,245 115 C Fraser-Fort George Regional District 2,280 40 1,200 1,010 60 C Alberni-Clayoquot Regional District 640 20 365 245 35 D Powell River Regional District 270 15 140 100 35 D Mount Waddington Regional District 225 30 165 50 0 D Central Coast Regional District 40 0 15 10 0 D Skeena-Queen Charlotte Regional District 125 0 85 35 0 D Kitimat-Stikine Regional District 695 45 435 245 15 D Bulkley-Nechako Regional District 1,050 10 545 460 40 D Peace River Regional District 1,795 30 940 700 150 D Stikine Region D Northern Rockies Regional District 0 0 0 10 0 235 10 105 40 85 D Source: Statistics Canada 2006 Census Manufactured Homes – Issues and Opportunities Page 36 APPENDIX B: SOCIO-DEMOGRAPHIC DATA Manufactured Homes Issues and Opportunities Page 37 Table B1: Household Size Table B1 shows the general distribution of households living in manufactured home units including the high prevalence of single person versus two or more person households. Total Households 1 person 2 persons 3 persons 4 persons 43,265 16,120 17,495 4,665 3,250 Fraser Valley Regional District 2345 900 1,040 200 130 A Greater Vancouver Regional District 5,365 2,200 2,285 440 285 A Capital Regional District 1,900 790 800 165 80 A Cowichan Valley Regional District 1,200 545 500 75 45 A Nanaimo Regional District 2,080 950 820 160 95 A Central Okanagan Regional District 3,655 1,270 1,715 340 235 A Okanagan-Similkameen 1,945 740 980 125 70 B Comox-Strathcona Regional District 1,965 800 770 195 135 B Squamish-Lillooet Regional District 635 245 230 80 55 B Thompson-Nicola Regional District 2,835 1,060 1,135 310 210 B North Okanagan Regional District 1,245 445 545 120 85 B East Kootenay Regional District 3,385 900 1,370 495 430 C Central Kootenay Regional District 2,075 895 715 235 140 C Kootenay Boundary Regional District 625 260 240 65 50 C Sunshine Coast Regional District 515 260 165 40 30 C Columbia-Shuswap Regional District 1,565 550 590 195 140 C Cariboo Regional District 2,495 825 940 335 270 C Fraser-Fort George Regional District 2,260 730 850 355 220 C Alberni-Clayoquot Regional District 650 245 245 75 50 D Powell River Regional District 310 140 120 25 10 D Mount Waddington Regional District 215 100 65 30 15 D Central Coast Regional District 35 20 10 5 0 D Skeena-Queen Charlotte Regional District 135 65 45 15 5 D Kitimat-Stikine Regional District 735 280 265 90 70 D Bulkley-Nechako Regional District 1,050 365 325 155 120 D Peace River Regional District 1,825 455 645 295 250 D Stikine Region 5 5 0 0 0 D Northern Rockies Regional District 255 80 85 45 25 British Columbia - D Source: Statistics Canada 2006 Census Manufactured Homes – Issues and Opportunities Page 38 Table B2: Household Composition Table B2 provides additional information on the household composition of families and individuals living in the manufactured home stock. Total – Household Family Without With Non-family type households children children households British Columbia - 43,265 25,730 13,790 6,935 17,520 Fraser Valley Regional District 2,435 1,335 865 255 1,100 A Greater Vancouver Regional District 5285 2,995 1,900 665 2,290 A Capital Regional District 1,875 1,020 650 185 855 A Cowichan Valley Regional District 1,250 685 430 85 560 A Nanaimo Regional District 2,080 1,105 635 255 975 A Central Okanagan Regional District 3,665 2,230 1,350 440 1,430 A Okanagan-Similkameen 1,830 1,130 875 150 700 B Comox-Strathcona Regional District 1,995 1,095 640 195 900 B Squamish-Lillooet Regional District 645 405 150 150 240 B Thompson-Nicola Regional District 2,910 1,730 845 505 1,180 B North Okanagan Regional District 1,270 650 390 190 620 B East Kootenay Regional District 3,540 2,500 1,195 855 1,035 C Central Kootenay Regional District 2,080 1,125 465 340 955 C Kootenay Boundary Regional District 605 310 200 50 300 C Sunshine Coast Regional District 450 225 90 80 220 C Columbia-Shuswap Regional District 1,515 905 400 345 610 C Cariboo Regional District 2,475 1,550 710 460 925 C Fraser-Fort George Regional District 2,280 1,490 675 460 790 C Alberni-Clayoquot Regional District 645 415 160 125 230 D Powell River Regional District 270 105 60 20 165 D Mount Waddington Regional District 220 100 55 25 120 D Central Coast Regional District 40 15 0 0 25 D Skeena-Queen Charlotte Regional District 120 80 50 20 40 D Kitimat-Stikine Regional District 695 420 125 155 280 D Bulkley-Nechako Regional District 1,050 710 280 345 340 D Peace River Regional District 1,795 1,250 510 520 540 D Stikine Region 10 0 10 0 10 D Northern Rockies Regional District 240 150 75 60 85 Sources Statistics Canada 2006 Census Manufactured Homes – Issues and Opportunities Page 39 Table B3: Age Profile of Households Living in Manufactured Home Units Table B3 shows the general age profile of households living in the manufactured home stock including the high prevalence of those who are 55 or older. Total – Household type Under 25 25 to 44 45 to 54 55+ 65+ British Columbia - 43,265 1,290 11,130 8,845 21,915 13,200 Fraser Valley Regional District 2,435 140 1,020 905 1,470 700 A Greater Vancouver Regional District 5,285 55 615 435 975 530 A Capital Regional District 1,875 15 135 135 315 205 A Cowichan Valley Regional District 1,250 20 200 210 1,400 990 A Nanaimo Regional District 2,080 30 440 345 1,625 1,100 A Central Okanagan Regional District 3,665 75 1,040 950 3,225 1,925 A Okanagan-Similkameen 1,830 30 340 310 1,200 755 B Comox-Strathcona Regional District 1,995 10 230 235 765 565 B Squamish-Lillooet Regional District 645 50 420 340 1,270 865 B Thompson-Nicola Regional District 2,910 0 205 185 260 145 B North Okanagan Regional District 1,270 45 520 460 965 600 B East Kootenay Regional District 3,540 0 40 65 160 100 C Central Kootenay Regional District 2,080 15 95 75 260 135 C Kootenay Boundary Regional District 605 25 235 210 175 85 C Sunshine Coast Regional District 450 105 885 550 1,355 780 C Columbia-Shuswap Regional District 1,515 75 695 660 2,235 1,490 C Cariboo Regional District 2,475 45 255 305 665 440 C Fraser-Fort George Regional District 2,280 60 485 350 610 280 C Alberni-Clayoquot Regional District 645 95 805 590 980 525 D Powell River Regional District 270 0 45 95 75 30 D Mount Waddington Regional District 220 0 0 10 30 20 D Central Coast Regional District 40 0 45 15 60 40 D Skeena-Queen Charlotte Regional District 120 10 225 200 255 120 D Kitimat-Stikine Regional District 695 75 420 255 290 170 D Bulkley-Nechako Regional District 1,050 150 880 510 730 385 D Peace River Regional District 1,795 125 750 375 540 210 D Stikine Region 10 0 0 10 0 0 D Northern Rockies Regional District 240 40 105 60 25 10 Source: Statistics Canada 2006 Census Manufactured Homes – Issues and Opportunities Page 40 Table B4: Prevalence of Seniors 65+ and 75+ Table B4 provides additional detail on the number of seniors living in the manufactured home stock. This includes information on those who are 65+ as well as those who are 75+. British Columbia Fraser Valley Regional District Under 25 25 to 44 45 to 54 55+ 65+ 75+ 1,290 11,130 8,845 21,915 13,200 5,810 140 1,020 905 1,470 700 230 A Greater Vancouver Regional District 55 615 435 975 530 235 A Capital Regional District 15 135 135 315 205 60 A Cowichan Valley Regional District 20 200 210 1,400 990 470 A Nanaimo Regional District 30 440 345 1,625 1,100 460 A Central Okanagan Regional District 75 1,040 950 3,225 1,925 1,010 A Okanagan-Similkameen 30 340 310 1,200 755 385 B Comox-Strathcona Regional District 10 230 235 765 565 275 B Squamish-Lillooet Regional District 50 420 340 1,270 865 470 B Thompson-Nicola Regional District 0 205 185 260 145 50 B North Okanagan Regional District 45 520 460 965 600 245 B East Kootenay Regional District 0 40 65 160 100 25 C Central Kootenay Regional District 15 95 75 260 135 65 C Kootenay Boundary Regional District C Sunshine Coast Regional District C 25 235 210 175 85 60 105 885 550 1,355 780 300 Columbia-Shuswap Regional District 75 695 660 2,235 1,490 575 C Cariboo Regional District 45 255 305 665 440 185 C Fraser-Fort George Regional District 60 485 350 610 280 75 C Alberni-Clayoquot Regional District 95 805 590 980 525 195 D Powell River Regional District 0 45 95 75 30 10 D Mount Waddington Regional District 0 0 10 30 20 10 D Central Coast Regional District 0 45 15 60 40 15 D Skeena-Queen Charlotte Regional District 10 225 200 255 120 45 D Kitimat-Stikine Regional District 75 420 255 290 170 75 D Bulkley-Nechako Regional District 150 880 510 730 385 195 D Peace River Regional District 125 750 375 540 210 90 D Stikine Region 0 0 10 0 0 0 D Northern Rockies Regional District 40 105 60 25 10 0 Source: Statistics Canada 2006 Census Manufactured Homes – Issues and Opportunities Page 41 APPENDIX C: HOUSING COSTS AND MARKET DATA Manufactured Homes – Issues and Opportunities Page 42 Table C1: Median Incomes and Average Shelter Costs (Selected Communities) This table provides information on median household income and average shelter costs for owners and renters in 38 selected communities in regions across B.C. Median Household Income Average Value 2006 Census Average Shelter Cost (Owners) Average Shelter Cost (Renters) A Fraser Valley Regional District Chilliwack $50,890 A Abbotsford $53,908 $300,515 $966 $701 $358,684 $1,075 $700 A Mission $50,163 $375,836 $1,254 $700 A A Hope $41,493 $228,001 $550 $683 A Greater Vancouver Regional District Langley District $69,805 $474,003 $1,266 $851 A Langley City $46,456 $294,293 $786 $1,060 A Surrey $52,926 $446,307 $1,251 $710 A White Rock $50,376 $466,010 $747 $850 A Coquitlam $59,294 $456,944 $1,107 $769 A A Maple Ridge $55,294 $396,462 $1,300 $760 A Capital Regional District Sidney $49,270 $422,628 $916 $550 A Victoria $38,850 $407,131 $873 $709 A Langford $64,199 $384,938 $1,271 $819 A A View Royal $67,136 $460,288 $1,251 $855 A Cowichan Valley Regional District Duncan $33,390 $208,402 $531 $590 A Lake Cowichan $45,347 $237,763 $605 $616 A Ladysmith $50,053 $290,213 $722 $662 A Nanaimo Regional District A Nanaimo $45,937 $313,464 $821 $675 A A Parksville $42,053 $293,040 $507 $700 A Central Okanagan Regional District Kelowna $48,859 $376,151 $846 $811 A Lake Country $56,592 $457,500 $1,027 $817 A B B Peachland Okanagan-Similkameen Regional District Princeton $45,187 $378,886 $686 $796 $34,826 $246,194 $426 476 B Summerland $48,454 $389,787 $508 $812 B Penticton Comox Strathcona Regional District Campbell River Squamish-Lillooet Regional District Squamish $41,383 $296,855 $590 $659 $51,011 $273,482 $766 $649 $64,322 $386,953 $1,276 $801 B B B B Manufactured Homes – Issues and Opportunities Page 43 Median Household Income $51,440 Average Value 20006 Census $421,483 Average Shelter Cost (Owners) $1,566 Average Shelter Cost (Renters) $812 B Pemberton B Whistler $62,299 $906,528 $1,475 $1,051 B $51,225 $167,678 $616 $600 B B Lillooet Thompson-Nicola Regional District Merritt $44,280 $211,914 $670 $580 B Cache Creek $41,234 $137,335 $345 $590 B Clinton $31,715 $97,403 $494 $567 B Kamloops $54,764 $257,242 $889 $661 B Chase $46,049 $205,599 $372 $634 B North Okanagan Regional District B Lumby $41,783 $226,407 $ B Vernon $43,140 $297,343 $893 $551 B Armstrong $42,079 $260,457 $876 $752 B Enderby $34,238 $199,331 $523 $517 Source: Statistics Canada, 2006, Community Profiles Manufactured Homes – Issues and Opportunities Page 44 Table C2: MLS Listings: Units and Asking Price Manufactured Home Units 2006 - 2009 This table provides information on the median asking price and the number of units of manufactured homes listed on the MLS listings in 38 communities across the Province. 2001 Mobile Home Units # of MLS Listings 2006 Median Selling Price # of MLS Listings 2009 Median Selling Price (April 2009) Fraser Valley Regional District A Chilliwack 215 42 $79,900 6 $69,900 A Abbotsford 455 18 $49,000 23 $89,000 A Mission 105 31 $88,900 24 $99,900 Hope n/a n/a n/a 18 $84,000 1,670 41 $36,900 83 $56,900 Greater Vancouver Regional District A Surrey A White Rock - 13 $155,000 1 $68,000 A Coquitlam 380 5 $74,500 8 $62,500 A Anmore 95 1 $79,900 5 $85,000 A Maple Ridge 150 7 $52,800 10 $44,900 A Capital Regional District A Sidney 45 3 3 $249,900 A Victoria $124,900 75 $149,000 A Langford 300 21 $69,800 5 $82,500 A View Royal 200 10 17 $158,000 A Cowichan Valley Regional District A Duncan - 31 $136,000 15 $36,900 A Lake Cowichan 10 2 $109,900 2 $68,000 A Ladysmith - 5 $98,900 12 $99,000 A Nanaimo Regional District A Nanaimo 1,205 48 $144,900 93 $99,900 A Parksville 80 41 $149,900 11 $74,500 A Central Okanagan Regional District A Kelowna 595 69 $89,900 98 $117,900 A Lake Country 125 16 $89,900 10 $119,000 A B Peachland 70 5 $34,900 4 $77,700 B Princeton 205 18 $89,900 12 $84,900 B Summerland 100 1 $199,900 4 $89,000 B Penticton 480 24 $74,000 33 $92,500 B Comox Strathcona Regional District B Campbell River 415 19 $60,000 22 $49,900 B Squamish-Lillooet Regional District B Squamish 200 18 $40,000 10 $110,000 60 Okanagan-Similkameen Regional District Manufactured Homes – Issues and Opportunities Page 45 2001 Mobile Home Units 35 # of MLS Listings 2006 2 Median Selling Price # of MLS Listings 2009 3 Median Selling Price (April 2009) $349,000 B Pemberton B Whistler 10 1 $215,000 B Lillooet 270 1 $37,900 B Thompson-Nicola Regional District B Merritt 245 9 $82,000 B Cache Creek 155 6 $68,500 B Clinton 1 $49,900 B Kamloops B Chase B North Okanagan Regional District B B B Armstrong B Enderby 30 3 1 1,295 17 185 13 Lumby 60 4 Vernon 230 29 25 7 - 4 $60,000 62 $78,500 57 $299,000 $56,900 9 $55,000 $90,000 56 $133,000 11 $114,500 9 $90,000 $39,900 Source: MLS Listings, 2006 and 2009 Manufactured Homes – Issues and Opportunities Page 46 Table C3: Median Selling Prices and Qualifying Incomes– Condo Stock This table provides information on median selling prices and qualifying incomes for strata condos in 38 selected communities in different regions across the Province. Median Selling Price (Condo) Qualifying Income (Condo) Monthly Housing Costs (Condo) Average Housing Costs 2006 Census (Ownership) A Fraser Valley Regional District Chilliwack $179,500 $46,083 $1,229 $966 A Abbotsford $190,000 $48,322 $1,289 $1,075 A Mission $289,900 $69,621 $1,857 $1,254 Hope $135,000 $36,381 $970 $550 A A Greater Vancouver Regional District Langley District $229,900 $56,828 $1,515 $1,266 A Langley City $229,900 $56,828 $1,515 $786 A Surrey $249,900 $61,093 $1,629 $1,251 A White Rock $367,900 $86,251 $2,300 $747 A Coquitlam $288,800 $69,386 $1,850 $1,107 A A Maple Ridge $242,000 $59,408 $1,584 $1,300 A Capital Regional District Sidney $399,000 $92,881 $2,477 $916 A Victoria $355,000 $83,500 $2,227 $873 A Langford - - - $1,271 A A View Royal - - - $1,251 A Cowichan Valley Regional District Duncan $173,900 $44,889 $1,197 $531 A Lake Cowichan $119,000 $33,184 $885 $605 A Ladysmith $184,900 $47,234 $1,260 $722 A Nanaimo Regional District Nanaimo $309,900 $73,885 $1,970 $821 Parksville $224,900 $55,762 $1,487 $507 A Central Okanagan Regional District Kelowna $299,900 $71,753 $1,913 $846 A Lake Country $319,000 $75,825 $2,022 $1,027 A B $375,000 $87,765 $2,340 $686 B Peachland Okanagan-Similkameen Regional District Princeton $154,900 $40,838 $1,089 $426 B Summerland $297,500 $71,241 $1,900 $508 B Penticton $285,000 $68,576 $1,829 $590 B Comox Strathcona Regional District B Campbell River Squamish-Lillooet Regional District Squamish $179,000 $45,976 $1,226 $766 $349,000 $82,221 $2,193 $1,276 A A A B B Manufactured Homes – Issues and Opportunities Page 47 Median Selling Price (Condo) $599,000 Qualifying Income (Condo) $135,523 Monthly Housing Costs (Condo) $3,614 Average Housing Costs 2006 Census (Ownership) $1,475 B Whistler B Pemberton - - - $1,566 B Lillooet - - - $616 B B Thompson-Nicola Regional District Merritt $145,000 $38,727 $1,033 $670 B Cache Creek - - - $345 B Clinton - - - $494 B Kamloops $234,900 $57,894 $1,544 $889 B Chase $144,900 $38,706 $1,032 $372 B B North Okanagan Regional District Lumby - - - B Vernon $245,000 $60,048 $1,601 $893 B Armstrong $159,800 $41,883 $1,117 $876 B Enderby $154,900 $40,838 $1,089 $523 Source: MLS Listings, 2006 and 2009 Manufactured Homes – Issues and Opportunities Page 48 Table C4: Median Selling Price and Qualifying Incomes – Manufactured Home Stock This table provides information on median selling prices and qualifying incomes for strata condos in 38 selected communities in different regions across the Province. Median Selling Price Manufactured Home Qualifying Income Manufactured Home Monthly Housing Costs (Manufactured Home) Average Housing Costs 2006 Census (Rental) A Fraser Valley Regional District Chilliwack $69,900 $21,778 $581 $701 A Abbotsford $89,000 $25,850 $689 $700 A Mission $99,900 $28,174 $751 $700 Hope Greater Vancouver Regional District Langley District $84,000 $25,470 $679 $683 A $129,000 $34,379 $917 $851 A Surrey $56,900 $19,006 $507 $710 A White Rock $68,000 $21,373 $570 $850 A Coquitlam $62,500 $20,200 $539 $769 A A $44,900 $16,448 $439 $760 A Maple Ridge Capital Regional District Sidney $249,900 $60,155 $1,604 $550 A Victoria $149,000 $38,643 $1,030 $709 A Langford $82,500 $24,464 $652 $819 A A $158,000 $40,561 $1,082 $855 A View Royal Cowichan Valley Regional District Duncan $36,900 $14,742 $393 $590 A Lake Cowichan $68,000 $21,373 $570 $616 A Ladysmith $99,000 $27,982 $746 $662 A Nanaimo Regional District Nanaimo $99,900 $28,174 $751 $675 Parksville $74,500 $22,759 $607 $700 A Central Okanagan Regional District Kelowna $117,900 $32,012 $854 $811 A Lake Country $119,000 $32,246 $860 $817 A B B Peachland $77,700 $23,441 $625 $796 Okanagan-Similkameen Regional District Princeton $84,900 $24,976 $666 $476 B Summerland $89,000 $25,850 $689 $812 B Penticton $92,500 $26,597 $709 $659 B Comox Strathcona Regional District B Campbell River Squamish-Lillooet Regional District Squamish $49,900 $17,514 $467 $649 $110,000 $30,328 $809 $801 A Langley City A A A B B $1,060 Manufactured Homes – Issues and Opportunities Page 49 Median Selling Price Manufactured Home Qualifying Income Manufactured Home Monthly Housing Costs (Manufactured Home) Average Housing Costs 2006 Census (Rental) $812 Pemberton B Whistler $215,000 $52,870 $1,410 $1,051 B Lillooet $37,900 $14,983 $400 $600 B B Thompson-Nicola Regional District Merritt $82,000 $24,417 $651 $580 B Cache Creek $68,500 $21,529 $574 $590 B Clinton $49,900 $17,550 $468 $567 B Kamloops $78,500 $23,669 $631 $661 B Chase $299,000 $70,840 $1,889 $634 B B North Okanagan Regional District Lumby $55,000 $18,641 $497 $ B Vernon $133,000 $35,328 $942 $551 B Armstrong $114,500 $31,370 $837 $752 B Enderby $90,000 $26,129 $697 $517 Source: MLS Listings, 2006 and 2009 Manufactured Homes – Issues and Opportunities Page 50