2040 Comprehensive Plan: Envision Shakopee

HOUSING: AFFORDABILITY WHILE HIGH RENTAL COST BURDENS ARE A REGIONAL PROBLEM, SHAKOPEE’S INCREASINGLY HIGH RENTAL COST BURDEN REMAINS LOWER THAN THE REGION AS A WHOLE. FIGURE 3.9 - HOUSINGCOST BURDENOVER TIME

CURRENT HOUSING NEEDS Cost burden in our community

Cost Burden by Tenure

Housing affordability is an issue throughout the Twin Cities, and Shakopee is no exception. As of 2015, 45% of those who are renters in Shakopee are cost burdened (i.e. households that spend more than 30% of their gross income on housing), compared to 49% of renters within the Twin Cities. For home-owning residents (73% of total households), the drop in relative housing prices since the 2008 Recession resulted in fewer cost-burdened households. In 2016, 25% of home owning residents were cost burdened, down from 34% in 2008. Despite the relative drop in for-sale prices, rental housing in Shakopee remains unaffordable to many who live in Shakopee as well as many who work in Shakopee. Unaffordable housing costs are a result of both high demand and few deliveries of either multifamily or single-family homes since 2010. Earnings and housing cost balance To afford a typical $225,000 home in Shakopee, a household must earn at least $68,000 gross income to afford a mortgage and related home- ownership expenses. Meanwhile, renters need a household income of at least $50,000 to afford an average $1,200 per month apartment in Shakopee. Given these income requirements, at least 42% of Shakopee householders are unable to afford a typical home in Shakopee, while 29% of Shakopee householders are unable to afford a typical rental unit. However, in addition to income requirements, a number of other obstacles present barriers to buying a home in Shakopee: these metrics assume that those who are income qualified can afford a 20% down payment, that they have sufficient credit to obtain a mortgage, and that they do not have other significant expenses, such as student loan debt, day care costs, health care expenses, and transportation costs.

Shakopee Renter Cost Burden Scott County Renter Cost Burden Twin Cities Region Renter Cost Burden

Shakopee Home Owner Cost Burden Scott County Home Owner Cost Burden Twin Cities Region Home Owner Cost Burden

10% 20% 30% 40% 50% 60%

1990 2000 2007 2008 2009 2010 2011

2012 2013 2014 2015

HOUSING: AFFORDABILITY TO AFFORD A TYPICAL $225,000 HOME, SHAKOPEE HOUSEHOLDS NEED TO EARN $68K GROSS ANNUALLY. RENTERS NEED AN INCOME OF AT LEAST $50K TO AFFORD AN AVERAGE $1,200/MONTH APARTMENT IN SHAKOPEE. FIGU E 3.10 - H ME FFORDABILITY

Shakopee Affordability of Home Ownership

Shakopee Affordability of Renting

Cannot Afford a Typical Rental

Cannot Afford a Typical Home

29%

Can Afford a Typical Rental

42%

Can Afford a Typical Home

71%

58%

82