Albuquerque Trends and Opportunities to 2040 Greater Albuquerque Association of Realtors Arthur C. Nelson, Ph.D., FAICP Professor of Planning & Real Estate Development University of Arizona April 16, 2015 

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Trends & Opportunities Trends – Population – Households – Housing – Preferences Opportunities 4 

New Housing Market Realities Sub-prime mortgages are history. 20% down-payments are the new normal. Meaning – Smaller homes  maybe more people per home – Smaller lots – More attached units – More renters  including doubled-up renters 5 

Population Change 2010-2040 Source: Woods & Poole Economics Figures in thousands. 6 Metric United States New Mexico Albuquerque Santa Fe Combined Population 2010 309,350 2,066 917 145 1,062 Population 2040 406,417 3,099 1,520 249 1,769 Population Change 97,067 1,033 603 105 707 Percent Change 31% 50% 66% 72% 67% 

Population 65+ Change 2010-2040 Source: Woods & Poole Economics Figures in thousdands. 7 Metric United States New Mexico Albuquerque Santa Fe Combined Population 2010 40,331 273 113 22 135 Population 2040 81,250 678 330 73 402 Population Change 40,919 405 217 51 268 Percent Change 101% 148% 192% 232% 199% Share of Change 42% 39% 36% 48% 38% 

Population Race/Ethnicity Change 2010-2040 Source: Adapted from Woods & Poole Economics by Arthur C. Nelson Figures in thousands. 8 Metric United States New Mexico Albuquerque Santa Fe Combined Baseline Population Change 97,067 1,033 603 105 707 White Non-Hispanic Population 2010 201,912 863 395 65 460 Population 2040 210,932 951 492 90 582 Population Change 9,020 88 97 25 122 Share of Change 9% 9% 16% 23% 17% New Majority Population 2010 107,438 1,203 523 79 602 Population 2040 195,485 2,148 1,028 160 1,188 Population Change 88,047 945 506 80 586 Share of Change 91% 91% 84% 77% 83% 

Change in Households by Type, 2010-2040 Source: Arthur C. Nelson Figures in thousands. Figures may not sum due to rounding. 9 Metric United States New Mexico Albuquerque Santa Fe Combined Baseline, 2010 116,945 794 357 62 420 Households with Children 34,814 231 104 15 119 2+ Person HHs w/o Children 50,867 341 151 26 178 Single-Person Households 31,264 222 102 21 123 Household Growth by Type Households 2040 152,171 1,182 588 107 695 Household Growth 35,226 388 231 45 276 HHs with Children 41,568 304 147 21 157 HHs with Children Growth 6,754 72 43 6 38 HHs with Children Growth Share 19% 19% 19% 13% 14% 2+ Person HHs Without Children 63,701 484 246 35 291 2+ Person HHs Without Children Growth 12,834 143 94 8 114 2+ Person HHs w/o Children Growth Share 36% 37% 41% 19% 41% Single-Person HHs 46,902 395 195 52 247 Single-Person HHs Growth 15,638 173 93 31 124 Single-Person HHs Growth Share 44% 45% 41% 68% 45% 

Change in Households by Age, 2010-2040 Source: Arthur C. Nelson Figures in thousands. Figures may not sum due to rounding. 10 Metric United States New Mexico Albuquerque Santa Fe Combined Change in Households by Age, 1990-2010 Household Change 24,951 250 125 24 149 Change in Households <35 (1,285) 11 11 1 12 Change in Households 35-64 20,457 166 83 15 98 Change in Households 65+ 5,779 73 31 8 40 Households <35 Share -5% 4% 9% 3% 8% Households 35-64 Share 82% 66% 66% 63% 66% Households 65+ Share 23% 29% 25% 34% 26% Change in Households by Age, 2010-2040 Household Change 35,226 388 231 45 276 Change in Households <35 5,885 63 41 6 47 Change in Households 35-64 10,041 119 83 9 92 Change in Households 65+ 19,300 206 107 30 137 Households <35 Share 17% 16% 18% 13% 17% Households 35-64 Share 29% 31% 36% 21% 33% Households 65+ Share 55% 53% 46% 66% 50% 

Distribution of Residential Units Built, United States,1989-2009 Type Volume Total Share Total New Units 24.5 Detached Units 20.7 85% Source: Adapted from American Housing Survey by Arthur C. Nelson, University of Arizona. Figures in millions of residential units. 82% 23% -5% 10% 16% 74% 1990-2010 2010-2030 National Mass Market for Sprawl is Over 

Home Ownership Rates Nation 1965-2014, 4th Quarter Source: Adapted from Census by Arthur C. Nelson, University of Arizona. 12 

US Owner/Renter Change 2005-2014 Tenure 2nd Q 2005 2nd Q 2014 Change Change Share Total 109,484 115,461 5,977 Owner 75,411 74,427 (984) -16% Renter 34,073 41,034 6,961 116% Owner Rate 68.9% 64.5% Source: Adapted from Census (Current Population Survey/Housing Vacancy Survey, Series H-111, U.S. Census Bureau, Washington, DC 20233) by Arthur C. Nelson, University of Arizona. Figures in thousands. 

Albuquerque is Different Metropolitan Area 2005 4th Q 2014 4th Q Point Change Percent Change United States 69.0 64.0 -5.0 -7% Albuquerque 68.2 68.3 0.1 0% Atlanta 70.7 62.9 -7.8 -11% Austin 67.0 62.3 -4.7 -7% Dallas-Ft. Worth 62.7 56.3 -6.4 -10% Denver 69.0 61.3 -7.7 -11% El Paso, TX 64.9 66.2 1.3 2% Houston 63.2 62.3 -0.9 -1% Los Angeles 54.4 47.6 -6.8 -13% Phoenix 71.2 61.9 -9.3 -13% Portland 68.9 62.3 -6.6 -10% Sacramento 61.3 58.2 -3.1 -5% Salt Lake City 71.2 68.3 -2.9 -4% San Antonio 67.1 66.9 -0.2 -0% Seattle 64.8 58.0 -6.8 -10% Tucson 65.5 57.6 -7.9 -12% Source: Adapted from US Census by Arthur C. Nelson (https://www.census.gov/housing/hvs/data/rates.html) Figures are percentages. 

Conservative Ownership Change, 2010-2040 Source: Arthur C. Nelson, University of Arizona Figures in thousands. 15 Metric United States New Mexico Albuquerque Santa Fe Combined Baseline, 2010 Owners 76,133 544 240 43 283 Renters 40,812 250 117 19 136 Ownership Rate 65.1% 68.5% 67.2% 69.2% 67.5% Renter Rate 34.9% 31.5% 32.8% 30.8% 32.5% Tenure Analysis 2010-2040 Homeowners 94,013 798 388 73 461 Renters 58,158 384 200 34 234 Ownership Rate 61.8% 67.5% 65.9% 68.6% 66.4% Renter Rate 38.2% 32.5% 34.1% 31.4% 33.6% Change in Owners 17,880 254 148 30 178 Change in Renters 17,346 134 83 14 98 Owner Change Share 51% 65% 64% 68% 65% Renter Change Share 49% 35% 36% 32% 35% 

Value-Planning for the Future Attribute Market “New urbanism” community + Walkable communities and destinations + Mixed-housing options in neighborhood + Mixed-uses in community + Low-density, single-use subdivisions - Distance from activity centers - 

Ewing Land-Use Integration Index Elements (14 total) • DENSITY (6 elements) • MIXED USE (3 elements) • CENTERING (3 elements) • STREET ACCESSIBILITY (2 elements) 

Land-Use Integration Index Comparisons Metropolitan Area Integration Index Rank New York 203 1 Denver 107 92 Colorado Springs 106 98 Albuquerque 98 126 Tucson 79 171 Phoenix 78 173 Atlanta 41 220 

Underwater Mortgages Denver 

100% 50% 0% Source: http://www.zillow.com/visuals/negative-equity/#13/35.0810/-106.6434 Underwater Mortgages Atlanta 

Underwater Mortgages Colorado Springs 

Underwater Mortgages Tucson 

100% 50% 0% Source: http://www.zillow.com/visuals/negative-equity/#13/35.0810/-106.6434 Underwater Mortgages Albuquerque 

Support for/Want to Live in Mixed-Use/Mixed-Housing Walkable Community Demographic Group Prefers Mixed-Use With Walkability (PPIC 2004/ ASU 2007) Would Support a “Smart Growth” Community (PN 2003 & 2005) Want to Live in a “Smart Growth” Community (PN 2003 & 2005) Average All 50% 51% 47% 49% Age 18-34 55% 55% 51% 54% 35-54 49% 48% 45% 47% 55-69 46% 52% 47% 48% 70+ 44% 59% 56% 53% Income <80% AMI 58% 50% 45% 51% 80%-120% AMI 48% 45% 41% 45% >120% AMI 44% 41% 39% 41% Household Type Single Person HH* 50% 50% 48% 49% HH Without Children 51% 52% 46% 50% HH With Children 50% 52% 46% 49% *Imputed from PPIC/ASU Source: Compiled by Arthur C. Nelson, University of Arizona, using Public Policy Institute of California and Arizona State University surveys, and survey data with permission by Porter-Novelli. 

The Unmet Demand for Walking and Biking to Work and Errands How important is it for you to … Demand Observed be able To Walk or Bike to Work? 23% 4% be able To Walk or Bike to Errands? 22% 10% Source: Compiled by permission from Porter-Novelli and reported in Arthur C. Nelson et al. “The Tragedy of the Unmet Demand for Walking and Biking,” The Urban Lawyer (2013). 

Walk/Bike Trends within 1 mile, 1995-2009 Year Walk/Bike to Work Less than 1 Mile Walk to Errands Less than 1 Mile 1995 20% 26% 2001 30% 35% 2009 33% 42% Change 61% 59% Source: Adapted from the National Household Transportation Survey by Arthur C. Nelson, University of Arizona. 

Unmet Demand? Up to a quarter of people want to have the option to ride/bike to work or errands. If all new development to 2040 created walking/biking destination options the apparent demand may remain unmet. Up to half of people want to live in a (well- designed) mixed-use/mixed- housing/walkable community. If all new development to 2100 provided this opportunity the apparent demand for use/mixed-housing/walkable communities may remain unmet. 

Albuquerque Job Growth 2010-2040 Source: Adapted from Woods & Poole Economics by Arthur C. Nelson, University of Arizona. Figures in thousands. 28 Sector 2010 2040 Change 2010-2040 Percent Change 2010-2040 Share of Change 2010-2040 Industrial 48 66 18 37% 5% Office/Services 242 415 172 71% 50% Retail/Lodging/Food 89 152 63 70% 18% Institutional 76 171 95 125% 27% Total 456 804 348 76% 

The New Promised Land? 29 

Tear Up a Parking Lot, Rebuild Paradise Large, flat and well drained Single, profit-motivated ownership Major infrastructure in place 4+ lane highway frontage  “transit-ready” Committed to commercial/mixed use Can turn NIMBYs into YIMBYs Slide title phrase adapted from Joni Mitchell, Big Yellow Taxi, refrain: “Pave over paradise, put up a parking lot.” 30 

Life-Span of Building Function Retail Office Warehouse Education Nonres. Homes 0 50 100 150 200 Years Life-Span of Building Source: Arthur C. Nelson, Presidential Professor & Director of Metropolitan Research, University of Utah, based on DoE Commercial Buildings Energy Consumption Survey. 31 

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Commercial Space per Capita 2003-2012 Metric 2003 2012 Change Income Population (thousands) 290,108 314,659 8% Total Square Feet per Capita 287.6 315.5 10% Education 34.0 38.9 14% Food Sales (restaurants) 4.3 4.0 -8% -7% Food Service 5.7 5.8 1% Health Care 10.9 13.2 21% Inpatient 6.6 7.5 15% Outpatient 4.3 5.7 31% Lodging 17.6 18.5 5% Mercantile 38.6 36.0 -7% -7% Retail (Other Than Mall) 14.9 17.3 16% Enclosed and Strip Malls 23.7 18.7 -21% Office 42.1 50.7 20% Public Assembly 13.6 17.7 30% Public Order and Safety 3.8 4.6 22% Religious Worship 12.9 14.5 12% Service 14.0 14.7 5% Warehouse and Storage 34.7 41.4 19% Other 6.0 6.4 6% Sources: Population from Census; space derived from CBECS, income change in 2012$ derived from BEA 

Albuquerque Nonresidential Development 2010-2040 Source: Arthur C. Nelson Figures in millions of square feet. 35 Nonresidential Space 2010 2040 Change 2010-2040 Percent Change 2010-2040 Share of Change 2010-2040 Space Supported 221 387 166 75% 33% Space Recycled 339 67% Total New Construction 505 New Construction as Share of Space Supported 2010 228% 

Ewing Land-Use Integration Index Elements (14 total) • DENSITY (6 elements) • MIXED USE (3 elements) • CENTERING (3 elements) • STREET ACCESSIBILITY (2 elements) 

Land Use Integration Improves Employment A 10% increase in Land-Use Integration is associated with 0.6% increase in jobs. [R2 = 0.49] Implication: Total jobs 2010 450,000 Total jobs 2040 800,000 New projected jobs to 2040 350,000 New induced jobs, up to 50,000 Induced payroll potential $2 billion 

Observations to 2040 More than 80% of growth will be New Majority. About the equivalent of 40% of growth will be 65+. More than 80% of HH growth will be without children. More than 40% of HH growth will be single persons. About a 1/3rd of HH growth will be peak housing demand (35-64) down from 2/3rd during 1990-2010. It may be difficult to meet the market demand for mixed-use/mixed- housing/walkable communities to 2040 or even 2100. About 500M nonresidential square feet built or more than double all space existing in 2010. 2/3rd of nonresidential development will be redevelopment. With 2010 FAR @ ~0.20, all new nonresidential demand can be met on existing parking lots and FAR would be ~0.40. Add half of all new attached and FAR would rise to ~0.60. $150 billion in total development, redevelopment and facilities. 38 

Albuquerque/Bernalillo County Plan Update Comp Plan Update Goals • Update growth and environmental projections • Identify key areas for economic growth and for neighborhood protection • Better integrate land use and transportation planning • Emphasize “Placemaking” approaches to development planning Fregonese & Associates 

Do What You Do Best Engage in the process To shape the future 

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