Item C: Eugene Comprehensive Lands Assessment

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Recommendations for Baseline Assumptions ECONorthwest April 2009 Page 11 household sizes will continue at 2.25 persons per household. Note that the rate of decrease is relatively slow: from 1980 to 2007 the average annual rate of decrease was on the order of 1/10 of 1% per year. ? CAC and TAC discussion: Some CAC members seemed to think that we should assume that household sizes will change in the future. ? Current technical recommendation for baseline assumption: We recommend using the safe harbor assumption that household sizes will remain at 2.25 persons per household. Forecasting future household sizes requires considering a number of demographic and social shifts that are complex: continued aging of the population, changes in ethnicity, and changes in student housing preferences. The differences over a 20 year period will be relatively small. ? Data source: The assumption about household size is based on a point estimate from the U.S. Census, American Community Survey, 2007. Residential vacancies Housing vacancy rates are cyclical. Low vacancy rates signal an excess of demand relative to supply, which brings new construction and, eventually, higher vacancy rates. Vacancy rates for rental and multiple family units are typically higher than those for owner-occupied and single-family dwelling units. In 1990 the Census reported a vacancy rate of 3.6%, increasing to 5.4% in 2000, and 6.3% in 2007. The Census’ vacancy rate data is accurate for the date of the Census (April 1) but the vacancy rate may change significantly in the months following the Census. Since state law and this project requires a 20-year forecast, and one should expect several housing cycles during that period, this project should be looking for an average vacancy rate (the “natural” rate of vacancy). OAR 660-024 established a “safe harbor” assumption for average residential vacancies—which is the figure from the most recent Census. ? Potential range of assumption: Census data probably describes a reasonable range of vacancy rates: 3.5% to 6.5% vacancy. ECO has typically found vacancy rates of 2% to 9% in other cities, depending on the type of housing and local housing market conditions. ? CAC and TAC discussion: Several CAC members said the most reasonable vacancy rate assumption would be 5%. That is an average rate that ECO has used in other studies of this type. ? Current technical recommendation for baseline assumption: We recommend assuming that an average of 5% of new dwellings will be vacant, based suggestions from the CAC.