Market Feasibility Analysis PDF

Market Feasibility Analysis
for the:
Salisbury Square
Residential Project
in:
Randolph, Vermont
Prepared for: Randolph Area Community

Development Corp.
Prepared by:
Douglas J. Kennedy
Norwich, Vermont 05055
September 23, 2006

v. 1.5b
LV #4606
Table of Contents
Introduction and Scope of Project 3
Project Site and Community Context 6

Location 6
Project Site, Profile and Context - 8
Market Analysis 13
Market Area 13
Area Economy - 16
Target Markets 19
Background Demographics 20
Population-Households Trends and Characteristics 20
Household Income Levels 25
Housing Market Trends and Comparables 27

Housing Supply and Characteristics 27
Comparable Housing Demand 30
Ownership 31
Rental 33
Market Rents 35
Affordable Ownership Housing Overview 36
Market Potential 37
Potential Market Pools Market Area Households 37
Market Capture and Absorption Rates 44
Summary 47
Market Analysis: Salisbury Square; Randolph, Vermont; September 2006 Page 2

Introduction and Scope of Project
The following report details research and analysis completed to assess the background
market and market-based feasibility of a planned new mixed-use development project in
Randolph, Vermont. The market analysis tested the market feasibility of the Salisbury
Square project that will potentially provide: 1) New for-sale units oriented toward moderate
income households and, as a secondary option; 2) New rental apartments oriented toward
lower/moderate income households. The project may also include commercial and office
space; However, the planned residential use is the focus of this report. The project will draw
upon the market in the greater Randolph area. The project will include the following
residential elements:
1. 19 Townhouse Units mix of two and three bedroom units. Intended for sale at
targeted pricing of $175,000+.
2. 10 Condominium/Apartment Units multi-unit building. Intended for sale with
targeted price in the $125,000 range. Secondary use option for these units would be
rental apartments.1
As assessed in this report, the project will potentially involve financing programs to assist
with homeownership:
1. The for-sale units will be made available to households with incomes ranging from
60 to 100 percent or 100 to 120 percent of the Orange County median. Households
at the lower end of this income spectrum will receive favorable financing and are
likely to be subject to equity sharing restrictions upon resale.
2. Efforts would be made to keep rental apartments should this option be chosen
within an affordable range for households with incomes of up to 100 percent of the
Orange County median.
Several factors were given consideration in the assessment of the market-based feasibility of
the project. Overall, the analysis was oriented toward answering several principal questions:
Given the demographics and economic situation in the market area, is there
sufficient support for the elements of the project and, if so, at what rate can the
residential units be expected to absorbed or rented?
What is the level of demand for the elements of the project?
What competition does the project face?
1 Also possible that one or two studio apartments could be included in the mix.
Is the proposed Salisbury Square site in Randolph appropriate for a project of this
type?
The report was prepared in response to a request from the Randolph Area Community
Development Corp. (RACDC) to assess a proposed residential development. We spoke
several times with a representative of RACDC to ensure that we had a thorough
understanding of the project concept.2 Elements of the project are summarized below:
Salisbury Square - Site is situated between School and Salisbury Streets, Randolph, Vermont
new construction of townhouse and condominium/apartment units. The project may
also include some commercial office and other space.
- Developer Randolph Area Community Development Corp.

- Location the project is located on a site lying between School and Salisbury Streets
in Randolph. The site is immediately adjacent to Randolphs downtown area.
- The site has access to public water and sewer.
- The project will involve: New construction of 19 for-sale townhouse units and 10
condominium/apartment units.
- Residential Market Orientation 1) Moderate income households who meet criteria
for Vermonts first time home buyer programs; 2) Moderate income households who
can purchase reasonably priced units and/or; 3) households that can afford rental
units priced at market levels.
- The project will be available to persons in any age group. The project in total will
likely include 24+ units, including both townhouses and condominiums/apartments.
In the event that the design, rental rates, or other aspects of the project differ in significant
respects from the program(s) described above, the findings contained in this report should be
revised.
The report covers the following major areas with respect to housing market conditions and
project viability:
Definition of a geographic market for the project, as well as the household types that
represent the target market(s) for the project.
An assessment of the local and regional context in which the project will be
developed, and a summary of local and regional growth and economic conditions.
A quantitative analysis of source market demographics and potential buyer pools.
2Interviews and other contacts with Jeremy Ingpen and Amy Diller of RACDC., who provided us
with background data regarding the project. In addition, we relied on project sketch plans developed
by the office of T.J. Boyle and Associates.
A review of existing, comparable housing market activity and assessment of
competitive offerings.
Projections regarding prospective project market absorption and recommendations.
Significant market findings and relevant quantitative data are contained in tables, charts and
figures contained in the text of the report. The analysis and this report are based on an
extensive review of available data from Federal, state, regional and local sources. In addition,
a number of individuals with knowledge of local/regional housing and commercial real
estate markets have been interviewed to provide additional background material for the
analysis.
This report, including all background data, findings and recommendations, is based on
market conditions as assessed by the analyst at the time of report preparation. In the event
that there are any significant changes in a number of factors, including; macro-economic
conditions, local/regional economic conditions, interest rates, local/regional competition,
changes in the project program, or other factors affecting the market, it is likely that the
findings contained in the report will change. No guarantees are offered that the estimates,
projections and findings in this report will be met. However, the findings contained in the
report do reflect the judgment of the analyst, following the review of housing and
commercial real estate market conditions.

Project Site and Community Context
A review of the project site and host community follows:
Location
Randolph is a central Vermont community and serves as Orange Countys principal

commercial and service center. Randolphs regional location is show in the graphic below.
Randolph - Regional Location
Randolph is located in southwestern Orange County. Orange County is located in east-

central Vermont and shares a border with New Hampshire (along the Connecticut River) to
the east. Major travel routes in the town include: Interstate-89 (Randolph is served by Exit
4) Vermont Routes: 14 and 12 for north-south travel and Route 66 for east-west travel.
Highway access is good. However, topography restricts direct travel to the west.

Randolphs estimated 2005 population was 5,054 persons, a 6.1 percent increase over the
1990 level - Orange County grew by 12.0 percent during the same period. As noted,
Randolph is Orange Countys principal commercial/service center. However, the
communitys influence is primarily in the western portion of the county along the I-89, VT
12, VT 14 and VT 110 north-south corridors. The presence of I-89 gives the community
strong links to the north and south and substantially increases the range in which Randolph
residents can seek employment. Similarly, the highways presence increases the geographic
area from which Randolph businesses can seek employees.
The communitys range of businesses and services can serve the great majority of residents
day to day needs. However, many travel to the Upper Valley (VT/NH) or the
Barre/Montpelier area for major shopping needs.
Downtown Randolph
Randolphs educational system includes the Randolph Elementary School, located at 40

Ayers Brook Road and the Randolph Union High School, located at 15 Forest Street. The
high school also hosts the Randolph Career and Technical Center.

Randolph Elementary School and Randolph Union High School
Project Site, Profile, and Context
As noted, the project site lies between School Street, Salisbury Street and the railroad tracks
just several blocks removed from Randolphs downtown commercial core. The site has an
east-west orientation and can be accessed from either School or Salisbury Streets. The site
location with respect to the downtown area is shown in the graphic below.
(Space Left Blank Intentionally)

Salisbury Square: Site Location
The site was previously used for industrial purposes and is regarded as a brownfield. With
the exception of several abandoned agricultural and industrial buildings, the site is principally
open. Significantly, a steep bank runs from east to west through the site, effectively
bifurcating the site for development purposes. As such, development occurring on the
School Street side of the site (north side) can take on a different character from that
occurring on the Salisbury Street/Railroad side of the site (south side.)
The site is shown in several views below:

Site View from end of Salisbury Street Looking Northwest
Site View looking westerly along Southern Boundary

Railroad to Left

Site View looking southerly from School Street
We note the following regarding the Salisbury Square site:
The site offers easy walking access to downtown Randolphs full range of services.
The site is located immediately adjacent to a town recreation area, offering open
space and recreational potential.
Town Recreation Area Across School Street
The site(s) can take advantage of existing village infrastructure.

The site is adjacent to, and can be linked with existing residential neighborhoods.
The most recent project site plan is shown in the graphic below.3
Salisbury Square: Current Site Plan
3Sources: RACDC and T.J. Boyle and Associates, plan dated 6/30/06. Note that this is a working
plan and that further changes are likely.
Market Analysis
Market Area
Moves by households are motivated by issues like: 1) Convenience in commuting to a job; 2)

Preferences for certain communities revolving around service and transportation factors,
and; 3) Search for high quality housing with affordable pricing. For older households,
important issues include: 1) Security; 2) Living near family and friends and; 3) Convenient
walking access to services.
A number of factors were considered in making a determination of the market area for
Salisbury Square, including; the regional transportation system and commuter patterns;
location of local and regional competition, and; existing commuting and social patterns in
the area.
The table below shows commuting patterns to Randolph from other area towns.4
Commute to Randolph
Number of % of Cumulative
Commuters to Randolph from: Commuters Total %
Randolph town Orange Co. VT 1,269 46% 46%
Braintree town Orange Co. VT 283 10% 56%
Brookfield town Orange Co. VT 169 6% 63%
Bethel town Windsor Co. VT 132 5% 67%
Northfield town Washington Co. VT 83 3% 70%
Tunbridge town Orange Co. VT 66 2% 73%
Barre town Washington Co. VT 63 2% 75%
Royalton town Windsor Co. VT 60 2% 77%
Barre city Washington Co. VT 50 2% 79%
Chelsea town Orange Co. VT 39 1% 81%
Others 536 19% 100%
Total 2,750
80 percent of commuters to Randolph originate from an area within roughly 15 miles of the
downtown. This is shown in the following graphic.
4 Source: US Bureau of the Census and Vermont Center for Rural Studies Year 2000 data.
80 Percent Commuter-Shed: Randolph
We also collected data regarding the commuting patterns of Randolph residents. The table
below shows the destination communities for Randolph commuters.5
5 Source: US Bureau of the Census and Vermont Center for Rural Studies Year 2000 data.
Commute from Randolph
Number of % of Cumulative
Commuters from Randolph to: Commuters Total %
Randolph town Orange Co. VT 1,269 51% 51%
Lebanon city Grafton Co. NH 114 5% 56%
Royalton town Windsor Co. VT 98 4% 60%
Braintree town Orange Co. VT 92 4% 63%
Hartford town Windsor Co. VT 90 4% 67%
Barre city Washington Co. VT 82 3% 70%
Montpelier city Washington Co. VT 65 3% 73%
Bradford town Orange Co. VT 63 3% 75%
Bethel town Windsor Co. VT 51 2% 77%
Barre town Washington Co. VT 48 2% 79%
Northfield town Washington Co. VT 37 1% 81%
Other Locations 478 19% 100%
Total 2,487
The majority (51 Percent) of Randolph commuters work in their hometown. However, we
note that over 10 percent commute to the Upper Valley (VT/NH) region.
Because we are assessing the potential for ownership housing programs (or possible rental)
within the project, we have attempted to be inclusive without overstating the likely influence
of any single element. Clearly, Randolph residents would be attracted to a project in their
home community. Further, we are anecdotally aware that a number of persons who work in
Randolph now live in other towns because of lesser housing costs. Again, these households
would be attracted to an affordable ownership or rental option in the town. Further, we are
aware that a number of workers commute to Randolph from outside the 15 mile area
particularly from the Upper Valley VT/NH and the Barre/Montpelier areas.
For purposes of this analysis, the primary market area has been defined as a circle with a
varying radius of approximately 15 miles, centered at the project site. Given the
attractiveness of the study area as a place to live and the growing economy, it is also
anticipated that 10 to 15 percent of the market for the project will be drawn from outside of
the defined market area.

Area Economy
The economy has a significant impact on the residential market, as both upward and
downward economic trends affect housing availability and pricing. Because this project will
have appeal to a range of prospective tenants in terms of age, a substantial portion of the
potential tenants will be active in the job market. A strong economy will draw new people to
a region, increasing the demand for housing and increases in pricing.
The current employment situation in the region is a significant factor in the housing market.
Employment trends and levels reflect economic conditions as a whole and are considered an
accurate barometer of a changing economy. The following table compares labor force,
employment, and unemployment rates for Orange County and Vermont. Figures are
expressed as annual averages.

Labor Force and Employment Comparison:
Orange County, Vermont (1990 2006)
Orange
County Vermont
Labor Unemploy- Labor Unemploy-

Force Employment ment Rate Force Employment ment Rate
1990 14,350 13,650 4.9% 304,500 289,200 5.0%

1995 15,050 14,500 3.7% 318,800 305,300 4.2%
2000 15,550 15,200 2.3% 333,900 324,900 2.7%
2001 15,900 15,450 2.8% 335,400 326,600 2.6%
2004 16,400 15,850 3.4% 353,400 340,400 3.7%
2005 16,550 16,000 3.3% 355,900 343,500 3.5%
2006* 17,000 16,550 2.6% 365,900 353,850 3.3%
Change 1990-2005 15.3% 17.2% 16.9% 18.8%

Note: All figures with exception of 2006 annual averages. 2006 figures for June.
Source: Vermont Dept. of Employment & Training
Orange County has experienced strong growth, both in terms of the size of its labor force
and in terms of employment gains. Labor force and employment growth have fallen only
slightly below the rate of growth for the state as whole. However, unemployment rates in
Orange County are quite low. Low unemployment rates typically result in a labor shortage
and resultant pressure on the housing market.
Similar data is shown for the Town of Randolph in the table below. Randolph serves as an
employment center for much of western Orange County and also draws workers from
northern Windsor County and southern Washington County.

Labor Force and Employment:
Town of Randolph (1990 2006)
Labor Force Employment Unemployment Rate
1990 2,560 2,360 7.8%
1995 2,610 2,480 5.0%
2000 2,630 2,570 2.3%
2004 2,730 2,650 2.9%
2005 2,760 2,690 2.5%
2006* 2,730 2,650 2.9%
Change 1990-2005 7.8% 14.0%

Note: All figures are annual averages except 2006
2006 figures for June.
Source: Vermont Dept. of Employment & Training
Although increases have not matched those for the county as a whole, it is apparent that the
employment situation in Randolph has improved over the years. Unemployment rates in
Randolph are particularly low.
Randolph has attracted a number of employers both well established and new. Several of
the communitys major private employers are summarized in the table below.

Major Private Employers: Randolph
Year Annual
Company Employees Product/Service Established Sales
Randolph
Gifford Medical Center 284 Health Services 1903 $10-50Million
Dubois & King 92 Engineering Services 1962 $5-10Million

Metal Stamping, Tool &
New England Precision 55 Die 1988 $10-50Million
Randolph National Bank 55 Commercial Banking 1875

Geotechnical &
Applied Research Associates 53 Environmental Equipment
Source: Vermont Business Magazine.
The community has a strong base in services and manufacturing. We note that Vermont
Technical College and the Randolph School System are also major local employers.
Overall, it is clear that the economy in the area of the project has grown and that it remains
strong. This has the effect of increasing demand for housing and pushing housing prices up.
Housing pricing typically increases in periods of economic growth. While the current
economy (at this time of this writing) appears to have softened, we do not expect housing
pricing to decline. Perhaps most significantly, the economy is drawing young workers to the
area. We note that recent reports indicate that the regional housing market is cooling, with
increases in for-sale inventories and potential price stabilization. Data presented in a later
section of this report is consistent with this assessment. However, it is important to note
that, to date, there has been no major correction in the housing market.
Target Markets
Given the range of affordable housing potential proposed in the project, there is no single
target market group. Rather, a number of household types and ages may be interested in
affordable rental or ownership housing.
Primary Target Market - Ownership Units

Ownership units will be primarily attractive to younger and middle aged households
attempting to break into the housing market. This could include couples, two persons
living together and families with children. Although the potential for an older household
to express interest in this housing product is a possibility, we have focused on younger
and middle aged households for purposes of this analysis.
Secondary Target Market -Rental Units
Potential appeal to a broad range of household types, including new, young households
(singles, couples, singles with children, couples with children, etc.) to older households
particularly single persons.
Background Demographics
Given the project profile, prospective occupants in ownership or rental units will need to
meet distinct age/income profiles. As such, it is essential to complete a thorough
demographic analysis in order to determine if there is are sufficient, qualified market pools
to provide tenant and buyer prospects. The analysis focuses on households with
characteristics that will make them eligible for tenancy or ownership in the project at various
income levels, as well as households propensity to move.
Given the parameters of the project, the primary focus must be on lower to moderate
income households who are seeking a housing change. Additional background demographic
data has been provided in order to provide an overall sense of change in the market area and
to assess the relative strengths of the target markets. The broader demographics of the
region will affect the projects market acceptance, for at least two major reasons: 1) Overall
market strength increases housing demand, both easing acceptance of new projects and
making it easier for households to move; 2) Demographic shifts result in changes in housing
needs. Critical background demographic indicators are summarized below.
Population/Household Trends and Characteristics
The table below shows historic and current population values for the market area, Randolph
Town and Orange County. We have also included data for the Region the area within 25
miles of the project site.

Population Trends and Projections:
Market Area, Randolph Town
and Orange County (1990 2010)
Projected 2005-'10
1990 2000 2005 2010 Change
Market Area 23,125 23,860 24,227 +367
% Change 3.2% 1.5%
Randolph Town 4,764 4,853 5,054
% Change 1.9% 4.1%
Orange County 26,149 28,226 29,287
% Change 7.4% 3.6%
Region* 117,317 118,680 119,637 +957
% Change 1.2% 0.8%

Sources: U.S. Bureau of the Census, ESRI Business Information Solutions,
Vermont Dept. of Health
The market area, town and county have all experienced moderate population growth in recent
years. Expectations are for some continued growth but not at a high level. Overall, it is
projected that the market areas population will increase by 367 persons during the next five
years.
The following table shows the current and projected market area population broken down
by age group.

Population by Age Bracket:
Market Area (2005 Projected 2010)
Total Persons
Age Group 2005 2010 % Change
0-14 4,056 3,828 -5.6%
15-24 3,531 3,489 -1.2%
25-34 2,577 2,544 -1.3%
35-44 3,388 3,077 -9.2%
45-54 4,104 4,070 -0.8%
55-64 3,054 3,779 +23.7%
65-74 1,622 1,841 +13.5%
75-84 1,121 1,114 -0.6%
85+ 429 485 +12.8%
Total Population 23,860 24,227 +1.5%
Median Age 40.7 42.6

Source: ESRI Business Information Solutions
Market area population change will show significant variation by age group. Based on the
projections, all of the population increase in the market area will occur in the 55 to 74 years and
85 or more years groups. Growth in the 55 to 74 years bracket is a clear reflection of the aging
of the baby boom cohort, a major force in the majority of US markets.
Household change is a direct indicator of housing need. The following table shows current and
projected market area households and average household size for each year. Data is also shown
for the region the area within 25 miles of the project site.
.

Household Change and Average Size:
Market Area and Region (2000 2010)
Projected
2000 2005 2010 Change
Market Area 2005-'10
Households 9,279 9,764 10,026 +262
% Change 5.2% 2.7%
Average HH Size 2.41 2.37 2.34
Region
Households 46,147 47,451 48,337 +886
% Change 2.8% 1.9%
Average HH Size 2.40 2.35 2.33

Sources: U.S. Bureau of the Census, ESRI Business Information Solutions
The number of households in the market area is expected to increase by 262 between 2005
and 2010. This represents a market for new housing, particularly if it is oriented toward the
appropriate market group. Average household size continues to decrease in this market,
resulting in a 2005 to 2010 household growth rate (2.7 percent) that exceeds the overall
population growth rate. Continued decreases in average household size are a reflection of
aging in the market.
Current and projected market area age data has been presented in terms of breakdown by
age of head of household, an indicator that is specific to the housing market. This is shown
in the table below.

Current and Projected Household Age Distribution:
Market Area (2005 - 2010)
2005 2010
HH Age Group HHs % of Total HHs % of Total Change
15-24 447 4.6% 422 4.2% (25)
25-34 1,282 13.1% 1,256 12.5% (26)
35-44 1,797 18.4% 1,589 15.8% (208)
45-54 2,340 24.0% 2,292 22.9% (48)
55-64 1,809 18.5% 2,198 21.9% 389
65-74 1,060 10.8% 1,194 11.9% 134
75+ 1,035 10.6% 1,075 10.7% 40
Totals 9,770 10,026 256

As noted, there is solid household growth in the market area a projected increase of 256
households over the next five years. Not surprisingly, particularly strong growth is expected
in the 55 to 64 years bracket, consistent with the aging of the baby boom. Overall,
households with heads aged 55 years or more will account for the majority of growth in the
market area. Although there will be no net increase in the number of younger households
housing needs will remain.
The following table shows market area and Region households by size (number of persons
in household.)

Households by Household Size;
Market Area and Region (2000)
Market Area Region - 25 Mile Radius

HH Size Number % of Number % of
(Persons) of HHs Total of HHs Total
1 2,431 26.2% 12,644 27.4%
2 3,452 37.2% 16,751 36.3%
3 1,392 15.0% 7,107 15.4%
4 1,327 14.3% 6,507 14.1%
5 464 5.0% 2,261 4.9%
6 139 1.5% 646 1.4%
7+ 65 0.7% 277 0.6%
Totals 9,279 46,147

Sources: US Bureau of the Census, ESRI
Over 63 percent of the households in the market area are composed of only one or two
persons, an indication that the majority of rental demand is likely to be for smaller units.
Household Income Levels
Household income level is significant for this project. Since eligible buyers (or tenants) have
been targeted within certain income guidelines, the presence (or absence) of income-eligible
households is a primary indicator of the projects marketability. Household income
distributions have been analyzed for the market area and region. Data is included for income
brackets that have potential for residence in the project. The tables below show household
age by income distributions for the market area and region for 2005. The income
distributions are shown for all households.6
6 Sources: US Bureau of the Census, ESRI.

Household Income by Age Distribution: Market Area (2005)
Number of Households
$25 - $34,999 $35 - $49,999 $50 - $74,999 $75 - $99,999
# of % of # of % of # of % of # of % of
HHs Total HHs Total HHs Total HHs Total
Age of HH Head
15 - 24 70 6% 83 5% 45 2% 4 0%
25 - 34 182 14% 289 16% 306 14% 63 6%
35 - 44 246 19% 379 21% 489 23% 242 23%
45 - 54 239 19% 424 24% 687 32% 307 30%
55 - 64 224 18% 305 17% 343 16% 256 25%
65-74 166 13% 199 11% 188 9% 78 8%
75+ 139 11% 104 6% 72 3% 85 8%
Totals 1,266 1,783 2,130 1,035

Household Income by Age Distribution: Region (2005)

Number of Households
$25 - $34,999 $35 - $49,999 $50 - $74,999 $75 - $99,999
# of % of # of % of # of % of # of % of
HHs Total HHs Total HHs Total HHs Total
Age of HH Head
15 - 24 351 6% 392 5% 225 2% 46 1%
25 - 34 860 15% 1,309 16% 1,618 16% 357 7%
35 - 44 997 18% 1,802 22% 2,470 24% 1,234 23%
45 - 54 982 17% 1,764 22% 3,082 30% 1,866 35%
55 - 64 1,007 18% 1,396 17% 1,629 16% 1,127 21%
65-74 759 13% 867 11% 796 8% 372 7%
75+ 706 12% 562 7% 493 5% 365 7%
Totals 5,662 8,092 10,313 5,367


Housing Market Trends and Comparables
We have provided a profile of housing stock, market dynamics and competitive housing in
the study area below. The range of housing opportunities in Randolph is reasonable, as the
town serves as an urbanized center and provides both low and relatively high density living
situations. Overall, the Randolph area market is principally oriented toward ownership
housing there are a broad variety of offerings in the region.
Relevant housing market data is presented below:
Housing Supply and Market Characteristics
The table below shows Census 2000 data for Randolph and Orange County. The table
shows total housing units, occupied housing units, owner-occupied units, renter-occupied
units and renter-occupied units as a percentage of total occupied units.
Housing Stock Data: Occupied Housing

Randolph Town and Orange County (2000)
Orange County Randolph
(2000) Town (2000)
Total Housing Units 13,386 1,905
Occupied Housing Units 10,936 1,769
- Owner-Occupied Units 8,559 1,245
- Renter-Occupied Units 2,377 524
Occupied Units as
% of Total Units 82% 93%
Renter Occupied as
% of All Occupied 21.7% 29.6%
Sources: U.S. Bureau of the Census
ESRI Business Information Solutions
Randolph households show a higher propensity to rent than do other households in Orange
County. This is a reflection of the towns more urbanized housing stock and the natural
concentration of renter households within the community. Overall however, it is apparent
that the county is primarily oriented toward ownership housing.

The table below accounts for vacant housing stock by type for 2000, based on U.S. Bureau
of the Census data.
Housing Vacancy: Randolph, Orange County (2000)
Orange County Randolph Town
Number of Number of
Vacant Units Vacant Units
For Rent 208 19
For Sale Only 132 21

Rented or Sold;
Not Occupied 70 2
For Seasonal, Recreational
or Occasional Use 1,850 65
Other Vacant 190 29
Totals 2,450 136
County-wide, seasonal (vacation) housing is a significant factor in the housing stock.

However, this is not the case in Randolph where the number of seasonal units is relatively
small. The small number of vacant rental units is notable the 2000 data implies a rental
vacancy rate of only 3.5 percent; It is apparent that housing demand pressures have
increased since 2000. Similarly, the data indicates that only 1.7 percent of housing units
intended for owner-occupancy were vacant in 2000. Again, housing demand pressure has
increased since 2000.
The following tables show the year 2000 number of renter and owner households by
household size for Randolph and Orange County.7
7 All data for year 2000.

Renter Household Distribution by Size of Household:
Randolph and Orange County (2000)
(2000) (2000)
1 866 36% 201 38%
2 715 30% 167 32%
3 367 15% 62 12%
4 251 11% 56 11%
5 123 5% 27 5%
6 37 2% 7 1%
7+ 18 1% 4 1%
Totals 2,377 524
Owner Household Distribution by Size of Household:

Randolph and Orange County (2000)
(2000) (2000)
1 1,690 20% 289 23%
2 3,327 39% 448 36%
3 1,389 16% 208 17%
4 1,401 16% 188 15%
5 538 6% 70 6%
6 138 2% 25 2%
7+ 76 1% 17 1%
Totals 8,559 1,245
The majority of Randolph and Orange Countys renter households are composed of small
households either one or two persons, an indication that market demand is primarily for
smaller units (70 percent in Randolph; 66 percent in Orange County). While the majority of
the market demand is generated among smaller households, it is important to note that there
are larger households in the rental market. Households in ownership housing are typically
somewhat larger, 38 percent of Randolphs owner households composed of three, four or
five persons and 38 percent of Orange Countys owner households composed of three, four
or five persons.
The table below shows residential building permits issued in Randolph and Orange County
since 1996, broken down by type, including single family and multi-family units.8
Building Permits Issued:

Randolph Town and Orange County (1996 2005)
% of
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Totals Total
Randolph
Single Family 8 5 13 9 9 16 10 20 19 12 121 88%
Multi-Family 0 0 0 0 0 0 8 0 0 8 16 12%
Totals 8 5 13 9 9 16 18 20 19 20 137
Orange County
Single Family 58 39 54 58 50 70 60 117 100 79 685 97%
Multi-Family 0 0 0 0 2 0 8 0 0 8 18 3%
Totals 58 39 54 58 52 70 68 117 100 87 703
The data make it clear that the rate of residential development in Randolph has accelerated
in recent years. During the past five years (2001 2005) Randolph averaged 18 to 19 new
residential units on an annual basis and accounted for over 20 percent of all residential
development in Orange County. Further, the data make it clear that the great majority of
recent housing development has been in single family development.
Comparable Housing Demand
A review of comparable housing demand in the area is useful for several reasons:
As an assessment of current demand and occupancy levels.

To assess general market conditions in the ownership market and rental housing
availability for lower and moderate income households and;
8Building permit data source: HUD User State of the Cities Data Systems. Building permit data not
available for Randolph.
As an aid in determining the potential market area for the project (See Market Area
above).
The primary focus of the review was on establishing that there is demand for existing affordable
housing options in the area particularly those that provide housing for lower and moderate
income households.
Ownership Housing Market Trends
We have collected data regarding residential sales to provide background regarding the
ownership market.
The table below summarizes R1 property sales for 2000 through 2005 in Randolph and
Orange County. R1 properties are year-round residential properties on less than six acres and
are generally regarded as the most representative of the year-round residential market. The
table shows total transactions, total dollar volume, average transaction and median
transaction amounts.9
R1 Sales Trends 2000 to 2005;

Randolph and Orange County
2000 2001 2002 2003 2004 2005
Randolph Town
Transactions 43 47 44 44 60 47
Volume
($Millions) $4.58 $4.42 $5.24 $5.03 $7.59 $8.82
Average $106,416 $93,966 $119,011 $114,292 $126,520 $187,647
Median $95,000 $89,900 $110,000 $116,000 $128,000 $145,000
Orange County
Transactions 243 204 248 229 249 264
Volume
($Millions) $26.61 $20.79 $28.79 $27.95 $32.85 $39.85
Average $109,497 $101,925 $116,107 $122,034 $131,941 $150,955
Median $92,000 $90,000 $104,500 $113,000 $125,000 $139,450
9 Source: Vermont Department of Taxes Division of Property Valuation and Review. Transactions
recorded in the R1 category include some sales to seasonal home buyers.
The number of R1 transactions in the town or county has not changed dramatically during
the years shown in the table. During the most recent years, Randolph averaged about 50
transactions and accounted for roughly 20 percent of all of Orange Countys transactions.
While the number of transactions did not increase significantly, significant increases in
average transaction amounts have resulted in substantially higher sales volumes. In
Randolph, the average R1 transaction increased in value by 76 percent between 2000 and
2005. There was a 48 percent increase between 2004 and 2005 alone.
We also assessed recent price trends over time by looking at the average of 40 trailing
transactions for the 2003 through 2006 period. This is shown in the graphic below.
Trailing 40 R1 Transactions: Randolph;

(2003 2006)
$180,000
$170,000
Trailing Average - 40 Sales
$160,000
$150,000
$140,000
$130,000
$120,000
2003 2004 2005 2006
1
10
19
28
37
46
55
64
73
82
91
100
109
118
127
136
145
154
163
172
The graphic shows clear price increases over the period from 2003 to 2005. The most recent
data (2006) is consistent with the recent slowdown in the real estate market as widely
reported in the media.
Finally, we assessed price bracketing in the market by breaking down R1 transactions by

price group both for the 2003/2004 and 2005 through current period. This is shown in the
graphic below.

R1 Transactions by Price Bracket: Randolph;
(2003-2004, 2005-Current)
35%
33.3%
30%
30.0%
2003-04
Percentage of Total Sales
25%
2005-Current
25.0%
20%
20.8%
20.0%
15%
13.8%
13.1%
11.9%
10%
9.2%
7.1%
5%
6.0%
3.6%
2.3%
3.8%
0%
<$50,000 $50-99,999 $100-149,999 $150-199,999 $200-249,999 $250-299,999 $300,000+
Price Bracket
The graphic makes it clear that the number of higher value transactions has increased in the
2005-Current period. In the 2003/2004 period, transactions of $250,000 or more accounted
for 6.2 percent of the total; this had increased to 13.1 percent of the total in the 2005-
Current period. However, we note that the core of the market remains in the $100,000 to
$199,999 range.
Finally, a review of area listings indicates that there are properties in the $100,000 to
$200,000 range.10 While a number of these properties clearly need work and/or are relatively
small, the Randolph area market remains one with some affordable ownership opportunities.
However, our research did not uncover any new units in this price bracket.
Rental Housing Overview
There are a number of rental housing projects with an orientation toward lower/moderate
income renters in the Randolph area. A summary of existing subsidized and partially
subsidized projects in study area follows:11
10Source: NNEREN-MLS.
11Sources: Interviews and data from RACDC, Interview with Rob Caron, Interviews with additional
area contacts Ellen Baker, Steve Reid.
Branchwood Apartments, Pearl Street, Randolph this is a 12 unit project, including
one, two and three bedroom units. There is no rental assistance (deep subsidies) but
rents are held at an affordable level using the LIHTC, HOME program and VHCB
funding. As of a recent report, all units were fully occupied and waiting periods for
persons on the wait list ranged from six to nine months.
Sass Apartments, Hedding Drive, Randolph this is a 16 unit project, including one and
two bedroom units. There is no rental assistance (deep subsidies) but rents are held at an
affordable level using the LIHTC. As of a recent report, all units were fully occupied and
waiting periods for persons on the wait list ranged from six to nine months.
Prospect-Forest Homes, Forest and Church Streets, Randolph a total of nine units,
including two, three and four bedroom units. These are deeply subsidized units, with
project-based Section 8 subsidies. As of a recent report, the units were fully occupied
and there were waiting lists for each of the unit sizes.
Forest and Church Street Units
Randolph Circle, Village Circle, Randolph this is a 20 unit project, including two, three
and four bedroom units. These are deeply subsidized units, with project-based Section 8
subsidies. As of a recent report, the units were fully occupied and there were waiting lists
for each of the unit sizes.
Randolph House and Red Lion Inn, Downtown Randolph both of these projects are
oriented toward the senior market and, as of a recent report, were fully occupied with
waiting lists. Both projects are deeply subsidized.

Market Rents
There appears to be solid demand for rentals in the study area vacancies are low and good
quality, affordable units are hard to find. Just as significantly, housing development oriented
toward first time buyers is rare. Market pricing can vary as rentals occur in a variety of unit
types, ranging from efficiencies to single family. Generally, contacts indicate that the quality
of housing in the market is reasonable. However, they further indicate that it is difficult to
secure a high quality rental because of the high level of demand. Projects that have
differentiated themselves in terms of quality, real amenities (garage, in-unit washer/dryer,
etc), or location command higher rents; a so-called quality premium.
Rents in the region have increased at a strong rate in recent years. An annual survey of rental
rates in the region by a major housing organization indicates that median rents increased at
an annual rate of 5.8 percent between 1998 and 2006.12 This is well ahead of the pace of
inflation. According to another recent study, rents in the Upper Valley Region have been
increasing at an annual rate of 10 percent in recent years.13
We reviewed a number of publications and databases to determine current market rental

pricing in the Randolph area.14 Our findings indicate the following:
Studio gross monthly rentals (including heat and other utilities) appear to average
$570. (We note that there are few of these units in the market.)
One Bedroom Units gross monthly rentals (including heat and other utilities)
appear to average $700.
Two/Three Bedroom Units gross monthly rentals (including heat and other
utilities) appear to average $870.
Rental units are attractive when they are competitive with the prevailing market rent,
particularly if the unit is in good to excellent condition. It is expected that if a decision to
include rental apartments is made that project rents will be comparable to prevailing
market rents. However, the units would be competitive because they are new and because
they are managed by RACDC which has a solid reputation in the market.
12 Based on data from Residential Rental Cost Survey produced annually by the New Hampshire
Housing Finance Authority. Data for Grafton County, NH where trends are similar to those in
Orange County, Vermont.
13 Source: Upper Valley Housing Needs Analysis.
14 Sources include print and online versions of: The Herald, The Valley News March through July
of 2006.
Affordable Ownership Housing Overview
The shortage of affordable ownership housing has been well documented in the regional
media. While a number of committees and organizations are working toward affordable
housing development, it is apparent that the production of these units is not occurring at the
pace required to satisfy demand.
The May 2005 Presentation to the Vermont Affordable Housing Coalition Vermont Housing Needs
Assessment, found that:15
Orange County has not produced an adequate number of new owner or rental
marketable units between 2000 and 2005 to meet the growing housing demand. Orange
has added just 2 percent new owner units and 2.4 percent renter units, compared with the
state rates of over 4 percent in each category.
15 Source: The Vermont Housing Council & Consolidated Plan Advisory Group.
Market Potential
The market success of the project will hinge on several factors. Major points regarding the
proposal are summarized below:
The project has an excellent location:

- The project site is in a central location in Randolph, with easy access to all
downtown services.
- The location is in Randolph, the area job center.
- The project can be integrated into a stable residential neighborhood.
The demographic analyses indicate that there are solid pools of income-qualified
households in the targeted markets for the project (see below). These markets will
experience growth, given the positive economy.
The study areas solid economy and growth trends are significant. Affordable
housing residents are likely to be persons drawn to the area by new jobs.
The study area is subject to strong housing pressures. Selective additions to the
affordable housing stock will meet with substantial demand.
It is reasonable to assume that the potential market for affordable housing projects
in the study area is larger than the market area analyses show. Randolph is regarded
as an attractive place to live new housing options would almost certainly draw
households in from outside the defined market area. For purposes of this analysis,
we have assumed that an additional 10 to 15 percent of the market for the
components of the project can be drawn from outside of the study area.
These factors indicate that there is market potential for the project. Additional assessment is
presented below, for each of the projects potential markets.
Potential Market PoolsMarket Area Households
The raw background demographic data can be analyzed to estimate the total available market
pools for the for-sale or rental components of the project, in terms of numbers of
households meeting relevant age and income criteria. Three market pool analyses have been
completed:
1. Ownership units a) 19+ units in the townhouse structures. The units would have
two or three bedrooms and will sell for approximately $175,000 and; b) 10+
condominium units in one and two bedroom configurations targeted selling price
of approximately $125,000 (these units could also be marketed for rental see
below). Financial features are summarized below. The ownership market has been
assessed in terms of households with incomes at 60 to100 percent of median income
and 100 to 140 percent of median income.
2. Lower/Moderate income rental units to include 10+ units in an apartment
building, with unit sizes ranging from Studio to two bedroom, this market pool could
include younger or elderly households with household sizes ranging from one to four
persons. Limited to households with incomes less than 100 percent of the Orange
County median. Ability to afford project rents will determine base income eligibility
for these units.
60, 80, 100 and 140 percent households income limits by household size for Orange
County are shown in the table below.16
Household Income Limits: Orange County, Vermont (2006)

Household Size
1 2 3 4 5 6
60% of Median Limit $24,720 $28,260 $31,800 $35,340 $38,160 $40,980
80% of Median $32,960 $37,680 $42,400 $47,120 $50,880 $54,640
100% of Median $41,200 $47,100 $53,000 $58,900 $63,600 $68,300
140% of Median $57,680 $65,940 $74,200 $82,460 $89,040 $95,620
The market pool analyses has been completed in two major steps:
1. Calculate the size of the age/income eligible market pools the number of households
that can take advantage of a particular housing program (ownership or rental) by virtue
of their age and household income level.
2. Estimate the propensity to move within each market pool. Only a segment of each
age/income qualified households will seek a change in housing at any given time. As
such, it is helpful to assess the propensity to move within age/income categories in
order to develop a realistic estimate of the size of the housing market. Households in
various age and income groupings display markedly varied propensities to move within
the course of a year. Most significantly, the propensity to move declines with increased
16 Source: HUD 2006 limits.

age and income. Thus, younger, lower income households are most likely to move,
while older, high income households are least likely to move.
As a measure of the volume of activity, the market pool estimates, as broken down by
age and income, have been applied to propensity to move factors specific to each
age/income group, based upon a variety of research studies.17 The result of these
calculations is an estimate of the number of market pool households likely to be
seeking to move within the course of one year. Note that these figures include moves
to all types of housing.
The market pool estimates follow:
Homeownership Program - 60 to 100 Percent Median (Lower/Moderate Income)
Ownership units are typically made affordable using two basic approaches:
1. Financing reduced down-payments, low interest rates, etc.

2. Subsidized Price achieved through direct subsidy, land write-downs, etc.
In combination, these tools can result in significant reductions in monthly housing

costs, reducing the required income level for home ownership.
Depending on the level of assistance, home purchasers may be subject to some

restrictions, most often in the instance of resale. Typically, buyers would face a
restriction on gain upon sale and only be able to take 25 percent of the appraised
gain in property value from the initial sale value. This factor does limit the potential
market for the project as some households do not find this limitation to be
acceptable.
Our analysis of home ownership market potentials focuses on households with

heads aged less than 55 years, under the assumption that there are few first time
buyers in age brackets above this level.
Our analysis for the income strata was conducted in several major steps:
17 Sources include:
Ernst and Young Real Estate Journal
American Demographics
American Housing Survey - U.S. Bureau of the Census
Current Population Reports - U.S. Bureau of the Census
Census 2000 - U.S. Bureau of the Census
Propensities to move values have been adjusted to account for lower than average propensities in
this region.
1. Calculate the number of age/income qualified households in the income bracket:
60 to 100 percent median;
2. Estimate the segment of the income qualified pool that already own homes;
3. Estimate the annualized propensity to move for each pool and;
4. Estimate the capture rate that an affordable housing project could achieve (final
section of report.)
The appropriate income parameters were applied to the demographic data in order to
develop estimates of the size of the age/income qualified market pool now living in the
market area. The table below shows the results of the first three steps of the above
analysis: 1) Age/Income qualified households; 2) Estimate the segment of the above
group that are not already homeowners, and; 3) Estimate the segment of the above
group that will exhibit a propensity to move within the next year. The analysis has been
completed using the raw demographic data. Results are broken down by head of
household age group.
Market Pool: 60 to 100 Percent of Median Market
HH Age Group <25 25-34 35-44 45-54 Totals
HH Income 60 to 100% Median 147 566 798 955 2,467
Factor out Homeowners 125 258 199 171 752
Propensity to Move 83 85 38 23 229
Based on the analysis, in 2005 there were 2,467 age/income (60-100 Median) households
in the market area; 752 of these households are not homeowners, and; 229 of these
households are likely to be seeking a new residence within the next year. Our analysis of
the capture rate that the Randolph project could achieve in this market follows in the
next report section.
Homeownership Program - 100 to 140 Percent Median (Moderate Income)
Ownership units are typically made affordable using two basic approaches:
1. Financing reduced down-payments, low interest rates, etc.

2. Subsidized Price achieved through direct subsidy, land write-downs, etc.

In combination, these tools can result in significant reductions in monthly housing
costs, reducing the required income level for home ownership. Subsidies for the 100
to 140 percent of median buyer will be less generous than those for the 60 to 100
group.
Depending on the level of assistance, home purchasers may be subject to some

restrictions, most often in the instance of resale. Typically, buyers would face a
restriction on gain upon sale and only be able to take 25 percent of the appraised
gain in property value from the initial sale value. Restrictions on resale will be
reduced given lesser subsidies for households in the 100 to 140 percent of median
bracket.
Our analysis of home ownership market potentials focuses on households with

heads aged less than 55 years, under the assumption that there are few first time
buyers in age brackets above this level.
Our analysis for the income strata was conducted in several major steps:
1. Calculate the number of age/income qualified households in the income bracket:

100 to 140 percent median;
2. Estimate the segment of the income qualified pool that already own homes;
3. Estimate the annualized propensity to move for each pool and;
4. Estimate the capture rate that an affordable housing project could achieve (final
section of report.)
The appropriate income parameters were applied to the demographic data in order to
develop estimates of the size of the age/income qualified market pools now living in the
market area. The table below shows the results of the first three steps of the above
analysis: 1) Age/Income qualified households; 2) Estimate the segment of the above
group that are not already homeowners, and; 3) Estimate the segment of the above
group that will exhibit a propensity to move within the next year. The analysis has been
completed using the raw demographic data. Results are broken down by head of
household age group.
Market Pool: 100 to 140 Percent of Median Market
HH Income 100 to 140% Median 60 392 707 955 2,115
Factor out Homeowners 46 157 152 145 499
Propensity to Move 29 49 28 19 125

Based on the analysis, in 2005 there were 2,115 age/income (100-140 Median)
households in the market area; 499 of these households are not homeowners, and; 125
of these households are likely to be seeking a new residence within the next year. Our
analysis of the capture rate that the Randolph project could achieve in this market
follows in the next report section.
Rental Units Up to 100 Percent Median (Lower Income)
Rental units (should they be offered) will be available to households with incomes of up
to 100 percent of the Orange County median. Base level incomes will be determined by
assuring that renter households have sufficient income to afford the gross rental cost
within their overall household budget.
The analysis has been performed on the demographics for the defined market area.
All tenants in the rental units must be households with incomes at 100 percent or
less of the median. The upper income limit varies dependent on household size as
shown above.
We have focused the analysis on households with heads aged 18 to 64 years the
family market. We would expect household sizes to range from one to four persons
for family households. The potential for elderly households (household head aged 65
years or more) to become a tenant represents an upside to the analysis as presented
below.
Prospective tenants must have sufficient income to make the rent cost work within
their budgets. Note the following:
- A review of tenant policies in family projects throughout the northeast indicates
that project management typically qualifies potential family tenants by ensuring
that the gross monthly rental cost will not exceed 37 percent of the household
income. This standard ensures that households will be able to afford the unit and
make timely rental payments.
The appropriate income parameters have been applied to the raw demographic data in
order to develop estimates of the size of the qualified market pool now living in the
market area. This is shown in the table below. The market pool has been broken down
in terms of age bracket (Head of Household) and household size.

Market Pool: Rental Units;
Family Households
Income-Qualified Households: Income Qualified Households:

Distribution by Head of HH Age: Distribution by HH Size
Number of Number of
Age Group HHs % of Total HH Size HHs % of Total
18-24 127 6% 1 470 23%
25-34 378 18% 2 884 42%
35-44 520 25% 3 346 17%
45-54 616 30% 4 380 18%
55-64 439 21% 5 0 0%
6 0 0%
Total 2,080 Total 2,080
The family age/income qualified market is estimated at 2,080 households.
As noted, only a segment of the total age/income qualified pools will consider moving at
any given time. The total market pool (above) has been applied to propensity to move
factors in order to estimate the number of qualified households that may be seeking
housing during the next years. This is shown for the family pool in the table below.
Market Pool: Rental Units;

Propensity to Move; Family Households
Income Qualified
Annual Market
Head of HH Number of % of
Age Bracket HHs Total
18-24 95 20%
25-34 141 29%
35-44 113 23%
45-54 96 20%
55-64 41 8%
Total 486 100%

The potential family market includes 486 households. Note that this includes moves to
all housing options not just the project. The potential capture rate of an affordable
rental project is assessed later in this report.
Market Capture and Absorption Rates
The majority of the project buyers/tenants will be drawn from qualified households living in
the market area. These pools are assessed below:
The following has been considered in estimating the projects capture rates from the avail-
able market pools:
Existing Housing Options With demand for rental apartment units at a high level, good to
excellent quality units are typically hard to find. In most instances, lower income
households settle for one of the lower quality, cheaper apartments available in the
Randolph area. However, vacancy rates for these units are also low.
The housing market review makes it clear there are options available for buyers seeking
ownership housing in the $150,000 to $200,000 price bracket.
Potential New Competition our research did not uncover any comparable new housing
projects in the market area.
Location the project location is excellent with respect to public and commercial services
and offers a quality setting for housing.
Current market conditions will give project units distinct competitive advantages: 1) Demand
will increase as the market area grows; 2) The units will offer a level of quality not usually
available within the market area, except for higher priced/rent units and; 3) Any new
construction activity will attract attention and potential buyers/tenants, particularly since new
units will be made available. Given these circumstances, it is likely that the project can achieve a
solid capture rate for each of its ownership or rental programs. Projected capture rates for
each component - by household age group - are shown in the tables below. These capture rates,
when applied to the number of qualified households who are likely to move within one year, of-
fer an estimate of the projects potential absorption rate.
Realistically, an additional 10 to 15 percent of the will be made up of households from

outside of the defined market area. Experience with similar projects throughout the
Northeast has shown that there is a steady stream of persons who will move outside their
home area to find good quality and affordable housing. Randolph is well regarded from
several perspectives: 1) High quality of life and; 2) Reasonable access to transportation and;
3) Location in a job center. A number of persons from outside the market area will view the
opportunity created by this project as a chance to live affordably. On this basis, the annual
absorption rate for the projects components will increase by 10 to 15 percent over that
which would be available from the defined market area alone. This is shown in the capture
rate tables.
Ownership Components:
Estimated Capture/Absorption Rate:

Ownership Units - 60 to 100 Percent Median Market
Market Pool:
Age/Income, Non-Owner,
Likely to Move
83 85 38 23 229
Adjust for:
Location, Development Type,
Applicable Restrictions
21 22 10 6 58
Adjust for:
Competition, Non-Market
Buyers
4.8 5.0 2.2 1.3 13
Estimated Capture/Absorption Rate:

Ownership Units - 100 to 140 Percent Median Market

Market Pool:
Age/Income, Non-Owner,
Likely to Move
29 49 28 19 125
Adjust for:
Location, Development Type,
Applicable Restrictions
10 17 9 6 42
Adjust for:
Competition, Non-Market
Buyers
2.3 3.8 2.1 1.5 10

Rental Units
Projected Capture and Absorption Rates:

Rental Units Family
Annual
Head of HH Number of HHs Absorption
Age Bracket Expected to Move Capture Rate Rate (HHs)
18-24 95 7% 7
25-34 141 15% 22
35-44 113 14% 16 Monthly

45-54 96 12% 12 Absorption
55-64 41 5% 2 Rate
Totals 486 59.6 5.0
Draw from Outside Market Area 12.5% 12.5%
Total Rates 67.1 5.6
The capture rate analyses indicate that the projects components could achieve annual
absorption rates of: 67 Units for the rental units and; 23 units for the ownership units. On a
combined basis, it is projected that the market has potential for absorption of 90+ units on an
annual basis, or 7.5 units on an average monthly basis. Realistically, average rates of absorption
will be exceeded during the initial months of listing/leasing activity on the project, as pent-up
demand for affordable housing and the marketing effect of new project construction will create
an above average rate of demand.
The table below summarizes the projected monthly and cumulative absorption rate for each
potential component of the project. The absorption schedule assumes that marketing and pre-
leasing/selling activity will occur during the construction of the units, with active leasing/sales
starting three months before the completion of construction and initial occupancy. Because of
pent-up demand, it is reasonable to expect that the rate of absorption will be above average
during the first few months and particularly near the time when the project is ready for
occupancy.

Absorption and Rent-Up Period:
Activity Starts
Leasing/Sales
Occupancy
Starts
Month 1 2 3 4 5 6 7 8 9 10 11 12
Rental
Monthly 6.2 7.3

Cumulative 6 13
Ownership - 60-100 Percent Median
Monthly 1.2 1.4 1.6 1.6 1.5 1.3 1.2 1.1 1.1 1.1 1.1 1.1
Cumulative 1 3 4 6 7 9 10 11 12 13 14 15
Ownership - 80-100 Percent Median
Monthly 0.9 1.1 1.2 1.2 1.2 1.1 1.0 1.0 0.8 0.8 0.8 0.8
Cumulative 1 2 3 4 6 7 8 9 9 10 11 12
Ownership - Combined
Monthly 2.1 2.5 2.8 2.8 2.7 2.4 2.2 2.1 1.9 1.9 1.9 1.9
Cumulative 2 5 7 10 13 15 18 20 22 23 25 27
Based on the absorption projections, it would take only two months after leasing activity is
initiated to completely lease rental units; and projections indicated that 27 ownership units could
be committed within a 12 month period. As such, the projects ownership or rental units could
be substantially occupied within one year after the completion of the completion of
construction.
Summary
Given the combination of a solid economy and the attractiveness of Randolph as a

place to live, a well-planned affordable ownership or rental housing option will
experience solid demand. The commencement of construction activity on any
project will immediately spur inquiries and potential sales or leasing activity.
The project will generate strong demand within the market and attract buyers and
tenants from outside the defined market area.

The findings of the analysis indicate that there is sufficient demand to build the
project in one phase. However, a two-phase construction program may better enable
RACDC to react to initial market demands particularly with respect to unit mix.
Unit mix
- The proposed unit mix for the rental apartments appears reasonable given
the demographics of the market.
- Initially, we feel that a 60/40 mix between two and three bedroom units
makes sense for the townhouse/for-sale units. However, we strongly
recommend conducting a pre-sales survey period and adjusting this mix if the
indications of demand make it clear that a different mix will better match
demands.
It is the overall finding of this analysis that there is more than sufficient market demand for the
Salisbury Square project and that the leasing/sales activity will result in substantially complete
occupancy within 12+ months of the initiation of construction of the project. Strong demand and a
high occupancy rate are projected for the foreseeable future.

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Market Feasibility Analysis

Prepared for: Randolph Area Community

September 23, 2006

Introduction and Scope of Project 3

Project Site and Community Context 6

Housing Market Trends and Comparables 27

Market Analysis: Salisbury Square; Randolph, Vermont; September 2006 Page 2

What is the level of demand for the elements of the project?

What competition does the project face?

- Developer Randolph Area Community Development Corp.

A quantitative analysis of source market demographics and potential buyer pools.

Projections regarding prospective project market absorption and recommendations.

Market Analysis: Salisbury Square; Randolph, Vermont; September 2006 Page 5

Randolph is a central Vermont community and serves as Orange Countys principal

Randolph - Regional Location

Randolph is located in southwestern Orange County. Orange County is located in east-

Market Analysis: Salisbury Square; Randolph, Vermont; September 2006 Page 6

Randolphs educational system includes the Randolph Elementary School, located at 40

Market Analysis: Salisbury Square; Randolph, Vermont; September 2006 Page 7

Project Site, Profile, and Context

(Space Left Blank Intentionally)

Market Analysis: Salisbury Square; Randolph, Vermont; September 2006 Page 8

The site is shown in several views below:

Market Analysis: Salisbury Square; Randolph, Vermont; September 2006 Page 9

Site View looking westerly along Southern Boundary

Market Analysis: Salisbury Square; Randolph, Vermont; September 2006 Page 10

We note the following regarding the Salisbury Square site:

Town Recreation Area Across School Street

The site(s) can take advantage of existing village infrastructure.

Salisbury Square: Current Site Plan

Moves by households are motivated by issues like: 1) Convenience in commuting to a job; 2)

Others 536 19% 100%

Market Analysis: Salisbury Square; Randolph, Vermont; September 2006 Page 15

Market Analysis: Salisbury Square; Randolph, Vermont; September 2006 Page 16

Labor Unemploy- Labor Unemploy-

1990 14,350 13,650 4.9% 304,500 289,200 5.0%

Change 1990-2005 15.3% 17.2% 16.9% 18.8%

Market Analysis: Salisbury Square; Randolph, Vermont; September 2006 Page 17

Labor Force Employment Unemployment Rate

1990 2,560 2,360 7.8%

1995 2,610 2,480 5.0%

2000 2,630 2,570 2.3%

2004 2,730 2,650 2.9%

2005 2,760 2,690 2.5%

2006* 2,730 2,650 2.9%

Change 1990-2005 7.8% 14.0%

Market Analysis: Salisbury Square; Randolph, Vermont; September 2006 Page 18

Gifford Medical Center 284 Health Services 1903 $10-50Million

Dubois & King 92 Engineering Services 1962 $5-10Million

Randolph National Bank 55 Commercial Banking 1875

Primary Target Market - Ownership Units

Market Analysis: Salisbury Square; Randolph, Vermont; September 2006 Page 19

Secondary Target Market -Rental Units

Population/Household Trends and Characteristics

Market Analysis: Salisbury Square; Randolph, Vermont; September 2006 Page 20

Market Area 23,125 23,860 24,227 +367

% Change 3.2% 1.5%

Randolph Town 4,764 4,853 5,054

% Change 1.9% 4.1%

Orange County 26,149 28,226 29,287

% Change 7.4% 3.6%

Region* 117,317 118,680 119,637 +957

% Change 1.2% 0.8%