[ CITY OF BAYTOWN NOTICE OF MEETING CITY COUNCIL WORK SESSION THURSDAY, JUNE 8, 2023 5:30 P.M. COUNCIL CHAMBER, CITY HALL 2401 MARKET STREET, BAYTOWN, TEXAS 77520 AGENDA CALL TO ORDER AND ANNOUNCEMENT OF QUORUM ]
[00:00:20]
SO I, I'LL CALL THIS, UH, WORK SESSION OF THE BAYTOWN CITY COUNCIL ORDER.
IT IS 5:34 PM WE DO HAVE A QUORUM.
WE ARE IN BAYTOWN CITY, ALL COUNCIL CHAMBERS.
[a. Discuss the Fire Department EMS ambulance fees and billing. ]
FIRST ITEM FOR DISCUSSION, WHICH IS DISCUSS THE FIRE PARK DEPARTMENT, EMS, AMBULANCE FEES AND BILLING.GOOD AFTERNOON, MAYOR AND COUNCIL.
SO I'M GONNA HAVE CHIEF DALBY COME UP IN A MINUTE AND KIND OF WORK THROUGH THE PRESENTATION.
BUT, UM, REAL QUICK, I WANNA COVER THE PURPOSE.
WE WANNA REVIEW CURRENT AMBULANCE TRANSPORT RATES, COMPARE THOSE RATES WITH REGIONAL AND STATE PROVIDERS.
AND AFTER WE DO THAT, WE WANNA TALK A LITTLE BIT ABOUT OUTSOURCING AMBULANCE BILLING.
OUR INTENTION IS TO, UM, GET TO A POINT WHERE WE CAN ADJUST THE RATES TO THE CURRENT MARKET LEVELS AND PROVIDE MORE EFFICIENT BILLING THROUGH OUTSOURCING.
AND CHIEF DALBY WILL CONTINUE.
WHEN WE TALK ABOUT AMBULANCE BILLING, WE, THE HPIC CODES ARE THE HEALTH CONDITION PROCEDURE CODES.
THERE'S THREE OF 'EM IN EMS, BBL, UH, B-L-S-A-L-S, AND AALS TWO BLS IS JUST AN, A BASIC AMBULANCE TRANSPORT RIDE.
MAY HAVE A BANDAGE SPLINT, MAYBE PUT A, UH, HAVE AN MN BASIN OR SOMETHING LIKE THAT.
AND OUR CURRENT CHARGE IS $500 FOR AN ADVANCED LIFE SUPPORT.
WE MAY START AN IV, PUT A EKG MONITOR ON YOU, OR MAYBE GIVE YOU A MEDICATION.
AND THAT'S $600 FOR AN ADVANCED LIFE SUPPORT.
THAT'S GONNA BE TWO OR MORE, UH, MEDICATIONS GONNA BE A DEFIBRILLATION, AN INNOVATION, MAYBE A NEEDLE DECOMPRESSION, A MORE CRITICAL CARE PATIENT, AND WE'RE CHARGING $700.
AND THOSE ARE THE THREE HC PICK CODES THAT, THAT INSURANCE COMPANIES USE.
AND THEN WE ALSO CHARGE 10 CENTS PER MILE.
AND THEN IF WE GO TO YOUR HOUSE AND SAY YOU'RE A DIABETIC AND WE START AN IV AND GIVE D 50 AND WAKE YOU UP, THAT'S A TREAT, NO TRANSPORT CHARGE OF 150.
ONE OF THE CONCERNS THAT PEOPLE ALWAYS HAVE IS THE INDIGENT AND, UH, THE ELDERLY POPULATION, MEDICARE, MEDICAID OR CMS SETS THE RATES FOR THOSE PROVIDERS.
AND SO WE CAN'T CHARGE ABOVE FOR THOSE PARTICULAR PATIENTS.
WE CAN'T CHARGE ABOVE IF OUR RATES ARE $5,000.
THEIR RATES ARE, ARE SET IN STONE.
IF YOU LOOK AT THIS CMS, UH, ALLOWABLE, THEY'RE 400, 5 32, 6 94, AND $9 A MILE.
WE, WHEN WE SET OUR RATES, THEY WERE, THEY WERE SET IN 2006 AND MEDICARE'S ALLOWABLE WAS $230.
SO THEY'VE INCREASED THEIR RATES OVER THE YEARS, AND WE HAVEN'T HAD THE OPPORTUNITY, OR HAVEN'T TAKEN THE OPPORTUNITY TO INCREASE OUR RATES AS NOW IF YOU LOOK AT A TYPICAL CMS PATIENT CHARGE, IT'S $404 PLUS, THE AVERAGE TRANSPORT IS ABOUT NINE MILES.
SO IT'S GONNA BE $458 THAT WE CAN CHARGE 80% OF THAT CMS PAYS FOR.
AND THE PATIENT IS, AS COPAY IS GONNA BE $92 FOR THAT PATIENT.
THERE'S $105 FEE THAT IS ADJUSTED OFF.
THAT'S ABOVE AND BEYOND WHAT IT, IT'S CALLED BALANCE BILLING.
AND WE CAN'T BALANCE BILL FOR, FOR THESE FEDERAL PROGRAMS. SO THEIR PAYMENT'S GONNA STAY THE SAME NO MATTER WHAT.
SO WHAT THOSE ADJUSTED WRITE OFF, WE HAVE ABOUT $717,000 IN 2022 OF THOSE WRITE OFFS WHERE WE COULDN'T, THAT WAS UNCOLLECTIBLE FUNDS THAT WE, WE WEREN'T ABLE TO GET JUST BECAUSE OF THE, THE, UH, FEDERAL PROGRAMS, FEDERAL AND STATE PROGRAMS. SO IF YOU LOOK AT OUR CURRENT PAYER MIX, THE FIRST COLUMN IS THE, THE PAYERS.
AND WE HAVE 10 TENS OR HUNDREDS OF DIFFERENT PAYERS.
I'VE GOT 'EM KIND OF LUMPED INTO THE GROUPS THAT THEY, THEY PAY BY MEDICARE, UH, MEDICARE, HMO, MEDICAID, PRIVATE INSURANCE, UNINSURED OR PRIVATE PAY, AND THEN AUTOMOBILE INSURANCE.
THE FIRST COLUMN IS INVOICE IS HOW MUCH WE BILLED OUT.
WE BILLED OUT $4 MILLION IN INVOICES LAST YEAR.
THE COLLECTION PERCENTAGE BY PAYER IS LISTED BELOW WITH THE OVERALL COLLECTION RATE OF 44%.
AND OUR PERCENTAGE OF REVENUE IS THE NEXT COLUMN THAT SHOWS WHAT WE'RE, WHERE WE'RE GETTING OUR FUNDS FROM.
AND, AND YOU CAN SEE THERE'S A, THERE'S STILL SOME, UH, SOME AREAS WHERE WE COULD DO BETTER ON COLLECTIONS.
THERE'S SOME AREAS WHERE WE'RE UNDER, WHERE I HOPE TO SHOW YOU THAT WE'RE UNDERCHARGING PEOPLE.
SO IF YOU TAKE INTO ACCOUNT THAT $717,000 THAT WE, THAT IS UNCOLLECTIBLE, THAT REDUCES OUR ACTUAL BILLS OR ADJUSTED INVOICE TO 3.3 MILLION, WHICH GIVES US A, AN ADJUSTED COLLECTION RATE OF FIVE 52%.
I KNOW THIS IS EXCITING STUFF, SO BEAR WITH ME.
WE'RE GONNA GET TO, UM, A BETTER WAY TO LOOK AT IT IS CASH PER TRANSPORT.
THE, WHEN YOU'RE LOOKING AT PERCENTAGES, YOU'RE, LOOK, SOME OF THAT MONEY FROM 2000 FROM LAST YEAR, WE MAY NOT COLLECT TILL THIS YEAR.
SO IT'S HARD TO, IT'S HARD TO SAY MONTH TO MONTH WHAT, WHAT YOU'RE ACTUALLY COLLECTING ON WHAT YOU'RE BILLING.
SO CASH PER TRANSPORT IS A BETTER WAY OF LOOKING AT IT.
[00:05:01]
LAST YEAR WERE 6,290 WITH ABOUT $280, UH, CASH PER TRANSPORT.SO IF WE COMPARE OUR CHA OUR, OUR RATES WITH THE, THE SURROUNDING AREA AND REGION, YOU CAN SEE THAT WE'RE VASTLY BELOW THE, THE, THE LEVELS AND, AND THE MEDIAN AT THE VERY BOTTOM IS 1,250.
1600, 1800 FOR B-L-S-A-L-S AND A LS TWO.
SO THEN, UH, MILEAGE CHARGE AGAIN IS, IS LESS THAN HALF OF OF THAT.
AND THEN A, AND THEN I ONLY HAVE A LS DISPOSABLE LISTED ON HERE AND THERE ABOUT 400 CURRENTLY WE'RE NOT, WE'RE NOT CHARGING FOR ANY DISPOSABLES BLS OR A LS.
SO THE STATE AVERAGED, UH, TAX PART INSURANCE DID A, A, A BILLING PRACTICES STANDARD, SOME WITH SURVEY FROM 2022 DATA THAT RELEASED THAT LAST YEAR.
AND, AND SO THIS INFORMATION IS 2022, BUT YOU CAN SEE BLS AND A LS RATES WERE 1,012 HUNDRED ON AVERAGE.
AND THEN BY REGION, UH, WE'RE IN THE EAST TEXAS AREA AND IT'S 1,013, ALMOST $1,400, AND THEN $20 PER MILE.
SO AS WE TALKED ABOUT AT THE BEGINNING, AND CHIEF HAD MENTIONED OUR, JUST TO ADJUST THE RATES TO CURRENT MARKET LEVEL, IF WE LOOK AT THE MEDIAN FOR THE, FOR THE AREA, WE'RE LOOKING AT 1,014 HUNDRED, 1600 IN MILEAGE OF 22.
AND THEN, AND, AND THEN ADOPT A OXYGEN DIS A BLS DISPOSAL AND A LS DISPOSAL CHARGE FOR THAT.
DO Y'ALL HAVE ANY QUESTIONS ABOUT THE BILLING RATES OR, OR PROPOSED CHARGES? OKAY.
SO I DID REACH OUT WHEN WE WERE TALKING TO, UH, SURVEYING THE COMMUNITIES IN THE AREA.
WE DISCUSSED, I ASKED THEM WHO THEY'RE USING FOR BILLING AND HOW, AND MO EVERY SINGLE ONE OF 'EM OUTSOURCE THEIR BILLING.
UM, THERE'S NOT A LOT OF PEOPLE THAT DO IN-HOUSE BILLING.
UM, A MAJORITY OF 'EM ARE USING A COMPANY CALLED AERON.
THEY ARE, THEY ARE A TEXAS BASED COMPANY.
THEY ARE ONE OF THE LEADERS IN EM EMS AND EVERY SINGLE ONE OF OUR NEIGHBORS IN, IN, IN THE COMMUNITY USING THEM.
THERE ARE SOME OTHER, UH, BILLING AGENCIES OUTSIDE OF OUR DIRECT COMMUNITY THAT PEOPLE ARE USING AND, AND THEY'RE AVAILABLE TO LOOK AT AS WELL.
UM, MERGER CON TAKES A UNIQUE APPROACH.
THEY, A LOT OF BILLING COMPANIES WILL DO A DIRECT, UH, AUTOMATED BILLING CYCLE WHERE IT COMES IN THROUGH THE COMPUTER AND SPITS IT OUT, AND THEY STILL HAVE PEOPLE LOOKING AT 'EM LIKE WE DO IN HOUSE.
AND THEY'RE AVERAGING A 30% INCREASE IN THEIR EMS, UH, COLLECTION RATES FOR COMPANIES THAT THEY TAKE OVER.
THEY'VE REC ALSO RECOMMENDED, UH, WITH THE DATA THAT I SHARE WITH THEM, THEY RECOMMENDED, UH, INCREASING OUR RATES AS, AS PRETTY MUCH WHAT WE HAD LISTED OUT.
SO THEIR, THEIR PROJECTION SHOWS OUR, OUR CASH PER TRANSPORT UP TO 422 FROM THE TWO 80, WHICH WOULD REALLY GIVE US ABOUT ANOTHER $986,000.
THEY DO CHARGE A 8% FEE, WHICH IS ABOUT 200,000, UM, WHICH BRINGS A THOUSAND TO 800.
THERE WOULD BE SOME ANNUAL COST SAVINGS THAT, THAT WE WOULDN'T HAVE TO PAY FOR THE, THE SOFTWARE THAT WE'RE USING NOW, SOME OF THE MAILING, UH, SUPPLIES AND SYSTEMS THAT WE USE.
AND WE'RE LOOKING AT ABOUT A $52,000 A YEAR SAVINGS JUST IN MATERIALS AND SOFTWARE.
UM, THEIR, THEIR AVERAGE CLIENT INCREASE.
THEY SEND ME A LIST OF CLIENTS THAT WE'RE DOING IN-HOUSE BILLING AND, AND SWITCHED.
AND, AND OURS IS SPECULATIVE HERE AT 2 84 22 AND 33.9.
BUT YOU CAN SEE THE PRE-EMERGE CON IN THE FIRST COLUMN VERSUS POST EMER CON AND THE PERCENTAGE OF INCREASE THAT, THAT THEY HAD WHEN THEY SWITCHED OVER TO MERG CON.
AND, AND I BELIEVE THAT'S, YOU KNOW, WE DON'T KNOW WHERE THE PRE-EMERGE CON RATES WERE, WHAT THEIR COLLECTION WAS, BUT WE, BUT IT'S A GOOD, PRETTY GOOD, UH, TABLE TO GO BY ON WHAT PO POTENTIALLY WE COULD INCREASE OUR REVENUE BY.
SO A THIRD PARTY BILLING ADVANTAGE WOULD BE QUICKER BILLING TURNAROUND.
THEY HAVE A EXTENSIVE RES, THEY DO EXTENSIVE RESEARCH IN THE BILLING COMPANIES.
THEY ASSIGN SOMEBODY TO A FEDERAL PROGRAM YOUR BILLING, MEDICARE, YOUR BILLING, MEDICAID OR BLUE CROSS BLUE SHIELD.
THEY WOULD ASSIGN US DEDICATED SUCCESS TEAM TO US.
AND THEN THAT TEAM LOOKS AT WHAT WE'RE DOING, WHAT OUR DEMOGRAPHICS ARE, HOW WE CAN IMPROVE OUR, OUR BILLING PROCESSES, AND, AND, AND THEY DO SOME DOCUMENTATION AND AUDIT, UH, TRAINING WITH OUR CREWS AND TRY TO HELP US WITH THE DOCUMENTATION AND ANNUAL COMPLIANCE.
AND THEN EVERY TWO YEARS, OUR, UH, MEDICARE, MEDICAID REVALIDATION IS DUE AND THEY WOULD HELP US, ASSIST US WITH THAT AS WELL.
SO THE NEXT STEPS, WE'LL PROPOSE A RATE INCREASE TO CITY COUNCIL IN THE NEAR FUTURE, AND THEN WE'LL WORK WITH THE CITY MANAGEMENT, LEGAL, FINANCE AND PURCHASING TO CONSIDER AN RFP OR INTERLOCAL AGREEMENT FOR THIRD PARTY BILLING.
Y'ALL HAVE ANY QUESTIONS? I KNOW I DO, BUT, UH, I'D LIKE TO HEAR FROM COUNSEL REGARDING, I KNOW I DO APPRECIATE THE, THE EXPRESS PRESENTATION.
[00:10:01]
I WILL, MY ONLY COMMENT I'LL MAKE RIGHT NOW WOULD BE THAT, UM, LOOKING BACK LIKE 2006, I REMEMBER BILLING AT THE TIME, UM, I THOUGHT IT WAS GOING TO A COMPANY, JACKI THOUGHT NO, JACK, JACK WAS, NO, WE WERE DOING IT IN-HOUSE.
JACK HAD STARTED HIS OWN COMPANY.
FOR THOSE OF Y'ALL DON'T KNOW, HE HAD, HE RETIRED AND STARTED HIS OWN COMPANY AND WE WERE, WE STILL CONTINUE TO DO IN-HOUSE BILLING SINCE THEN.
YEAH, I JUST, I'M ACTUALLY SURPRISED.
AND SO, UM, BUT I'D LIKE TO HEAR FROM COUNSEL ON THAT.
I WAS JUST CURIOUS, UM, WHEN I EXPECTED TO SEE UNINSURED SELF-PAY NOT COLLECTED WHEN WE WERE LOOKING AT ONE OF THE FIRST SLIDES THAT YOU HAD MM-HMM
UM, BUT WHAT WOULD BE SOME OF THE REASONS THAT IT'S HARD TO GET THE MONEY FROM MEDICAID? UM, AND THOSE, THE INSURANCE COMPANIES? SO IT WAS A LARGE PERCENTAGE I COLLECTED.
SO INSURANCE COMPANIES KIND OF WORK BACKWARDS.
THEY DE DECLINE OR REJECT YOUR CLAIMS A LOT OF TIMES.
AND SO OUR BILLERS HAVE TO WORK BACKWARDS AND JUSTIFY SHOW PROVE MEDICAL NECESSITY AND, AND THINGS.
AND SO IT'S A PROCESS AND IT PUTS A LOT OF DELAYS IN, IN COLLECTIONS.
AND ONE OF THE REASONS WE'RE, WE'RE LIMITED ON OUR BILLING STAFF, AND SO IT'S, WE CAN ONLY CHASE THE DOLLAR SO, SO FAR BEFORE IT BECOMES SO HARD TO GET 'EM.
AND, AND THAT'S WHY WE THINK AN OUTSOURCED BILLER COMPANY HAVE WHO'S, WHO'S, UH, PROMOTED A LITTLE BIT MORE BY INCENTIVE TO COLLECT THAN WE ARE MM-HMM
AND SO THEY'RE, WE WANT TO COLLECT THE MEDICARE MAY GIVE YOU AN A DENIAL.
IT'S GOTTA BE, IT'S GOTTA MEET MEDICAL NECESSITY RULES.
IF WE DON'T TELL PEOPLE WE'RE NOT GONNA TAKE 'EM TO THE HOSPITAL, SOMEBODY CALLS US AND THEY, AND THEY HAVE A CHIEF COMPLAINT AND THEY WANT TO GO TO THE HOSPITAL, WE GIVE THEM OPTIONS.
AND IF THEY WANT TO GO TO THE HOSPITAL, WE TAKE 'EM TO THE EMERGENCY ROOM.
WE DON'T, WE DON'T REFUSE ANYBODY FROM TRANSPORT.
AND THEN, UM, MY SECOND QUESTION IS JUST SINCE Y'ALL DO IN-HOUSE BILLING MM-HMM
UM, THAT STAFF MEMBER, IS THERE GONNA BE ANOTHER JOB I'M ASSUMING THAT THEY CAN DO? YES.
WE'LL, WE'LL WORK 'EM INTO WHAT WE'RE CURRENTLY DOING.
UM, YOU, YOU'D GONE THROUGH, YOU MENTIONED WHAT THE FEE, THEIR FEE WOULD BE MM-HMM
UM, I DON'T, IT WAS $200,000 OR SO, BUT IS THAT, UH, A FLAT RATE OR JUST A PERCENTAGE OF REVENUE? IT'S PERCENTAGE OR, OR A A PERCENT, YEAH, COMBINATION OF THE TWO.
YOU DID SAY, I'M SORRY, I MISSED THAT.
ANYBODY ELSE? NOT, UM, YEAH, I MEAN, IT LOOKED LIKE YOU'RE TAKING A KIND OF A TWO SEPARATE APPROACH.
ONE, OBVIOUSLY RAISING RATES FOR EVERYONE, YOU'RE GONNA HAVE INCREASED REVENUE, BUT THAT DOESN'T SOLVE, IT DOESN'T SOLVE THE ISSUE OVERALL.
UM, I THINK GOING TO THIRD PARTY IS CERTAINLY, I'M GONNA SAY VERY, VERY NECESSARY, UM, EXPERTS IN THE FIELD AND LET, LET THEM HANDLE IT.
THERE'S, THERE'S AREAS OF CITY OPERATIONS AND SERVICES, AND THIS IS ONE THAT I THINK IT'S BEST FOR A THIRD PARTY.
SO WHAT WOULD BE THE NEXT STEPS? I KNOW YOU, YOU, YOU SHOWED IT.
WHEN WE EXPECT EITHER ONE A RATE, RATE CHANGE, I'D LIKE THAT TO BE, ALTHOUGH RIGHT NOW WE'RE AT THE VERY END OF THE RATE.
I DON'T WANT US TO GO AND TRY TO BE AT THE TOP EITHER TO BE LOOK AT, LOOK AT, AT, UH, AT SOME COMPS AND, AND KIND OF FIGURE OUT WHAT THAT SHOULD BE.
OUR GOAL WOULD BE TO BE IN THE MEDIAN AREA, IF YOU WILL.
UM, WHAT WE PROPOSED, SO IF YOU LOOK AT THIS CHART, THE, THE MEDIAN IS IS 12 50, 1600, 1400.
WE ACTUALLY ARE, WE'RE THINKING, YOU KNOW, UH, A LITTLE BIT BELOW THAT.
UM, SO WE'RE 1400 AND 1600 ON THE, UH, A LS AND A LS TWO CHARGE.
AND THEN THE 1200 OR THOUSAND DOLLARS FOR THE, FOR THE BLS DOUBLE THE BLS RIGHT NOW.
I MEAN, I'M SURE WE'LL, WE'LL GET A NUMBER AND, AND, UH, WE'LL KIND OF CONSIDER THAT.
I DON'T, I DON'T HAVE ANY RESERVATIONS.
I THINK IT'S, IT'S GOOD THAT THIS IS, I GUESS SURFACING UNFORTUNATE MAYBE, BUT IT'S GOOD THAT IT'S SURFACING.
[b. Present and discuss findings of the Housing Needs Assessment Report.]
ALRIGHT, MOVE ON TO OUR NEXT ITEM IS ITEM ONE B TO PRESENT AND DISCUSS FINDINGS OF THE HOUSING NEEDS ASSESSMENT REPORT.UM, SO AS YOU'LL REMEMBER, A FEW MONTHS BACK, WE HAD HAD SOME, UH, RESERVATIONS FROM STAFF ABOUT OUR RECOMMENDATIONS AND THE DATA THAT WE HAD MOVING FORWARD IN, IN ANY, UM, REALLY SPECIFICALLY MULTIFAMILY REZONES, BUT REALLY IT INVOLVED ALL OF THE HOUSING NEEDS FOR THE CITY OVER THE COMING YEARS.
SO, UH, AS YOU REMEMBER, WE, UH, YOU, YOU, THIS, THE COUNCIL APPROVED A MORATORIUM AND THAT GOES UNTIL JULY 1ST IN ORDER TO ALLOW US TIME TO GET THROUGH THE HOUSING NEEDS ASSESSMENT STUDY.
UM, THAT STUDY WAS PERFORMED BY ATRIA PLANNING AND WE HAVE THE INITIAL FINDINGS.
[00:15:01]
SO WE, WE WON'T BE ASKING YOU TO, UH, ADOPT ANYTHING TONIGHT, BUT IN, IN PREPARATION FOR MAKING THAT REQUEST ON THE 22ND, WE WANTED TO KIND OF COME HERE AND, AND JUST HAVE A DISCUSSION ABOUT THAT TONIGHT.SO I'VE ASKED OUR CONSULTANT, REBECCA ROTHENBERG FROM HA, PLANNING TO, UH, PRESENT THE INITIAL FINDINGS TO YOU, AND WE'RE, UM, HERE TO ANSWER ANY QUESTIONS THAT MIGHT COME UP AS A PART OF THAT.
I HAVE I THINK, 20 MINUTES TO DO THIS.
SO I WILL BE, UM, RELATIVELY BRIEF, BUT WE DO HAVE ABOUT 10 MINUTES FOR QUESTIONS AND THERE ARE ANSWERS WITHIN THE REPORT AS WELL.
SO I, UM, CONDUCTED A HOUSING NEEDS ASSESSMENT THAT FOCUSES ON YOUR SUPPLY DEMAND DYNAMICS AND THEN ALSO LOOKS AT SOME OF THE HOUSING CHALLENGES THAT EXISTING RESIDENTS EXPERIENCE, UM, USING HUD DATA AND THEN ALSO LOOKING AT REGIONAL ECONOMIC GROWTH POPULATION FORECASTS.
UM, I'LL PREFACE THAT FORECASTS ARE BASED ON HISTORIC TRENDS.
UM, AND SO I DON'T HAVE A LOT OF FAITH IN FORECASTS THAT ARE COMING OUT RIGHT NOW BECAUSE THINGS ARE, WE'RE A BIT WONKY IN THE PAST THREE YEARS.
UM, THAT BEING SAID, UH, HOUSTON, UM, HAS EXPERIENCED QUITE A BOOM DURING COVID AND THAT IS EXPECTING TO CONTINUE FOR THE NEXT, AT LEAST THREE YEARS, PROBABLY FIVE.
UM, SO WITH THAT IN MIND, UM, I, I DID WORK WITH, UM, FORECAST FROM THIRD PARTY SOURCES, UM, ESRI BUSINESS ANALYST AND NIELSEN CLARITAS, AND THEN I ALSO LOOKED AT THE TEXAS POPULATION FOR FORECASTS.
UM, SO I'LL GET TO THE, THE NITTY GRITTY IN THE BEGINNING AND THEN I'LL GO THROUGH SOME OF THE, SOME OF THE DATA.
UM, BAYTOWN IS, UH, A JOB CENTER.
IT'S A SUBURBAN JOB CENTER, AND THEREFORE IT'S ALWAYS BEEN, UM, HAD, HAD A SIGNIFICANT RENTER POPULATION.
UM, BUT IN THE PAST DECADE IT'S ACTUALLY SHIFTED MORE TOWARDS SINGLE FAMILY.
UM, AND THEN RELATIVE TO THE COUNTY OR THE STATE, ITS GROWTH, WHILE VERY STRONG HAS NOT BEEN AS STRONG AS THE, THE COUNTY OR THE STATE.
AND SO JUST PUTTING THAT IN PERSPECTIVE, THE BUILDING ACTIVITY, MULTIFAMILY AND SINGLE FAMILY HAS NOT BEEN, UM, ON PAR WITH THIS EXTREMELY RAPID GROWTH, UM, THAT WE SEE IN TEXAS AND THE HOUSTON METRO.
UM, THE APARTMENT VACANCY RIGHT NOW IS AROUND 10%, WHICH IS THE SAME AS THE REGION.
AND THAT'S A BIT HIGHER THAN IT WAS SIX MONTHS AGO.
SIX MONTHS AGO IT WAS MAYBE 6%, UM, SIX TO, I WOULD SAY FIVE TO 8% IS LIKE A HEALTHY RANGE.
UM, BUT THAT, UM, INCREASE IS DUE TO A HUGE SUPPLY OF, UH, APARTMENTS COMING ONLINE BECAUSE ONCE CO UM, STOP BEING SUCH A HINDRANCE IN DEVELOPMENT THAT ALL THE, ALL THE PIPELINES STARTED GOING UNDER CONSTRUCTION.
SO YOU JUST HAD A TON OF PRODUCT COMING ONLINE.
SO, UM, MARKET ANALYSTS, UM, AND UM, ECONOMIC GROUPS, UH, THINK THAT THIS WILL BE, UM, ABSORBED BY THE THIRD QUARTER OF THIS YEAR AND IT'LL GO BACK DOWN TO HEALTHY RATES.
UM, AND HISTORICALLY IT'S BEEN RELATIVELY HEALTHY VACANCY.
UM, SO BAYTOWN IS NOT SHOWING AN OVERSUPPLY.
UM, FUNCTIONAL OBSOLESCENCE IS A BIG ISSUE IN THIS MARKET.
UM, AND THAT, UM, TO, TO SUMMARIZE MEANS THAT YOU HAVE A LOT OF HOUSING STOCK, PARTICULARLY MULTIFAMILY THAT'S DATED.
AND THE COST TO BRING IT UP TO BE COMPETITIVE WITH NEWER PROPERTIES, UM, WOULD BE COST PROHIBITIVE.
UM, AND, YOU KNOW, YOU CAN LOOK AROUND AND, AND PROPERTIES GO OUT OF THE MARKET ALL THE TIME, UM, BECAUSE THEY'RE NOT USEFUL ANYMORE AND IT COSTS TOO MUCH TO RECONFIGURE.
UM, SO YOU HAVE A LOT OF HOUSING STOCK THAT FITS THAT CATEGORY, UM, AND CALL 'EM LIKE CLASS B, CLASS C, EVEN SOME CLASS D APARTMENTS, UM, THAT DO NOT COMPETE WITH NEW PRODUCT.
THEY'RE TWO VERY SEPARATE MARKETS AND THE DEMAND FOR NEW PRODUCT IS HIGH AND THE DEMAND FOR OLD PRODUCT IS LOW, AND THAT'S NOT GONNA CHANGE.
SO WHEN WE'RE TALKING ABOUT DEMAND FOR NEW UNITS, IT'S DIFFERENT FROM
[00:20:01]
DEMAND FROM PRODUCT THAT WAS BUILT BEFORE 1980, JUST VERY DIFFERENT TENANTS, VERY DIFFERENT, UH, PRICING.UM, SO IT'S A, IT'S A DIFFERENT PLANE.
UM, THAT BEING SAID, YOU HAVEN'T HAD A LOT OF DEVELOPMENT OF MULTIFAMILY IN THE PAST 20 YEARS.
UM, I KNOW THAT WE SEE IT BECAUSE THEY'RE VERY LARGE DEVELOPMENTS, BUT COMPARED TO, UM, THE COUNTY, THE REGION AND THE STATE, UM, IT'S NOT BEEN AT THE SAME LEVEL.
AND THAT'S FOR MULTIFAMILY AND FOR OVERALL DEVELOPMENT.
UM, SO YOU END UP HAVING A GLUT OF PROPERTIES THAT ARE OLDER AND RELATIVELY FEWER NEWER PRODUCT.
UM, SO WE ALSO LOOKED AT HOUSING NEEDS OF YOUR EXISTING POPULATION, AND IT'S A PRETTY AFFORDABLE MARKET, BUT YOU DO HAVE A LOT OF WORKERS IN THE RETAIL, UM, FOOD SERVICE, UM, THAT ARE LOWER WAGE EARNERS AND STILL STRUGGLE WITH HOUSING COSTS, EVEN AT THE AFFORDABLE RATES.
SO ARE THERE TOO MANY, UH, RENTAL UNITS? UM, NO.
UM, BECAUSE THE VACANCY RATE IS STILL PRETTY REASONABLE ON PAR WITH THE REGION, THE METRO'S EXPECTED TO GROW SIGNIFICANTLY.
UM, YOUR PERMIT ACTIVITY IS STILL LEANING TOWARDS SINGLE FAMILY, UM, AND YOU DON'T HAVE A LOT OF NEW PRODUCT.
IS THERE A SHORTAGE? THIS IS, UM, I WISH I COULD GIVE YOU AN EASIER ANSWER.
UM, BUT IT'S, IT'S YES AND NO.
SO IF YOU'RE TRYING TO ACCOMMODATE YOUR EXISTING RENTERS, YOU UM, DON'T HAVE A SHORTAGE.
YOU DO HAVE ENOUGH PRODUCT, BUT AGAIN, WE'RE TALKING ABOUT A LOT OF OLDER, UM, APARTMENTS COMPARED TO NEWER APARTMENTS, AND THERE'S GOING TO BE SIGNIFICANT GROWTH.
UH, THE FORECAST INDICATE 120,000 HOUSEHOLDS, YOU KNOW, WITHIN THE COUNTY, UM, OVER THE NEXT DECADE.
THAT'S A LOT OF BUILDING ACTIVITY.
UM, THE FORECASTS, UM, POPULATION FORECAST PER BAYTOWN SHOW, VERY LITTLE GROWTH.
BUT AGAIN, THAT'S BASED ON WHAT YOU'VE BEEN BUILDING.
IF YOU WANNA CAPTURE SOME OF THAT SIGNIFICANT, SIGNIFICANT GROWTH, YOU'RE GOING TO HAVE TO ADD NEW PRODUCT BECAUSE THEY'RE NOT GOING TO WANNA MOVE INTO OLDER UNITS.
IF THEY, IF THEY HAVE CHOICE, THEY'RE GOING TO MOVE TO NEWER DEVELOPMENTS.
SO NOW I'LL JUST RUN THROUGH SOME OF THE DATA THAT, YOU KNOW, IS WORTH NOTING.
UM, MINING AND CONSTRUCTION, THIS IS WHERE, UM, YOU HAVE YOUR, YOUR STRENGTHS AND THEN YOU HAVE A LOT OF SERVICE JOBS.
UM, SO ARTS, ENTERTAINMENT, RECREATION, ACCOMMODATION, FOOD SERVICE, THE YELLOW LINE IS BAYTOWN.
UM, ALSO YOU HAVE MORE IN THE RETAIL TRADE.
UM, SO THAT'S, THAT'S SORT OF LIKE A, THE BULK OF YOUR, UM, JOB MARKET COMPARED TO OTHER AREAS OF THE REGION.
UM, I SHOULD NOTE THAT YOU HAVE A STRONG, UM, UH, BLUE COLLAR WORKFORCE OR WORKFORCE THAT DOESN'T NECESSARILY REQUIRE, UM, AN ADVANCED DEGREE THAT PAYS WELL.
UM, AND SO YOU'LL SEE THAT MANIFESTED IN, IN INCOME AND THEN ALSO, UM, PRETTY SIGNIFICANT HIGHER INCOME RENTAL POPULATION, UM, WHICH IS UNUSUAL.
UM, THIS JUST KIND OF PUTS AN IDEA AROUND AREA MEDIAN INCOME BECAUSE WHEN WE'RE TALKING ABOUT AFFORDABLE HOUSING, IT BREAKS IT DOWN INTO A MI.
SO JUST TO GIVE SOME CONTEXT, WHEN WE'RE TALKING ABOUT HOUSING NEEDS, UM, IT'S BASED ON REGIONAL INCOME.
AND SO SOMEONE WHO IS VERY LOW INCOME, YOU KNOW, MAY HAVE A PRETTY DECENT JOB, BUT THEY'RE ONLY ONE, UM, ONE PERSON WORKING IN A HOUSEHOLD OF FOUR.
SO THEY COULD BE MAKING 40, 45,000 BUT STILL QUALIFY.
UM, AND THEN HUD PUBLISHES A VERY, UM, IN DEPTH, UM, DETAILED CENSUS TRACK LEVEL ANALYSIS OF HOUSEHOLDS AND HOUSING NEEDS.
UM, IT'S BROKEN DOWN BY COST, AFFORDABILITY, UM, OVERCROWDING CONDITIONS, UM, SUBSTANDARD HOUSING.
AND YOU CAN SEE THAT, UM, THE HOUSING NEEDS ARE VERY, VERY SIGNIFICANT FOR POPULATIONS EARNING LESS THAN 30% A MI.
SO THAT'S ROUGHLY 25,000 OR 30,000.
AND YOU HAVE SOME OF YOUR LOWER WAGE SERVICE INDUSTRY JOBS, JANITORIAL SERVICES, UM, EARNING THAT AND ARE GOING TO
[00:25:01]
STRUGGLE TO AFFORD HOUSING WITHOUT SUBSIDY.UM, IN THE REPORT WE HAVE A BIT MORE DETAIL, UM, IN COMPARISON WITH OTHER AREAS.
UM, BAYTOWN IS MORE AFFORDABLE THAN THE COUNTY OR THE STATE AND DEFINITELY MORE THAN THE US.
SO EVEN THOUGH THESE NUMBERS LOOK ALARMING, IT'S WORSE IN OTHER PLACES.
UM, THIS SHOWS THE INCOME DISTRIBUTION BY TENURE AND YOU CAN SEE THAT, YOU KNOW, HALF MORE THAN HALF, I THINK IT'S 60 SOME PERCENT OF YOUR RENTERS EARN ABOVE 40,000 AND, UM, ONE IN THREE, OR I THINK IT'S LIKE 40% EARN ABOVE 50,000 A YEAR.
SO YOU HAVE A PRETTY SIGNIFICANT RENTER POPULATION THAT ARE HIGH HIGHER EARNERS.
UM, AND THAT IS IN LINE WITH THE FACT THAT YOU ARE A SUBURBAN JOB CENTER.
UM, SO YOU HAVE, UM, A, A FABRIC THAT IS CATERING TOWARDS OWNERS AND RENTERS.
UM, YOU'RE STILL PREDOMINANTLY SINGLE FAMILY.
UM, AND YOU ALSO HAVE VERY DIVERSE HOUSING STOCK.
UM, WHEN YOU LOOK AT THE 20 PLUS UNITS, YOU CAN SEE THAT IT'S VERY DIFFERENT FROM HARRIS COUNTY.
UM, AND MORE IN LINE WITH THE STATE WHERE YOU HAVE FIVE TO 19 UNITS.
THESE SMALLER RENTAL PROPERTIES, UM, IS WHERE YOU HAVE A PRETTY SIGNIFICANT SUPPLY.
AND A LOT OF THAT IS THE OLDER HOUSING STOCK.
YOU DO HAVE SOME OF THE MASSIVE DEVELOPMENTS THAT WERE BUILT LIKE PRE 1990, UM, THAT ARE DATED AS WELL.
SO IT'S, IT'S A, IT'S KIND OF A MIXED BAG AGE.
YOU CAN SEE 1970 TO 1990S WHERE YOU HAD PRETTY SIGNIFICANT CONSTRUCTION.
THOSE ARE THE PROPERTIES THAT I THINK SOME OF YOU HAVE CONCERN OVER, UM, THAT ARE IN NEED OF SUBSTANTIAL REHABILITATION.
I DON'T THINK MUCH OF THIS IS NEW.
UM, HUGE SPIKE IN PRICES, UH, NATIONALLY AND IT HIT HOUSTON.
I THINK PRICES ARE UP BY 40, 50%.
THINGS HAVE TEMPERED A LITTLE BIT.
UM, FOLKS DON'T HAVE WOW,
UM, YOUR SALEABLE LIST PRICE IS 97%, SO YOU'RE NOT SEEING THE PRICE DROPS THAT YOU ARE IN OTHER PLACES, IT'S JUST TAKEN A LITTLE BIT LONGER.
SO THIS IS A, A COMPARISON OF PRICES AND THE BOTTOM RED AND PURPLE LINE, UM, BAYTOWN AND HIGHLANDS, YOU CAN SEE THAT IT FOLLOWS NATIONAL TRENDS WITH THIS VERY SHARP JUMP AROUND COVID PANDEMIC, BUT COMPARED TO OTHER PLACES, IT'S STILL QUITE AFFORDABLE.
UM, I THINK I COVERED SOME OF THIS, BUT JUST TO RECAP, THE, THE VACANCY RATE WAS PRETTY HEALTHY, YOU KNOW, THREE, SIX MONTHS AGO.
AND THE RECENT REPORTS OF IT JUMPING IS BECAUSE OF THE NEW, UH, SUPPLY.
UM, BUT OVERALL IT'S BEEN A PRETTY HEALTHY RENTAL MARKET, UM, IN BAYTOWN AND IN THE REGION.
AND THERE'S A HUGE CONSTRUCTION BOOM IN THE REGION BECAUSE DEVELOPERS KNOW THAT POPULATION IS COMING BECAUSE OF JOBS AND TRENDS AND WHERE PEOPLE ARE MOVING.
UM, AND IT'S, UH, THE TEXAS FORECASTS ARE EVEN STRONGER THAN THE, THE PRIVATE FORECAST BECAUSE THEY'RE TRACKING, UM, THE TAX RETURN DATA, UM, SHOWING WHAT HAS HAPPENED DURING THE COVID PERIOD.
UM, 2021 TO 2023 IS WHERE YOU'RE SEEING A REALLY SIGNIFICANT JUMP.
UM, SO THAT'S GOING TO CONTINUE.
UM, AND WHILE YOU DON'T HAVE AS MANY, YOU HAVE A, UM, A LOT OF CONSTRUCTION IN THE PAST DECADE, BUT IT HASN'T BEEN AS MUCH AS AS THE REGION.
UM, AND I THINK THAT THERE WAS, I WANNA SAY, I THINK I WROTE IT DOWN LIKE 75,000 UNITS UNDER CONSTRUCTION IN THE METRO AREA, UM, JUST THIS YEAR.
AND SO WHEN YOU'RE THINKING ABOUT AND, UM, FEELING ALARMED BY THE RAPID CONSTRUCTION ACTIVITY, IT'S SOMETHING THAT'S HAPPENING, UM, REGIONALLY AND THROUGHOUT THE STATE BECAUSE PEOPLE ARE MAKING THAT PRETTY BIG SHIFT, UM, TO TEXAS BECAUSE OF A
[00:30:01]
LOT OF REASONS THAT YOU'RE FAMILIAR WITH.UM, I LIVE IN CALIFORNIA AND I CAN TELL YOU THAT I HAVE LOTS OF FRIENDS WHO HAVE MOVED HERE.
UM, WE TALKED ABOUT THE DIFFERENCE IN PROPERTY TYPES, THE CLASS A VERSUS CLASS BBC.
UM, I'LL SHOW YOU SOME EXAMPLES JUST TO VISUALIZE IT, BUT, UM, AS YOU KNOW, THE NEWER PROPERTIES ARE RENTING AT, YOU KNOW, 1200 TO EVEN 1900 FOR A ONE BEDROOM, UM, AVERAGE AROUND 1500.
AND THEN YOU HAVE OLDER STOCK THAT'S LIKE 700, 800, AND THOSE ARE JUST VERY DIFFERENT TYPES OF RENTERS.
AND SO WHEN YOU'RE TALKING ABOUT NEW CONSTRUCTION, EVEN IF IT'S TAX CREDIT PROPERTIES, UM, THAT ARE SET AT 60% A MI, THEY'RE STILL GONNA BE RENTING AT A HIGHER RENT THAN THESE OLDER APARTMENT BUILDINGS.
AND THE, THEY WILL NOT NECESSARILY COMPETE WITH ONE ANOTHER.
UM, WHAT MAY HAPPEN IS THEY USUALLY LOWER PRICES SOMEWHAT LIKE FIVE TO 10% AMONGST THAT CLASS, BUT IT DOESN'T TRICKLE DOWN.
UM, I TALKED ABOUT THE PROJECTIONS, UM, I DON'T KNOW IF I, I DON'T HAVE IT IN THIS SLIDE DECK, BUT, UM, YOU'RE FORECASTED TO HAVE A REALLY BIG SHIFT IN INCOME, UM, CATEGORIES.
SO YOU'RE LOSING ROUGHLY 6,000, 7,000 HOUSEHOLDS EARNING LESS THAN 50,000.
UM, AND YOU'RE EARNING ROUGHLY THE SAME AMOUNT, EARNING MORE THAN 75,000.
AND THERE'S A REALLY BIG JUMP IN HOUSEHOLDS WHO ARE GONNA BE EARNING MORE THAN A HUNDRED THOUSAND.
UM, AGAIN, THESE ARE BASED ON FORECASTS, UM, WHICH ARE BASED ON HISTORIC TRENDS, BUT THE PEOPLE WHO ARE, UM, EITHER COMING IN OR CHANGING, LIVING WITHIN HERE AND MAKING MORE MONEY, BUT, SO THE DEMAND FOR HOUSING IS CHANGING, UM, FOR HIGHER PRICE UNITS, HIGHER PRICED RENTAL UNITS AND HIGHER PRICED HOMES FOR SALE.
UM, I THINK WE TALKED ABOUT, UM, THE RENT.
THIS IS THE AVERAGE, TYPICAL OBSERVE RENT.
SO THIS IS INCLUDING THE CLASS BC, AND THE CLASS A MARKETS.
YOU DIDN'T HAVE A TON WHEN I DID THE SURVEY, UM, EARLIER IN THE YEAR.
UM, I THINK THAT THERE'S A BIT MORE, UM, SINCE I DID THE SURVEY, BUT YOU CAN SEE THAT THERE WASN'T A LOT OF SUPPLY.
HERE'S AN EXAMPLE OF A CLASS A PROPERTY.
YOU'RE LOOKING AT $2 A SQUARE FOOT FOR A ONE BEDROOM.
IT LOOKS VERY DIFFERENT FROM THIS PROPERTY BUILT IN 1969.
THAT'S, YOU KNOW, PRICED AT HALF THAT.
UM, AND WITH A HIGHER VACANCY RATE, AND THAT'S A, THAT'S A REGIONAL TREND AS WELL.
LIKE THE, THE ABSORPTION IS GOING DOWN FOR CLASS BBC PROPERTIES AND IT'S GOING UP FOR CLASS A PROPERTIES, AGAIN, SIGNIFYING THAT PEOPLE ARE MAKING MORE MONEY IF PEOPLE ARE MOVING HERE, ARE MAKING MORE MONEY, AND UM, IF THEY'RE RENTING, THEY'RE GONNA WANT A DIFFERENT PRODUCT.
UM, SO JUST A HIGH LEVEL OF SOME RECOMMENDATIONS.
UM, YOU HAVE A GLUT OF OLDER HOUSING STOCK AND IT'S GOING TO LEAVE THE MARKET OR REQUIRE SUBSTANTIAL REHABILITATION REGARDLESS OF WHAT YOU DO.
UM, SO THERE ARE WAYS TO EITHER, UM, PRESSURE THOSE PROPERTIES OUT OF THE MARKET AS OPPOSED TO THEM BECOMING, UM, SLUMLORD PROPERTIES BY BEING SHARP ON CODE ENFORCEMENT.
UM, AND IF THE PROPERTY OWNER CAN NO LONGER GENERATE INCOME WITH MORE STRICT, UH, CODE ENFORCEMENT, THEN THEY'LL HAVE TO DO SOMETHING WITH THAT PROPERTY.
UM, AT THE SAME TIME, UM, YOU DO HAVE A NEED FOR NEWER PROPERTIES BECAUSE YOU DON'T HAVE IT AS MUCH OF YOUR RENTAL STOCK THAT'S BUILT, I KNOW, PAST 20 YEARS.
AND IT WOULD BE, UM, LUCRATIVE TO CAPTURE A PORTION OF THE GROWTH REGIONALLY IN TERMS FROM OF AN ECONOMIC DEVELOPMENT STANDPOINT.
UM, SO, WELL I WOULDN'T SAY THAT YOU HAVE A NEED PER SE FOR NEW UNITS TO MEET LOCAL DEMAND.
UM, THE REGION NEEDS MORE UNITS AND IF PEOPLE WANT TO BUILD IN BAYTOWN, UM, I WOULD SAY THAT THAT WOULD BE A POSITIVE THING FOR THE CITY.
UM, ADDITIONALLY THERE ARE OTHER ELEMENTS TO IN IMPROVE LIKE THE QUALITY OF LIFE OR THE ATTRACTIVENESS FOR MORE RESIDENTS.
SO LARGE MULTI-FAMILY HAS ALL THE BELLS AND WHISTLES AND UM, BUT IT'S NOT NECESSARILY FOR LONG-TERM RENTERS.
UM, AND SO THERE ARE OTHER PRODUCTS THAT YOU COULD ADD
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TO THE MARKET, INCLUDING SOME OF THAT MIDDLE HOUSING THAT PEOPLE TALK ABOUT OR HISTORIC REHABS OR REVITALIZING YOUR HISTORIC DISTRICT SO THAT YOU CAN HAVE THAT WALKABLE, UM, COMMUNITY THAT IS VERY ATTRACTIVE TO, UH, MILLENNIAL AND GEN Z BUYERS, UM, WHICH ARE THE BIGGEST DEMOGRAPHIC GROUP FOR PURCHASING, UM, AND FIRST TIME HOME BUYER PROGRAMS. UM, I THINK COULD BE ALSO APPEALING FOR, UM, YOUNGER DEMOGRAPHICS BECAUSE YOU ALREADY HAVE AN AFFORDABLE HOUSING STOCK.UM, SO KIND OF MARKET THAT, UM, TO ATTRACT NEW, UH, HOMEOWNERS.
SO THERE'S QUITE A BIT MORE IN THE REPORT, BUT I WANTED TO GIVE YOU LIKE THE, THE HIGH LEVEL AND, AND ANSWER THE QUESTION THAT YOU HAVE.
UM, SO I DUNNO IF YOU WANNA ADD ANYTHING OR OPEN IT UP TO QUESTIONS.
UM, ANY, ANY FINAL COMMENTS I GUESS FROM STAFF? UM, OPEN UP TO ANY COMMENTS ON THE PRESENTATION? NO COMMENTS FROM THE PRESENTATIONS, BUT I DO HAVE A QUESTION.
AND SO YOU'VE MENTIONED THE, YOU KNOW, THAT RENTAL WOULD BE I GUESS, IMPORTANT TO THE AREA IN TERMS OF MULTI-FAMILIES, BUT I KNOW THERE HAS BEEN PUSHBACK FROM CURRENT RESIDENTS THAT DON'T WANT ANY MORE APARTMENTS.
AND SO WHAT WOULD YOU SAY, UM, WHAT WOULD YOU FEEL WOULD BE A GOOD, A GOOD BALANCE, I GUESS, TO GET US TO WHERE WE NEED TO BE FOR ANYONE MOVING IN? DO YOU HAVE AN IDEA OR ARE YOU TALKING ABOUT NUMBERS OR POLICY? I AM NUMBERS.
UM, SO I, UH, RAN A DEMAND ANALYSIS MM-HMM
AND THEN A SLIGHTLY HIGHER GROWTH RATE OF 2.5% OF, UM, NEW HOUSEHOLDS.
AND THAT ENDED UP BEING 4 50, 4 50 TO 850 RENTAL UNITS AND 1500 TO 3000 HOME OWNERSHIP UNITS.
AND I THINK THAT'S CONSERVATIVE, UM, BECAUSE OF WHAT HAS HAPPENED IN THE PAST FEW YEARS.
BUT, UM, THAT IS WHAT WOULD BE REPRESENTATIVE OF BAYTOWN IN COMPARISON TO THE COUNTY AND THE FORECASTED COUNTY GROWTH.
THANK YOU SO MUCH FOR COMING AND PRESENTING.
UM, I REALLY APPRECIATE ALL THE STATISTICS.
I JUST, UM, WANNA MAKE A FEW COMMENTS.
EARLIER ON IN YOUR PRESENTATION YOU SAID THAT, UM, YOU DIDN'T TRUST THE HISTORIC TRENDS, BUT THEN THEY WERE USED TO COLLECT ALL THE DATA.
COULD YOU CLARIFY THAT FOR ME? SURE.
UM, I DON'T HAVE AS STRONG OF A TRUST.
I SHOULDN'T SAY I HAVE NO TRUST.
UM, BUT AS A, YOU KNOW, DOING ANY KIND OF MARKET ANALYSIS, THAT'S THE ONLY THING THAT WE HAVE TO GO OFF OF.
UM, THAT BEING SAID, THE PROJECTIONS WERE HIGH FOR HOUSTON AND TEXAS, BUT THE ACTUAL GROWTH HAS FAR EXCEEDED PROJECTIONS IN THE PAST FEW YEARS.
AND SO THE PROJECTIONS ARE GENERALLY BASED ON THREE TO FIVE YEAR DATA POINTS, DEPENDING ON THE DATA SOURCE.
AND I, I THINK THAT, THAT THEY STILL MAY BE CONSERVATIVE, BUT THAT'S WHAT I'M USING.
UM, I, I ACTUALLY WAS TALKING ABOUT THIS EARLIER WITH ONE OF MY COLLEAGUES.
UM, I JUST WANNA MAKE SURE THAT WE'RE DOING WHAT'S RIGHT FOR OUR RESIDENTS BECAUSE WE DO HAVE, UM, A LOT OF PEOPLE THAT PUSH BACK WHEN WE LOOK AT THE MULTIFAMILY UNITS, UM, WHEN THEY COME UP FOR ZONING AND THINGS LIKE THIS.
AND I, I THINK SOME OF THE THINGS THAT YOU SAID TO ME, REALLY, THEY, THEY SPOKE TO ME, BUT I'M JUST CONCERNED AS WE MOVE FORWARD, AND I JUST WANNA MAKE SURE THAT I SAY THIS PUBLICLY, I DON'T THINK THAT AS A WHOLE, THE CITY OF BAYTOWN WANTS TO LOOK LIKE THE REST OF OUR COUNTY.
I KNOW THAT WE HAVE TO USE THAT DATA AND THAT'S IMPORTANT DATA, UM, AS WE MOVE FORWARD WITH, WITH WHAT WE WANT OUR, OUR VISION AS A WHOLE TO LOOK LIKE IN OUR TOWN.
BUT I'M HOPING, UM, AS WE MOVE FORWARD THAT WE LOOK AT MAYBE WHAT TO DO WITH OUR DILAPIDATED PROPERTIES FIRST BEFORE WE START ADDING MORE MULTIFAMILY BECAUSE EVERYTHING NEW BECOMES OLD.
AND, AND I GUESS I'D JUST LIKE TO KIND OF, UH, JUST GO BACK TO ONE OF THE THINGS THAT REBECCA MENTIONED EARLIER, WHICH WAS THE FACT THAT AS THE NEW, UH, AS NEW APARTMENT COMPLEXES COME IN, THAT'S, THAT'S KIND OF WHERE THE DEMAND WILL BE IN THE FUTURE FOR THE CITY OF BAYTOWN AND REGIONALLY WE WOULD EXPECT THE OBSOLETE OLDER APARTMENT
[00:40:01]
COMPLEXES TO, UM, AGAIN, THEY'LL, THEY'LL GO TO A, THEY'LL GET PAST A POINT WHERE THE DOLLARS MAKE SENSE FOR THE OWNERS BECAUSE THEY'RE GONNA COST TOO MUCH TO REHAB AND THEREFORE WE WOULD ANTICIPATE THIS GOING AWAY.I, I CAN'T SAY HOW LONG THAT WILL TAKE.
UM, THOSE STILL MIGHT HANG OUT THERE FOR ANOTHER 10 YEARS OR 15, YOU KNOW, HOWEVER LONG.
BUT WE WOULD ANTICIPATE THAT WHEN THE DEMAND GOES DOWN AS WE EXPECT IT TO, THEN THOSE, THOSE BUILDINGS WILL NO LONGER REALLY BE, UM, RELEVANT.
THEY'LL BE OBSOLETE TO, TO THE MARKET.
THIS STUDY WAS VERY IMPORTANT.
I'M VERY GLAD THAT Y'ALL WERE ABLE TO BRING THIS TO US.
UM, 'CAUSE IT'S GONNA HELP DRIVE A LOT OF MY OWN PERSONAL DECISIONS UP HERE WHEN THEY, WHEN Y'ALL BRING THINGS TO US, I JUST, JUST WANNA GO AGAIN AND SAY, I, I WANT TO MAKE SURE THAT, UM, WE ARE VERY, VERY CAREFUL ABOUT ADDING THE NEW PROPERTIES, MAKING SURE WE HAVE A DIVERSE, UM, COLLECTION OF PROPERTIES.
I KNOW WE'VE SEEN SOME, SOME NEAT THINGS EVEN THIS YEAR COME UP TO US, BUT, UM, THAT WE, THAT WE GET RID OF THE, THE OLDER PROPERTIES AS WELL.
I, I THINK WITH THE REPORT AS WELL, WE'LL BE ASKING, AGAIN, WE'LL BE ASKING COUNSEL TO ADOPT THAT AS SOMETHING THAT WE CAN USE AS A REFERENCE GOING FORWARD, AT LEAST FOR THE NEXT TWO OR THREE YEARS, UM, UNTIL THE MARKET MAKES SOME OTHER WILD SWING THAT WE DIDN'T SEE.
UM, AND THE, UM, THE IDEA WILL BE THAT WE WANT TO, AS STAFF LOOK FORWARD TO, ARE THERE POLICY CHANGES THAT WE, THAT WE THINK WOULD BE HELPFUL? ARE THERE ZONING CHANGES THAT WE THINK WOULD BE HELPFUL THAT YOU ALL THINK WOULD BE HELPFUL? WE WANNA JUST, THIS IS THE BEGINNING OF THAT CONVERSATION, SO I DON'T ANTICIPATE HAVING ANY BIG RECOMMENDATIONS FOR POLICY OR ZONING CHANGES AT THE NEXT MEETING.
BUT GOING FORWARD WE WILL BE LOOKING AT, AT REBECCA'S, UH, RECOMMENDATIONS AS, OKAY, HOW CAN WE KIND OF GET TO THAT SPOT? WE'LL ALSO POSSIBLY BE LOOKING AT A HOUSING PLAN OVER THE NEXT YEAR OR SO.
THAT WILL ALSO HELP GIVE US MORE DETAIL ON HOW TO, HOW TO GET WHERE WE WANT TO GO.
REBECCA, THANK YOU FOR BEING HERE.
I ACTUALLY HAVE SOME QUESTIONS PERTAINING TO THE ACTUAL PRESENTATION, UM, AND GOING BACK AND FORTH WITH SOME OF THE DATA.
SO ON YOUR SLIDE, UM, TALKS ABOUT THE RENTAL, UM, THE RENTAL, IT IS LIKE TWO BACK I BELIEVE, BUT DOES THIS INCLUDE, DOES THIS DATA INCLUDE RENTAL HOMES OR JUST MULTIFAMILY? SORRY, I'M TRYING TO SCROLL PAGE UP THE WATER, MIDDLE PAGE UP.
THIS IS MULTI-FAMILY, SO IT'S MULTI-FAMILY ONLY.
UM, WELL I SHOULD SAY IT IS, UM, YES, IT DOES NOT INCLUDE, UM, SINGLE FAMILY RENTALS.
UM, IN THE PRESENTATION AS WELL.
SO CLASS A, CLASS A, B, AND C, CLASS A DOES NOT ALWAYS MEAN NEW BECAUSE YOU CAN HAVE RENOVATED OLDER BUILDINGS THAT ARE STILL CHARGED $2 PLUS.
A SQUARE FOOT CAN BE CLASS A, CORRECT? YES.
IF YES, IF THEY'VE HAD SUBSTANTIAL REHABILITATION, WE HAVE A CONUNDRUM FROM THE, WHAT I SAW IN THERE THAT WE HAVE A LARGE POPULATION THAT NEEDS MORE MULTIFAMILY RENTAL THAT'S BELOW $700 A MONTH OR, UM, BUT AT THE SAME TIME, IF WE WANT THE FAIR SHARE OF THE 26,000 THAT ARE COMING IN, UH, TO THE REGION OVER THE NEXT FIVE YEARS, THEY'RE LOOKING FOR CLASS A SPACE.
AND SO WE HAVE TO DEBATE ON WHAT'S THE NEED OF THE PEOPLE THAT ARE ALREADY HERE, WHICH IS LESS THAN $700, UM, OR 1100 FOR A FAMILY FOUR OR CLASS A AND AND BRINGING SOME OF, UH, THE NEW 26,000 THAT ARE COMING IN.
SO IT'S A LITTLE BIT OF COMPETING AGAINST EACH OTHER AT THE SAME TIME? NOT, NOT EXACTLY.
AND IT, IT, IT'S, UM, IT'S THE HOUSING CHALLENGES ARE THE PEOPLE WHO ARE ALREADY HERE, UHHUH AND THEY ALREADY HAVE A UNIT.
THEY JUST CAN'T FIND A UNIT THAT IS AFFORDABLE TO THEM BECAUSE THERE ARE NO UNITS OR THERE ARE NO DECENT UNITS PRICED AT SOMETHING THAT THEY CAN AFFORD.
SO IF THEY CAN AFFORD 500, THEY'RE PAYING 700, THEY'RE PAYING MORE THAN THEY SHOULD, THEY DON'T HAVE ENOUGH MONEY FOR FOOD, HEALTHCARE, ET CETERA.
UM, VERSUS A NEW UNIT MEETING, THE NEED OF A NEW HOUSEHOLD.
SO IT'S LIKE THE CHALLENGES OF EXISTING RESIDENTS ARE MORE CATERED TO HOW DO YOU INVEST YOUR CDBG HOME MONEY, RIGHT? HOW DO YOU INVEST YOUR, UM, VOUCHERS TO ALLEVIATE THE COST BURDEN OF EXISTING RENTERS AND THE HOUSING DEMAND IS HOW MANY UNITS, UM, CAN YOU
[00:45:01]
OR SHOULD YOU BILL TO MEET DEMAND? OKAY.UM, THEY'RE, THEY'RE RELATED, BUT THEY'RE DIFFERENT.
BUT YOU'RE HITTING ON GREAT POINTS TOO, WHEN WE TALK ABOUT POLICY PIECES ON THE VOUCHERS.
CAN THEY, I THINK YOU MENTIONED THAT EVEN WITH CLASS A OR, OR NEW BUILDINGS, YOU CAN USE THE VOUCHERS AND, AND SOME OTHER INCENTIVES I GUESS FROM THE CITY TO HELP OR GOVERNMENT, UH, TO GET INTO SOME OF THESE CLASS A SPACES, ESPECIALLY WITH TAX CREDITS AS WELL.
UM, ESPECIALLY IF IT'S PROJECT BASED VOUCHERS.
ANY OTHER QUESTIONS OR COMMENTS FROM COUNSEL? IF, IF NOT, UM, YOU KNOW, I THINK, UM, COUNCILWOMAN GRAHAM, SHE MENTIONED, YOU KNOW, THERE THE, THERE'S A PERCEPTION AND I GUESS BAY OFF DATA, THERE'S THE MISPERCEPTION THAT BAYTOWN HAS TOO MUCH MULTIFAMILY.
I THINK THAT'S THE FIRST THING, THE FIRST TAKEAWAY YOU HAVE TO GET FROM THE REPORT.
UM, AND THAT MAY BE FOR DIFFERENT REASONS.
I'M, I'M NOT SURE WHAT YEAR, BUT WE, WE BEGAN KIND OF A MORATORIUM ONE ON, I WANNA SAY TAX CREDIT, LOW INCOME HOUSING.
THAT WAS DONE PROBABLY IN ABOUT THE 2009 TIMEFRAME.
THE OTHER WAS WE DID A DISTANCE, PRETTY MUCH A DISTANCE TYPE REQUIREMENT BETWEEN UH, WHERE COMPLEXES, MULTIFAMILY COMPLEXES COULD BE IN PROXIMITY TO OTHER ONES THAT EITHER EXIST OR ARE PLANNED, LET'S SAY.
UM, AND THEN THERE WAS JUST SIZE ITSELF I THINK, I THINK OUR SIZE IS THREE 50 SOMEWHERE IN THAT NEIGHBORHOOD, DEPENDING ON THE MF ONE, TWO, OR THREE FOOTPRINT.
SO WITH THAT SAID, YOU KNOW, MOVING FORWARD, AND I THINK THERE WAS A LITTLE BIT OF DISCUSSION ON IT, BUT YOU KNOW, MY QUESTION WOULD BE, WHAT HAVE YOU SEEN IN AREAS WHERE THERE IS THE CLASS B, C AND D? UM, AND OBVIOUSLY WE HAVE SOME OF THAT TO GET 'EM TO AN A OR BETTER, OR EXCUSE ME, BETTER THAN WHAT THEY ARE ARE OBVIOUSLY AN A, UM, OBVIOUSLY EVERYTHING GETS AGED.
THERE'S SOME APARTMENT COMPLEXES UNFORTUNATELY THAT REGARDLESS OF THE CONDITION THEY MAY BE IN, THAT'S ALL THAT FAMILY CAN AFFORD.
AND SO HOW DO WE BALANCE BETWEEN THAT? IS THAT, IS IT, IT DOESN'T MATTER WHAT CLASS IT IS, THEY DON'T LOOK AT IT.
THIS IS, THIS IS WHAT I CAN AFFORD FOR MY FAMILY.
HOW DO WE DO THAT? UM, AND TRY TO GO AND ELEVATE OUR HOUSING STOCK FOR THOSE THAT STILL CAN HAVE AFFORDABLE MULTIFAMILY.
UM, I WILL SAY, I KNOW THERE'S LOTS OF THINGS IN AND ABOUT BEING ON THE RECORD AND NOT BEING ON THE RECORD, BUT MULTIFAMILY IS, IS A COMPONENT OF HOUSING FOR THE COMMUNITY PERIOD, RIGHT? BECAUSE A LOT OF TIMES PEOPLE MAKE COMMENTS, WE DON'T NEED ANY MORE H MORE APARTMENTS OR MULTIFAMILY.
AND IF THAT WAS THE CASE, THEN WHY EVERY TIME ONE IS BUILT, THEY'RE PRETTY MUCH AT CAPACITY IMMEDIATELY.
AND SOME OF IT IS BECAUSE WE HAVE A STRONG JOB BASE WHERE THERE'S INDIVIDUALS THAT WORK IN, UM, INDUSTRY HERE AND THEY, FOR WHATEVER REASON, THEY CHOOSE NOT TO BE A SINGLE FAMILY HOMEOWNER.
SO THEY GO AND THEY, THEY, THEY ARE MAKING GREAT MONEY.
I THINK YOUR, YOUR DATA ALSO SHOWS THAT, SO THEY PURSUE THE CLASS A 1600, $2,000 A MONTH FOR, FOR A SINGLE, YOU KNOW, BEDROOM.
AND SO I JUST WANT TO LOOK AT A BALANCE ON AND REALLY KIND OF MAKE DATA-DRIVEN DECISIONS, NOT JUST THINGS THAT WE SEE ON SOCIAL MEDIA.
THOSE ARE JUST PEOPLE'S OPINION AND WE HAVE TO MAKE DECISIONS ON ACTUAL DATA, UH, WHERE WE ARE AS A COMMUNITY AND WHAT PHILOSOPHY DO WE WANT TO TAKE MOVING FORWARD.
IF THAT'S A RATIO BETWEEN, UM, I THINK LIKE ONE WAS MENTIONED LIKE WE DON'T WANNA BUILD ANYTHING NEW UNTIL WE GET RID OF THE OLD, WELL WHAT DO WE DO WITH CERTAIN COMPLEXES THAT, I MEAN, IT'S STILL A FREE MARKET, WE CAN'T FORCE SOMEBODY TO DO THAT.
RIGHT? THERE'S THE ONLY TIME THAT WE HAD TO DO THAT WAS BECAUSE THERE WAS THE, THE WATER SUPPLY OR OTHER CASES, IT, IT FORCED US TO GO AND CONDEMN THAT MULTI-FAMILY AND WE HAD TO DO THAT.
UM, BUT THAT'S NOT ALWAYS GONNA BE THE CASE.
SO WE HAVE A LOT OF, IT'S GONNA TAKE A MULTI-FACETED APPROACH ON HOW WE, WE TRY TO GO IMPROVE OUR HOUSING STOCK 'CAUSE THAT IS WHAT WE WANT AS A COMMUNITY, BUT WE ALSO HAVE TO MAKE SURE THAT THERE'S AFFORDABLE HOUSING IN WHATEVER FORM OR FASHION THAT MAY BE FOR ALL OUR FAMILIES IN BAYTOWN.
SO THAT'S WHAT I WANNA LOOK AT.
UM, THIS IS JUST A PRESENTATION.
THERE'S NO DECISIONS TONIGHT, BUT THIS COUNCIL, I GUESS IN THE SHORT TERM, WHENEVER, WHENEVER THIS IS VISITED, WE NEED TO LOOK AT WHAT IS GONNA BE OUR APPROACH, A PHILOSOPHICAL APPROACH ON, ON HOW WE HANDLE THAT.
BUT I THINK THE MAIN TAKEAWAY IS THE DATA DOES PROVE THAT, THAT WE ARE, WHEN IT COMES TO MULTIFAMILY FOR THE PAST DECADE, WE ARE NOT, WE ARE NOT OVERRUN WITH THAT.
ANY OTHER COMMENTS? IF NOT, WE WILL, WE WILL RECESS UNTIL SIX 30 OR WE WILL, WE WILL ADJOURN THIS MEETING AND WE WILL, UM, RE UM, RECONVENE AT SIX 30 FOR OUR COUNCILS MEETING.