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Table of Contents Table of Contents ................................................................................................................................................................................ i

Table of Exhibits ............................................................................................................................................................................... iii

Executive Summary ........................................................................................................................................................................... 1

Introduction ....................................................................................................................................................................................... 2

Ponca City Regional Characteristics ............................................................................................................................................................................ 2

Study Background ........................................................................................................................................................................................................ 2

Scope and Approach .................................................................................................................................................................................................... 3

Research Methodology ............................................................................................................................................................................................... 4

Ponca City Demographics ................................................................................................................................................................... 6

Current Housing Conditions ............................................................................................................................................................. 10

Housing Classifications within Ponca City ................................................................................................................................................................. 12

Housing Development within Ponca City Market Areas ........................................................................................................................................... 15

Housing Inventory and Home Sales Trends .............................................................................................................................................................. 19

Market Area Statistics ............................................................................................................................................................................................... 20

Ponca City Rental Housing ......................................................................................................................................................................................... 25

Ponca City Active and Future Residential Developments ......................................................................................................................................... 26

Redevelopment Opportunities .................................................................................................................................................................................. 29

Market Segments Not Currently Present in Ponca City New Development ............................................................................................................. 30

Market Size and Construction Costs...................................................................................................................................................................... 34

Market Size and Transactional Costs .................................................................................................................................................................... 34

Land Cost and Residential Land Development Feasibility ..................................................................................................................................... 35

Home Size and Marketability ................................................................................................................................................................................ 36

Ponca City Housing Projections ........................................................................................................................................................ 37

Population Growth and Housing Demand ................................................................................................................................................................ 37

Comprehensive Housing Demand Study Ponca City, Oklahoma

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Employment Growth and Housing Demand ............................................................................................................................................................. 38

Recommendations ........................................................................................................................................................................... 47

Homefinding / Housing Information Center ............................................................................................................................................................. 47

Development of “Class A” Apartment Community ................................................................................................................................................... 48

Development of Communities for Moderate and Affordable Houses ...................................................................................................................... 50

Conclusion ....................................................................................................................................................................................... 53

Qualifications of the Analyst ............................................................................................................................................................ 54

Lawrence A. Dean, Senior Market Analyst ............................................................................................................................................................ 54


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Table of Exhibits

Ponca City Regional Setting ................................................................................................................................................................ 2

US Census Population Trends ............................................................................................................................................................. 6

Oklahoma State Data Center Population Projections ......................................................................................................................... 6

2008 Estimated Population by Sex ..................................................................................................................................................... 7

Age Distribution of Population ........................................................................................................................................................... 7

Estimated Income Levels .................................................................................................................................................................... 8

Household Income Distribution ......................................................................................................................................................... 8

2008 Estimated Population by Single Race Classification ................................................................................................................... 9

Household Size .................................................................................................................................................................................. 9

Housing Type Distribution ................................................................................................................................................................ 10

Age Distribution of Housing Structures ............................................................................................................................................ 11

Housing Tenure ................................................................................................................................................................................ 11

Household Income Distribution ....................................................................................................................................................... 13

Mortgage Qualification Percentages – Aggressive Environment ...................................................................................................... 14

Mortgage Qualification Percentages – Conservative Environment ................................................................................................... 14

Single Family Building Permits Issued Since 2000 by Market Area .................................................................................................... 15

Ponca City Market Areas .................................................................................................................................................................. 16

Northeast Ponca City ....................................................................................................................................................................... 16


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Southwest Ponca City ...................................................................................................................................................................... 16

Southeast Ponca City ....................................................................................................................................................................... 16

Northwest Ponca City ...................................................................................................................................................................... 16

Single Family Building Permits Issued Since 2000 by Subdivision ..................................................................................................... 17

Percentage of Single Family Building Permits since 2000 by Market Area ........................................................................................ 17

Percentage of Homes Sold by Price Range ....................................................................................................................................... 19

Days on Market by Price Range ........................................................................................................................................................ 20

Sales Price by Market Area .............................................................................................................................................................. 21

Percentage of Homes Sold by Market Area ...................................................................................................................................... 21

Days on Market by Market Area ...................................................................................................................................................... 21

Percentage of Current MLS Listings by Age Range ............................................................................................................................ 22

Percentage of Homes Sold by Age Range ......................................................................................................................................... 22

Sales Price per Square Foot by Age .................................................................................................................................................. 23

Days on Market by Age Range ......................................................................................................................................................... 23

Ponca City Multi‐Family Examples – Market Rate ............................................................................................................................ 25

Ponca City Multi‐Family Examples ‐ Subsidized ................................................................................................................................ 25

Ponca City Active and Future Projects .............................................................................................................................................. 27

Percentage of Current MLS Listings by Age ...................................................................................................................................... 30

Source: CDS Market Research, National Association of Realtors, North Central OK ......................................................................... 30

Total Current MLS Listings by Age .................................................................................................................................................... 30


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Total MLS Listings Four Years Old or Newer by Price Range ............................................................................................................. 31

Examples of Moderate to Luxury Homes Constructed on 50’ Wide Lots in Suburban Houston ......................................................... 33

Annual Single Family Building Permits ............................................................................................................................................. 34

Total MLS Listings Four Years Old or Newer by Square Foot Range .................................................................................................. 36

Percentage of Total Sales by Size of Home ....................................................................................................................................... 36

Housing Demand Based on Population Growth Projections ............................................................................................................. 37

Total Employment Historical Trends ................................................................................................................................................ 38

Anticipated Growth Employers ........................................................................................................................................................ 38

Ponca City Major Employers ............................................................................................................................................................ 39

Housing Demand Based on Scenario A ‐ Conservative Growth Scenario ........................................................................................... 43

Housing Demand Based on Scenario A ‐ Conservative Growth Scenario ........................................................................................... 44

Housing Demand Based on Scenario B ‐ Aggressive Growth Scenario .............................................................................................. 45

Housing Demand Based on Scenario B ‐ Aggressive Growth Scenario .............................................................................................. 46


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Executive Summary • Ponca City has a current (2005) estimated population of 26,150

residents. The Oklahoma State Data Center projects that this will grow by 1,940 to 28,090 residents by 2030.

• Year over year employment growth in Ponca City exceeded that of the other area cities and the State of Oklahoma as a whole since 2006.

• Additional technology oriented employers are anticipated to continue to add jobs in Ponca City partially due to the presence of community assets such as the OSU University Multispectral Lab and the Pioneer Technology Center.

• Using a Conservative Growth scenario, this Study projects housing demand in Ponca City to be 595 new households and housing units over the next ten year period based on recent employment growth.

• Using an Aggressive Growth scenario, this Study projects housing demand in Ponca City to be 2,001 new households and housing units over the next ten year period based on recent employment growth.

• In a conservative mortgage lending environment as the United States is currently experiencing, 63.6% of these new households can be expected to qualify for mortgages to support the purchase of homes in the price category defined in this study as Affordable, 26.4% can be expected to qualify to purchase homes in the Moderate price category, and 10.0% can be expected to qualify to purchase homes in the Luxury price Category.

• In a more aggressive mortgage lending environment, 46.9% of these new households can be expected to qualify for mortgages to support the purchase of homes in the price category defined in this study as Affordable, 33.8% can be expected to qualify to purchase homes in the Moderate price category, and 18.9% can be expected to qualify to purchase homes in the Luxury price Category.

• Ponca City’s current housing stock is older, but largely well maintained and of high quality. 64% of homes sold in Ponca City on the Multiple Listing Service (MLS) over the last twelve months have been 41 years old or older.

• The lack of available speculative homes in Ponca City has reportedly caused some employees of local industry to commute to Stillwater forty miles south of Ponca City where new Moderately priced homes are more plentiful.

• The majority of new homes currently marketed in Ponca City fall into the Luxury price category. It should be the priority of both the public and private sectors to facilitate the development of new homes priced within the Affordable and Moderate price categories (under $225,000).

• The multi‐family housing stock in Ponca City is also old. Market support is likely there for a new “Class A” apartment community to house new technology workers and a variety of other residents.

• Local industry, the public sector, and local housing industry participants will all benefit if communication is improved regarding near future housing demand.


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Ponca City Regional Setting

Source: CDS Market Research

Introduction

Ponca City Regional Characteristics Ponca City, Oklahoma is a small city located in North Central Oklahoma. The city is located 93 miles northeast of Tulsa, 86 miles south of Wichita, Kansas, and 105 miles north of Oklahoma City. Ponca City has a historically significant industrial heritage as home to a large ConocoPhillips facility as well as campuses of other companies and industries.

Ponca City shares Kay County with smaller municipalities Blackwell, Newkirk, and Tonkawa. The area around Ponca City is relatively flat and has the characteristics of the Great Plains region of which it is part. Much of urbanized Ponca City can be characterized as heavily treed, but these tree‐lined streets are more likely the result of thoughtful developers and urban planners than the presence of naturally wooded areas. The areas east of Ponca City near Lake Ponca and ultimately Kaw Lake are more naturally wooded than most of the area.

Ponca City features a mixture of mid‐twentieth century suburban style growth and classic small‐town development patterns. The latter includes a rejuvenated Central Business District corridor along Grand Avenue and historic residential neighborhoods several of which feature brick paved streets.

Study Background The Ponca City Foundation for Progress (PCFP) and the Ponca City Development Authority (PCDA), are interested in determining the realistic potential for new housing development in Ponca City, Oklahoma for the next 10‐years. The ultimate purpose of this Study is to make that determination.

Ponca City is home to the new University Multispectral Lab (a project of OSU) and a strong base of manufacturing companies including one of ConocoPhillips largest inland refineries. Due to the strength and growth of these facilities and of the overall community, the need for additional


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housing has become apparent. New employees coming into the area are reportedly having a difficult time finding suitable housing. The process is understood to be exacerbated by local builders who are reluctant to start speculative homes without a purchase contract.

The primary purpose of this study is to provide an independent opinion regarding the market potential for new construction and redevelopment of for‐sale and rental housing to meet needs in Affordable, Moderate and Luxury price categories. The initial emphasis will be to identify the types of housing that are now and/or will be needed over the next 10‐years. Research and analysis will then focus on evaluating specific opportunities for rehabilitation, new construction and/or development of various types of housing. Barriers will be identified and addressed melding local circumstances with consideration of best practice solutions. Finally, strategic recommendations will be made designed to assist the community in dealing with increasing the housing stock and related housing issues.

Scope and Approach To meet the objectives as described, CDS has employed a conventional approach to the research and analysis, combining experience in housing demand analysis with comprehensive research of issues affecting current and future needs for various types of housing in the area. The intent is to develop a broad understanding of the market and economic factors driving current and future demand as well as the positive attributes and constraints impacting the potential for new and rehab housing in the city. We will form an opinion regarding adequacy of the existing housing stock and the need for various types of additional housing now and in the future. From this base of information, community leaders will be in a position to guide and direct private and public building and development programs to help assure the right type and price of housing is planned and made available at the right time and in the right places.

It is the intention of this analyst for this Study to thoroughly address each of the following:

• Define appropriate market areas based on population, demographics, and real estate development trends.

• Assess and analyze existing housing conditions with regard to age, type, occupancy and livability. This review will include conventional single family and multi‐family housing as well.


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• Evaluate community and regional population projections, demographic factors and trends that influence the need for for‐sale, rental and various types and price ranges of housing.

• Evaluate employment projections and economic factors and trends that influence the need for for‐sale, rental and various types and price ranges of housing.

• Collect information on for‐sale and rental markets in terms of construction, sales, inventories, values, land development activity, rental rates, services, occupancies and resident profiles.

• Project future need for housing units based on an assessment of historic and current absorption patterns and the population, demographic and economic/employment factors that are expected to shape future demand.

• Evaluate the quality of existing lots/land and any proposed or pending developments in terms of satisfying portions of future housing demand.

• Analyze the overall supply and demand balance of for‐sale and rental housing.

• Determine the number, type and price range of new and/or rehabilitated housing units of all types that will be required to meet current and future needs of Ponca City residents over the next 10‐year period. Recommendations for additions or upgrades to the housing stock will include housing appropriate for affordable, moderate and luxury price categories.

• Suggest preferred locations and time‐lines for development of new housing products.

Research Methodology This study will involve several complimentary research techniques that together will provide the basis for analysis and conclusions.

The research phase will include investigation of secondary source data including information provided by PCDA, city departments, real estate publications and reporting services, government records, census/demographic data, and studies prepared by others. The interview phase will focus on gathering primary information and background facts from various real estate and homebuilding market participants, employers, public officials and consultants familiar with market trends, specific


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properties, development activity, and planned developments. The reporting phase will consist of organizing the findings and results of the analysis into a practical and meaningful presentation format.

Utilizing results from all aspects of the study CDS will develop an understanding of market area dynamics. We will assess the adequacy of existing and planned housing components, provide an independent opinion regarding the degree to which changing employment and demographic characteristics will impact housing and make recommendations for short and long‐term initiatives


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US Census Population Trends

Oklahoma, Kay County, and Ponca City

Population Totals

Oklahoma Kay County, OK Ponca City, OK

2013 Projection3,719,670 43,474 23,159

2008 Estimate3,615,450 45,341 24,271

2000 Census 3,450,654 48,080 25,9191990 Census 3,145,585 48,056 26,572Growth 1990‐2000 9.7% 0.1% ‐2.5%

Source: PCensus, Tetrad Computer Technology Copyright 2008

Oklahoma State Data Center Population Projections

Ponca City and Kay County

Population Projections2000 2005 2010 2015 2020 2025 2030

Ponca City 25,919 26,150 26,470 26,950 27,390 27,760 28,090

Increase 231 320 480 440 370 330

HH Increase 98 136 203 186 157 140

Kay County 48,080 48,500 49,100 50,000 50,800 51,500 52,100

Increase 420 600 900 800 700 600

HH Increase 172 246 369 328 287 246

Ponca City % 55% 53% 53% 55% 53% 55%

Source: Oklahoma State Data Center

Ponca City Demographics

This portion of the Study will focus on the current , historical, and future projected demographic trends Ponca City has undergone.

Current and future population is of primary importance to any study of housing demand. Ponca City’s current population and the direction in which it is trending is inconsistent depending upon which reporting source once consults. The city experienced slight population loss between 1990 and 2000 . Census based projections by the firm PCensus (as illustrated in the table to the upper right) carry that loss forward to the 2008 Estimate and the 2013 Projection. It is important to note that PCensus estimates and projections are built solely on Census trending and not on local occurrences and dynamics. The same series of methodology is used to create all projections and estimates nationwide.

In contrast, the Oklahoma State Data Center is much more locally focused regarding Ponca City. As illustrated in the table at the lower right, the Data Center projects continual growth for Ponca City and Kay County. Because of its local focus and regional orientation, this analyst will focus this Housing Demand Study on the Oklahoma State Data Center projections. PCensus projections however will be used in this Study for individual dynamics on the following pages.


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2008 Estimated Population by Sex

Ponca City

Total Percentage

Total 24,271 Male 11,616 47.9%Female 12,655 52.1%

Male/Female Ratio 92.0%


Age Distribution of Population

Ponca City, Kay County, Oklahoma

2008 Estimated Total Population by Age

Ponca City Kay County Oklahoma

Total 24,271 45,341 3,615,450Age 0 to 4 1,803 7.4% 3,266 7.2% 257,765 7.1%

Age 5 to 9 1,715 7.1% 3,130 6.9% 245,125 6.8%

Age 10 to 14 1,763 7.3% 3,255 7.2% 243,409 6.7%

Age 15 to 17 998 4.1% 1,965 4.3% 151,123 4.2%

Age 18 to 20 874 3.6% 1,985 4.4% 161,909 4.5%

Age 21 to 24 1,157 4.8% 2,152 4.8% 209,805 5.8%

Age 25 to 34 2,674 11.0% 4,842 10.7% 487,542 13.5%

Age 35 to 44 2,773 11.4% 5,094 11.2% 464,659 12.9%

Age 45 to 49 1,728 7.1% 3,257 7.2% 256,862 7.1%

Age 50 to 54 1,753 7.2% 3,273 7.2% 245,581 6.8%

Age 55 to 59 1,634 6.7% 3,056 6.7% 222,983 6.2%

Age 60 to 64 1,236 5.1% 2,451 5.4% 180,819 5.0%

Age 65 to 74 1,864 7.7% 3,587 7.9% 256,426 7.1%

Age 75 to 84 1,539 6.3% 2,747 6.1% 162,950 4.5%

Age 85 and over 760 3.1% 1,281 2.8% 68,492 1.9%

Age 16 and over 18,638 76.8% 35,036 77.3% 2,819,781 78.0%

Age 18 and over 17,992 74.1% 33,725 74.4% 2,718,028 75.2%

Age 21 and over 17,118 70.5% 31,740 70.0% 2,556,119 70.7%

Age 65 and over 4,163 17.2% 7,615 16.8% 487,868 13.5%


The table to the left compares the age distribution of the population of Ponca City, Kay County, and the State as a whole. Ponca City has a higher percentage of both children and senior citizens than the County and State. A greater percentage of residents are aged 0‐14 in Ponca City than in the county or the state. Similarly, Ponca City has the highest percentage of residents aged 65 and older of the three areas surveyed in the table.

The table above looks solely at the City of Ponca City. Ponca City has a slightly higher percentage of women than men. This may be directly attributable to the higher percentage of senior citizens, particularly of those aged 85 and older. Women typically outlive men and this could result in the uneven gender distribution in Ponca City.


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Estimated Income Levels



Average Household $51,428 $50,523 $53,690 Median Household $37,051 $37,508 $40,780

Per Capita $21,595 $20,506 $21,417


Household Income Distribution


2008 Estimated Households by Household Income


Total 10,015 18,137 1,421,631Less than $15,000 1,795 17.9% 3,115 17.2% 232,673 16.4%

$15,000 to $24,999 1,623 16.2% 2,834 15.6% 196,620 13.8%

$25,000 to $34,999 1,381 13.8% 2,624 14.5% 188,244 13.2%

$35,000 to $49,999 1,525 15.2% 2,963 16.3% 242,067 17.0%

$50,000 to $74,999 1,713 17.1% 3,173 17.5% 264,972 18.6%

$75,000 to $99,999 895 8.9% 1,620 8.9% 137,568 9.7%

$100,000 to $149,999 740 7.4% 1,247 6.9% 108,372 7.6%

$150,000 to $249,999 234 2.3% 389 2.1% 35,458 2.5%

$250,000 to $499,999 82 0.8% 131 0.7% 11,368 0.8%

$500,000 or more 27 0.3% 41 0.2% 4,289 0.3%


The table to the upper right illustrates estimated household income distribution for Ponca City, Kay County, and the state of Oklahoma. Both Ponca City and Kay County have the highest percentages of households within the under $15,000 and $50,000 to $74,999 income ranges. This is in contrast to the State of Oklahoma as a whole whose two highest percentages are households with incomes within the $35,000 to $49,999 and $50,000 to $74,999 ranges.

Ponca City can largely be characterized as middle income in nature. 41.2% of households fall into the household income ranges between $35,000 and $99,999. This can be directly attributed to the historical and current wealth of blue collar and white collar employment opportunitites afforded by ConocoPhillips and increasingly other companies located in or near the Airport Industrial Park in Northwest Ponca City.

The table to the lower right analyzes average household income, median household income, and per capita income for Ponca City, Kay County, and the State of Oklholma. Ponca City has the highest per capita income of the three areas analyzed. However, it has the lowest median household income and a higher average household income than Kay County but lower than the state as a whole.


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2008 Estimated Population by Single Race Classification

Ponca City

Total Percentage

Total 24,271 White Alone 19,845 81.8%Black or African

American Alone 756 3.1%American Indian and

Alaska Native Alone 1,714 7.1%Asian Alone 256 1.1%Native Hawaiian and

Other Pacific Islander Alone 10 0.0%Some Other Race

Alone 625 2.6%Two or More Races 1,065 4.4%


Household SizePonca City, Kay County, Oklahoma

2008 Estimated Average Household Size

Ponca City 2.36Kay County 2.44

Oklahoma 2.46


Ponca City can be characterized as ethnically homogeneous. The table to the upper left illustrates the distribution of residents of various racial classifications within Ponca City. Caucasians comprise 81.8% of the city’s residents. The most prominent ethnic minority group is American Indians or Native Americans. This is not surprising given Oklahoma’s history as the home to many Native Americans and Native American Reservations. Kay County and the Ponca City area are no exception; the Osage Indian Reservation lies directly southeast of Ponca City.

Finally, the table to the lower left compares the average household size of Ponca City to that of the County and State as a whole. Ponca City has the smallest average household size of the three. This may be a function of the higher percentage of senior citizens within the population.


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Housing Type Distribution


2008 Estimated Housing Units by Units in Structure* Ponca City Kay County Oklahoma

Total 11,573 21,536 1,615,3421 Unit Attached 238 2.1% 345 1.6% 38,619 2.4%

1 Unit Detached 9,552 82.5% 17,606 81.8% 1,149,995 71.2%

2 Units 301 2.6% 475 2.2% 29,720 1.8%

3 to 19 Units 776 6.7% 1,077 5.0% 147,510 9.1%

20 to 49 Units 144 1.2% 265 1.2% 24,770 1.5%

50 or More Units 309 2.7% 312 1.5% 43,017 2.7%

Mobile Home or Trailer 243 2.1% 1,393 6.5% 175,669 10.9%

Boat, RV, Van, etc. 10 0.1% 63 0.3% 6,042 0.4%

Dominant structure type 1 Unit 1 Unit 1 Unit


Current Housing Conditions Ponca City currently contains a wide variety of housing styles and types. During the field research portion of this analysis, CDS observed this diversity of housing stock within the community. These observations will be discussed in greater detail shortly within this report.

The table to the right contains the estimated distribution of the various housing types as defined by the US Census. This estimate is a forecast of 2008 housing unit distribution based on the 2000 and earlier US Census. As illustrated in this table, the majority of housing units in Ponca City are 1 Unit Detached homes. Nearly 83% of housing units are comprised of this property type. This Census estimate corresponds with what CDS observed in the field. This trend holds true as well for Kay County and to a slightly lesser degree the state of Oklahoma as a whole.


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Age Distribution of Housing StructuresPonca City, Kay County, Oklahoma

2008 Estimated Housing Units by Year Structure

B il


Total 11,573 21,536 1,615,3421999 to 2008 478 4.1% 1,282 6.0% 192,835 11.9%

1995 to 1998 108 0.9% 403 1.9% 89,026 5.5%

1990 to 1994 230 2.0% 512 2.4% 72,966 4.5%

1980 to 1989 1,326 11.5% 2,451 11.4% 271,671 16.8%

1970 to 1979 1,714 14.8% 3,214 14.9% 327,922 20.3%

1960 to 1969 1,661 14.4% 2,516 11.7% 217,561 13.5%

1950 to 1959 2,769 23.9% 4,237 19.7% 186,931 11.6%

1940 to 1949 1,683 14.5% 2,712 12.6% 109,867 6.8%

1939 or Earlier 1,604 13.9% 4,209 19.5% 146,563 9.1%

2008 Estimated Median Year Structure Built** 1959 1959 1974

Dominant Year Structure Built

1950 to 1959

1950 to 1959

1970 to 1979


Housing TenurePonca City

2008 Tenure of Occupied Housing Units

Total Percentage

Total Units 10,015Owner‐Occupied 6,854 68.4%

Renter‐Occupied 3,161 31.6%


Ponca City also contains an older housing stock. The majority of homes were built prior to 1979, and the highest percentage of homes was built during the decade of the 1950’s. The table to the left indicates that only 478 housing units have been constructed in Ponca City since 1999. This is a liberal estimate based on CDS’ field observation. Since 2000, 119 single family building permits have been issued and one multi‐family development containing 88 units has been constructed.

Per the estimations in the table to the left, Ponca City contains a slightly smaller percentage of housing units constructed within the last ten years than the County as a whole, and a significantly smaller percentage than the State as a whole.

In addition, the majority of housing units in Ponca City are owner occupied. The table above indicates that over 68% of housing units are occupied by their owners while 31.6% of housing units are occupied by renters.


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Housing Classifications within Ponca City This Study is ultimately focused on future demand for housing within three product classifications:

• Affordable Housing

• Moderate Housing

• Luxury Housing

These classifications are defined for the purpose of this study by the cost of housing relative to the income required to afford monthly rent rates or to obtain and pay timely a mortgage payment within a market realistic consumer lending environment.

The focus in the development of these classifications has centered on mortgage qualification although rental housing typically plays an important role in affordable housing. Two mortgage availability scenarios will be used in this Study:

A Conservative Lending Environment in which households can be expected to reasonably qualify for a mortgage to support the purchase of a home costing 2.25 times their household income. This scenario closely resembles the current lending environment.

An Aggressive Lending Environment in which households can be expected to reasonably qualify for a mortgage to support the purchase of a home costing three times their household income. This scenario more closely resembles the lending environment of most of the 2000s up until the last approximately twelve to 18 months.

Affordable housing, be it rental or for sale housing, is defined within this Study as most rental housing, or for sale housing priced at or below the $105,000 to $115,000 range. This is housing that is typically affordable to households earning


13

Household Income Distribution


2008 Estimated Households by Household Income


Total 10,015 18,137 1,421,631 Less than $15,000 1,795 17.9% 3,115 17.2% 232,673 16.4%

$15,000 to $24,999 1,623 16.2% 2,834 15.6% 196,620 13.8%

$25,000 to $34,999 1,381 13.8% 2,624 14.5% 188,244 13.2%

$35,000 to $49,999 1,525 15.2% 2,963 16.3% 242,067 17.0%

$50,000 to $74,999 1,713 17.1% 3,173 17.5% 264,972 18.6%

$75,000 to $99,999 895 8.9% 1,620 8.9% 137,568 9.7%

$100,000 to $149,999 740 7.4% 1,247 6.9% 108,372 7.6%

$150,000 to $249,999 234 2.3% 389 2.1% 35,458 2.5%

$250,000 to $499,999 82 0.8% 131 0.7% 11,368 0.8%

$500,000 or more 27 0.3% 41 0.2% 4,289 0.3%


$34,999 or less annually. Moderate housing is defined for the purpose of this study as housing that is priced above the $105,000 to $115,000 range through the $225,000 ‐ $250,000 range. This is housing that is generally affordable to households with household incomes of between $35,000 and $74,999. Finally, Luxury housing is defined as all housing priced above the ranges of Affordable and Moderate. Luxury housing is generally affordable to households with household incomes greater than $75,000. These three classifications have been expressed in price bands (i.e. the $225,000 to $250,000 range) instead of in exact price boundaries due to the differences in affordability exhibited by using the Conservative and Aggressive lending environment models.

It is important to understand that these models have been developed simply to begin to quantify housing affordability. In low cost housing markets such as Ponca City and Oklahoma as a whole, it is to be anticipated that many families will purchase homes below their means. Housing markets in the middle of the United States tend to offer more cost effective housing than in higher priced markets in other regions. Families may purchase a home less expensive than they could ultimately afford because it fully suits their needs. The local building and development community must stay abreast of such activity and offer market suitable products accordingly. The table to the left illustrates the current estimated household income distribution for Ponca City, Kay County, and the State as a whole.

The charts on the following page illustrate what percentage of Ponca City households can realistically afford to purchase Affordable, Moderate, and Luxury housing based on their household incomes in both a Conservative and Aggressive mortgage lending environment.

In a Conservative lending environment, 63.6% of Ponca City households can afford only housing within the Affordable category. In a more aggressive lending environment, this percentage shrinks to 46.9% as a greater percentage of Ponca City households can qualify to purchase homes within the Moderate category. Similarly, in a Conservative environment, only 10% of Ponca City households can purchase a Luxury home compared to 18.9% in an Aggressive environment.


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Mortgage Qualification Percentages – Conservative Environment

Ponca City Current Estimated Household Income Distribution


63.6%

26.4%

10.0%

Affordable Moderate Luxury

Mortgage Qualification Percentages – Aggressive Environment

Ponca City Current Estimated Household Income Distribution


46.9%

33.8%

18.9%



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Single Family Building Permits Issued Since 2000 by Market Area

Market Area Permits

Northeast Ponca City 93Northwest Ponca City 12

Southeast Ponca City 12

Southwest Ponca City 2

Source: CDS Market Research, City of Ponca City

Housing Development within Ponca City Market Areas For the purpose of this study, Ponca City will be divided into four market areas based on geography. These market areas closely resemble those utilized by the North Central Oklahoma Board of Realtors. It was not this analyst’s intention to mimic their market area boundaries. However, upon extensive field research, these market area boundaries did appear to CDS to be relevant psychological and market driven boundaries within Ponca City.

Northeast Ponca City is defined as the area generally north of Lake Road and east of 14th Street. Northeast Ponca City is characterized as largely residential in nature largely containing neighborhoods and cultural amenities such as parks and schools. This area contains many of Ponca City’s more upscale residential neighborhoods and virtually all new single family development. Retail development flanks 14th Street.

Northwest Ponca City is defined as the area generally north of Lake Road / Highland Avenue and west of 14th Street. This area contains a mixture of residential neighborhoods, cultural amenities, industrial uses, and much of the area’s retail. Such landmarks as the Wal‐Mart / Prospect Avenue retail corridor, Ponca City High School, Ponca City Medical Center, and the Ponca City Airport Industrial Park lie within Northwest Ponca City. Some of Ponca City’s finest historic neighborhoods are also located with Northwest Ponca City.

Southeast Ponca City is the area east of 14th Street and south of Lake Road. This area is less developed than most of Ponca City but contains several upscale vintage and more recent upscale residential neighborhoods immediately south of Lake Road.

Southwest Ponca City is a mixture of mature residential areas, the historic Central Business District corridor along Grand Avenue, and the large ConocoPhillips refining and office facility in the southwest corner of the city. This area contains most of Ponca City’s heavy industry and much of its affordable housing. At least based on visual inspection, Southwest Ponca City contains the largest percentage of opportunities to renovate and rehabilitate older homes to increase the supply of quality affordable housing in Ponca City.

The table to the above right illustrates how many single‐family residential building permits were issued since 2000 in each of the four defined market areas. The majority were issued for construction in Northeast Ponca City. The map on the following page illustrates the Market Areas as defined in this Study.


16

Ponca City Market Areas

Northwest Ponca City

Southeast Ponca City

Northeast Ponca City

Southwest Ponca City


17

Percentage of Single Family Building Permits since 2000 by Market Area

Ponca City


78.2%

10.1%

10.1%

1.7%

Northeast Ponca City Northwest Ponca City

Southeast Ponca City Southwest Ponca City

Single Family Building Permits Issued Since 2000 by Subdivision

Ponca City

Subdivision Permits

Huntington North 25Lakewood South 13

Huntington Place 12

Woodridge Place 10

North Crest 8

Deer Place 8

Fieldstone 7

Gingers East Estate 4

North Meadowlark 4

Meadowlark Heights 4

High Pointe Estates 3

Academy Hill 3

Ranchwood Manor 3

Lakewood 2

Stoneridge 2

Greenbriar Addition 2

Brentwood Villa 2

Hampton Heights 2

Briar Ridge 1

Turner Heights 1

Woodland Sub 1

Lake Road Addition 1

Enfield 1


On a percentage basis, 78.2% o residential building permits issued since 2000 were pulled for construction within Northeast Ponca City. In contrast, only 1.7% of similar permits issued within the same time period were for construction in Southwest Ponca City. This is illustrated in the chart below to the left. The table to the right illustrates at the subdivision level the distribution of single family building permits since 2000.

Huntington North, Huntington Place, and North Crest are adjacent to each other near Prospect Avenue and Turner Drive in Northeast Ponca City and contain a total of 45 permits pulled since 2000.

This one combined community represents nearly 38% of the total single family building permits issued during this time period. These neighborhoods can be characterized as moderate to luxury in nature with homes priced generally within the $200,000 to $300,000 range according to MLS listings and interviews with area builders. Building is ongoing in Huntington North.

Lakewood, Lakewood South, and Deer Place form a corridor along Pecan Road between Prospect Avenue and Hartford Road in Northeast Ponca City. Collectively this corridor accounts for 23 permits issued since 2000, or 19% of the total permits issued. These neighborhoods are luxury in nature and feature homes from $250,000 and up. Building activity is ongoing in Deer Place.


18

The pictures below illustrate new homes and homes currently under construction in Huntington North.


19

Percentage of Homes Sold by Price Range

Ponca City Homes Sold Between 1/1/2008 and 11/15/2008

Source: CDS Market Research, North Central Oklahoma MLS

25%

37%

19%

9%

5%

2% 3%

$0 ‐ $49,999

$50,000 ‐ $99,999

$100,000 ‐ $149,999

$150,000 ‐ $199,999

$200,000 ‐ $249,999

$250,000 ‐ $299,999

$300,000 and above

Housing Inventory and Home Sales Trends In the period from January 1, 2008 through November 15, 2008 242 new and resale homes were sold in Ponca City utilizing the North Central Oklahoma Multiple listing service. This figure equates to 23 homes per month sold. This includes homes of all ages in all four market areas. This figure does not, however, include all new homes. CDS learned in interviews with local homebuilders that some builders market their own homes directly instead of utilizing the MLS. Their reasoning for this was to minimize realtor and broker commissions paid. Therefore, a portion of new home sales will not be captured in this number.

There are currently 133 homes listed for sale on the MLS in Ponca City. CDS observed five additional homes currently for sale directly from the builder that are not listed on the MLS. At an average of 23 homes per month sold during 2008, a current inventory of 136 homes for sale equals a 5.9 month supply of inventory currently on the market. This is within a generally accepted range in which housing markets are thought to have reached equilibrium; they are neither buyer’s markets nor seller’s markets.

Additionally, Ponca City has an estimated total of 11,573 housing units. 136 homes currently on the market represents only 1.2% of the total housing stock. This 136 does not take into account apartments currently available and other rentals. If this quantity is assumed to be another 40 units, this still represents 1.5% of the total housing stock as being currently available. Both of these percentages are low when compared to many other markets. It is common for between 3% and 5% of a market’s total housing stock to be currently on the market at a given point in time.

The chart above looks at the distribution of homes sold in Ponca City since January 1, 2008 by price range. The largest percentage (62%) is made up of homes priced lower than $99,000. Homes in this price range will typically be older homes clustered in Northwest and Southwest Ponca City. Homes priced from $100,000 to $149,999 comprise another 19% of sales and homes $150,000 and above make up the last 19%


20

Days on Market by Price Range



84

112

68

105

79

9789

111

75

98

76

99

63

87

0

20

40

60

80

100

120

Median Average

$0 ‐ $49,999 $50,000 ‐ $99,999

$100,000 ‐ $149,999 $150,000 ‐ $199,999

$200,000 ‐ $249,999 $250,000 ‐ $299,999

$300,000 +

The table to the left analyzes how long it takes to sell a home in Ponca City, or the number of “days on market” based on its price. Homes in Ponca City priced over $300,000 have the lowest average DOM at 87 days. Homes priced under $49,999 have the highest average DOM at 112 days. Homes in the most expensive price range make up the lowest percentage of market supply while those in the lowest price range make up the greatest percentage of market supply. The relative supply of inventory for each price range has a direct cause for the respective time on the market average. Luxury homes over $300,000 are in the shortest supply and therefore move the most quickly. Affordable homes under $49,999 are in the greatest supply and therefore move the slowest.

Market Area Statistics The tables on the following page analyze total sales, sales velocity (days on market), and sales price by market area. Southeast Ponca City featured the highest average sales price of $219,167. This market area also achieved the lowest average days on market of 62 days. However it is important to note that both of these statistics have a great deal to do with the small amount of supply and the Luxury nature of the supply that is there. Only 1.2% of all home sales occurring in Ponca City since January 1, 2008 occurred in Southeast Ponca City. The greatest percentage of homes sold during this time period occurred in Northwest Ponca City, where many of the area’s higher quality Affordable homes are located. The second highest percentage of sales occurred in Northeast Ponca City where many quality Moderate resale homes are available.


21

Sales Price by Market Area



$132,000$150,442

$66,750 $77,118

$259,500

$219,167

$45,000 $54,401

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

Median Average



Days on Market by Market Area



79

104

67

99

68 62

91

125

0

20

40

60

80

100

120

140

Median Average



Percentage of Homes Sold by Market Area



37.1%

43.3%

1.2% 18.4% Northeast Ponca City

Northwest Ponca City

Southeast Ponca City

Southwest Ponca City


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Percentage of Homes Sold by Age Range



0.4% 0.4% 3.7%2.9%

12.8%

15.7%64.0%

New 1 Day ‐ 3 Years 4 ‐ 10 Years 11 ‐ 20 Years

21 ‐ 30 Years 31 ‐ 40 Years 41 + Years

Percentage of Current MLS Listings by Age Range

Ponca City Homes Currently on the Market 11/2008


0.0% 1.7%1.7%

7.0%

12.2%

13.0%64.3%

New 1 Day ‐ 3 Years 4 ‐ 10 Years 11 ‐ 20 Years

21 ‐ 30 Years 31 ‐ 40 Years 41+ Years

As mentioned earlier in this study, Ponca City has an older housing stock. This proves true when analyzing housing inventory and sales trends as well. Approximately 64% of both homes currently on the available on the MLS and those that have sold since January 1, 2008 have been 41 years or older. In both categories, the next highest percentage of homes is those built between 31 and 40 years ago. Contrasting with new homes, there are currently no new homes listed on the MLS (although a small quantity is currently being marketed directly from the builder) and only .4% of all homes sold on the MLS since January 1,2008 (1 home) are new construction. This is slightly misleading though. Very few builders in the Ponca City market build spec homes for sale, and those that do typically do not use the MLS and Realtors to market their properties. Based on building permit quantity and field inspection by CDS, an additional 10‐15 new homes are believed to have been built specifically for buyers and therefore not listed on the MLS during this period.


23

Days on Market by Age Range



151 151

191 191

78

103

69

93

62

86103

125

75

102

0

50

100

150

200

250

Median AverageNew 1 Day ‐ 3 Years 4‐10 Years11‐20 Years 21‐30 Years 31‐40 Years41 + Years

Sales Price per Square Foot by Age



$88.3 $88.3$97.2 $97.2

$87.1$91.6

$96.3 $95.0

$73.6 $76.1$69.3 $67.5

$50.3 $47.3

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

Median Average

New 1 Day ‐ 3 Years 4 ‐ 10 Years11 ‐ 20 Years 21 ‐ 30 Years 31 ‐ 40 Years41 Years or older

The tables above illustrate the relative sales velocity and average price per square foot of homes in different age ranges that have sold in Ponca City in 2008.. As illustrated above, older homes are the most affordable on a per square foot basis. The average price per square foot of a home aged 41 years and older is only $47.30, followed by $67.50 and $76.10 for homes built between 31 to 40 years ago and 21 to 30 years ago respectively. This is in contrast to $87.10 per square foot for homes 4 to 10 years old and $97.20 for resale homes built three years ago or less. The table indicates an average new home sales price of $88.30 per square foot. However, this is not an accurate portrayal of new home prices in


24

Ponca City. This reflects the single new home that was sold using the MLS in Ponca City in 2008. This home was a unique Affordable home in an infill location in the Hampton Heights neighborhood of Southwest Ponca City. Local homebuilders have indicated construction costs ranging from $80 to $125 per square foot for more mainstream new homes in Northeast Ponca City. Two Moderate to Luxury spec homes currently available in the Huntington North subdivision have asking prices between $100 and $120 per square foot. Builders mentioned that it is difficult to compete with the resale market because of its affordability. Local realtors indicated that the presence of ConocoPhillips has historically provided Ponca City with a ready market of middle and upper managers who built high quality homes in attractive neighborhoods. These residents often built homes nicer than one might typically in a market the size of Ponca City because if they had to relocate, ConocoPhillips would often purchase their homes as part of their relocation package. This alleviated the typical concerns of resale ability and has resulted in the presence within the market of many older homes with custom features at reasonable prices.

These homes and neighborhoods can be found clustered along Pecan Road south of Prospect Avenue as well as along 14th Street near the intersection of Lake Road. Neighborhoods including Copperfield, Woodlands, Acre Homes, and The Meadows (known locally as “the bird streets”) contain such housing.


25

Ponca City Multi‐Family Examples – Market Rate

Complex Occ. # Units Price # Beds/Baths Yr. Built Class Amenities

Cedargate 50% 2 $425 1/1 1975 C furnished apts. available,

Paladin 96% 200$325, $375 1/1, 2/2 1963 B

2 laundry facilities, pool, covered parking, security, 24 hr. maintenance

Pioneer 90% 62 $510 1/1, 2/1 1974 C paid utilities

Village Green 100% 63$425, $475 1/1 ‐ 2/1 1984 B

W/D Hookups, Clubhouse, Pool, 24 hr. Maintenance, furnished available

Windsor Park 100% 56 $460 2/1 1984 B On‐site mgmt, private patios, W/D hookups, wireless internet

Paradise Corner 90% 60Unknown 1/1 ‐ 2/1 ‐ 3/2 1973 C

laundry facility, paid utilities, patios, 24 hr. maintenance

Pecan Place 100% 195$440, $480 1/1 ‐ 2/1 1986 B

Walk‐in closets, pool, basketball court, patios, laundry facility


Ponca City Multi‐Family Examples ‐ Subsidized

Complex Occ. # Units Type # Beds/Baths Yr. Built Amenities

Willow Creek 100% 88Seniors

tax credit 1/1, 2/1 2001/2007Club Room, Exercise Room, Picnic Area w/ BBQ, Laundry Center, Fenced Gated

Meadows 100% 24 tax credit 2/1.5 1976laundry facility, paid utilities, patios, 24 hr. maintenance

East Terrace 98% 60 Sect. 8 2/1, 3/2 1983playground, laundry facility

Timbers North 84% 100 Sect. 8 1/1 ‐ 2/1 1978Covered parking, laundry room, paid utilities, porches, pool


Ponca City Rental Housing Thus far this Study has focused on for sale housing in Ponca City. Ponca City also contains a wide variety of rental housing.

Most of the area’s apartment complexes are located in the Northeast and Northwest Ponca City market areas. The majority of these properties feature relatively low rents and would fall into the Affordable category as defined in this study. One and two bedroom units typically rent in the $325 to $550 range.

The area’s apartment complexes are largely older properties. The most recent market rate apartment developments in Ponca City were developed in the mid 1980’s. This is largely true of the subsidized multi‐family properties as well. Willow Creek, located on 14th Street, is the one exception. This property is a Seniors Low Income Tax Credit Property that was developed in two phases one in 2001 and the second in 2007.

Ponca City also includes a variety of individually owned rental properties in all market areas. Single family homes available for rent at the time of this study ranged in price from $325 per month to


26

$800 per month depending on size, condition, and location. Like the area’s apartment complexes, these rental rates are low relative to those of other areas as well. The individually owned rentals observed by CDS during field research appeared to fall nearly entirely within the Affordable classification. CDS did not see advertised nor observe firsthand the availability of Moderate or Luxury single family homes for rent. This may have been merely representative of what was currently available at the time of this study, however.

Ponca City Active and Future Residential Developments Through interviews with local real estate professionals, city officials, homebuilders, and developers, this analyst gained an understanding of the currently active and future planned residential developments in Ponca City.

The majority of active and future projects are single family and Moderate to Luxury in nature. Both Deer Place and Huntington North were discussed previously in this Study. Deer Place is a Luxury community in Northeast Ponca City in which custom homes are currently being built. It appears to be nearing build out.

Huntington North is a Moderate to Luxury community also in Northeast Ponca City. This community has the greatest level of new home activity in the area. The current phase of Huntington North has less than ten lots remaining. However, the developer stated that there is sufficient available remaining land to develop an additional 20 lots.

Fieldstone and Highpointe Estates are two additional single family developments with current homebuilding activity and lots available. Both are located in Northeast Ponca City off of Pecan Road north of Prospect Ave. Both feature large “estate‐lot” home sites and high end Luxury custom homes. Interviews with local real estate professionals indicated that these two communities were the new home of some of Ponca City’s business leaders.

Spring Village Phase II is Luxury single family development in Southeast Ponca City located adjacent to existing Spring Village Phase I and Woodridge Park and Woodridge Place subdivisions. This development currently offers lots to build homes of the same Luxury character as those that have been built in the adjacent subdivisions over the last three decades.


27

Ponca City Active and Future Projects

Project Name Market Area Location Project Type Status Unit / Lot Count

Deer Place NE Ponca CityPecan Rd between Prospect and

Hartford Luxury Single Family Active 13 Lots

Fieldstone NE Ponca City Pecan Rd North of Prospect Ave. Luxury Single Family Active 8 Lots

Fox Run NE Ponca City LA Cann Dr., Lake Ponca Area Luxury Single Family Future 103 Lots

Highpointe Estates NE Ponca City Pecan Rd North of Prospect Ave. Luxury Single Family Active 41 Lots

Huntington North NE Ponca CityOff of Turner Dr. north of Prospect

Ave. Moderate to Luxury

Single Family Active 25 Lots

Pecan Village Assisted Living NE Ponca City Pecan Rd North of Prospect Ave. Seniors Housing Future

200 Assisted Living Units

Pecan Village Single Family NE Ponca City Pecan Rd North of Prospect Ave. Seniors Housing Future 39 Lots

Spring Village Phase II SE Ponca City Lake Rd. and Cascade Dr. Luxury Single Family Active 10 Lots

Source: CDS Market Research, City of Ponca City, Local Interviews

Fox Run is the largest development currently underway in Ponca City. This will be a Luxury single family community in Northeast Ponca City in the Lake Ponca / Wentz Park area. Ultimately 103 lots are to be built including single family and patio home lots. CDS observed site work in process during field research. The location of this development is emblematic of the move further east of Moderate to Luxury single family development. It was explained anecdotally to CDS that due to its natural beauty and close proximity to Ponca City employment, many affluent residents are choosing to build homes in far east Ponca City near Lake Ponca or east of the city limits near Kaw Lake.


28

Finally, Pecan Village is the sole planned future project that is not strictly single family in nature. Pecan Village is a Seniors Housing development planned to be built off of Pecan Road north of Prospect Avenue in Northeast Ponca City. This age restricted development will feature 39 single family homes and approximately 200 assisted living units offering associated services ranging from nursing care to dementia care. Site work has not yet begun on this tract.

Local real estate professionals and City officials also indicated that another out of town developer was currently seeking sites for another seniors housing development. The perception is that Ponca City contains a significant percentage of affluent retirees, many of whom worked for ConocoPhillips. These households may be wishing to downsize from their current homes and may also need a housing solution that includes a health maintenance and care component.

Both Pecan Village and the other contemplated seniors housing development are intended to capitalize on this market.

It should be noted that CDS observed no active or future planned apartment developments or Affordable housing developments. Moderate

housing is only slightly represented in the Huntington North development, although the majority of homes offered there fall into the Luxury category due to price as well.


29

Redevelopment Opportunities As discussed previously in this Study, Ponca City contains a significant older housing stock. The oldest housing is generally located in Southwest Ponca City and in portions of Northwest Ponca City nearest the Central Business District. CDS observed that much of it is in good condition and provides quality housing to its inhabitants. However, as in any community a portion of the older homes have fallen into disrepair. This presents an opportunity within the Ponca City housing market to provide quality Affordable homes. A property by property inspection was beyond the scope of this study. However, CDS spent extensive time in the field in all four market areas of Ponca City. By and large, the older housing stock in presumably lower income neighborhoods of Southwest Ponca City appeared to largely be in better condition than that in similar neighborhoods in other similarly sized cities. This could be attributable to the historical energy industry orientation of Ponca City’s blue collar employment which typically features higher wage scales than does other sectors of blue collar employment.

Since January 1,2008, 23 homes have sold in Ponca City for less than $50,000, and 36 homes have sold for between $50,000 and $75,000. Additionally, there are 11 homes currently on the market for sale with asking prices of less than $50,000 and 8 homes currently on the market priced between $50,000 and $75,000 as well.

Arthur C. Nelson of the Metropolitan Institute at Virginia Tech estimated the typical life of a single‐family home at 160 years – but in some cities, a 60‐year old home is considered obsolete without major renovations. It is not the intention of this study to state that housing stock in Ponca City would deteriorate beyond habitability on any large scale. While certain older housing may become less market desirable, it is not anticipated that it will face attrition from the marketplace.

The most innovative affordable housing initiatives CDS has observed typically happen in larger markets that are challenged by high housing costs. Ponca City is fortunate to have low housing costs and a large quantity of existing privately owned housing that is affordable both for rental and purchase. An appropriate best practice would be the utilization of a rebate program to help homebuyers and landlords renting affordable homes renovate and repair these homes. This would optimize use of the existing significant affordable housing stock.

If renovation money were to be made available either from public or private sources, this segment of the resale market could provide quality Affordable housing to support Ponca City’s future growth.


30

Percentage of Current MLS Listings by Age

Ponca City and Stillwater

Source: CDS Market Research, National Association of Realtors, North Central OK

0.0% 1.7% 1.7% 7.0%

12.2% 13.0%

64.3%

14.3% 16.0% 15.6%8.4%

17.7%8.0%

19.8%

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%

New 1 Day ‐3 Years

4 ‐ 10 Years

11 ‐ 20 Years

21 ‐ 30 Years

31 ‐ 40 Years

41+ Years

Ponca City Stillwater

Total Current MLS Listings by Age


Source: CDS Market Research, National Association of Realtors, North Central OK MLS

0 2 28

14 15

74

34 38 37

20

42

19

47

01020304050607080

New 1 Day ‐ 3 Years

4 ‐ 10 Years

11 ‐ 20 Years

21 ‐ 30 Years

31 ‐ 40 Years

41+ Years


Market Segments Not Currently Present in Ponca City New Development Local officials indicated during interviews with this analyst that a portion of affluent ConocoPhillips employees (73 families) and management personnel with other local entities including Ponca City Medical Center were choosing to live in Stillwater, Oklahoma 40 miles south of Ponca City. Stillwater is the home of Oklahoma State University. Stillwater has a current estimated population of 45,651. However, OSU has 20,756 full time students so the permanent non‐student population of Stillwater is comparable to Ponca City’s estimated 2008 population of 24,271. The presence of OSU allows Stillwater to offer a somewhat greater diversity of entertainment and retail options than Ponca City. However, in interviews with employers, Ponca City Development Authority officials have repeatedly found that lack of available new housing is the primary reason families choose to commute from Stillwater to Ponca City for work. Stillwater does not have the older housing stock that Ponca City does largely because it did not have large industry driving residential development throughout the middle 20th century as did Ponca City. The graphs below compare the current housing inventory in Stillwater to Ponca City. Over 30% of homes currently on the market (72 in total) in Stillwater are 3 years old or newer as compared to 1.7% of homes currently on the market (or two homes total) in Ponca City. In total there are currently 237 homes in Stillwater listed on the MLS while there are 115 listed in Ponca City. Additional direct from builder homes not listed on the MLS are likely available in both cities. CDS observed 5 such properties in Ponca City but did not ascertain the quantity available in Stillwater.


31

Total MLS Listings Four Years Old or Newer by Price Range


Source: CDS Market Research, National Association of Realtors, North Central Oklahoma MLS

1 1

13

15

19

9

16

0

2

4

6

8

10

12

14

16

18

20

$0 ‐$149,999

$150,000 ‐$199,999

$200,000 ‐$249,999

$250,000 ‐$299,999

$300,000+

Moderate Level Housing

Current newer housing inventory in Stillwater is both more plentiful and offers more price‐point variety than in Ponca City. There are currently 28 newer homes (four years old or newer) available in Stillwater priced under $200,000 while there are none available in Ponca City in this price range. Only two homes four years old or newer are currently listed on the MLS, and CDS knows of five additional homes currently available directly from the builder, all of which are priced between $200,000 and $350,000. Ponca City economic development officials indicated that many of the professional jobs that new companies are bringing to Ponca City offer starting annual salaries in the $45,000 to $60,000 range. For a young professional earning this sort of salary, a home priced over $200,000 is likely out of reach. This household may not have sufficient cash, time, or desire to purchase an older home and renovate it. Therefore, they will likely gravitate to more moderately priced new housing. This type of Moderate new housing is available in Stillwater but not in Ponca City.

Examples of this sort of housing that are currently on the market in Stillwater are illustrated on the following page. These example homes range in price from $128,900 to $181,000. They are sized from 1,310 to 1,867 square feet. Importantly, they are constructed on lots sized 4,400 square feet, 6,600 square feet, 7,150 square feet, and 7,800 square feet. Three of the four of these homes are constructed on lots that are smaller than the required 7,200 square foot minimum lot size in Ponca City. In many suburban housing markets around the Central United States, 50’x115’ (5,750 square feet) 55’x120’ (6,600 square feet) lots are very common. Allowing for smaller lots for single‐family homes produces greater housing affordability because developers can sell lots to builders or builders can develop their own lots for lower prices than they could if they were required to produce larger lots. Photos of examples of Moderate to Luxury homes built in the Houston Texas market by large regional homebuilders on 50’ wide lots are on the page following the Stillwater example. Both of these examples are attractive, well‐appointed homes. Through quality home construction and consciences subdivision development, attractive neighborhoods can be brought to market featuring smaller lots.


32

Source: CDS Market Research, National Association of Realtors MLS

3 Bedroom, 2 Bathroom, 1,428 square feet on 60’x110’ (6,600sf) lot priced at $137,900, Built 2005

3 Bedroom, 2 Bathroom, 1,310 square feet on 55’x80’ (4,400 sf) lot priced at $128,900, Built 2008




33

Examples of Moderate to Luxury Homes Constructed on 50’ Wide Lots in Suburban Houston

Source: CDS Market Research, Chesmar Homes, Highland Homes


34

Annual Single Family Building Permits


Source: CDS Market Research, City of Ponca City, City of Stillwater

28 3014 16 26 12

132

215237 218 209

176

0

50

100

150

200

250

2002 2003 2004 2005 2006 2007


Market Size and Construction Costs

Interviewed homebuilders indicated to this analyst that new home construction costs were relatively high in Ponca City. Reported costs ranged from $90 to $120 per square foot. High construction costs may be partially attributable to the small size of Ponca City’s home building market. There is not a significant pool of laborers and tradesmen in Ponca City. There is reportedly a greater supply of such human resources in Stillwater because there is greater construction activity. CDS could not accurately confirm the amount of tradesmen and laborers available in Stillwater versus Ponca City, but this is believable based on the number of single family building permits issued in both cities since 2002. The table to the left illustrates this difference.

Market Size and Transactional Costs

Due in part to the relative small size of Ponca City’s housing market, realtors in Ponca City typically charge a 7% commission. A six percent (3% to the listing agent and 3% to the buyer’s agent) commission is typical in most major markets. However, in larger more competitive markets realtors are more likely to negotiate their commission structure. This will often take the form of scenarios such as listing a home at a reduced commission if the seller agrees to use that realtor to help them find their new home. Such negotiations resulted in a recent National Association of Realtors (NAR) study finding that the average commission nationwide was 5.1%, not the standard 6%.


35

Land Cost and Residential Land Development Feasibility

Land costs have been cited as another reason new home construction in Ponca City has been limited. An approximate rule of thumb used by developers is that they can afford to pay the same amount for an acre of raw land that they can get for a developed lot. Of course, that “rule of thumb” must be adjusted for the “cost” of entitlements and unique regulations related to the development such as stormwater detention. Additionally, production homebuilders in larger markets can typically afford to pay 15% to 20% of a home’s total sales price for a standard finished subdivision lot with full street and utility service. Custom luxury homebuilders (more representative of the current builders in Ponca City) typically can budget 20% to 25% of the home sales price for a standard finished lot. Therefore, the price at which an acre of land can be sold for subdivision development starts with 15% to 25% of the price the average home times the number of lots into which an acre is to be divided minus development and engineering costs (which will need to be supplied by a local civil engineer familiar with Ponca City development), carrying costs, and developer profit.


36

Total MLS Listings Four Years Old or Newer by Square Foot Range

Stillwater

Source: CDS Market Research, National Association of Realtors, North Central Oklahoma MLS

9

2319

912

0

5

10

15

20

25

0‐1,500 1,500‐2,000 2,000‐2,500 2,500‐3,000 3,000+

Percentage of Total Sales by Size of Home



21.2%

56.4%

21.2%

1.2%

2 Bedroom 3 Bedroom 4 Bedroom 5+ Bedroom

Home Size and Marketability

A greater percentage of new homes in Stillwater are constructed at smaller square footages than in Ponca City. Currently no homes aged four years old or newer are on the market in Ponca City sized less than 2,000 square feet. In contrast, 32 homes, or 44% of the total, similarly aged homes on the MLS in Stillwater are below 2,000 square feet. This is illustrated in the table below. Building within smaller square footage bands allows more Moderate homes to be marketed even in spite of higher than average construction costs.

Additionally, in many markets around the country Moderate to Luxury buyers prefer four bedroom homes. A current expectation in the housing market is for there to be an owner’s suite, or master bedroom, bedrooms for two children, and a guest bedroom. The majority of homes that have been in Ponca City’s recent housing inventory are three bedroom homes. Three bedroom homes make up over 56% of homes sold since January 1, 2008 while four bedroom homes make up only 21% of homes sold. This distribution is illustrated in the chart above.


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Housing Demand Based on Population Growth Projections

Based on Oklahoma State Data Center Projections

Population Projections

2000 2005 2010 2015 2020 2025 2030

Ponca City 25,919 26,150 26,470 26,950 27,390 27,760 28,090

Increase 231 320 480 440 370 330

HH Increase 98 136 203 186 157 140

Housing Demand

Affordable

$0 ‐ $80,000 46 64 96 88 74 66 $80,000 ‐ $115,000 16 22 33 30 26 23

Moderate $115,000 ‐ $170,000 17 24 36 33 27 24 $170,000 ‐ $225,000 9 12 18 17 14 12

Luxury $225,000 ‐ $340,000 7 9 14 13 11 10

$340,000+ 3 4 6 6 5 4

Source: CDS Market Research, Oklahoma State Data Center

Ponca City Housing Projections

Population Growth and Housing Demand The primary goal of this Study is to analyze Ponca City’s current housing market and area growth expectations resulting in a housing demand projection for the next ten year period for Affordable, Moderate, and Luxury housing. This demand projection will be produced three ways. The first method is briefly summarized in the table to the left This table is focused on the population increase projections of the Oklahoma State Data Center for Ponca City. According to the Data Center, Ponca City’s population is expected to grow by 1,940 residents between 2005 and 2030. Based on historical average household sizes in Ponca City, this would result in an increase of 822 new households during this same period. The table to the right uses current household income distribution for Ponca City to apply these new household creations to housing price categories accordingly. The majority of new households will be requiring Affordable homes. Much of this demand will likely be satisfied by either rental units or Ponca City’s existing quality Affordable housing stock.


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Total Employment Historical Trends

Ponca City

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 5 Year 10 Year

Total Wage & Salary Employment ‐ QCEW 20,027 20,261 21,271 20,904 19,552 19,758 19,204 20,175 21,066 21,366 20,314 20,358

Percentage Increase ‐2.8% 1.2% 5.0% ‐1.7% ‐6.5% 1.1% ‐2.8% 4.8% 4.2% 1.4% 1.7% 0.4%

Total Increase ‐580 234 1009 ‐367 ‐1352 206 ‐554 971 891 300 363 76

Source: CDS Market Research, PCDA, OSU Center for Applied Economic Research

Anticipated Growth Employers

Expectations Based on Current Announcements

Organization Expected WorkforceCurrent and Future Sector

University Multispectral Lab (OSU) 38 to grow to 120 Science / Technology

Host Analytics 35 to 50 Computer Software

Continental Technologies 30 to grow significantly Science / Technology

Source: Ponca City Development Authority, CDS Market Research

Employment Growth and Housing Demand The prior page of this report briefly reviewed current population growth projections as per the Oklahoma State Data Center. However, employment growth is one of the key drivers of population increase, new household creation, and ultimately new housing demand. The remainder of this portion of the analysis will focus more in‐depth on population and household projections based on the annual job and population growth analysis provided by the Center for Applied Economic Research at Oklahoma State University. Ponca City has established a relationship with this research group and it is understood that their analysis of growth in Ponca City is conducted on a more regular, “real‐time” basis and therefore is likely to be a very accurate portrayal of current trends. The table above illustrates the ten year history of Total Wage and Salary Employment in Ponca City.

The table to the bottom right outlines three of Ponca City’s reported future growth employers. Interviews with Ponca City Development Authority officials indicated that in addition to these three, there were numerous other firms either currently establishing facilities in Ponca City or anticipated to do so in the near future. Most of these could not be fully disclosed at this time.

Finally, the table on the following page outlines Ponca City’s current major employers. While ConocoPhillips is clearly the largest employer, it is important to note the diversity of other organizations employing large numbers of people within Ponca City.


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Ponca City Major Employers

Organization Employees Sector Organization Employees Sector ConocoPhillips Phillips 1500 Energy Ponca City Country Club 56 HospitalityPonca City Public Schools 755 Education JC Penney Company 55 Retail Tyson Foods, Inc. 700 Meat Packaging Home National Bank 51 Banking Ponca City Medical Center 453 Health Care Cameron Valves 50 Gas Valve Assembly Smith Technologies 440 Drilling and Mining Bit Mfg. Eastman National Bank 50 Financial Institutions Air Systems Components 400 Air Grilles & Diffusers Bowker Ford / Lincoln / Mercury 45 Automotive Retail / Service City of Ponca City 384 City Government Custom Mechanical Equipment 45 Custom Ventilation Equip. Mfg. Albertsons, Inc 355 Distribution, Warehouse Modern Investment Casting 41 Investment Castings Sykes 327 Inbound Call Center Boettcher, Martin, Jean, and Jackson 40 Law Firm Mertz, Inc. 250 Machine Assembly Consulting and Field Services 40 Inspection Services Mid‐America Door 200 Commercial and Residential Doors Precisions Tool and Die 40 Machining Tool & Die FabricationTimec 98 Plant Maintenance Quality Water Services 40 Water Filtration / Bottling Pioneer Technology Center 95 Education Drisco Trucking 39 Logistics Food Pyramid / Starbucks 92 Retail Pemberton Cadillac / Chevrolet 38 Automotive Retail / Service American Legion Children's Home 80 Service Encompass Tool and Machine 35 Injection Molds Bliss Industries 80 Hammer Mills & Pelletizers Oklahoma Casting 31 Home Accessories Lowe's Home Improvement 75 Retail Cookshack 30 Electric Smokers Shawn Manor 75 Long Term Nursing Care Sober Brothers 30 Sand, Gravel, Excavation Edwin Fair Community Center 72 Mental Health Services St. Mary's Catholic School 29 Education Continental Carbon 70 Carbon Black Production Garoutte Products 25 Leather Equine Equipment Evans and Associates 70 Asphalt and Concrete Mfg. Jupiter Sulphur 25 Sulphur Production Ponca City Publishing 70 Newspaper Publishing Pioneer Equipment Rental Co. 25 Equipment Rental Ponca City Nursing and Rehab Center 70 Long Term Nursing Care Ponca City Christian Academy 25 Education Compression Systems 67 Machining / Assembly Quarter Turn Resources 25 Valve Manufacturing Ponca City Discount Foods 63 Retail Seismic Source 25 Geologic Equipment U.S. Postal Service 61 Postal Service Cherokee Strip Credit Union 24 Banking Lindsay Manufacturing 60 Central Vacuum Systems Oklahoma Natural Gas 22 Natural Gas Supplier Northern OK Insulation Co. 60 Industrial Insulation Sullivan Trucking 22 Commercial Trucking Ratliff, Inc. 60 Industrial Contractors Centerline 21 Spindles RCB Pioneer Bank and Trust 58 Banking United Supermarket, Inc. 21 Retail

Source: Ponca City Development Authority, CDS Market Research


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For the purpose of the Housing Study, two employment and population growth scenarios were created. A Conservative Growth Scenario (Scenario A) will assume that the current ten year growth average percentage (0.4% annually through 2012 growing to 0.8% from 2013 through 2018) will continue for the following ten years. An Aggressive Growth Scenario (Scenario B) will assume that the current five year growth average (1.7% annually) will continue for the following ten years. From each year’s growth of Total Wage and Salary Employment in both scenarios, 15% will be assumed to be filled by members of households currently residing in Ponca City or the surrounding area. From that remaining 85% that is assumed to be new household creations, it will be assumed that 60% will choose to reside within Ponca City limits. The assumption that 60%

of new households will choose to reside in Ponca City is based on the percentage of total Kay County growth that the Oklahoma State Data Center estimates will happen within Ponca City. Depending on variables including quality of new housing development within Ponca City and the types of jobs and employees brought to Ponca City, this percentage could be conservative or liberal. The new household creation resulting from the above calculations was then distributed by housing type (Affordable, Moderate, and Luxury) based on the Conservative and Aggressive mortgage lending environments explained on page 10 of this Study. The charts on the following two pages illustrate the potential housing demand based on both growth and mortgage availability scenarios.


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Scenario A Conservative Growth

10 Year Housing Demand by Class

Ponca City


456

339

190

243

72

136

0

50

100

150

200

250

300

350

400

450

500

Conservative Mortgage Environment Aggressive Mortgage Environment


The chart to the left illustrates housing demand by type given conservative growth in employment. This level of growth would result a demand for 352 housing units in Ponca City over the next ten year period.

In a Conservative mortgage environment in which a borrower can reasonably expect to purchase a home costing 2.25 times their annual household income, the majority of these homes (64%) would need to be within the Affordable category. These could be made up of rental housing, renovation and redevelopment of current older housing stock, and new reasonably priced homes.

In an Aggressive mortgage environment in which a borrower could expect to purchase a home costing three times their annual household income, only 47% of new demand needs to be within the Affordable category.

Tables on pages 42 and 43 of this Study illustrate how these housing demand projections were developed.


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Scenario B Aggressive Growth

10 Year Housing Demand by Class

Ponca City


1273

946

529

677

199

378

0

200

400

600

800

1000

1200

1400

Conservative Mortgage Environment Aggressive Mortgage Environment


The chart to the left illustrates housing demand by type given aggressive growth in employment. This level of growth would result a demand for 981 housing units in Ponca City over the next ten year period.

In a Conservative mortgage environment in which a borrower can reasonably expect to purchase a home costing 2.25 times their annual household income, the majority of these homes (64%) would need to be within the Affordable category. These could be made up of rental housing, renovation and redevelopment of current older housing stock, and new reasonably priced homes.

In an Aggressive mortgage environment in which a borrower could expect to purchase a home costing three times their annual household income, only 49% of new demand needs to be within the Affordable category.

Tables on pages 44 and 45 of this Study illustrate how these housing demand projections were developed.


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Housing Demand Based on Scenario A ‐ Conservative Growth Scenario

Housing Classifications Based on Conservative Lending Environment

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Total Wage & Salary Employment ‐ QCEW 21,366 21,452 21,537 21,624 21,710 21,884 22,059 22,235 22,413 22,592 22,773

Percentage Increase 0.40% 0.40% 0.40% 0.40% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80%

Total Increase 85 86 86 86 174 175 176 178 179 181

Total New Household Creation (85%) 73 73 73 74 148 149 150 151 152 154

Ponca City New Household Creation (60%) 44 44 44 44 89 89 90 91 91 92

Housing Demand

Affordable

$0 ‐ $80,000 21 21 21 21 42 42 43 43 43 44

$80,000 ‐ $115,000 7 7 7 7 14 15 15 15 15 15

Moderate

$115,000 ‐ $170,000 8 8 8 8 15 16 16 16 16 16

$170,000 ‐ $225,000 4 4 4 4 8 8 8 8 8 8

Luxury

$225,000 ‐ $340,000 3 3 3 3 6 6 6 6 6 6

$340,000+ 1 1 1 1 3 3 3 3 3 3

Source: CDS Market Research, Oklahoma State University Center for Applied Economic Research


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Housing Demand Based on Scenario A ‐ Conservative Growth Scenario

Housing Classifications Based on Aggressive Lending Environment

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018



Total Increase 85 86 86 86 174 175 176 178 179 181



Housing Demand

Affordable

$0 ‐ $75,000 14 14 14 14 29 29 30 30 30 30

$75,000 ‐ $105,000 6 6 6 6 13 13 13 13 13 13

Moderate

$105,000 ‐ $150,000 7 7 7 7 14 15 15 15 15 15

$150,000 ‐ $225,000 8 8 8 8 15 16 16 16 16 16

Luxury

$225,000 ‐ $300,000 4 4 4 4 8 8 8 8 8 8

$340,000+ 4 4 4 4 9 9 9 9 9 9



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Housing Demand Based on Scenario B ‐ Aggressive Growth Scenario

Housing Classifications Based on Conservative Lending Environment

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018



Total Increase 363 369 376 382 389 395 402 409 416 423



Housing Demand

Affordable

$0 ‐ $80,000 88 89 91 92 94 95 97 99 100 102

$80,000 ‐ $115,000 30 31 31 32 32 33 33 34 35 35

Moderate

$115,000 ‐ $170,000 32 33 34 34 35 35 36 36 37 38

$170,000 ‐ $225,000 17 17 17 17 18 18 18 19 19 19

Luxury

$225,000 ‐ $340,000 13 13 13 13 14 14 14 14 15 15

$340,000+ 6 6 6 6 6 6 6 6 7 7



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Housing Demand Based on Scenario B ‐ Aggressive Growth Scenario

Housing Classifications Based on Aggressive Lending Environment

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018



Total Increase 363 369 376 382 389 395 402 409 416 423



Housing Demand

Affordable

$0 ‐ $75,000 61 62 63 64 65 66 67 68 70 71

$75,000 ‐ $105,000 27 27 28 28 29 29 30 30 31 31

Moderate

$105,000 ‐ $150,000 30 31 31 32 32 33 33 34 35 35

$150,000 ‐ $225,000 32 33 34 34 35 35 36 36 37 38

Luxury

$225,000 ‐ $300,000 17 17 17 17 18 18 18 19 19 19

$340,000+ 18 19 19 19 20 20 20 21 21 21



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Source: Woodlands Development Company

Source: General Growth Properties

Recommendations In addition to creating housing demand projections, CDS’ other key goal in this project was to synthesize all of the interviews, data and field research, and concluding projections to develop actionable recommendations as to how Ponca City may move forward from its current housing situation. The following recommendations are based on all of CDS’ research and investigation.

Homefinding / Housing Information Center Issue: When companies expand or relocate into Ponca City, new employees are typically matched with a local realtor to show them local housing. Most local builders of Moderate price range houses reported that they market their homes directly to the public and do not make the choice to work with realtors. Builders interviewed cited realtor commissions as too high a percentage of their net profit from homebuilding. One builder stated that a six percent realtor commission represented 50% of his profit. While local builders market their homes themselves, they are not large enough to afford the nearly impossible to miss marketing campaigns that regional and national homebuilders in larger markets achieve. This dynamic results in new residents of Ponca City not being introduced to most of the available new homes.

Recommendation: Ponca City, namely a public entity such as Ponca City Development Authority, Ponca City Foundation for Progress, or the Ponca City Chamber of Commerce could establish a Homefinding Center. This Center should be modeled after those implemented by large developers of master‐planned communities in larger markets.

These centers are typically built and managed by the land development company and present customers equal information on all builders currently building within the community, resale homes currently available, realtors specializing in the community, and other housing related resources. It is important that the Center be staffed by a neutral third party that is not affiliated with any one builder, real estate agency, etc. This way all housing industry participants who wish to be would be equally represented. Within master‐planned communities, these staff members are typically hourly employees of the development company. In the case of Ponca City, these could be carefully vetted volunteers or public staff members. This staff member or possible Center management could take


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Source: Rob Johnson Interests

the additional role of liaison between local industry and housing industry participants. This person could be the primary point of contact for all employers planning on adding staff and relocating people to Ponca City. If this information can be presented to local housing industry participants as early as possible, new or otherwise suitable housing may be made available to these new residents more quickly.

The scale of Homefinding Centers in many large Master Planned Communities in large markets is likely too large to be realistic for Ponca City. A space in the building that houses Ponca City Development Authority, or possibly an underutilized vintage storefront on Grand Avenue in the Central Business District could be of an appropriate scale to house the facility.

This resource would greater promote Ponca City’s new and existing housing assets and could help to prevent additional erosion of the new home buyer base to Stillwater.

Development of “Class A” Apartment Community Issue: CDS found in interviews with PCDA officials that a percentage of new technology related jobs added to Ponca City’s employment base were being filled with young professionals, namely recent graduates from nearby Oklahoma State University. Despite their attractive starting salaries, these graduates are not likely candidates to purchase a home in Ponca City immediately after graduation. Recent graduates who are just starting out typically do not wish to take on that level of responsibility and will often not yet possess the down payment required to purchase a home in the current mortgage environment. However, most of Ponca City’s market rate rental housing is older and not of the quality that these recent graduates would expect had they accepted job offers in Tulsa, Oklahoma City, Dallas, etc.

Recommendation: Further analysis to determine feasibility to develop a new “Class A” apartment community in Ponca City. Such a property could serve the following market segments:

• The abovementioned recent college graduates

• New Ponca City residents who are waiting for a new home to be built

• A portion of households whose income places them in the highest 50% of those who need housing within the Affordable price category. A family that could only purchase an $80,000 to $100,000 home may choose to instead rent a new luxury apartment for $800 to $1,000.

• A portion of existing older Ponca City residents who wish to downsize from a single family house but do not desire to live in a retirement community yet


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Such a property would need to feature amenities such as a swimming pool, fitness center, covered parking option, and movie room. Units would need to feature 9’ ceilings, crown molding, quality carpet, tile, or wood laminate flooring, walk in closets, and full appliances including washer and dryer in the unit.

CDS would recommend this property be developed in phases to minimize market risk to the developer. The first phase should contain the smallest possible number of units that could support completion of a swimming pool and fitness center. A new Class A apartment community could expect to achieve rents significantly higher than current Ponca City complexes. While further analysis would be needed in order to provide an actionable rent rate expectation, such properties often command greater than $1.00 per square foot monthly rent. While both photos of such communities in this Study feature three story structures, the same type of product can be achieved

using a two story structure.

CDS has identified several locations within Ponca City that would be suitable for such a development, as bulleted below. These site locations were chosen strictly based upon perception of market acceptance. All of them would need to be rezoned to the R‐3 zoning classification that allows for apartments. Land value and deal economics were both beyond the scope of this portion of the analysis. Sites include:

• East Hartford Avenue immediately east of Ponca Plaza shopping center in the Northeast Ponca City market area. This site would benefit from close proximity to Ponca City Medical Center and the North 14th Street business and retail corridor.

• In the vicinity of the intersection of Lake Road and Pecan Road. A large developable tract exists in the northwest corner of this intersection, a portion of which could be used for such a development. However, other suitable tracts likely exist in the vicinity as well.

• Hartford Avenue where it turns southward and becomes Kygar Road. This site would benefit from close proximity to Lake Ponca and Wentz Park recreational amenities and is surrounded by upscale residential communities.

• East Prospect Avenue, west of 14th Street and directly east of Greenbriar Road. This site might only be suitable for a smaller apartment community because it is encumbered by a naturally channelized stream running through it. However, the site offers excellent access to Ponca City’s newest restaurants and retail establishments along East Prospect.

• On a small scale, such apartment units could built within existing downtown historic buildings redeveloped as “loft” properties. The infrastructure is there in Downtown Ponca City to support this sort of development to fill a portion of the city’s “Class A” apartment needs.


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Development of Communities for Moderate and Affordable Houses Issue: Current and future planned residential development in Ponca City is nearly exclusively within the Luxury category. It is the opinion of CDS that the current housing industry participants and pipeline projects in Ponca City will satisfy the need for Luxury housing for the next ten year period. The active and future residential developments listed in the table on page 27 of this Study include approximately 150 available or planned lots that are suitable for Luxury housing. The most aggressive estimate using Scenario B on page 41 of this Study calls for a demand of 378 Luxury homes within the next ten years, and local developers and builders will likely fill the additional demand of approximately 228 lots within a ten year period. However, Huntington North is the only active or future development with any Affordable or Moderate component.

Recommendation: Residential land developments need to be facilitated that offer Affordable and Moderate homes. As defined earlier, Affordable homes for the purposes of this Study are those generally priced below $115,000. Moderate homes are defined within this study as homes priced between $115,000 and $225,000. These two home categories make up the majority of projected demand.

Smaller lot sizes than the current 7,200 square foot minimum in Ponca City should be allowed in certain circumstances in order to facilitate Affordable and Moderate housing development. As discussed in pages 31 and 32 of this Study, many Moderate homes in Stillwater are constructed on lots smaller than 7,200 square feet. In exchange for smaller lot sizes, Ponca City planning officials should require consistent and attractive entry monumentation in order to preserve a high quality community feel. Builders generally cannot spend more than 18% to 20% of a home’s base sales price on the lot. Smaller lots allow developers to sell lots to builders at a lower price and therefore allow less expensive homes to be sold. This would also facilitate builders being able to market smaller homes than they currently are in Ponca City. The supply of currently available new homes in Ponca City starts at approximately 2,000 square feet. As illustrated on Page 32 of this Study, much smaller new and newer resale homes are readily available in Stillwater. These less expensive homes would be more within financial reach for most households in the Ponca City area.


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The public sector in Ponca City can also implement initiatives to help facilitate development of Moderate and Affordable housing. A tax increment financing reimbursement program could be implemented to reimburse land developers for a portion of the costs associated with water, wastewater, storm sewer, and drainage construction. A portion of the additional property taxes generated by the improvement of the land could be used to pay for these rebates. This would allow developers to develop lots more cost effectively and sell them to builders at a lower price, therefore ultimately allowing builders to sell more affordable homes. A different sort of rebate program could also be implemented under which builders would be paid a rebate once a new spec home has sold and closed. Such a rebate should only be offered to a builder if they agree to build a spec home, not one with a purchase contract in place. This would work to reduce the risk faced by builders of speculative homes while serving the public good of working to alleviate the shortage of new Moderate and Affordable housing in Ponca City.

Finally, Ponca City officials could work to streamline the permitting process to the greatest degree possible for those who wish to construct new Moderate and Affordable housing. Interviews with neither planning officials nor local builders indicated that Ponca City had a particularly difficult or time consuming permitting process. However, any improvement to the process targeted at development of Moderate and Affordable housing could result in increased housing of that type being offered.

This analyst has identified several locations within Ponca City that would be suitable for such a development, as bulleted below. These site locations were chosen strictly based upon perception of market acceptance. Land value and deal economics were both beyond the scope of this portion of the analysis. It should be noted that all of these sites are sized for relatively small subdivision developments. In order to obtain a larger site suitable for 200 or more lots, a developer may have to acquire a tract outside current Ponca City limits. Identified sites include:

• The Northwest corner of Waverly and Grand Avenue in the Southwest Ponca City market area. This site benefits from close proximity to both Lincoln Elementary School and the planned Ponca City Aquatic and Family Center. This site could also benefit Ponca City by providing new Affordable houses to an area of the city that has not seen significant new residential development.

• The vacant tract comprising the northern portion of North Meadowlark subdivision near Fifth Street and Prospect in the Northwest Ponca City market area. Because this site is located immediately adjacent to existing North Meadowlark, a potential new subdivision would benefit from the infrastructure efficiencies related to infill development. It would also provide residents close proximity to Airport Industrial Park employment and most of Ponca City’s newer retail.

• All vacant tracts surrounding the Huntington Place, Huntington North, and North Crest subdivisions in the northwest corner of Prospect and Pecan. Based on historical sales and permits, this is Ponca City’s most desirable are for Moderate priced homes. The area benefits from


52

proximity to Trout Elementary School. Creative land planning featuring smaller lots and slightly smaller homes could create new additional Moderate home sales opportunities for this section of the Northeast Ponca City market area.

• Higher density Affordable and Moderate homes could be built on the remaining lots within the Ranchwood Manor subdivision near Lake Road and Kygar in the Northeast Ponca City market area. This community was originally platted and subdivided for townhomes, and the use of creative and attractive exterior elevations could result in desirable attached or detached high density new homes priced within the Affordable category. The two pictures to the right illustrate both some of the current vacant lots in this subdivision as well as the most recent attached homes to be built within same.

• The tract in the southwest corner of Kygar Road and Hartford Avenue could be an attractive site for the development of a Moderate priced community in the Northeast Ponca City market area. The site benefits from upscale residential surroundings and close proximity to Lake Ponca and Wentz Park recreational amenities.


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Conclusion Ponca City is a small North Central Oklahoma city with a substantial industrial and employment base. In recent years it has seen employment growth greater in percentage than most other Oklahoma cities. However, its supply of new housing has not kept pace with this employment growth. While Ponca City’s current single family housing stock is largely well maintained and of high quality, it is also an older housing stock. 64% of homes sold in Ponca City over the last year were 41 years old or older. The majority of new housing currently being produced or planned for future development is within the Luxury price category as defined herein. The majority of Ponca City’s current and projected future residents are part of households with household incomes appropriate for Affordable or Moderate price category homes. Older resale homes within these price categories provide stiff competition to new homes, often leading builders to avoid these price categories. Ponca City also features an older multi‐family housing stock. New development is needed of this housing type as well. Significant opportunities for redevelopment of older housing exist in Ponca City’s oldest neighborhoods. This redevelopment can help satisfy Affordable housing needs that new construction may not be able to economically.

This Housing Study has endeavored to analyze employment, population and demographic trends in order to develop projections of new housing demand for the next ten year period and actionable recommendations to assist in increasing Ponca City’s housing stock as needed. The Oklahoma State Data Center projects Ponca City’s population to grow by 1,940 residents between 2005 and 2030. Projections based on more recent employment growth statistics from the Center for Applied Economics at Oklahoma State University indicate that Ponca City’s population could grow by between 595 and 2,001 households by 2018 alone. The majority of these households each represent a new home that will need to be developed in Ponca City within the next ten year period.

In conclusion, CDS is of the opinion that Ponca City’s housing demand projections for the next ten years will provide local housing industry participants significant opportunities. Some level of changes as to what sorts of homes are produced and how they are marketed may be necessary in order for participants to benefit fully from these opportunities.


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Qualifications of the Analyst

Lawrence A. Dean, Senior Market Analyst

Lawrence Dean Joined CDS Market Research in 2007 as a Senior Market Analyst. Prior to his affiliation with CDS, Mr. Dean was in strategic planning, land acquisition, and land development in the production homebuilding industry for a number of years. He began his career with KB Home as a Land Development Superintendant. He then worked for market leaders Royce Homes, D.R. Horton, and Kimball Hill ultimately achieving the position of Land Acquisition Manager for Kimball Hill responsible for land and lot acquisitions throughout the Houston area.

Over the years, Mr. Dean has gained a diversity of experience. He has consistently provided strategic market information to homebuilder regional leadership. He has regularly performed extensive analysis of the land/ lot and new home markets in the Houston area to support the divisional long term planning and annual business planning of his employers. He served as his employers’ “gatekeeper” to the Houston developer and broker community by rigorously assessing the land and lot acquisitions they proposed for market feasibility, financial feasibility, and business plan fit. He also leveraged market knowledge and relationships to proactively seek out residential land development and lot purchase opportunities that particularly fit his employers’ business goals and objectives. In addition to this specialization in residential land acquisition, he has also managed the land development process

from project conception to substantial completion of lots. Mr. Dean has also managed the disposition of underperforming lot assets, having contributed to the sale of over $7 million of lots on behalf of his homebuilder employers. Also, while pursuing his education, he gained exposure to the public sector interning in Urban Planning at the City, County, and Council of Governments levels as well as in Municipal Economic Development.

As Senior Market Analyst, Mr. Dean is responsible for managing a wide variety of market and economic studies. These include market and economic studies related to student housing, homebuilding, real estate development and redevelopment, land development, public / private partnerships, ultimately leading to recommendations for site selections and market supported development.

Mr. Dean has a Bachelor of Arts in Sociology from the University of Houston as well as a Masters of Urban Planning and Masters of Science in Land Development both from Texas A&M University in College Station, Texas. He has extensive background in market analysis, site selection analysis, acquisition analysis, and project management which has provided him with the tools required to excel in his current position at CDS. Mr. Dean is an active member of the Greater Houston Builders Association and the Urban Land Institute


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