Residential Market Potential Downtown Atlantic City Study Area City of Atlantic City Atlantic County, New Jersey September, 2013 Conducted by On Behalf of ZIMMERMAN/VOLK ASSOCIATES, INC. Casino Reinvestment Development Authority P.O. Box 4907 1014 Atlantic Avenue Clinton, New Jersey 08809 Atlantic City, New Jersey 08401
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Residential Market Potential
Downtown Atlantic City Study Area
City of Atlantic City Atlantic County, New Jersey
September, 2013 Conducted by On Behalf of ZIMMERMAN/VOLK ASSOCIATES, INC. Casino Reinvestment Development Authority P.O. Box 4907 1014 Atlantic Avenue Clinton, New Jersey 08809 Atlantic City, New Jersey 08401
ZIMMERMAN/VOLK ASSOCIATES, INC. P.O. Box 4907 Clinton, New Jersey 08809 908 735-6336 www.ZVA.cc • [email protected]
Research & Strategic Analysis
STUDY CONTENTS
RESIDENTIAL MARKET POTENTIAL 1
Introduction 1
Overview of Atlantic City and the Downtown Study Area 4
Market Potential for the City of Atlantic City 7 Where will the potential market for housing in the City of Atlantic City move from? 7 —The Draw Areas— 7
Market Potential for the Downtown Atlantic City Study Area 10 Where will the potential market for housing in the Downtown Study Area move from? 10 How many households have the potential to rent or purchase new or existing dwelling units within the Downtown Atlantic City Study Area each year over the next five years? 10 What are their housing preferences? 11 Table 1: Annual Potential Market for New Workforce and Market-Rate Higher- Density Housing Units 13
Target Market Analysis 14 Who is the potential market? 14 —The Target Markets— 14 Table 2: Annual Market Potential for Higher-Density Units by Household Type 21
The Current Context 22 What are the alternatives? 22 —Multi-Family Rental Properties— 22 Table 3: Summary of Selected Rental Properties 24 —Multi-Family and Single-Family Attached For-Sale Properties— 27 Table 4: Summary of Selected For-Sale Multi-Family and Single-Family Attached Developments 29 Table 5: Summary of Multi-Family and Single-Family Attached Units Currently For Sale 30
Rent and Price Ranges: The Downtown Atlantic City Study Area 37 What is the market currently able to pay? 38 —Rental Distribution— 38 Table 6: Target Groups for New Mixed-Income Multi-Family For-Rent 41 —For-Sale Distribution— 43 Table 7: Target Groups for New Mixed-Income Multi-Family For-Sale 45 Table 8: Target Groups for New Mixed-Income Single-Family Attached For-Sale 48 —General Rent and Price Ranges— 49 Table 9: Optimum Market Position—Workforce and Market-Rate Dwelling Units 50 How fast will the unit lease or sell? 51 —Market Capture— 51
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Downtown Atlantic City Study Area City of Atlantic City, Atlantic County, New Jersey September, 2013
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Downtown Housing Types 53
Downtown Housing Strategies, Policies, and Programs 56
Methodology 59
Assumptions and Limitations 70 Rights and Study Ownership 71
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ZIMMERMAN/VOLK ASSOCIATES, INC. P.O. Box 4907 Clinton, New Jersey 08809
R E S I D E N T I A L M A R K E T P O T E N T I A L
Downtown Atlantic City Study Area City of Atlantic City, Atlantic County, New Jersey
September, 2013
INTRODUCTION
The purpose of this study is to examine the depth and breadth of the market for new workforce and
market-rate dwelling units, both new construction as well as adaptive re-use of existing buildings,
that could be developed over the next several years within the Downtown Atlantic City Study Area.
For the purposes of this study, the Study Area boundaries include Florida Avenue from Turnpike
Road to the Boardwalk; the Boardwalk from Florida Avenue to Mississippi Avenue; Mississippi
Avenue from the Boardwalk to Pacific Avenue; Pacific Avenue from Mississippi Avenue to South
Carolina Avenue; South Carolina Avenue to Atlantic Avenue; Atlantic Avenue to New York Avenue;
New York Avenue to Baltic Avenue; Baltic Avenue to Martin Luther King Boulevard; Martin Luther
King Boulevard to Mediterranean Avenue; Mediterranean Avenue to Bacharach Boulevard;
Bacharach Boulevard to Ohio Avenue; Ohio Avenue to Baltic Avenue; from Baltic Avenue south of
the Convention Center crossing the Atlantic City Expressway to North Georgia Avenue; North
Georgia Avenue to Sunset Avenue; Sunset Avenue to Turnpike Road; and Turnpike Road to North
Florida Avenue. The Downtown Study Area lies within the newly-designated Atlantic City Tourism
District.
For purposes of this analysis, workforce housing units are those that are affordable to households
earning between $30,000 and $75,000 annually; market-rate units are those that are affordable to
households with annual incomes above $75,000.
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The depth and breadth of the potential market for new housing units within the Downtown Study
Area have been determined using Zimmerman/Volk Associates’ proprietary target market
methodology. In contrast to conventional supply/demand analysis—which is based on supply-side
dynamics and baseline demographic projections—target market analysis establishes the optimum
market position for new housing derived from the housing preferences and socio-economic
characteristics of households in the draw areas within the framework of the local housing market
context.
The target market methodology is particularly effective in defining realistic housing potential
because it encompasses not only basic demographic characteristics, such as income qualification and
age, but also less-frequently analyzed attributes such as mobility rates, lifestage, lifestyle patterns, and
household compatibility issues.
The current constrained market—characterized throughout most of the United States by weak
housing prices; higher than typical levels of unsold units, both builder inventory units as well as
foreclosed and/or abandoned houses; and high levels of mortgage delinquencies by speculators and
investors as well as homeowners—has resulted in restrictive development financing and mortgage
underwriting, taking a significant percentage of potential homebuyers out of the market. However,
contrary to typical performance during economic recessions with high unemployment levels, rental
occupancies have, in general, risen over the past year.
These market constraints do not reduce the size of the potential market; however, depending on the
timing of market entry, the initial percentage of the potential market able to overcome the
constraints of the deep recession and restrictive mortgage underwriting could be reduced.
The findings of this analysis reflect the impact on the Study Area of larger, national and regional
demographic and housing changes. The remarkable transformation of American households—
particularly the emerging predominance of one- and two-person households—over the past decade,
combined with steadily increasing traffic congestion and rising gasoline prices and home
heating/cooling costs, is contributing to significant changes in neighborhood and housing
preferences. A shift has become discernable away from single-family detached houses in lower-
density exurban locations to a diverse mix of apartments, townhouses, and higher-density detached
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houses in downtowns and in walkable, mixed-use neighborhoods. This fundamental transformation
of American households and housing is likely to continue for at least the next decade, representing
an unprecedented demographic foundation on which cities can re-build their downtowns and in-
town neighborhoods.
In brief, using the target market methodology, Zimmerman/Volk Associates determined:
• Where the potential renters and buyers for new workforce and market-rate housing
units in the Downtown Study Area are likely to move from (the draw areas);
• How many have the potential to move to the Downtown Study Area if appropriate
housing units were to be made available (depth and breadth of the market);
• What their housing preferences are in aggregate (rental or ownership, multi-family or
single-family);
• Who currently lives in the draw areas and what they are like (the target markets);
• What their alternatives are (other relevant housing in the Atlantic City area);
• What they will pay to live in the Downtown Study Area (workforce and market-rate
rents and prices); and
• How quickly they will rent or purchase the new units (absorption forecasts).
The target market methodology is described in detail in the METHODOLOGY section at the end of
this study.
NOTE: Tables 1 and 2, included in this document, contain summaries of the market potential and general market segments for new market-rate housing units created through adaptive re-use of existing buildings and/or new construction within the Downtown Atlantic City Study Area. Tables 3 through 5 provide the relevant supply-side context. Tables 6 through 10 outline the optimum market position, and the specific target household groups, for new workforce and market-rate housing units. The appendix tables, provided in a separate document, contain migration and target market data covering the appropriate draw areas for both the city and for the Downtown Atlantic City Study Area.
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OVERVIEW OF ATLANTIC CITY AND THE DOWNTOWN STUDY AREA
The City of Atlantic City, which covers just under 12 square miles, is an historic resort city located
in southern New Jersey. Originally founded as a seaside resort in the 1850s, the city began to
experience significant disinvestment after World War II, spurred by dramatic declines in tourism. In
1976, to encourage new development and redevelopment within the city, New Jersey passed the
Casino Gambling Referendum, and two years later, the first casino, Resorts International, opened to
the public. Today, the city is the location of 11 casinos, with a twelfth, Revel, which opened to the
public in 2012. Since 1984, when the Casino Reinvestment Development Authority was established
to direct the investment of the casino reinvestment funds, more than $1.5 billion has been spent on
projects in Atlantic City, including over $350 million on housing, resulting in the construction of
more than 1,500 housing units. In 2003 substantial new retail was introduced downtown when
Cordish Associates opened The Walk, the only outlet mall in South Jersey; the center now has more
than 100 stores and restaurants. Phase III is currently under construction, and plans for Phase IV,
Atlantic City Live, are under review.
Approximately 38,000 people work in the casinos; nearly 5,200 people are employed by Atlanticare.
Between 32 and 35 million visitors come to Atlantic City each year, to frequent the casinos, to
attend meetings and shows at the convention center, to shop at The Walk, and to stroll along the
Boardwalk and swim in the Atlantic Ocean. The city is the fifth largest tourist destination in the
country.
As of the 2010 Census, a total of 39,558 people lived in the city, a decline of 2.3 percent over the
city’s 2000 Census population of 40,517. Thirty-eight percent of the city’s residents were African-
American, just under 27 percent were white, 15.6 percent were Asian, and the remaining 20 percent
were some other race or mix of two or more races. More than 30 percent of the population were
Hispanic/Latino, predominantly Mexican and Puerto Rican.
In 2010, Atlantic City contained just over 20,000 housing units. The city’s median housing value is
estimated at $193,200 in 2013, approximately 13 percent higher than the national median home
value, but almost 12 percent lower than the Atlantic County median. More than 46 percent of the
city’s housing units were built before 1960; however, almost 12 percent have been built since 1990.
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Just over 15 percent of Atlantic City’s dwelling units are single-family detached, 15.7 percent are
single-family attached, 31.9 percent are units in large multi-family buildings of 50 units or more,
and the remainder are a mix of units in smaller multi-family buildings and duplexes. According to
the 2010 Census, just 28.6 percent of the city’s occupied housing units are owner-occupied, in part
because, compared to the median home value, median household incomes are very low.
The Atlantic City median household income is estimated at $28,700 in 2013, approximately 42
percent below the national median of $49,300, and more than 45 percent lower than the county
median of $52,500. Over 62 percent of the households that lived in the city in 2010 contained just
one or two persons, considerably higher than the national percentage (59 percent); the traditional
American family household—a married couple with children—represented only 12.5 percent of all
Atlantic City households, considerably below the national percentage of just over 22 percent.
Approximately 14.3 percent of all residents aged 25 or older held a college or advanced degree, a
share that was well below the national percentage of 27.7 percent. Over half percent of the city’s
residents aged 16 or more were employed in service/farm occupations, 35.3 percent in white-collar,
and 14.2 percent in blue-collar occupations. Approximately 9.7 percent of the population over 16
were estimated to be unemployed in 2011; another 40.6 percent were not in the labor force (not
employed and not looking for work, or retired).
As noted in the INTRODUCTION, for the purposes of this study, the Downtown Atlantic City Study
Area boundaries include Florida Avenue from Turnpike Road to the Boardwalk; the Boardwalk from
Florida Avenue to Mississippi Avenue; Mississippi Avenue from the Boardwalk to Pacific Avenue;
Pacific Avenue from Mississippi Avenue to South Carolina Avenue; South Carolina Avenue to
Atlantic Avenue; Atlantic Avenue to New York Avenue; New York Avenue to Baltic Avenue; Baltic
Avenue to Martin Luther King Boulevard; Martin Luther King Boulevard to Mediterranean Avenue;
Mediterranean Avenue to Bacharach Boulevard; Bacharach Boulevard to Ohio Avenue; Ohio
Avenue to Baltic Avenue; from Baltic Avenue south of the Convention Center crossing the Atlantic
City Expressway to North Georgia Avenue; North Georgia Avenue to Sunset Avenue; Sunset
Avenue to Turnpike Road; and Turnpike Road to North Florida Avenue.
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The Downtown Study Area occupies parts of the Third and Fourth Wards, and is surrounded by the
Ducktown, Uptown, and Westside neighborhoods. The Study Area also lies within the boundaries
of the newly-created Atlantic City Tourist District.
In addition to the ongoing development of The Walk, the Downtown Study Area includes two
potential areas for targeted redevelopment: the Arts and Cultural District—featuring the Dante Hall
and Boardwalk Hall venues—and the Eds-Meds Corridor, adjacent to Atlanticare Hospital, and
including the Atlantic Cape Community College, and the Carnegie Library Center of Richard
Stockton College. The Arts and Cultural District is focused on Mississippi Avenue from
Mediterranean Avenue to the Boardwalk, and it includes the blocks between Georgia and Missouri
Avenues. The Eds-Meds Corridor is a 14-and-a-half block area between New York and Ohio and
Pacific and Baltic Avenues.
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MARKET POTENTIAL FOR THE CITY OF ATLANTIC CITY
Analysis of migration, mobility and geo-demographic characteristics of households currently living
within defined draw areas is integral to the determination of the depth and breadth of the potential
market for newly-created workforce and market-rate housing units within the Downtown Atlantic
City Study Area.
American households, more than any other nation’s, have always been extraordinarily mobile. In
2010, because of the impact of the recession on household mobility, approximately 11 percent of
Atlantic City and Atlantic County households moved from one dwelling unit to another, a
considerably lower mobility rate than in previous years. In general, household mobility is higher in
urban areas; a greater percentage of renters move than owners; and a greater percentage of younger
households move than older households.
Where will the potential market for housing in the City of Atlantic City move from?
—The Draw Areas—
As derived from migration analysis—based on the most recent taxpayer records from the Internal
Revenue Service—the principal draw areas for new housing units within the Downtown Atlantic
City Study Area extends from the city and Atlantic County to include adjacent counties, and to
Philadelphia metropolitan area counties in New Jersey and Pennsylvania. This analysis also factors
in the market potential from households currently living in all other counties represented in Atlantic
County migration.
Analysis of the current residences of the employees and staff of the Atlanticare Medical Center and
several of the casinos located in Atlantic City provides additional support for the draw area
conclusions of the migration analysis. Of the hospital and casino employees included in the analysis,
approximately 13 percent currently live in the City of Atlantic City, approximately 75 percent
currently live in the balance of Atlantic County, approximately five percent currently live in Cape
May, Cumberland or Ocean Counties, and approximately seven percent currently live in Camden,
Gloucester, or Burlington Counties in New Jersey, or Philadelphia or Montgomery Counties, in
Pennsylvania.
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Based on these analyses, then, the draw areas for the City of Atlantic City and the Downtown
Atlantic City Study Area have been delineated as follows:
• The primary draw area, covering households with the financial capacities to rent or purchase
workforce or market-rate dwelling units currently living within the city limits of Atlantic
City.
• The local draw area, covering households with the financial capacities to rent or purchase
workforce or market-rate dwelling units currently living in the balance of Atlantic County.
• The regional draw area, covering households with the financial capacities to rent or purchase
workforce or market-rate dwelling units that are likely to move to the City of Atlantic City
from Cape May, Cumberland, and Ocean Counties.
• The Philadelphia draw area, covering households with the financial capacities to rent or
purchase workforce or market-rate dwelling units that are likely to move to the City of
Atlantic City from Camden, Gloucester, and Burlington Counties in New Jersey, and
Philadelphia and Montgomery Counties in Pennsylvania.
• The national draw area, covering households with the financial capacities to rent or purchase
market-rate dwelling units and with the potential to move to the City of Atlantic City from
all other U.S. counties (primarily counties on the East Coast).
As derived from the updated migration and mobility analyses, then, the draw area distribution of
market potential (those households with the potential to move within or to the City of Atlantic
City) is as shown on the following page (see also Appendix One, Table 9):
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ZIMMERMAN/VOLK ASSOCIATES, INC.
Market Potential by Draw Area City of Atlantic City, Atlantic County, New Jersey
City of Atlantic City (Primary Draw Area): 39.6% Balance of Atlantic County (Local Draw Area): 28.3% Cape May, Cumberland, and Ocean Counties (Regional Draw Area): 7.1% Camden, Gloucester, Burlington, Philadelphia, and Montgomery Counties (Philadelphia Draw Area): 8.4% Balance of US (National Draw Area): 16.6%
Total: 100.0%
SOURCE: Zimmerman/Volk Associates, Inc., 2013.
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MARKET POTENTIAL FOR THE DOWNTOWN ATLANTIC CITY STUDY AREA
Where will the potential market for housing in the Downtown Study Area move from?
The target market methodology also identifies those households with a preference for living in
downtowns and in-town neighborhoods. Therefore, after discounting for those segments of the
city’s potential market that would choose suburban and/or rural locations, the distribution of draw
area market potential for new and existing market-rate dwelling units within the Downtown Study
Area would be as follows (see also Appendix One, Table 10):
Market Potential by Draw Area THE DOWNTOWN ATLANTIC CITY STUDY AREA City of Atlantic City, Atlantic County, New Jersey
City of Atlantic City (Primary Draw Area): 26.2% Balance of Atlantic County (Local Draw Area): 26.9% Cape May, Cumberland, and Ocean Counties (Regional Draw Area): 10.0% Camden, Gloucester, Burlington, Philadelphia, and Montgomery Counties (Philadelphia Draw Area): 15.5% Balance of US (National Draw Area): 21.4%
Total: 100.0%
SOURCE: Zimmerman/Volk Associates, Inc., 2013.
The regional, Philadelphia, and national draw areas represent much larger proportions of market
potential for new housing in the Downtown Study Area (a combined 47 percent) than for the city as
a whole (a combined 22 percent). Conversely, households already living in the City of Atlantic
represent a considerably smaller segment of market potential for the Downtown Study Area (26.2
percent) than for the city as a whole (39.6 percent).
How many households have the potential to rent or purchase new or existing dwelling units within the Downtown Atlantic City Study Area
each year over the next five years?
As determined by the target market methodology, which accounts for household mobility within the
City of Atlantic City and the balance of Atlantic County, as well as migration and mobility patterns
for households currently living in all other cities and counties, over the next five years an annual
average of approximately 1,545 younger singles and couples, empty nesters and retirees, and
traditional and non-traditional families represent the potential market for new or existing housing
units within the Downtown Study Area.
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However, not all of those 1,545 households can afford either workforce or market-rate housing
units. Applicable workforce income ranges can vary depending on household size—based on the
Atlantic City-Hammonton MSA Area Median Family Income of $71,100 for a four-person
household—and whether the units are rental or for-sale. For example, a single-person household
earning between $30,000 and $75,000 per year would fall between approximately 60 percent and
150 percent of the Atlantic City AMI. At the same income range, a two-person household would fall
between approximately 55 percent and 132 percent AMI; a three-person household would fall
between approximately 47 percent and 117 percent AMI; and so on.
In nearly every U.S. market, renter households with annual incomes at or below 30 percent of the
AMI typically can afford only subsidized public housing units; households with incomes between 30
and 50 percent AMI are also only able to afford the least expensive rental housing. Low-income
housing tax credits, typically used to provide affordable and workforce rental housing, are restricted
to projects where at least 20 percent of the households would earn no more than 50 percent of the
AMI, calculated by household size, and at least 40 percent would earn no more than 60 percent of
the AMI; the remaining 40 percent would potentially have no income limitations. On the for-sale
side, it is nearly impossible for households with annual incomes at or below 50 percent of the AMI to
qualify for mortgages, even with heavily-subsidized down payments.
Therefore, this analysis focuses only on households with annual incomes above 50 percent of the
AMI.
What are their housing preferences?
From the perspective of draw area target market propensities and compatibility, and within the
context of the new housing marketplace in the Atlantic City market area, the potential market for
new housing units within the Study Area could include the full range of housing types, from rental
multi-family to for-sale single-family detached. However, downtown development should
concentrate on the highest-density housing types, including redevelopment or adaptive re-use of
existing buildings, which support urban development and redevelopment most efficiently and
provide the greatest fiscal, economic and social/lifestyle benefit.
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The housing preferences of those 1,145 draw area households with incomes of at least 50 percent of
the AMI are outlined as follows (see also Table 1):
Annual Potential Market for New and Existing Higher-Density Housing Units THE DOWNTOWN ATLANTIC CITY STUDY AREA City of Atlantic City, Atlantic County, New Jersey
NUMBER OF PERCENT HOUSING TYPE HOUSEHOLDS OF TOTAL
These 1,145 households account just under a third of the 3,610 households that represent the
annual potential market for new and existing units citywide, and indicate the depth of the potential
market for new housing units within the Downtown Study Area, not housing need and not
projections of household change. These are the households that are likely to move within or to the
Downtown Study Area if appropriate housing options were to be made available and favorable
economic factors are in place.
Casino and Atlanticare employees are likely to represent between 15 and 25 percent of the potential
market for new housing within the Downtown Study Area, particularly those currently living outside
of Atlantic County. Although between 85 and 90 percent of the approximately 38,000 casino and
hospital employees currently live in either the City of Atlantic City or in Atlantic County, an
estimated 3,800 to 5,700 employees currently live outside the county. Based on employee
demographics, it is likely that at least five percent of these employees—or 190 to 285 employees per
year—would be likely to move to the Downtown Study Area if appropriate housing options were to
be made available.
Table 1
Annual Potential Market For New Workforce And Market-Rate Higher-Density Housing UnitsDistribution Of Annual Average Number Of Households With The Potential
To Move To The Downtown Atlantic City Study Area Each Year Over The Next Five YearsBased On Housing Preferences And Income Levels
The Downtown Atlantic City Study AreaCity of Atlantic City, Atlantic County, New Jersey
Atlantic City, Balance of Atlantic County, Regional Draw Area, Philadelphia Draw Area, and Balance of USDraw Areas
Average Annual Number Of HouseholdsWith Potential To Rent/Purchase Within
The City of Atlantic City 3,610
Average Annual Number Of HouseholdsWith Potential To Rent/Purchase Within The Downtown Atlantic City Study Area 1,145
NOTE: The names and descriptions of the market groups summarize each group’s tendencies—as determined through geo-demographic cluster analysis—rather than their absolute composition. Hence, every group could contain “anomalous” households, such as empty-nester households within a “full-nest” category.
SOURCE: Zimmerman/Volk Associates, Inc., 2013.
(Reference APPENDIX THREE, TARGET MARKET DESCRIPTIONS, for detail on each target group.)
The mix of households often progresses during the establishment of downtown living. In city after
American city, the successful establishment of new market-rate housing options in previously non-
residential areas has often been initially dependent upon “risk-oblivious” households. “Risk-
oblivious” households are mostly young singles and couples, often with a large contingent of gays
and a high percentage of artists and artisans seeking inexpensive space for combined living and
working. These pioneers will often begin neighborhood transformation by living illegally in
commercial space. Eventually, once the area becomes populated, restaurants, bars, clubs and unique
or unusual retail establishments begin to define the neighborhood character and raise its profile. At
this point, these neighborhoods become sought after by “risk-tolerant” households. “Risk-tolerant”
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households are also usually young and almost always childless. The “risk-tolerant” includes those
willing to make investments in ownership housing—sometimes they are the former “risk oblivious”
seeking to recoup years of sweat equity.
In every case, however, the neighborhood established by these households has grown to encompass
more than simply housing; its flavor and tone has been reinforced by the non-residential uses—avant
garde shops, cutting-edge galleries, trendy clubs, and stylish eating and drinking establishments—
that follow the risk-oblivious and risk-tolerant households, make the neighborhood acceptable for
the “risk-aware” households that follow and contribute to the area’s residential rent/price escalation.
The target market analysis indicates that there is a growing number of risk-oblivious and risk-
tolerant households who already live within the city limits, and a significant market with the
potential to move from outside the city and county limits.
Table 2
Annual Market Potential For Higher-Density Units By Household TypeDistribution Of Annual Average Number Of Households With The Potential
To Move To The Downtown Atlantic City Study Area Each Year Over The Next Five YearsThe Downtown Atlantic City Study Area
City of Atlantic City, Atlantic County, New Jersey
Traditional &Non-Traditional Families 10% 10% 1% 21%
YoungerSingles & Couples 73% 79% 73% 60%
100% 100% 100% 100%
Note: As of March 2009, Fort Wayne MSA Median Family Income for a family of four is $63,300.The Atlantic City-Hammonton MSA Area Median Family Income (AMI) is $71,100 for a family of four in 20011.
SOURCE: Nielsen Claritas, Inc.;Zimmerman/Volk Associates, Inc.
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THE CURRENT CONTEXT
What are the alternatives?
—Multi-Family Rental Properties—
Zimmerman/Volk Associates has assembled data from a variety of sources, including on-site field
investigation, augmented by telephone follow-up and internet research, on several larger rental
properties, representing more than 3,000 rental apartments in and around Atlantic City. (See Table
3.) Some of these properties are investment-grade assets: all were built before 2000, and all have 150
or more units. A large number are at functional full occupancy, with five percent or less vacant
units. There are also numerous small properties, rented condominiums and single-family houses
scattered throughout the Atlantic City area where rents per square foot tend to be lower than those
at professionally-managed properties.
Three properties are located in Atlantic City. Metropolitan Plaza, a 191-unit high-rise located on
Rhode Island Avenue, had only two vacant units as of the update in September, both of which have
been re-leased. The property contains 191 one- and two-bedroom units in the high-rise building,
and 24 two- to four-bedroom units in townhouse configurations. Rents range from $665 per month
for a 597-square-foot one-bedroom to $926 per month for a 1,428-square-foot four-bedroom unit
($0.65 to $1.07 per square foot). Income-qualified residents using Section 8 vouchers occupy 20
percent of the units.
Rents for studios start at $690 per month for 456 square feet of living space ($1.51 per square foot)
at The High Gate Apartments, a 14-story high-rise building located on Absecon Boulevard, and
reach $800 per month for a 620-square-foot one-bedroom unit ($1.29 per square foot). The High
Gate was built in 1983 as the Marina Club Condominiums, and some of the units are owned.
Chelsea Village is a 261-unit low-rise property located on Fairmount Avenue. One-bedroom/one-
bath apartments start at $850 per month for a 495-square-foot unit ($1.72 per square foot), 580-
square-foot, two-bedroom/one-bath apartments rent for $1,050 to $1,075 ($1.81 to $1.85 per
square foot), and three-bedroom/one bath units range between $1,250 to $1,275 per month ($1.42
to $1.45 per square foot). At the time of the field investigation, the property was 92 percent
occupied.
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The Marina Del Rey apartments, built in the 1950s, are located in nearby Pleasantville. The
property, which contains 232 units, is almost fully occupied, with 98 percent of the unit leased.
Rents range from $720 to $780 per month for 616-square-foot one-bedroom/one-bath apartments
($1.17 to $1.27 per square foot) and from $820 to $880 per month for 729-square-foot two-
bedroom/one-bath apartments ($1.12 to $1.21 per square foot). In Absecon, two large properties,
the 416-unit Landings and the 228-unit California Apartments, have a number of vacancies. At
The Landings, curently 85 percent occupied, monthly rents range from $865 for a 900-square-foot
one-bedroom to $1,035 for an 1,175-square-foot two-bedroom ($0.88 to $1.10 per square foot, the
lowest rents per square foot of the properties included in the survey). At California Apartments,
currently 94 percent occupies, rents range from $970 per month for a one-bedroom apartment
containing 868 square foot to $1,165 for a two-bedroom/one-and-a-half bath apartment containing
1,128 square feet ($1.03 to $1.12).
Several large apartment properties built between 2000 and 2008 are located further inland, in Mays
Landing, and Galloway: Hamilton Greene and Evergreen at Timber Glen in Mays Landing; and
Sunrise Bay and the Woods at Blue Heron Pines in Galloway Township. In general, one-
bedroom rents at these properties range from $850 to $1,435 per month for one-bedroom units
ranging in size from 575 to 1,056 square feet ($1.10 to $1.48 per square foot) and $1,115 to $1,510
for two-bedroom apartments containing between 850 and 1,559 square feet (approximately $1.02 to
$1.32). Two- and three-bedroom townhouses, ranging in size from 1,144 to 2,226 square feet of
living space carry rents of $1,315 to $2,150 per month ($1.01 to $1.47 per square foot). These
suburban properties contain significant amenities, ranging from clubhouse, pool, fitness center,
business center, and a playground.
Table 3 Page 1 of 3
Summary Of Selected Rental PropertiesAtlantic City Market Area, New Jersey
September, 2013
Number Unit Base Unit Rents per Occupancy/Property of Units Type Rent Sizes Sq. Ft. Other InformationAddress
. . . . . Atlantic City . . . . .
Metropolitan Plaza (1988) 191 99%145 S. Rhode Island Avenue Hi-rise. 1br/1ba $665 597 $1.11 Vouchers accepted.AIMCO Management 2br/2ba $802 807 $0.99 20% voucher units.
The High Gate (1983) 158 99%655 Absecon Boulevard Studio $690 456 $1.51 Fitness center,Lakewood Highgate 1br/1ba $760 to 605 to $1.26 to concierge.{also Marina Club condominiums) $800 620 $1.29
Chelsea Village 261 92%(Remodeled 2008) 1br/1ba $850 to 495 $1.72 to Playground.3300 Fairmount Avenue $875 $1.77Beacon Property Management 2br/1ba $1,050 to 580 $1.81 to
$1,075 $1.853br/1ba $1,250 to 880 $1.42 to
$1,275 $1.45
. . . . . Pleasantville . . . . .
Marina Del Rey (1950s) 232 98%112 Atlantic Avenue 1br/1ba $720 to 616 $1.17 to Fitness center, spa, Community Realty Management $780 $1.27 Fitness center.
2br/1ba $820 to 729 $1.12 to pool, spa.$880 $1.21 Income restricted
. . . . . Absecon . . . . .
The Landings at Absecon 416 85%(Remodeled 2008) 1br/1ba $865 to 900 $0.96 to Fitness center,800 Falcon Drive $990 $1.10 spa, pool,Morgan Properties 2br/2ba $1,015 to 1,125 to $0.88 to business center.
$1,035 1,175 $0.90
SOURCE: Zimmerman/Volk Associates, Inc.
Table 3 Page 2 of 3
Summary Of Selected Rental PropertiesAtlantic City Market Area, New Jersey
September, 2013
Number Unit Base Unit Rents per Occupancy/Property of Units Type Rent Sizes Sq. Ft. Other InformationAddress
. . . . . Absecon (continued) . . . . .
California Apartments 228 94%(Remodeled 2009) 1br/1ba $970 868 $1.12 Clubhouse,400 Manor Drive 2br/1ba $1,215 1,128 $1.08 pool, tennis,The Manor Group 2br/1.5ba $1,165 1,128 $1.03 playground.
. . . . . Mays Landing . . . . .
Hamilton Greene 416 98%(Remodeled 2000) 1br/1ba $1,145 to 814 to $1.41 to Fitness center,3401 Montgomery Drive $1,435 862 $1.66 clubhouse, pool,Scully Company 2br/2ba $1,230 to 935 to $1.32 to tennis, hot tub,.
$1,335 1,042 $1.28 basketball courts.2br/2.5ba TH $1,315 to 1,130 $1.16 to
$1,665 $1.473br/2.5ba TH $1,565 to 1,325 $1.18 to
$1,775 $1.34
Evergreen at Timber 498 80%Glen (2008) 2br/2ba $1,275 to 1,164 to $1.10 to Playground, pool,2000 Timber Glen Drive $1,419 1,210 $1.17 tennis courts,Edgewood Properties 2br/2.5ba $1,490 1,454 $1.02 to clubhouse,
$1,510 $1.04 fitness center,2br/2.5ba TH $1,605 to 1,420 to $1.13 to business center.
$1,655 1,480 $1.173br/2.5ba TH $1,700 to 1,660 to $1.02 to
$1,825 1,750 $1.10
SOURCE: Zimmerman/Volk Associates, Inc.
Table 3 Page 3 of 3
Summary Of Selected Rental PropertiesAtlantic City Market Area, New Jersey
September, 2013
Number Unit Base Unit Rents per Occupancy/Property of Units Type Rent Sizes Sq. Ft. Other InformationAddress
. . . . . Galloway Township . . . . .
Sunrise Bay 325 93%(Remodeled 2008) 1br/1ba $850 to 575 to $1.24 to Pool, playground,180 Walden Way $965 777 $1.48 fitness center,Edgewood Properties 2br/2ba $1,115 to 850 to $1.11 to clubhouse,
$1,180 1,065 $1.31 business center.2br/2ba TH $1,250 to 1,144 $1.09 to
$1,390 $1.222br/2.5ba TH $1,305 to 1,242 to $1.01 to
$1,450 1,436 $1.053br/1.5ba TH $1,340 1,144 $1.173br/2.5ba TH $1,390 to 1,436 to $0.87 to
$1,400 1,615 $0.97
The Woods at 330 99% Blue Heron Pines (2001) 1br/1ba $1,335 to 1,056 $1.26 to Clubhouse, pool,1000 Bally Bunion Drive $1,435 $1.36 fitness center,DiLucia Management Corp. 2br/2ba $1,555 to 1,309 $1.19 to business center,
$1,655 $1.26 $100 premiums2br/2ba-double master bd $1,685 1,513 $1.11 for water views.
2br/2ba - Loft $1,675 1,559 $1.073br/2ba $1,675 to 1,559 $1.07 to
$1,775 $1.143br/2.5ba TH $2,050 to 2,226 $0.92 to
$2,150 $0.97
SOURCE: Zimmerman/Volk Associates, Inc.
RESIDENTIAL MARKET POTENTIAL Page 27 Downtown Atlantic City Study Area City of Atlantic City, Atlantic County, New Jersey September, 2013
ZIMMERMAN/VOLK ASSOCIATES, INC.
—Multi-Family and Single-Family Attached and Detached For-Sale Properties—
Zimmerman/Volk Associates has assembled data through field investigation, telephone and internet
research on the few for-sale properties currently marketing new units, representing just under 1,000
new apartments, townhouses, and single-family detached houses in the Atlantic City market area,
and on the several older condominium buildings in and around Downtown Atlantic City with a
total of over 150 resales on the market in September 2013. (See Tables 4 and 5.) Throughout the
market area, those for-sale properties that were either introduced or had not completed sales in 2007
or later, were severely affected by the collapse of the housing market, as numerous buyers cancelled
reservations or were unable to qualify for mortgages. In response, a number of existing properties
discontinued marketing or are leasing unsold units, and several planned properties have not
commenced construction.
In Atlantic City, the 200-unit Bella Condominiums, by Scannapieco Development, has sold 136
units, an average of approximately 1.5 units per month, since opening in December 2005. The two-
bedroom/two-bath units currently for sale are priced at $290,000 to $370,000 for 1,060- to 1,128-
square-foot units ($274 to $349 per square foot), depending on floor. A total of 63 of the Chelsea
View townhouses, developed by Renaissance Properties, have been sold. The three-bedroom/three-
bath units contain between 2,117 and 2,547 square feet and are currently priced at $294,900 to
$479,990 ($139 to $188 per square foot). Sales have averaged just under one unit per month since
opening in 2007.
In West Atlantic City, K. Hovnanian’s Bayport on Lake’s Bay is a 131-unit townhouse property
located on Bayport Drive. The property, which opened in 2008, has sold 94 units, for an average
sales pace of 1.5 units per month. The two-bedroom/three-and-a-half-bath units range in size from
1,489 to 2,020 square feet and in price from $159,900 to $179,900, or $89 to $107 per square foot.
Three single-family subdivisions are currently being marketed, two in May’s Landing and one in Egg
Harbor Township. Eaglesmere, a 107-lot property on Rue Chagal in May’s Landing, is being built
by Ryan Homes. A total of 93 of the houses had been sold as of September 2013 update, for an
average sales pace of 1.6 units per month; base prices range from $209,990 to $279,990 for houses
containing 1,402 to 2,760 square feet ($101 to $150 per square foot).
RESIDENTIAL MARKET POTENTIAL Page 28 Downtown Atlantic City Study Area City of Atlantic City, Atlantic County, New Jersey September, 2013
ZIMMERMAN/VOLK ASSOCIATES, INC.
Another national builder, Lennar Homes, is developing Cedar Pointe, 176 single-family houses on
quarter-acre lots on Darby Lane, also in May’s Landing. Base prices range from $268,950 to
$347,950 for houses containing between 1,643 to 3,719 square feet ($94 to $164 per square foot).
Lennar has sold 151 of the houses since opening for sales in 2008, for an average of 2.5 units per
month.
Finally, Ryan Homes is also selling detached houses at The Enclave, a subdivision within
Renaissance at Silver Oaks in Egg Harbor Township. Base prices range from $239,990 to $294,990
for 1,680- to 2,822-square-foot houses ($105 to $143); 160 of the total 240 units planned have been
sold since the opening in 2009, for an average sales pace of 3.3 units per month.
Several condominium buildings located in Atlantic City have multiple resale units available. Resale
asking prices at the Ritz on the Boardwalk range from $75,000 for a 392-square-foot studio to
$325,000 for a two-bedroom/two-bath unit; at the time of the update, 26 units in the building were
on the market, most of which have been offered for sale in 2013.
Eight resale units are available at the Atlantic Palace, also on the Boardwalk. Asking prices range
between $79,000 for a 400-square-foot studio to $270,000 for a two-bedroom/two-bath flat.
More than 20 units are on the market at The Warwick, with asking prices starting at $79,900 for a
studio to $175,000 for a one-bedroom flat. Resale prices per square foot range between $148 and
$256.
The most expensive resales are at the Ocean Club, a 1984 tower with 37 condominiums on the
market as of September 2013. Asking prices range from $149,000 for an 623-square-foot, studio
apartment to $2,150,000 for a 3,300-square-foot, four-/bedroom/four-bath penthouse. Prices per
square foot range between $235 per square foot to more than $650 per square foot. Many of these
units have been on the market for less than a year, although one unit has been for sale for more than
four years.
Table 4
Summary Of Selected For-Sale Multi-Family AndSingle-Family Attached And Detached Unit Developments
Atlantic City Market Area, New JerseySeptember, 2013
Unit Unit Price Unit Size Price Per Total Sold toDevelopment Type Range Range Sq. Ft. Units DateDeveloper/Address
. . . . . Atlantic City . . . . .
Bella (12/05) CO 200 136 (1.5)526 Pacific Avenue 2br/2ba $290,000 † 1,060 $274 {units for saleScannapieco Development $340,000 † 1,128 $301 and for rent}
$350,000 † 1,060 $330$370,000 † 1,060 $349
Chelsea View (2007) TH 75-80 63 (0.9)Chelsea Court 3br/2.5ba $294,900 to 2,117 to $139 to {leasingRenaissance Properties $479,990 2,547 $188 unsold units}
. . . . . West Atlantic City . . . . .
Bayport on Lake's Bay TH 131 94 (1.5){2008} 2br/3.5ba $159,900 to 1,489 to $89 to
Bayport Drive $179,900 2,020 $107K. Hovnanian
. . . . . May's Landing . . . . .
Eaglesmere (2008) SF 107 93 (1.6)22 Rue Chagall 0.25 acre $209,990 to 1,402 to $101 toRyan Homes $279,990 2,760 $150
Cedar Point (2008) SF 176 151 (2.5)45 Darby Lane 0.25 acre $268,950 to 1,643 to $94 toLennar Homes $347,950 3,719 $164
. . . . . Egg Harbor Township . . . . .
Renaissance at Silver Oaks 240 160 (3.3) The Enclave (2009) SF $239,990 to 1,680 to $105 toRidge Avenue 0.25 to $294,990 2,822 $143Ryan Homes 0.3 acre
† Spec or model units.
SOURCE: Zimmerman/Volk Associates, Inc.
Table 5 Page 1 of 5
Summary of Multi-Family And Single-Family Attached Units Currently For SaleAtlantic City Market Area, New Jersey
September, 2013
Year Asking Unit Price Date Property Built Price Size psf Configuration ListedAddress
Condominiums
The Ritz 1920 $75,000 392 $191 Studio/1ba April, 20122721 Boardwalk $79,000 349 $226 Studio/1ba September, 2012
Note: The Atlantic City-Hammonton MSA Area Median Family Income (AMI) is $71,100 for a family of four in 20011.
SOURCE: Nielsen Claritas, Inc.;Zimmerman/Volk Associates, Inc.
RESIDENTIAL MARKET POTENTIAL Page 49
Downtown Atlantic City Study Area City of Atlantic City, Atlantic County, New Jersey September, 2013
ZIMMERMAN/VOLK ASSOCIATES, INC.
—General Rent and Price Ranges—
Based on the tenure and unit preferences of draw area households and their income and financial
capabilities, the general range of rents and prices for newly-developed residential units—new
construction, redevelopment, or adaptive re-use—that could currently be sustained by the target
markets for the Downtown Atlantic City Study Area is as follows (see also Table 9):
General Rent, Price and Size Ranges Newly-Created Housing (Adaptive Re-Use and New Construction)
THE DOWNTOWN ATLANTIC CITY STUDY AREA City of Atlantic City, Atlantic County, New Jersey
RENT/PRICE SIZE RENT/PRICE HOUSING TYPE RANGE RANGE PER SQ. FT.
FOR-RENT (MULTI-FAMILY)—
Hard Lofts * $600–$1,450/month 450–1,000 sf $1.33–$1.45 psf
Soft Lofts † $675–$1,650/month 500–1,100 sf $1.35–$1.50 psf
Luxury Apartments $1,150–$2,000/month 750–1,200 sf $1.53–$1.67 psf
FOR-SALE (MULTI-FAMILY)—
Hard Lofts * $110,000–$170,000 600–1,100 sf $155–$183 psf
Soft Lofts † $125,000–$200,000 650–1,200 sf $167–$192 psf
Luxury Condominiums $225,000–$300,000 1,000–1,450 sf $207–$225 psf
FOR-SALE (SINGLE-FAMILY ATTACHED)—
Townhouses $195,000–$350,000 950–1,750 sf $200–$205 psf
* Unit interiors of “hard lofts” typically have high ceilings and commercial windows and are either minimally finished, limited to architectural elements such as columns and fin walls, or unfinished, with no interior partitions except those for bathrooms.
† Unit interiors of “soft lofts” may or may not have high ceilings and are fully finished, with the
interiors partitioned into separate rooms, and typically contain architectural elements reminiscent of “hard lofts,” e.g.—exposed ductwork, scored and polished concrete floors, and commercial brushed stainless hardware.
SOURCE: Zimmerman/Volk Associates, Inc., 2013.
The aforementioned rents and prices are in year 2013 dollars, are exclusive of consumer options and
upgrades, or floor or location premiums, and cover a broad range of rents and prices for newly-
developed units currently sustainable by the market in the Downtown Atlantic City Study Area.
Parking is not included in the rents or prices.
Table 9
Optimum Market Position--Workforce and Market-Rate Dwelling UnitsThe Downtown Atlantic City Study Area
City of Atlantic City; Atlantic County, New JerseySeptember, 2013
Base Base Base AnnualPercent of Rent/Price Unit Size Rent/Price Market
Units Housing Type Range* Range Per Sq. Ft.* Capture
45.9% Multi-Family For-Rent 124to
Hard Lofts {Adaptive Re-Use} $600 to 450 to $1.33 to 148Open Floorplans/1ba $1,450 1,000 $1.45 units
Soft Lofts {New Construction} $675 to 500 to $1.35 toStudios to Two-Bedrooms $1,650 1,100 $1.50
Luxury Apartments $1,150 to 750 to $1.53 to{New Construction} $2,000 1,200 $1.67
One- and Two-Bedrooms
28.8% Multi-Family For-Sale 28to
Hard Lofts {Adaptive Re-Use} $110,000 to 600 to $155 to 32Open Floorplans/1ba $170,000 1,100 $183 units
Soft Lofts {New Construction} $125,000 to 650 to $167 toOne- and Two-Bedrooms $200,000 1,200 $192
Luxury Condominiums $225,000 to 1,000 to $207 to{New Construction} $300,000 1,450 $225
Two-Bedrooms
25.3% Single-Family Attached For-Sale 24to
Townhouses $195,000 to 950 to $200 to 28Two- and Three-Bedrooms $350,000 1,750 $205 units
100.0% 176to
208units
NOTE: Base rents/prices in year 2013 dollars and exclude floor and view premiums, options and upgrades.
SOURCE: Zimmerman/Volk Associates, Inc.
RESIDENTIAL MARKET POTENTIAL Page 51
Downtown Atlantic City Study Area City of Atlantic City, Atlantic County, New Jersey September, 2013
ZIMMERMAN/VOLK ASSOCIATES, INC.
For the most part (and depending on location), these rents and prices cannot be achieved by the
development of one or two infill units, but require that projects be of sufficient size to achieve
development efficiency, to have a significant perceived impact on its locale, and to support a high-
profile marketing campaign. Location will also have a significant influence on rents and prices.
How fast will the units lease or sel l?
—Market Capture—
As noted previously in this study, the current constrained market is characterized in many locations
by reduced housing prices, high levels of unsold units, high levels of mortgage delinquencies and
foreclosures, and restrictive mortgage underwriting and development finance. Partly as a result,
there has been a significant shift in market preferences from home ownership to rental dwelling
units, particularly among younger households. This results in a higher share of consumer preference
for multi-family rentals even among relatively affluent consumers than would have been typical just
three years ago.
Given current economic conditions, which are not likely to improve significantly for new for-sale
housing over the near term, Zimmerman/Volk Associates has determined that an annual capture of
approximately eight to 10 percent of the potential market for each for-sale housing type could be
achievable over the next five years. (Nationally, prior to the housing collapse in 2008, new dwelling
units represented 15 percent of all units sold; in the first quarter of 2011, new dwelling units
represented just 8.5 percent of all units sold.)
In contrast to the constrained for-sale housing conditions, Zimmerman/Volk Associates has
determined that for new multi-family rentals, an annual capture of 25 to 30 percent of the potential
market is likely to be achievable.
Based on these market capture forecasts, the Downtown Atlantic City Study Area should be able to
support between 176 to 208 new workforce and market-rate housing units per year over the next five
years, as follows:
RESIDENTIAL MARKET POTENTIAL Page 52
Downtown Atlantic City Study Area City of Atlantic City, Atlantic County, New Jersey September, 2013
ZIMMERMAN/VOLK ASSOCIATES, INC.
Annual Capture of Market Potential THE DOWNTOWN ATLANTIC CITY STUDY AREA City of Atlantic City, Atlantic County, New Jersey
NUMBER OF NUMBER OF ANNUAL HOUSING TYPE HOUSEHOLDS NEW UNITS CAPTURE RATE
Rental Multi-Family 525 124 to 23.6% to (lofts/apartments, leaseholder) 148 28.1%
For-Sale Multi-Family 330 28 to 8.5% to (lofts/apartments, condo/co-op ownership) 32 9.7%
For-Sale Single-Family Attached 290 24 to 8.3% to (townhouses/live-work, fee-simple ownership) 28 8.7%
Total 1,145 176 to 208 units
SOURCE: Zimmerman/Volk Associates, Inc., 2013.
These capture rates are well within the target market methodology’s parameters of feasibility.
NOTE: Target market capture rates are a unique and highly-refined measure of feasibility. Target market capture rates are not equivalent to—and should not be confused with—penetration rates or traffic conversion rates.
The target market capture rate is derived by dividing the annual forecast absorption—in aggregate and by housing type—by the number of households that have the potential to purchase or rent new housing within a specified area in a given year.
The penetration rate is derived by dividing the total number of dwelling units planned for a property by the total number of draw area households, sometimes qualified by income.
The traff ic conversion rate is derived by dividing the total number of buyers or renters by the total number of prospects that have visited a site.
Because the prospective market for a location is more precisely defined, target market capture rates are higher than the more grossly-derived penetration rates. However, the resulting higher capture rates are well within the range of prudent feasibility.
This analysis examines market potential over the near term. Because of the dramatic changes in the
composition of American households that has occurred since the 1990s (see again TARGET MARKET
ANALYSIS above), and the likelihood that significant changes will continue, both the depth and
breadth of the potential market for downtown living is likely to continue to grow. The experience of
other American cities has been that, once the downtown residential alternative has been securely
established, the percentage of households that will consider downtown housing typically increases.
RESIDENTIAL MARKET POTENTIAL Page 53
Downtown Atlantic City Study Area City of Atlantic City, Atlantic County, New Jersey September, 2013
ZIMMERMAN/VOLK ASSOCIATES, INC.
DOWNTOWN HOUSING TYPES
Building and unit types most appropriate for the Downtown Atlantic City Study Area include:
• Courtyard Apartment Building: In new construction, an urban, pedestrian-oriented
equivalent to conventional garden apartments. An urban courtyard building is three or more
stories, often combined with non-residential uses on the ground floor. The building should
be built to the sidewalk edge and, to provide privacy and a sense of security, the first floor
should be elevated significantly above the sidewalk. Initially, parking is likely to be at grade
behind or interior to the building.
The building’s apartments can be leased, as in a conventional income property, or sold to
individual buyers, under condominium or cooperative ownership, in which the owner pays a
monthly maintenance fee in addition to the purchase price.
• Loft Apartment Building: Either adaptive re-use of older warehouse or manufacturing
buildings or a new-construction building type inspired by those buildings. The new-
construction version usually has double-loaded corridors.
Hard Lofts: Unit interiors typically have high ceilings and commercial windows and are
minimally finished (with minimal room delineations such as columns and fin walls), or
unfinished (with no interior partitions except those for bathrooms).
Soft Lofts: Unit interiors typically have high ceilings, are fully finished and partitioned into
individual rooms. Units may also contain architectural elements reminiscent of “hard lofts,”
such as exposed ceiling beams and ductwork, concrete floors and industrial finishes,
particularly if the building is an adaptive re-use of an existing industrial structure.
The building’s loft apartments can be leased, as in a conventional income property, or sold to
individual buyers, under condominium or cooperative ownership, in which the owner pays a
monthly maintenance fee in addition to the purchase price. (Loft apartments can also be
incorporated into multifamily buildings along with conventionally-finished apartment
units.)
RESIDENTIAL MARKET POTENTIAL Page 54
Downtown Atlantic City Study Area City of Atlantic City, Atlantic County, New Jersey September, 2013
ZIMMERMAN/VOLK ASSOCIATES, INC.
• Liner Building: An apartment building with apartments and/or lofts lining two to four sides
of a multi-story parking structure. Units are typically served from a single-loaded corridor
that often includes access to parking. Ground floors typically include a traditional apartment
lobby and can also include maisonette apartments, retail or some combination of the two.
• Maisonette Apartment: An apartment that is integral to a multifamily apartment building,
but that includes a private, individual entrance at street level. When sited with shallow
setbacks, the entrance to the apartment on the first floor is elevated above sidewalk level to
provide privacy and a sense of security.
• Podium Building: A small-scale apartment building construction type with two or more
stories of stick-frame residential units (lofts or apartments) built over a single level of above-
grade structured parking, usually constructed with reinforced concrete. With a well-
conceived street pattern, a podium building can include ground-level non-residential uses
lining one or more sides of the parking deck.
• Mansion Apartment Building: A two- to three-story flexible-use structure with a street
façade resembling a large detached or attached house (hence, “mansion”). The attached
version of the mansion, typically built to a sidewalk on the front lot line, is most appropriate
for downtown locations. The building can accommodate a variety of uses—from rental or
for-sale apartments, professional offices, any of these uses over ground-floor retail, a bed and
breakfast inn, or a large single-family detached house—and its physical structure
complements other buildings within a neighborhood.
Parking behind the mansion buildings can be either alley-loaded, or front-loaded served by
shared drives
Mansion buildings should be strictly regulated in form, but flexible in use. However,
flexibility in use is somewhat constrained by the handicapped accessibility regulations in both
the Fair Housing Act and the Americans with Disabilities Act.
• Townhouse: Similar in form to a conventional suburban townhouse except that the
garage—either attached or detached—is located to the rear of the unit and accessed from an
RESIDENTIAL MARKET POTENTIAL Page 55
Downtown Atlantic City Study Area City of Atlantic City, Atlantic County, New Jersey September, 2013
ZIMMERMAN/VOLK ASSOCIATES, INC.
alley or auto court. Unlike conventional townhouses, urban townhouses conform to the
pattern of streets, typically with shallow front-yard setbacks. To provide privacy and a sense
of security, the first floor should be elevated significantly above the sidewalk.
• Live-work is a unit or building type that accommodates non-residential uses in addition to,
or combined with living quarters. The typical live-work unit is a building, either attached or
detached, with a principal dwelling unit that includes flexible space that can be used as office,
retail, or studio space, or as an accessory dwelling unit.
Regardless of the form they take, live-work units should be flexible in order to respond to
economic, social and technological changes over time and to accommodate as wide as
possible a range of potential uses. The unit configuration must also be flexible in order to
comply with the requirements of the Fair Housing Amendments Act and the Americans with
Disabilities Act.
RESIDENTIAL MARKET POTENTIAL Page 56
Downtown Atlantic City Study Area City of Atlantic City, Atlantic County, New Jersey September, 2013
ZIMMERMAN/VOLK ASSOCIATES, INC.
DOWNTOWN HOUSING STRATEGIES, POLICIES, AND PROGRAMS
From the perspective of draw area target market propensities and compatibility, a broad range of
new construction as well as adaptive re-use of existing buildings will be required to support and
sustain residential diversity in Atlantic City and the Downtown Study Area.
An effective housing strategy to attract the target households should include:
• The creation of a variety of housing types, both rental and for-sale, including higher-
value market-rate as well as workforce housing units throughout the Downtown
Study Area.
• The establishment of general urban guidelines to assure the compatibility of every
scale and type of housing.
• Mixed-use development: the inclusion of a residential component within mixed-use
buildings, either adaptive re-use or new construction.
The residential re-use of existing non-residential structures is one of the most beneficial
redevelopment types because it creates and enhances a pedestrian-oriented street environment at a
familiar, and often historic, urban scale. The residential redevelopment of the upper floors of
existing commercial buildings along Atlantic and Pacific Avenues, particularly those of architectural
merit, should be encouraged because of the demonstrated positive impact rehabilitation has had on
housing and neighborhood values nationally.
The City of Pittsburgh inaugurated its Vacant Upper Floors Initiative in 2004 with a guide for the
residential adaptive re-use of the upper floors of Downtown buildings. The second phase was
launched in 2006 and provided an architectural consulting program managed by the Community
Design Center of Pittsburgh. The third and final phase, the Vacant Upper Floors Loan Fund, was
launched in 2009 and is a low-interest loan program for developers/owners of downtown buildings
to turn the upper floors into housing. Further information on the Pittsburgh program is available
from the Downtown Pittsburgh Partnership, www.downtownpittsburgh.com.
RESIDENTIAL MARKET POTENTIAL Page 57
Downtown Atlantic City Study Area City of Atlantic City, Atlantic County, New Jersey September, 2013
ZIMMERMAN/VOLK ASSOCIATES, INC.
The City of Philadelphia has had a similar program, called Turning on the Lights Upstairs, in effect
since 1996. Further information on the Philadelphia program is available from the Center City
District, www.centercityphila.org.
Successful residential development/redevelopment in the Downtown Study Area will require the
establishment of a cohesive downtown residential neighborhood, instead of disconnected residential
buildings. A neighborhood is established when enough “mass” is created—both in number of
people and in number of residential buildings.
A neighborhood is the sum of a variety of elements: the configuration of the street and block
network, the arrangement of lots on those blocks, and the manner in which buildings are disposed
on their lots and address the street. A downtown neighborhood succeeds when its physical
characteristics consistently emphasize urbanity and the qualities of city life; conversely, attempts to
introduce suburban scale and housing types (or, indeed, suburban building forms in general) into
urban areas have invariably yielded disappointing results. Therefore, appropriate urban design—
which places as much emphasis on creating quality streets and public places as on creating or
redeveloping quality buildings—will be essential to success. The important elements can be
summarized in several practical inter-related guidelines:
• Preservation or restoration of the urban fabric. Emphasis should be on adaptive re-use, with
new construction used as infill among rehabilitated structures.
• Respect for the urban context. Major renovation and new infill construction should
maintain the building lot disposition and “build-to” line. When building heights are
increased, the new floors should be set back from the existing historical cornice line.
Pedestrian entrances should always be from the sidewalk; automobile entrances should
always be minimized. Buildings should never present a blank wall to the street.
• Streets designed for pedestrian comfort. Automobiles are accommodated on great urban
streets; however, they are not given precedence over ease of pedestrian movement. The
emphasis on streets can have significant, long-term impact on both street safety (providing
“eyes on the street”) and usable parks and squares.
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• Improvement of the streetscape. Local artists could create a unique physical environment
which could be extended to the Downtown’s “street furniture”—the trash receptacles,
seating areas, public sculptures, and other small street amenities that make the difference
between an “automobile-oriented road” and a “neighborhood street.”
A high-profile marketing program should be undertaken to promote the Downtown as a viable and
exciting housing option. An effective marketing program will require advertising and public
relations, merchandising and promotion. This could be undertaken as an adjunct to the marketing
of the Tourist District as a destination for shopping and entertainment.
— Advertising and public relations should include an “image” campaign that not only
keeps the Downtown within the public consciousness, but also reinforces the positive
aspects of urban living.
— Merchandising includes consistent street amenities, such as lighting and trash
receptacles with a uniform theme and distinctive designs.
— Promotion should include a series of special events that attract large numbers to the
Downtown.
Since its inception the CRDA has been instrumental in providing financial assistance to potential
homeowners through a variety of funding mechanisms, ranging from the 10 Percent Homebuyer
Loan Programs, the Firefighter and Teacher Home Loan Program, and the 3-2-1 Police Officer
Neighborhood Program to participation in the city’s HOPE VI redevelopment as well as the
transformation of the Northeast Inlet into Harbour Pointe, a mixed-use neighborhood of
townhouses, apartments and a small neighborhood convenience center.
In addition to the re-institution or continuation of programs that encourage home ownership in the
city, any newly-proposed policies should be made compatible with the underlying objective of
promoting and enhancing a vibrant mixed-use urban environment in the Downtown Study Area.
Adding to housing options will build on the strength of, and add support to, the economic
development efforts in the gaming and retail sectors. Resident households, spanning all ages,
household types and incomes, will help sustain the value of the new and existing assets in
Downtown Atlantic City.
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METHODOLOGY
The technical analysis of market potential for the Downtown Atlantic City Study Area included
delineation of the draw areas and physical evaluation of the area and the surrounding context.
The delineation of the draw areas for housing within the City of Atlantic City was based on the most
recent migration data for Atlantic County, and incorporating additional data from the 2008-2010
American Community Survey three-year estimates for the City of Atlantic City, and other market
dynamics.
The evaluation of market potential for the study area was derived from target market analysis of
households in the draw areas, and yielded:
• The depth and breadth of the potential housing market by tenure (rental and
ownership) and by type (apartments, attached and detached houses); and
• The composition of the potential housing market (empty-nesters/retirees, traditional
and non-traditional families, younger singles/couples).
NOTE: The Appendix Tables referenced here are provided in a separate document.
DELINEATION OF THE DRAW AREAS (MIGRATION ANALYSIS)—
Taxpayer migration data provide the framework for the delineation of the draw areas—the principal
counties of origin for households that are likely to move to the City of Atlantic City. These data are
maintained at the county and “county equivalent” level by the Internal Revenue Service and provide
a clear representation of mobility patterns. The migration data for the city has been supplemented by
mobility data from the 2008-2010 American Community Survey three-year estimates for the City of
Atlantic City.
Appendix One, Table 1. Migration Trends
Analysis of the most recent Atlantic County migration and mobility data available from the Internal
Revenue Service—from 2004 through 2008—shows that the county began to experience significant
out-migration the last three years of the study period, with net migration ranging from a gain of 170
households in 2004 to a loss of 615 households in 2008. (See Appendix One, Table 1.)
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Annual in-migration into Atlantic County slowly declined over the study period, ranging from
5,220 households in 2004, (the highest in-migrating total over the five years) to 4,415 households in
2008 (the lowest in-migrating total). More than 25 percent of the county’s in-migration is from the
three adjacent counties of Cape May, Cumberland, and Ocean. Another 25 percent of in-migration
comes from the Philadelphia MSA counties of Camden, Gloucester, and Burlington in New Jersey
and Philadelphia, and Montgomery in Pennsylvania.
Annual out-migration from Atlantic County has remained fairly steady over the study period, with
5,050 households moving out of the county in 2004, rising slightly to 5,285 households in 2005,
then falling to the low of 5,030 households in 2008. Just under 20 percent of the out-migration is
to the three adjacent counties, and 21 percent is to the aforementioned five counties in the
Philadelphia MSA.
Although net migration provides insights into a city or county’s historical ability to attract or retain
households compared to other locations, it is those households likely to move into an area (gross in-
migration) that represent that area’s external market potential.
Based on the migration data and employee current residence data, then, the draw areas for the City
of Atlantic City and the Downtown Atlantic City Study Area have been delineated as follows:
• The primary draw area, covering households currently living within the Atlantic City city
limits.
• The local draw area, covering households currently living in the balance of Atlantic County.
• The regional draw area, covering households with the potential to move to the City of
Atlantic City from Cape May, Cumberland, and Ocean Counties.
• The Philadelphia draw area, covering households with the potential to move to the City of
Atlantic City from Camden, Gloucester, and Burlington Counties in New Jersey and
Philadelphia and Montgomery Counties in Pennsylvania.
• The national draw area, covering households with the potential to move to the City of
Atlantic City from all other U.S. counties.
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Anecdotal information obtained from real estate brokers, sales persons, leasing agents, and other
knowledgeable sources corresponded to the migration data.
Analysis of the current residences of the employees and staff of the Atlanticare Medical Center and
several of the casinos located in Atlantic City provides additional support for the draw area
conclusions of the migration analysis. Of the hospital and casino employees included in the analysis,
approximately 13 percent currently live in the City of Atlantic City, approximately 75 percent
currently live in the balance of Atlantic County, approximately five percent currently live in Cape
May, Cumberland or Ocean Counties, and approximately seven percent currently live in Camden,
Gloucester, or Burlington Counties in New Jersey, or Philadelphia or Montgomery Counties, in
Pennsylvania.
Migration Methodology:
County-to-county migration is based on the year-to-year changes in the addresses shown on the
population of returns from the Internal Revenue Service Individual Master File system. Data on
migration patterns by county, or county equivalent, for the entire United States, include inflows and
outflows. The data include the number of returns (which can be used to approximate the number of
households), and the median and average incomes reported on the returns.
TARGET MARKET CLASSIFICATION OF CITY AND COUNTY HOUSEHOLDS—
Geo-demographic data obtained from Nielsen Claritas, Inc. provide the framework for the
categorization of households, not only by demographic characteristics, but also by lifestyle
preferences and socio-economic factors. An appendix containing detailed descriptions of each of
these target market groups is provided along with this study.
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Appendix One, Tables 2 and 3. Target Market Classif ications
An estimated 15,520 households lived in the City of Atlantic City in 2011. (Reference Appendix
One, Table 2.) Median income in the city was estimated at $31,000 in 2011, approximately 38
percent less than the national median of $49,300. Median home value in the city was estimated at
$195,800 in 2011, more than 13 percent higher than the national median of $172,800. With
median home values nearly six times the median income, ownership housing has become
unaffordable for increasing numbers of Atlantic City residents. More than 46 percent of the city’s
households could be characterized as empty nesters and retirees, another 38.5 percent were younger
singles and couples, and 15.3 percent were traditional and non-traditional families.
An estimated 103,725 households lived in Atlantic County in 2011. (Reference Appendix One,
Table 3.) The county median income was estimated at $52,100, approximately five percent higher
than the national median. The county median home value was estimated at $237,700, almost 38
percent higher than the national median. Approximately 53 percent of Atlantic County’s
households could be characterized as empty nesters and retirees, another 29.4 percent were
traditional and non-traditional families, and the remaining 17.6 percent were younger singles and
couples.
Target Market Methodology:
The proprietary target market methodology developed by Zimmerman/Volk Associates is an
analytical technique, using the PRIZM NE household clustering system, that establishes the optimum
market position for residential development of any property—from a specific site to an entire
political jurisdiction—through cluster analysis of households living within designated draw areas. In
contrast to conventional supply/demand analysis—which is based on supply-side dynamics and
baseline demographic projections—target market analysis establishes the optimum market position
derived from the housing and lifestyle preferences of households in the draw area and within the
framework of the local housing market context, even in locations where no close comparables exist.
Clusters of households (usually between 10 and 15) are grouped according to a variety of significant
“predictable variables,” ranging from basic demographic characteristics, such as income qualification
and age, to less-frequently considered attributes known as “behaviors,” such as mobility rates and
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lifestyle choices. Zimmerman/Volk Associates has refined the analysis of these household clusters
through the correlation of more than 500 data points related to housing preferences and consumer
and lifestyle characteristics.
As a result of this process, Zimmerman/Volk Associates has identified 41 target market groups with
median incomes that enable most of the households within each group to qualify for market-rate
housing. The most affluent of the 41 groups can afford the most expensive new ownership units;
the least prosperous are candidates for the least expensive existing rental apartments. Another 25
groups have median incomes such that most of the households require housing finance assistance.
Once the draw areas for a property have been defined, then—through field investigation, analysis of
historical migration and development trends, and employment and commutation patterns—the
households within those areas are quantified using the target market methodology. The potential
market for new housing units is then determined by the correlation of a number of factors—
including, but not limited to: household mobility rates; median incomes; lifestyle characteristics and
housing preferences; the location of the site or study area; and the competitive environment.
The end result of this series of filters is the optimum market position—by tenure, building
configuration and household type, including specific recommendations for unit sizes, rents and/or
prices—and projections of absorption within the local housing context.
DETERMINATION OF THE POTENTIAL MARKET FOR THE CITY OF ATLANTIC CITY (MOBILITY ANALYSIS)—
The mobility tables, individually and in summaries, indicate the average number and type of
households that have the potential to move within or to the City of Atlantic City each year over the
next five years. The total number from each county is derived from historical migration trends; the
number of households from each group is based on each group’s mobility rate.
Appendix One, Table 4. Internal Mobility (Households Moving Within the City of Atlantic City)—
Zimmerman/Volk Associates uses U.S. Bureau of the Census data, combined with Nielsen Claritas
data, to determine the number of households in each target market group that will move from one
residence to another within a specific jurisdiction over a given timeframe (internal mobility).
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Using these data, Zimmerman/Volk Associates has determined that an annual average of 1,430
households living in the City of Atlantic City have the potential to move from one residence to
another within the city each year over the next five years. Over 60 percent of these households are
likely to be younger singles and couples (as characterized within eight Zimmerman/Volk Associates’
target market groups); another 22.7 percent are likely to be empty nesters and retirees (in seven
market groups); and the remaining 17.1 percent are likely to be traditional and non-traditional
families (in five market groups).
Appendix One, Table 5. External Mobility (Households Moving To the City of Atlantic City from the Balance of Atlantic County)—
The same sources of data are used to determine the number of households in each target market
group that will move from one area to another within the same county. Using these data, an annual
average of 1,020 households, currently living in the balance of Atlantic County, have the potential to
move from a residence in the county to a residence in the City of Atlantic City each year over the
next five years. Just under 38 percent of these households are likely to be traditional and non-
traditional families (in 15 market groups); a third are likely to be younger singles and couples (in 12
groups); and the remaining 28.9 percent are likely to be empty nesters and retirees (in 19 groups).
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Appendix One, Tables 6 through 8; Appendix Two, Tables 1 through 8. External Mobility (Households Moving To the City of Atlantic City from Outside Atlantic County)—
These tables determine the average number of households in each target market group living in each
draw area county that is likely to move to the City of Atlantic City each year over the next five years
(through a correlation of Nielsen Claritas data, U.S. Bureau of the Census data, and the Internal
Revenue Service migration data).
Appendix One, Table 9. Market Potential for the City of Atlantic City—
Appendix One, Table 9 summarizes Appendix One, Tables 4 through 8. The numbers in the Total
column on page one of these tables indicate the depth and breadth of the potential market for new
and existing dwelling units in the City of Atlantic City over the next five years originating from
households currently living in the draw areas. Up to 3,610 households a year have the potential to
move within or to the City of Atlantic City over the next five years. Younger singles and couples (in
16 groups) are likely to account for almost half of these households, traditional and non-traditional
families (in 19 groups) another 28.5 percent, and with the remaining 21.7 percent likely to be empty
nesters and retirees (in 24 groups).
The distribution of the draw areas as a percentage of the potential market for the City of Atlantic
City is as follows:
Market Potential by Draw Area City of Atlantic City, Atlantic County, New Jersey
City of Atlantic City (Primary Draw Area): 39.6% Balance of Atlantic County (Local Draw Area): 28.3% Cape May, Cumberland, and Ocean Counties (Regional Draw Area): 7.1% Camden, Gloucester, Burlington, Philadelphia, and Montgomery Counties (Philadelphia Draw Area): 8.4% Balance of US (National Draw Area): 16.6%
Total: 100.0%
SOURCE: Zimmerman/Volk Associates, Inc., 2013.
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DETERMINATION OF THE POTENTIAL MARKET FOR THE DOWNTOWN ATLANTIC CITY STUDY AREA—
The total potential market for new housing units to be developed within existing buildings or new
construction within the Downtown Atlantic City Study Area also includes the primary, local,
regional, Philadelphia, and national draw areas. Zimmerman/Volk Associates uses U.S. Bureau of
the Census data, combined with Nielsen Claritas data, to determine which target market groups, as
well as how many households within each group, are likely to move to the Study Area in a given
timeframe.
Appendix One, Tables 10 through 15. Market Potential for the Downtown Atlantic City Study Area—
As derived by the target market methodology, an average of 1,545 of the 3,610 households that
represent the market for new and existing housing units in the City of Atlantic City are a market for
new housing units in the Downtown Atlantic City Study Area. (See Appendix One, Table 10.)
Almost 69 percent of these households are likely to be younger singles and couples (in 13 market
groups); another 17.2 percent are likely to be empty nesters and retirees (in 13 groups); and 13.9
percent are likely to be traditional and non-traditional family households (in seven groups).
The distribution of the draw areas as a percentage of the market for the Downtown Atlantic City
Study Area is:
Market Potential by Draw Area THE DOWNTOWN ATLANTIC CITY STUDY AREA City of Atlantic City, Atlantic County, New Jersey
City of Atlantic City (Primary Draw Area): 26.2% Balance of Atlantic County (Local Draw Area): 26.9% Cape May, Cumberland, and Ocean Counties (Regional Draw Area): 10.0% Camden, Gloucester, Burlington, Philadelphia, and Montgomery Counties (Philadelphia Draw Area): 15.5% Balance of US (National Draw Area): 21.4%
Total: 100.0%
SOURCE: Zimmerman/Volk Associates, Inc., 2013.
The 1,545 draw area households that have the potential to move within or to the Downtown Study
Area each year over the next five years have been categorized by tenure propensities to determine
renter/owner ratios. More than half of these households (or 785 households) comprise the potential
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market for new rental units. The remaining 49 percent (or 760 households) comprise the market for
new for-sale (ownership) housing units. (See Appendix One, Table 11.)
Up to 525 of the 785 households that prefer, or can only afford, rental housing units, have incomes
above 50 percent of the Atlantic City-Hammonton MSA area median family income (AMI). Forty
percent of these renter households, or 210 households, have incomes between 50 and 80 percent of
the AMI; 29.5 percent, or 155 households, have incomes between 80 and 120 percent of AMI; and
30.5 percent, or 160 households above 120 percent of the AMI. (See Appendix One, Table 12.)
Up to 695 of the 760 households that prefer ownership housing units have incomes above 50
percent of the Atlantic City-Hammonton MSA area median family income (AMI). Of these 695
households, 47.5 percent (or 330 households) comprise the market for new multi-family for-sale
units (condominium apartments and lofts); and another 41.7 percent (290 households) comprise the
market for new attached single-family (townhouse/live-work) units. The remaining 10.8 percent (or
75 households) comprise the market for new single-family detached houses. (See Appendix One,
Table 13.)
Up to 120, or 36.5 percent, of the 330 households that prefer multi-family for-sale housing units
have incomes between 50 and 80 percent of the AMI; 85 households, or 25.8 percent, have incomes
between 80 and 120 percent of the AMI; and 125 households, or 37.9 percent, have incomes above
120 percent of the AMI. (See Appendix One, Table 14.)
Up to 160, or 55.2 percent, of the 290 households that prefer single-family attached for-sale housing
units have incomes between 50 and 80 percent of the AMI; 60 households, or 20.7 percent, have
incomes between 80 and 120 percent of the AMI; and 70 households, or 24.1 percent, have incomes
above 120 percent of the AMI. (See Appendix One, Table 15.)
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—Target Market Data—
Target market data are based on the Nielsen Claritas PRIZM geo-demographic system, modified and
augmented by Zimmerman/Volk Associates as the basis for its proprietary target market
methodology. Target market data provides number of households by cluster aggregated into the
three main demographic categories—empty nesters and retirees; traditional and non-traditional
families; and younger singles and couples.
Zimmerman/Volk Associates’ target market classifications are updated periodically to reflect the
slow, but relentless change in the composition of American households. Because of the nature of
geo-demographic segmentation, a change in household classification is directly correlated with a
change in geography, i.e.—a move from one neighborhood condition to another. However, these
changes of classification can also reflect an alteration in one of three additional basic characteristics:
• Age;
• Household composition; or
• Economic status.
Age, of course, is the most predictable, and easily-defined of these changes. Household composition
has also been relatively easy to define; recently, with the growth of non-traditional households,
however, definitions of a family have had to be expanded and parsed into more highly-refined
segments. Economic status remains clearly defined through measures of annual income and
household wealth.
A change in classification is rarely induced by a change in just one of the four basic characteristics.
This is one reason that the target household categories are so highly refined: they take in multiple
characteristics. Even so, there are some rough equivalents in household types as they move from one
neighborhood condition to another. There is, for example, a strong correlation between the
Suburban Achievers and the Urban Achievers; a move by the Suburban Achievers to the urban core can
make them Urban Achievers, if the move is accompanied by an upward move in socio-economic
status. In contrast, Suburban Achievers who move up socio-economically, but remain within the
metropolitan suburbs may become Upscale Suburban Couples or Fast-Track Professionals.
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Household Classification Methodology:
Household classifications were originally based on the then Claritas PRIZM geo-demographic
segmentation system that was established in 1974 and replaced by PRIZM NE in 2005. The revised
household classifications are based on PRIZM NE which was developed through unique classification
and regression trees delineating 66 specific clusters of American households. The system is now
accurate to the individual household level, adding self-reported and list-based household data to geo-
demographic information. The process applies hundreds of demographic variables to nearly 10,000
“behaviors.”
Over the past 23 years, Zimmerman/Volk Associates has augmented the PRIZM cluster system for
use within the company’s proprietary target market methodology specific to housing and
neighborhood preferences, with additional algorithms, correlation with geo-coded consumer data,
aggregation of clusters by broad household definition, and unique cluster names.
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