Housing Needs Assessment & Workforce Housing


The challenges faced by Bay Minette are similar to most rural communities. There is still a notable gap between the cost to develop housing and the purchase prices and rental rates developers can expect to receive for new or redeveloped units. Lack of quality entry-level and mid-priced housing is an impediment to attracting and retaining a local workforce, thus affecting the growth potential for business and the community as a whole.

To determine development solutions to support new and renovated housing development, Alchemy Community Transformations reviewed and leveraged existing reports and conducted new research to create assumptions for total number of units. Analysis assessing blighted properties helped identify potential sites for redevelopment in existing neighborhoods and new development surrounding the community. The resulting housing action plan will include recommendations for how best to use existing development tools and create new options to achieve Bay Minette’s goals.


Population in Bay Minette has experienced stable growth since 1950 with only a slight decline between 1980 and 1990. In the past decade population growth has grown by 1,247 people or 15.5%. That’s an increase in population of 2,123 people or nearly 30% since 1990.

Table 1 – Population (1990-2018)

1950 3,732
1960 5,197 39.9%
1970 6,727 29.4%
1980 7,455 10.8%
1990 7,168 -3.8%
2000 7,820 9.1%
2010 8,044 2.9%
2018* 9,291 15.5%
*Population estimate provided by US Census.

SOURCE: US Census Bureau, Decennial Census


When a community experiences population growth, new housing will follow. When comparing Bay Minette’s housing growth to Baldwin County and the state of Alabama, it appears to have fallen short with “new house” starts. Since 1990, an estimated 1,031 housing units were constructed in Bay Minette accounting for 32.4% of all housing units. These figures are slightly lower than what was experienced at the state level with 866,240 housing units built in that 30-year period accounting for 38.8% of all housing units. However, Baldwin County as a total produced 65,941 units in that period since accounting for 60.0% of all housing units. More recently, fewer than 100 housing units have been built in Bay Minette since 2010, considerably lower than Baldwin County or the state overall. The lack of new housing units coupled with a continued population growth of Bay Minette results in a tight housing market.

Table 2 – Age of Housing Units

Bay Minette Baldwin County State of Alabama
2010 to later 86 2.7% 5,512 5.0% 91,630 4.1%
2000 to 2009 369 11.6% 32,970 30.0% 365,930 16.4%
1990 to 1999 577 18.1% 27,459 25.0% 408,680 18.3%
1980 to 1989 575 18.0% 19,413 17.6% 329,162 14.8%
1970 to 1979 666 20.9% 11,167 10.1% 373,677 16.7%
1960 to 1969 381 11.9% 5,744 5.2% 253,565 11.4%
1950 to 1959 274 8.6% 3,581 3.3% 195,444 8.8%
1940 to 1949 149 4.7% 2,035 1.8% 94,744 4.2%
1939 or earlier 116 3.6% 2,142 1.9% 118,294 5.3%
TOTAL HOUSING UNITS 3,193 110,023 2,231,126

SOURCE: US Census via American Community Survey, Five-Year Estimates (2017)


Reviewing the housing occupancy and tenure data help explain where much of Bay Minette’s residents lived. For instance, Bay Minette has a vacant housing rate of 13.4% which is lower than the county or at the state level with 30.8% and 16.8%, respectively. Furthermore, Bay Minette’s vacancy rate for both owner-occupied (2.2%) and rental (8.8%) units is relatively lower. These factors together signal a need for new housing.

Another factor to consider is the ratio of owner-occupied versus renter-occupied units. The rate at the national level is estimated at 65% owner-occupied to 35% renter-occupied which is similar to the ratio at the state level, 68.6% owner-occupied to 31.4% renter-occupied. However, Bay Minette’s housing market is nearly equal with 49.2% owner-occupied to 50.8% renter-occupied. A portion of this can be attributed to student population of Coastal Alabama Community College. As a result of lower than average household income, Bay Minette suffers due to issues such as a lack of down payment funds or being priced out of the local market.

Table 3 – Housing Tenure & Occupancy

Bay Minette Baldwin County State of Alabama
TOTAL HOUSING UNITS 3,193 110,023 2,231,126
Vacant housing units 429 13.4% 33,890 30.8% 374,431 16.8%
Homeowner vacancy rate 2.2% 4.9% 2.2%
Rental vacancy rate 8.8% 41.0% 10.0%
Occupied housing units 2,764 76,133 1,856,695
Owner-occupied 1,361 49.2% 55,470 72.9% 1,273,217 68.6%
Renter-occupied 1,403 50.8% 20,663 27.1% 583,478 31.4%
      Owner-occupied 2.95 2.69 2.59
      Renter-occupied 2.75 2.48 2.46
SOURCE: US Census via American Community Survey, Five-Year Estimates (2017)

The table below outlines the median and mean household incomes. The median describes the middle of a set of data to reduce outliers or extremes. For instance, if 100 people lived in a town and Nick Saban was a resident, his $8 million salary would not be typical of other residents. The mean household income would be dramatically skewed due to this single outlier. To correct for this outlier, household incomes would be tallied, sorted in ascending order, and then the 50th household income would be selected for the median household income for this fictitious community.

Bay Minette’s median household income is nearly half of Baldwin County and nearly 25% less than the state overall. While the mean household income skews positively for all three regions, Bay Minette still has considerably less buying power. As a result, such as a lack of down payment funds or being priced out of the local market due to lower than average household income.

Table 4 – Median & Mean Household Income

Bay Minette Baldwin County State of Alabama
Median Household Income $31,310 $52,562 $46,472
Mean Household Income $47,790 $73,061 $64,476

Housing Challenges

The list of challenges below was developed through a thorough review of past studies and extensive interviews with key stakeholders in Bay Minette. While not exhaustive, these are the top issues that can be addressed through intervention by the city and other local partners.

1) Barriers to Developers/Investors

The problem lies in the cost gap; in other words, the cost to build new housing does not equal the return on investment to sell or rent this product. For this reason, a majority of new development is being built in communities much larger than Bay Minette further south toward Mobile and the gulf coast.

Another barrier that may impact a developer’s ability or desire to build in a community is the local permitting process. A community that seeks growth needs to make the process of investing in the local housing market as transparent, predictable, and competitive as possible. The alternative is these developers will follow the path of least resistance to unincorporated Baldwin County or nearby cities that may be more challenging to get permitted but result in a higher return on investment.

2) Buyers’ purchasing challenges

Stakeholder feedback and statistical analysis have identified challenges Bay Minette buyers face in affording for-purchase housing. Whether it is insufficient resources to afford a down payment, difficulty qualifying for traditional housing loans, or becoming cost-burdened by mortgage payments requiring more than 30% of their monthly income, these issues cause weaknesses in Bay Minette’s ability to transition residents from rental units to owner-occupied housing.

The National Association of Homebuilders conducted a study in 2017 to determine the average construction cost for a single-family home across the country. Their study looked at 4,267 homebuilders. The study found that the average home size was 2,776 square feet with an average lot size of 11,186 square feet. The study found that the average cost of a new construction home is estimated to be $237,760 or a cost of $88 per square foot of finished construction. If a buyer chooses to make a 5% down payment (typically the minimum amount allowable), a home at this price would require an upfront investment of $11,888. The remaining mortgage balance would be $225,872. A mortgage with the dynamics listed below would cost the Bay Minette buyer $1,481 per month.

Table 5: Estimated Monthly Payment (PITI)* – New Construction

Principal & Interest $1,111

Property Taxes

Calculated for Bay Minette, Baldwin County property taxes

Homeowners Insurance $198

PMI insurance

Required for down payment less than 20%

Total Monthly Payment $1,481
*30-year fixed loan at 4.25% w/ 5% down payment
Source: Nerdwallet mortgage calculator and Navy Federal Mortgage Loan Calculator

The $1,481 monthly housing payment estimate helps to understand the cost of a new home, but who can afford a house at this price point? Housing costs that account for more than 30% of a household’s overall income, is considered cost burdened. To avoid this issue, household incomes should be at least $59,259 to afford a new home priced at $237,760 with the current dynamics (i.e. down payment, interest rates).

Table 6: Gross Income Required to Afford – New Construction

Home Price $237,760
Monthly Payment (PITI) $1,481
Monthly Household Income Required $4,938
Annual Household Income Required $59,259

As seen in the following table, the annual cost of a new construction home is beyond the reach of the average Bay Minette household. In fact,
66.9% of Bay Minette households earn less than $50,000 per year and would be cost burdened if they attempted to finance a newly constructed home.

Table 7: Median Household Income (2017)

  Bay Minette Baldwin County State of Alabama
Median household income: $31,310 $52,562 $46,472
Mean household income: $47,790 $73,061 $64,476
Source: American Community Survey via US Census

Let’s compare the scenario for new construction homes to the purchase of existing homes in Bay Minette sold in the same ten-year period. The estimated average sale price was $121,400. A home at this price in Bay Minette would require a minimum 5% cash down payment which is an investment of $6,070. The remaining mortgage balance would be $115,330. A mortgage with the dynamics listed below would cost the Bay Minette buyer $756 in total monthly outlays.

Table 8: Estimated Monthly Payment (PITI)* – Existing Home

Principal & Interest $567
Property Taxes (Calculated for Bay Minette, Baldwin County property taxes) $40
Homeowners Insurance $101
PMI insurance (Required for down payment less than 20%) $48
Total Monthly Payment $756
*30-year fixed loan at 4.25% w/ 5% down payment
Source: Nerdwallet mortgage calculator and Navy Federal Mortgage Loan Calculator

Based on both mean and median household incomes, the average Bay Minette household would be able to afford an existing house, but the challenge stakeholders reported is that many existing homes require major renovation work or else do not have the features and amenities that appeal to a modern buyer. Additional financing may be necessary to make the required improvements.

Table 9: Gross Income Required to Afford – Existing Home

Home Price $121,400
Monthly Payment (PITI) $756
Monthly Household Income Required $2,521
Annual Household Income Required $30,257

Housing Recommendations

A variety of housing needs persist in Bay Minette from attainable single-family housing ($150,000-$250,000) to multi-family housing to serve workforce and student housing needs. As such, the focus of these recommendations is creating a model project for rental, multi-family housing, one of the top issues highlighted in the visioning sessions. Further evidence of this need was provided by Coastal Alabama Community College whose dormitory facilities are filled and have a waiting list of 100 students. Furthermore, there are surely other commuting students that would live in Bay Minette, but don’t even attempt to find housing due to the tight housing market.

The survey made available through the visioning process helped to identify the type of rental units most sought after by renters seeking new housing. Some survey participants were single person households looking for a one-bedroom unit while others requested two- or three-bedroom units with roommates to help share the cost. A number of survey participants also included families seeking units with three-bedrooms or more. As a result of this input, a mix of one-bedroom, two-bedroom, and three-bedroom units was determined for this pilot project:

One bedroom 5 units @ $700/month
Two bedroom 6 units @ $950/month
Three bedroom 4 units @ $1,200/month
Total units 15 units

The Steering Committee identified a total of seven sites (11 parcels) as potential development options for the proposed multi-family / restaurant project. Figure 1 displays the varied locations primarily adjacent to US Highway 31/ State Highway 39. Only two sites are within a designated Opportunity Zone Census Tract. However, the remaining parcels are adjacent to and eligible candidates for investment by Opportunity Zone funders. The tax incentives for investors through the Opportunity Zone program will help make this proposed real property viable. Also, the site location north of Baldwin County High School (one site, three parcels) were designated as brownfields sites and would be eligible for additional financial support to clean up and reuse the site.

When developing the pro forma, there is a challenge since these sites vary in size and assessed value. The seven sites overall have an average assessed value $15,267.64 per acre and an average of 21.2 acres. Utilizing these figures, the estimated site cost would be ‭$323,674. ‬‬

In addition to housing, the proposed project will include a ground level 3,850 square foot restaurant space (see Sports Bar business plan). The tenants will likely patron the restaurant as well as provide an opportunity for employment. Any of the selected development options would be very accessible to the larger community and passersby with its location on US Highway 31.

Figure 1: Development Options – Multi-Family Development Sites

Housing Development and OZ Census Tracts

Table 10: Development Options – Site Details

0 378518 Slate And Stone LLC 708 HWY 31 S $90,000 10.0 NO YES
1 378519 Dempsey, Hampton Eugene etal Dempsey, Ve Highway 59 and Jaycee Rd $90,000 10.0 NO YES
2 10580 Dempsey, Hampton Eugene etal Dempsey, Ve Highway 59 and Jaycee Rd $54,800 10.0 NO YES
3 47723 Young, Virginia Lee 46611 ST HWY 59 $172,600 39.0 NO NO
4 61953 Bay Minette Land Co DOBSON AVE N $122,000 6.1 NO NO
5 61945 Bay Minette Land Co DOBSON AVE N $201,600 11.2 NO NO
6 61936 Bay Minette Land Co Tiger Drive and McCleans Ave $252,000 11.2 NO NO
7 67848 McDill, L Vermelle etal Gibson, Maxine; McCleans Ave and McMillian Ave $455,000 13.0 YES NO
8 20751 Stevens Automotive LC US Hwy 51 and Stevens Parkway (East) $156,400 17.0 YES NO
9 102327 Bay Minette Land Company US Hwy 51 and Stevens Parkway (West, South) $135,200 12.4 NO NO
10 42490 Thompson, Albert M Iii US Hwy 51 and Stevens Parkway (West, North) $162,300 8.4 NO NO

Development Incentives

Building a market rate apartment at these rental rates will require incentives to make this a reality. Most state and federal loan and grant programs targeted at addressing “affordable” housing could help fulfill the housing needs but would restrict renters to incomes of 80% of the area median income or about $25,000. These programs also typically come with other restrictions and requirements that is not appealing to some developers. The intent of this proposed project is to provide housing targeted at people earning at or above the median household income ($31,310).

A long-term tax abatement agreement is one such tool that could help make this project possible. Granting a 10-year tax abatement on a project of this scale could save nearly $200,000 over a 10-year period which equates to nearly a 30% savings of the projected monthly operating fees ($1,600/month). This savings would be taken into consideration by a bank or other investor when making a decision to finance this proposed project.

Even with this tax abatement incentive, the project at these lease rates are require additional incentives to work financially. Other incentives could include:

  • Special Financing- lower interest rate to lower monthly payments
  • Rental Assistance – employers provide a monthly payment of $100+ to help offset high rents
  • Free Land – local municipality or development group donate the land to reduce financing costs

Action Steps


Identify city-owned/attainable land parcels located in an Opportunity Zone and New Market Tax Credit (NMTC) low income census tract(s)


City of Bay Minette


Using city/county GIS mapping resources and CDFI Fund, identify all city-owned/attainable (financially feasible for purchase/lease) land parcels to be considered for new housing development.


Q1 2020


Create and approve incentives for housing development


City of Bay Minette


Position the project locations in areas eligible for Opportunity Zone investment and NMTC. Layer these federal programs with local incentives such as tax abatement (for 10 years) or tax exemption.


Q2 2020


Publish Request for Proposals (RFP) for development of city-owned property (if applicable)


City of Bay Minette


If the city chooses to maintain ownership of the identified land parcels for new development then it should publish an RFP for developers to respond to, including but not limited to, a description of the proposed project, developer’s experience, timeline, and benefits (e.g., property tax revenues, sales tax revenues, projected job creation, etc.) of the proposed project.


Q3 2020


Meet and negotiate incentives with prospective developers


City of Bay Minette


Based on the vision and proposals provided by prospective developers, offer incentives equal to the economic impact of the proposed development (especially if more than one developer responds to the RFP).


Q4 2020


Select and approve developer(s) to begin the housing development process


City of Bay Minette


Depending on the procurement policy for the city, this will likely require a city council vote for final approval.


Q1 2020

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