1. LOCAL MARKET TRENDS IMPACTING AFFORDABLE HOUSING Portland-Vancouver Metropolitan Area Jerry Johnson Principal Johnson Reid, LLC

2. THE GREAT RECESSION

3. CURRENT RECESSION RELATIVE TO SIMILAR FINANCIAL CRISIS RECESSIONS

4. EMPLOYED POPULATION RATIO Ages 25-54 Years

5. PART TIME EMPLOYMENT

6. LONG TERM UNEMPLOYED

7. UNEMPLOYED SHIFTING TO DISABLED

8. FAMILY INCOME TRENDS BY QUINTILE Family Income Down Net Worth Down 40% from 2007

9. EMPLOYMENT TRENDS BY SECTOR Portland Metro Area – 2001-2011 OLMIS and Johnson Reid

10. EMPLOYMENT TRENDS BY SECTOR Portland Metro Area – 2001-2011 OLMIS and Johnson Reid

11. GENERAL MARKET TRENDS REAL ESTATE MARKETS ARE CYCLICAL, NOT LINEAR

12. HOMEOWNERSHIP RATE National Trends

13. PRICE TO RENT RATIO National Trends

14. CASE SHILLER HOME PRICE INDEX TRENDS

15. POPULATION GROWTH BY TYPE 2000-2010

16. MAJOR DEMOGRAPHIC SHIFTS AGING BABY BOOMERS –Less affluent than expected –Lost Equity/Negative Positions YOUNG BABY BOOMERS –Changing retirement plans –Kids later, high income demands CHILDREN OF BABY BOOMERS –Generation Y, Millennials, Echo Boom –It’s all about them

17. RESIDENTIAL IMPACTS OF DEMOGRAPHIC SHIFTS INCREASED INTEREST IN HIGHLY AMENITIZED LOCATIONS –Willingness to swap space and price for amenities –Urban amenities with a practical impact VALUE ADDED STRATEGY IN PRIME LOCATIONS –Small units carefully sited –No parking?

18. RENTAL APARTMENT MARKET TRENDS Portland Metro Area

19. DISTRIBUTION OF PORTLAND METRO RENTAL APARTMENT PIPELINE

20. PIPELINE AS A PERCENT OF CURRENT BASE

21. HOUSING MARKET DYNAMICS DEMAND INCREASING –Losses to tenure split ending –Rising rental pricing –Continued low interest rates PIPELINE DRY –Very little new construction –Lot supply limited –Pricing must rise to replacement cost

22. LOCAL RENTAL APARTMENTS NO LONGER A CAN’T MISS MARKET –Production Cycle Well Underway –Attention Needs to be Paid to Pipeline –Infill, Understand Micro Markets –Quality Locations –Urban Amenity Profile –“Sustainable Competitive Position” DEATH OF SUBURBS OVERSOLD