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Do we have a housing availability problem?

Do we have a housing availability problem?. Snapshot of Today August 8, 2016 Rental: Apartments - Source(s): Matik , Jakobson , IRET, Paramark & RentersWarehouse websites 2 bdrm apartments @ Under $1,050/month = 16 units For Sale – Single Family: As of August 8, 2016

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Do we have a housing availability problem?

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  1. Do we have a housing availability problem? Snapshot of Today August 8, 2016 Rental: Apartments - Source(s): Matik, Jakobson, IRET, Paramark & RentersWarehouse websites 2 bdrm apartments @ Under $1,050/month = 16 units For Sale – Single Family: As of August 8, 2016 Average Sold Price: $222,296 = + $12,419 since 2015 ytd = + $35,083 since 2014 ytd

  2. What is “Work-Force Priced” Housing? Seniors Market Rate 80% AMI & > 50% - 80% of AMI $33,500 - $53,600 Up to 50% - AMI = $33,500 Subsidized Rent Homeless

  3. Who Are We Talking About? • Area Median Income (2014 data) • Olmsted: $67,000 • 80% = $53,600/yr gross $4,467/mo. gross $3,252/mo. net • 60% = $40,200/yr gross $3,350/mo. gross $2,438/mo. net • Rochester: $63,500

  4. Home Ownership Affordability - The Story in Numbers • * Household income total: If two earners combine for this amount, Lvng Expense data will increase. • ** Assume one parent / one elementary school age child • If additional persons are included both income and Lvng Expense data will change • *** What the mortgage company will allow: Up to 30% of gross monthly income providing total indebtedness obligation does not exceed 42%. • “PITI” refers to Principle, Interest, Taxes & Insurance: P.I. = Principle & Interest: T.I. = Taxes & Insurance

  5. How Many of These Folks Do We Have in Olmsted County? • Total HH Under $50,000/yr 36.5% 22,545 HH • Total Households: 61,766 • HH Under $35,000/yr 24% 14,824 HH • HH $35,000 - $50,000/yr 12.5% 7,721 HH (2.54 persons/household)

  6. What Kinds of Jobs Are These Folks Employed In? • Olmsted County Employee Examples; • Detention Deputy: 41% at 80% AMI or less • Licensed Peace Officer Deputy Sheriff: 26% at 80% AMI or less • Social Worker: 13% at 80% AMI or less • Trades: • Carpenter (Union) Apprentice 1 - 4 yrs. 47% - 80% AMI • Plumber (Union) Apprentice 1 - 4 yrs. 56% - 80% AMI • Electrician (Union) Apprentice 1 - 4 yrs. 53% - 81% AMI • Auto Mechanic/Technician 60% - 90% AMI

  7. What Can Our Community do Now? • Rochester Area foundation will convene, will facilitate collaboration, will lead and will raise local funds to support the creation of work-force priced housing. • Community Awareness Campaign of the growing “Affordability Gap” • cost of so many households over-burdened by housing expense or commuting expense. •Government Policy Advocacy – promote policies that provide relief from fee and permit process expense for “Work-force-priced” housing. • Developer / Industry Support Programs: • Below market rate financing tools • New housing products development • Emerging market trends: demographics market research • Risk mitigation/distribution strategies • Government – Private Sector collaboration We have the opportunity and the resolve to define the kind of community we want for the housing and living conditions for those workers that provide essential services that we all rely on everyday.

  8. Budget Model for 60% A.M.I. First Homes 2016 Generic Monthly Family Budget 60% of Area Median Annual Gross Household Income Revenue: Description: Amount: Notes: Annual Gross $40,200 60% of 2013 Are Median income of $67,000 per year. Monthly Gross: 3,350 19.33 / hour @ 2080 hrs/year (full-time) Monthly Net: 2,43927.2% Withholding; F.I.C.A., State, Federal, Medicare Expenses: Assume one elementary school age child_____________ Health Insurance Prem. $330 Sample: Olmsted County Plan/1 Dependent Dental Insurance premium 17 Medical Co-pay 30Assume 80/20 coverage; 1 visit per yr per person Car Payment 213Lease or Purchase – Assume self-supporting (8,000 car; finance $7K @ 6%-36 mo. = $213/mo + 37/mo Ins.) Auto Ins Prem. 100Full coverage required for financing, $8,000 car, 25-30 yoa good driver Vehicle Maintenance 15Assume 3 lube/oil/yr @ $50 ea. Utilities 150 Gas, electricity, Water, etc. Combined even-pay Cell Phone 60Assume minimum plan TV/INTERNET 60 Assume minimum plan Waste Removal 25 Assume minimum plan Food 500Includes paper & personal hygiene & household products Gas, Out-of-pocket 150Includes fast food, entertainment, etc. Assume 40 gal/mo @ 20 mpg @ $2.75/gal. = $110/mo = 9,600 mpy. Clothing 100 Monthly average for annual expenditure Child Care 500 ISD 535 SACC program, school year and summer rates average Child related: 100 (School, sports/dance, camp, etc.) Christmas, Birthdays, etc. 50 Assume $360/yr minimum holiday related expenses Total $1,028 2,400 Conclusion: $ 39Remainder available for housing expense (Rental: variable depending upon utilities included in rent) Housing Cost: Rental:Average market 2 Bdrm apartment is $900 - $1,000 Own: $160,000 house - $1,016 / month: P.I.T.I. Market price *150,000 Mort. @ 30 yrs & 4%, $250 T.I. Own: CLT: $121,000- $873 / month: P.I.T.I. *CLT owns lot for $40,000 * $120,000 Mort. @ 30 yrs & 4%: $250 / mo. T.I.: $50 /mo. CLT Fee Note: Above budget does not include considerations for, savings account, college loan payments, life Insurance premium, credit card payment, a contingency fund or a home maintenance fund

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