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Housing Affordability Overview Alachua County, Florida

Housing Affordability Overview Alachua County, Florida. Shimberg Center for Affordable Housing M.E. Rinker, Sr. School of Building Construction College of Design, Construction and Planning University of Florida. In today’s presentation, we will:.

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Housing Affordability Overview Alachua County, Florida

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  1. Housing Affordability OverviewAlachua County, Florida Shimberg Center for Affordable Housing M.E. Rinker, Sr. School of Building Construction College of Design, Construction and Planning University of Florida

  2. In today’s presentation, we will: • Look at a brief overview of Alachua County households • Define affordable housing • Define housing “cost burden” • Look at examples that illustrate who may experience housing cost burden in Alachua County

  3. Let’s get started by looking at households in Alachua County. . .

  4. Alachua County Households • Total households (2000): 87,509 • About 55% of households are families • About 25% of households are families with children • About 6% of households have one or more members age 65 or above

  5. Alachua County Poverty • Nearly 23 percent of Alachua County’s total population was below the poverty level in 1999 • This compares with 12.5% of Florida’s total population in poverty for the same year; and • 12.4% for the U.S. in 1999

  6. Alachua CountyRenters or Owners? • Owner-occupied housing accounted for about 55% of the housing units in Alachua County in 2000 • Renter-occupied housing made up about 45% of Alachua County’s housing units in 2000 • Florida’s homeownership rate is about 70% • U.S. homeownership rate is about 66%

  7. Now that we’ve seen a brief overview of Alachua County’s households, let’s move into a discussion of affordablehousing. . . .

  8. What is Affordable Housing?Housing is considered affordable if a household pays no more than 30 percent of its gross income for all housing related costs.

  9. Rental housing is affordable if these items total no more than 30% of gross income: • Rent • Electric • Gas • Water & Sewer

  10. Homeownership is affordable if these items total no more than 30% of gross income: • Mortgage payment, including: • Principal • Interest • Taxes • Insurance • Homeowners’ association fees (if any) • Allowance for periodic maintenance • Electric • Gas • Water & Sewer

  11. What is housing“cost burden?” • Households are considered cost burdened if housing related costs exceed 30 percent of gross income. • Households who pay more than 30 percent of their gross income for housing may have difficulty affording other necessities such as food, child care, transportation and health care.

  12. Alachua County Cost Burden • Nearly 37% of Alachua County renters are housing cost burdened. • Note that this number has been adjusted to exclude student households. • More than 25% of Alachua County homeowners who have a mortgage are cost burdened.

  13. Since housing affordability is based on household income, let’s look at some example groups’ earnings. . .

  14. Earnings Examples • Public school teachers (K-12) with a bachelor’s degree and 5 years’ experience: $28,800. • Deputy Sheriffs (entry level): $29,355 • Firefighters (entry level): $26,735 • Registered nurses (degreed, entry level): $38,522 • Child Care Workers: $12,792

  15. More Earnings Examples • Secretaries: $17,748 • Maids and housekeepers: $14,352 • Food Service Workers: $12,771 • Retail Sales Clerks: $13,104 • Minimum Wage Workers: $10,712

  16. Now let’s look at rental housing in Alachua County . . .

  17. Average Rental Unit • Total housing costs for a 2-bedroom rental unit in Alachua County: • Average rent: $812 • Electric: 94 • Total housing cost: $906 • What income level would make this rental unit affordable? • Income would need to be $3,020 per month or $36,240 per year

  18. Using our example groups, who can afford this rental unit? • Registered nurses can afford the average 2-bedroom rental unit in Alachua County. • None of the other workers in our example groups can afford this rental unit.

  19. How much of their income would other groups have to spend for that average 2BR unit in Alachua County?

  20. Average 2 BR Example: • Experienced public school teacher earning $28,800 would be spending 38% of their gross income for this rental unit. • Deputy sheriff earning $29,355 would be spending 37% of their gross income for this unit. • Firefighter earning $26,735 would be spending 41% of their gross income for this unit.

  21. Average 2 BR Example(Continued) • Secretary earning $17,748 would be spending 61% of their gross income for this unit. • Child care worker earning $12,792 would be spending 85% of their gross income for this unit. • A minimum wage worker would need to work 135.32 hours per week to afford this unit.

  22. If most of our example groups cannot afford the average 2BR rental unit, what can they afford?

  23. How much can our example households afford? • A public school teacher with 5 years’ experience can afford a unit renting for $626. • A deputy sheriff can afford a unit renting for $640. • A firefighter can afford a unit renting for $574.

  24. How much can our example households afford? (continued) • An experienced secretary can afford a unit renting for $350. • A child care worker can afford a unit renting for $226. • A minimum wage worker can afford $174.

  25. Let’s shift gears to homeownership. . .

  26. Homeownership Affordability • The Shimberg Center for Affordable Housing publishes homeownership affordability information annually in The State of Florida’s Housing. • One of the ways of looking at affordability involves the calculation of an index.

  27. Affordability Index • An index of 100 means that the average house is affordable to the average household. • The higher the index, the more affordable homeownership is.

  28. Alachua CountyAffordability Index • Alachua County’s index for the most recent year available (2001) was 121.38. • So on average, homeownership is affordable in Alachua County.

  29. But how do we stack up against other Florida counties? • In 2001, Alachua County ranked in the bottom third of Florida’s 67 counties in terms of single-family homeownership affordability (actual rank: 47 of 67). • About 70% of Florida’s counties offer a more affordable balance between median income and median house price than Alachua County.

  30. Let’s translate this into more specific information. . .

  31. Median Sales Price • The median sales price for houses in Alachua County was $154,500 in the quarter ended September 30, 2003. • The median sales price for the same period in 2001 was $123,500. • This represents a 25.1% increase for the 2-year period.

  32. How much income does a household need to qualify for the median-priced house? • A household would need an income of about $50,850 per year to afford the median priced house in Alachua County. • Note these important assumptions: • The household has no debt • The household is using FHA loan at 6.25% fixed interest rate over 30 years

  33. Which of our example groups are income-qualified for this house? None of our example groups qualify.

  34. Let’s look at an example selling at less than median sales price in 2004. . .

  35. Example Property • Springtree II subdivision • 3 BR/2 BA • 1,623 square feet • Carport • Built 1979 • Sold January 29, 2004 for $124,400 • Sold for $80,000 on May 28, 1999 • represents nearly 56% appreciation in less than 5 years

  36. How much income would be necessary to qualify for a mortgage for this home? • Household income would need to be about $40,950 to income qualify for this home, assuming: • No debt • FHA mortgage at a fixed 6.25% for 30 years

  37. Now let’s look at our example groups and see who can afford this home. . .

  38. Who qualifies? None of our example groups qualify.

  39. Now let’s look at income qualification in another way. . .

  40. How much house could our groups qualify for? • Public school teacher with 5 years’ experience qualifies to purchase an $87,512 home. • Deputy sheriff qualifies to purchase an $89,198 home. • Firefighter qualifies to purchase an $81,237 home. • Registered nurse qualifies to purchase a $117,053 home. • Secretary qualifies to purchase a $53,929 home. • A child care worker qualifies to purchase a $38,870 home.

  41. Let’s wrap it up. . .

  42. Who may be affected by problems with housing affordability? • Many of those who provide services essential to community functioning, such as those employed providing public safety, nursing care, public education and child care. • Those who provide other essential services within our community, such as secretaries, retail clerks, food service workers and maids and housekeepers.

  43. Useful links: • Shimberg Center for Affordable Housing • www.shimberg.ufl.edu • Alachua County Property Appraiser • www.acpafl.org • Alachua County Dept. of Growth Management’s Housing Programs • http://growth-management.alachua.fl.us/housing/housing_index.php

  44. More useful links: • Florida Housing Finance Corporation • www.floridahousing.org • Florida Housing Coalition • www.flhousing.org • Florida Supportive Housing Coalition • www.flshc.org

  45. Further useful links: • Florida Department of Education (follow links to “Housing Assistance” for “Homes 4 Teachers” Program): • teachinflorida.com • U.S. Department of Housing and Urban Development (HUD): • www.hud.gov

  46. Useful Calculators andHomeownershipEducational Information: • GinnieMae • www.ginniemae.gov • This site provides: • mortgage affordability calculator • buy versus rent calculator • other homeownership education information

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