Transcript Utah Housing Corporation

U.I.R. Annual Summit
Affordable Housing
Presentation
October 18, 2007
Recent Headlines in Utah
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“Report Shows Utah is on
Verge of Housing Crisis”
“Affordable Housing
Tough for Cops”
More Recent Headlines
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“Want More than a
Condo? Be prepared to
Pay more than $200K”
“Housing Markets
Pricing Out Middle Class”
… and More Recent Headlines
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“Housing Affordability:
Serious Disequilibrium”
“Housing Dilemma:
Utah’s Economy
Booming, but Affordable
Homes are Hard to Find”
What is Utah Housing?
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Created by State Legislature in 1975.
Mission: Affordable Housing
Opportunities; Low- Moderate Income.
DCED to Independent Public Corp.
No $$$ support from the State.
Use Entrepreneurial techniques.
Largest provider of Afford Hsg Finance.
UHC’s Major Programs
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Single Family finance:
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Low Interest rates
Down Payment and Closing Costs
Financed with Bonds and UHC funds
Multi-Family finance
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Low Interest rates
Provide affordable Equity and Debt
Financed with Bonds and Tax Shelters
UHC Annual Budgets
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Lean staffing: 55 employees
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Use private sector: lender, builders etc.
Operating Budget $3.9M/ yr
Capital Budgets = $363M/ yr
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Single Family Bonds
Housing Tax Credit
Multi-Family bonds
UHC Reserves
= $254M
= $ 44M
= $ 47M
= $ 18M
Who Needs Housing Help?
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Low-Income households
Elderly
Single Moms w/ kids
New Families
Mentally Ill
Physically handicapped
Native Americans
Who Needs Housing Help
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(cont’d)
Homeless and near-homeless
Teachers, Policemen, Fire Fighters, etc
Renters
First Time Homebuyers
What is Area Median Income?
½ above
½ below
100% of AMI
“Lower-Income” is NOT
Homogeneous? Degrees.
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Moderate Income
Low-Income
Very-Low Income
Poverty
Near Homeless
Homeless
Degrees of Lower Income
100%
80%
60%
50%
AMI
32%
25%
What is “Affordable” Housing
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Balance between “Cost” and “Income”
Pay no more than 30% of Income for
Housing costs (incl utilities, etc)
Many are paying <60%: Unaffordable
Rents and Selling Prices risen much
faster (>18%) than Incomes (2-3%).
Over time affordable housing becomes
out of reach.
Example of Affordable Rent
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S.L. County avg rent 2bdrm = $766/mo
Needed Income to be “Affordable” :
$2,553/mo or $30,640/yr.
This is $14.73 / hour wage.
Avg Hourly Wage for Renters in Utah is
$9.92 / hour.
Average Renter must work 59.4 hrs /
wk to “afford”, or need 1½ workers, OR
pays 45% of wages on housing!
How Make Housing More
Affordable?
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Reducing Costs, generally
Zoning: Increase density; reduce land
costs per Unit
Reduce Fees; Ease regulatory
requirements
Assist with Down Payment/ Closing Cost
Reduce Labor Costs in construction
Reduce Debt / Interest Rates
Private Activity Bond Authority
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Federal Gov’t grants each state amount of TaxExempt bonding authority, on population.
24%
33%
42%
Single Fam
Student Lns
Small Iss.
Ex. Facility
Total for 2007 = $256.2 Million
Housing Tax Credits
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Complex tax shelters to raise Equity.
Use only for affordable Rental projects.
Created 1987 / per capita allocation.
To date UHC has issued $750 M and
financed 17,000 units in 350 projects.
Also created State Tax Credits to work
in tandem with Federal Credits.
Impact on Rents
FAIR
MARKET
RENTS
(2bdr)
RENTS WITH
FED’L TAX
CR.
RENTS WITH
FED & STATE
TAX CR.
METRO:
MO. RENTS
$783
$570
$490
INCOME
NEEDED
$31,320
$22,800
$19,600
MO. RENTS
$632
$445
$380
INCOME
NEEDED
$25,280
$17,800
$15,200
RURAL:
UHC Affordable Home Buying
(Salt Lake County)
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Avg Price of homes in 2007= $153,500
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Avg price Last Year = $134,500 (+14%)
Avg price 10 years ago = $94,500 (+63%)
Avg Buyers’ Income in 2007=80% AMI
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Income Last Year = 73% AMI
Income 10 years ago = 65% AMI
Taking More Income to Buy
100%
80%
60%
>80% AMI
65-80% AMI
<65% AMI
40%
20%
0%
2002
2006
2007
Burden Gets Heavier in Salt
Lake County
63%
26%
Burden Gets Heavier Across
State of Utah
What are they Buying?
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% of Homes were “New” in 2007=7%
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% “New” last year = 12%
% “New” ten years ago = 25%
% of Homes were Condos in ’07= 44%
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% Condos last year = 39%
% Condos ten years ago = 10%
Financial Stability Council
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Housing Committee Recommendations:
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Resources: Increase Existing and Create
New; i.e. Dedicated Trust Funds
Strengthen Local Gov’t Commitment: HB295;
Encourage development not obstruct
Affordable Housing efforts.
Education Campaign: Put a Face on Afford
Hsg; Your Parents, your children, important
Citizens, Econ and Social Benefits, etc.
Challenging Existing
(mis)Perceptions of Aff. Hsg.
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It’s Attractive, well-built, and
consistent with surrounding
Architecture.
Does not Negatively impact Property
Values.
Families are Responsible, hardworking and willing to maintain
homes. Specify Income Ranges.
Auxiliary Benefits and
Linkages Socio Economically
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Aff. Hsg links to Childhood and Family
Development.
Aff. Hsg links to Economic Development
and Economic Impact
Aff. Hsg links to Reduced Transportation
and Energy Costs.
Aff. Hsg links to Attracting and
Retaining Entry – Mid level Employees