Transcript 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:

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
Let’s get started by looking at
households in
Alachua County. . .
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
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

Alachua County
Renters 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%
.
Now that we’ve seen a brief
overview of Alachua County’s
households, let’s move into a
discussion of affordable
housing. . .
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.
Rental housing is affordable if
these items total no more than
30% of gross income:

Rent
 Electric
 Gas
 Water & Sewer
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
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.
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.
Since housing affordability is
based on household income,
let’s look at some example
groups’ earnings. . .
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
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
Now let’s look at rental
housing in Alachua County . . .
Average Rental Unit

Total housing costs for a 2-bedroom rental unit in
Alachua County:
– Average rent:
– Electric:
– Total housing cost:

$812
94
$906
What income level would make this rental unit
affordable?
– Income would need to be $3,020 per month or $36,240
per year
Using our example groups,
who can afford this rental
unit?

Registered nurses can afford the average 2bedroom rental unit in Alachua County.
 None of the other workers in our example
groups can afford this rental unit.
How much of their income would
other groups have to spend for
that average 2BR unit in Alachua
County?
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.
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.
If most of our example groups
cannot afford the average
2BR rental unit, what can they
afford?
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.

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.
Let’s shift gears to
homeownership. . .
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.
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.
Alachua County
Affordability Index
Alachua County’s index for the most recent
year available (2001) was 121.38.
 So on average, homeownership is affordable
in Alachua County.

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.
Let’s translate this into more
specific information. . .
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 2year period.
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
Which of our example groups
are income-qualified for this
house?
None of our example groups qualify.
Let’s look at an example
selling at less than median
sales price in 2004. . .
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
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
Now let’s look at our example
groups and see who can
afford this home. . .
Who qualifies?
None of our example groups qualify.
Now let’s look at income
qualification in another way. . .
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.
Let’s wrap it up. . .
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.
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_ind
ex.php
More useful links:

Florida Housing Finance Corporation
– www.floridahousing.org

Florida Housing Coalition
– www.flhousing.org

Florida Supportive Housing Coalition
– www.flshc.org
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
Useful Calculators and
Homeownership
Educational Information:

GinnieMae
– www.ginniemae.gov

This site provides:
– mortgage affordability calculator
– buy versus rent calculator
– other homeownership education information