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					 Housing Affordability
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
 Define affordable housing
 Define housing “cost burden”
 Look at examples that illustrate who may
  experience housing cost burden in Alachua
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
 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
 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
 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
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
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:         $812
    – Electric:               94
    – Total housing cost:   $906
   What income level would make this rental unit
    – Income would need to be $3,020 per month or $36,240
      per year
    Using our example groups,
     who can afford this rental
 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.
How much of their income would
 other groups have to spend for
that average 2BR unit in Alachua
    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
 Firefighter earning $26,735 would be
  spending 41% of their gross income for this
      Average 2 BR Example
 Secretary earning $17,748 would be
  spending 61% of their gross income for this
 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
If most of our example groups
   cannot afford the average
2BR rental unit, what can they
    How much can our example
       households afford?
 A public school teacher with 5 years’
  experience can afford a unit renting for
 A deputy sheriff can afford a unit renting
  for $640.
 A firefighter can afford a unit renting for
     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
 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
 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 2-
  year 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

  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,
    – 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
   Firefighter qualifies to purchase an $81,237 home.
   Registered nurse qualifies to purchase a $117,053
   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
 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-
           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
      Educational Information:
   GinnieMae
    – www.ginniemae.gov
   This site provides:
    – mortgage affordability calculator
    – buy versus rent calculator
    – other homeownership education information

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