Affordable Housing

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					Affordable Housing

      An Introduction
      Eric Anderson
         ARC 466
 Farmingdale State College
Index Card 1
o What is the median income for Long
Index Card 2
o What is the median cost to purchase a
 house on Long Island?
Index Card 3
o What is the median cost for a two-
 bedroom apartment on Long Island?
Index Card Reponses
1 – The median income on Long Island for a
family of four is approximately $ 80,000
($87,000 – Nassau, $77,000-Suffolk)
2 – The median cost for a house on Long
Island is $ 414,000
3 – The median rent for a two-bedroom
apartment on Long Island is $1800
o The generally accepted definition of affordability
  is for a household to pay no more than 30 percent
  of its annual income on housing.
o Families who pay more than 30 percent of their
  income for housing are considered cost burdened
  and may have difficulty affording necessities such
  as food, clothing, transportation and medical care.
o An estimated 12 million renter and homeowner
  households now pay more then 50 percent of their
  annual incomes for housing, and a family with one
  full-time worker earning the minimum wage
  cannot afford the local fair-market rent for a two-
  bedroom apartment anywhere in the United
  Source: Community Planning & Development, US HUD
 Unsubsidized housing
o Unsubsidized housing is housing that is
  inexpensive enough to allow low-and
  moderate-income families to pay for it
  without spending a disproportionate share
  of their income.
o When this housing meets the existing needs
  within a region, the market has succeeded
  largely without governmental intervention,
  although it is also clear that land-use
  regulations can determine the market’s
  Subsidized Housing
o Subsidized housing requires federal, state,
  or local subsidies.
o If the housing is built or rehabilitated as
  affordable housing, it is subject to a deed
  restriction or covenant that restricts its sale
  price or rent to affordable levels for a
  certain time (e.g., 20 to 30 years) and
  provides eligibility criteria.
Taxonomy of American
Affordable Housing 1800-2000
Initiative         Heyday      Description and challenges
                               Land grant with ownership obligations;
Homestead Act      1863-1900   sweat equity required.

                               Direct local ownership. Slum clearance
Public Housing     1937-1960   device not specifically aimed at poverty
                               alleviation. Confusion between goals:
                               affordability, sustainability, urban

                               Programs to address worker needs at TVA
Workforce          1937-1945   and war production facilities. Innovation
Housing                        in prefabrication.
                               Based on income subsidy to occupants or
Appropriated       1968-1985   developer subsidy, even in areas without
(public-private)               market viability.
                               Leverage private investment through tax
Tax Credit         1986-now    incentives to create target/set-asides.
                               Developer bears all risks.

                               Adjust rent/sale of existing public and
Moving to Market   1996-now    affordable housing with a combination of
                               rent/income subsidies.
 Regulatory Barriers
o Increased complexity of
  environmental regulation
o Interpretation of “smart growth”
  policies and philosophy by local
o Impact fee expansion
Milestones of American Affordable
Housing Technology 1800-2000
Technology        Heyday        Description and challenges

                  1800 - now    Replaced expensive hand-forged nails
Cut Nails                       and reduced cos

                  1830 - now    First used in Chicago to reduce
Balloon Framing                 construction time for speculative building.

                  1850-now      Organization and machinery to
Mass-Production                 manufacture volumes with reduced
                                investment in labor; all building

                  1900 - 1930   Required completion of national railroad
Catalog Pre-Cut                 network and delivery system to permit
Houses                          marketing of homes by catalog
                                companies. Based on 1820 model for
                                Australian settlement

                  1941-1946     Industrial production and materials used
War Workforce                   to create inexpensive prefabrication and
Housing                         installation

                  1947-1952     War workforce housing techniques
Levittown                       adapted to site built housing
Long Island Context
    LI Facts
o The median price of a home in Nassau County is about
    $440,000. (New York Times)
o   The median price of a home in Suffolk County is about
    $373,500. (New York Times)
o   The share of homes being sold for less than $250,000 is now
    only 4%, though it made up 62% of the market in 2000. (Long
    Island Index, 2008)
o   Long Island’s housing stock is approximately 80% ownership
    and 20% rental housing. (National Low Income Housing
o   Since 2000, rents have increased by 39% island-wide. (Long
    Island Index, 2008)
o   A studio apartment in Nassau or Suffolk county costs 302% of
    minimum wage. (National Low Income Housing Coalition)
o   No wage earner making less than $51,800 a year can afford to
    rent a one bedroom, Fair Market Rent (FMF) apartment in
    Nassau or Suffolk County. (National Low Income Housing
  LI Facts
o A wage-earner would need to make $29.40 an hour, or
  411% of minimum wage, to afford a two-bedroom
  apartment. This is unaffordable to 56% of renters.
  (National Low Income Housing Coalition)
o In order to afford the $1,198 Fair Market Rent (FMR) for a
  two-bedroom apartment, a minimum wage earner must
  work 129 hours per week, 52 weeks per year. (National
  Low Income Housing Coalition)
o 60,000 young people between ages 25 and 44 moved off
  of Long Island between 2000 and 2004 (, and
  65% of those between ages 18 and 24 said they were
  likely to move away from Long Island in the next five
  years. (Long Island Index, 2008)
o Long Island is the third most racially segregated
  suburban region in the United States. (ERASE Racism
  report, “Long Island Fair Housing: A State of Inequity,”
  March 2005)

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