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Fairfax County Moderate Income Definition Project. George Mason University Center for Regional Analysis Presentation of Report September 22, 2006. Purpose of Analysis. Assess the County’s definition of moderate income in terms of its use for affordable housing programs. Factors and Findings. - PowerPoint PPT Presentation
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Fairfax County Moderate Income Definition Project
George Mason UniversityGeorge Mason UniversityCenter for Regional AnalysisCenter for Regional Analysis
Presentation of ReportPresentation of ReportSeptember 22, 2006September 22, 2006
Purpose of Analysis
Assess the County’s definition of Assess the County’s definition of moderate income in terms of its moderate income in terms of its use for affordable housing use for affordable housing programsprograms
Factors and Findings
• Income Available for Housing NeedsIncome Available for Housing Needs
• Housing Supply and Costs in Fairfax Housing Supply and Costs in Fairfax CountyCounty
• Ability of Moderate Income Families to Ability of Moderate Income Families to Afford Housing in the Fairfax County Afford Housing in the Fairfax County Housing MarketHousing Market
• Other FactorsOther Factors
• ConclusionsConclusions
Income Available for Housing Needs
Income Available for Housing Needs
• Based on consumer expenditure data , Based on consumer expenditure data , renter households in Fairfax County renter households in Fairfax County have approximately 22% of income have approximately 22% of income available for housing after available for housing after expenditures for food, transportation, expenditures for food, transportation, health care and other items. health care and other items.
From 1999 - 2004
• Median household income grew by Median household income grew by 8.8%8.8%
• Average home price grew by 84%Average home price grew by 84%
• Average rent increased by 29%Average rent increased by 29%
• Costs of utilities and fuel grew by 26%Costs of utilities and fuel grew by 26%
• Costs of health care grew by 19%Costs of health care grew by 19%
Increases: 1999 to 2004, Fairfax
84.0
29.0
26.0
19.0
13.0
8.8
0 20 40 60 80 100
Home Prices
Rent
Utilities
Health Care
Transportation
Incomes
%
Increases in Costs March 2005 – March 2006
U.S.
17.8 17.0
6.1 5.74.1
0
5
10
15
20
HomeGas/Elec
Auto Gas Education Child Care MedicalCare
Source: BLS, GMU Center for Regional Analysis
%
Income Available for Housing Needs
For households and families to maintain For households and families to maintain lifestyles given increases in costs, a lifestyles given increases in costs, a 30% threshold for housing affordability 30% threshold for housing affordability is too high. is too high.
Variations in Income Needed by Family
Size and type
“The Self-Sufficiency Standard for the Washington, DC Metropolitan Area 2005”
Dr. Diana Pearce, University of Washington
Prepared for Wider Opportunities for Women
How much income would it take for families to live and work without public or private assistance or
subsidies? – a measure of income needed to meet basic needs.
Summary Results of Standards Report for Fairfax County: 2005
Family TypeFamily Type Income NeededIncome Needed
One Adult, One ChildOne Adult, One Child $39,000 - $52,400$39,000 - $52,400
One Adult, Two ChildrenOne Adult, Two Children $46,300 - $75,300$46,300 - $75,300
One Adult, Three ChildrenOne Adult, Three Children $57,900 - $103,900$57,900 - $103,900
Two Adults, One ChildTwo Adults, One Child $54,600 - $68,100$54,600 - $68,100
Two Adults, Two ChildrenTwo Adults, Two Children $57,800 - $84,600$57,800 - $84,600
Two Adults, Three Two Adults, Three ChildrenChildren
$66,900 - $110,700$66,900 - $110,700
Housing Supply and Costs in Fairfax
County
Median Sales PriceExisting HousesFairfax County
209,000238,000
275,000315,000
385,000
479,200
0
100,000
200,000
300,000
400,000
500,000
600,000
2000 2001 2002 2003 2004 2005Source: MRIS, GMU Center for Regional Analysis
$ + 129%Since 2000
AllHousing
Types
Number of Units Sold by Price RangeFairfax: 2000-2005All Housing Types
64
29
73
50 47
0
20
40
60
80
100
< $250K $250K - $500K > $500K
2000
2005
Source: MRIS, GMU Center for Regional Analysis
%
Share of Private Rental Market by Monthly Rent Level Range:
2000-2005, Fairfax County
37.0
21.125.0
16.812.9
18.3
40.5
28.3
0
10
20
30
40
50
< $1250 $1250 - $1500 $1500-$2000 > $2000
2000
2005
Source: MRIS, GMU Center for Regional Analysis
%
Ability of Moderate Income Families to Afford Housing in the Fairfax County
Housing Market
Household Income and Housing Price Divergence, 1995
– 2005Washington Metro Area
-5
0
5
10
15
20
25
1995 2000 2005
%
Housing Price
Income
Long term compound interest rate increases, in current $: Income = 5.4% , Housing = 7.0%
Existing Housing Sales Affordable at 30% of Income, 2000 and 2005, Fairfax
64
7
75
11
0
10
20
30
40
50
60
70
80
2000 2005
Med Inc
120% MI
%
5% Down, 6.5% 30-yr mortgage
Percent of Income Required to Purchase Housing, 2000 and 2005, Fairfax
33
68
26
54
22
45
0
10
20
30
40
50
60
70
80
2000 2005
80% M I
Med Inc
120% M I
%
5% Down, 6.5% 30-yr mortgage
Other Factors
Percent of Jobs in FairfaxHeld by Resident vs In-Commuters
0
10
20
30
40
50
60
70
80
1970 1980 1990 2000
%
In-Commuters
Residents
Households Relocating Outside Fairfax County
• IRS County-County Migration FilesIRS County-County Migration Files
• 2000 – 2004 from Fairfax County to:2000 – 2004 from Fairfax County to:»Loudoun 21,800
»Prince William 23,400»Fauquier, Spotsylvania, Stafford
5,000
Conclusions
Conclusions
• Income available for families to Income available for families to spend on housing has declined spend on housing has declined because of rising costs of other because of rising costs of other needs.needs.
• The “Self-Sufficiency Standards” The “Self-Sufficiency Standards” report documents that many family report documents that many family types need incomes greater than types need incomes greater than the median to meet the basic the median to meet the basic needs. needs.
Conclusions
• For-sale housing price increases in For-sale housing price increases in the past five years have made home the past five years have made home ownership practically impossible for ownership practically impossible for moderate income families in Fairfax, moderate income families in Fairfax, even at 120 % of median income.even at 120 % of median income.
• Rental market is now the only choice Rental market is now the only choice for moderate income families, and the for moderate income families, and the rental prices now and next five years rental prices now and next five years will see significant increases, at the will see significant increases, at the 6-7 percent per year.6-7 percent per year.
Conclusions
• Analysis of the rent burden in the Analysis of the rent burden in the county shows that a growing county shows that a growing share of households and families share of households and families making more than 80% of median making more than 80% of median face significant affordability face significant affordability problems, especially larger problems, especially larger families that face a reduced supply families that face a reduced supply and higher costs of larger units.and higher costs of larger units.
Conclusions
• In the consideration of policy In the consideration of policy changes, there are large changes, there are large differences in the housing differences in the housing affordability situation between affordability situation between residents who bought several residents who bought several years ago and newer residents years ago and newer residents moving into the county.moving into the county.
Conclusions
• Trends in in-commuting and Trends in in-commuting and household relocation outside the household relocation outside the county indicate that more must be county indicate that more must be done in addressing housing done in addressing housing affordability if the County wants affordability if the County wants moderate income families to have moderate income families to have living in the county as a choice.living in the county as a choice.
Recommendation – Ownership Housing
New policies and programs New policies and programs are needed if ownership are needed if ownership housing is to be possible housing is to be possible for moderate incomes and for moderate incomes and families.families.
Recommendation – Rental Housing
There is a growing housing There is a growing housing affordability problem for moderate affordability problem for moderate income households, and the income households, and the definition of moderate income definition of moderate income should be expanded. Market should be expanded. Market conditions will be changing rapidly conditions will be changing rapidly in the next 2-3 years, and the issue in the next 2-3 years, and the issue should be re-examined.should be re-examined.
