The Need for Affordable Housing The Need for Affordable Housing An OverviewAn Overview

Charlotte County, FloridaCharlotte County, Florida

Shimberg Center for Affordable HousingM.E. Rinker, Sr. School of Building Construction

College of Design, Construction and PlanningUniversity of Florida

In today’s presentation, In today’s presentation, we will:we will:

Look briefly at Charlotte County household characteristics

Define affordable housing and “cost burden” Examine affordable housing need estimates and

projections Look at examples that illustrate who may

experience housing cost burden in Charlotte County

Briefly consider the impact of special population groups

Let’s get started by looking at Let’s get started by looking at general household general household characteristics. . .characteristics. . .

Charlotte County Households Charlotte County Households II

Total households (2005): 69,400 About 76% of households have 1-2 persons,

about 19% of households have 3-4 household members, and 5% are large households with 5 or more persons

Charlotte County has a higher percentage of smaller household compared to the State

Charlotte County Households Charlotte County Households IIII

Charlotte County households are much older in comparison to the State

9% of Charlotte’s households are under age 35, and approximately 46% are 65 or above

For the state as a whole, 18% are under age 35 and 27% are 65 or older

Charlotte County Households III: Charlotte County Households III: Renters or Owners?Renters or Owners?

Owner-occupied housing accounted for about 84% of the households in Charlotte County in 2005 (58,000)

Renter-occupied housing made up about 16% of Charlotte County’s households in 2005 (11,400)

Florida’s homeownership rate is about 70%U.S. homeownership rate is about 66%

Now that we’ve seen a brief Now that we’ve seen a brief overview of Charlotte County’s overview of Charlotte County’s households, let’s move into a households, let’s move into a

discussion of affordablediscussion of affordablehousing. . .housing. . .

.

What is Affordable Housing?What is Affordable Housing?

Housing is considered Housing is considered affordable if a household pays affordable if a household pays no more than 30 percent of its no more than 30 percent of its gross income for all housing gross income for all housing

related costs.related costs.

Rental housing is affordable if Rental housing is affordable if these items total no more than these items total no more than

30% of gross income:30% of gross income:RentElectricGasWater & Sewer

Homeownership is affordable if these Homeownership is affordable if these items total no more than 30% of items total no more than 30% of

gross income:gross income: Mortgage payment, including:

– Principal– Interest– Taxes– Insurance

Condominium fees or manufactured housing costs Electric Gas Water & Sewer

What is housing“cost burden?”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.

Affordable Housing NeedAffordable Housing Need

A common measure of housing need is the number of cost burdened households

Besides cost burden the other major component of affordable housing need estimates is household income:– defined as a percentage of area median income (AMI)

and adjusted for household size These components and their definitions are related

to program eligibility requirements

The need for affordable housing The need for affordable housing is frequently discussed using is frequently discussed using

these income levels:these income levels:

Moderate income: 80-120% AMILower income: 60-80% AMILow income: 50-60% AMIVery low income: 30-50% AMIExtremely low income: less than 30% AMI

and these cost burden levels:and these cost burden levels:

The conventional threshold of more than 30%Severe cost burden, more than 50% (DCA

summary indicator)Florida Housing’s threshold of 40%The choice of a level has significant

implications for numerical goals

Affordable Housing NeedAffordable Housing NeedCharlotte County 2005Charlotte County 2005

(households with incomes less than 80% AMI)(households with incomes less than 80% AMI) Cost burden greater than

– 30%: 10,603 households (7,274 owners; 3,329 renters)– 40%: 7,432 households (5,263 owners; 2,169 renters– 50%: 5,247 households (3,707 owners; 1,540 renters)

Severe cost burden is highly correlated with extremely low income

The distribution of cost burden in Charlotte County is somewhat lower than the overall State distribution

Current need and projected growthCurrent need and projected growth

Distinct policy and program issues– The current need for affordable housing is not a

construction need estimate– The growth in low income, cost burdened

households is a supply issue

Projected growth in affordable Projected growth in affordable housing need, Charlotte Countyhousing need, Charlotte County(severely cost burdened households with (severely cost burdened households with

incomes less than 80% AMI)incomes less than 80% AMI)

2005 – 2010:446 households

340 owners 106 renters

Growth 2005-2025 averages 100 households annually

How much do households How much do households earn in Charlotte County?earn in Charlotte County?

Area Median Income (AMI) as defined by the U.S. Department of Housing and Urban Development is $49,150 for 2005; 48,600 in 2004

That means in 2005:– Half of our residents have household incomes

greater than $49,150; and– Half of our residents have household incomes

less than $49,150

Now let’s look at rental Now let’s look at rental housing in Charlotte County . . housing in Charlotte County . .

..

Rental unit at HUD estimated Fair Rental unit at HUD estimated Fair Market RentMarket Rent

Fair Market Rent for a 2-bedroom rental unit in Charlotte County is $655

What income level would make this rental unit affordable?– Income would need to be approximately $2,200 per

month or $26,200 per year– This means household income would need to be more

than 50% of AMI

Who may be affected by Who may be affected by problems with housing problems with housing

affordability?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 from which we benefit on a frequent basis, such as secretaries, retail clerks, food service workers and maids and housekeepers.

Special Population GroupsSpecial Population Groups

These groups may be disproportionately represented or may not be incorporated in estimates:– Elderly– Farmworkers– Homeless People– Persons with Disabilities

Assisted Housing Supply, Assisted Housing Supply, Preservation and Other IssuesPreservation and Other IssuesIn 2004 there were 1,600 units of assisted

rental housing, not including public housing units

Preservation of Florida’s assisted housing supply is under study by the Affordable Housing Study Commission

This presentation did not address housing condition or overcrowding

Link:Link:

Florida Housing Data Clearinghouse:– www.flhousingdata.shimberg.ufl.edu