Quality Homes For Arizonas Workforce… Key To a Vibrant Economy 14 June 2004 Phoenix, Arizona Michael Collins

Housing Matters 1. Children and families 2. Neighborhood/community quality 3. Economic benefits 4. Workforce stability Alarming Trends 1. Lack of affordable homes 2. Citizens are concerned 3. Negative effects on communities and families Solutions Exist Public-private partnership is key Changing perceptions to counter NIMBY Targeted investment is required Overcome regulatory barriers to accelerate development Overview

The Benefits of Quality Affordable Homes n Supports stronger families n Supports stronger communities n Creates economic spin-offs n Stabilizes work force

Research Shows: Housing Matters for Families n Moving has negative impact on school performance n Affordable homes combined with steady employment reduce stress and health care costs n Tough choices: Paying greater than 30% of income for housing or taking on low-quality home reduces ability to pay for other expenses results in poor living environment Sources: Demography, 1991; GAO, 1994; Evans, et al, 2002; Newman, et al, 1999; Millennial Housing Commission, 2002.

Higher Housing Costs Impact Spending Share of Income Spent on Housing Source: Consumer Expenditure Survey, $80 less $14 less$61 less$23 less$17 less

Many Benefits of Homeownership n Owners have greater self-esteem n Owners are more involved in community organizations, voting and other activities n Children of owners are more likely to buy homes n Homeowners build more wealth than comparable renters Source: Neighborhood Reinvestment, 2003

Benefits for Neighborhoods n Families and children benefit from quality neighborhoods n Quality homes have a rub-off effect on the real estate market n Affordable working-family neighborhoods have a positive impact on home values and rents Sources: Millennial Housing Commission, 2002; Joint Center for Housing Studies, 2004 Properties in neighborhoods with mixed housing types appreciate at greater rates than even affluent single-family areas. Source: Joint Center for Housing Studies, 2004

The Housing Sector & the Economy n In 2001, new residential construction was associated with roughly 3.5 million jobs nationally and $166 billion in local income n In 2001, home building was the source of about $65 billion in combined taxes and fees n In 2000, home building and remodeling accounted for about 4 percent of GDP Source: Millennial Housing Commission, 2002.

Housing is a Third of Nations Tangible Assets Source: Bureau of Economic Analysis, Survey of Current Business, September 2001

Local Economic Benefits for the Community n Building equity for owners n Lenders originating mortgages n Construction & home-related businesses n Household spending n Real estate professionals n Local governments n Employers, businesses & professionals

Potential Benefits of 1,000 New Owner Occupied Homes and 1,000 Apartments 2,783Jobs Supported $3 MillionHome related spending $18 MillionLocal government revenue $9 MillionTransaction revenues $49 MillionLender revenue over 10 yrs. $53 MillionHousehold wealth in 10 yrs. $134 MillionConstruction activity Source: Michael Collins N-BEST; NAHB; $30,000 income; $100,000 homes, $60,000 apartments Local Income $161 Million

n 66% of the net worth of low-income households is in their home n Among non-elderly low- income families, owners have 12 times the wealth of similar renters n 61% see buying a home a safe investment with potential vs. 39% for IRAs Asset Building for Families Source: 2001 Survey of Consumer Finances; Fannie Mae 2003 National Housing Survey

Americas Housing Challenges 1.Affordability is the single greatest housing challenge facing the nation n Affordability problems reach across all but the highest income groups 2.The burden on working families 3.Supply constraints 4.Persistent homeownership gaps Source: Millennial Housing Commission, 2002.

Affordability Challenges for Working Families Source: JCHS tabulations of the 2000 Census Supplemental Survey. 1-2 times Minimum WageAll

Burdens on Working Families n 36 percent of households (both owners and renters) with children have: n physically inadequate housing, or n crowded housing, or n pay more than 30 percent of income. n 29 million households pay > 30% of income in rent n Ability to pay for food, health care, insurance reduced n Commute times lengthen n Pressure to crowd into homes Sources: Millennial Housing Commission, 2002; Joint Center for Housing Studies, 2004

Immigrants Face Crowding Issues Source: 2000 Census

Supply Gaps n Between 1997 and 1999, the share of homes that are affordable fell from 47% to 44% of the total owner-occupied stock Half million net new affordable units over two years; 69% are mobile/manufactured homes n 1.1 million net rental units added 1991 to 2001 Only 20% affordable to low-income families Net losses of units for working families Source: 1999 American Housing Survey

Persistent Gaps in Homeownership Rates Source: Census 2000 Share Owning Home, 2000

41% of Working Families say lack of affordable housing is a big or fairly big problem -Peter D. Hart Research Associates, 2004 Lack of Affordable Homes is Real Issue 71% of surveyed families agree government should place a higher priority on making housing – both for renters and owners – affordable in my area - Public Opinion Public Opinion Strategies, 2003

Worries Among Renters and Owners n 62% worry that the cost of housing is getting so expensive that teachers, firemen & police cannot afford to live in the area n 42% worry they have to spend too much time commuting because homes closer to work are too expensive n 48% think rents are being driven up because there is not enough rental housing available Source: Public Opinion Public Opinion Strategies for NAR 2003

What if Nothing is Done? n Families and children worse off housing expenses erode consumption commute times lengthen stress increases health care costs school performance declines n Workforce stability declines increase in recruitment and retention costs pressure on wages to keep up with housing costs health & productivity decline n Neighborhoods lose quality of life lack of diversity - segregation volatility in real estate markets community services and amenities

Policy Issues n Facilitate Partnerships across sectors n Facilitate Investments – land cost & quality standards n Campaigns to Change Perceptions – erase NIMBY n Streamline Regulations – reduce delays & lower cost n Planning for Growth – inclusionary zoning n Innovations & Experiments n Land trusts n Equity partnerships n Manufactured housing n Employer assisted housing n Mixed-income n High density designs n Transportation & energy efficiency

Housing Matters 1. Children and families 2. Neighborhood/community quality 3. Economic benefits 4. Workforce stability Alarming Trends 1. Lack of affordable homes 2. Citizens are concerned 3. Negative effects on communities and families Solutions Exist Public-private partnership is key Changing perceptions to counter NIMBY Targeted investment is required Overcome regulatory barriers to accelerate development Conclusion

Quality Homes For Arizonas Workforce… A Key To a Vibrant Economy