The Need for Affordable Housing An Overview Hillsborough 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 briefly at Hillsborough 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 Hillsborough County Briefly consider the impact of special population groups

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

Hillsborough County Households I Total households (2005): almost 430,000 About 61% of households have 1-2 persons, about 30% of households have 3-4 household members, and 9% are large households with 5 or more persons Hillsborough County’s household size distribution is almost identical to the State

Hillsborough County Households II Hillsborough County households are younger in comparison to the State About 23% of Hillsborough’s households are under age 35, and approximately 19% are 65 or above For the state as a whole, 18% are under age 35 and 27% are 65 or older

Hillsborough County Households III: Renters or Owners? Owner-occupied housing accounted for about 65% of the households in Hillsborough County in 2005 (280,000) Renter-occupied housing made up about 35% of Hillsborough County’s households in 2005 (150,000) Florida’s homeownership rate is about 70% U.S. homeownership rate is about 66%

Now that we’ve seen a brief overview of Hillsborough 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 Condominium fees or manufactured housing costs 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 care.

Affordable 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 is frequently discussed using these income levels: Moderate income: % AMI Lower income: 60-80% AMI Low income: 50-60% AMI Very low income: 30-50% AMI Extremely low income: less than 30% AMI

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 Need Hillsborough County 2005 (households with incomes less than 80% AMI) Cost burden greater than – 30%: 92,834 households (38,279 owners, 54,555 renters) – 40%: 63,691 households (26,767 owners, 36,924 renters – 50%: 45,528 households (19,152 owners, 26,376 renters) Severe cost burden is highly correlated with extremely low income The distribution of cost burden in Hillsborough County is similar to the State distribution

Current 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 housing need, Hillsborough County (severely cost burdened households with incomes less than 80% AMI) 2005 – 2010: – 4,319 households 2,175 owners 2,144 renters Growth averages 900 households annually

How much do households earn in Hillsborough County? Area Median Income (AMI) as defined by the U.S. Department of Housing and Urban Development is $52,150 for 2005, 51,200 in 2004 (Tampa Bay metropolitan area) That means: –Half of our residents have household incomes greater than $52,150; and –Half of our residents have household incomes less than $52,150

Who earns less than AMI in Hillsborough County? (based on Q wage data) Public school teachers (K-12) Policemen Firefighters Nurses Secretaries Child Care Workers Maids and housekeepers Food Service Workers Retail Sales Clerks Many others

What does this mean in dollars? Lower income households earn between $31,300 and $41,750 Low income households earn between $26,100 and $31,300 Very low income households earn between $15,650 and $26,100 Extremely low income households earn less than $15,650 per year

Let’s look at these categories in another way: Moderate income group may include experienced police officers and registered nurses Lower income group may include less experienced firefighters, police officers and nurses Low income group may include entry level teachers (K-12) and firefighters Very low income group may include secretaries and retail salespersons Extremely low income group may include child care workers, maids and housekeepers, food service workers, and retail salespersons

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

Rental unit at HUD estimated Fair Market Rent Fair Market Rent for a 2-bedroom rental unit in Hillsborough County is $805 What income level would make this rental unit affordable? – Income would need to be approximately $2,700 per month or $32,200 per year – This means household income would need to be more than 60% of AMI

Using our example groups, who cannot afford this rental unit? Entry level firefighters and entry level public school teachers, secretaries, child care workers, retail salespersons, maids and housekeepers, food service workers

Who may be affected by problems with housing 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 Groups These groups may be disproportionately represented or may not be incorporated in estimates: – Elderly – Farmworkers – Homeless People – Persons with Disabilities

Persons with Disabilities – Hillsborough County 2005 estimate Households with low income (<60% AMI), severe cost burden (50+%), and including at least one person age 15+ with a disability: – 19,961 households (8,671 owner households, 11,290 renter households) – Over 60% of these households have incomes under 30% AMI – Approximately 2,500 of these households are in substandard housing – Over half receive Social Security of SSI income

Assisted Housing Supply, Preservation and Other Issues In 2004 there were almost 20,000 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: Florida Housing Data Clearinghouse: –