The Need for Affordable Housing An Overview Charlotte 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 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 general household characteristics...

Charlotte County Households I 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 II 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: 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 overview of Charlotte 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 Charlotte County 2005 (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 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, Charlotte County (severely cost burdened households with incomes less than 80% AMI) 2005 – 2010: 446 households 340 owners 106 renters Growth averages 100 households annually

How much do households 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 housing in Charlotte County...

Rental unit at HUD estimated Fair Market 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 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

Assisted Housing Supply, Preservation and Other Issues In 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: Florida Housing Data Clearinghouse: –