Housing Affordability Overview Door County, Wisconsin

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.

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.

Out of Reach 2005 The National Low Income Housing coalition compiles this report each year Findings for Door County: – Area Median Income, 2005 = $55,500 – 30%of AMI = $16,650 – Fair Market Rent for Two Bedroom Unit = $581 (40 percent of median)

Out of Reach (cont) Annual Income Needed to Afford 2 bedroom FMR: $23,240 Hourly Wage needed to 40 hours per week = $11.17 Housing wage as a % of minimum wage = 196% Work hours necessary at minimum wage = 78

Since housing affordability is based on household income, let’s look specifically at two households, one earning median income ($55,500) and one earning 40 percent of median ($22,200).

Who Falls in These Categories? Examples of Earnings Elementary school teachers: – Mean: $38,786 – Mean of first third (entry): $25,083 Nursing Aides, Orderlies, Attendants: – Mean: $24,375 – Entry: $20,433 Child Care Workers: – Mean: $16,558 – Entry: $13,899

More Earnings Examples Firefighters: – Mean: $31,976 – First Third (entry level): $29,732 Motor Boat Mechanics: – Mean: $28,536 – Entry: $18,711 Food Preparation Workers: – Mean: $19,129 – Entry: $13,820 Hotel, Motel, Resort Desk Clerks: – Mean: $19,454 – Entry: $15,149

Now let’s look at rental housing in Door County Total housing costs for a 2-bedroom rental unit in Door County: – Average rent:$588 What income level would make this rental unit affordable? – Income would need to be $1,960 per month or $23,520 per year Our second household could not afford this unit

The second household would have to spend more than 30 percent of their income for that average 2BR unit in Door County. They could afford a rent of $555. What units are available and where?

Let’s shift gears to homeownership The median sales price for houses in Door County was $221,400 in the last quarter of 2005.

How much income does a household need to qualify for the median-priced house? A household would need an income of about $58,896 per year to afford the median priced house in Door County. Note these important assumptions: – The household has no debt – The household is using a loan at 6.25% fixed interest rate over 30 years, makes a 10 percent downpayment, and spends 25 percent of their income on mortgage payments

How much house could our two households qualify for? With an income at the median of $55,500, a household could qualify for a home value of $208,655 With an income of $22,200, a household could qualify for a home value of $83,462 Again, this assume a 10 percent downpayment and the ability to qualify for the specified loan terms.

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 within our community, such as secretaries, retail clerks, and food service workers. Others working in manufacturing and services.

What are the Implications Potential difficulty in economic development Performance of children in school Budget issues for families Community building and participation

Other Housing Issues Median year structure built (2000): 1971 Percent of housing units built before 1970: 47.8 Percent married couple households with own children: 21.9 Percent nonfamily households: 32.3