1. Housing in West Florida November 16, 2006

2. In this part of today’s presentation, we will:  Briefly examine the impact of the base realignment on housing demand  Define affordable housing and “cost burden”  Examine affordable housing need estimates and projections for the region  Discuss characteristics of the region’s housing supply

3. Base realignments  Eglin Addition of 4,475 military and civilian jobs $304 million in construction investment  Pensacola NAS Loss of 1,600 jobs Eglin Air Force Base Pensacola Naval Air Station Whiting Field Gulf Breeze Milton Crestview DeFuniak Springs Fort Walton Beach Destin Niceville Valparaiso Pensacola EscambiaSanta RosaOkaloosaWalton

4. Economic impacts – jobs  Okaloosa 7,500 additional jobs  Escambia Loss of 2,300 jobs  Santa Rosa 250 additional jobs  Walton 275 additional jobs

5. Projecting additional households  Household impacts projected using ECFRPC DRI Housing Methodology Estimates income for employees Estimates headship rates for employees (eliminating those who are not the head of the household) For employees who are the head of their household, estimates single and multi-worker households Estimates additional income for multi-worker households

6. Projecting additional households Projected Households, 2010 EscambiaOkaloosaSanta RosaWalton Direct Military-4933,218 Civilian-59611 Professional, Technical-598 Indirect -5521,5643372 Total-1,7004,8023372  Direct and indirect impacts of the base realignments

7. Projecting total households, examining affordable housing need  Total households  Owners and renters  Household income  Age of householder  Cost burden

8. 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.

9. Renter- or owner-occupied housing 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

10. 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

11. The need for affordable housing is frequently discussed using these income levels:  Moderate income: 80-120% AMI ($63,050)*  Low income: 50-80% AMI ($42,050)*  Very low income: 30-50% AMI ($26,300)*  Extremely low income: less than 30% AMI ($15,750)*  60% AMI ($31,550)* is a typical level for Florida Housing’s rental programs *income limit for 4-person household using the 2005 State Median of $52,550

12. 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

13. Cost burden  Cost burdened households: households spending more than 30% of their income for housing  In 2005: Percent of all households that were cost-burdened and earned 60% or less of median income Okaloosa17.5% (9 th in state) Escambia17.5% (10 th in state) Santa Rosa14.1% (45 th in state) Walton12.6% (63 rd in state)

14. Cost burden  In 2005: Percent of renter households that were cost-burdened and earned 60% or less of AMI Escambia31.8% (10 th in state) Santa Rosa31.4% (16 th in state) Okaloosa30.1% (28 th in state) Walton27.6% (47 th in state)  In 2005: Percent of owner households that were cost-burdened and earned 60% or less of AMI Okaloosa11.1% (31 st in state) Escambia10.5% (39 th in state) Santa Rosa10.0% (52 nd in state) Walton09.0% (64 th in state)

15. Cost burden and income  In 2005 the 4 county region has an estimated 24,000 low income, severely cost burdened households (almost evenly split between owners and renters).  By 2030 that number will grow by 14,000 households.  Between 2005 and 2030 the number of households with incomes less than 60% AMI will grow by 44,000

16. Special Population Groups  These groups may be disproportionately represented or may not be incorporated in estimates: Elderly Farmworkers Homeless People Persons with Disabilities

17. Disability & Housing Need Summary 4 County Summary, 2005

18. Public Housing – 4 County summary  There are approximately 1,300 public housing units and over 3,700 Housing Choice (Sec. 8) vouchers.  Two of the largest Authorities, Pensacola and Ft. Walton, have waiting lists of approximately 1,500 households for Housing Choice vouchers (2004 survey data).

19. Assisted Housing Supply – 4 County summary  There are 4,661 assisted housing units in the 4 county region.  Of these, 2,723 units have HUD or Rural Development rental assistance.  Preservation: in Escambia County, for example, there are over 700 units in assisted properties which have terminated HUD mortgages, or RD or FHFC restrictive use/income or rent restrictions that expire by 2010.

20. Housing supply  Impact of hurricanes  Building activity, 2000-2006  Seasonal housing  Affordability/cost burden  Home sales

21. Hurricanes  Estimated damage from hurricanes: several thousand residential units  Hurricane recovery funding  Labor and material shortages

22. Hurricanes (1)

23. Hurricanes (2)

24. Hurricanes (3)  Hurricane housing recovery plans

25. Building activity  Between 2000 and July 2006, 48,993 permits issued Escambia14,208 Okaloosa13,068 Santa Rosa09,736 Walton11,981  Type Single family37,291 (76%) Multifamily11,702 (24%)

26. Seasonal housing  In 2000, 40% of vacant units in West Florida were seasonal Escambia25% Okaloosa36% Santa Rosa23% Walton63%

27. Seasonal housing, second homes, investment properties Single Family Home Sales West Florida Counties, 2005 EscambiaOkaloosa Santa RosaWalton All Sales Number of Sales6,6485,1703,5051,807 Median Sales Price$143,000$204,900$208,900$431,800 No Homestead Exemption in Year Following Sale Number of Sales3,1332,7331,4991,418 Median Sales Price$134,000$195,000$200,000$469,450 Percent of Total Sales47%53%43%78% Homestead Exemption in Year Following Sale Number of Sales3,5152,4372,006389 Median Sales Price$150,900$213,900$214,150$320,000 Percent of Total Sales53%47%57%22%

28. Home prices, 2000-2005 (Florida Association of Realtors MLS data)  In the Fort Walton Beach MSA, the median sale price rose by 97%  In the Pensacola MSA, the median sale price rose by 60%

29. Home valuation Estimate of Home Over- or Under-Valuation Florida Metro Areas, 2003-2006 Year2003200420052006 Fort Walton Beach-8%-1%20%39% Miami10%22%37%64% Naples15%29%53%103% Orlando-2%2%13%40% Pensacola-2%2%14%30% Tampa-St. Petersburg-3%4%15%36% West Palm Beach2%18%39%66%

30. How rising prices relative to income have reduced affordability – comparing 2000 with 2005 in Santa Rosa

32. How rising prices have reduced availability 2000 – 2005 in Okaloosa County

33. Sale price trends Median Sale Price Trends West Florida Metro Areas, 2005-2006 PensacolaFort Walton Beach Condominiums, January 05-06-61%-57% Condominiums, August 05-06-29%-28% Single family homes, August 05-06-3%-11%

34. Rental unit at HUD estimated Fair Market Rent  In Pensacola MSA, the Fair Market Rent (FMR) for a two-bedroom apartment is $579. In order to afford this level of rent and utilities, without paying more than 30% of income on housing, a household must earn $23,160 annually (a very low income household).  Assuming a 40-hour work week, 52 weeks per year, this level of income translates into a Housing Wage of $11.13.

35. Summary  Hurricanes damaged housing, exacerbated existing labor and material shortages and reduced the supply of affordable housing  West Florida experienced rapid home price increases between 2000-2005  Percent of cost burdened households increased in all 4 counties between 1990 and 2000  Trend in affordability of homes sold was downward between 2003 and 2006 in all counties  Homes are over-valued in most Florida MSAs  Sales prices of single family homes and condos are now trending downward

36. Housing and transportation Metro area Average percent of income spent on HousingTransportationBoth New York Tampa 37.6% 37.3% 15.4% 20.4% 53.0% 57.7%

37. Links and Contact:  Florida Housing Data Clearinghouse: www.flhousingdata.shimberg.ufl.edu www.shimberg.ufl.edu  Florida Housing Coalition www.flhousing.org  Contact information: Bill O’Dell 352-273-1171 billo@ufl.edu