Recently in Housing Category

Source: Breakthroughs, Vol. 8 no. 4, July 2009

Median home prices in Fairfax County, Virginia are out of reach for many low- and moderate-income households. The 2007 median market value of owned homes in Fairfax County, Virginia was $536,162, and the average rental complex rent in 2007 was $1,317. Essential county employees, such as firefighters, police, and teachers, are unable to buy or rent a home near their workplace, forcing them to commute long distances. To create and preserve affordable housing for its workforce, Fairfax County has adopted a number of programs and initiatives. This article focuses on one such unique program, known as the Magnet Housing Program.

Source: Joint Center for Housing Studies of Harvard University, 2009

From the press release:
The housing downturn hit low-income minorities especially hard. With unemployment rates sharply higher among minorities, minority households are more likely than others to spend more than half of their incomes on housing. Also, higher shares of minorities live in neighborhoods with elevated foreclosure rates and where house prices fell the most.

Meanwhile, the number and share of households spending more than half their incomes on housing continues to remain at elevated levels. Before the economy began to shed jobs in 2008 and 2009, the number of households with such severe cost burdens, in 2007, stood at 18 million, up from 14 million, in 2001. Although renters are more cost burdened than homeowners, the most rapid growth in households with housing burdens, during the decade, occurred among owners.

Even though present housing challenges are legion--including still soaring foreclosures, millions of homeowners stuck in homes worth less than the amount they owe on their mortgage, and falling rental property values--the State of the Nation's Housing report concludes that the demographic moorings of future demand remain strong. The largest generation in American history will be reaching young adulthood in record numbers over the next decade. As a result, even under a set of household projections that assume annual immigration falls some 40 percent below the average of the first half of this decade to just half of U.S. Census Bureau immigration projections, household growth from 2010-2020 should still rival the solid performance in the 1995-2005 period. Even if immigration slows considerably, minorities will still account for about three-quarters of household growth.
See also:
- SON 2009 Fact Sheet
- SON 2009 Appendix Tables (Microsoft Excel)
- SON 2009 Sources (Microsoft Excel)
- SON Archive

Source: Breakthroughs, Vol. 8 no. 2, March 2009

Communities depend on vital services provided by their essential workforces. Teachers, firefighters, and police officers are only a few examples of professionals that are hard-pressed to afford homes in the communities they serve. In areas where homeownership continues to be out of reach, nearby affordable housing can improve the viability of a community and its workforce. In an attempt to retain employees, Montgomery County, Maryland is promoting the area's first workforce housing program designed specifically for moderate-income earners. Montgomery County established its Workforce Housing Program in 2006 to promote the construction of affordable housing for the county's public employees and other moderate-income workers.

Source: David Rosnick and Dean Baker, Center for Economic and Policy Research, February 2009

From the summary:
Turmoil in the housing and stock markets now threatens the retirement security of tens of millions of baby boomers who looked to their houses and investments as sources of retirement wealth. A new report from the Center for Economic and Policy Research (CEPR) shows that due to the collapse of the housing bubble, the vast majority of near retirees have accumulated little or no wealth. This means that they will be almost completely reliant on Social Security and Medicare to support them in their retirement years.

Source: Douglas Rice and Barbara Sard, Center on Budget and Policy Priorities, February 24, 2009

A large and growing number of low-income renters face unaffordable housing costs. Federal housing programs have proven effective in enabling millions of low-income households to obtain stable, decent housing, but a funding squeeze and various actions taken by Congress and the Bush Administration have weakened these programs considerably, just when the need is rising. This report documents that growing need, explains how federal housing programs help address it, shows how recent funding shortfalls and policy changes have hurt these programs, and outlines a series of steps to make housing more affordable for low-income families.

Source: Urban Land Institute, Terwilliger Center for Workforce Housing, 2009

Working families in the Washington, DC, metro area face many challenges. By national standards the median household income of $78,000 is high, but so too are the costs of owning or renting a home. Pockets of affordable housing exist in parts of the District of Columbia and Prince George's County, MD, but most of the homes in the central and inner suburbs, particularly in adjoining Fairfax County, VA, and Montgomery County, MD, are far beyond the means of the median-income family.

To find affordable homes, many in the workforce have followed the popular advice to "drive till you qualify" by moving to remote suburbs such as Warren and Fauquier counties, VA, in the west; Spotsylvania County, VA, and Charles County, MD, in the south; Frederick County in the north; and Calvert County, MD, in the east. As reflected in this report, however, efforts to save on housing expenses often lead to higher transportation costs, with the result that an even larger portion of household budgets are consumed by the combined burden of housing and transportation costs.

This report provides a comprehensive examination of the "cost of place" in the Washington, DC, region, presenting a jurisdiction-by-jurisdiction look at the combined housing and transportation cost burdens for households in the metropolitan area. Drawing on the latest research and methodologies, estimates of household transportation costs are used to develop a new way of looking at the total cost of housing and the issue of housing affordability in the region.

Region-wide, households spend an average of nearly $23,000 per year on housing and $13,000 on transportation. Combined, these costs represent almost 47 percent of the median household income. These cost burdens vary significantly across the 22 jurisdictions. In some areas where households spend more on housing, they tend to spend less on transportation and vice versa. Across the metropolitan area, however, there are neighborhoods where households are saddled with both high housing and high transportation cost burdens.
See also:
Transportation Calculator

Source: Douglas W. Elmendorf, Congressional Budget Office, Testimony before the Committee on the Budget United States Senate, January 28, 2009

A strong financial sector is a necessary component of a robust economy. Financial markets and institutions channel funds from savers to borrowers who need the money to build businesses and hire workers and to buy homes and other goods and services. Indeed, credit is often required to support the ordinary operations of businesses--for example, to finance their inventories and to meet payrolls before payments are received. If the customary means of obtaining credit break down, the disruption to households' and businesses' spending can be severe.

Thus, the ongoing crisis in the U.S. financial system has significantly depressed economic activity during the past year and a half, and it poses a serious threat to the nation's ability to quickly return to a path of solid economic growth. Losses on mortgages, on assets backed by mortgages, and on other loans to consumers and businesses, together with an associated pullback from risk taking in many credit markets, have raised the cost and reduced the availability of credit for borrowers whose credit ratings are less than the very highest. To be sure, among the fundamental causes of the crisis was the provision of too much credit at too low a price as well as insufficient capital. However, the sudden shift to a much higher price for risk taking has led to a significant reduction in wealth and borrowing capacity; it has also forced a number of financial institutions to close and others to be merged with stronger operations. Those forces, in turn, are weighing heavily on consumption, the demand for housing, and businesses' investment.

Source: Mark Hugo Lopez,  Gretchen Livingston, Rakesh Kochhar, Pew Hispanic Center, January 8, 2009

Like the U.S. population as a whole, Latinos are feeling the sting of the economic downturn. Almost one-in-ten (9%) Latino homeowners say they missed a mortgage payment or were unable to make a full payment and 3% say they received a foreclosure notice in the past year, according to a new national survey of 1,540 Latino adults conducted by the Pew Hispanic Center. Moreover, more than six-in-ten (62%) Latino homeowners say there have been foreclosures in their neighborhood over the past year, and 36% say they are worried that their own home may go into foreclosure. This figure rises to 53% among foreign-born Latino homeowners.

Source: Reid Cramer and Jeffrey Lubell, New America Policy Papers, January 2009

The rental housing market in the United States is characterized by a fundamental disconnect between rents and household incomes. It has been this way for decades. Millions of Americans simply earn too little to afford to rent a decent home. To meet these families' basic needs for shelter, the federal government spends more than $25 billion each year to provide rental assistance to more than four million poor and near-poor households. This assistance is delivered through a mix of housing vouchers and deep subsidies to public housing agencies and private owners to maintain a stock of affordable housing developments built in prior decades. Despite this large and important federal investment, the unmet need remains vast. As of 2007, some eight to nine million renter households spent more than half their incomes for rent and utilities. 

Source: Will Fischer, Center on Budget and Policy Priorities, February 2, 2009

The economic downturn has sharply reduced the effectiveness of the Low-Income Housing Tax Credit, the nation's primary subsidy for development of affordable rental housing.  Faced with lower profits and reduced access to capital, fewer corporations are willing to invest in affordable housing in exchange for the credits.  As result, the LIHTC is supporting far less construction and rehabilitation of affordable housing and creating far fewer jobs than it has in the past.  This is occurring at a time when the number of homeless families is rising and the already extensive need for affordable rental housing is likely to grow.