The Affordable Housing Challenge

1. The Affordable Housing Challenge Prepared for: Broward Housing Partnership Summit By: Andrew Dolkart, President Miami Economic Associates, Inc.

2. Median Income 2000 Census: $41,691 Ranked 12th lowest among the 50 metros with 1,000,000 people or more 2004 Estimate: $44,799 Rate of increase 2000 - 2004: 7.5 percent Rate of inflation 2000 – 2004: 9.6 percent

3. Income Determinants No state income tax “Sunshine” Concentrations of employment in low-paying sectors Retailing (13.8%) Recreation and hospitality services (10.9%) Other non-professional services (10.9%) In-migration from abroad

4. Implications of Low Median Income Levels Low home ownership rates Broward County: 60% Florida: 70% United States: 65% Large numbers of cost-burdened households 77% of very low income households 55% of low income households 29% of moderate income households

5. Affordability Parameters Very Low Income: Up to 50% of AMI Income: Up to $29,050 Rental range: Up to $690 Home price: Up to $83,927 Low Income: 50 to 80% of AMI Income: $29,051 - $46,480 Rental Range: Up to $1,114 Home price: Up to $130,829 Moderate Income: 80 to 120% of AMI Income: $46,481 - $69,720 Rental Range: Up to $1,685 Home price: Up to $193,330

6. Market Structure:Affordably Priced Units Very Low Income (217,584 households) Rental units: 46,458 For-sale units: 69,567 Total units: 116,025 Low Income (139,262 households) Rental units: 109,115 For-sale units: 77,121 Total units: 186,236 Moderate Income (130,583 households) Rental units: 43,747 For-sale units: 114,169 Total units: 157,916 Total Affordable Housing (487,429) Rental units: 199,320 For-sale units: 260,857 Total units: 460,177

7. Market Trends Loss of rental stock through condo conversions Pricing frequently remains in affordable ranges Down payment requirements Debt to income ratios Rapidly rising prices 2000 Average: $158,159 2004 Average: $247,572 Change: 56.5%

8. Pricing Trends by Market Component:2000 - 2004 Used Single-family 2000 Average: $157,499 (32,332 transactions) 2004 Average: $281,942 (40,908) Change: 79.0% New Single-family 2000 Average: $228,177 (8,095) 2004 Average: $426,081 (3,797) Change: 86.7% Used Condominiums 2000 Average: $ 78,664 (18,080) 2004 Average: $155,226 (22,745) Change: 97.3% New Condominiums 2000 Average: $246,738 (486) 2004 Average: $252,088 (3,682) Change: 2.2%

9. Pricing Trends by Market Segment:2004 – June 2005 Used Single-family 2004 Average: $281,942 (40,908 transactions) 2005 Average: $356,861 (16,529) Change: 26.5% New Single-family 2004 Average: $426,081 (3,797) 2005 Average: $424,936 (2,091) Change: (0.3%) Used Condominiums 2004 Average: $155,226 (22,745) 2005 Average: $197,098 (12,022) Change: 27.0% New Condominiums 2004 Average: $252,088 (3,682) 2005 Average: $279,333 (2,096) Change: 10.7%

10. Solving the Problem Will require: Proper measurement of its extent Understanding of the context in which action will be taken Assignment of responsibilities based on capabilities to contribute to the solution

11. Measurement Question relevancy of historic trends when producing projections in terms of: Bases for population growth Ability to accommodate population growth

12. Measurement (Cont’d) Utilize data that is: Relevant Reliable Appropriate Complete

13. Context Analyze and assess the mutability of the forces influencing prices such as: Land availability Permit Fees Construction costs Association fees Interest rates Levels of activity in the market unrelated to growth

14. Responsibilities Evaluate and capitalize on the relative capabilities/constraints of: Private vs. public sector Local vs. regional government