What Does Affordable Housing Mean?
Simply put, it means a buyer can handle the mortgage payment with enough margin left in the budget for other necessities (food, transportation, etc.). HUD* explains it this way: “Housing that is affordable is generally defined as housing a household can afford spending no more than 30% of their income.” A quick way to simplify the calculation is to use three times gross income, as seen in the chart below.
That’s important, because housing is being developed across Lake County at a breath-taking rate. Can the people working here afford to buy one of these new homes? Below is some useful data for discussing affordable housing in Lake County.
March ‘24 Median Sold Price for a home: $ 399,999**
To be ‘affordable’ this would require a salary of: $ 133,333
The March ’24 Median advertised Salary in Lake County: $ 40,576**
This median advertised salary is short this much: $ 92,757
Can people afford to live here?
Here‘s a chart showing what HUD’s definition of affordable looks like at various income levels. It assumes 2080 paid hours–a 40 hour workweek, 52 weeks per year. It‘s important to note: ‘Affordable’ is a BUDGET term and not a CONSTRUCTION term, it simply refers to the payment relative to the buyer’s income.
What do you think?
What do you think? With these numbers, can we recruit/retain teachers, firefighters, nurses, HVAC techs, and other jobs that a vibrant economy needs if those employees can’t afford to live here? While buyers could lower their mortgage via a significant down payment, is that realistic based on this data?
What is the solution?
By clarifying the definition of ‘affordable’ and asking, ‘Affordable for who?’ we hope that conversations on this topic, whether with elected officials, constituents or with developers proposing a new project, will lead to real solutions that make homeownership possible for those who make our communities possible.
A flyer version of this information is available here.
*https://www.hud.gov/program_offices/comm_planning/affordable_housing_barriers
**Median Sold Price and Median Advertised Salary are from Elevate Lake’s Economic Indicators Q1 Ending March 2024