Quality Homes For Arizonas Workforce… Key To a Vibrant Economy 14 June 2004 Phoenix, Arizona...
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Transcript of Quality Homes For Arizonas Workforce… Key To a Vibrant Economy 14 June 2004 Phoenix, Arizona...
Quality Homes For Arizona’s Workforce…
Key To a Vibrant Economy
14 June 2004
Phoenix, Arizona
Michael Collins
Housing Matters1. Children and families2. Neighborhood/community quality3. Economic benefits4. Workforce stability
Alarming Trends1. Lack of affordable homes2. Citizens are concerned3. Negative effects on communities and families
Solutions Exist Public-private partnership is key Changing perceptions to counter NIMBY Targeted investment is required Overcome regulatory barriers to accelerate development
Overview
The Benefits of Quality Affordable Homes
Supports stronger families
Supports stronger communities
Creates economic spin-offs
Stabilizes work force
Research Shows: Housing Matters for Families
Moving has negative impact on school performance
Affordable homes combined with steady employment reduce stress and health care costs
Tough choices: Paying greater than 30% of income for housing or taking on low-quality home
reduces ability to pay for other expenses results in poor living environment
Sources: Demography, 1991; GAO, 1994; Evans, et al, 2002; Newman, et al, 1999; Millennial Housing Commission, 2002.
Higher Housing Costs Impact SpendingLow-Wage Monthly Spending Constrained by Housing Costs
$699
$241
$28
$95
$43 $38$14
$34 $21
$68
$556
$39$29$24
$215
$20
$161
$351
$0
$100
$200
$300
$400
$500
$600
$700
$800
All non-housing Food Clothes Healthcare Insurance & pension Entertainment
20-29% 30-50% >50%Share of Income Spent on Housing
Source: Consumer Expenditure Survey, 2001.
$80 less
$14 less $61 less $23 less $17 less
Many Benefits of Homeownership
Owners have greater self-esteem
Owners are more involved in community organizations, voting and other activities
Children of owners are more likely to buy homes
Homeowners build more wealth than comparable renters
Source: Neighborhood Reinvestment, 2003
Benefits for Neighborhoods Families and children
benefit from quality neighborhoods
Quality homes have a “rub-off effect” on the real estate market
Affordable “working-family” neighborhoods have a positive impact on home values and rents
Sources: Millennial Housing Commission, 2002; Joint Center for Housing Studies, 2004
Properties in neighborhoods with mixed housing types appreciate at greater rates than even affluent single-family areas.
Source: Joint Center for Housing Studies, 2004
The Housing Sector & the Economy
In 2001, new residential construction was associated with roughly 3.5 million jobs nationally and $166 billion in local income
In 2001, home building was the source of about $65 billion in combined taxes and fees
In 2000, home building and remodeling accounted for about 4 percent of GDP
Source: Millennial Housing Commission, 2002.
Housing is a Third of Nation’s Tangible Assets
Source: Bureau of Economic Analysis, Survey of Current Business, September 2001
Local Economic Benefits for the Community
Building equity for owners Lenders originating mortgages Construction & home-related
businesses Household spending Real estate professionals Local governments Employers, businesses & professionals
Potential Benefits of 1,000 New Owner Occupied Homes and 1,000 Apartments
2,783Jobs Supported
$3 MillionHome related spending
$18 MillionLocal government revenue
$9 MillionTransaction revenues
$49 MillionLender revenue over 10 yrs.
$53 MillionHousehold wealth in 10 yrs.
$134 MillionConstruction activity
Source: Michael Collins N-BEST; NAHB; $30,000 income; $100,000 homes, $60,000 apartments
Local Income $161 Million
66% of the net worth of low-income households is in their home
Among non-elderly low-income families, owners have 12 times the wealth of similar renters
61% see buying a home a safe investment with potential vs. 39% for IRAs
Asset Building for Families
Source: 2001 Survey of Consumer Finances; Fannie Mae 2003 National Housing Survey
America’s Housing Challenges
1. Affordability is the single greatest housing challenge facing the nation Affordability problems reach across all but the
highest income groups
2. The burden on working families
3. Supply constraints
4. Persistent homeownership gapsSource: Millennial Housing Commission, 2002.
Affordability Challenges for Working Families
Source: JCHS tabulations of the 2000 Census Supplemental Survey.
Single Earner Households 2000
21%
13%
33%
22%
19%
30%
21%
36%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Moderately Cost-Burdened (%)
Severely Cost-Burdened(%)
Moderately Cost-Burdened (%)
Severely Cost-Burdened(%)
Full Time Part Time
1-2 times Minimum WageAll
Burdens on Working Families
36 percent of households (both owners and renters) with children have:
physically inadequate housing, or crowded housing, or pay more than 30 percent of income.
29 million households pay > 30% of income in rent Ability to pay for food, health care, insurance reduced Commute times lengthen Pressure to crowd into homes
Sources: Millennial Housing Commission, 2002; Joint Center for Housing Studies, 2004
Immigrants Face Crowding IssuesCrowded Households: Native & Foreign
(more than one person per room)
8%
13%
22%
26%
8%
4% 3% 3%
0%
5%
10%
15%
20%
25%
30%
1970 1980 1990 2000
Foreign Born Native Born
Source: 2000 Census
Supply Gaps
Between 1997 and 1999, the share of homes that are affordable fell from 47% to 44% of the total owner-occupied stock
Half million net new affordable units over two years; 69% are mobile/manufactured homes
1.1 million net rental units added 1991 to 2001
Only 20% affordable to low-income families
Net losses of units for working familiesSource: 1999 American Housing Survey
66.2%71.3%
45.7% 46.3%
55.7%53.2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
All Households White alone Hispanic or Latino Black or AfricanAmerican
American Indian /Native
Asian
Persistent Gaps in Homeownership Rates
Source: Census 2000
Share Owning Home, 2000
41% of Working Families say lack of affordable housing is “a big or fairly big problem”
-Peter D. Hart Research Associates, 2004
Lack of Affordable Homes is Real Issue
71% of surveyed families agree “government should place a higher priority on making housing – both for renters and owners – affordable in my area”- Public Opinion Public Opinion Strategies, 2003
Worries Among Renters and Owners
62% worry that the cost of housing is getting so expensive that teachers, firemen & police cannot afford to live in the area
42% worry they have to spend too much time commuting because homes closer to work are too expensive
48% think rents are being driven up because there is not enough rental housing available
Source: Public Opinion Public Opinion Strategies for NAR 2003
What if Nothing is Done?
Families and children worse off housing expenses erode consumption commute times lengthen stress increases health care costs school performance declines
Workforce stability declines increase in recruitment and retention costs pressure on wages to keep up with housing costs health & productivity decline
Neighborhoods lose quality of life lack of diversity - segregation volatility in real estate markets community services and amenities
Policy Issues Facilitate Partnerships across sectors Facilitate Investments – land cost & quality standards Campaigns to Change Perceptions – erase NIMBY Streamline Regulations – reduce delays & lower cost Planning for Growth – inclusionary zoning Innovations & Experiments
Land trusts Equity partnerships Manufactured housing Employer assisted housing
Mixed-income High density designs Transportation & energy
efficiency
Housing Matters1. Children and families2. Neighborhood/community quality3. Economic benefits4. Workforce stability
Alarming Trends1. Lack of affordable homes2. Citizens are concerned3. Negative effects on communities and families
Solutions Exist Public-private partnership is key Changing perceptions to counter NIMBY Targeted investment is required Overcome regulatory barriers to accelerate development
Conclusion
Quality Homes For Arizona’s Workforce…
A Key To a Vibrant Economy