WHY AFFORDABILITY IS STILL AN ISSUE

By Theresa Swanson

For generations, owning a home has been the American dream. It all started when World War II veterans returned from overseas and were ready to settle down and start families. 

The federal government was there to assist with the Servicemen’s Readjustment Act of 1944, offering no-down-payment loans guaranteed by the Veteran’s Administration. Seemingly overnight, subdivisions began cropping up. 

Baby boomers continued their parents' tradition of homeownership, as did Generation Xer's. Millennials, though, were slow to jump on the bandwagon. They had seen the housing bubble burst, and weren’t convinced a picket fence and a mortgage equated to happiness.

Even so, housing is hot in Central Florida. Inventory is low, and prices are steadily rising. The American dream is back. But not everyone will be able to enjoy it. 

The notoriously low wages that thousands of full-time workers earn are rising slowly, if at all, despite many companies earning record profits. This, coupled with the rising cost of land and mounting fees charged by local governments, has forced many families to become renters for life.

That, in turn, drives up rental rates. Many families are spending most of their income on rent, unable to save for a down payment. Economists have coined a term for this: “rent burdened.” 

Everyone is calling for more affordable housing. But when you add up land acquisition, development costs and the government fees, a local single-family homesite, on average, costs more than $100,000 before a shovel of dirt is turned. 

Yes, we do have an affordable housing crisis. But it's a direct result of an affordable wage crisis. And until that’s fixed, the affordability crisis will remain.