Trends
After all, the median sale price for a single-family home in Tampa Bay is now about $209,700, while the median sale price for a condominium is now $164,100.
A would-be buyer earning $54,000 per year can probably qualify for a mortgage of about $135,000. So it doesn’t take a math whiz to see the disparity, particularly in the single-family market.
But don’t give up on the American Dream. There are affordable homes to be had, if you know where to look.
The problem, of course, is a 77 percent run-up in home prices over the past five years. Has your paycheck gone up 77 percent?
Probably not. In fact, the Florida Housing Coalition says the region’s median household income has crept up by just 1.4 percent during the same time period.
Luckily for buyers, however, price increases have stalled and even slipped a bit. The median sale price for a single-family home was $218,600 a year ago, according to the Florida Association of Realtors, while the median price for a condo was $172,300.
Still, it’s tough for people looking for something in the $180,000 range, says Nicole Rateau, a realtor with Charles Rutenberg Realty in Clearwater.
“And that’s just a basic house of 1,200 square feet or less,” Rateau says. “To find that, you have to be a little bit more creative or the realtor will have to work out of the box.”
One effect of the price boom has been that essential workers—teachers, firefighters, police officers—can often no longer afford to live where they’re employed. At first, they’ll compensate by moving farther out and commuting.
“For homebuyers, you drive until you qualify,” says Joe Narkiewicz, executive vice president of the Tampa Bay Builders Association.
But for middle-income commuters, fuel costs are becoming prohibitive. In addition, there’s a psychic cost because longer commutes mean less family time.
What’s affordable?
?
“Affordable housing” once referred to housing for people with low incomes. But another increasingly common industry buzzword is “workforce housing,” which specifically refers to homes for people with average incomes.
“Affordable housing is a very relative term,” says Mike Shrenk of New Millennial Homes in Tampa, a builder who specializes in affordable new homes. “Our passion is the entry-level market, which would include all workforce housing.”
Some Bay area communities are beginning to recognize the problem. And the Florida Legislature has created the Community Workforce Housing Innovation Pilot Program to address the needs of essential service workers.
But what about the rest of the regular folks?
Renting their
only option?
Unfortunately, there’s no sign of an influx of higher-paying jobs.
In fact, the Florida Agency for Workforce Innovation estimates that 75 percent of the jobs that will be created between now and 2013 in Tampa" target="_blank">Hillsborough County will pay at or below 80 percent of the area’s median income.
That means the current supply of affordable housing will be inadequate.
The Shimberg Center for Affordable Housing at the University of Florida estimates Tampa" target="_blank">Hillsborough County will need an additional 19,000 units for these workers to keep up with demand.
Renting might seem to be the only choice for families that can’t afford to buy, but even that can be a problem, as supplies are shrinking and rents are rising.?
The National Low Income Housing Coalition’s “Out of Reach” report, released in December, provides data on how much a household must earn to afford a modest market-rate rental home.
The report says the fair market rent in Florida for a two-bedroom apartment is $850 per month. To reasonably afford renting such a unit (with utilities), a household must earn $2,834 per month or $34,007 per year.
A minimum-wage worker earning $6.40 per hour would have to work 102 hours each week for 52 weeks to afford the unit.
That’s obviously not realistic. But neither, say some experts, is the opinion that developers and builders should simply build a greater number of lower-cost homes.
Homebuilder hurdles
Residential construction companies, like any business, must make a profit, says Narkiewicz.? And when builders’ costs go up, they get passed along to buyers.
“One of the prime issues is land cost,” Narkiewicz says. “That’s a major contributor to increased housing costs.”
Homebuilders also face high impact fees and costly permitting procedures, which help to drive up housing costs, he says.?
Narkiewicz says it’s also a misconception that “inclusionary zoning,” which requires builders to include affordable housing as part of their projects, can alleviate the problem. If one group of homeowners in a community pays below-market prices, he points out, then the other homeowners will be forced to pay higher prices to compensate.
“Inclusionary zoning does nothing more than drive up the housing across the board and it [housing] becomes less affordable for everyone else,” Narkiewicz says.
What’s the answer?
The problem can be addressed, Narkiewicz says, but don’t expect builders alone to bear the burden.
“First, there has to be property tax relief and insurance relief,” he says. “And the government needs to wake up and recognize that all the regulations they have passed have contributed to the high cost of housing.”
Solutions can also include setting up land banks and streamlining the permitting process for builders who want to create affordable housing.
Another possibility not discussed often enough is employer-based housing, says Tom de Yampert, manager of housing and community development for the city of St. Petersburg. Companies can offer a rent supplement or down payment assistance as incentives to get workers.
Where is affordable housing now?
Buyers typically find their dollar stretches further when they go farther from the city center.
Tripp Trademark Homes is building townhomes priced from the $170s in Hillhurst Crossing and single-family homes from the $190s in Tierra Del Sol, near Land O’ Lakes. In north Sarasota" target="_blank">Manatee County, Ryland Homes is building townhomes starting from $178,990 at Copperstone.
In St. Petersburg, New Millennial Homes specializes in building homes ranging from about $140,000 to $240,000 on infill sites. The company, which has built more than 1,000 homes in the Bay area since 1998, offers 12 models that range in size from 1,200 to 3,200 square feet.
And US Home is building 36 three-bedroom townhomes priced from the $140s and 58 four- and five-bedroom homes priced from the $170s at The Oaks at Riverview, in the heart of old Tampa off North Florida Avenue near the Lowry Park Zoo.?
Building more affordable homes is one solution, but there are others, says de Yampert.
“Maybe we change our mindset,” he says. “Maybe we don’t get the brand new 2,200-square-foot house with granite countertops. Maybe we make it work with the 1,200-square-foot fixer-upper or the condo conversion in a building from the 1970s. And then we put in elbow grease and make it our home. We build up equity and later buy a larger home. That’s how it used to be.”
De Yampert also suggests looking in emerging neighborhoods such as Bartlett Park, where you can still find single-family homes priced between $150,000 and $200,000.
“There is affordable housing to be had,” he says. “But there’s no easy fix. Affordable housing is not something that’s going to be solved today or tomorrow.”
EASING STICKER SHOCK
Looking to ease the sticker shock on that new home?
Government agencies offer several homebuyer assistance programs, including ones that help buyers with their down payments, says Tom de Yampert, manager of housing and community development for the city of St. Petersburg.
“There’s money at the city, county and state level,” says de Yampert. “Layering these funds makes the homes more affordable.”
Pinellas County, for example, offers programs to help builders and developers lower the cost of building affordable housing. For more information: (800) 806-5154;
www.pinellascounty.org.
For more information on other local affordable housing programs, check with these offices:??
?
The City of St. Petersburg, (727) 893-7247; www.stpete.org/housing/index.htm.
Pinellas County Community Development Department, (727) 464-8210.
Pasco County Housing Authority, (352) 567-0848; www.pascocountyhousing.org.
Hillsborough Housing Office, (813) 246-3171; www.hillsboroughcounty.org/affordablehous-ingoffice.