Housing Affordability Housing Affordability OverviewOverview

Door County, WisconsinDoor County, Wisconsin

What is Affordable Housing?What is Affordable Housing?

Housing is considered Housing is considered affordable if a household pays affordable if a household pays no more than 30 percent of its no more than 30 percent of its gross income for all housing gross income for all housing

related costs.related costs.

What is housing“cost burden?”What is housing“cost burden?”

Households are considered cost burdened if housing related costs exceed 30 percent of gross income.

Households who pay more than 30 percent of their gross income for housing may have difficulty affording other necessities such as food, child care, transportation and health care.

Out of Reach 2005Out of Reach 2005

The National Low Income Housing coalition compiles this report each year

Findings for Door County:– Area Median Income, 2005 = $55,500– 30%of AMI = $16,650– Fair Market Rent for Two Bedroom Unit =

$581 (40 percent of median)

Out of Reach (cont)Out of Reach (cont)

Annual Income Needed to Afford 2 bedroom FMR: $23,240

Hourly Wage needed to afford @ 40 hours per week = $11.17

Housing wage as a % of minimum wage = 196%

Work hours necessary at minimum wage = 78

Since housing affordability is Since housing affordability is based on household income, based on household income, let’s look specifically at two let’s look specifically at two households, one earning households, one earning

median income ($55,500) and median income ($55,500) and one earning 40 percent of one earning 40 percent of

median ($22,200). median ($22,200).

Who Falls in These Categories?Who Falls in These Categories?Examples of EarningsExamples of Earnings

Elementary school teachers: – Mean: $38,786– Mean of first third (entry): $25,083

Nursing Aides, Orderlies, Attendants: – Mean: $24,375– Entry: $20,433

Child Care Workers: – Mean: $16,558– Entry: $13,899

More Earnings ExamplesMore Earnings Examples

Firefighters: – Mean: $31,976– First Third (entry level): $29,732

Motor Boat Mechanics:– Mean: $28,536– Entry: $18,711

Food Preparation Workers: – Mean: $19,129– Entry: $13,820

Hotel, Motel, Resort Desk Clerks: – Mean: $19,454– Entry: $15,149

Now let’s look at rental housing in Now let’s look at rental housing in Door CountyDoor County

Total housing costs for a 2-bedroom rental unit in Door County:– Average rent: $588

What income level would make this rental unit affordable?– Income would need to be $1,960 per month or $23,520

per year

Our second household could not afford this unit

The second household would The second household would have to spend more than 30 have to spend more than 30

percent of their income for that percent of their income for that average 2BR unit in Door County. average 2BR unit in Door County. They could afford a rent of $555. They could afford a rent of $555.

What units are available and What units are available and where?where?

Let’s shift gears to Let’s shift gears to homeownershiphomeownership

The median sales price for houses in Door County was $221,400 in the last quarter of 2005.

How much income does a How much income does a household need to qualify for household need to qualify for

the median-priced house?the median-priced house? A household would need an income of about

$58,896 per year to afford the median priced house in Door County.

Note these important assumptions:– The household has no debt– The household is using a loan at 6.25% fixed interest

rate over 30 years, makes a 10 percent downpayment, and spends 25 percent of their income on mortgage payments

How much house could our How much house could our two households qualify for?two households qualify for?

With an income at the median of $55,500, a household could qualify for a home value of $208,655

With an income of $22,200, a household could qualify for a home value of $83,462

Again, this assume a 10 percent downpayment and the ability to qualify for the specified loan terms.

Who may be affected by Who may be affected by problems with housing problems with housing

affordability?affordability? Many of those who provide services essential to

community functioning, such as those employed providing public safety, nursing care, public education and child care.

Those who provide other essential services within our community, such as secretaries, retail clerks, and food service workers.

Others working in manufacturing and services.

What are the ImplicationsWhat are the Implications

Potential difficulty in economic development

Performance of children in school Budget issues for familiesCommunity building and participation

Other Housing IssuesOther Housing Issues

Median year structure built (2000): 1971Percent of housing units built before 1970:

47.8Percent married couple households with

own children: 21.9Percent nonfamily households: 32.3