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U.I.R. Annual Summit

U.I.R. Annual Summit. Affordable Housing Presentation October 18, 2007. Recent Headlines in Utah. “Report Shows Utah is on Verge of Housing Crisis” “Affordable Housing Tough for Cops”. More Recent Headlines. “Want More than a Condo? Be prepared to Pay more than $200K”

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U.I.R. Annual Summit

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  1. U.I.R. Annual Summit Affordable Housing Presentation October 18, 2007

  2. Recent Headlines in Utah • “Report Shows Utah is on Verge of Housing Crisis” • “Affordable Housing Tough for Cops”

  3. More Recent Headlines • “Want More than a Condo? Be prepared to Pay more than $200K” • “Housing Markets Pricing Out Middle Class”

  4. … and More Recent Headlines • “Housing Affordability: Serious Disequilibrium” • “Housing Dilemma: Utah’s Economy Booming, but Affordable Homes are Hard to Find”

  5. Created by State Legislature in 1975. Mission: Affordable Housing Opportunities; Low- Moderate Income. DCED to Independent Public Corp. No $$$ support from the State. Use Entrepreneurial techniques. Largest provider of Afford Hsg Finance. What is Utah Housing?

  6. UHC’s Major Programs • Single Family finance: • Low Interest rates • Down Payment and Closing Costs • Financed with Bonds and UHC funds • Multi-Family finance • Low Interest rates • Provide affordable Equity and Debt • Financed with Bonds and Tax Shelters

  7. UHC Annual Budgets • Lean staffing: 55 employees • Use private sector: lender, builders etc. • Operating Budget $3.9M/ yr • Capital Budgets = $363M/ yr • Single Family Bonds = $254M • Housing Tax Credit = $ 44M • Multi-Family bonds = $ 47M • UHC Reserves = $ 18M

  8. Who Needs Housing Help? • Low-Income households • Elderly • Single Moms w/ kids • New Families • Mentally Ill • Physically handicapped • Native Americans

  9. Who Needs Housing Help (cont’d) • Homeless and near-homeless • Teachers, Policemen, Fire Fighters, etc • Renters • First Time Homebuyers

  10. What is Area Median Income? Wealthiest Poorest ½ below ½ above 100% of AMI

  11. “Lower-Income” is NOT Homogeneous? Degrees. • Moderate Income • Low-Income • Very-Low Income • Poverty • Near Homeless • Homeless

  12. Degrees of Lower Income “Low-Income” (LIHTC) “Very-Low-Income” “Low-Income” (HUD) Near Homeless “Moderate Income” “ Homeless“ Poverty 100% 80% 60% 50% 32% 25% AMI

  13. What is “Affordable” Housing • Balance between “Cost” and “Income” • Pay no more than 30% of Income for Housing costs (incl utilities, etc) • Many are paying <60%: Unaffordable • Rents and Selling Prices risen much faster (>18%) than Incomes (2-3%). • Over time affordable housing becomes out of reach.

  14. Example of Affordable Rent • S.L. County avg rent 2bdrm = $766/mo • Needed Income to be “Affordable” : $2,553/mo or $30,640/yr. • This is $14.73/ hour wage. • Avg Hourly Wage for Renters in Utah is $9.92/ hour. • Average Renter must work 59.4 hrs / wk to “afford”, or need 1½ workers, OR pays 45% of wages on housing!

  15. How Make Housing More Affordable? • Reducing Costs, generally • Zoning: Increase density; reduce land costs per Unit • Reduce Fees; Ease regulatory requirements • Assist with Down Payment/ Closing Cost • Reduce Labor Costs in construction • Reduce Debt / Interest Rates

  16. Private Activity Bond Authority • Federal Gov’t grants each state amount of Tax-Exempt bonding authority, on population. 24% 42% 33% Total for 2007 = $256.2 Million

  17. Housing Tax Credits • Complex tax shelters to raise Equity. • Use only for affordable Rental projects. • Created 1987 / per capita allocation. • To date UHC has issued $750 M and financed 17,000 units in 350 projects. • Also created State Tax Credits to work in tandem with Federal Credits.

  18. Impact on Rents (2bdr)

  19. UHCAffordable Home Buying (Salt Lake County) • Avg Price of homes in 2007= $153,500 • Avg price Last Year = $134,500 (+14%) • Avg price 10 years ago = $94,500 (+63%) • Avg Buyers’ Income in 2007=80% AMI • Income Last Year = 73% AMI • Income 10 years ago = 65% AMI

  20. Taking More Income to Buy

  21. Burden Gets Heavier in Salt Lake County 63% 26%

  22. Burden Gets Heavier Across State of Utah

  23. What are they Buying? • % of Homes were “New” in 2007=7% • % “New” last year = 12% • % “New” ten years ago = 25% • % of Homes were Condos in ’07= 44% • % Condos last year = 39% • % Condos ten years ago = 10%

  24. Financial Stability Council • Housing Committee Recommendations: • Resources: Increase Existing and Create New; i.e. Dedicated Trust Funds • Strengthen Local Gov’t Commitment: HB295; Encourage development not obstruct Affordable Housing efforts. • Education Campaign: Put a Face on Afford Hsg; Your Parents, your children, important Citizens, Econ and Social Benefits, etc.

  25. Challenging Existing (mis)Perceptions of Aff. Hsg. • It’s Attractive, well-built, and consistent with surrounding Architecture. • Does not Negatively impact Property Values. • Families are Responsible, hard-working and willing to maintain homes. Specify Income Ranges.

  26. Auxiliary Benefits and Linkages Socio Economically • Aff. Hsg links to Childhood and Family Development. • Aff. Hsg links to Economic Development and Economic Impact • Aff. Hsg links to Reduced Transportation and Energy Costs. • Aff. Hsg links to Attracting and Retaining Entry – Mid level Employees

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