Fostering Self-Sufficiency
Housing Alliance :: FAQs
Below is a list of our most commonly asked questions about the Housing Alliance.
What is Affordable Housing?
Why is Affordable Housing Important in Morris County?
Who is affected by the lack of Affordable Housing and what is the impact?
What is the current status of Affordable Housing in Morris County?
What are some economic impacts of not having enough affordable housing in the county?
To what is the lack of Affordable Housing attributed?
Will my property values be lowered with the affordable housing in my neighborhood?
What is Affordable Housing?
The standard definition of affordable housing is when housing expenses, e.g., rent, mortgage, insurance, taxes, and utilities, cost no more than 30% of a household’s annual income. Programs to create or preserve affordable housing typically focus on households earning 80% ($66,866*) or less of the area median income, which is $83,5831 in the county. For example, Morris Habitat homeowners typically earn 50% of the median income for this area. In that program, the combination of volunteer labor, donations and no-profit, no-interest mortgages make the homes affordable.
*Income for a four person household. Income limits vary based on the size of the household.
1 American Community Survey, (ACS) 2004.
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Why is Affordable Housing Important in Morris County?
About one out of three homeowners and renters currently pay more than 30% of their income for housing, which means they are “housing-cost” burdened. These households are often forced to choose between housing and essential items such as food, clothing, healthcare, and transportation.
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Who is affected by the lack of Affordable Housing and what is the impact?
The ENTIRE community is affected, but the greatest impact is felt by those earning less than the median income of $83,5832. Often this affects particular groups such as:
- Senior Citizens – who have raised their families in the community and are increasingly unable to afford to stay in their homes.
- Families and Individuals – who are not able to live near their jobs, extended families or social infrastructures, such as houses of worship, civic organizations, etc.
- People with Special Needs – who are struggling to obtain services due to the outlying location of their homes.
- Taxpayers – who deserve long-lasting, sustainable solutions to the housing crisis.
- Businesses – who rely on a diverse labor pool of skilled and unskilled workers.
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What is the current status of Affordable Housing in Morris County?
- At the 2005 median selling price ($546,3603), a homebuyer would need to earn
$144,850 annually to afford a house in this price range assuming a 6.23%, 30
year-conventional loan and a 10% down payment4.
- While for sale housing prices rose 57% since the first quarter of 20005, median income rose only 13% over the same period6.
- 35% of Rental Households spend 30% or more of their income on rent7.
- Hardest hit are renters earning less than $41,000. Market forces have moved previously low-income rental units into the price range of more moderate-income residents. The result is a sizeable decrease in the number of rental units available for $875 or less per month.
- A 2004 United Way of Morris County study shows there is a shortfall of more than 10,000 affordable housing units in Morris County.
- According to the county's Department of Planning, Development and Technology, there are 5,259 units specifically for low- and moderate-income households – this is only 3% of the entire occupied housing stock (171,967).
- In Morris County, a person earning minimum wage needs to work 152 hours/week to afford a two- bedroom apartment at the Fair Market Rate8.
3 Weichert Realtors as reported in "Housing Market Humming Along," Daily Record, July 28, 2005.
4 Methodology by Dan McGuire, 2005.
5 New Jersey Home Sales Report, New Jersey Association Realtors.
6 Methodology by Dan McGuire, 2005.
7 American Community Survey Profile, 2003.
8 National Low Income Housing Coalition, Out of Reach, 2004.
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What are some economic impacts of not having enough affordable housing in the county?
There are direct and indirect impacts on social, natural and infrastructure resources, including:
- Employers are having difficulty filling and/or retaining entry-level and service jobs.
- Many county and municipal workers, hospital staff and health aides, teacher's aides and child care workers, store and office clerks, even accountants and computer systems analysts, provide essential services to our community but cannot afford to live here9.
- Productivity is wasted as workers are spending more time in their cars traveling from home to work, which is adding to congestion, traffic, stress and poor air quality.
- Communities are losing contributions that individuals make through volunteerism, serving in public office, supporting businesses, and helping neighbors (e.g. volunteer fire and emergency services, etc.).
9 Average annual salary from NJ Department of Labor and Workforce Development Wage Survey
for multi-county area that includes Morris County. Top
To what is the lack of Affordable Housing attributed?
The combination of a heated real estate market, scarcity of land, local and state zoning, land use, and economic and tax policies are fueling the supply shortage and demand increase.
Also:
- Lower interest rates have resulted in increased purchasing of real estate. This increased demand, combined with a low supply of housing has caused an escalation of prices.
- Investors, buying on speculation, have further reduced the supply of real estate, pushing up the price of housing.
- Recent legislation such as the Highlands Water Protection and Planning Act, have preserved large tracts of land, while at the same time, imposing a barrier on supply of new housing.
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Will my property values be lowered with the affordable housing in my neighborhood?
Property market movement results primarily from neighborhood desirability, characteristics of the housing being sold, and the overall development and prosperity of the area. Research has found that affordable housing has no negative impact on the price or frequency of sales of neighboring homes. Any housing that is attractively designed, well maintained and is of quality construction can actually contribute to increased property.
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For more information about the Housing Alliance email Housing Alliance, or phone 973.993.1160, x150. The Housing Alliance is a member of the Homes for NJ campaign, www.homesfornj.com.
Click here to download a word doc of these frequently asked questions. |
