Housing in West Florida

November 16, 2006

In this part of today’s presentation, we will:

Briefly examine the impact of the base realignment on housing demand

Define affordable housing and “cost burden” Examine affordable housing need estimates and

projections for the region Discuss characteristics of the region’s housing

supply

Base realignments Eglin

Addition of 4,475 military and civilian jobs $304 million in construction investment

Pensacola NAS Loss of 1,600 jobs

Eglin Air Force Base

Pensacola Naval Air Station

Whiting Field

Gulf Breeze

Milton

Crestview

DeFuniak Springs

Fort Walton Beach

Destin

NicevilleValparaiso

Pensacola

Escambia

Santa Rosa Okaloosa Walton

Economic impacts – jobs Okaloosa

7,500 additional jobs Escambia

Loss of 2,300 jobs Santa Rosa

250 additional jobs Walton

275 additional jobs

Projecting additional households Household impacts projected using

ECFRPC DRI Housing Methodology Estimates income for employees

Estimates headship rates for employees (eliminating those who are not the head of the household)

For employees who are the head of their household, estimates single and multi-worker households

Estimates additional income for multi-worker households

Projecting additional households

Projected Households, 2010  Escambia Okaloosa Santa Rosa Walton

Direct

Military -493 3,218    

Civilian -596 11    

Professional, Technical

-59 8    

Indirect

-552 1,564 33 72

Total -1,700 4,802 33 72

Direct and indirect impacts of the base realignments

Projecting total households, examining affordable housing need Total households

Owners and renters Household income Age of householder 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.

Renter- or owner-occupied housing is affordable if these items total no more than 30% of gross income:

Mortgage payment, including: Principal Interest Taxes Insurance

Condominium fees or manufactured housing costs

Electric Gas Water & Sewer

Affordable Housing Need A common measure of housing need is the

number of cost burdened households Besides cost burden the other major component

of affordable housing need estimates is household income: defined as a percentage of area median income (AMI)

and adjusted for household size These components and their definitions are

related to program eligibility requirements

The need for affordable housing is frequently discussed using these income levels:

Moderate income: 80-120% AMI ($63,050)* Low income: 50-80% AMI ($42,050)* Very low income: 30-50% AMI ($26,300)* Extremely low income: less than 30% AMI

($15,750)* 60% AMI ($31,550)* is a typical level for Florida

Housing’s rental programs

*income limit for 4-person household using the 2005 State Median of $52,550

and these cost burden levels:

The conventional threshold of more than 30%

Severe cost burden, more than 50% (DCA summary indicator)

Florida Housing’s threshold of 40% The choice of a level has significant

implications for numerical goals

Cost burden Cost burdened households: households

spending more than 30% of their income for housing

In 2005: Percent of all households that were cost-burdened and earned 60% or less of median income Okaloosa 17.5% (9th in state) Escambia 17.5% (10th in state) Santa Rosa 14.1% (45th in state) Walton 12.6% (63rd in state)

Cost burden In 2005: Percent of renter households that were

cost-burdened and earned 60% or less of AMI Escambia 31.8% (10th in state) Santa Rosa 31.4% (16th in state) Okaloosa 30.1% (28th in state) Walton 27.6% (47th in state)

In 2005: Percent of owner households that were cost-burdened and earned 60% or less of AMI Okaloosa 11.1% (31st in state) Escambia 10.5% (39th in state) Santa Rosa 10.0% (52nd in state) Walton 09.0% (64th in state)

Cost burden and income In 2005 the 4 county region has an

estimated 24,000 low income, severely cost burdened households (almost evenly split between owners and renters).

By 2030 that number will grow by 14,000 households.

Between 2005 and 2030 the number of households with incomes less than 60% AMI will grow by 44,000

Special Population Groups

These groups may be disproportionately represented or may not be incorporated in estimates: Elderly Farmworkers Homeless People Persons with Disabilities

Disability & Housing Need Summary4 County Summary, 2005

Disability and Housing Needs Summary4 West Florida Counties

Households with Low Income (<60% AMI), Severe Cost Burden (50+%), and Including At Least One Person Age 15+ with a Disability:

Household Income Tenure(percent of median income) Owner Renter Total 0-20% 1,832 2,219 4,051 20.1-30% 1,250 1,780 3,030 30.1-50% 1,911 1,224 3,135 50.1-60% 518 126 644Total 5,511 5,349 10,860

Sources: U.S. Census Bureau, 2000 Census of Population and Housing, 5-Percent Public Use Microdata Sample (PUMS); U.S. Census Bureau, 2000 Census of Population and Housing, Special Cross-Tabulation Prepared for the Shimberg Center for Affordable Housing,

Year 2005 Estimates

Public Housing – 4 County summary

There are approximately 1,300 public housing units and over 3,700 Housing Choice (Sec. 8) vouchers.

Two of the largest Authorities, Pensacola and Ft. Walton, have waiting lists of approximately 1,500 households for Housing Choice vouchers (2004 survey data).

Assisted Housing Supply – 4 County summary

There are 4,661 assisted housing units in the 4 county region.

Of these, 2,723 units have HUD or Rural Development rental assistance.

Preservation: in Escambia County, for example, there are over 700 units in assisted properties which have terminated HUD mortgages, or RD or FHFC restrictive use/income or rent restrictions that expire by 2010.

Housing supply Impact of hurricanes Building activity, 2000-2006 Seasonal housing Affordability/cost burden Home sales

Hurricanes Estimated damage from hurricanes:

several thousand residential units Hurricane recovery funding Labor and material shortages

Hurricanes (1)2004 Storms - FEMA Applicants

Counties Total DamageDestroyed or

Major Damage Total DamageDestroyed or

Major DamageEscambia 6,724 2,289 4,857 1,557Okaloosa 1,174 306 775 189Santa Rosa 3,976 1,964 2,377 1,073Walton 592 208 484 178Total 12,466 4,767 8,493 2,997

*Units sustaining structural damage and eligible for FEMA assistance

All FEMA Applicants*Households with Incomes

under $30,000

Hurricanes (2)Depreciation in just value: 2005 tax roll compared to 2004 tax roll

(homestead exemption in 2004)

Counties Single-FamilyManuf. Housing (real

property only) Condominium TotalEscambia 4,405 232 385 5,022Okaloosa 170 20 64 254Santa Rosa 2,562 769 106 3,437Walton 173 994 21 1,1884 County Total 7,310 2,015 576 9,901

State 77,249 26,265 13,479 116,993

Hurricanes (3) Hurricane housing recovery plans

Building activity Between 2000 and July 2006, 48,993

permits issued Escambia 14,208 Okaloosa 13,068 Santa Rosa 09,736 Walton 11,981

Type Single family 37,291 (76%) Multifamily 11,702 (24%)

Seasonal housing In 2000, 40% of vacant units in West

Florida were seasonal Escambia 25% Okaloosa 36% Santa Rosa 23% Walton 63%

Seasonal housing, second homes, investment properties

Single Family Home SalesWest Florida Counties, 2005

  Escambia OkaloosaSanta Rosa Walton

All SalesNumber of Sales 6,648 5,170 3,505 1,807

Median Sales Price $143,000 $204,900 $208,900 $431,800

No Homestead Exemption in Year Following Sale

Number of Sales 3,133 2,733 1,499 1,418

Median Sales Price $134,000 $195,000 $200,000 $469,450

Percent of Total Sales 47% 53% 43% 78%

Homestead Exemption in Year Following Sale

Number of Sales 3,515 2,437 2,006 389

Median Sales Price $150,900 $213,900 $214,150 $320,000

Percent of Total Sales 53% 47% 57% 22%

Home prices, 2000-2005(Florida Association of Realtors MLS data)

In the Fort Walton Beach MSA, the median sale price rose by 97%

In the Pensacola MSA, the median sale price rose by 60%

Home valuation

Estimate of Home Over- or Under-ValuationFlorida Metro Areas, 2003-2006

Year 2003 2004 2005 2006

Fort Walton Beach -8% -1% 20% 39%

Miami 10% 22% 37% 64%

Naples 15% 29% 53% 103%

Orlando -2% 2% 13% 40%

Pensacola -2% 2% 14% 30%

Tampa-St. Petersburg -3% 4% 15% 36%

West Palm Beach 2% 18% 39% 66%

How rising prices relative to income have reduced affordability – comparing 2000 with 2005 in Santa Rosa

Santa Rosa County: median sales price and median family income, 2000Applicant Information:Annual Income 41,900 M onthly Debt 300.00M onthly Incom e 3,491.67Front Ratio 31% Total 300.00Back Ratio 41%

M ax Front Ratio $1,082.42 M ax M ortgage am ount 133,932.77M ax Back Ratio less debt $1,131.58 Deferred Loan Needed N/AM ax M onthly PITI $1,082.42

Total M onthlySales Down M ortgage Annual M onthly Term M onthly Paym entPrice Paym ent Am ount Interest Interest (M onths) Paym ent T&I without subsidy

$110,950 $5,547.50 $105,402.50 6.75% 0.56250% 360 $683.64 $213.73 $897.37T&I Escrow Calculations:Asseessed Value* 85%Hom estead Exem ption $25,000.00M illage Rate per $1,000 $25.00Estim ated Taxes 1732.69Annual Cost of Insurance* 0.75%Estim ated Annual Insurance $832.13M onthly T&I Escrows 213.7345833* as a % of Purchase Price

How rising prices relative to income have reduced affordability – comparing 2000 with 2005 in Santa Rosa

Santa Rosa County: median sales price and median family income, 2005Applicant Information:Annual Income 50,700 M onthly Debt 300.00M onthly Incom e 4,225.00Front Ratio 31% Total 300.00Back Ratio 41%

M ax Front Ratio $1,309.75 M ax M ortgage am ount 134,241.45M ax Back Ratio less debt $1,432.25 Deferred Loan Needed 60,508.55M ax M onthly PITI $1,309.75

Total M onthlySales Down M ortgage Annual M onthly Term M onthly Paym entPrice Paym ent Am ount Interest Interest (M onths) Paym ent T&I without subsidy

$205,000 $10,250.00 $194,750.00 6.75% 0.56250% 360 $1,263.14 $439.06 $1,702.21T&I Escrow Calculations:Asseessed Value* 85%Hom estead Exem ption $25,000.00M illage Rate per $1,000 $25.00Estim ated Taxes 3731.25Annual Cost of Insurance* 0.75%Estim ated Annual Insurance $1,537.50M onthly T&I Escrows 439.0625* as a % of Purchase Price

How rising prices have reduced availability 2000 – 2005 in Okaloosa County

Okaloosa County - Single Family Home Sales by Price

$108,500 $112,000$121,800

$130,000

$155,000

$201,000

0%

10%

20%

30%

40%

50%

60%

Year of Sale

Percentage of Total Sales

$0

$50,000

$100,000

$150,000

$200,000

$250,000

Median Sales Price

Less than $100,000 44% 41% 34% 28% 17% 6%

$100,000 to $199,999 42% 45% 48% 49% 50% 43%

$200,000 or More 14% 14% 18% 23% 33% 51%

MEDIAN $108,500 $112,000 $121,800 $130,000 $155,000 $201,000

2000 2001 2002 2003 2004 2005

Sale price trends

Median Sale Price TrendsWest Florida Metro Areas, 2005-2006

Pensacola Fort Walton Beach

Condominiums, January 05-06 -61% -57%

Condominiums, August 05-06 -29% -28%

Single family homes, August 05-06 -3% -11%

Rental unit at HUD estimated Fair Market Rent

In Pensacola MSA, the Fair Market Rent (FMR) for a two-bedroom apartment is $579. In order to afford this level of rent and utilities, without paying more than 30% of income on housing, a household must earn $23,160 annually (a very low income household).

Assuming a 40-hour work week, 52 weeks per year, this level of income translates into a Housing Wage of $11.13.

Summary Hurricanes damaged housing, exacerbated

existing labor and material shortages and reduced the supply of affordable housing

West Florida experienced rapid home price increases between 2000-2005

Percent of cost burdened households increased in all 4 counties between 1990 and 2000

Trend in affordability of homes sold was downward between 2003 and 2006 in all counties

Homes are over-valued in most Florida MSAs Sales prices of single family homes and condos

are now trending downward

Housing and transportationMetro area

Average percent of income spent on

Housing Transportation Both

New York

Tampa

37.6%

37.3%

15.4%

20.4%

53.0%

57.7%

Links and Contact:

Florida Housing Data Clearinghouse: www.flhousingdata.shimberg.ufl.edu www.shimberg.ufl.edu

Florida Housing Coalition www.flhousing.org

Contact information:Bill O’Dell352-273-1171billo@ufl.edu