Just because you're paying your rent or mortgage every month on the dot doesn't mean you can really afford it. That's the idea of "house poor," people spending so much on housing costs that they're not spending on much of anything else -- or saving, for that matter.

Is this you?

The National Housing Conference and Center for Housing Policy just updated their "Paycheck to Paycheck" data this week to show the income you need to avoid spending too much on the typical home or rental in metro areas across the country.

Their calculations suggest that plenty of workers -- from bank tellers to security guards to school bus drivers -- had better double up with another working stiff, or they'll have a hard time of it. That's all right for a variety of families, but it's less all right for single folks and any couples dealing with a job loss.

In the Baltimore region, the two housing groups say, you need to earn almost $70,000 a year to buy the median-priced home and not spend more than 28 percent of your income on the mortgage, taxes and insurance (a common measure of affordability). This assumes a 10 percent down payment, bigger than FHA's minimum requirements.

You don't need to earn as much if you're renting, but it's still a good chunk of change.

Continue reading "House (or apartment) poor" »

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Categories: Affordable housing, Housing stats
        

In response to this post about a call to convert downtown Baltimore office buildings into apartments, a reader offered this plea:

"What the downtown area really needs isn't just more apartments. It needs more affordable apartments where young single people can live alone in a nice place without dropping $1700 a month for a 500 sq ft studio/1br plus parking. There's really no middle ground between the high end apartments that aren't as nice as the rents would suggest and the never-renovated dumps. But that middle ground is a huge market. I know so many people who would ditch their 2 and 3 roommate row houses if more reasonable apartments were available."

It reminds me of the frustration expressed by middle-income home buyers that they can't find anything suitable in their price range.

The question I have for builders is, can you build homes or apartments aimed at people in the middle? If not, what's standing in your way?

The median household income in the Baltimore region is about $67,000, according to the Maryland Department of Planning. In Baltimore proper, it's $40,000. If you agree with the notion that 30 percent of your pre-tax income is the maximum you should be spending on housing, that's $1,675 a month for the typical household in the region and $1,000 for the typical city household.

Are you typical? What do you think of your housing choices?

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Categories: Affordable housing, Renting
        

Mike Mitchell has led Habitat for Humanity of the Chesapeake through one name change, two mergers and lots and lots of affordable-housing construction projects since he took the helm almost nine years ago. Now the CEO is about to head out the door.

He said he thinks the organization is well-positioned, and he's ready to do something else.

"There's been a lot of change," Mitchell said Tuesday. "I think with all of that change, I am, I guess, tired in a lot of ways -- 'tired' isn't the right word, but I'm just ready for something new. I'm actually going to take some time, and I may even change careers completely. I don't know what I'm going to do, but I'm excited about doing something different."

He plans to step down in mid-November. The group expects to launch a search for his replacement shortly but has already been getting inquiries from potential candidates, which tells you how fast news travels in the nonprofit community here. (It was only Friday that Mitchell told the board he intended to leave.)

Continue reading "CEO of local Habitat for Humanity chapter is moving on" »

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Categories: Affordable housing
        

If you're trying to cut your utility bills, find a less expensive place in live in pricey Howard County or get a loan modification from Wells Fargo, you might want to check out these events:

Energy conservation. The Fuel Fund of Maryland is partnering up with Direct Energy and The Loading Dock to hold a weatherization fair on Saturday, Oct. 29 from 1 p.m. to 3:30 p.m.

They promise a hands-on look at subjects ranging from fixing leaks to installing weather stripping and caulking. Oh -- and an intro to "vampire energy," just in time for Halloween.

Where: The Loading Dock, 2 N. Kresson St. in Baltimore.

Affordable housing. Howard County's Moderate Income Housing Unit program is taking applications through Oct. 31 for people hoping to snag a less-pricey home for sale or rent there. Eligible purchasers must have a household income no more than 80 percent of the county's median income, while eligible renters have to be at 60 percent or below. (It ranges depending on family size -- more details here.)

Continue reading "Three housing events you might want to know about" »

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Categories: Affordable housing, Foreclosure help, Housing events, Utility bills
        

Housing costs are a big piece of most people's budgets. Too big, in many cases.

The rule of thumb is to keep them at or below 30 percent of your before-tax income. But the Center for Housing Policy's newest look at metro areas finds that it's difficult to impossible to do that on one salary alone for workers in a large variety of jobs. 

Here's what the Center's Paycheck to Paycheck analysis found for the Baltimore region:

--To afford the typical rent on a one-bedroom apartment (just over $1,000 a month including utilities, according to HUD), you need to earn $42,000

--To afford the typical rent on a two-bedroom apartment (almost $1,300 a month including utilities), you need to earn $50,000

--To afford to buy a typical home for sale at $220,000 (using a 10 percent downpayment and a mortgage with a 5 percent rate), you need to earn $65,000

The average salary in the Baltimore metro area: $55,000, according to the state. Yeah, $10,000 less than the threshold to buy the typical home -- not the average home, mind, which is more expensive -- and just $5,000 more than the two-bedroom threshold.

The center analyzed 72 occupations in the Baltimore area, jobs like nurse and truck driver that typically require no more than a bachelor's degree, and found that three-quarters don't pay enough to afford the rent on a typical two-bedroom unit. All but a few don't pay enough to buy that $220,000 house. (The center used median salary data for workers with several years of experience, so it's not entry-level.)

This week's story on the report mentions some of the popular coping strategies, such as getting smaller digs, commuting longer distances and ratcheting back on non-housing expenses. The most common is probably the dual-income strategy. But as the center's Maya Brennan notes, you can't always count on both you and your spouse or significant other having a job.  

Continue reading "A housing affordability problem" »

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Categories: Affordable housing
        

Size matters when it comes to the cost of housing. More space means forking over more money, both for energy and for the rent or mortgage.

The constraints imposed by the housing bust/financial crisis/recession trifecta put downward pressure on the ever-expanding size of new houses. After increasing in floor area by more than 40 percent between 1980 and 2007, the typical newly built single-family house in the U.S. shrunk 6 percent over the next two recessionary years, according to the most recent Census Bureau data.

But that's a minor change, not a major one. At 2,135 square feet, the typical single-family home built in 2009 was still substantially larger than the 1,595-square-foot new homes people were buying a generation earlier.

It's not just homes for sale. Apartment units have also gotten bigger over the years. Thirty-four percent of U.S. units built in 2007 were 1,200 square feet or larger, compared with 21 percent in 1999. (Those were the most recent and oldest years available from this Census Bureau report.)

Do we really need that extra space?

Extra amenities inside homes and outside, in the development or apartment complex, drive up costs, too. When I wrote about high-end rental amenities in the region earlier this year, Wonk reader BB noted that average complexes have felt the need to spruce up -- and then raised the rents.

"Many of the $650-750 apartments are now asking $800-900+. They ALL were boasting 'new' kitchens, and a free LCD wall mount tv in the living room," BB wrote. "There was nothing wrong with the old kitchens, and I do not need a TV - Can I go back to paying $700 a month please? To me this is a major disincentive that is just driving up the cost."

I'm curious whether the new (or newly renovated) homes and apartments in the region fit your idea of the right balance between quantity, quality and affordability. Would you do something entirely different if you were in charge? Or is everything peachy?

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (3)
Categories: Affordable housing, Homebuilding, Renting
        

Former President Jimmy Carter isn't scheduled to start hammering nails for Habitat for the Humanity of the Chesapeake until Oct. 5, but already he's lending them a hand.

Mike Mitchell, chief executive of the nonprofit, says the planned visit as part of Carter's annual "work project" week with Habitat for Humanity International has helped the Baltimore-based affordable housing builder raise hundreds of thousands of dollars.

Check out the Q&A I did with Mitchell, in which he discusses the ripple effect of the work project, how to volunteer and whether these economic times are any good for affordable housing efforts.

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Categories: Affordable housing
        

Two local nonprofit developers won awards this week for their work on affordable housing in challenging times.

Homes for America, based in Annapolis, was named developer of the year by the Housing Association of Nonprofit Developers, which focuses on work from Baltimore to Richmond. Homes for America was honored for building three apartment communities for seniors on top of purchasing and fixing up two affordable-housing properties -- despite the deep freeze on financing.

Greater Baltimore AHC won an honorable mention in the "Affordable Housing Development" category for pulling off the rehabbing of a deteriorating Section 8 complex in Baltimore even as the financial crisis unraveled their original financing plans. (Read more about the MonteVerde Apartments project here.)

FDIC Chair Sheila C. Bair, speaking at the awards ceremony, suggested that the government has too long focused on homeownership at the expense of affordable rentals. Add up mortgage interest deductions, local property tax deductions and exclusions on capital gains from home sales, and "the taxpayer subsidies for homeowners are about three times the size of all rental subsidies and tax incentives combined," she said.

Continue reading "Affordable-housing awards -- and a debate point" »

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Categories: Affordable housing
        

You've probably seen video walk-throughs of homes for sale. But what about apartments that don't yet exist?

The 3D demo above was put together to give people an idea of what a Columbia affordable-housing project will look like when the aging Guilford Gardens complex is razed and the 269-unit Monarch Mills rises in its place.

Larry Carson reported earlier this month that demolition has begun and the first new units are slated to be finished early next year. Monthly rents will range from $360 to $1,700. (The plan is a mixed-income community.)

Do you find video walk-throughs helpful? From a house- or apartment-hunting perspective, are photographs alone insufficient?

Here's an example of a video walk-through of a fixer-upper that is decidedly not affordable housing:

Continue reading "A look at a Columbia apartment complex that doesn't exist" »

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Categories: Affordable housing, Video
        

Habitat for Humanity's most famous booster is former President Jimmy Carter, so you can imagine the glee of any chapter that gets him as a volunteer.

Take Baltimore's Habitat for Humanity of the Chesapeake -- it's holding two public announcements today to spread the word about its good luck.

Carter and wife Rosalynn will be helping build homes at one of the chapter's sites in East Baltimore and another in Annapolis on Oct. 5, part of their annual Habitat work week. (Other chosen ones this year: Washington; Birmingham, Ala.; and the twin Minnesota cities of Minneapolis and St. Paul.)

"Habitat for Humanity's Jimmy and Rosalynn Carter Work Project for 27 years has been a catalyst for increasing the work being done in local communities and empowering people to bring hope, stability and housing solutions," Habitat for Humanity International said in a press release.

Mike Mitchell, chief executive of Habitat for Humanity of the Chesapeake, said he's "thrilled" that Carter "has decided to join with us in raising the visibility of the lack of simple, decent, affordable housing in our community along with the paradox of need alongside the plenty."

"I'm referring to the thousands of vacants in our community that could be homes and harbors from crime, poor health, and environmental degradation," Mitchell wrote me in an email.

Posted by Jamie Smith Hopkins at 7:00 AM | Permalink | Comments (4)
Categories: Affordable housing
        

If you're an affordable-housing group that's managed to scrape together grants to sell homes to low- or moderate-income workers, you might want those homes to always stay in the hands of your target audience. But state law isn't ideally set up for such a move, said Jim Kelly, an assistant professor at the University of Baltimore School of Law.

That's poised to change.

Under bills that passed the Maryland House and Senate recently, affordable-housing groups will get the right to repurchase such homes whenever the owners decide to sell. Right now, the options available to enforce that right have a time limit -- 15 years for a ground lease (after that, it becomes a redeemable ground rent) and 30 years for a deed restriction, Kelly said.

The new legislation "makes sure that long-term resale restriction agreements between a subsidized homeowner and the group that wants to protect that subsidy ... [are] clear, fair and enforceable," said Kelly, chairman of the policy committee at the Maryland Asset Building and Community Development Network. "And it's really been the 'enforceable' part that has been the most obvious problem under current law."

"They're getting a very good deal, moving into a home they couldn't afford otherwise," he added. "We wanted to be very clear that ... people would be free to make a promise to pass the good deal on." 

What terms the buyer and affordable-housing group agree to upfront is left up to them, he said. When buyers later sell, they could get back everything they invested in the home plus a share of any appreciation, for instance.

Continue reading "Permanently affordable housing" »

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Categories: Affordable housing
        

We saw one way of measuring home-price affordability yesterday: What's the median price in your region, and how does that compare with the salaries for jobs such as police office and school teacher?

Another new report offers a different way: comparing typical income with housing costs plus the expense of getting from home to work.

The Center for Neighborhood Technology's H+T Affordability Index aims to get people thinking more broadly about the cost of living here vs. there, and whether settling far from work to save money is actually cost-effective.

Its page for the Baltimore metro area lets you look at two maps side by side: which parts are affordable based on the "spend less than 30 percent of your income on housing" rule of thumb, and which are affordable if you want to shell out less than 45 percent on housing and transportation combined.

By the center's calculation of the latter measure, few parts of the Baltimore metro area are affordable outside the city. According to the center, "increased transportation costs begin to offset savings on the cost of housing when commutes reach a distance of about ten miles."

"Families unwittingly shortchange themselves by being economical when it comes to housing
costs while taking on incremental travel costs that wipe out those savings," it says in its report, "Penny Wise, Pound Fuelish." (Very punny.)

The Maryland Department of Housing and Community Development takes a different tack: It analyzes affordability (or lack thereof) by offering up a stand-in for a first-time home buyer and a move-up buyer. By its calculations, move-up buyers in Baltimore can afford to purchase there, and likewise in the surrounding counties. But first-timers?

Continue reading "Three ways of looking at housing affordability" »

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Categories: Affordable housing, From home to work
        

It's been couched as a "bad news, good news" sort of deal: The drop in home prices has devastated some who already own homes, but it makes homeownership affordable to more people who don't yet have a foot in the door.

Now comes the Center for Housing Policy, which is warning everyone not to call the affordable-housing problem solved just yet.

If you've got a 10 percent down payment, you'd need to make about $70,000 to get the median-priced home in the Baltimore metro area without spending more than 28 percent of your income on the mortgage, property taxes and insurance. We're talking about a $235,000 place.

Though $70,000 happens to be the median household income in the metro area, there's a lot of two-income couples accounting for that figure. Trying to buy on one salary can be tricky, especially if you're a police officer ($52,000) or a licensed practical nurse ($41,000) or in any of the many professions that pay less.

The center's newest Paycheck to Paycheck report ranks metro areas by price (we're tied for 29th most expensive out of 208), by change in income needed to buy (we're middle of the pack) and by rental costs (we're 27th most expensive out of 210).

Today's story has more, including the experience of a woman looking for a $200,000 home and finding mostly foreclosures. And check out this map of the most and least expensive places.

What's your experience? Is the housing market affordable to you and the people you know?

Posted by Jamie Smith Hopkins at 9:54 AM | Permalink | Comments (5)
Categories: Affordable housing
        

Demand might be high for low-rent apartments, but building them is even more difficult than usual these days. Financiers have pulled back. The market for the Low Income Housing Tax Credit program -- an important source of money for affordable-housing developers -- is a shadow of its former self. And it's not as if local government agencies have extra dough to dish out.

That's what Greater Baltimore AHC was up against when it was putting together a deal to acquire and fix up a dilapidated apartment complex in Northwest Baltimore. The group, part of nonprofit developer AHC Inc., is excited that the project came together despite it all.

The two 13-story towers on Violet Avenue -- originally Greenhill Apartments, but renamed MonteVerde Apartments -- are earmarked for seniors and younger residents with disabilities. The apartments cost $30 million to buy and remodel.

Construction will probably be finished next month. To give you an idea of the work involved, here's one of the kitchens before the project began (in a photo supplied by Greater Baltimore AHC):

And here's an "after":

Continue reading "Despite economy, affordable-housing renovations go forward" »

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Categories: Affordable housing
        

A recession only increases demand for less-pricey homes and apartments, so affordable-housing builders aren't used to downturns affecting their line of work. But no one nowadays is avoiding the ripple impact of tight credit and tightfisted investors.

"While it always has been challenging to do affordable housing, it's even more so today," said Chickie Grayson, president and chief executive of Enterprise Homes, the building arm of affordable-housing giant Enterprise Community Partners.

You can read about it in my story today, which explains how the credit crunch is decreasing the number of affordable rentals under construction and making it more difficult for groups to sell homes aimed at moderate-income workers.

Who qualifies for partially subsidized affordable housing, assuming there's any to be had? It depends on the program, but some homeownership efforts let you buy if you're making no more than 80 percent of your area's median household income. Around here, that works out to $44,800 for a one-person household, $51,200 for two, $57,600 for three and $64,000 for four.

That's the limit for eight "green" townhomes built by the Brooklyn and Curtis Bay Coalition, which says higher down payment requirements and tougher loan qualification rules have kept interested people from becoming buyers.

Continue reading "Market's tough for affordable housing, too" »

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Categories: Affordable housing