Alice Blue Gown. Alice’s Restaurant. Alice through the Looking Glass.
But the Alice of the moment is not a woman’s name, but an acronym for Asset Limited Income Constrained Employed. ALICE is a project of the United Way, whose study has concluded that 30% of all Americans are spending more than 50% of their income on housing; that there is a shortage of safe, habitable, affordable housing for them. We could be empathetic, concluding that, blessedly, this does not apply to us or our family (maybe your kids), but you might be surprised that your neighbors might meet the ALICE definition. And don’t forget, the remaining 50% of income has to cover transportation, food, medical, insurance, etc. Now we can probably understand how serious life can be, living paycheck to paycheck and hoping there is no emergency ahead.
It concerns me that so many people are locked out of home ownership and relegated to rental housing. I am not talking about the anecdotal millennials who prefer to rent (they will outgrow that when family comes along), but to the broader population that cannot qualify for a mortgage even though they are employed and earn a respectable income. They may be paying more in rent than what a mortgage payment might be, if only they could afford the down payment.
“Affordable” by definition, is based on a formula consisting of income and family size. For instance, a family of four with a household income of $60,950 would still be considered low income. That represents 80% of the County median income for a family of four. They should be spending not more than 30% of their income on housing, or $1,666 a month. At that price point, there is very limited availability.
In built-out Broward County, there is a shortage of affordable housing stock, and virtually none is being built. There is too much demand for luxury and market rate product. That’s where the easy money is.
The more I learn about affordable housing, the more there is to learn, but what is clear is that, like many things in life, this is a matter of money as well as will.
The City Community Development Division receives $2 million a year to be used for housing rehabilitation, replacing some unsafe structures, first-time homeowner assistance, etc. (Minus operating costs).
. $600,000 from the State Sadowski Trust Fund
. $370,000 in HOME funds from the Fed
. $1 million in Community Development Block Grant Funds, from the Fed
Important to know that the State funds come from the Sadowski Trust Fund which governors and the legislature have raided for years, to the tune of $1.3 billion out of a “bank” of $1.8 billion. And the Federal government is just as bad, with past administrations reducing their contributions by 40% over the past four years. And there are no local funds.
Let me simplify my objectives here:
- First, for several years, the Commission/CRA has been working with Broward County to redistribute Tax Increment Funds from the Beach CRA. As proposed, and actually done this year, the CRA refunded $1.5 million to the County, with the understanding that the County would consider returning that money as long as it was used for economic development outside the CRA. That “deal: is still pending.
- Should it be approved, I would recommend that the money be allocated to Affordable Housing; not to create more, but to provide:
- Home owner assistance in the form of down payment assistance. This would be directed to families that have well-paying jobs, paying rent close to what a mortgage payment would be, but unable to obtain a mortgage; first time homeowner programs, property improvements so that once a family moves in, they don’t face an unexpected roof replacement in a few years. Those who would be eligible are living in rentals, and once in an ownership position, that rental unit now becomes available to others.
- Vouchers for low-income families to assist them in finding safe, affordable rental housing.
(We have a very experienced and competent staff that would create policies consistent with State and Federal Law)
- There still is a need to create additional housing for professionals; teachers, public employees, the creative class. To be considered is how to encourage and enable this to happen.
Finally, I have asked for a workshop on this subject, because the Commission has never adopted an Affordable Housing Policy based on additional funds being available. The City Manager has agreed to schedule this in the fourth quarter.
More to learn. More to do.