Between 2000 and 2006, median income of  South Florida homeowners  rose nearly 27%In the same period, the median sales price of existing single family homes rose nearly 150%

The national dialogue about the issue of affordable housing often connects it to the ability of school teachers, police officers and fire fighters to own their own homes.  There is little, if any, recognition that this is also an issue for public works employees.  This group includes heavy equipment operators, maintenance workers, groundskeepers, carpenters, electricians, and plumbers, the majority of whom earn less than school teachers, police officers and firefighters.  The situation is more acute for people who are beginning their work career in public works at the beginning pay which is significantly less than the starting pay for school teachers, police officers and firefighters.

Nationwide, availability of affordable housing has become a major issue.  In a September 12, 2007 story, the Miami-Herald reported the following statistics comparing Miami-Dade, Broward and other counties with the highest percentage of homeowners spending 50% or more of household income on housing:

  Miami-Dade, Fl                      24.9%

  Kings, NY                              24.2%
  Bronx, NY                             23.1%
  Queens, NY                           22.8%
  Monterey, Ca                         22.4%
  Broward, Fl                            21.5%
  Lake, Fl                                 21.5%
  Monroe, Fl                             21.4%
  Passaic, NJ                            21.2%
  Union, NJ                               21.2%

In a 2006 survey by the American Community Survey, U.S. Census Bureau, 46% and 60% of households in Broward and Miami-Dade counties, respectively, spent 30% or more of their income on housing.

The Florida Association of Realtors reports that from December 2006 to December 2007, the median sales price of single-family homes in Florida fell 10.2%, from $367,600 to $329,800.  The $329,800 median price in December, 2007 provides some relief, although it is still 122% above the median price in 2000.  At the same time, increased insurance costs and property taxes have also contributed to high housing costs and exacerbated the affordability issue in South Florida.

Chart 1 shows the growth of household income and median sales price of single family homes and condominiums in Broward County, for the 2000 through 2006 period

Chart 1

At 6%, annual principal and interest payments on a $200,000 mortgage total approximately $15,000.  Adding $4,000 for property taxes, $3,500 for homeowner insurance, and $3,500 for utilities, the annual payments total $26,000.  Annual income under $52,000 places this homeowner in the group spending 50%, or more, of household income on housing. 

There is no easy solution for providing affordable housing for public works employees or others with the same incomes.  While home prices in recent months have declined, the above analysis of annual payments doesn’t change.  Increasing pay rates significantly is out of the question with the passage of Amendment 1 in Florida on January 29th.   New housing developments approved in the last two to three years have included or required construction of affordable housing, but the backlog of need far surpasses the resulting supply.  Two income families, or two income earners sharing ownership of a home, are a partial solution.  Renting is another option, although rental rates have also escalated rapidly due to increases in taxes, insurance, and utility costs.

Recognizing and discussing the issue is paramount to finding solutions over time.