Florida’s Affordable Housing Hurtles: From Renting to Owning
If you live in Florida, you know it’s difficult to find an affordable place to live on a middle-class income. According to the National Low Income Housing Coalition (NLIHC),
affordability means that no more than 30% of a household’s gross income should be spent on rent and utilities. A household paying over 30% is considered cost-burdened. A household forking out over 50% of their income is severely cost-burdened. The NLIHC’s annual report for 2018 ranks Florida 16th
in the nation in terms of affordable housing. This is a slight increase over the last two years’ ranking of 17th
In order to afford the average rent and utility bill in the Sunshine State—without paying more than 30% of your income on housing—your household must earn $44,716 annually. Obviously, these numbers vary by area (sorry, bougie Monroe County, you’re the most expensive), but considering renters make up 35% of Florida’s population, we need to have a conversation about what this means for You-the-Renter.
HOUSING PRICES VS. WAGES
We’ll begin with the facts. Let’s put the numbers away (don’t worry left-brainers, they’ll be back later) and discuss the main affordability culprit: housing prices versus wages. Across the state, the lower and middle classes are watching the cost of housing substantially outpace wage increases. Essentially, wages are the tortoise and housing prices are the hare, only in this analogy, it doesn’t look like the hare is stopping for a nap anytime soon (google “The Tortoise and the Hare” if you have no idea what I’m talking about). This imbalance makes it far more difficult to locate an affordable rental. especially in metropolitan areas where—catch-22—there also happens to be a greater availability of jobs.
Many people who work in these metropolitan areas have no choice but to move to a more affordable area. This move requires a longer commute to and from work. Too often, however, the increased expenses of long, daily commutes negate the affordability of living outside a metropolitan area. And whether you’re a renter
or a homeowner, you know what a long, daily commute in Florida does to your soul, especially if you live in the I-4 Corridor like me (the other day I saw a Sandhill Crane
walking along the side of the highway at a faster pace than my car, and I’m pretty sure he side-eyed me).
FLORIDA’S ATTEMPT AT A SOLUTION
To be clear, Florida knows affordable housing is and has been a problem. In 1992, Florida lawmakers established the Sadowski Trust Fund (STF)
. The Sadowski Trust Fund supports the production and preservation of both affordable multifamily rental housing and affordable home-ownership. A percentage collected from the state documentary stamp tax on deeds finances the fund. However, lawmakers pulled $182 million from the fund for the FY 2018-19 to allocate elsewhere. This “borrowing” has gone on for the past 15 years, sweeping huge percentages of the fund into other programs. Surprisingly, the Legislature’s own Affordable Housing Workgroup advised otherwise in a 2017 report—oh, politics.
AFFORDABLE HOUSING’S EFFECT ON THE ECONOMY
Between 2006-2016, every dollar appropriated by the Florida Legislature for the STF resulted in $9.50 of economic activity. This translated into $12.5 billion in sales and revenue for Florida businesses. It also translated into 94,000 jobs, and $3 billion in income for Floridians. We’re entering into yawn territory, but I needed to live up to the promise I made earlier to the left-brainers. THE POINT IS: affordable housing greatly benefits the economy! Without affordable housing, people and businesses cut-and-run. And there goes the neighborhood Starbucks.
Think about it: affordable housing
has a significant positive effect on local economic activity because as more people move into an area, jobs are created across many industries (retail, healthcare, education, and restaurants, to name a few). Furthermore, communities in which people live AND work are more vibrant. People forced to commute to work take their economic and social capital with them when they clock out. They then make everyday purchases closer to home. I’m sure I speak for most of us when I say that when I get home from work—long after the Sandhill Crane—I don’t leave a 3-mile radius to spend my money (you’re welcome, Tasty Wok).
PROGRAMS FOR RENTERS
So, other than vote for candidates who support funding affordable-housing initiatives, what can you do? Listen up, You-the-Renter, I have a few solutions. Did you know renters would typically pay less in mortgage payments on an average 3-bedroom home? Hang on. I know: the high cost of rent limits your ability to put money away for a down payment. If you’re a Millennial, you probably have some hefty student loan debt (tell me yours, I’ll tell you mine). You may feel left with few resources.
The good news is many real estate companies are now offering some great Rent-to-Own
programs across the state designed to offer credit-counseling services while you rent, so you can improve your financial health to buy later. You-the-Renter make up 35% of the population and that gives you leverage, so check some of these programs out. I don’t know your financial history, but I know you have a much better chance than you think. Just be careful not to overextend yourself, for that would be futile; make sure when purchasing a home, your housing costs don’t exceed 30% of your household’s monthly income.
There are some simple energy-efficient upgrades you can make to your rental (while you’re trapped in a lease). These upgrades will help you save some extra money. Switch to LED light bulbs, for one. Lighting can account for up to 30% of your electric bill. LED bulbs use up to 80% less electricity, and you can find some decent ones for around 5 bucks. You can switch out your shower heads for a WaterSense
labeled product. Moen
has some great ones that will use up to 30% less water without compromising that invigorating, full-body coverage (there’s nothing worse than a shower that feels like a light drizzle). The monthly savings from these simple upgrades is money you can put toward other uses while you rent: savings account, paying down debt, a spa treatment for your grandmother so you can get back in the will. You get the picture.
AFFORDABLE, ENERGY-EFFICIENT HOMES
If you’ve already begun shopping around for a home, there are other ways to combat Florida’s housing affordability problem. There’s a growing movement across the state to offer energy-efficient homes
—even solar-powered homes
—that are affordable on a middle-class income, because at 62% of the U.S. population, the middle-class is driving consumer trends. And most of you are probably in that 62%. Thanks to leading-edge real estate developers, solar is no longer just for the wealthy (they can’t have caviar AND the sun—that’s just not fair).
Purchasing the right energy-efficient home can save you thousands per year in energy costs. But you need to be mindful. Many companies building houses in Florida only offer energy efficiency as an upgrade. That can cost you a lot out of the gate, setting you up for financial failure. There are a handful of companies—Brite Homes Florida
to name one in my area—offering this technology standard, so you’ll need to do your research. Because I like you, I’ll give you a great place to begin: click here
IN THE MEANTIME
A good resource to check out is the Consumer Financial Protection Bureau
(CFPB), a government agency created to help consumers make smart financial decisions, and they’re pretty much financial know-it-alls, so they can help you get in control of your money, at least until the wage-tortoise starts outpacing the housing-cost-hare (it happens in the fable, but I can’t guarantee the reality).
Maybe you’re sitting next to me on the hour-commute home cursing that pompous Sandhill Crane. Or cursing Florida and its high cost of rent. But being stuck in traffic doesn’t mean you’re stuck renting. There are resources for you. None of us should have to live in one time zone and work in another just to barely make ends meet. Owning a home is easier than you’ve been told, and even if you end up paying the same in monthly mortgage payments as you do in rent, at least now you’re living in a giant piggy bank—because owning a home is a great investment.
I’d love to stay and chat, but until the lease on my apartment is up and I can take advantage of the programs I’ve told you about, I have an hour commute home—and today’s the day I beat that pesky Sandhill Crane!