Affordable Housing and Wages
At fist thought affordable housing may be perceived as an issue that only concerns the poorest sector of our society. While, such an inference may seem justified and reassuring by the derogatory stereotypes wrongly attached to this group, nothing is further from the truth—especially in southwest Florida. Even people from middle class society who would normally be unaffected by housing costs are struggling with the high cost of living. From a national perspective it becomes obvious that Lee and Collier counties suffer from low wage jobs. Comparison of wages in southwest Florida with those of other comparative markets around the U.S. illuminates a stark discrepancy in pay and housing costs. On Sunday October 15, 2006 an article in the Bonita News titled “Wages not catching up for essential workers,” addressed this point directly. Essential workers, such as policemen, teachers, nurses, firefighters, etc. are people that perform jobs essential for proper community development and function. . While these careers have recently seen increases in pay, those increases are still insufficient by national standards.
In a recent news article, “Official: Florida must fix housing issues” Naples Daily News journalist, Elysa Batista, reported that State Representative Mike Davis, the head of the statewide affordable housing task force, said Florida lawmakers have created a Community Workforce Housing Innovation Program (CWHIP). The focus of this program is to “provide multifamily residential and single family housing for essential personnel…in high-cost areas (Batista).” The stipulation underlying the implementation of this program commands a “public-private partnership where local agencies agree to kick in at least 15 percent of the value of the project through land, dollars or other in-kind value (Batista).”
In addition to the aforementioned housing program, legislation also approved $514 million of affordable housing incentives (Batista). $243 million will be appropriated (by whom?) annually as recurring revenue while $30 million is earmarked to aide residents earning less that 30 percent of local median income (Batista). All of this sounds great until you start asking questions like, When will construction begin? How will the $30 million be used to aid the residents making below 30 percent of local income? And what about other affordable housing plans that have been proposed but never implemented? What are the reasons or excuses for the lack of action? These are all pertinent question frequently met by meaningless political claims and opinions. Mike Davis was reported as saying that “growth planning is a more appropriate term than growth management…and frankly, I have observed that here in Collier County we’ve done a pretty darn good job”(Batista). The question is at what point do we stop planning and start acting?
The main point to understand when discussing issues much like these is that community interpretation and government officials’ interpretations are comparatively very different. For example, when officials in southwest Florida speak about affordable housing, they speak only of housing with temporal restraints that, ultimately, deprive the purchaser from reaping the benefits of price appreciation in a flourishing real estate market. Regulations such as this are inherently disastrous for buyers because they serve only to promote disparity between socioeconomic classes. When local residents were asked what they thought affordable housing meant, most respondents spoke of homes that are much cheaper than the average home in a given area and that can be purchased through government aid by the poorer sector of society.
In many ways, socioeconomic disparity is being combated. Organizations such as the Association of Community Organizations for Reform Now (ACORN), the Center for Community Change, and the National Campaign for Jobs and Income Support facilitate change through initiatives such as the implementation of a Living Wage Law and local and state mandated increases in minimum wage. Insufficient wages contribute greatly to the problem of affordable housing. Based on Florida’s minimum wage value for 2006 and median home prices in Collier and Lee Counties during October 2006, it would take eleven people and six people respectively, on minimum wage salaries to afford a home. This statistic was generated from the percent household income—suggested by the Center for Housing Policy—required to acquire a mortgage. Other methods of finance exist such as interest only loans that allow buyers with inadequate incomes to purchase a home, but programs like this provide only superficial relief. Consider recent news stories heralding 2007 as the highest rate of expected foreclosures.
There is yet another influential aspects of our economy that exacerbates the affordable housing dilemma. The Snowbird phenomenon plays a huge role in real estate availability with affordability following in suit. A study performed by the University of Florida supports this idea. Their findings implicate the influx of higher-paid, better-educated northerners as a catalyst for high real estate prices (see charts below for statistics).
Snowbird Phenomenon
*Graphs acquired by University of Florida