Workforce housing

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Workforce housing is a relatively new term that is increasingly popular among planners, government administrators and housing activists, and is gaining cachet with home builders, developers and lenders. Workforce housing can refer to almost any housing, but always refers to affordable housing.

Contents 1 Overview 2 History 3 A critical problem 4 Solution strategies 5 References 6 External links

[edit] Overview

Workforce housing is defined by four principal factors^{[citation needed]}:

Affordability

Based on criteria set by mortgage lenders, the U.S. Department of Housing and Urban Development (HUD) concludes that no more than 30% of household income should be allocated to housing Principal, Interest, Taxes and Insurance (PITI). Typically, pricing calculations that define workforce housing use 30% of household income as the maximum threshold of affordability.^{[citation needed]}

Home ownership

Most appropriately, workforce housing connotes single-family detached homes for sale at prices that workforce families can afford. Obviously, workforce families often seek alternative housing opportunities in rental apartments and rental homes, town homes, condominiums, co-ops and shared housing, including subsidized housing. The most appropriate and socially valuable definition of workforce housing connotes fee-simple ownership of single-family homes with yards, one of the least efficient but perhaps the most personally satisfying land use forms.^{[citation needed]}

Critical workforce

Most appropriately, "workforce housing" connotes housing intended to appeal gainfully employed, essential workers in the community, i.e. police officers, firemen, teachers, nurses and medical technicians, office workers, etc.^[1] Workforce families are generally younger and often include or plan to include children.

Workforce housing, then, implies a subjective change in awareness of a widespread social condition that has been referred to generally by terms such as affordable housing.

Proximity

Most appropriately, "workforce housing" is located in or near employment centers (as opposed to distant suburbs) and is sometimes cited as one antidote to urban sprawl, with its accompanying traffic congestion, lengthy commutes, convenience stores and strip retail centers.^{[citation needed]}

Ideally, workforce housing aims at satisfying the housing needs of family households earning 50% to 150% of median household income in a given SMSA (Standard Metropolitan Statistical Area).^{[citation needed]} Ideally, workforce housing aims at providing for-ownership single-family homes priced and financed in 30-year fixed-rate monthly terms equal to approximately 15% to 45% of median household income within a given SMSA.^{[citation needed]}

[edit] History

Workforce housing has its early roots in the ski towns of Telluride and Aspen, Colorado. In 1974, in response to locals not being able to purchase homes due to the disparity between wages and the cost of homes which was amplified by competition from buyers that make their livings in New York and Hollywood, a conference was organized in Aspen at the Aspen Institute.

The problem which many people believed was an anomoly in the ski resorts due to limited land for development caused by the mountains and National Forest and exacerbated by deep snow in the winter time which made "sprawling" unrealistic has turned out to in fact be just a precursor today to the same problem in cities all around the country and the world.

The plan which was developed was to create a seconday and separate "local worker" housing market which was based on local wages and affordability.

Some of the standard tools which were eventually invented for the purpose of affordably priced homes, for local workers that would stay affordable for future generations are: a deed restriction which in its most simple form states that to qualify for purchasing a home the applicant must live in the community, not own another home in the community, must work essentially full-time and must have lived in the community for a period of time like 18 months.

Also, the owner can only sell the home to someone thay meets the same criteria.

Later provisions which were added over the years of "trial and error" include income restictions to qualify, and cap rates on the amount of profit an owner is allowed to make, which guarantees that the home will remain affordable forever. Three per cent per annum has been a justifiable number over the years.

Also, dedicated funding sources utilizing real estate transfer taxes, and retail sales taxes,to supplement tools like inclusionary zoning, upzonings, density bonuses, and the waivier of fees like: building permit fees, water and sewer fees, and impact fees have become popular. Plus, expedited zoning and permitting processes are becoming popular.

Record low mortgage interest rates spurred a nationwide surge in housing demand from 2002 - 2006. Record housing construction in many communities and record housing prices in almost all communities drove land costs higher. Construction materials and labor costs, propelled by disastrous hurricanes in 2004 and 2005 that damaged or destroyed hundreds of thousands of homes in Florida and on the Gulf Coast, amplified the problem to create a critical dilemma: in many communities, average income households cannot afford a median-priced home.^{[citation needed]}

[edit] A critical problem

According to Stacey D. Stewart, President and CEO of the Fannie Mae Foundation, decline of this younger, working middle class signals bad news for many communities.^[2] Without a satisfied and supportive middle class striving to realize the promise of economic advancement, a key plank of capitalist theory is threatened.

More practically, essential goods and services (transport, delivery, installation, maintenance) become increasingly expensive and decline in quality as competitive forces vanish. An absentee and commuting service class creates substantial demand for suburban tract neighborhoods, regional road systems, strip retail centers and other evidence of urban sprawl.^{[citation needed]}

In addition, there exists a policy gap to fund workforce housing development. Many of the funding programs of the federal and state governments are geared towards low income programs designed for people that make less than 60% of Area Median Income (AMI). One of the more effective programs for this income level is Low Income Tax Credits which mainly spur development of rental properties.

Workforce housing is designed for people that make 60% to 180% of AMI and is an income strata that is largely unserved and unaddressed by both Federal and State program and thus largely left to individual municipalities and counties to deal with.

Many families that fall into this income category have found it difficult to purchase a home that is located in the area in which they work that is adequate for their needs. In response, many families have taken to "driving for affordability", or "drive till you qualify" to own a decent home with quality schools and a low crime rate.

This set of circumstances has caused many people driving and hour or even hours per working day and has also caused congestion and the need to enlarge the highway system at huge costs. In addition, the cost of a reliable car and gasoline has added to the unaffordability of this type of a solution to owning a home. The social costs of having less and less time to spend with the children or to just time to take care of yourself has yet to be fully calculated, but is believed to astronomical.

As urban centers have suffer from this pervasive problem, their economies have failed to compete with neighboring suburbs. As a result, the workforce population moves into an area they can afford.^{[citation needed]} This effect has crippled the social, political and economic sustainability of many urban areas throughout the US including Newark, Philadelphia, Washington DC and Baltimore.^{[citation needed]} HUD has contributed this American occurrence by not updating their housing programs to reflect true market forces of real estate, price increases with the past 10 years and social trends of population movements.^{[citation needed]} Moreover, HUD is viewed as the umbrella organization upon which state governments will mimic their policies to correspond for funding eligibility.^{[citation needed]}

[edit] Solution strategies

Many U.S. communities have developed sophisticated strategies to address the acute shortage of workforce housing. The Workforce Housing Coalition of the Greater Seacoast in Portsmouth, New Hampshire, may rank among the first community-based organizations to specifically address workforce housing needs by name.^{[citation needed]}

The third or fourth-most populous state and one of America's last frontiers, Florida has faced record growth for most of its history. More recently, some Florida communities have developed sustainable programs to encourage development of workforce housing. The Florida Housing Coalition has served for almost 20 years as one of the leading U.S. innovators in housing advocacy.^{[citation needed]} The South Florida Workforce Housing Initiative in Miami publishes 37 reasonable public policy initiatives to promote workforce housing development. The Florida Workforce Housing Network is an example of a regional web community that promotes workforce housing with a wide range of resource links and open discussion.

[edit] References

[edit] External links

• U.S. Dept. of Housing and Urban Development (HUD)
• Orange County Business Council
• Workforce Housing St. Louis
• workforce housing
• [1]

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