CJHRC presents. Somerset County Affordable Housing Needs. May 11, 2015

Transcription

1 CJHRC presents Somerset County Affordable Housing Needs May 11, 2015

2 HOUSING NEEDS HUD REPORT HIGHLIGHTS Renters with incomes below 50% of median without a subsidy have severe housing cost burdens The US does not have enough affordable rental units (no inventory) The number of renters is increasing due to unemployment and foreclosure

3 Somerset County Rental Overview The Fair Market Rent for a 2BR Apartment in Somerset County is $1,458 Gross annual income needed to afford this is $58,320 (30% of income) The most expensive rents are in our region (Somerset, Hunterdon & Middlesex County Estimated % of Somerset County renters unable to afford 2 Bedroom Apartment at Fair Market Rent is 53%

4 Region 3 Income Limits - Adopted May 14, 2014 By the NJ Council on Affordable Housing (COAH) Somerset, Hunterdon & Middlesex Counties The below chart is for anyone who wants to live in Somerset, Hunterdon or Middlesex Counties in New Jersey - we have the highest limits in NJ Family Size 1 Person 2 Person 3 Person 4 Person 5 Person 6 Person Median $73,500 $84,000 $94,500 $105,000 $113,400 $121,800 Moderate $58,800 $67,200 $75,600 $84,000 $90,720 $97,440 Low $36,750 $42,000 $47,250 $52,500 $56,700 $60,900 Very Low $22,050 $25,200 $28,350 $31,500 $34,020 $36,540 The only resource we have for families larger than 6 is Habitat for Humanity

5 When Will the 2015 Affordable Housing Regional Income Limits for New Jersey Be Released? Issue No one knows who is now authorized to calculate the 2015 Regional Income Limits since the March 10 th order clearly states that, The Supreme Court s order effectively dissolves, until further order, the FHA s exhaustion-of-administrative-remedies requirement. DCA has prepared them just cannot release them. Possible Option The trial court could and should require use of updated income limits pursuant to COAH s longstanding methodology as part of any proceeding following the Supreme Court s decision.

6 All households must meet the following criteria: a. Be a US Citizen or permanent resident alien b. Be at least 18 years old c. The purchaser must use the affordable unit as his or her primary residence d. Have sufficient income to finance the purchase e. Meet the income and documentation requirements * Also must meet credit criteria for landlord or mortgage

7 Somerset County CJHRC Statistics 5/31/14 4/30/15 We Served 1,610 Clients 28% (449 clients) Moderate income 36% (579 clients) Low Income 28% (452 clients) Very Low Income (8% were over the moderate income guidelines) 62% (1002 clients) Wanted to rent 14% (223 clients) Wanted to buy (24% clients were either homeowners seeking services, clients who were homeless or clients for group counseling programs)

8 Currently Available 5/1/15 See Handout with Complete List 2BR Low Woods At King George Green Brook $1,105 mo. ($37,886) 1BR Mod Pike Run Montgomery $1,175 mo. ($40,286) 1BR Low Claremont Hills $ mo ($21,972) 1BR Low Whiton Hills (age restricted 55+) $ mo ($20,781)

9 What is 35% Ratio? (40% for Seniors) Lets say Jane Smith calls us. She is a single mom with a son 11 and a daughter 9 (family of 3) she is working and earns $14 an hour and works 40 hours a week. She likes her job and her gross annual income is $29,120 and she has good credit. She has been living with her family and now her parents house is under Contract of Sale and they are moving to North Carolina as they retired 6 months ago. She wants to keep the kids in same school in Franklin Township and wants to live in Countryside Apartments that has a 3 BR Low available for $943 a month. She has been unsuccessful in collecting any child support. She has not been paying rent and has been able to save $5,000 so she has funds for 1 st month rent and security. RATIO ---Take the monthly rent amount, multiply it by 12 (1 year lease) divide by.35 = minimum income a household can earn to live in apartment they are considering 3BR Low Rent $943 x 12 = $11,316 divided by.35 = $32, (This example shows this household needs a co-signor)

10 Example Affordable Housing Rentals SUNNYMEADE RUN (HILLSBOROUGH NJ) Size & # being built Current Rate Income Needed 1 BR, Very Low Income (2) $592 Min. Income: $20,297 2 BR, Very Low Income (9) $698 Min. Income: $23,931 3 BR, Very Low Income (2) $797 Min. Income: $27, Very Low units (11%) will be built and demand for these units is 28% 1 BR, Low Income (10) $853 Min. Income: $29,246 2 BR, Low Income (28) $999 Min. Income: $34,251 3 BR, Low Income (11) $1,207 Min. Income: $41, Low units (41%) will be built and demand for these units is 36% 1 BR, Moderate Income (12) $995 Min. Income: $34,114 2 BR, Moderate Income (36) $1,275 Min. Income: $43,714 3 BR Moderate Income (12) $1,480 Min. Income: $50, Moderate units (50%) will be built and demand for these units is 28%

11 Be Careful Just Because You Build It They May Not Come Tenants Request Affordable prices Spacious rooms, Storage, Laundry in Unit, Assigned or Enough Parking General Amenities (Security, Pool, Playground, Community Room) Pet Policy

12 Typical Scenarios Clients get upset upon learning what if anything is available in the County in regard to price of rental units. They state - well if you are the Housing Resource Center shouldn t you have an inventory of apartments that are less than $500 a month When discussing their prior rental history or credit/debt situation they are upset to learn that affordable housing requires good credit and a minimum income most state if they had that they would not need an affordable unit in a program. Most landlords will not take a co-signor. How can a $1,400 a month apartment be affordable housing?

13 Typical Scenarios (continued) We are a family of 3 and need to find a rental unit by September 1, 2015 upon further info gathering CJHRC learns: a) They have no funds for the 1 st month rent or security b) Their income is too low to afford the 35% ratio (see example on next slide) and cannot get a co-signor (hard to get a landlord to take one) c) They have credit issues (hardly any landlords take a cosigner for poor credit only if under minimum income required

14 Somerset County Resale (Sale) Overview Data from Zillow Through April 30, 2015 $375,600 is the Median Home Value Home values have increased 2.5% in the last year Zillow predicts they will rise another 0.9% one year from now (Apr 30, 2016) See Handout with Complete List of Affordable Units for Re-Sale

15 Typical Scenarios Since I cannot afford the majority of market rate housing stock I am contacting you about the affordable housing program. I am single, a college graduate, 29 years old, I work and earn $33,000 a year, pay $300 a month in a car payment, pay $441 a month in student loans and want to either rent or buy and have no rental history as I have been living with my parents since graduating college. We are selling our home in Bridgewater and want to stay in the area to be close to our children and grandchildren but we are retired and on a fixed income.

16 Affordable Re-Sale Units Low income units often quick to sell unless Efficiency or Studio 2 Bedroom Low income Units Most Desired 2 & 3 Bedroom Moderate Income Units in Somerset County Compete with Market Rate Condo Units ***************************************************************************************************************************************************** CJHRC feels it is important for towns to consider extending controls on their affordable units. Regardless of the number of years the affordability on a particular unit is extended, it does not obligate the current owner to continue living in the unit. At any time the affordable owner could sell the unit under the UHAC guidelines. Extending controls merely allows the Township to retain inventory of an affordable unit and allows the unit to be assessed at a lower tax rate. **************************************************************************************************************************************** Even with extension of controls on an affordable unit the homeowner association may be allowed to charge affordable owners same rates as market rate owners once original restrictive period expires. This is a legal matter.

17 Typical Scenerios I am tired of paying $1,200 a month for rent and want to buy a home. We are a family of 3 and upon further info gathering CJHRC learns: a) They have no funds for the down payment or closing costs b) They have issues that may prevent them from being able to attain a mortgage high debt, late payment or charge offs, have been late twice in a 10 month period with the rent, they are self employed, majority of household income earned is undocumented (under the table

18 Contact Info: Central Jersey Housing Resource Center (CJHRC) Sharon Clark, Executive Director Phone Web Site