Growth & Infrastructure Consortium

Transcription

1 : New Normal or Forces from Within? Robert W. Burchell, Ph.D. (Rutgers) James Nicholas, Ph.D. (University of Florida) Julian Conrad Juergensmeyer, JD (Georgia State U College of Law) Catamaran Resort Hotel and Spa San Diego, CA October 27, :00 5:15 PM Session

2 : New Normal or Forces from Within? Robert W. Burchell, Ph.D., PP Co Director Center for Urban Policy Research Chair Urban Planning and Policy Development Program Rutgers University Growth and Infrastructure Consortium National Conference San Diego, California Thursday, October 27, 2011

3 History of Affordable Housing Implementation in New Jersey New Jersey, reflective of the Mount Laurel decisions (1974, 1983) and the New Jersey Fair Housing Act (1985), had Fair Share housing quotas from Fair Share numbers were calculated for two six year rounds ( , ); since then, 10 year Growth Share numbers, published two times, have had no success. Approximately 315 of 566 New Jersey communities have gone before the administrative arm of affordable housing enforcement (Council on Affordable Housing [COAH]). Being before COAH protected the community from a builder s remedy lawsuit. Growth Share has not been successful because the ratio of growth share (% inclusionary) cannot be agreed upon, and those who successfully criticize attack the details of the method. 3

4 Retentions under Growth Share New Jersey went from Fair Share to Growth Share in the Third Round ( ). Growth Share methodology may be unconstitutional reflecting an appellate court decision; a fourth New Jersey Supreme Court decision is determining constitutionality. In the changeover, New Jersey has retained its definitions of both the income eligible population and housing regions (<80% of median; six 3 4 county areas). It has also retained the concept of three basic forms of need: Rehabilitation Need Income eligible in deteriorated housing Prior Round Need Unanswered past new construction obligations Future Need Income eligible that will be produced in a 10 year future 4

5 Changes under Growth Share New Jersey has altered the way it calculates housing deficiency and the U.S. Census has stopped reporting two variables (number of stories, access through the unit). New Jersey no longer has urban rehabilitation as a separate category of new construction suburban need (reallocated present need). New Jersey no longer has, a priori, individually assigned future need; produced number is a guide (whichever larger growth or number). N. J. has Growth Share whose constitutionality is dubious: Current (2008) Prior (2004) 1 Affordable Unit for 4 Market Units 1 for 8 Market Units 1 Aff. Unit* for 16 jobs or 5,000 ft. 2 1 for 25, or 8,000 ft. 2 * Pay into fund 5

6 Eligibility Definitions Target Populations Low and moderate income families defined by HUD Section 8 income standards (HUD Low/Very low = New Jersey Moderate/Low) NJ Moderate = households whose income falls between 50 and 80 percent of regional median family income ($35,000 $55,000) NJ Low = households whose income falls below 50 percent of regional median income (below $35,000) Housing Regions Six housing regions of 3 or 4 counties each drawn together by commuting patterns and economic ties 6

7 1. Rehabilitation Share (2000) Type of Housing Demand Defined by income limitations as requiring housing because they live in deteriorated or overcrowded housing. Procedure Three rehabilitation indices exist at the municipal level: crowding (1939 and earlier units), incomplete plumbing, and incomplete kitchen facilities. Number Estimated number 25,000 (2004*); 50,000 (2008**) (Not nonoverlapping secondary source removed) 2004* = first growth share numbers 2008** = second growth share numbers 7

8 2. Prior Round Obligation ( ) Type of Housing Demand Continuously keeping track of obligations of municipalities from prior affordable housing rounds. Procedure A tally of prior affordable housing that was required (Prior Cycle Future Need [two rounds] but not delivered). Number Estimated number 79,000 (2004); 95,000 (2008) = Overall Prior Round Obligation (Did not allow recalculation that showed initial projections were too large) 8

9 3. Future Affordable Housing Need ( ) Type of Housing Demand A projection of population and households into the future projection period Procedure Use multiple sources of population projections and convert population projections to households. Population projections are from: New Jersey Department of Labor New Jersey Department of Transportation Number 140,000 (2004); 131,000 (2008) (Projections smaller later on) 9

10 4. Secondary Sources of Supply ( ) Type of Housing Demand Non new housing supply (and additional demand) to low/moderate households from the existing stock. Procedure An addition of demolitions (+7,900 [2004]/18,400 [2008]); A subtraction of filtering: ( 59,000 [2004]/ 24,000 [2008]); residential conversion ( 13,000 [2004]/ 10,000 [2008]); publicly subsidized production ( 23,077 [2004] /0 [2008]); from future need. Spontaneous rehabilitation (7,316 [2004]/0 [2008]) is no longer subtracted from Rehabilitation Share. Number Estimated number ( )87,000 (2004); ( )16,000 (2008) (Did not count filtering in urban areas; no LIHTC.) 10

11 5. Growth Share 53,000 units (2004) 115,000 units (2008) (140,000 87,000) (131,000 16,000) Residential Increase Affordable Hsg. 26,000 (2004) Supply 70,000 (2008) Ten Year Housing Supply (Positive) 230,000 (2004) 325,000 (2008) Growth 1 for 8 mkt units (2004) Share Ratio 1 for 4 mkt units (2008) + Nonresidential Increase Affordable Hsg. 27,000 (2004) Supply 45,000 (2008) Ten Year Job Increase (Positive) 680,000 (2004) 723,000 (2008) Growth 1 for 25 jobs or 8K ft. 2 (2004) Share Ratio 1 for 16 jobs or 5K ft. 2 (2008) 11

12 6. Combined Obligation ( ) (1,2,6) Type of Need Sum of all major component obligations Procedure The summation of the various components of affordable housing need: (a) Rehabilitation Share (25,000 [2004]; 50,000 [2008]); (b) Remaining Prior Round Obligation (79,000 [2004]/95,000 [2008]), and (c) Growth Share (53,000 [2004]/115,000 [2008]) Number Estimated number: 157,000 [2004] / 260,000 [2008] 12

13 7. Reaction to Numbers Scale Unreachable by Communities A community of 7,500 homes was given a future obligation of 1,500. Would have had to re create the entire community (7,500 units) to answer one round of affordable housing need at 1 for 4 market units (1,500 affordable + 6,000 market). Communities Did Not Know Where to Begin Dug in their heels, obtained legal counsel, and fought. Constant Motions to Challenge Rules by Advocates and Communities Reasonable judges accepted motions; process stalled. 13

14 What Has Been Done (I) New Jersey COAH Accomplishments to Date TOTAL ,000 Built (COAH figure includes earlier) 35,000 25,000 50,000 Assigned (not built) 10,000 40,000 33,500 Rehabbed 18,500 15,000 30,000 Rehab Designated (not rehabbed) 20,000 10,000 Only state with three branches of government implementing the same affordable housing need: Judicial Mount Laurel cases/ subsequent litigation Legislative Fair Housing Act/other state legislation Executive Council on Affordable Housing/ Governor s Office 14

15 What Has Been Done (II) New Jersey has produced more unsubsidized affordable housing through land use policies than most other states. The first question at a development hearing is whether the affordable housing obligation has been met. This happens on a regular basis nowhere else in the U.S. Currently, nearly every resident of New Jersey has a friend, relative, or employee living in affordable housing. 15

16 Maximum Feasible Misunderstanding (Ia) 1. DCA Commissioner and acting Attorney General made dubious decisions at critical times. A. DCA Commissioner Brought in numbers team that neither knew New Jersey well nor understood COAH methodology details. New team did not appreciate how simple the task was B. Acting Attorney General Was not present at oral argument of rules challenge after she and Commissioner prepared brief. Replacement Deputy Attorney General was unsure of facts during oral arguments. 16

17 Maximum Feasible Misunderstanding (Ib) 2. Those opposing rules challenged details and required voluminous explanations and interpretation of rules. This proved to be an effective and ongoing strategy. 3. Opposition was able to take advantage of new team that was unfamiliar with rules and relying on contract extensions to finish work. 4. Extensions were not granted by the Appellate Court, and portions of their submitted work did not meet the test of accuracy upon delivery. 5. COAH Rules did not withstand challenges from advocates, builders, and municipalities, incl. League. 17

18 Maximum Feasible Misunderstanding (II) 1. New affordable housing numbers, after being redone, were too large and not reflective of the best data available. 2. The affordable housing measurement doubled from 1 for every 8 units of market based housing and 1 unit for every 8,000 ft. 2 of nonresidential development to 1 unit for every 4 units of market housing and 1 unit for every 5,000 square feet of nonresidential development. 3. If the affordable housing number were delivered just by the residential sector, it was 23 percent (53, ,000) originally and 36 percent (115, ,000) after revision. 4. On the original numbers, 250 communities immediately came forward to answer their affordable need; under the secondary numbers, communities abandoned the inclusionary approach and came forward using a nonresponsive approach. 18

19 Maximum Feasible Misunderstanding (III) 1. Appellate Court decisions have also changed the methodology. The first Appellate Court decision (Judge Cuff) upheld noninclusion of: (1) cost burdened, (2) reallocated present need, and (3) post 1939 crowding; it also upheld (4) RCAs, (5) affordability controls, (6) rental credits, and (7) the vacant land adjustment. In contravention of the methodology, it said that: (1) the low income tax credit units could not be counted; (2) filtering should be verified; and (3) growth share percentages should be required to have a numbers check. It further said that (4) elderly percentage ought to be verified, and (5) there should be some type of density bonus available to developers. 2. The above caused the assignment of the new numbers team and the rejection of the methodology and new growth share numbers (2008) resulting from their efforts. 19

20 Maximum Feasible Misunderstanding (IV) 1. The second Appellate Court decision (Judge Skillman) involved a questioning of growth share as constitutional. 2. Given the above, it called for a return to Fair Share and the methodology of the first two rounds. 3. Third Round Rehabilitation Share and Prior Round Obligation upheld 4. It also took to task municipalities for claiming they would build affordable housing themselves if they were provided funding. 5. They were given five months; COAH petitioned for a stay to have the New Jersey Supreme Court determine whether Fair Share is constitutional. Thirteen cities/towns and League of Municipalities also asked for New Jersey Supreme Court intervention. 6. On March 31, 2011 the Supreme Court agreed to hear the case. 20

21 Maximum Feasible Misunderstanding (V) 1. There have been several legislative actions that have altered the methodology. 2. There is no more requirement for nonresidential development to build affordable housing. Rather, 2.50 percent of the development s nonresidential value is contributed to a construction fund (Roberts Bill suspended and remains suspended for projects before 2010). 3. There was also a bill that would have set the inclusionary percentage at 20 percent and abolish COAH (Lesniak Bill). This bill also linked an affordable housing number to 10 percent of the existing stock, with less of a percentage in the highestsubsidy school lunch program districts. 4. The above bills, the first of which was adopted by the State Legislature and the second vetoed by the Governor, have introduced further uncertainty into the COAH process. 21

22 Going Forward: What to Expect (I) 1 LEGAL A. The New Jersey Supreme Court will hear the second Appellate ruling s petitions; the briefs were filed in Summer 2011; oral arguments will take place in winter 2011 and a decision could be rendered by January B. Growth Share could likely be determined to be unconstitutional by the Supreme Court of New Jersey. C. This could cause a return to the Fair Share Methodology of Rounds 1 & 2. 22

23 Going Forward: What to Expect (II) 2 IMPLEMENTATION A. Growth Share, if constitutional, could be a simple percentage (10 percent) of all developments built with 10 or more units. Fractional units will pay into a development fund. If unconstitutional, return to second round procedures. B. All direct provision of affordable housing will be on the residential sector. Nonresidential will pay into a development fund (2.50 percent of total value of the nonresidential development). Governor is opposed to such a nonresidential development fee. C. COAH has been disbanded (and affirmed by the Supreme Court) whether or not Growth Share is held to be constitutional or unconstitutional. 23

24 Housing New Normal (I) 1. Owners relegated to the long term. Generation of homeowners stuck in their first homes. No second step on ladder. Speculators or flippers are no longer in non troubled sales areas. 2. Dysfunctional properties weeded out and creatively reused badly deteriorated, long unoccupied being demolished slumburbias (unsold Mc Mansions) converted to affordable housing. 3. American housing stock energy upgrade to sell more homes or to sell more quickly. Housing is being made green and more efficient also homeowners now stay longer and upgrade. 4. People forced to make more responsible mortgage decisions making themselves better qualified; way below mortgage max; larger down payments. House is not an ATM machine 5. Cash incentives are more frequent: sellers are paying home inspection or closing costs. 24

25 Housing New Normal (II) 1. There will be fewer housing purchases possibly more reliance on used versus new housing. This has implications for inclusionary affordable housing, which will be less. 2. Weeded out properties may allow for mixed use and TOD developments with inclusive affordable housing. 3. Affordable housing can benefit from general greening of the entire stock more efficient HVAC; more insulation, more collected rain water; more use of penetrating driveway materials. 4. Ownership housing is not the low income housing panacea. Rental housing is back and much more appreciated. 5. More housing is generally affordable: more rentals, more sellers willing to take FHA/VA mortgages, and to assist with closing and inspection costs. 25

26 New Jersey New Normal 1. New Jersey s affordable housing situation has little to do with New Normal and much more to do with Maximum Feasible Misunderstanding. 2. Housing advocates zeal for higher numbers has rendered existing affordable housing ratios non deliverable. 3. New Jersey is absolutely at square one in its overall approach to affordable housing and probably will return to its old methodology of fair share allocation. 4. When the new methodology is delivered it will not have significant growth share components. 5. New Jersey is a very good system in complete disrepair. 26

27 Affordable Housing in Georgia Julian Conrad Juergensmeyer Professor of Law Georgia State University

28 State Affordable Housing Programs in Georgia All state level affordable housing programs in Georgia are administered by the Department of Community Affairs (DCA) and/or the Georgia Housing and Finance Authority (GHFA). The state level programs are: Housing Tax Credit Program: The DCA allocates both state and federal tax credits to owners of qualified affordable housing units who rent to low or median income individuals 28

29 State Affordable Housing Programs in Georgia (cont d) Georgia Dream Home Ownership Program: This is a state home loan program which provides subsidized home loans to qualified buyers. There is an income cap There are credit score requirements All homes to be purchased must fall within a certain price range The program is administered by the DCA and is financed through bonds issued by the GHPA. 29

30 State Affordable Housing Programs in Georgia (cont d) Lower Income Rental Assistance: The DCA provides rental assistance to qualified individuals This program is funded by the U.S. Department of Housing and Urban Development (HUD). Community Development Block Grants The DCA distributes grants to enhance community development, including affordable housing projects This program is funded by HUD 30

31 City and Local Government Affordable Housing Programs Atlanta Area: Most affordable housing programs are administered by the Urban Residential Finance Division (URFA) (a subdivision of the Atlanta Development Authority (ADA)) The Atlanta Programs are: ADA down payment assistance program: Program begun in 2007 Income cap of $68,300 for 1 2 person households to qualify Qualified buyers get a soft mortgage for up to a 30% down payment at 0% interest. Repayment on this loan is deferred 5 15 years or upon sale of the house First mortgage must be a standard, fixed rate mortgage Price of house to be purchased cannot exceed $252,890 31

32 City and Local Affordable Housing Programs (cont d) Atlanta Area: Housing Opportunity Bonds Bonding Program started in 2004 by Mayor Shirley Franlkin. Bonding Program was a joint venture between the ADA, Atlanta Housing Authority (AHA) and the City of Atlanta First $35 million bond set was sold in 2007 to fund the following initiatives: Multi family developer loans: Below market rate interest loans of up to $25,000 per unit or 20% of the total capital cost of a project (whichever is less) are available to developers who devote a minimum of 20% of the project to affordable housing units. Community Housing Development Organization (CHDO) Loans: Below market rate interest loans which provide up to 50% of capitol costs of a project. Stricter qualification requirements than the multi family developer loans. 32

33 City and Local Affordable Housing Programs (cont d) Atlanta Area: Housing Opportunity Bonds Land Assemblage Fund City of Atlanta has contributed $5 million to the Enterprise Foundation s land assemblage fund. This matches $25 million already raised from private developers This fund aims to provide below market rate interest financing for low to moderate income housing developers to acquire land. This program exists to mitigate the problem of quickly escalating land values in Atlanta due to gentrification activity This fund is only available to non profit development organizations OR for profit companies working in concert with non profit organizations. 33

34 City and Local Affordable Housing Programs (cont d) Atlanta Area: Housing Opportunity Bonds Single Family Builder Initiative: loans program which will provide construction financing to non profit and for profit developers to finance the acquisition, construction or renovation of single family residential units to be sold to affordable homebuyers. Loans cannot be used to finance entire project 34

35 City and Local Affordable Housing Programs: A Snapshot of Other Georgia Cities Savannah Area: The City of Savannah currently has no affordable housing program However, an affordable housing task force released a report in 2008 urging the city to set up an affordable housing trust fund. 35

36 City and Local Affordable Housing Programs: A Snapshot of Other Georgia Cities Athens Area: The City of Athens Housing Authority administers the Act 1 Homes Program: Funded by HUD s Community Block Grants Program (and administered by the DCA). Athens Housing Authority uses funds to buy and construct houses (22 have been built to date). House prices are set so that monthly mortgage payments will be between $600 and $750/month. Selected buyer must put $1000 down on the home and obtain a privately funded mortgage. 36

37 City and Local Affordable Housing Programs: A Snapshot of Other Georgia Cities Augusta Area: The City of Augusta offers the Home Ownership Assistance Program The program is funded by HUD The program provides qualified applicants with a down payment and below market rate mortgages 37

38 Community Land Trusts (CLTs) A CLT is a private, non profit community organization that buys land and then builds houses on that land in order to provide affordable housing opportunities. CLTs then lease these affordably priced homes to families with limited incomes The CLT keeps the price of homes affordable by separating the price of the house from the cost of the land. 38

39 Community Land Trusts in the Atlanta Area Atlanta had a failed experiment with CLTs in the late 1980s and early 1990s. These CLTs were not well received by the local development community and the CLTs eventually sold off their assets and shut down. The Atlanta Beltline has reinvigorated the use of CLTs in the Atlanta Area The Atlanta Beltline is a $2.8 billion redevelopment project which will provide a network of public parks, multi use trails and transit along a historic 22 mile railroad corridor circling downtown Atlanta and will connect 45 neighborhoods directly to each other. Some of these neighborhoods have traditionally been lower income areas Because the Beltline is expected to dramatically increase surrounding property values, the Beltline wanted to ensure that families of limited means would not be forced out of these neighborhoods. 39

40 Community Land Trusts in the Atlanta Area (contd.) Atlanta Land Trust Collaborative (ALTC): Set up by the Atlanta Beltline to provide support for CLTs in the Atlanta area The Beltline Partnership also plans to set aside $240 million (15% of the total expected revenue from its TADs) into its own CLT for the purpose of building workforce housing units within the Beltline area. Though the ALTC is in its infancy, other neighborhoods are setting up CLTs: Ex. Reynoldstown; Pittsburgh 40

41 Some Non profit Affordable Housing Groups Operating in Georgia Habitat for Humanity Progressive Redevelopment Mercy Housing Paces Foundation In Fill Housing Affordable Housing Enterprises Communities Empowering People Together and many more.. 41

42 Affordable Housing in the Aftermath of the Foreclosure Crisis At first glance, it would appear as if the foreclosure crisis has been good for the affordable housing market. After all, there has been a substantial decrease in both the cost of housing and the cost of financing. The median appraised value of a home in Atlanta has fallen 41% from its peak of $204 thousand in 2007 to $120 thousand in In 2011, for the first time ever, the average interest rate on a 30 year fixed rate mortgage fell below 4%. These factors are the result of Atlanta having the 5 th highest vacancy rate of any city in the United States (5.4%) In other words, the market is creating its own supply of affordable housing. 42

43 Affordable Housing in the Aftermath of the Foreclosure Crisis However, the sudden affordability of houses in the Atlanta area is offset by other economic factors: high unemployment (11.6%) decreased state wide median household income ($49,344 in 2006 to $44,108 in 2010) The credit crunch Many Georgia affordable housing programs still require the recipient to obtain a private mortgage which many are unable to do Thus, while the value of homes has come down, their affordability to the general population has not. 43

44 Affordable Housing in the Aftermath of the Foreclosure Crisis State and local governments are experiencing a significant reduction in tax revenue collection. State tax revenues dropped close to 25% from 2007 to 2009 and is only now beginning to rebound. City of Atlanta tax revenue has remained relatively flat during the economic downturn. This in turn signals reduced or flat support for affordable housing policies. In the Atlanta area: Many of the City of Atlanta affordable housing programs were only created in As of right now, only the ADA Down Payment Assistance Program has been fully implemented. All other City of Atlanta affordable housing programs are in various stages of implementation and their funding (heavily dependent on bond sales) is in doubt due to the state and local government funding crisis. 44

45 Affordable Housing in the Aftermath of the Foreclosure Crisis A Final, Long Term Problem: While there is a temporary surplus of housing on the market, the demand for housing often increases faster than the residential construction market can supply it. Residential construction has been depressed since the beginning of the Recession: The number of residential construction permits granted in Georgia has fallen from a peak of 9,000/month in 2006 to a stable low of about 1500/month in 2009, 2010 and This level of construction is not enough to keep up with projected population growth in Georgia and will ultimately lead to a shortage of affordable housing. 45

46 LAND BANKS & AFFORDABLE HOUSING IN GEORGIA Land Banks once popular in Europe cities bought undeveloped land outside the city in order to control when and how development occurred have been reinvented. Modern Urban Land Banks take control of foreclosed and abandoned property to ensure future development that best serves public interest including affordable housing goals See Frank Alexander (Emory University) Land Banks and Land Banking, bankbook resources 105.php 46

47 Valdosta Lowndes County Land Bank Authority Georgia state land bank statute allowed the city of Valdosta, the Valdosta Lowndes County Land Bank and Habitat for Humanity to turn several parcels of land into the Fellowship Place subdivision. The city of Valdosta utilized the land bank to hold the properties tax free until they were transferred to Habitat for Humanity to help achieve its mission of creating affordable housing for low income, first time homebuyers. 47

48 AFFORDABLE HOUSING IN FLORIDA: Let the Market do it. James C. Nicholas, Ph.D. University of Florida Growth and Infrastructure Consortium San Diego, CA October 27,

49 Florida s Housing Policy It is the intent of this act to assur[e] that by the year 2010 each Floridian shall have decent and affordable housing. This strategy must involve state, regional, and local governments working in partnership with communities and the private sector and must involve financial as well as regulatory commitment to accomplish this goal. GOAL. By the year 2010, this state shall ensure that decent and affordable housing is available for all of its residents (set in 1990). 49

50 Two Thrusts of Florida Housing Program 1. Local requires all local governments to have Housing Elements, that set out how the local government is going to meet the housing needs of its entire current and anticipated population, including low, very low income, special needs populations, farmworker housing, group homes, and foster care facilities. In addition to the Housing Element, they must also adopt a Future Land Use Map, which identifies adequate sites for affordable housing; this requirement is interpreted to prohibit, for example, the exclusion of multi family housing from the jurisdiction. 50

51 State 1. William E. Sadowski Affordable Housing Act, documentary stamp tax paid on the transfer of all real estate in Florida Housing Finance Corporation 30% and 70% to the local housing trust fund to be used by local governments under the State Housing Initiatives Partnership program (SHIP) created within the Sadowski Act 2. A 10 per $100 real estate doc stamp adopted in In 2007 the Legislature capped funds going to housing at $243 million, with no increases since. In 2011 this cap was removed. This allowed and additional $40 million for housing, which was promptly swept into the general fund. 51

52 Florida s HFA Florida Housing Finance Agency receives 30% of Sadowski funding for First Time Homeowner Assistance Moderate Income Homeowner Assistance Moderate Income mortgage assistance State Apartment Incentive Loan Program State Elderly Loan Assistance Program Multifamily Mortgage Revenue Bonds Low Income Housing Credits 52

53 Results The state and local programs have put forward above $1 billion in public funds, Which has attracted about $2.4 billion in private funds For a total of some $3.5 billion towards affordable housing since

54 Also 1. Many local governments imposed ad hoc set asides for affordable/workforce housing 2. Two local governments adopted required affordable (workforce) housing provision of payments in lieu; a. Tallahassee (sued but dismissed for lack of standing) b. Islamorada no legal challenge 3. The State s Development of Regional (DRI) program was used to require some developments to provide or contribute towards affordable/workforce housing. 54

55 Florida HFA/DCA Two Agencies charged with responsibility; Florida Department of Community Affairs, and Florida Housing Finance Agency IN 2011 the FL Department of Community Affairs is scheduled to have all of its powers removed except disaster preparedness and to be transferred as an agency of the Florida Department of Economic Opportunity. The Florida Housing Finance Agency will continue to function 55

56 Florida DRI Process Additionally The State DRI process is again being studied for modification or repeal. We don t hear much about affordable housing issues anymore. 56

57 But what else has happened? Housing Construction went crazy! But not for the first time. 57

58 350,000 Dwelling Units Permitted Florida , , , , ,000 50,

59 350,000 Dwelling Units Permitted Florida , , , ,000 Trend 100,000 50,

60 Boom and Bust are Normal for Florida 200,000 Change in Housing Inventory , ,000 50, , , ,000 60

61 In 2010 The inventory of unsold dwellings stands at 1.6 million units 18%. Additionally, there are more than 150,000 partially built units, which may have to be torn down. 61

62 In the end... Housing has become more affordable 62

63 $300,000 Median Resale Prices Florida $250,000 $200,000 $150,000 Multi-Family Single Family $100,000 $50,000 $

64 40,000 Existing Home Sales Florida 35,000 30,000 25,000 20,000 15,000 Multi-Family Single Family 10,000 5,

65 $300,000 Single Family Florida Price 40,000 $250,000 35,000 30,000 Median Price $200,000 $150,000 $100,000 $50,000 Sales 25,000 20,000 15,000 10,000 5,000 Number Sold $

66 Median Sales Prices and Median Income Prices Household Income 66

67 Median Household Income as % of Median Price Florida

68 The results of overbuilding... The substantial overbuilding coupled with the collapse of demand has resulted is a decline of prices that affordability has been restored. But only for those at or above the median level. Housing for those less than the median remain an issue. The Florida Housing Finance Agency will continue its programs for the foreseeable future. Most local efforts appear to have been abandoned. 68

69 We got affordable housing... The market has provided affordable housing in Florida by... Decreasing annual sales by 52%, with 30 40% of those occurring either foreclosures or short sales, Increasing inventory of unsold homes by 1.1 million Decreasing median sales prices Single Family 51% Multi Family 63% and in excess of 250,000 residential foreclosures. 69