Making $98K a Year? That’s What You’ll Need In Order To Buy a Home in Broward County
Updating a continuing story, the Sun-Sentinel reports that the housing crisis in Broward County has gotten so bad that only someone making almost $100,000 a year can afford the market’s median price. And, since about 90,000 homes must be built during the next six years to keep pace with the area’s job growth, the problem is likely to become even worse.
The findings of a comprehensive study of the Broward County housing market show the problem to be more dire than expected. It is becoming more widely known how much more affordable housing is needed (and lacking), and how wide the gap is between what’s on the market and what most can afford.
“I don’t know how anybody in their 20s and 30s can afford housing here right now,” said County Commissioner Suzanne Gunzburger said after hearing the findings Monday. “They would have to be making six figures. That’s just not realistic.”
The root of the problem is that the median price of an existing single-family home is almost $400,000, while the median income among the local economy’s largest job is $26,000. That is bad news for people who work in retail, hotels, restaurant, health care and administrative capacities.
According to the study conducted by Ned Murray of the Metropolitan Center at Florida International University, the gap between what a prospective buyer can afford and what is available to them is roughly $92,000. It’s the most extreme in Fort Lauderdale, where the median price is $452,000 and the typical worker, even with the assistance of low-interest Florida home loans, can afford to spend around $172,000.
Other markets, such as Palm Beach real estate, have experienced rapidly escalating prices, but what makes Broward’s situation bad is the low incomes of most workers. Only 15 percent of the county’s work force earns the $98,000 necessary to pay the principal, interest, taxes and insurance (PITI) owed on the median home for sale.
“The gap between jobs and affordable housing is so extreme that the ripples will continue across the economy for some time and could affect job growth if nothing is done,” Murray said. “What really has happened in the housing market is so explosive, we are just beginning to see those ripples.”
The Broward Housing Partnership, a coalition of local developers, bankers and employers, sought the study and will receive a final report later this month. Although Murray presented his findings at the first meeting of the County Commission’s affordable housing task force, the Housing Partnership says it will not provide the public and media with a printed version until the report is finalized.
To tackle the lack of affordable housing that is consuming much of South Florida, officials are looking at a number of options — everything from increasing subsidies for middle-income housing projects to imposing zoning requirements that any development include some units affordable to the average citizen. Housing prices have jumped 65 percent in two years, and almost a third of area families are spending more than they should for housing expenses.
Financial planners typically recommend a debt-to-income ratio of no more than a third, in terms of how much of a household’s income should be devoted to housing costs.
Murray’s report found that nurses in Broward earn about $50,000 a year and thus could afford a $193,000 home, resulting in a gap of $198,000 based on current prices. Elementary school teachers have a median salary of $40,000 and could afford a $149,000 home, a $242,000 shortfall. The problem is worst in Fort Lauderdale, but other communities aren’t much better off. The gap in Miramar is $170,000, and in Hollywood it’s $109,000.
Based on planners’ estimates that 135,000 new jobs will be created in the area by 2012, as South Florida’s economy remains strong, the county needs 90,000 additional homes — and of those, 51,000 will be needed for people earning less than $42,000 a year. It’s a lofty goal for the county, with Florida home loan rates still low and a real estate market that looks poised for continual growth.
