For Buyers in North Florida Housing Market, Affordability Concerns Mount

Althea Gaines, a paralegal for a Tallahassee law firm, began searching for years ago, but soon became frustrated with the process of buying a home.

“I came to the conclusion quickly there was little I could afford,” said the 31-year old mother of four. “The market doesn’t give you much to work with.”

Even as the market levels off from years of skyrocketing prices and record home sales, events of the past few years have made the dream of home ownership a challenge for a great many middle- and working-class families. It’s a problem that comes not just from prices and incomes, but is exacerbated by hurricanes and a glut of condo conversions.

State affordable housing advocates, lawmakers and employers are searching for solutions to a problem that is not limited to individuals who can’t afford homeownership. Policymakers address the issue as a threat to the Northeast Florida economy as well as that of the whole Sunshine State.

In the North Florida housing market, where the affordable housing crunch has not been as keenly felt as in South Florida where prices shot even higher, home prices still have risen precipitously.

But by some bankers’ measures, Tallahassee remains among the state’s top areas for affordable housing. Affordable housing advocates, and the experience of residents like Gaines and others, indicate that the area has not been immune from the same forces at work more acutely elsewhere.

• According to the Florida Association of Realtors, the median price for an existing house in Tallahassee rose from $129,700 in 2001, to $185,000 in September.
• Between 2002 and 2005, the statewide median family income rose from $51,800 to $52,550, while the median existing home price jumped from $137,800 to $235,100.

A recent federal study showed only 33 percent of Florida families could afford to purchase a median-priced home in the state using a conventional Florida mortgage, compared to 70 percent in 1999. With homes rising two or three times faster than incomes, that’s a recipe for disaster as far as first-time buyers are concerned.

Oh, and rising property taxes, along with a statewide homeowner’s insurance crisis, haven’t helped the equation, either.

The affordable housing shortage became so pervasive that the Legislature formed an affordable housing workgroup to figure out ways to make homes more affordable. The Tallahassee City Commission passed an inclusionary zoning ordinance, which mandates that developments of 50 or more units in more expensive parts of town price 10 percent of units below $160,000.

Gregory Miller, chief economist for SunTrust bank, based in Atlanta, said Tallahassee is the most affordable place to live in Florida. Miller said statistics show a family in Tallahassee can afford to buy a house 35-40 percent above the median-priced home.

As a whole, Florida outpaces most other states in home costs. The American Dream Coalition said a new four-bedroom home in Austin, Texas, would cost about $200,000. That same home would cost $300,000 in Tallahassee; $350,000 in Daytona and $400,000 in Fort Lauderdale. That’s enough to push Florida mortgage loan payments through the roof.

The affordable housing issue has many state leaders, private and public, scrambling to find ways to help working- and middle-class families buy homes. Solutions vary, from employers buying land for work-force housing to prospective home buyers receiving government down payment help.

The Tallahassee Habitat for Humanity board decided in February to increase the minimum guideline for income requirements, meaning to qualify for the program families must earn 40-60 percent of the area median income, instead of 30-60 percent.