Is affordable housing in Payson a myth?
Documentation on the subject from various government agencies and the most fundamental research seems to indicate it might well be.
A report from the 2000 Census estimates that the median household income in Gila County is $27,960.
A report from the town of Payson Housing Advisory Committee showed more than 50 percent of the community's residents made less than $25,000 a year in 1996.
An income of at least $25,000 is needed to qualify for a $70,900 mortgage in 2000, based on a 30-year, fixed rate loan at 8 percent interest, according to the housing committee's report.
A look in the classified advertisements show that a mortgage like that will not buy much in Payson.
Even manufactured housing costs, when the purchase of a lot and development fees are included, are not likely to fall into that range. Most lots for manufactured housing cost almost $30,000. A basic manufactured home is about $50,000 to $55,000. Development fees are between $10 and $12,000, according to the housing committee's report. The three things combined give manufactured housing a cost of about $90,000.
Flyers at even the most modest site-built homes show asking prices approaching $90,000. The asking price on a fixer-upper is almost $75,000.
To qualify for a $90,000 mortgage, an applicant's household income would need to be between $30,000 and $35,000. According to the May 2000 housing committee's report, $30,000 in household income would qualify for an $85,100 mortgage, while an income of $35,000 would get a $99,300 mortgage.
Interest rates have dropped dramatically, but historically, increases in income have not kept up with the increase in housing costs.
From 1990 to 1995, the report says, the median income levels for Gila County increased by 6.1 percent annually. Housing costs during the same time period increased by 14.23 percent annually. The discrepancy ... means that each year fewer households are able to afford to buy the average-priced home. This leads to the purchase of poorer quality housing or being overburdened by housing costs.
The national standard for affordability states that a household which pays more than 30 percent of its gross income for housing is considered to be overburdened with housing costs, according to the report. Housing costs include utilities.
So, if the median income for Gila County is $27,960, 30 percent would be $8,388 annually, or $699 a month.
Is affordable housing a myth?
For example, the mortgage on a 1997 manufactured home, on a 1/3 acre lot, is approximately $642 a month, with electricity, water and gas averaging $243 in the summer, for a total housing cost of $885 a month or $10,620 a year.
To not be overburdened with housing costs, the household income of this example would need to approach $36,000.
As for rentals, two different rentals in the same neighborhood as the manufactured house in the example above are going for $650 and $750. If utilities are not included in those rents and average the same as the manufactured home, the total housing costs would be $893 and $993 respectively. In both instances these modest homes would be out of the "affordable" range of a household earning the county's median income of $27,960.
The town of Payson, working with other groups, has attempted an affordable housing plan for a number of years.
Approval has been given to several developments touting themselves as being able to provide affordable housing with zoning for manufactured homes. But their lots and homes are selling for more than $100,000.
Currently, grants coming to the town for affordable housing have been designated to rehabilitate older homes, both site built and manufactured.
Still on the drawing board are plans to:
Develop assisted rental housing for seniors, families with children and the disabled;
Make changes in the regulatory process;
Provide assistance for first-time home buyers;
Rehabilitate more of the housing in Payson; and
Provide temporary housing for the homeless.
Over the next few weeks, the Roundup will further examine Payson's affordable housing situation, and ways the town is looking at helping low-income residents search for the American Dream.