Despite the recent decline in home values, the average Payson worker can’t come close to making the payments on the average Payson home, according to a just-concluded study.
A single worker or a two-income family would need to put down about $13,000 and earn $75,000 to buy the average Payson home — valued at about $268,000, concluded the study prepared for the town by Martina Kuehl, a Phoenix-based consultant.
That means the average home costs 179 percent more than the average Rim Country worker can afford.
Moreover, the town still suffers from an acute shortage of rental units, which has eased only slightly as a result of the recession.
Based on a study of the town’s resident income, it is estimated that as of 2008, Payson needed 134 additional units renting for under $250 month, 41 units in the $250-$500 price range and 71 units in the $500 to $875 range — a total shortfall of about 245 apartment units. Lower cost rentals include federally subsidized apartments for qualifying low-income residents.
The consultant recommended a grab bag of responses — starting with trying to educate residents about the need for cheaper housing. “Affordable” housing usually involves apartments, mobile home developments or much higher densities — all things that normally prompt neighbors to pack town council meetings to oppose new projects.
The consultants recommended developing rent and housing assistance programs, providing providing more incentives to developers of low-cost housing, updating zoning and building codes to increase densities and the use of manufactured housing.
The few recent proposals to resume construction on scattered projects in Payson after a severe, two-year housing drought illustrated the consultant’s point about the need to educate residents to reduce opposition to higher-density, lower-cost homes. Two recent subdivision proposals that complied with existing zoning recently produced a council chamber packed with residents demanding the council reject the projects or dramatically reduce the density of the units.
However, the just-released report documented the severe problem anyone making less than about $75,000 can have when it comes to finding a home in Payson. That could explain why many larger employers have a hard time recruiting workers, the report said.
The report said the gap between the average income and the average home price gaped open between 2000 and 2007, creating a crisis of affordability. The gap has remained about the same in the past two years, thanks to a decline in home prices.
Trend in housing types
During the boom years, the Payson housing stock expanded rapidly — and became ever less affordable for the average worker, the consultant’s report said.
On average, since 1970, builders have added 222 homes each year to the town’s supply. Between 1995 and 2000, the boom peaked at an average of 295 units annually. Since 2000, the average has run closer to 200. In the past two years, developers have added just 20 or 30 homes annually.
Single-family homes account for about 70 percent of Payson’s housing stock, compared to about 63 percent in 1990.
Manufactured homes account for about 19 percent — down from 28 percent in 2000. Apartments account for another 11 percent.
The apartments and manufactured homes accounted for the bulk of the affordable housing, and most of the homes available for rent. By 2008, the town had 1,746 rental units, including 1,200 manufactured and site-built homes. Median rent stood at $825 per month — up nearly 52 percent in eight years.
The price of the site-built homes also escalated dramatically until the recent onset of the recession. Median housing prices jumped 85 percent between 2000 and 2007, to $269,000. Vacation homes accounted for about 15 percent of that total.
Crisis in affordability
The rise in rents and home values far outstripped the increase in income for most of this decade, the report concluded.
In 2000, it took an income of $45,350 and a $7,400 down payment to pay for the average Payson home. But by 2007, it took an income of $75,600 and a down payment of nearly $13,000 to afford the average home, the report said.
Back in 2000, 28 percent of the homes for sale cost less than $100,000. By 2007, that number had fallen to 3 percent. At that point, 19 percent of the homes for sale were priced between $400,000 and $300,000 — the largest category in the listings.
Meanwhile, spiraling rents squeezed people priced out of the housing market. Between 2000 and 2007, median wages rose 32 percent, rents rose 51 percent and home prices rose 84 percent.
Recent declines in home prices have brought some relief — but not much, concluded the consultant’s report.
From September 2008 to April 2009, the number of houses on the market has remained steady at about 500. So has the average asking price — about $329,000.
In April 2009, about 80 percent of the units for sale were single-family homes with a median asking price of $399,000. Another 12 percent were manufactured units, with an asking price of $155,000 on average. About 8 percent were condos and townhouses, with median asking prices of $235,000.
Roughly 40 percent of the area’s homeowners are above 65 years old. Those homeowners generally have a lower income than the average resident — but more equity in their homes and more additional resources.
The consultant concluded with a list of recommendations, many of which focused on simply getting existing residents prepared for the real solutions — most of which involve higher densities.
Currently, the developed areas of Payson have only about 60 percent of the density allowed under the existing zoning, since many developers reduced the number of units.