August 22, 2016

Insufficient Affordable Housing Limits Florida's Economic Potential

Florida is a great place to visit, and even greater place to live. But for many Floridians struggling to make ends meet and looking to contribute to the state’s economy, it’s just not affordable.

Many low- and moderate- income households face housing costs that exceed 30 percent of their income. In addition, many face a lengthy commute to work, which compounds that cost burden. Affordable housing proximate to employers would not only alleviate this burden, but it would also spur economic growth, by providing new businesses with a reliable workforce and enabling residents the time and resources necessary to grow their communities.

Florida’s local communities and state policymakers both have a role to play in encouraging the development of affordable housing that will relieve a significant burden on families struggling to secure their future and help businesses start and grow.

Insufficient Affordable Housing Limits Florida’s Economic Potential

Most households have a limited amount of available resources, and the proportion of income that cost-burdened families spend on housing cannot simultaneously be available for spending in the community. Struggling families that spend more than 50 percent of their income on housing (or housing and transportation) spend 41 percent less on food and 74 percent less than their counterparts who live in affordable housing.

Entrepreneurs and business owners looking to grow their companies acknowledge that the availability of affordable housing substantially affects their ability to recruit and retain qualified entry- and mid-level employees, according to a variety of surveys from the Center for Housing Policy. The Center further cites surveys in which the availability of affordable housing is a primary concern of companies as they make siting decisions.

Traffic congestion from commuters negatively impacts businesses as well as employees. Congested roads increase business operating costs and shrink the area from which customers and clients are drawn. These problems are also a significant deterrent to business relocation in a community. As Florida’s policy makers look to encourage job creation and the state’s overall economy, recognition of these facts suggests they should increase available funding and undertake other measures that will increase the stock of affordable housing.

The Context of Housing Affordability in Florida

Florida has an affordable housing crisis. This problem is exemplified by the 36 percent of Florida households who pay more than 30 percent of their incomes for housing and the 18 percent who pay more than 50 percent. Payments for housing include the mortgage or rent, monthly utilities, property taxes, homeowner’s insurance, and neighborhood or condominium association fees. Appendices A and B differentiate Florida counties by their proportion of cost-burdened and severely cost-burdened households.

For the purpose of this report, we use “affordable housing” as defined by the Florida Housing Coalition:

“affordable housing” refers to privately owned housing that receives a subsidy to bring its rent or purchase price down to a level affordable to a low- or moderate-income family. Except for the subsidy, affordable housing is indistinguishable from non-luxury market-rate housing – it has the same architectural and landscaping styles, and often has basic amenities like energy efficient appliances and community gathering spaces. Substandard housing is, by definition, not affordable housing.

Just as substandard housing is not considered affordable housing, neither are the public housing developments with which many are familiar. Affordable housing is not owned and managed by the government, unlike public housing.

Why does this matter? Housing is only one, albeit the largest, of the monthly expenses for most households. Other recurring expenses include transportation, clothing, groceries, and health care. The more a household’s income is consumed by housing, the fewer resources are available for savings or spending on other goods and services in their communities.

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