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Affordability a village issue

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Examining Affordability

This is the first in a series of articles looking at various aspects of affordable housing in Yellow Springs.

Anecdotal evidence in the region suggests that Yellow Springs is a relatively expensive place to live, and real estate data supports the assumption that the cost of housing in the village is relatively high, compared to surrounding communities. For nearly 20 years various local groups have worked to establish affordable housing in Yellow Springs to help residents with a wider range of income levels to live here.

But what is affordable housing exactly, and how much of it does the community need?

The local conversation regarding affordable housing has ebbed and flowed in recent years. In the late 1990s, Village Council identified creating more affordable housing as its highest priority, entering into an agreement with Home, Inc. for a project on the Village-owned Glass Farm. However, that project became controversial and, in a Village referendum, was voted down in 2002. Since then, private groups have pursued the housing issue independent of public support.

But the topic has once more captured the attention of many Yellow Springers. Creating affordable housing was identified by the more than 300 visioning participants as one of the village’s highest-priority action steps, and recently Village Council and school board members jointly discussed ways to encourage more young families to move to town, partly by increasing the supply of starter homes.

This fall Council members Judith Hempfling and Lori Askeland introduced a proposal for a modest — four single-family homes — affordable housing project on Cemetery Street, stating that their intent is to target young families. Council voted at its Nov. 1 meeting to work with Home, Inc. to design a plan for the site. The project is the start of further discussions focused on the issues of housing in the village.

The numbers in Yellow Springs

According to the U.S. Department of Housing and Urban Development, housing is generally considered affordable if the costs of mortgage/rent, taxes, insurance and utilities do not exceed 30 percent of a household’s gross income. A family spending above 30 percent of its income on housing is considered “burdened” and could experience difficulty paying for other needs, such as food, clothing, medical care, transportation or saving for the future, the HUD Web site said.

The affordability issue could be framed by looking at the incomes and the cost of the homes that already exist in Yellow Springs. According to the 2000 Census (2010 Census figures are not yet available), the median household income in Yellow Springs is $54,600, and using the standard 30 percent ratio as a rough estimate (and a handy mortgage calculator), a median-income family might reasonably afford a $175,000 house. Those making less than the median income, for example, 80 percent, or $41,600, might be able to afford a $140,000 home. Those making 60 percent of the median income, or $31,200, could  maybe afford a $105,000 house.

The question that follows is, how many homes in these different price ranges does Yellow Springs currently have?

Of the approximately 1,342 homes in the village, according to 2000 census data, 17 percent (234 homes) are valued at $100,000 or less; 28 percent (380 homes) are valued at between $100,000–150,000; 27 percent (371 homes) are valued at between $150,000–200,000; and 26 percent (357 homes) are valued at over $200,000. If half of the population is making $52,000 or less, that half could presumably be looking for homes in the $175,000 range or less, and approximately 58 percent of the homes in Yellow Springs fall within that range.

There are several problems with that simplified model, however. One is that the homes under $175,000 in Yellow Springs tend to be small, with less than four bedrooms, and most of them need anywhere from $30,000–50,000 of renovation to make them livable and/or attractive, according to Re/Max realtor Rick Kristensen.

The other issue is that lower-priced homes seldom come on the market, he said. Though the housing market in Yellow Springs has retracted with the rest of the economy, most of the homes that have sold this year in the village are in the $200,000–$250,000 range, which is lower than average for the village, according to Kristensen.

And this week’s market showed a similar story. On Monday, the Web site listed for sale 16 homes in Yellow Springs, including several on East Enon Road. Of those options, one is $150,000 or under, two are $150,000–200,000, six are $200,000–250,000, two are $250,000–300,000 and five are over $300,000.

There has been an ongoing challenge for people looking for a good quality home with three to four bedrooms in the $150,000 range, he said. When houses go on the market at that cost here, they usually need to be updated, and prospective buyers know they can find a better house for the same price elsewhere in the Dayton area, Kristensen said.

“Yellow Springs hasn’t had homes in that price range for a while,” he said. “We get a lot of people saying, ‘I can’t afford Yellow Springs.’”

The housing options in Yellow Springs well outprice those outside of town. According to the Dayton Area Board of Realtors, in 2009 the average price for properties sold in Yellow Springs was $197,887, which is about 79 percent higher than the average sale price of $101,000 for a home in Xenia or Fairborn. That squares with census data, which showed that homes in neighboring towns and cities generally cost anywhere from 10–20 percent less than those in Yellow Springs.

What’s affordable has changed

What a family can afford to pay for a house is closely linked to what that family is making. And the trends show that housing costs have increased at a rate that’s far outpaced income levels in the area. According to the 2003 Yellow Springs Cost of Living Study, while the median income level multiplied four times from 1970 to 2000 from $13,000 to $52,000, the median cost of housing multiplied seven times from $21,000 to $151,000. The result is that average homebuyers now pay a higher percent of their income to purchase a home in the village than residents paid three decades ago.

Using data from the Cost of Living Study, one can figure out that in 1970 a median-income family buying a median-price home with a 30-year mortgage at 6 percent interest would have spent about 15 percent of its income on housing. In 2000, the same family spent about 27 percent of its income on a house, and today that family spends about 35 percent.

While median-income residents are liable to pay a technically unsustainable amount for their homes, lower income families would have an even tougher time affording a home in the village. According to the 2000 census, about 41 percent of households in the village were making at or below 80 percent of the median (or $43,200), while one-third of households were making 60 percent of the median (or $31,200).

“With affordable housing many people think in terms of themselves and their own income, ‘what’s affordable for me?’ And that’s fine,” said Susan Stiles, director of Greene Metropolitan Housing Authority. “But there is an acknowledgment among public officials that there can be an affordability gap all the way up to 120 percent of area median income, especially in Yellow Springs, which is a finite area with not a lot of new development and where property values keep going up.”

Help for those who struggle

While Greene Metropolitan Housing Authority subsidizes housing for residents with lower-level incomes (mostly those making under 60 percent of median income), and those with upper-level incomes can take care of themselves, the middle-level income range, those making 80–120 percent of average median income ($45,000–$60,000 for a family of four), are typically the families who are not finding homes or are not being served in Yellow Springs, according to former Greene Metropolitan Housing director Donna Denman. So private groups have formed over the past 20 years to address the middle-income families who need a leg up. In Yellow Springs that group is Home, Inc., an independent land trust that works to support permanently affordable housing in the village.

Subsidizing homebuyers is often done either through private groups and/or with federal, state or municipal support in the form of grants, tax abatements, donations of land and partnerships with local affordable housing organizations. Yellow Springs has its own history of this kind of partnership.

According to Denman, Village government has played a part in the housing picture since at least 1970, when a League of Womens Voters study found that many people who worked in Yellow Springs could not afford to own a home here. In the 1960s former Antioch College President Arthur Morgan had helped to establish 20 rental units at Lawson Place as the first project of what was then the Yellow Springs Housing Authority.

The organization expanded as Greene Metropolitan Housing Authority in the ’70s under the direction of Donna Denman. Village government donated about five acres on the corner of Corry and President Streets as well as a small parcel on South Winter Street to help the group build apartments with Section 8 funds. Greene Metropolitan Housing eventually added onto the Lawson place property and built more units scattered around the village for a total of 75 lower-income housing units, of which 56 are rentals and 19 are single family homes, Stiles said.

Home, Inc., established in 1998 to support middle-income families, has built 14 rental and single-family units around the village, with no monetary assistance from the Village.

More homes provide a bigger tax base for both the municipality and the school district. And though Home, Inc. retains ownership of the land its homes are built on, the properties and homes are taxed like any other property in the village, according to Greene County Auditor Luwanna Delaney. Housing authority properties are also taxed according to the regularly appraised value of the land and the home that sits on it, Delaney said.

“Every property is appraised for the value of its use and taxed at 35 percent of its fair market value,” Delaney said, making exception only for property owned by a municipality or government, any public or private schools or universities or land which is used for a public purpose.

Housing affects community

The Village Comprehensive Plan states that Yellow Springs’ vision of itself is to be an inclusive and diverse community, and yet the Cost of Living study shows that the trend is toward an older, more affluent and more racially homogenous village. In 1970, the village population was 28 percent people of color with a median age of 22, and while the data is somewhat skewed by the decline of Antioch College students over time, the median age in the village is now 41 and the percentage of people of color is 23. And while incomes grew both in the village and across the country, in Yellow Springs they grew about 20 percent more than in the nation.

Many villagers feel, therefore, that private and/or public programs are needed to turn the community’s goal into reality, and some are pursuing it through affordable housing.

Those who support the affordability effort feel that enabling people of all income levels to live in the community helps to ensure that the community remains diverse, vibrant and equitable, according to Home, Inc. Outreach Coordinator Emily Seibel. Having a higher percentage of residents who own their homes also adds stability to a community and the individual families within it, according to Stiles, who said that homeowners are generally more motivated to establish roots, raise a family and participate in the community that surrounds them. And because housing tends to be the biggest single living expense, approaching the problem of affordability on that plane is an effective way of opening opportunities for people, according to Stiles and Home, Inc. Director Marianne MacQueen.

Those who are opposed feel that subsidizing housing for individuals can pose a financial burden to the community at large. Whereas other costly public services benefit the entire community, some argue that subsidized housing benefits only the subsidized homeowners, according to villager Joe Lewis. And in a village whose independent school district is facing a budget crisis, others believe that public dollars would be better spent on the education system that is vital to the entire community.

There are other ways to make housing more affordable. Because the market controls property values, one way to drive down property values is to give up some of the amenities that make the community a desirable and therefore expensive place to live, suggested MacQueen. Villagers could withhold support for school levies, they could reduce support for green space and police services, as well as the community pool.

“We could have all the low- and moderate-income people live in Xenia or Springfield,” MacQueen said. “But do we see a value in enabling people of that income level to live in the village? Because if people do think there is a value in it, then we should have a program that supports that.”

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