Agenda - 02-07-2001-7a - Laserfiche WebLink

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Further, it is estimated that approximately 12,280 of all households in Orange County (44,854) 3 were considered very low income, with incomes between 0-50 percent of median family income (MFI). HOUSING AND COMMUNITY DEVELOPMENT NEEDS Conditions The high cost of homeownership has forced many families to purchase housing in other counties and commute into Orange County for work. The inflation of the rental market by University of North Carolina-Chapel Hill (UNC-CH) students has caused hardships for families with incomes below 50 percent of MFI. Larger rental units are particularly scarce. Market Conditions According to the Orange County Economic Development Commission, the average new home sales in 1999 was $247,661, and for an existing home the price was $200,601. To purchase this new home a low income family of four persons would have to spend approximately 7.9 times their annual wages. For an existing home, the family would have to spend approximately 6.4 times their annual wages. In both of these instances, the low-income family need to have more money than they earn and is certainly well above the HUD standard for affordable housing. (U.S. Department of HUD standards define affordable owner occupied housing as purchasable at 2.5 to 3.0 times total family annual income.) The rental housing market, inflated by the ability of University of North Carolina at Chapel Hill students able to pay market rents, is beyond the means of families with incomes below 50% of the area median. In 2000, it is estimated that rental units represent 43% of the county-wide housing market and approximately 67% of those rental households experience an extreme cost burden - paying between 30% to 50% of their income for rental housing. Each year, HUD publishes existing housing Fair Market Rents (FMRs) for metropolitan areas and non-metropolitan counties in the country. These FMRs are based on the fortieth percentile of standard quality rental units occupied by recent movers. Public housing units, newly constructed units, and substandard units are excluded from the calculations. FMRs are established by unit size (number of bedrooms) and include an allowance for utilities. Experience in Orange County has shown that local rents often run an average of 15 to 20 percent higher than those HUD published rates, which explains why such a high percentage (35%) pay more than 50% of their income for rental housing costs. For families earning 80% or more than the County median monthly family income of $4,022 renting a multi-bedroom apartment is relatively easy given that they are able to locate units with 3 or more bedrooms. Larger apartments are in relative scarcity because the rental market is oriented toward providing student rental housing. The most recent County data estimates that 24% of the County's rental properties contain three or more bedrooms. For families earning 50% or less than the median monthly income the primary concern is not finding a rental unit but rather affording one. In 2000, the upper level income limit for a low- income family of four was $29,740. For these families renting a three bedroom dwelling unit in