FHCE 3300 1nd Edition Lecture 21Outline of Last Lecture I. Physical CharacteristicsA. DensityB. Housing TypesC. Housing Age and ConditionD. LocationE. TransportationII. Types of Planned NeighborhoodsA. Traditional SubdivisionB. Planned Unit DevelopmentC. New Urbanism/Neo-traditionalD. Gated CommunitiesE. Conservation CommunitiesIII. When Planning Doesn’t Always Lead to Improved Quality of LifeA. Low-density Neighborhoods1) Suburbs2) ChallengesB. AffordabilityC. Annual Household Gasoline ExpensesThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.D. Not Just About HousingE. Neighborhoods – Post-foreclosureF. Possible Future Problems for SuburbsG. Sustainable SuburbsH. Housing MarketsI. Buyer’s MarketJ. Seller’s MarketK. Rental Markets1) Vacancies and RentsOutline of Current Lecture I. AffordabilityII. 30% RuleIII. GuidelinesIV. Housing Cost BurdenV. Lack of Affordable HousingVI. Fair Market RentVII. Affordability at Household LevelVIII. Renting and AffordabilityCurrent LectureI. Affordability- Household should spend no more than 30% of total income on housing costs, including mortgage or rent payments and utilities- Factors influencing affordability: income level, household size, geographic variationII. 30% Rule- Evolved from U.S. National Housing Act of 1937 – started as public housing income guidelines; income couldn’t exceed 5-6 times the rent- 1940 – max rent standard; 20% of income- 1969 – public housing rents increase in response to rising maintenance and operation costsIII. Guidelines- Help consumers choose housing that’s within their means- Serve as guideline for gov’t and non-profit housing programs- Provide analytical tool to look at match between demographics and housing in community, understand community housing needsIV. Housing Cost Burden- Paying more than 30%: housing cost burdened- Paying more than 50%: severely housing cost burdened- 37% of U.S. households (42 million) pay more than 30% of their income on housing- 18% pay more than 50% of income on housingV. Lack of Affordable Housing- Considered largest (long-term) housing problem facing U.S.- Many gov’t housing policies address housing affordability- Problem for both communities and individual households- For communities: attracting and keeping employment opportunities, quality neighborhoods, school mobility- For households: inability to meet other basic needs, stay in housing over timeVI. Fair Market Rent- FMR- Established by HUD- Includes rent + cost of all tenant-paid utilities, except phones, cable or satellite tv service, and internet service- HUD sets FMRs to assure sufficient supply of rental housing is available to its program participants High enough to permit a selection of units and neighborhoods Low enough to serve as many low-income families as possible- Expressed as percentile point within rent distribution of standard-quality rental housing units. Current definition = 40th percentile rentVII. Affordability at Household LevelKristine has 8-year-old twins, Megan and Matthew. Her husband died a few years ago. She has lived with her parents and worked at a local store for the past four years and is about to finish an associate’s degree. Kristine is starting a new job soon. She would like to rent a three-bedroom apartment for herself and her two kids. Kristine lives in Athens. The typical rent for a 3 bedroom rental unit is$1000.- At $12.75 per hour (40 hour week for 52 weeks), how much would Kristine earn in one year? $26,520- How much would she earn in one month (before taxes)? $2,210- How much can she afford to pay in rent? $663- Can she afford to rent a 3-bedroom unit? What are her options? No. Can look for public housing, can live with parents, can get a 2-bedroom aptVIII. Renting and Affordability- Poor households that rent suffer the most severe housing cost burdens- Supply of low-cost rental housing units has not been sufficient for the demand- Much of that housing is old & located in neighborhoods with little access to jobs & adequate services- Government assistance is available, but is not