Wednesday, January 4, 2012

Why we still need affordable housing

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By JOHN FLATTERY

People sometimes ask why Habitat for Humanity continues to press for more affordable housing when it appears that there is a surplus of inexpensive homes available in our community. The answer is complex, but there is still a shortage of decent housing for low to moderate wage earners to purchase in the Wood River Valley.

First, the good news. The exodus of many workers from the valley over the past two years due to the loss of jobs in the construction industry, an industry that contributed 60 percent of our economic production during the past two decades, has created a supply of homes at values lower than we have seen in almost 20 years.

Cash buyers have a vast array of inventory from which to choose if they are willing to deal with layers of bank bureaucracies and have a lot of time. However, most people do not possess the cash, legal skills and time necessary to make a deal today.

The bad news is that although prices have come down drastically, the median per-capita income has also been reduced by about 25 percent. This major reduction in income has widened the affordability gap, making it even more difficult for families who earn low to moderate wages to purchase a decent home in our community.

Couple this fact with the changes in rules by the lending community, which now requires better credit and higher cash down payments, and you have a very difficult environment for the low to moderate wage earner to negotiate a purchase.

All this brings me to continue to press the expansion of Habitat's acquisition and renovation program in our community. Our mission of providing decent affordable homes for low- to moderate-income families is critical to building a workforce that lives and works in our community.

We have hundreds of workers who commute from outside the county. One survey showed that three-fourths would prefer to live in Blaine County if they could afford it.

To date we have helped three families acquire their own homes in the Wood River Valley. We built the first home from the ground up. With today's lower real estate prices, we found it to be less expensive to buy and rehabilitate existing homes for the other two projects.

Habitat sells homes to families for no profit, with a no-interest mortgage based on ability to pay. Monthly payments are used to build additional homes.

If the homeowner decides to sell the house, Habitat has the option to repurchase it for the initial purchase price. The buyer will receive equity from all the mortgage payments made prior to the sale. This also allows Habitat to keep the home in its inventory.

Since its founding in 1976, Habitat has built, rehabilitated, repaired or improved more than 500,000 houses worldwide, providing simple, decent and affordable shelter for more than 2 million people. Our goal is to help one family at a time in the Wood River Valley, building or renovating three to four homes a year.

Families contribute "sweat" equity by doing part of the work on the home themselves and/or volunteering to help with other community groups.

Our process of identifying and helping families to partner with us to acquire their own home with an affordable, interest-free mortgage is powerful and fundamental to building a sustainable community.

John Flattery is chair of the Habitat for Humanity Blaine County affiliate.

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