- Housing

Workforce Housing
(formerly "Housing Affordability Gap")
-- Thriving, Diverse & Sustainable Economy --

What are the Most Important Goals?

• Informed populace
• Visionary leaders
• Engaged institutions
• Accessible services
• Integrated infrastructure
• Directed growth
• Balanced demographics

What is this Indicator?

The Workforce Housing Indicator measures median income and what percentage of income would be needed in order to buy or rent an average-priced house on Cape Cod. The homeownership figures assume a 5% down payment, a 30-year fixed-rate mortgage at 6%, private mortgage insurance costs of $55 per month, $180 in estimated tax and insurance costs, and a debt-to-income ratio of 30%. For rental housing it is assumed that a tenant pays no more than 30% of gross income, including utilities, for rent. The accepted practice is for a household to pay no more than 30% of gross income for shelter in order to have money to pay for other living expenses.

Why is this Indicator Important?

This indicator shows Cape residents' ability to support entry-level housing needs, particularly for first-time homebuyers and renters. It is through housing that people put down roots in a community. This measurement is particularly important for Cape Cod due to retirement and second-homeownership, which drive up purchase prices, and summer rental demand, which drives up year-round rental rates.

It is important for Cape Codders to think about where entry-level homeowners and the employment force will live if they cannot find affordable housing on the Cape. Particularly in the hospitality industry, there are already employers that either "bus" workers from off-Cape or need to make housing arrangements for the workers on- Cape. This is happening year-round, not just during the summer months. As evidenced in Figures 1 and 2 (below), although the total population on the Cape increased 19% between 1990 and 2000, the population of 20-34-year-olds decreased 22%. That represents the entry-level workforce exiting the Cape. It is important to have affordable housing to support our core service employees as well as to strengthen our year-round economy.

What Can We Do?

Individuals:
• Participate in community forums and informational meetings which address the issue of affordable workforce housing.
• Join the local housing committee or housing authority.
• Support candidates who make affordable housing a priority.
• Support the Community Preservation Act in our towns, prioritizing affordable workforce housing.
• Lobby community decisionmakers to act.

Analysis of Data

If one assumes that a sustainable community, from a housing point of view, is one in which the affordability gap is zero (that is, a household earning the median income can purchase a median-priced home and a household earning 80% of median income can afford an average-priced rental unit), then the Cape has drastically deviated from that standard. Figure 3 shows that while the median income increased 26% between 1998 and 2002, the income needed to purchase a median-priced home increased 73%. The median-priced home was $135,000 in 1998 and $296,375 in 2002. The affordability gap (the difference in income needed to afford a median-priced home) increased from $1,300 in 1998 to $22,875 in 2002.

For renters, households earning the median income could afford the average two-bedroom rental (based on a survey of available rentals) in both 1998 and 2002. However, renters typically are entry-level workers earning less than the median income. Therefore, it is more revealing to compare the 80% of median income measure and the income needed to rent a two-bedroom unit. Using this comparison, the rental affordability gap increased from $6,240 in 1998 to $10,000 in 2002.

What Can We Do?

Communities:
• Develop an affordable housing education plan in order to enable the public to understand the issues.
• Develop and implement a housing action plan.
• Adopt zoning bylaws that encourage affordable housing and a wider range of housing choices, such as apartments and townhouses.
• Allow higher density of development in village centers and other areas, supported by wastewater treatment systems that protect the environment.
• Encourage housing mitigation as part of commercial expansion.

Decision-makers:
• Provide more resources for affordable housing.
• Maintain a public commitment to the creation of affordable housing.
• Establish a Workforce Preservation Committee.
• Provide more resources for wastewater management, especially centralized, advanced treatment systems that can accommodate higher density housing.

What Connections Does This Indicator Have?

A change in the housing affordability gap affects the stability and well-being of our population and labor force, and less directly, the environment.

Economic
Ensuring that housing is both affordable and available for our younger residents and their families to buy or rent helps ensure a stable workforce for the Cape's year-round industries. A stable workforce also is an enticement for businesses considering locating here, which may in turn increase demand for education and skills training. Beyond supporting local for-profit businesses, a local stable and skilled labor force is also necessary to sustain the services provided by municipalities, such as police and fire protection, health and human services, and educational organizations, such as the area's hospitals and Cape Cod Community College.

Environmental
Affordable and decent housing is essential for our feeling of well-being and sense of belonging to our community. Living in run-down housing or housing that is located in poor surroundings makes it difficult to feel connected to our surroundings and to take responsibility for decisions affecting our environment. Substandard housing perpetuated by a lack of decent workforce housing alternatives can significantly impact the environment. For example, when a large number of workers cram into a dwelling unit designed for far fewer people, it can cause local impacts from septic pollution, because the septic systems are too small. Inadequate construction and poor insulation can increase the amount of energy that is used.

Social
A healthy and stable community needs younger residents of all ages to continuously renew itself with fresh energy, new ideas, and a sense of optimism. As the Cape's population ages, and younger residents move away to find jobs where they can afford to live, our community will become increasingly unbalanced towards older and wealthier residents and people commuting here to work or living here on a short-term or temporary basis. Affordably priced housing is essential to provide young families and young residents with a feeling of safety, security and connection to the community, which in turn is one of the building blocks needed by a sustainable society.