This slide show describes some of the challenges facing Athens, GA and some of the surrounding areas in terms of housing. It was presented in mid-2007.

1. A PLACE FOR US:
THE CHALLENGES OF HOUSING IN
ATHENS AND SURROUNDING AREAS
Andy Carswell, Ph.D.
Dept. of Housing & Consumer Economics
University of Georgia
June 22, 2007

2. OUTLINE FOR DISCUSSION
• Affordability defined
• How is it measured?
• Some of the culprits behind the problem
• Potential solutions

3. HOUSING AFFORDABILITY
• Broadly Defined  The relation of a
consumer’s housing costs to his or her
available resources.
• Tightly Defined  Usually done through
established industry indicators

4. HOUSING OPPORTUNITY INDEX
• Measures the % share of homes that a median-
income household can afford in a city/metro
area
• The higher the index value, the greater the
degree of affordability that exists within a certain
market
• Ranks only the metropolitan areas

5. Housing Opportunity Index: 4th Quarter 2006
By Affordability Rank
HOI 4th Qtr 2006 2006 4th Qtr 2006 4th Qtr 2006
Metro Area Share of Homes Median Median Affordability
Affordable for Family Sales Rank
Median Income Income Price National Regional
(000s) (000s)
Springfield, OH 90.7 55.4 90 1 1
Davenport-Moline-Rock Island, IA-IL 89.8 60.1 87 2 2
Bay City, MI 89.6 55.8 85 3 3
Mansfield, OH 89.1 52.7 83 4 4
Canton-Massillon, OH 89.0 54.9 93 5 5
Indianapolis, IN 89.0 65.1 113 5 5
Lima, OH 89.0 52.2 81 5 5
Lansing-East Lansing, MI 88.4 64.9 105 8 8
Youngstown-Warren-Boardman, OH-PA 88.0 52.1 83 9 9
Detroit-Livonia-Dearborn, MI ^^^ 87.8 56.7 92 10 10
Battle Creek, MI 86.9 55.2 86 11 11
Flint, MI 86.5 57.8 100 12 12
Saginaw-Saginaw Township North, MI 86.4 53.8 90 13 13
THE AFFORDABILITY “HIGH FLYERS”

6. HOI 4th Qtr
2006 2006
4th Qtr
2006 4th Qtr 2006
Metro Area
Share of
Homes Median Median Affordability
Affordable for Family Sales Rank
Median Income Income Price National Regional
(000s) (000s)
Atlanta-Sandy Springs-Marietta, GA 68.2 68.1 183 54 13
HOI AFFORDABILITY
“THE DIRTY DOZEN”
El Centro, CA 6.8 43.3 280 191 54
Riverside-San Bernardino-Ontario, CA 6.8 57.5 391 191 54
Modesto, CA 6.1 54.4 360 193 56
Santa Barbara-Santa Maria, CA 5.3 65.8 519 194 57
New York-White Plains-Wayne, NY-NJ ^^^ 5.1 59.2 500 195 40
Santa Cruz-Watsonville, CA 5.1 75.1 665 195 58
San Diego-Carlsbad-San Marcos, CA 5.0 64.9 475 197 59
Merced, CA 4.7 46.4 325 198 60
Napa, CA 4.3 75.0 588 199 61
Santa Ana-Anaheim-Irvine, CA ^^^ 4.0 78.3 620 200 62
Salinas, CA 3.7 62.2 580 201 63
Los Angeles-Long Beach-Glendale, CA ^^^ 2.0 56.2 525 202 64

7. NAR’s AFFORDABILITY INDEX
• More established than NAHB index
• Ratio of the median income to the minimum income
required to qualify for a conventional loan covering 80%
of median existing home price
• Index value of 110 means that a family earning median
family income has 110% of income necessary to qualify
for an 80% loan
• Only 22 metro areas covered under the index

8. NLIHC’S “Out of Reach” Index
• Points out that there is an overemphasis
on housing prices, not rents.
• Covers every MSA
• Calculates the hourly wage a HH must
earn in order to afford a rental unit at the
area’s FMR
• Assumes that a HH pays no more than
30% of income for housing costs

10. RESULTS OF NLIHC’s “OUT OF REACH”
INDEX – ATHENS, GA
ATHENS
% renter 43%
AMI $52,900
30% AMI $15,870
FMR (2 BR) $ 665
Est. Hsg. Wage $ 12.79
GEORGIA
33%
$58,203
$17,461
$ 679
$ 13.05

11. HOUSING AFFORDABILITY
Non-Traditional Methods of Measuring the
Affordability Problem
- Mortgage delinquency and foreclosure rates
- Rent-burden statistics
- Mortgage types originated
- Doubling up/overcrowding
- Other home expenses

12. Athens Living Wage
Housing $622
Food $405
Child Care $880
Transportation $275
Health Care $335
Other Necessities $277
Taxes $268
Monthly Total $3,062
Annual Total $36,744
% of People in GA living below
family budget line
25.6% or 451,000 people
Monthly Expenses for One Parent with Two Children in Athens, GA
Source: Economic Policy Institute; Basic Family Budget Calculator.

13. Georgia Labor Categories &
Earnings
JOB CATEGORY # of Jobs Mean Salary
Local Government 398,961 $32,864
Accommodations & Food
Service
332,887 $14,456
Administrative & Waste Services 281,210 $28,548
Retail Trade 460,002 $24,596
First Year Teachers 7,500 $30,441
A $30,000 annual salary will qualify an individual for a
$90,000 mortgage.
From Georgia Employment and Wages 2005, Produced by the GA Dept. of Labor and
Georgia Department of Education.

14. SO, WHO’S TO BLAME FOR THE
AFFORDABILITY PROBLEM?
• Land as a finite resource
• Government infatuated with homeownership
• Liberalized financing of mortgages
• Building codes
• Mortgage fraud
• Suburbanization
• Housing norms
• Inflexible nature of market rents
• Lack of availability of Section 8
• Growth of subprimes
• The dominance of the “stick-built” market

15. POSSIBLE SOLUTIONS TO
AFORDABILITY PROBLEM
• Solid, yet realistic, homeownership counseling
programs
• Reducing the stigma of manufactured housing
• Reducing the influence of the sub-prime market
• Living wage campaigns
• Land trusts
• Housing trust funds

17. The Big Picture: Workforce
Housing
1. There is very limited housing choice in rural
Georgia and a significant proportion of
Georgia’s rural workforce is dissatisfied with
their housing situation.
2. Housing construction is virtually nonexistent in
nearly one-half of Georgia’s counties. The
near absence of housing construction activity
contributes to both the lack of choice and to
the aging of the existing stick-built housing
stock

18. The Big Picture: Workforce
Housing
3. The mix and lack of availability of workforce housing in rural
Georgia is influenced by a number of factors including:
• Credit worthiness of potential buyers
• Low profit margins in the development of affordable
housing
• Relatively small size of local housing markets
• Inadequate infrastructure to support housing
development
• Lack of knowledge about housing assistance program
• Lack of available land
• Land development codes such as zoning and
subdivisions

19. The Big Picture: Workforce
Housing
4. Economic development in rural Georgia is
suffering because of the inadequate supply
and mix of workforce housing.
5. If workforce housing needs are not addressed,
the lack of housing choice combined with an
aging housing stock and inadequate
infrastructure will virtually preclude many
counties from realizing their economic
development potential.

20. The Big Picture: Workforce
Housing
6. Existing market incentives alone are
insufficient to attract private sector housing
builders and developers. In addition, existing
publicly financed housing incentives are too
limited to adequately address the state’s
workforce housing needs.
7. Consumers and employers are generally
unaware of existing housing programs and
resources. In addition, there is a lack of
awareness and replication of successful
housing models.

21. The Big Picture: Workforce
Housing
8. Greater understanding and local leadership is needed
at the local level to address workforce housing needs.
9. There is insufficient information to address housing
related issues, and to identify strategies and initiatives
that could expand housing choice, housing quality,
and housing affordability in rural Georgia.
10. Current housing programs and funding are insufficient
to meet the current and potential demand for
workforce housing.