Will the High Cost of Living in HoCo be It’s Downfall?
Posted by bsflag2007 on Wednesday, November 29, 2006
The new County Council members recently attended a two day briefing/retreat. The impact of the high cost of housing in the area on future growth and development was apparently a recurring theme.
“The labor force is the single biggest issue in economic development,” said Ed Ely, a former Rouse Co. official who runs a commercial development firm and briefed the council on the county’s big-picture prospects.
“We have a labor shortage,” he said, a point reinforced by McMahon and school Superintendent Sydney L. Cousin.
“If you attract new jobs but limit homes, it ignores a contradiction,” Ely said. “We could kill that golden [economic] goose. Housing and job growth go hand in hand.”
To make things worse, Howard County is the only county between Baltimore and Washington without mass transit, making it harder for workers to get to local jobs from other places. Cousin said the county is facing a crisis in attracting and keeping custodians, school bus drivers and teachers, despite starting salaries for teachers that are double from what they were two decades ago.
“In 1986, at $19,000 a year, our teachers could afford to live in the county,” Cousin said. “Now, at $40,000, they can’t, unless they live with you all.”
Despite that need, Leonard Vaughan, the county housing director, noted that some residents oppose subsidized housing for working families with incomes from about $30,000 to $50,000 if the units would be built near them.
shamelessly lifted from The Baltimore Sun, 11/29/06
The cost of housing in HoCo is high, and has grown quickly. No question about that. A truly healthy, self sufficient, local economy needs to have economic diversity and adequate, affordable housing for all segments of the population. I believe that.
Although, I am not at the hand wringing, hair tearing stage…. yet.
I think some of the oft repeated statements made about how things used to be soo much different and better are an exercise in revisionist history. For example, the comment was made that20 years ago a new teacher could afford to
live in the county – but now at $40,000 they can’t.
Using a tiny one bedroom condo over by the Columbia Mall that sold for $50,000 in 1985, and sold again in 2005 for $125,000 as an example — (on little patuxent pkwy – found with just a quick check of transfer records) … tells me that in 1985, when interest rates were 12% — it would have required a $24,000 per year salary to qualify as “affordable” housing. A little tight for our new teacher.
(according to HUD “affordable” means no more than 30% of income for housing expense – though lenders used 28% for housing to income ratio) $462.88 principle and interest plus another $125 for taxes, insurance, condo fees and private mortgage insurance common for first time buyers = about $600 per month total payment with 10% down.
The same condo today — at $125,000 with 10% down at 7% = $748.47 (pi) plus about$225 (tic/pmi)=$975 monthly expense — which, at 30% affordable housing indicator, requires exactly $40,000 income.
Soooo – sadly, a young teacher fresh out of school, living alone, is not going to be able to “afford” a lovely four bedroom, 3 1/2 bath mini-manse…. but, he or she can afford exactly the same one bedroom condo his 1985 counterpart could possibly squeeze into – right here in Howard County – with more ease than the 1985 grad.
In fact, I graduated from college in 1983 — and my first job did not pay $19,000 per 10 months. though I did buy a tiny one bedroom condo in the North End of Boston on $17,000 per year in 1985. I don’t think it was as nice as the one by the mall, though. Mine was a 400 sq ft 4th floor walk up in a 200 year old building…. and it had orange shag carpet and mushrooms growing between the baseboard and the flooring.
That’s not to say affordable housing is not an issue — I just prefer we not cloud our thinking with fictional nostalgia.