The affordability factor
Affordability is one of the top challenges Mason City homebuyers and renters face in attaining newly constructed housing units. Whether it is insufficient resources to afford a down payment, difficulty qualifying for traditional housing loans, or becoming cost-burdened by mortgage payments requiring more than 30% of their monthly income, these issues cause weaknesses in Mason City’s ability to transition residents from rental units to owner-occupied housing and attract new residents to the community.
Affordable housing is a term that has various definitions according to different people and is a product of supply and demand. The U.S. Department of Housing and Urban Development (HUD) defines affordability as the ability of household to pay no more than 30% of its annual income on housing (including utilities). Families who pay more than 30% of their income for housing (either rent or mortgage) are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care.
Future Demand
Generate excitement
The availability or lack of attainable housing units can be derived by comparing the distribution of household incomes with housing costs and provide a high-level estimate of supply and demand to meet local housing needs.
Demand for housing can come from several sources, including: household growth, changes in housing preferences, replacement need of aging housing stock, and workforce demands. Unless there is enough desirable vacant housing available, new housing must be built to accommodate an increase in households. Demand is also affected by shifting demographic factors such as the aging of the population, which dictates the type of housing to be built. New housing to meet replacement need is required, even in the absence of household growth, when existing units are not marketable in their current state and when renovation is not feasible because the structure is physically or functionally obsolete
The ten-year housing demand based on the turnover rate and commuter conversion methodologies totals 522 new housing units. This is broken down to 178 owner occupied units and 344 renter occupied units. The owner-occupied units are further broken out with 133 single family units and 44 multifamily units, such as for-sale duplex, townhomes, and condo units. The renter-occupied units are further broken down into market rate versus affordable and workforce units. A total of 207 renter units should be leased at market rate, while there should be 69 workforce units and 68 affordable/income-restricted units built over this ten-year period. The detailed breakdown of housing demand can be found in the found in the table below:
Development Opportunity
With a demand calculated, the next logical step in the housing development process is identifying where to locate these new housing units. ArcGIS mapping was utilized to help establish a few models to identify opportunities to locate housing in infill lots throughout the community. While a new subdivision may be necessary to accommodate all the projected single-family growth, filling existing vacant lots was identified as a top priority of the Steering Committee members.
Vacancy can be described as a parcel of land or lot with no improvements or structures. It can also be defined as an underutilized property with no residents. The US Census accounts for 1,138 vacant units in Mason City. Of this total, there were 290 vacant rental housing units accounting for 6.4% of the overall rental units, which seemed inaccurate to many members of the Steering Committee.