Thursday, June 6, 2019

HB 2001: Missing Middle and SF Detached Housing Units for All 60 Oregon House and 30 Senate Districts.

Cleaned up references to detached and attached in original text and PDF. 
HB 2001 has a public hearing and work session scheduled for June 11th.   

I thought it would be instructive to see counts of missing middle and SF detached units for all of the Oregon House and Senate Districts.   

I constructed a PDF HERE and embedded below with that 2017 data from ACS table B25024, Units in Structure. 

Notes on the PDF file: 
Grey shaded member names in the PDF are members of the House Ways and Means Economic and Transportation Subcommittee. 

Columns to the right shaded in red indicate missing middle percentages below the statewide average (12%) or above the statewide single family detached percentage (64%). 

Counts of "Missing middle" here include attached one unit properties, duplexes, triplexes, and fourplexes. 

I added member names (and party) to district numbers earlier this year; if you find any errors, please let me know.

There are more than 1.1 million detached single family units in Oregon and more than 202,000 missing middle units. That's 64%/12% of the count of total units in Oregon. 

I count 32 House districts and 13 Senate districts where the missing middle % of all units is lower than the statewide average.

I count 39 House districts and 17 Senate districts where the single family detached % of all units is higher than the statewide average.

Among the 8 members of the Joint Ways and Means Transportation and Economic Development subcommittee  4 members represent districts where the missing middle % of all units was lower than the statewide average and 6 are in districts where the SF detached % of all units is higher than the statewide average.

Originally created and posted on the Oregon Housing Blog.

Tuesday, May 28, 2019

Oregon Land Use Law History, 1969,1973: Hat Tip to OPB; I Created Folder with Searchable Text Files.

OPB's Anna Griffin recently tweeted about the availability of MP3 files from legislative hearings on Oregon's land use bill SB10, enacted in 1969.
After seeing her tweet I went to the Oregon SOS land use legislative archive and found PDF files with the legislative text and history for SB 10 (1969) and SB 100 (1973).  There are 1,250 pages in these archive files, and as posted they could not be text searched.  

[As it turns out Wednesday May 29th is the 46th anniversary of the date that SB 100 was signed into law]. 

I used Adobe to OCR these files to allow text searches, and have posted 4 files in a folder HERE.

You won't find the word "affordable" in these files but Section 50 of SB 100 requires that comprehensive plans must find that zoning regulations/ordinances are not preventing "adequate housing for persons of low income". 

(Difficult to see why a substantial percentage of land zoned exclusively for single family only housing wouldn't fail this standard). 

ADD ON: I also ran across a nearly 500 page 1978 Portland State master's thesis on the long history of SB 100 from Kathleen Joan Zachary and created a searchable PDF file that I added to the same folder; look for "Politics of land use _ the lengthy saga of Senate bill 100". (The original PSU posting is HERE). 

Originally created and posted on the Oregon Housing Blog

Friday, May 24, 2019

New Excel Tool Shows Condo Affordability at Different HOA Levels, Down Payments, and Other Variables.

I did a recent blog post HERE with a PDF file that showed how condo affordability is impacted by different HOA fee levels, using a standard 20% down payment. 

I have created a new Excel workbook HERE, and embedded below, that builds on that earlier post:
  1. It adds a variables for mortgage insurance that allow calculations of affordability for down payment levels below 20%. (Default mortgage insurance fees shown are for FHA loans with a loan to value of 95% or more). 
  2. It includes differing fees for home insurance for a single-family property that has no HOA fees vs home insurance fees for condos. (Generally, condo home insurance is less than for comparable single-family properties since part of the HOA fee covers insurance on the common elements).
  3. It includes an additional section that shows how the Portland mortgage credit certificate (MCC) program could further increase condo affordability.  The Portland MCC program offers an annual 20% federal income tax credit of the amount of home interest paid for first time home buyers. Details on the Portland MCC program can be found HERE. The MCC can be particularly useful for median family and above households without children who have significant federal tax liability (and cannot benefit from federal child tax credits).  

Observations: [With default purchase and loan assumptions.  $269,000 sales price, 3.5% down, 4.5% interest rate, FHA mortgage insurance premiums, property tax and insurance assumptions as shown, and a 43% debt to Income limit]. 

The two person HUD 2019 100% median income in the Portland metro area is $70,320.

Without a Mortgage Credit Certificate:
IF the home purchased does NOT have a condo fee, the income required to qualify is $64,655   [But the universe of single family homes at that price point is smaller than for condos].

IF the home purchased has a $400 monthly HOA/condo fee, the income required to qualify is $75,067, 16% more than required for a single family home purchase (with NO HOA/condo fee].

WITH a Mortgage Credit Certificate
If the home purchased does NOT have a condo fee, and IF the purchaser is a first time home buyer who is otherwise eligible, the purchaser would only need an income of $59,167 to qualify if they can use a City of Portland MCC. That is 8.5% less than required if NO MCC is used. 

If the home purchased has a $400 HOA/condo fee and IF the purchaser is a first time home buyer and are otherwise eligible they would only need an income of $69,579 to qualify if they can use a City of Portland MCC (with a condo fee of $400). That is 7.3% less than required if NO MCC is used AND note that income level is below the Portland metro 2 person MFI of $70,320.

You likely will have to scroll to right to see all columns in the Excel workbook, download to avoid this issue. 

In the Excel workbook grey shaded cells are where data can be entered, other cells are protected to avoid inadvertent data entry. A second worksheet includes links to a comparison of FHA and private mortgage insurance fees, a FHA loan calculator, and the City of Portland median income and related income and rent limits.  

Portland's current 2 person MCC income limit is $87,900, substantially below the Oregon Housing Bond program limit of $97,680 for Multnomah county, even though both programs are subject to the same IRS limits. (IRS will likely soon publish new 2019 income data and this provides a new opportunity to increase the Portland MCC income limit). 

Originally created and posted on the Oregon Housing Blog

Tuesday, May 14, 2019

Income Required to Qualify for Condo Loan Increases as HOA Fees Increase: A Graph and Table Illustrate the Impacts.

There has been a recent pick up in interest in condominiums as an affordable home ownership alternative to single-family detached housing. (See recent Oregonian story HERE). 

[Full disclosure, I have lived in condos for 40+ years]. 

One of the unique features of underwriting a condominium loan is the inclusion of homeownership association fees as part of a borrower’s fixed monthly obligations. This  reduces the maximum loan that would otherwise be available compared to a single-family detached home but only if both were at the same price point (and generally condo prices are lower than detached SF housing).

To illustrate the underwriting impacts of varying HOA fee levels, I have constructed an example in the PDF HERE and embedded below.

  • $375,000 sales price. 
  • 20% down payment (NO mortgage insurance required).
  • $300,000 loan amount.
  • 4.5% loan interest rate.
  • 1.1% property tax rate.
  • 0.50% insurance rate.
  • 41% maximum debt to income ratio.
  • $500 in additional fixed monthly obligations for car/student loan etc.
  • Variable condo fee from $0 to $1,000.
  1. With NO homeowners association fee a buyer (with assumptions above) could qualify for a $300,000 loan with an income of $73,758.
  2. With a HOA of $300 qualifying income increases by 12% to $82,538.
  3. With a HOA of $500 qualifying income increases by 20% to $88,392.
  4. With a HOA of $1,000 qualifying income increases by 40% to $103,026.

Originally created and posted on the Oregon Housing Blog

Wednesday, April 24, 2019

2019 HUD Income Limits Out: Oregon Leads All States in Rate of Increase at 7.9%/Portland Metro Increase 8%.

HUD has published FY 2019 income limits HERE. ( My prior post on FY 2018 income limit changes is HERE). 

Note that HUD's income limits use median family income, not median household income; household income is lower than family income. My prior 2017 post HERE allows comparisons of various income measures for different geographies. (Data has not been updated since post, but provides good idea of relative differences between different income measures). 

The table HERE and embedded below shows Oregon HUD median family limits (and select % changes) for FY 1999, FY 2010, FY 2016, FY 2017, FY 2018, AND FY 2019.

County/Metro median income increases last year ranged from -5.1% (Douglas) to 15.3% (Josephine).

HUD median income increases this year range from -9% (Josephine ) to 23.1% (Umatilla).   

Portland Metro: Median "Affordable" Rent Now Just a Coffee Below $2,200.
The HUD Portland metro median income for FY is 87,900, up from $82=81,400 in FY 2018). Last year the annual increase was 8.1%, and this year it is 8%.

In 2019 the Portland metro "affordable" rent at median income is $2,198 VS $2,035 last year. 

That means that at the HUD Portland metro median family income, "affordable rent" [30% of income] increased by $163 a month for FY 2019, AFTER increasing by $168 in FY 2018--a $331 increase in two years.  

Oregon Had Largest State Percentage Increase
Oregon's statewide HUD median family income increased by 7.9% (from $69,900 to $75,400), the LARGEST statewide percentage median income increase in the  country. [The average US increase was 5%].  The table also shows that Oregon HUD median family income has increased by 67.2% from FY 1999-FY2019.

Median incomes are used as a base for calculating rent increases in a variety of programs.  OHCS will soon post income and rent limits HERE for a variety programs like LIHTC, HOME, LIFT, inclusionary zoning, etc.  It is important to use program guidance on income limits, they don't always follow simple percentage calculations. 

[Cheat sheet: As a gross rule, you can calculate affordable monthly rent (30% of income for rent) by dividing the annual income by 40].

Originally created and posted on the Oregon Housing Blog