Magazine article Mortgage Banking

Going the Distance for Affordable Housing

Magazine article Mortgage Banking

Going the Distance for Affordable Housing

Article excerpt

IT'S STILL DARK, BUT ALREADY THE ROAD is filling up with people on their daily commute. They have one thing in mind: beating the traffic before their drive time doubles. Others on a 9-to-6 schedule have no choice but to play the waiting game. Why are so many people choosing to put their patience and pocketbooks to the test? They do it for one reason: fulfilling their dream of homeownership.

Dollar for dollar, outlying communities come out on top of the affordable-housing list. It doesn't matter whether you're talking about areas outside of Atlanta, Dallas or Seattle. Everyone knows that the cheapest land is located in less-populated areas where space is readily available. Builders then pass the savings onto consumers in the form of affordable housing.

These homes not only mean the fulfillment of a dream, but they also tend to come with the extras that a house close to the city does not. For the new homeowner, this could mean a large back yard, additional square footage or free upgrades. If you had a 3,000-square-foot home with a pool-size lot in the country or a 1,500-square-foot property with a tiny garden and they both cost the same, which would you choose?

For some families, moving 40 to 60 miles away from a large city is the only way they can afford to own a home. Reasonably priced housing no longer exists in major urban areas. Across the country, one solution has been to build this type of housing farther away from cities and major areas of employment. My question is: What is the actual cost of this affordable housing?

As a resident of California, I will use that state as the example. It might be easy to say that California is an anomaly, but have you tried commuting lately in Chicago, Dallas or Boston?

California probably tops the list of places where commuters spend the greatest amount of time in their cars, and the state continually posts some of the highest housing prices. The 2000 U.S. Census indicated that Californians were less likely to own homes than anyone else in the country except those living in Hawaii, New York and Washington, D.C. The San Diego County Building Industry Association reported that the average cost of a new home is $409,262. For an existing home, the association reported the average price was $265,000, up from $203,000 just three years ago. For working-class families, this is a hard amount to swallow.

And in southern California in particular, the public transportation system is limited. Add to that the high cost of gasoline coupled with rising utility costs, and it is easy to question the affordability of this housing.

Gasoline is a commodity that sustains California commuters. However, it is a commodity that we are using up faster than it can be created. As we continue to gear our society toward commuting, we can only expect the price of gasoline to further increase. That being said, I believe that gasoline will become a larger budget item affecting the ratio between affordable housing and the cost of reaching an employment center. This summer, gasoline surpassed the $2 per gallon mark. This consumption can certainly have a profound effect on disposable income in relationship to affordable housing.

Let's look at the difference between a person who drives 10 miles roundtrip to work each day and someone who travels 100 miles round-trip. …

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