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PLANNING CONTEXT
<br />Housing Affordability
<br />With current housing prices and rents, housing affordability is a critical issue for
<br />many households. The lack of affordable housing can create undesirable
<br />situations, including overpayment and overcrowding. The following discussion
<br />assesses the ability of a four - person household to afford housing in Santa Ana.
<br />Affordability is defined as paying no more than 30 percent of gross income. This
<br />topic as it relates to overpayment is discussed in detail later in this chapter.
<br />Because of the market downturn, the median price for an existing single - family
<br />home has been in decline since 2008. Between 2010 and 2012, however, median
<br />home prices steadily increased to $350,000 (DataQuick), and the amount of
<br />household income needed to afford a home is $100,450, which is affordable to a
<br />four - person above moderate income household. Condominiums offer a more
<br />affordable housing choice. With recent price reductions, the average price of an
<br />existing condominium at $150,000 is affordable to low and moderate income
<br />households. New homes sell at prices substantially higher than existing homes.
<br />Although the housing market downturn has resulted in lower housing prices, the
<br />majority of lower income households can only afford apartments due to income
<br />and /or down payment requirements. Similar to homeownership, rental housing
<br />affordability is typically assumed as rent payments of no more than 30 percent of
<br />gross income. Assuming a four - person household, the maximum affordable
<br />monthly rent would be $1,066 for very low- income households, $1,706 for low
<br />income households, and $2,986 for moderate income households.
<br />According to RealFacts, the median rent for an apartment ranges from $1,115 for
<br />a studio, $1,242 for a one - bedroom unit, $1,661 for a two- bedroom unit, and
<br />$1,696 for a three - bedroom unit. In comparison to these figures, extremely low
<br />and very low households could not afford the median apartment without
<br />significant overpayment. In contrast, moderate income households could afford
<br />the majority of existing apartments, except for three- bedroom units. Chart 11
<br />illustrated the amount of income needed to afford housing in Santa Ana.
<br />Income
<br />$61,650
<br />$60,000
<br />$92,700
<br />to - $48,900
<br />CD $167,400
<br />CD
<br />8100,450
<br />Median
<br />Median
<br />2007
<br />2012
<br />Apartment Rent $1,541
<br />$1,507
<br />Condo Sales Price $320,000 $150,900
<br />Home Sales Price $610,000 $350,000
<br />$0 $100,000 5200.000 $300,000
<br />Purchase Price
<br />CITY OF SANTA ANA GENERAL PLAN HOUSING ELEMENT
<br />2007
<br />E 2012
<br />Chart 11: Income Needed to
<br />Afford Housing in Santa Ana
<br />Source: DataQuick, 2013; RealFacts,
<br />2013; and Trulia, 2013.
<br />JA&
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