The November wildfires that ravaged Northern and Southern California took their place as among the worst natural disasters in the State’s history. The fires destroyed more than 125,000 acres of Northern California and also devastated the Southern part of the State, with a total death toll of at least 11: 9 in Northern California and two in Southern California. The California Department of Forestry and Fire Protection reported a loss of 6,522 residences, and a report issued by CoreLogic estimated that the total reconstruction cost value was approximately $18 billion.

As the campfires moved across the State, they displaced thousands of homeowners and renters, fueling the already pervasive housing shortage. According to a recent statement issued by the Executive Director of the Non-Profit Housing Association of Northern California, “massive action” is required to address the shortage. With 1,500 homes destroyed in Southern California, more than 5,600 in Napa and Sonoma, and nearly 1,100 in Shasta, thousands are displaced. The Non-Profit Housing Association estimates that in order to rectify the shortage, 1.8 million homes are needed by 2025.

Because the fires ravaged some of the most expensive areas in the State, residents are facing a dilemma: rebuild (which would be extremely costly) or move on and look for more affordable housing elsewhere. This issue is particularly pronounced in places like the Town of Paradise in Northern California, a town of retirees who, on a fixed income, are realizing that they simply cannot afford to rebuild. 

This shortage is quickly becoming a statewide issue: In Butte County, there are no vacant rental properties left, and homes are selling for between $30,000 and $100,000 above asking price. Due to these rising costs and the discrepancy between supply and demand, the estimated 52,000 who’ve been evacuated and displaced have been taking up residence in hotels, shelters, and makeshift refugee camps.

Government Assistance through HUD

The U.S. Department of Housing and Urban Development has announced disaster relief measures for victims, specifically in Butte, Los Angeles, and Ventura Counties, proposing the following measures:

• Providing foreclosure relief– HUD is imposing an automatic 90-day moratorium on foreclosures on FHA insured home mortgages. For assistance, call your loan servicer or FHA Resource Center at 1-800-304-9320.
• Making mortgage insurance available– The section 203(h) program provides FHA insurance to disaster victims whose homes were destroyed or damaged to such an extent that reconstruction is necessary. Some borrowers from participating FHA lenders are eligible for 100 percent financing for new homes, including closing costs.
• Making insurance available for both mortgages and home rehabilitation– The section 203(k) loan program allows those who’ve lost their homes to finance the purchase or refinance of a home along with repair through one single mortgage, allowing those whose homes were damaged to finance the rehabilitation of their homes.
• Making information on housing providers and HUD programs widely available– HUD will share information with FEMA and the State on housing providers that may have available units in the impacted counties. HUD will also connect FEMA and the State to subject matter experts to provide information on other programs that HUD offers displaced homeowners.

Find more disaster resources from HUD and its partner agencies here.

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At Harmony Communities, we feel strongly that each resident has a sense of home. That they come home from work and feel pride in their environment and in their place in the greater community. That families are comfortable raising children in our neighborhoods, and that couples and singles know that they belong to something bigger than their four walls. In other words, we seek to create harmony within each community, making our communities not just passable, but peaceful, safe, functional, and beautiful.

The post Camp Fire in Paradise: How a Natural Disaster is Aggravating Housing Shortages in California appeared first on Other CMS.

The affordable housing landscape in 2018 involved rising housing prices and increased shortages – trends that will likely continue in 2019. In light of the continued challenges, though, there are a number of measures that developers and advocacy groups are taking to improve affordability.

2018 Overview

The Failure of California’s Proposition 10 

In November, California voters rejected a statewide initiative to allow cities and counties to impose rent control. However, supporters of the rejected initiative are working to devise innovative solutions to the affordability issue caused by the State’s rising rents. In particular, some advocates are recommending waiving impact fees for affordable housing projects and offering renters short-term leases.

Rising Home Prices and Increasing Shortages 

Housing costs continued to rise nationwide throughout 2018. In California in particular, the rising costs have been pricing hundreds of citizens out of the housing market. According to one source, in 2018, housing sales trended 4% lower than in previous years, leaving many homes sitting on the market for extended periods of time.

Increasing Rates of Homelessness

Throughout 2018, homelessness was a pervasive issue across the country. In California in particular, the destructive Camp Fire exacerbated the problem. 

According to one source, there is a link between the highest rates of homeless in the nation and the highest housing prices. Homelessness rates were the highest in Washington, D.C., Hawaii, California, and New York, places where affordable housing is scarce. They were the lowest in Iowa and Nebraska, two states with relatively low housing prices.

Innovative Attempts to Address the Housing Crisis

Throughout 2018, various advocacy groups and governments attempted to solve the issue of affordable housing through innovative solutions like tiny house communities, large affordable apartment complexes, and a move to modular construction. There have also been plans in some major metropolitan areas, especially on the West Coast, to construct affordable housing units on public transit lines.

2019 Projections

Rising Interest Rates

Although interest rates fell to a nine-month low at the start of 2019, rates are expected to increase again in 2019, making housing less affordable overall. Researchers with Freddie Mac estimate that the 30-year fixed mortgage rate will increase half a percentage point in 2019.

Rising Home Prices

According to the National Association of Realtors, home prices will rise 2.5% in 2019 to a median price of just over $265,000.

As home prices and mortgage rates rise, more and more buyers may find it difficult to afford a home. However, sales will likely increase in more affordable parts of the country, according to the Chief Economist for Realtor.com. These areas include El Paso, Texas; Tulsa, Oklahoma; and Chattanooga, Tennessee. 

Concerns about affordability are further aggravated by fears of tariff laws impacting the costs of maintaining a home – particularly when it comes to finding and managing sustainable energy sources. In June, China announced that it would not issue approvals for any new solar power installations. Moreover, the U.S. Government imposed tariffs on imported solar cells and modules. One school of thought believes that the United States will adapt to this disruption in the renewable energy industry and will find innovative ways to capitalize on sustainable energy sources. Others, however, fear this will continue to impact affordability.

Continued Housing Shortages 

Researchers with Freddie Mac project continued shortages in affordable homes, as construction trends appear to favor high-end homes over entry-level ones. This is a problem given that the growth in the population and in entry-level jobs demands an increased supply of affordable housing. According to one source, 96% of new construction in urban areas requires household incomes of more than $75,000, but the median income is approximately $60,000, with 62% of renters earning below 80% of that number.

Harmony Communities will closely monitor the affordable housing landscape throughout 2019 and will periodically provide updates on housing availability, pricing, and solutions.

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At Harmony Communities, we feel strongly that each resident has a sense of home. That they come home from work and feel pride in their environment and in their place in the greater community. That families are comfortable raising children in our neighborhoods, and that couples and singles know that they belong to something bigger than their four walls. In other words, we seek to create harmony within each community, making our communities not just passable, but peaceful, safe, functional, and beautiful.

The post Affordable Housing Trends appeared first on Other CMS.