Last week the Center for Housing Policy released their second annual Paycheck to Paycheck: Wages and the Cost of Housing in America, a report that includes affordability rankings for buying and renting in major metropolitan areas and an interactive database that shows regional affordability by occupation (only a select 65). The study found that, "Overall, the income needed to purchase a median-priced home dropped in 93 percent of the homeownership markets studied between 2008 and 2009," including Los Angeles, which went from a qualifying income of $103,645 in 2008 to $95,522 in 2009. The median home price just barely budged upward, from $319,000 to $320,000. The study also found that "the typical rent for a two-bedroom home rose in 89 percent of the markets studied," including in Los Angeles, where it went from $1,361 to $1,420.
To judge affordability, the study assumes a 10 percent down payment and "that not more than 28 percent of household income should be used to pay the mortgage, property taxes and insurance" for buying, and that rental costs be no more than 30 percent of income. Unsurprisingly, LA housing isn't very affordable to many of the area's workers--it's the fifteenth most expensive homeownership market and the tenth most expensive rental market in the US. But the jobs represented in the CHP's database do seem a bit cherry-picked. Here're some of the criteria: "traditional jobs with traditional wages...infrastructure occupations [that] may grow even during the economic downturn as the infrastructure investments in the stimulus package get off the ground...occupations that are attracting recent graduates from welfare and other first-time entrants into the workforce, including recent immigrants...some occupations on the list, such as police officers, librarians and firefighters, have been selected for the vital role they play in our communities." God save the urban planners (they're the bar all the way on the right).
· HOMEOWNERSHIP REMAINS UNAFFORDABLE FOR MANY KEY WORKERS, DESPITE LOW INTEREST RATES AND STEEP DROPS IN HOME PRICES [CHP]
· CHP Paycheck to Paycheck [CHP]