Ordinance No. 20585 - Laserfiche WebLink

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discretionary expenses. Households with higher income may be able to pay more than 30% of their income on housing without impacting the household's ability to pay for necessary non - discretionary expenses. Cost burden compares income to housing costs and does not account for accumulated wealth. As a result, the estimate of how much a household can afford to pay for housing does not include the impact of accumulated wealth on a household's ability to pay for housing. For example, a household with retired people may have relatively low income but may have accumulated assets (such as profits from selling another house) that allow them to purchase a house that would be considered unaffordable to them based on the cost burden indicator. Cost burden is only one indicator of housing affordability. Another way of exploring the issue of financial need is to review wage rates and housing affordability. Table 20 shows an illustration of affordable housing wage and rent gap for households in Lane County at different percentages of median family income (MFI). The data are for a typical family of four. The results indicate that a household must earn $15.44 an hour to afford a two- bedroom unit according to HUD's market rate rent estimate. Table 20. Illustration of affordable housing wage and rent gap by HUD income categories for a two-bedroom rental unit, Lane County, 2012 Minimum 100% 120% Value Wage 30% MFI 50% MFI 80% MFI MFI MFI Annual Hours 2088 2088 2088 2088 2088 2088 Derived Hourly Wage $8.80 $8.51 $14.18 $22.68 $28.35 $34.02 Annual Wage At Minimum Wage $18,374 $17,760 $29,600 $47,360 $59,200 $71,040 Annual Affordable Rent $5,512 $5,328 $8,880 $14,208 $17,760 $21,312 Monthly Affordable Rent $459 $444 $740 $1,184 $1,480 $1,776 HUD Fair Market Rent (2 Bedroom) $806 $806 $806 $806 $806 $806 Is HUD Fair Market Rent Higher Than The Monthly Affordable Rent? Yes Yes Yes No No No Rent Paid Monthly OVER 30% of Income $347 $362 $66 na na na Rent Paid Annually OVER 30% of Income $4,160 $4,344 $792 na na na Percentage of Income Paid OVER 30% of Income for Rent 23% 24% 3% na na na Total Spent on Housing 53% 54% 33% 20% 16% 14% For this area what would the "Affordable Housing Wage" be? $15.44 $15.44 $15.44 $15.44 $15.44 $15.44 The Affordable Housing Wage Gap IS: $6.64 $6.93 $1.26 na na na Source: U.S. Department of Housing and Urban Development, http://www.huduser.org/DATASETS/iI/i109/index.html, http://www.huduser.org/datasets/fmr.html MFI: Median family income, FMR: Fair market rent Part 11 — Eugene Housing Needs Analysis ECONorthwest Page 79