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Housing Costs

 

We like to say Rochester is a really affordable place to live. But one-third of households in the Rochester region are struggling with housing costs, according to a study by Harvard University. (See interactive map.)

A household is considered “burdened” if it is paying more than 30 percent of its income on housing costs. Thirty-three percent of households in our region are burdened, slightly lower than then 35 percent national rate. Approximately 1 in 6 households – 16 percent face severe housing costs, meaning they’re spending more than half their income on housing. Nationally, 17 percent of households are severely burdened.

 

Housing Costs

 

The picture for renters is bleaker. More than half – 53 percent – of Rochester area renters are spending more than 30 percent of their income on housing. That’s higher than the national rate of 49 percent. Thirty percent of Rochester area renters are severely burdened, paying more than half of their income toward housing costs. That’s also higher than the national rate of 27 percent.

The median household income for Rochester area renters is $26,000. The median monthly cost for renters is $770.

Rochester ranks 103rd out of 381 metros in the share of renters who are burdened. It seems the area needs more affordable housing options.

 

Housing Costs

 

But even homeowners are feeling pressure. The study says nearly 1 in 4 homeowners  are burdened. Nearly 1 in 10 are severely burdened. The median monthly home ownership cost is $1,019. The median household income for homeowners is $65,000. Rochester ranks 193rd out of 381 metros on homeowner burden.

The report calls on the federal government to take a strong role in assisting the housing market. Mortgage rates, as well as FHA insurance and guarantee premiums play a role. The study also says rental assistance is also extremely important for lower-income households, not only to ease the financial burden, but to help families live in higher-quality housing in better neighborhoods.

 

Links of the Day:

 

– Wegmans PILOT has expired in Geneva and now it wants its assessment lowered.

– There’s a big risk in asking colleges to take over high schools. They can just up and leave.

– One in three Americans has been arrested. Even if the charges are dropped, an arrest may come back to haunt you.

– Now we’re militarizing school police officers, too.

– Los Angeles wants to reduce the number of students arrested in schools. Here’s a thought: Don’t have cops in schools if you don’t want them to act like cops.

– Are you noticing there’s not a lot of Ferguson in your Facebook news feed? There’s a reason.

How Kansas City is luring Millennials.

– The “eternal flame” is drawing people to Orchard Park.

– Should viral memes dictate our charitable giving? I got killed on Facebook for saying I resented the peer pressure involved in the ice bucket challenge. But the distortion of my words and the vicious personal attacks on me that resulted from my post seemed to validate my point. Peer pressure? What peer pressure!

8 Responses to Does Rochester Have Housing Problem?

  1. Federal assistance? I just have to shake my head every time something like this is suggested. As a person who purchased his house at 23 years and refinanced 3 years later for 15 years at 3%, I can tell you that 30% of my “burden” is just in town/school taxes alone.

    The first step in rectifying this problem is understanding what you can and can’t afford. My generation is by-and-large clueless on what they can afford and then expect entitlements to make up the difference.

    The next step is to let the free market decide the housing prices. If apartments/rentals are too expensive, it gives others an incentive to offer property/apts for rent and the ensuing increase in supply causes a decrease in price.

    My generation largely doesn’t want to own. They don’t want to mow, maintain a house, or really bother with upkeep. On top of that, employment has become so fluid to the point where we tend to move around with little encouragement. Commitment is something we tend to fear.

  2. August 20, 2014 at 1:00 pm Lee Drake responds:

    Could it be that instead of a bad housing market we have a poor employment environment, due to (for instance) Xerox laying off 120 jobs and moving them out of state? Or B&L shutting down their headquarters and doing the same? Might it be that if we kept more jobs here, houses would be more affordable and competition would drive salaries higher? This isn’t about housing being too expensive – our housing is some of the least expensive in the nation, it’s about degrading salaries, and a bleak employment picture. Are taxes high RELATIVE TO HOME VALUE – yes. Are absolute $$ in taxes paid per household all that different from other mid-size metropolitan areas – NO. The difference is what people are making – not how much they’re paying.

  3. August 20, 2014 at 7:01 pm Orielly responds:

    “Are absolute $$ in taxes paid per household all that different from other mid-size metropolitan areas – NO” Really? Please explain.

    I have seen numerous studies that say that we pay the highest property and school taxes per assessed value of any place in the country.

    Assessed value vs tax paid IS reflective in actual dollar outlay. A 300K house in comparable Florida burb will cost about 1500 per year total property taxes. In Pittsford that house will cost around 8,000+ in taxes.

  4. I really have no comment on housing prices. I think we are pretty fair. As mentioned, the problem is the TAXES…especially SCHOOL taxes. My mortgage with interest is $450/ month. The escrow for taxes is $600/ month. My home is assessed at $175k.
    I would like to comment on the ice bucket challenge. I find it refreshing and encouraging that the young generation demonstrate that basic human nature is really caring. What we see CONSTANTLY in the media is terror. I can’t get enough of watching the videos of average people expressing their concern for their fellow man. I think Ferguson is a media, activist drivin event that is attempting to paint a picture of racism that doesn’t really exist for most of America. Racism is a business. I hope this business goes bankrupt soon.

  5. August 20, 2014 at 9:06 pm Sarah J responds:

    Our real estate is undervalued as much as our taxes are overfunded. The $300K Pittsford house here will be $500K+ in almost all the rest of the country, and over a million in some areas. Yes, our tax amounts as a percentage of property values are way out of whack with the rest of the country, however; a brand new fire engine in Florida costs about what it costs Rochester to purchase so state and local income, by whatever means, has to be enough to purchase one. Stuff and staff costs what it costs. Maybe the people with homes that they paid $300K for with an $8,000 tax bill would feel better if they paid $850K for their home but keep the same $8,000 tax bill. Me, I will take affordable real estate and higher taxes than the other way around.

  6. August 21, 2014 at 2:15 pm Orielly responds:

    When one retires they many times sell their home and downsize. In Roch you sell your 300K home and move to FLA and get a 150K home. In the NYC or Boston area or most other areas of the country you sell your 800K and buy a 300K home in FLA and pocket 500K to live off of.

    If you think this area is doing well because our homes are more affordable, (which means they didn’t appreciate like the rest of the country) you are blind to the fact that you’re not gaining anywhere near what other areas are in increased home value. That makes a huge difference in accumulated wealth over the course of 20 or more years. Additionally, you’ve paid out a lot more via the taxes you’ve had to pay that you get no return on the tax vs the mortgage payment.

    And a Fire truck might cost the same in all areas, but we have more fire houses ..we don’t need in most cases, and we pay the high pension costs for the firemen who can retire at 55 and take their pension to Florida.

    NYS will soon be underwater financially, like NJ is today thanks to high pensions.

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