13. Affordable Housing in Conway
As outlined in the previous section, the lack of affordable housing is a significant problem for New Hampshire. The U.S. Department of Housing and Urban Development provides definitions of area income levels that reflect a range between very low (50% of area median family income), low (80% of area median family income) and median income levels. For the purposes of this analysis, a moderate income level of 150% of the median family income level has been provided. Table 3-12 presents a comparison of income levels ranging from 50% to 150% of the median family income threshold for Carroll County housing market as of 2001. In addition to the income levels, the table also identifies the maximum housing costs for home ownership and renter households, based on 28% and 30%, respectively, of the total gross income.
Typically, real estate and financial analysts consider that homeowners should allocate no more than 28% of their gross income and renters should allocate no more than 30% of their gross income for housing expenses.
Table 3-13 presents two scenarios related to the annual housing costs required to purchase a average priced ($111,619) single family home in Conway in 2000. The first assumes a 10% downpayment and a 6.5% interest rate, and the second a slightly higher interest rate of 7.5% with a 5% downpayment. Under the first homeownership scenario, households within Carroll County that have incomes ranging from the median to the 150% of the median would be able to purchase the average priced home in Conway based on the sale prices of 2000. Households within the 80% and 50% income range would not be able to afford a median priced home in Conway. Under the second scenario, only households in the 150% range would be able to afford the average priced house in Conway. It is conceivable that households at the median income level could afford the cost, however they would be at the margin allocating 28.2% of their income toward shelter.
Households within the 80% and 50% income range could not afford the average priced home in Conway based on 2000 sales values. Discussions with real estate professionals in Conway indicate that since 2000, the residential real estate market has become even “tighter” with almost no single family homes on the market listing for $100,000 or less. Units that are selling for under $100,000 are typically very small, in poor condition or are manufactured housing.
The conclusions derived from the above scenarios reinforces the findings outlined in the New Hampshire Housing Forum’s affordable housing study in that many households are priced out of the current housing market. If interest rates were to reverse their current course and start to creep upward, affordability would decline further.
For the purpose of examining the affordability of rental units, the median rent rate for a two bedroom unit, based on rent information provided by the NHHFA (Figure 3-10) was used. The median rent for a two bedroom apartment unit in Carroll County in 2001 was $703 based on the NHHFA rent survey. As illustrated in Table 3-12, this rental rate for a two bedroom unit would be considered affordable for family households > with incomes between 80% and 150% of the median income in Carroll County. However, those households at 50% of the median would not be able to afford the two bedroom unit in Carroll County without paying more than 30% of their gross income.
Table 3-14 provides a distribution of households in Conway based on their income range relative to the median family income in Carroll County for 2001. The data shows that housing affordability may be an issue for households at or below the median family household income level. Additionally, seniors may be most the affected as almost 70% of senior households have incomes below the County median income level.
In addition to the market-rate housing options outlined above, there are an estimated 142 assisted housing units in Conway as shown in Table 3-15. Since Conway has no dedicated housing authority to assist in the production of affordable housing in the town, individuals interested in renting a subsidized apartment unit must either register with the NHHFA for a Section 8 voucher or register with one of the project-based United States Department of Agriculture (USDA) subsidized developments. The Section 8 program provides vouchers for low-income families and individuals which entitles the holder to pay 30% of their income towards shelter with the balance being subsidized through either the state or federal government. The USDA program is a project-based initiative whereby qualified applicants may apply 30% of their income towards rent within the respective development with the difference being made-up by the federal government.
Of the 142 affordable units identified in Conway, only 44 (31%) are dedicated for families with the remainder designated for elderly and/or handicapped residents. According to interviews with property managers at each of the assisted housing developments in Conway, demand for rental-assisted units is very high with most developments being 95% to 100% occupied - generally considered to be fully occupied. Within the largest concentration of assisted housing developments in Conway located on Grove Street (Brookside, Millbrook, Whitman Woods and Pinewood), waiting lists for a rental assisted unit range from three months to three years depending on the respective development.