EVEN MORE: HIGHLIGHTS FROM THE 2009 OC COMMUNITY INDICATORS REPORT

HOUSING AFFORDABILITY NEARLY DOUBLES

Description of Indicator
This indicator measures the value and change in value of the
median-priced existing single-family detached home. It uses the
California Association of Realtors Housing Affordability Index
to measure the percentage of households that can afford the
existing median-priced single-family detached home in Orange
County. It also compares homeownership rates.

Why is it Important?
High relative housing prices adversely impact businesses’ ability
to attract and retain workers. A shortage of affordable housing,
particularly for first-time buyers, discourages young workers
from moving to or remaining in Orange County. In addition,
a lack of affordable housing results in longer commutes, leading
to increased traffic congestion and pollution, decreased productivity
and diminished quality of life. Homeownership increases
stability for families and communities and is a significant means
of personal wealth creation.

How is Orange County Doing?
The single-family median home sale price is significantly less
than the previous year, although still out of reach for many:
• In July 2008, the median sale price of an existing singlefamily
detached home in Orange County was $537,570, down
$172,150 or 24% since July 2007.
• This price is still nearly $200,000 more than the state median
price for a comparable home in July 2008.

Housing affordability nearly doubled since last year:
• The minimum household income needed to purchase a median-priced
single-family home in Orange County is approximately $78,100.1
• As of the second quarter of 2008, 41% of households in
Orange County could afford an existing single-family
detached home that was priced at 85% of median (or
$456,900).
• This is significantly higher than the 23% able to afford the
same home in 2007.
• Orange County’s affordability rate is consistent with San
Diego and Los Angeles counties.
• Neighboring Riverside and San Bernardino counties remain
more affordable with housing affordability rates of 59% and
63%, respectively.

Homeownership rates rose slightly:
• Homeownership rates for Orange County rose from 62.4% in
2006 to 62.7% in 2007.
• Orange County has similar levels of homeownership as many
of our peer regions, but still lags behind the national rate by
approximately 4.5%.

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Housing Wage Drops for First Time

Description of Indicator
This indicator measures the Housing Wage – the hourly wage a resident needs to afford “Fair Market Rent” (the median rent in the Orange County market).

Why is it Important?
Lack of affordable rental housing can lead to overcrowding and household stress. Less affordable rental housing also restricts the ability of renters to save for a down payment on a home, limiting their ability to eventually become homeowners and build personal wealth through housing appreciation. Ultimately, a shortage of affordable housing for renters can instigate a cycle of poverty.

How is Orange County Doing?
Orange County’s Housing Wage decreased in 2009:
• For the first time since tracking began, the hourly wage needed for a one-bedroom apartment fell – from $25.57 in 2008 to $24.92
in 2009. This Housing Wage is equivalent to an annual income of $51,840.
• The hourly wages needed to afford two- and three-bedroom apartments also declined.
• Despite decreases in Housing Wage levels, Orange County has the second highest Housing Wage (less affordable rental housing)
compared to state and national peer metropolitan areas.

Renting in Orange County

Fair Market Rent (Monthly)
----------------2008 - 2009
One Bedroom ----$1,330 $1,296
Two Bedroom ----$1,595 $1,546
Three Bedroom --$2,282 $2,188

Amount a Household Earning Minimum Wage
Can Afford to Pay in Rent (Monthly)
2008: $416
2009: $416

Number of Hours per Week a Minimum Wage
Earner Must Work to Afford a One-Bedroom
Apartment
2008: 128
2009: 125

Source: Orange County Business Council analysis of U.S. Department of Housing and Urban Development Fair Market Rent (www.huduser.org/datasets/fmr.html) using the methodology of the National Low Income Housing Coalition (www.nlihc.org), and California Employment Development Department (www.calmis.ca.gov)

[from page 24]
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