For Teachers, First Responders, Living Where They Work Remains Problematic

In America’s biggest housing markets, teachers, police officers, firefighters and restaurant workers continue to struggle to afford homes in the communities they serve.

Trulia, San Francisco, issued a report this week, Teacher, Teacher, Can You Live Here? (https://www.trulia.com/blog/trends/affordable-housing/), that warns with home prices on the rise across the county and inventory at historic lows, homeownership is even more out of reach for many middle-income Americans.

The typical American worker makes $37,040 annually (national median income) while the typical American house costs $254,900 (national median list price). The median worker would have to spend 42% of his/her income on mortgage payments to buy a median-priced home, up six percentage points from two years ago.

Trulia examined the incomes of teachers, first responders, restaurant workers and doctors in nearly 100 major U.S. metros to see where people are struggling to afford to buy a home in the communities they serve. Trulia defined affordability as having a debt-to-income ratio at 31%, assuming borrowers can put down a 20% down payment for a 30-year fixed rate mortgage at a 4.1% interest rate. Key findings of the analysis:

–Restaurant workers faced the greatest challenges to affording a home. Receiving the lowest reported wages among the occupations examined, which hovered just above $20,000 a year, restaurant workers could afford less than 10% of the available homes in 56 of 93 major metros.

–Seven of least affordable markets for teachers were in the coastal California metros such as San Francisco, Los Angeles and San Diego. Austin, Texas, Denver and Honolulu round out the top 10. A teacher’s salary goes furthest in the Rust Belt, where teachers could afford at least 75% of for-sale homes in Dayton, Ohio, Akron, Ohio, Detroit, El Paso, Texas, Syracuse, N.Y., Little Rock, Ark. and Toledo, Ohio.

–Beyond the San Francisco Bay Area, first responders, such as police officers and firefighters struggle to find homes they can afford in high priced Southern California markets of Orange County, Calif. and San Diego. Less expensive markets where first responders are paid less, such as Raleigh, N.C., Madison, Wis. and Nashville also pose challenges to home buying.

–Doctors, the highest wage earners of any group examined here, find at least 50% of the housing in each market affordable in all but San Francisco where this percentage is just 41.57%. In Dayton, Ohio, Toledo, Ohio, El Paso, Texas, Columbia, S.C. and Little Rock, Ark., doctors get their pick of the lot as they can afford to buy 99% of listed homes.

Specifically, Trulia looked at housing affordability in three cities: Dayton; Chicago; and San Francisco. Dayton, with a median home list price of $129,000, appeared in the top 10 list of most affordable housing markets for each occupation analyzed. Restaurant workers (average annual wages: $19,736) can afford nearly one-third of the homes for sale. Meanwhile, teachers ($61,810), first responders ($49,405) and doctors ($208,000) could buy most of the homes on the market as 83.3%, 75.0% and 99.6% of homes are affordable to workers in these occupations, respectively.

In the middle of the affordability spectrum are markets such as Chicago, where the median listing price for a home is slightly above the national median, at $279,000. Following the trend nationally, restaurant workers ($21,338) and doctors ($208,000) are able to afford the least and most homes in the market, respectively. However, teachers ($70,483) and first responders $75,600) can afford nearly half of homes at 52.3% and 55.3% each.

Contrast this with San Francisco and San Jose, Calif., two of the top three cities (with Honolulu) of least housing affordability. Both metros boasted the highest median listing prices in the country at $1.25 million and $917,903, respectively. Restaurant workers ($28,612) couldn’t afford any of the currently listed homes in these markets. Meanwhile, teachers ($72,340) and first responders ($100,625) could only afford less than 10% of homes. Doctors ($208,000) fared better, but even they could only afford 41.6% and 56.9% of homes, respectively.

However, Trulia noted while large shares of available homes remain unaffordable to teachers, first responders and restaurant workers in some the nation’s biggest markets there are pockets of affordability in even the most expensive metros. n the East Bay in the San Francisco Bay Area, or the Oakland metro area, 8.2% of homes are affordable to teachers. Many of these homes are located in Bay Area cities such as Antioch, Hayward and Union City. Meanwhile, first responders and doctors have even more options with 24.3% and 76.0% of the market affordable, respectively.

Some cities are addressing the issue. New York City is in the third year of its “Still Your City” initiative, an affordable housing plan that has produced 41,600 rent-protected apartments and homes and construction of nearly 21,000 affordable housing units targeted at seniors, teachers and first responders. Mayor Bill de Blasio (D) said affordable housing units in New York reached a 25-year high in 2016. The goal is 200,000 units.

“This is about saving a mixed-income New York, and so we’ve held nothing back,” said Deputy Mayor Alicia Glen. As we protect more buildings and our newly built apartments rent up, New Yorkers are going to see and feel a difference in their neighborhoods.”

Similarly, California cities are addressing affordability issues. The Wall Street Journal recently reported that firefighters in Menlo Park, Calif., cannot afford to live within the city limits; 15 firefighter live at least 100 miles away.

In response, Menlo Park fire chief Harold Schapelhouman has authorized housing stipends for firefighters, ranging from $100 to $2,000 per month. Facebook, which is headquartered in Menlo Park, offers employees a one-time payment of up to $15,000 to move closer to work. San Francisco has also implemented bonus programs and is currently reassessing affordable housing requirements to address affordability concerns.