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Comprehensive Plan Housing Element Table 7.13 Indian River County 2005 Cost Burden by Income Group Household income as percentage of Area Median Income (AMI) Households paying between 30-50% of income for housing Households paying 50% or more of income for housing Total (ELI) Less than 30% AMI 764 2,178 2,942 (VLI) 30 — 50% AMI 2,531 1,970 4,501 (LI) 51 — 80% AMI 1,796 434 2,230 81-120 % AMI 3,420 484 3,904 Total 8,511 5,066 13,577 ELI: Extremely Low hicome, VLI: Very Low Income, LI: Low Income, MI: Moderate Income Source: Shimberg Center for Affordable Housing Most likely, the 13,577 households identified in Table 7.13 are having housing affordability problems. Of those 13,577 households, 9,673 are extremely low income, very low income, or low income. Those 9,763 very low and low-income households are surely having housing affordability problems. During the 2005-2007 period, when housing prices so significantly outpaced household income, housing experts recognized that, even though a limit of 30% of a household's income allocation for housing costs was a good social goal, that 30% allocation limit may not always be economically feasible. In fact, most financial institutions now consider 35-40 percent of household income as a better measure of how much income could be spent for housing costs. With a 30% allocation limit, a household can purchase a house with a mortgage that is approximately 3 times its household gross annual income. In those cases where households do not have any other debt and can allocate more income for housing cost, they can purchase a higher priced home. With a 40% allocation limit, however, a household could purchase a house with a mortgage approximately 4 times the household's gross annual income. Consequently, a 40% front end ratio may be an appropriate measure for moderate income and workforce households, since they have more disposable income. Given the fact that housing costs are significantly lower now then during the 2005-2007 housing boom, the workforce housing affordability problems of that period have significantly lessened. As with the pre -housing boom period, housing affordability is again mostly a low/very low/extremely low income problem. Consequently, the county's affordable housing policies should focus on those groups. The above information indicates that there is a need for additional assistance to very low and low income households. In the future, the county should continue to apply for any federal and state funding that could assist very low and low income households within the county. • Projected Housing Needs Housing need is defined as the number of new dwelling units that must be constructed within a certain timeframe to accommodate a projected future population. For Indian River County, the University of Florida Bureau of Economic and Business Research (BEBR) population projections are used to project 24 Community Development Department Indian River County