Overview: Okeechobee Population and Economy
Table of Contents
Table of Contents 1
Executive Summary 5
Overview of Okeechobee County Housing, Population, and Economy 8
Introduction 8
Housing Market Area 9
Characteristics of the Okeechobee/Coastal Ownership Housing Market 11
Population and Household Trends 13
BEBR Projections: Number of Households Projected to Grow More Slowly 13
Squaring BEBR Projections with the Reality of Okeechobee’s Housing Market 14
Age Distribution 15
Employment, Income, and Cost of Living 16
Job Growth 16
Unemployment 16
Okeechobee Employment Categories and Wages 16
Federal Cast Stone Chooses Okeechobee 18
Comparative Wages, Okeechobee and Counties East 18
Cost of Living 21
Resale Home Market 22
Tax-Appraised Values Show Modest Housing Stock 22
Existing Home Values Rising Strongly 22
Median Prices Up in Recent Years 22
Individual Home Sales Show 7.8% Annual Appreciation 23
Huge Price Increases in Treasure Coast 23
Okeechobee Real Estate Manufactured Home Values are Rising Too 23
Manufactured Housing’s Impact 25
Introduction 25
Okeechobee Restrictions on MH Placements 26
How Manufactured Housing Became So Popular in the County 27
MH Isolation 28
MH Opportunity Cost 28
Equity-Building Opportunity 29
Low-Cost Financing Opportunity 30
Summary: Reducing MH Opportunity Cost to Zero 30
Demographics of Okeechobee MH Residents 31
MH Parks 32
Cost Comparison 33
New Construction 34
Residential Construction is Accelerating 34
Unit Size Is Increasing 36
Builders 37
Residential Land Market 37
Housing Finance 41
National Mortgage Market Serves Okeechobee 41
Controlling Default Risk: Cash Downpayment vs. Credit Quality 42
Financing Manufactured Housing 43
Home Improvement Financing 44
Subsidized Finance Programs 45
Reverse Mortgages 46
Rental Housing 47
Income and Demographics 47
Rental Housing Construction 47
Subsidized Rental Housing 47
Manufactured Home Rentals 50
Market Rents 51
Occupancy Rate 52
Rental Housing Needs 52
Renter Incomes 52
Renter Cost Burden and Crowding 53
Targets: Fully Meeting the Need for Affordable Rental Housing 55
Tax Credit Rental Housing 56
What Happened with Okeechobee II? 58
Description and Condition of Housing Stock 59
Single-Family Site-Built and HUD-Code Manufactured Homes Dominate 59
Vacant and Seasonal Units 59
Overall Condition of the Housing Stock 59
How the county evaluates condition 59
Single-family units: site-built and manufactured 60
Quality of Okeechobee Single-Family Construction is Trending Higher 61
Condition of Multi-family Housing 62
Manufactured Housing Quality and Condition 62
Vintages of Manufactured Housing 62
Septic Systems on Small MH Lots 65
Code Enforcement 65
Minimum Housing Code 65
Licensing Farmworker Housing 66
Additions to MH: Gray Area of Code Enforcement 66
County’s Housing in Racial/Ethnic Perspective 68
Ownership Rate 68
Housing without Plumbing or Kitchen 68
Crowding 68
Housing Problems in Block Groups with High Proportion of Minority Population 70
Defining Block Groups with High Proportion of Minority Population 70
Farmworker Housing 73
Housing Programs in Okeechobee County 76
Overview 76
Okeechobee Nonprofit Housing 76
Okeechobee Community Improvement Association 77
Affordable Housing Advisory Committee 77
Continuum of Care/Mission Outreach 78
Okeechobee Senior Services 78
Indiantown Non-Profit Housing and Community Development Corporation 79
How County Policies and Regulations Affect Housing 80
Land Use Regulation 80
Background 80
Manufactured Housing is Tightly Regulated 80
County Has No Sites for Multifamily Housing 80
City of Okeechobee 81
Subdivision Regulations 81
Infrastructure 81
Sewer and Water 81
Transportation 82
Timely, Predictable Permitting 82
Property Taxes and Fees 82
Okeechobee’s Housing Plan 82
Recommended Strategies 83
Strategy: Promote Development of Affordable Rental Housing 83
Action: Re-zone land for multifamily housing 83
Action: Compete for limited Section 8 Vouchers for people with disabilities 83
Action: Seek Rural Housing Service rental assistance 84
Action: Compete for rental-related HOME funds 85
Action: Partner with nonprofits to develop Section 202 supportive housing for the elderly 85
Action: Revive Okeechobee II 86
Strategy: Improve Farmworker Housing 87
Strategy: Education 88
Action: Take steps to pre-empt NIMBY 88
Action: To prevent NIMBY (not-in-my-back-yard) disputes from polarizing, consider using mediation 89
Action: Provide an ongoing buyer education and counseling program 89
Strategy: Ownership Housing Production 90
Action: Increase use of FHA 203(b) financing for manufactured housing 90
Action: Activate the USDA Rural Housing Service 502 Guaranteed Loan Program 90
Action: Provide information and financial support for owners of pre-1976 manufactured homes to enable them to upgrade to late-model units. 91
Strategy: Improve the Condition of the Housing Stock 91
Action: Offer rehab loan financing to address limited “aesthetic” improvements as well as code problems in owner-occupied and rental properties. 91
Action: Apply for MH rehab, replacement, or park re-development funding from Corporation for Enterprise Development 91
Action: Work with local lenders to design a rehab program for HUD-code manufactured homes. 91
Action: Promote use of home equity conversion mortgages for seniors 92
Action: Inspect and certify rental units 92
Action: Consider a rehab sub-code 92
Action: Promote favorable personal property financing for replacement of MH units in parks and on private land 92
Action: Eliminate the existing “gray area” of code enforcement for additions to HUD-code manufactured homes 93
Action: Develop county incentives to encourage buyers to purchase Wind Zone 3 HUD-code homes for placement in Okeechobee. 93
Action: Apply for state assistance to retrofit and upgrade pre-1999 MH installations in MH parks. 93
Action: Investigate special assessments for code repairs 93
Action: Increase staffing for pro-active code enforcement 93
Action: Activate HUD’s Section 203(k) purchase/rehab program 94
Action: Maintain strict regulation of installation of HUD-code and modular units. 94
Strategy: Modify Regulations, Programs, and Policies 94
Action: Use multifamily zoning to promote homeownership 94
Action: Provide affordable housing density bonus 94
Action: Reduce utility hookup fees for affordable housing units 95
Action: Identify county-owned land for affordable housing development 95
Action: Review 30-acre minimum for MH subdivisions meeting design standards 95
Action: Consider inclusionary zoning 95
Action: Organize an ongoing county housing initiative 97
Executive Summary
Okeechobee County’s housing market is hot. After decades of moderate rises in land prices and home prices, and stable levels of residential construction, there has been a remarkable spike in all three indicators during the past three years. Home prices are appreciating strongly and lot values are rising faster still. Residential construction is accelerating.
Driving the boom are the affluence and steep increases in housing values in coastal counties to the east. Okeechobee County’s economy is far from being completely integrated with that of the Treasure Coast. In fact, the county remains a world apart, and that is its appeal. Okeechobee’s rural character and neighborly environment appeal to a segment of coastal residents. They have more buying power than traditional Okeechobee residents.
In the context of the greater Treasure Coast housing market, Okeechobee is an “alternative” location. It offers good highway connections to urban coastal jobs. Coastal county homeowners can choose a new lifestyle, sell their homes, and substantially upgrade their housing and/or increase their savings by moving to Okeechobee. Former coastal county households already account for up to 10 percent of Okeechobee’s total.
Predicting the duration of the current boom is tricky, because home prices and construction increases are not being driven by the county’s economy, but by the economic calculations and lifestyle preferences of in-migrants. Another driver is the group of people buying land with a plan to move to Okeechobee in the medium-term future. Speculation is part of the boom, but big increases in residential construction indicate that speculation explains only some of the increase in land values. Aside from the special case of the Viking area, it appears that the market’s momentum is powered mainly by people who want to live in the county, now or later.
Okeechobee is on its way to becoming more of a bedroom community, with many more working households commuting than the 20 percent who do now. In-migrants will continue to bid up the prices of ownership housing and residential lots. They will build larger, higher-quality homes than Okeechobee’s existing stock offers, and they will attract homebuilders away from the entry-level market and its smaller margins. The increasing number of commuters will make ownership housing less affordable for traditional Okeechobee residents who do not commute, but rely on the local economy. Unless countermeasures are taken, market forces could perpetuate the county’s heavy reliance on HUD-code manufactured housing to meet entry-level and retiree needs for low-cost housing. Site-built home price increases will force some renters to delay purchasing their first homes, increasing demand for the county’s limited rental stock.
The Okeechobee market has traditionally been served by small-scale local builders. That is about to change, as several large projects are being planned by out-of-town developers. HUD-code units continue to supply the lower-priced end of the market, and for decades they have comprised 30-40 percent of the new home market. The absence of land zoned for multifamily housing, except in the City of Okeechobee, prevents site-builders from delivering larger-scale developments of low-cost attached housing that could compete effectively with HUD-code units.
HUD-code manufactured housing (MH) is home to 45 percent of the county’s year-round households, making the county number five in Florida on this measure. Most MH are owner-occupied. In the current strong housing market, real estate manufactured homes with land are appreciating at almost 5 percent annually.
HUD-code homes have evolved so much over three decades that it is impossible to generalize about them. Many manufactured homes pose serious housing problems and safety risks. Others are fully comparable to high-quality site-built homes. The county has done a good job of establishing controls and design standards for new and used units now being placed. The big challenge is to come to grips with the large, existing MH stock. The vast majority of Okeechobee MH, both real estate and personal property, meets neither HUD wind standards nor Florida’s strict installation standards. Rehabilitation, replacement, installation retrofit, and code enforcement for additions are important needs for the county’s MH stock.
The national mortgage market is serving Okeechobee with a wide array of financing products, but good opportunities exist to improve homebuyer financing options. FHA loans should be used to finance manufactured homes on land. USDA Rural Housing Service 502 guaranteed mortgages are a valuable, under-utilized financing source for middle-income home buyers. Expanded access to equity-line financing would help MH owners upgrade their homes, and rising MH values should make such credit viable for banks. Buyer education and credit counseling programs are needed, and should definitely include specialized training for the MH market.
The county has a well-recognized shortage of quality, affordable rental housing. Housing problems are common among the county’s renters, 28 percent of whom have incomes below the poverty line. Attracting funding for rental subsidies should be a priority for the county. The proportion of low-income Okeechobee renters who receive rent subsidies is much lower than in coastal counties or statewide. Almost half of renters live in pre-1980 manufactured and mobile homes. Ten percent of renter households are severely overcrowded. To address the housing needs of cost-burdened renter households, 900 rental vouchers and/or subsidized rental units are needed.
Multi-family construction has been negligible. The county should identify and zone suitable parcels for multifamily construction and invite developers to design high-quality units with good management. The already-approved Okeechobee II tax credit rental project can be revived and built.
Over-reliance on low-quality HUD-code housing has caused a sizeable problem of substandard housing. About 3,000 single-family units are substandard (23.4%), including 2,273 mobile and manufactured homes classified as real estate.
Special housing problems of Okeechobee’s African American and Hispanic households include much lower homeownership rates, higher incidence of extremely substandard housing, and overcrowding (particularly for Hispanic households). At least 2,300 migrant and seasonal farmworkers live in the county, about 15 percent of the workforce. Some farmworkers accompanied by spouses are becoming homeowners with support from Okeechobee Nonprofit Housing. Unaccompanied workers typically live in squalid conditions as they work to establish themselves. Their unconventional living arrangements and sporadic incomes don’t match well with existing housing options and regulations.
The county has begun to develop an organizational capacity for tackling affordable housing challenges. The Affordable Housing Advisory Committee oversees SHIP and provides policy leadership. Okeechobee Nonprofit Housing has focused on housing needs in the Hispanic community. Indiantown Nonprofit Housing is well-respected and willing to bring its expertise to the county.
The county should pursue three basic housing strategies: 1) promote high-density and multifamily site-built housing development for both renters and owners; 2) use information, public relations, and design controls to pre-empt NIMBYism and build acceptance of quality, affordable housing, especially rental housing; 3) create incentives for owners to rehabilitate or replace existing housing, especially HUD-code homes. In view of the rapid changes now underway in the price structure of Okeechobee housing, the county should consider launching a comprehensive, ongoing housing initiative.
Overview of Okeechobee County Housing, Population, and Economy
Introduction
Okeechobee is a rural county on the northern shore of Lake Okeechobee, and its real estate market is now being strongly influenced by the burgeoning Treasure Coast counties of St. Lucie, Martin, and Palm Beach to the east. Beginning with a population of about 11,000 in 1970, the county grew rapidly in the seventies and eighties, and more slowly during the nineties to its 2004 population of about 37,500 year-round residents.[i] The county has long been a popular winter destination, and thousands of seasonal residents appear in November-December every year.
The county’s job base is concentrated in the service-providing industries of education and health care, retail trade, tourism, and government, including a large number of workers at correctional institutions. Agriculture, mainly beef cattle and dairy, accounts for about 15 percent of the county’s jobs. Per capita income is lower in Okeechobee than in counties to the east and lower than in Florida statewide. So is the cost of living.
A steadily increasing share of Okeechobee residents commutes to jobs outside the county, primarily to the counties east. Good highway connections put many more jobs within reach for those willing to commute 30-60 minutes.
Prices for Okeechobee land and homes have risen sharply in the past three years. Demand from former residents of counties to the east is driving the trend. Single-family construction activity has spiked during the same period. Some buyers are purchasing lots for retirement, while others are choosing to enjoy Okeechobee’s small-town atmosphere and commute to their present jobs in coastal counties.
Most of Okeechobee’s population is clustered in the southern part of the county, in the City of Okeechobee and surrounding area. The county’s 1974 zoning ordinance has preserved large areas as agricultural land and has prevented sprawl. A large majority of households chose to buy HUD-code manufactured homes during the county’s rapid growth in the 1980’s, when mobile homes accounted for an estimated 70 percent of all new homes.[ii] As a result, HUD-code manufactured homes account for an unusually high proportion of year-round occupied homes, 45 percent as of 2000.
Almost three Okeechobee households out of four are homeowners. There is very little multifamily housing, and about half of the county’s rental stock is HUD-code manufactured housing.
Hurricanes Frances and Jeanne both hit the county in 2004 with 100 mph winds. The storms caused major devastation in the counties to the east and destroyed some 300 homes in Okeechobee County.
Little housing subsidy has flowed to the county. Okeechobee receives an annual SHIP grant of $350,000 and has two subsidized rental complexes. State HOME funds have recently supported development of single-family rentals by a local nonprofit organization. The Rural Housing Service makes a small number of subsidized loans and repair grants. The county has no Section 8 rental assistance vouchers or public housing units.
Official statistics say one out of five county residents is Hispanic, but Census officials informally estimated that 5,000 Hispanic residents were probably uncounted in 2000, making the true Hispanic proportion closer to 25 percent. Eight percent of county residents are African American.
The county is home to about 2,300 migrant farm workers, many of whom work in the counties to the east.
Housing Market Area
Housing markets often do not follow jurisdictional boundaries. Commuting patterns that define a labor market create a more accurate housing market boundary. Because about 20 percent of the county’s workers hold jobs in Martin, St. Lucie, or Palm Beach counties,[iii] and because market participants interviewed unanimously agreed that the county is experiencing substantial in-migration and land purchases by people from those counties, it appears clear that the housing markets of Okeechobee and the counties east are merging into one. Confirmation comes from the fact that the state Agency for Workforce Innovation includes Okeechobee in the Treasure Coast Workforce Development Region.
Within the regional market, Okeechobee is a niche market with different housing options, much lower housing costs, and a different lifestyle from its neighbors to the east. According to the Treasure Island Regional Planning Council, many coastal county residents already have north-south commutes of 45 minutes to one hour, making Okeechobee a reasonable alternative location that requires about the same commute time. Much of the new housing stock in those counties is of highly uniform design. Along the coast there is even greater vulnerability to hurricane winds than Okeechobee’s location 50 miles inland. Finally, the very rapid rise in home values in coastal counties has positioned many homeowners favorably for selling their home and buying more house, and more land, in Okeechobee County. Others may choose to refinance their homes and use some of their equity to purchase an Okeechobee lot for a future home, or as an investment.
Although home prices and commute times to jobs support the ongoing merger of housing markets between Okeechobee and the coast, Okeechobee’s limited shopping opportunities will act to slow down the process. The county has no shopping mall and the only big-box retailer is Wal-Mart. Medical services used to be another limiting factor, but now Okeechobee residents must travel to the coastal counties only for specialized services like oncology or cardiology.
Okeechobee’s assimilation into the coastal housing market has been happening for some time. Those who moved into the county from coastal counties in the late 1990’s got the full benefit of Okeechobee’s “local” prices. During the past two-three years, the bidding has intensified and the market has experienced substantial price increases.
Some 1,367 households moved to Okeechobee County from Palm Beach, Martin, and St. Lucie counties between 1996 and 2002. If all of these households continued to live in Okeechobee, then migrants from these counties accounted for 10 percent of all Okeechobee households as of 2002. The breakdown by county of origin and year was as follows:
Estimated Number of Households Moving To Okeechobee County from Coastal Counties, 1996-2002
|County of Origin |1996 |1997 |1998 |1999 |
|Okeechobee |$82,500 |$99,000 |$110,000 |+33% |
| | | |(June-August) | |
|Martin and St. Lucie |$128,300 |$153,900 |$199,700 (August only) |+56% |
|Palm Beach |$194,600 |$241,300 |$324,700 (August only) |+67% |
Source: Florida Board of Realtors and qualified sales, Okeechobee County tax records. Okeechobee data excludes manufactured homes.
[pic]
Housing affordability is always a relative thing, a ratio of local incomes to home prices. Although wages are higher in coastal counties, they aren’t high enough to offset the much higher prices of homes, so affordability is worse in coastal counties than in Okeechobee. As of 2004, the Shimberg Center’s affordability index ranks Okeechobee as the state’s 16th most affordable county for ownership housing. St. Lucie is 23rd, and Palm Beach and Martin are 52nd and 53rd respectively. Okeechobee County’s affordability advantage grows even larger for commuters who combine its lower home prices with higher coastal incomes.
A serious housing crunch is underway in the Treasure Coast. At an August 2004 Palm Beach County Commission meeting, Commissioner Tony Masilotti said police officers, nurses, mail carriers, and teachers are being priced out. “We have sheriff’s officers living in St. Lucie County,” he said. “It’s very difficult to get a nurse to work at Palms West or West Boca. It’s really, in my opinion, a direct result of the housing.”[v] The current crisis has been building for years. A 1995 Treasure Coast regional plan stated, “The cost of housing in much of the Region is much higher than the ability of persons employed in the region to pay. Speculation and regulations have driven the price of land up and much of the new housing supply caters to wealthy retirees moving from other areas of the US and other nations.”[vi]
With its excellent highway connections, small-town appeal, and lower prices, Okeechobee is a housing relief valve for a segment of the coastal workforce.
Population and Household Trends
BEBR Projections: Number of Households Projected to Grow More Slowly
The best available projections from the University of Florida’s Bureau of Economic and Business Research indicate that for the next decade, Okeechobee will remain a small, slowly-growing county with much faster-growing metropolitan counties to the east. School district projections tell the same story. BEBR projects that demand for new single-family site-built housing will be stable in the range of 115 to 130 per year through the year 2015. As will be seen, these figures are far below actual unit production during the past three years.
Household growth drives housing demand. The number of Okeechobee households is projected to grow by about 14 percent during the present decade, and is forecast to continue at the same rate of growth through 2015. This projected household growth rate is 42 percent slower than what the county experienced during the 1990’s.[vii] The average size of Okeechobee households has been falling since 1990, and is forecast to continue declining. Okeechobee County’s population is forecast to grow modestly through 2015.
In the counties east, the number of households is projected to grow at about twice Okeechobee’s rate.
Number of Households, 1990-2015, Okeechobee and Counties East
|County |1990 |2000 |
|2005 |15-24 |[pic]633 |
| |25-34 |[pic]1,642 |
| |35-54 |[pic]4,761 |
| |55-64 |[pic]2,339 |
| |65-74 |[pic]2,267 |
| |75+ |[pic]1,842 |
|2015 |15-24 |[pic]630 |
| |25-34 |[pic]1,769 |
| |35-54 |[pic]4,538 |
| |55-64 |[pic]3,232 |
| |65-74 |[pic]3,065 |
| |75+ |[pic]2,301 |
Source: Florida Housing Data Clearinghouse, Shimberg Center, U of F.
Okeechobee Population Age Distribution, 2003
| | |% of total population |
|37,236 |Total | |
|2,370 |0-4 |6.4% |
|6,668 |5-17 |17.9% |
|8,428 |18-34 |22.6% |
|9,570 |35-54 |25.7% |
|4,103 |55-64 |11.0% |
|4,656 |65-79 |12.5% |
|1,441 |80+ |3.9% |
|6,097 |Total 65+ |16.4% |
Source: BEBR, University of Florida
The Okeechobee School District reports that the county’s school-age population declined for about eight years during the nineties, but has begun to rise in recent years. Slow growth, fewer than 100 new students per year, is projected for the period 2004-09.
Employment, Income, and Cost of Living
Job Growth
Job growth is a key predictor of housing demand, and moderate job growth is projected for Okeechobee through 2015. The number of Okeechobee non-farm, full-time, year-round jobs rose by a strong 3 percent annually from 1990 to 2000. Job growth is projected to slow to 1.8 percent annually during the present decade.
Job growth in Okeechobee is projected to be somewhat slower than in Martin and Palm Beach counties, but faster than in St. Lucie. Long-term forecasts for Okeechobee call for job growth of 1.2 percent annually from 2010 through 2015, about the same as for counties east.[ix]
Okeechobee’s housing market will feel the impact of a major new research facility in Palm Beach County. Scripps Research Institute, the world’s largest, private non-profit biomedical research organization, intends to build the facility on highway 710 within a 45-60 minute commute for residents of eastern Okeechobee. Up to 500 jobs are expected to be created there, and a state economist estimates that spin-off jobs could grow to 6,500 over the next 15 years. If the facility becomes a magnet for other research businesses, thousands more jobs could result.[x] However, in September 2004 the proposed site was drawing opposition on grounds of urban sprawl and environmental impact, and county commissioners discussed a possible change to another unspecified location in Palm Beach County.[xi] A county planner said alternate sites are located in the Jupiter area, which would also be accessible to Okeechobee commuters. Major support by the state of Florida and Palm Beach County makes it highly unlikely that Scripps will not build a facility in one of the possible sites.
Unemployment
Okeechobee’s unemployment rate was 9 percent in August 2004, compared to 5.4 percent statewide. The county’s unemployment rate averaged 7 percent for the year 2003. Even during the national economic boom in 1999, the county’s unemployment rate was 7.5 percent in a year when only 3.9 percent of all Floridians were unemployed.[xii] Unemployment is projected to remain at about 8 percent for Okeechobee during this decade.[xiii]
Okeechobee Employment Categories and Wages
The average Okeechobee full-time worker earned $26,408 per year as of December 2003. That wage allows for a housing budget of $660 per month, including utilities for renters and taxes and insurance for homeowners.[xiv]
The amount a household can pay for housing depends on wage levels and the number of earners in the household. In Okeechobee, two or more people are employed in two-thirds of all married-couple families (excluding those with no workers).[xv] 1,154 single-parent households with children live in the county.[xvi]
For all county households with earnings, the average amount earned was $41,101 in 1999.[xvii]
More than three out of four Okeechobee workers deliver services of one kind or another. Another 15 percent work in agriculture. The county’s manufacturing sector is small.
The word “services” encompasses a broad range of occupations, from retail to education to government. Education, health care, and government jobs pay relatively well, over $31,000 per year, while leisure/hospitality, food service, and retail trade pay from $12,688 to $20,088. A mid-level police officer for the city of Okeechobee earns $32,000, a firefighter somewhat less. City clerical staff earn about $25,000, and “city jobs are some of the best jobs in town” says Okeechobee City Manager Bill Veach, who says young people are leaving the county in numbers for better-paying opportunities.
Interviews with Okeechobee residents provided an informal view of local job opportunities and wages. A first-year teacher in Okeechobee schools earns $30,000; the top of the scale is $48,000. About half of the school district’s employees are non-teachers, and most of them earn much less. For example, teacher aides and school bus drivers earn about one-half of teacher salaries.
Starting bank tellers earn $7.00 per hour; a loan officer earns about $30,000 per year. Workers at one of the county’s five corrections and juvenile justice facilities earn about $10 per hour ($21,800/year), with a good benefits package.
Federal Cast Stone Chooses Okeechobee
Federal Cast Stone, a maker of custom building facades, will be moving west from Martin County to become the Okeechobee industrial park’s first tenant in early 2005. To start, the 73,000 square foot facility will employ 65 people, and owner Robert Myer expects most of them will be moving to the county. He evaluated ownership housing opportunities before he decided to make the move. Although Myer found much to like in the Okeechobee community and will be building a house in the county himself, he found a real shortage of both entry- and mid-level ownership housing available for his employees. He found relatively few site-built homes listed with real estate agents in the current strong market, and an oversupply of HUD-code manufactured homes.
Comparative Wages, Okeechobee and Counties East
Workers earn more in counties to the east than in Okeechobee. But prices in the Treasure Coast’s housing market are outpacing wage growth by a large margin, increasing Okeechobee’s attractiveness to overstretched Treasure Coast workers. Although average wages in counties east are significantly higher than Okeechobee’s, median home prices have risen in Martin and St. Lucie counties by 73 percent, and by 80 percent in Palm Beach county, while family income has risen just 19 percent in the Treasure Coast in the past five years.[xviii] The affordable housing crunch in the Treasure Coast is exacerbated by a mismatch between the housing buying power that comes with the area’s main industry, retirement, and the low wages paid to the workers on whom retirees depend. If mortgage interest rates rise as expected during the next few years, affordability will worsen and the crunch will intensify. Recognizing the problem, St. Lucie County voters last year approved a referendum measure authorizing the county to grant incentives to attract higher-paying employers to the area.
Meanwhile, the mismatch between coastal wages and housing prices, and the lower prices in Okeechobee, will continue to fuel demand for Okeechobee housing and land. To the following places, commute times from downtown Okeechobee are:
Stuart - 1 hour
Jupiter - 1 hour 10 minutes
Port St. Lucie - 1 hour
Fort Pierce - 55 minutes
Sites in eastern Okeechobee offer commute times 10-15 minutes shorter.
The following graph and table make clear that in virtually every industry and job classification, workers can bring home more money from jobs in Treasure Coast counties.
Okeechobee County Employment and Wages by Industry, with Coastal County Average Wages, Fourth Quarter 2003
|Industry Title |
These wage differences are evident in per capita income comparisons. The gap between real, inflation-adjusted per capita personal income in Okeechobee versus Martin and Palm Beach counties has widened steadily since 1970, and is projected to widen further by 2010, as real incomes shoot higher in the two coastal counties. Between 1970 and 2000, Okeechobee’s real per capita personal income rose 48 percent, vs. 71 percent in St Lucie and 129 percent and 126 percent respectively in Martin and Palm Beach counties. By 2010, average personal incomes in Martin and Palm Beach will be more than twice those of Okeechobee County.
[pic]
Cost of Living
Okeechobee County’s overall cost of living is moderate, scoring 96.76 on the 2003 Florida Price Level Index, and ranking as the 22nd most costly county in the state. The index evaluates the cost of food and beverages, medical care, housing, transportation, and a sample of other goods and services. Counties to the east are higher on the cost scale. Martin: 99.66; Saint Lucie: 97.27; and especially Palm Beach at 103.68. Okeechobee’s housing cost index is substantially lower than that of some neighboring counties--Okeechobee: 88.65; Saint Lucie, 91.59; Martin, 100.38; and Palm Beach, 109.46.[xix]
Uninsured medical problems can create instability in people’s housing situation by forcing rent or mortgage payments to be missed, and consequently reducing credit scores below threshold requirements for both homeownership and rental. An unusually high percentage of Okeechobee residents lack health insurance. Of the county’s population age 64 and under, about 28 percent have no coverage.[xx]
Resale Home Market
Tax-Appraised Values Show Modest Housing Stock
Of the county’s approximately 4,500 single-family site-built and modular homes located on less than 1.5 acres, 80 percent have appraised values less than $100,000.[xxi] Another 9 percent are appraised between $100,000 and $125,000. Typical quality of construction is rated “average” for homes built before the early nineties, according to county staff appraisers. Many households live in HUD-code homes, whose median value was just $46,200 for owner-occupied units (including personal property and real estate) as of 2000.[xxii] Construction of the Hoover Dike and channelization of the Kissimmee River eliminated some prime residential sites, contributing to a concentration of modest housing stock.
Existing Home Values Rising Strongly
Median Prices Up in Recent Years
Values are rising steadily. The median sale price for site-built and modular homes was $110,000 for homes that sold in the first eight months of 2004. The median has risen 12 percent annually since 2000.
In August 2004, MLS listed 60 site-built homes for sale in the county, with a median asking price of $199,000. Only seven homes carried an asking price of under $120,000. Hallie Davis of Century 21 has been selling homes for 12 years in Okeechobee, and has less inventory now than ever before to offer buyers.
Median Price, Existing Site-Built and Modular Homes
|Year |Median Sale Price |Percent Change from Previous Year |Number of Sales |
|Through August |$110,000 |11.1% |495 |
|2004 | | | |
|2003 |$99,000 |20.0% |437 |
|2002 |$82,500 |7.8% |432 |
|2001 |$76,500 |9.3% |441 |
|2000 |$70,000 |7.7% |353 |
|1999 |$65,000 |-1.1% |379 |
|1998 |$65,750 |3.5% |438 |
|1997 |$63,500 |15.5% |353 |
|1996 |$55,000 |2.8% |329 |
|1995 |$53,500 |N/A |322 |
*Note: 2004 sale price calculated through August; number of 04 sales extrapolated from 327 sales through
August.
Source: Price data, qualified sales, Okeechobee County Appraiser Office. Number of sales includes unqualified sales to reflect the scale of the market.
Individual Home Sales Show 7.8 Percent Annual Appreciation
Comparing median prices from year to year conveys the overall market trend by focusing on the middle of the market. A more precise measure of value appreciation is a repeat sales index, which measures price changes on individual homes from one sale to the next. A repeat sales index was developed for this assessment using county appraiser office records of qualified, arms-length sales in the first nine months of 2004. Sales of single-family residences with less than 1.5 acres of land were analyzed to keep the focus on homes, not land values. In addition, sales indicating annual value changes of 20 percent or more, plus or minus, were eliminated because of possible data problems (for example, the previous sale might have been an unimproved lot or a residence that was later replaced).
After this screening, the database contained 147 pairs of qualified sales. The average annual value change was 7.8 percent since the previous sale; median value change was 7.6 percent. Two sales showed value declines; 145 showed increases. Annual increases of this scale indicate a strong housing market. For comparison, statewide home prices increased by 2.9 percent annually during the 1990’s as measured by a federal repeat sales index.[xxiii]
In Okeechobee’s current fast-paced market, a majority of home sales are happening directly between buyers and sellers. In the six months ending on August 10, a total of about 600 homes including real estate manufactured homes changed hands in the county (including some no-cost transfers), while 204 units sold via MLS.
In the attached housing market, Oak Lakes units are selling for up to $80,000, up from about $40,000 two years ago, according to Hallie Davis at Century 21. A simple CBS (concrete block structure) home in Douglas Park that sold for $48,000 six years ago has appreciated to about $68,000 today, a strong 7 percent annual gain that matches the overall market performance. SHIP administrator Linda Rucks reports that buyers in the county’s homeownership assistance program, funded by SHIP funds, are still finding site-built homes that meet the $95,000 price limit. This will not be possible for more than another year or so.
Huge Price Increases in Treasure Coast
The 2004 home market is booming in the Treasure Coast counties. In St. Lucie and Martin Counties, homes that sold in the first half of 2004 averaged 20.5 percent annual increases in price since their previous sale; in Palm Beach, the figure was 17.2 percent. Statewide, home sales in 2004 reflected a 13.3 percent annual gain from time of previous sale of the same residence.[xxiv]
Okeechobee Real Estate Manufactured Home Values are Rising Too
A lower price range applies to the county’s HUD-code manufactured home market, but values are ratcheting upward. In the current market, MH owners with land are building equity. The median price is now $62,900, up 9.4 percent since 2000. As of August 2004, the median asking price for a HUD-code home with land was $94,750 for the 53 homes listed. (Real estate agents handle only real estate manufactured homes, i.e., homes with land.) Some of the increase in MH value is attributable to the fast-rising values of canal-front lots in subdivisions along Taylor Creek in the southern part of the county.
Median Sale Prices of Manufactured Homes with Land,
Okeechobee County 1995-2001
|Year |Sale Price |Change from Previous Year |
|2001 |46,000 |10.8% |
|2000 |41,500 |3.8% |
|1999 |40,000 |11.9% |
|1998 |35,750 |2.1% |
|1997 |35,000 |16.7% |
|1996 |30,000 |-3.2% |
|1995 |31,000 |29.2% |
Source: Florida Housing Data Clearinghouse
A resale price index for real estate manufactured homes in Okeechobee was developed for this assessment. Okeechobee sellers of real estate manufactured homes in 2004 realized an average 4.7 percent annual gain over the price previously paid for the same home. Median annual value change was 3.8 percent. Similar gains were realized on sales in the previous two years. The same methodology was followed as for site-built homes, using qualified sales only, and eliminating data for homes with more than 1.5 acres. Sales reflecting value changes of more than 15 percent annually were also eliminated, because many of these sales probably reflect replacement of the manufactured home. Ninety-eight pairs of 2004 sales met these criteria; 7 sales showed price declines and 91 showed gains.
Annual Value Change, Real Estate Manufactured Homes
Sold 2002-2004 in Okeechobee County
|Year of Sale |2004 |2003 |2002 |
| |(98 sales) |(115 sales) |(87 sales) |
|Median value change per year since |3.8% |3.9% |3.9% |
|previous sale | | | |
|Average value change per year since |4.7% |4.8% |4.6% |
|previous sale | | | |
Source: Qualified sales from Okeechobee Appraiser Office calculated by Housing & Community Insight.
The results disprove the stereotype that HUD-code homes must always depreciate. In Okeechobee’s strong housing market, buyers who need affordable housing are providing ongoing support for MH valuations. In other markets, research shows that well-designed and well-located HUD-code homes appreciate when the land is owned and homes blend well into the general housing stock.
Single-section manufactured homes on canals in the Taylor Creek neighborhood are selling for $85-90,000 or higher, depending on room additions, reports Jeri Patent of the Donald Renfranz real estate office. Five years ago they sold for prices in the 50s. Prices really accelerated during the past 18 months. In the Treasure Island neighborhood, prices are about $10,000 lower than Taylor Creek. In these areas there has been a steady trend toward increasing year-round occupancy.
Manufactured Housing’s Impact
Introduction
The fact that 45 percent of Okeechobee’s year-round households live in HUD-code manufactured housing dominates the county’s housing situation. Statewide, 10 percent of Floridians live in HUD-code units—still a substantial number, but 45 percent is an extremely high proportion of HUD-code units, even on a national scale. Okeechobee’s percentage of manufactured housing places the county fifth-highest in the state. Although HUD-code housing is very diverse in its execution and it can be a wise purchase, there have been serious problems with HUD-code construction, regulation, marketing, finance, legal protection, and land use regulation over the years. These problems are reflected in significant parts of Okeechobee’s manufactured housing stock. MH-related needs are discussed throughout this assessment.
“Manufactured housing” is the term reserved by the US Congress to describe housing built to meet the federal building code, known as the HUD code. The code was implemented in June 1976. It pre-empts state and local building codes, meaning that local officials may not override or modify any requirements that are addressed in the HUD code. All HUD-code homes have an integral steel I-beam frame that is a permanent part of the structure.
Implementation of the pre-emptive HUD code in 1976 enabled the modern manufactured housing industry to emerge, because manufacturers could achieve economies of scale by selling identical homes in every state with no complications from local and state codes. Mass-production allowed manufacturers to realize the full value engineering potential of factory-building technology.
Installation is a critical aspect of HUD-code home performance, and it is not addressed by the HUD code. Installation is comprehensively regulated by the state of Florida and by local building inspectors, as described below.
Confusion surrounds the term “manufactured housing,” because HUD-code homes are not the only homes built in a factory. Modular, panelized, and kit homes all involve factory production, so in the ordinary sense of the word, they too are manufactured homes. The simple way to keep track of the many varieties of factory-built housing is to remember that in Florida, there are only two acceptable residential building codes: the Florida Building Code, and the HUD code. Except for HUD-code homes, all factory-built homes must meet the same code that site-built (stick-built) homes meet.
The most prominent category of non-HUD-code factory-built housing is the so-called “DCA home,” also known as a modular home, because it is built in modules and shipped to the site on a flatbed-truck. The modules are then removed by crane and assembled. Modular homes in Florida are called “DCA homes” because they are certified by Florida’s Department of Community Affairs to comply with same Florida Building Code standards that site-built homes meet. It is worth noting that in its evaluation of building performance in Hurricane Andrew, the Federal Emergency Management Agency (FEMA) reported that “overall, relatively minimal structural damage was noted in modular housing developments. The module-to-module combination of the units appears to have provided an inherently rigid system that performed much better than conventional residential framing.”[xxv]
In this report, the official term “manufactured home” (MH) will identify HUD-code homes, otherwise known as mobile homes, single-wides, double-wides, and trailers. Homes built before the 1976 HUD code will be called “mobile homes.”
Okeechobee Restrictions on MH Placements
In its planning, zoning, and building regulations, the county has already taken steps to reduce the county’s reliance on manufactured housing, particularly low-end manufactured housing.
Units built before 1976 may not be placed anywhere in the county, but existing pre-1976 units are grandfathered. Used units more than five years old that are moved into the county must be certified by an architect or engineer to meet HUD code requirements. This is an important control on quality, because older HUD-code units have frequently been taken out of code compliance by improperly attached additions or transit damage. The county requires used units to meet basic condition standards such as intact bottom board, tie-downs, and working heat. Requests for placement of units more than five years old must be presented to a public hearing and be approved by the Board of Adjustment.
Various design standards apply to newly-placed HUD-code homes in Okeechobee, depending mainly on placement location. New or used units placed in mobile home parks must have approved skirting, but are subject to no other design standards. MH that will house farmworkers must be placed more than 200 feet from a public right-of-way and be at least 800 square feet in size. New or used units to be placed in A, RM, or RR zoning districts must be at least 1,000 square feet in floor area, which effectively requires multi-section units. In those zones, units must meet detailed appearance standards designed to blend units with the typical appearance of site-built homes. However, single-section homes are allowed to be replaced one time.
In its Residential Mobile Home (RMH) district, the county has taken measures to restrict the creation of new manufactured home parks or subdivisions. The minimum size for new parks, 15 acres, stops further proliferation of small-scale mobile home developments mixed incompatibly with site-built neighborhoods. There is a 30-acre minimum for manufactured home subdivisions.
In the City of Okeechobee, the minimum area for new mobile home parks and subdivisions is 10 acres. The city has design standards that apply uniformly to all single-family homes, both HUD-code and Florida Building Code. A minimum 800-square feet of floor area and a minimum 20-foot width are required, so in effect new units must be multi-section. This requirement serves to blend manufactured homes into the general housing stock, a worthwhile objective that benefits both MH owner and neighbors. An existing single-section home in the city may be replaced with another single-section home. Like the county, the City requires units more than five years old to be certified to meet HUD code, meet appearance and design standards like the county’s, and be approved by the Board of Adjustments.
How Manufactured Housing Became So Popular in the County
Manufactured housing has been big in Okeechobee for a long time, and it continues to play a major role in the new home market. For local residents, MH prices have been in line with local incomes, and they have also been popular as vacation and retirement units, as reflected in the fact that 26 percent of MH were counted as vacant/seasonal by the Census (versus 12 percent for all other types of units). According to the county’s comprehensive plan, “mobile homes accounted for about 70 percent of all residential development between 1979 and 1990.” From the late 1950’s through the early 1970’s, before the HUD code placed basic controls on MH quality, land use controls in the county were minimal, and many units were placed haphazardly in developments and parks that could not be approved today.
Since 1994, manufactured homes have averaged 44 percent of total new single-family units built in the county every year. By contrast, manufactured homes accounted for just 14 percent of all new ownership housing statewide during the decade. A large majority of new Okeechobee MH have been multi-section, as is true statewide where 82 percent were multi-section in 2003.
New, previously unoccupied MH placed in the county totaled 892 multi-section units and 159 single-section units over the past 9 ½ years.
New Manufactured Homes Placed in Okeechobee, 1995-2004
|Year |Total |Est. % Multi* |Est. % Single* |
| |Placements | | |
|1994 |101 |76.8% |23.2% |
|1995 |121 |81.5% |18.5% |
|1996 |91 |80.3% |19.7% |
|1997 |80 |80.0% |20.0% |
|1998 |64 |92.5% |7.5% |
|1999 |135 |89.7% |10.3% |
|2000 |91 |91.5% |8.5% |
|2001 |64 |82.8% |17.2% |
|2002 |116 |90.1% |9.9% |
|2003 |111 |92.7% |7.3% |
|2004 est. |82 |84.9% |15.1% |
|Total |1056 |86% |14% |
*Multi/single proportions estimated from Statistical Surveys Inc. data for Okeechobee
Source: Florida Housing Data Clearinghouse, Census C-40 reports.
MH Isolation
A basic issue with manufactured housing is that MH has been and continues to be isolated from the mainstream housing market, including finance, housing policy and programs, and consumer protection. In Okeechobee, a 45 percent share of occupied housing falls within this neglected domain. The isolation has contributed to a kind of benign neglect from policymakers. Manufactured housing has not been taken very seriously as a housing solution; in fact, it is often stigmatized as a second-rate solution. Affordable housing professionals sometimes have the strongest bias against MH because they confront the negative manifestations so regularly. Although the reaction is understandable, engaging the MH market would be more productive than boycotting. The boycott of MH is a failed strategy. Neglecting MH on the grounds that it is an inferior choice becomes a self-fulfilling prophecy. When mainstream housing market players and housing advocates ignore manufactured housing, it enables the industry and consumers to continue doing what they’ve always done: create a few exemplary homes, and many more distinctly second-rate units that provide decent, affordable shelter but shortchange buyers and the local tax base in terms of asset-building.
MH isolation has many dimensions. MH has unique financing, taxation, legal classification, code enforcement, marketing and distribution, access to real estate agents, resale financing, and repossession or foreclosure. Not all manufactured homes are equally isolated in a world of their own. An old single-wide in a park is about as different from a standard site-built home as any form of housing can be, so it is understandable that such a home would be financed and taxed differently. However, about 72 percent of Okeechobee County’s MH are on the owner’s land, and many MH in the county match or exceed the functionality of site-built homes. A basic aim of Okeechobee policy regarding manufactured homes should be to integrate MH into the county’s housing market in as many dimensions as possible. In Okeechobee this integration is well underway, as local lenders, officials, realtors, etc. have all taken meaningful steps to come to grips with MH popularity in the county, and work with it. But it needs to go further, because the MH industry is not going away and new units will continue to be placed in the county, especially as site-built home prices shoot up.
MH Opportunity Cost
“The decision to produce or consume a product involves giving up another product. The real cost of an action is the next best alternative forgone.” So says an economics glossary in defining the economics term “opportunity cost.”[xxvi] What costs do Okeechobee manufactured housing owners incur by choosing not to purchase a site-built home?
There are two major opportunities that MH owners forgo by not owning a site-built home. First, for MH units on leased land or for old mobile homes, owners usually forfeit the opportunity for their home to hold its value or appreciate in value over time. Second, MH owners on leased land give up the opportunity for lower cost conventional mortgage financing.
Equity-Building Opportunity
The opportunity to build home equity is a primary benefit of homeownership. Because most site-built homes hold their value, house payments are a kind of savings account. In markets like Okeechobee where home values are rising, owners get the additional benefit of equity appreciation. In Okeechobee the overall homeownership rate is 74.9 percent, higher than state and national rates. The homeownership rate captures everyone who owns their unit, regardless of whether they own the underlying land. Manufactured home ownership is a major contributor to the county’s overall ownership rate. If MH owners are excluded from the calculation so that it reflects only the ownership rate for occupied site-built homes, Okeechobee’s homeownership rate falls by 12.3 percentage points.
There are about 1,033 year-round owner-occupied personal property MH in the county, and about 1,166 owner-occupied pre-1976 homes, making a total of 2,199 MH households who are counted as homeowners. But in fact they should be considered as “almost homeowners,” because they do not get the full benefits normally associated with homeownership. Owners of personal property MH and obsolete pre-1976 mobile homes miss out on the opportunity to build home equity. This is easy to understand at the level of the individual owner. But it is worth considering the aggregate impact, given the large share of Okeechobee homeowners who own personal property MH or pre-1976 MH. Taken together, the county’s stock of such housing represents a large investment by people of modest means. The average value of owner-occupied manufactured homes in Okeechobee county was $46,200 in 2000.[xxvii] If we assume that the average value of owner-occupied personal property units and pre-1976 mobile homes is only $20,000, that still adds up to a total investment of almost $44,000,000. What are the owners of these homes receiving as an annual return on an investment of $44 million?
If we assume that this subset of Okeechobee’s owner-occupied manufactured homes is simply holding its value, but not appreciating, then these MH owners are losing the opportunity to earn a typical appreciation rate for owner-occupied real estate manufactured homes in the county. [xxviii] Based on real estate MH values in Okeechobee, that amounts to $1.7 million per year of lost equity gains.
If we assume that this set of MH is losing value (depreciating) at a rate of 3 percent per year, then owners are losing $2.8 million annually, compared to the owners of appreciating real estate MH.
A similar opportunity cost analysis can be done for the owners of post-1976 real estate manufactured homes, whose recent average 3.8 percent appreciation rate is only about half the 7.8 percent appreciation experienced by owners of site-built homes.
Although the figures look precise, the purpose is to make a general point. Manufactured home ownership represents a major investment by low and moderate income people. In Okeechobee, the average income of all MH owners was $34,436 in 1999,[xxix] and for these low-valued units the average is certain to be lower. Personal property and pre-1976 homes are unlikely even to be holding their value, let alone appreciating. Investment in manufactured housing is not returning the kinds of benefits that we usually assume for homeownership. For some senior households, building equity is of no concern. But for a sizeable portion of Okeechobee households, owner-occupied manufactured housing is draining capital from those who really need it.
Low-Cost Financing Opportunity
Over the life of a long-term home loan, a few extra percentage points on the interest rate add up to tens of thousands of dollars in extra expense. Thousands of households have accelerated their path to home ownership with MH financing that accepts “come as you are” credit scores.
How much does subprime financing cost the county’s manufactured home owners? Manufactured home loan terms vary widely. A conservative assumption is that on average, manufactured home owners are paying interest rates 250 basis points (2.5 percentage points) above home mortgage rates.
Every year, Okeechobee’s manufactured home owners pay an annual surcharge of about roughly $1.4 million on the estimated $55 million in outstanding debt on owner-occupied units in the county.[xxx]
Summary: Reducing MH Opportunity Cost to Zero
The opportunity costs suggest the scale of the financial impact of manufactured housing’s popularity in Okeechobee. The analysis is based on current realities of Okeechobee’s manufactured housing and site-built housing markets. Some MH consumers are buying basic homes that stand out from the housing stock, and are installed with block-skirting setups that anyone can spot as being “different.” Most finance them with subprime loans. And many consumers place homes on leased land, isolating themselves from the benefits of increasing land values. Given these realities, it is reasonable to estimate that every year, owners of pre-1976 and personal property MH in Okeechobee lose between $1.7 million and $2.8 million in equity opportunity, and all MH mortgage borrowers pay a surcharge of some $1.4 million per year in financing costs.
These financial impacts are not inevitable consequences of choosing a house that is built to the HUD code. For example, consider a double-section manufactured home with house-like siding, steeper roof pitch, and high construction quality that is placed on a desirable site with a stucco or masonry curtain wall between home and ground. With good maintenance, the home will hold value, or increase, in line with its site-built neighbors. Why? Because the home is fully comparable in appearance, performance, and land ownership with its site-built neighbors. Such a manufactured home would qualify for conventional or FHA mortgage financing if the borrower’s credit rating and debt ratios are sufficient. With such a home, the opportunity cost would be zero. In other words, the home and its financing would be “mainstreamed” into the overall housing stock.
Demographics of Okeechobee MH Residents
Following are basic characteristics of MH owners, renters, and their homes in Okeechobee County:
|Total population in MH |14,170 |
|Percent population in MH |39.5% |
|Occupied MH as % of all occupied units |44.9% |
|Median value, owner-occupied MH |$46,200 |
|Percent and number MH owner-occupied |73.2%, 4,141 homes |
|Percent and number MH renter-occupied |26.8%, 1,518 homes |
|Percent and number MH vacant or seasonal |25.8%, 1,968 homes |
|Estimated percent and number personal property |27.1%, 2,171 homes |
|Average household income, MH owners |$34,436 |
|Average household income, MH renters |$23,828 |
|Race-ethnicity of MH occupants (% of all householders of stated race-ethnicity living| |
|in MH) | |
| African American |8.0% |
| American Indian/AK Native |34.5% |
| Asian |27.0% |
| Hispanic-Latino |52.5% |
| White, not Hispanic |46.8% |
|MH Owners: Age of Householder | |
| 15-24 |2.1% |
| 25-34 |11.0% |
| 35-44 |13.1% |
| 45-54 |13.2% |
| 55-64 |18.6% |
| 65-74 |24.6% |
| 75+ |17.4% |
| Total Age 65+ |42.0% |
|MH Renters: Age of Householder | |
| 15-24 |13.4% |
| 25-34 |23.9% |
| 35-44 |26.5% |
| 45-54 |19.5% |
| 55-64 |8.3% |
| 65-74 |5.7% |
| 75+ |2.7% |
| Total Age 65+ |8.4% |
MH Parks
The county has 1,591 rental spaces in 81 parks licensed by the Okeechobee County Health Department. Many parks are very small. The median park size is just 13 lots. There is a concentration of parks in the county’s southeast quadrant, along Taylor Creek, and lake access in many of these parks makes them prime residential land.
Rents are $200 per month in basic, conveniently-located parks like Kings Park at the intersection of Highway 70 and 98. $239 is the rent for waterfront lots in the 115-lot Riverbend park, reserved for people age 55 and over, behind Big Lake Bank on Parrot Ave. Remaining lots are $229. Occupancy is 60 percent seasonal in Riverbend, where a 1989 single-section home on a waterfront lot could be had for just $25,000—before the 2004 hurricane season.
Florida regulates land-lease communities extensively. The Federation of Manufactured Home Owners, a 100,000 member consumer organization based in Largo, has achieved an impressive record of success in the Florida legislature over a 34-year period.[xxxi] As stated in Florida’s Mobile Home Act,
The Legislature finds that there are factors unique to the relationship between a mobile home owner and a mobile home park owner. Once occupancy has commenced, unique factors can affect the bargaining position of the parties and can affect the operation of market forces. Because of those unique factors, there exist inherently real and substantial differences in the relations which distinguish it from other landlord-tenant relationships. The Legislature recognizes that mobile home owners have basic property and other rights which must be protected. The Legislature further recognizes that the mobile home park owner has a legitimate business interest....” (F.S. 2003 Ch. 723.004 (1))
George Allen, a national expert, says Florida’s protections for park tenants are the most stringent in the nation.[xxxii] A key element is the requirement that park owners formally disclose to prospective tenants how the park is managed, what amenities are promised, and on what basis rents may be changed over time. The representations are binding on park owners and are assignable to a new owner upon home resale.
Florida give tenants the right to make the first offer whenever a park is placed on the market for sale. The importance of this protection is growing. Older parks in Florida cities have been converting to uses that generate higher returns, causing mass evictions. The state now has over 600 resident-owned land-lease communities, but the county health department reports there are none in Okeechobee County. In a resident-owned community, individual homeowners rent lots from a resident-owned corporation that owns the land and maintains infrastructure and common amenities. Rents are held to modest levels. Homeowners are more likely to build equity because they have guaranteed, long-term tenancy.
Some migrant farmworker mobile home parks in the county have closed under pressure from code enforcement authorities, but no one interviewed for this study had heard of a park that sold for conversion to another use.
The state Department of Business and Professional Regulation enforces the law that regulates parks, Chapter 723, the Florida Mobile Home Act. The Department investigates complaints, and can issue subpoenas and bring action in civil court to enforce the Mobile Home Act. It also helps homeowners in parks mediate proposed rent increases with park owners.
Some gaps remain in Florida’s protections, notably:
Tenants get leases for only one year
• Tenants have no right to purchase parks when owners receive unsolicited offers to buy, opposed to listing a park for sale
Cost Comparison
Nationwide, the net cost savings range from about 20-25 percent to zero for an installed manufactured home that is fully comparable to a site-built home, depending largely on local costs for site-built construction labor. In view of the housing boom underway in Okeechobee County and in the counties east, construction labor costs will likely be rising over the next few years, increasing the cost advantage of HUD-code and other factory-built homes.
In the Okeechobee market, site-builders are delivering very good quality homes for a construction cost of $65 to $70 per square foot.
The Marshall & Swift Residential Cost Handbook provides a finely detailed assessment of the construction costs for various quality levels of manufactured housing. Costs for high-end manufactured homes, excluding land and setup, are stated as follows:
Excellent and Very Good Quality Manufactured Homes: Costs per Square Foot
| |Single-Section |Double-Section* |
|“Excellent” quality MH |$47.29 |$44.16 |
|“Very good” quality MH |$38.88 |$36.02 |
*Double-section based on 32x60 dimensions.
Source: Marshall & Swift Residential Cost Handbook 2003.
“Very good” quality would typically include vinyl siding, 2x6 exterior walls, insulation values of R-11 floor, R-19 walls, and R-30 ceiling, thermopane windows, and painted sheetrock walls. To achieve a more “house-like” appearance, pitched roof options are available. $3,000 buys a 5-12 roof pitch; 7-12 roof pitch costs $6,000.
New Construction
Residential Construction is Accelerating
New housing construction in the county has picked up sharply in the past several years. During the four and one-half years ending in August 2004, an average of 146 new site-built single-family homes were built annually. The average was 112 for the previous six years ending in December 1999. In 2002, single-family construction hit a record of 138 units. 2003 was higher, and 2004 is on pace for another record, 189 units.
Housing Construction in Okeechobee County, 1994-2004
|Year |S/F Units |
|1995 |112 |
|1996 |124 |
|1997 |137 |
|1998 |115 |
|1999 |107 |
|2000 |117 |
|2001 |71 |
|2002 |116 |
|2003 |111 |
|Jan-July 2004 |41 |
|Total |1051 |
|Annual average |111 |
Sources: Florida Housing Data Clearinghouse; Statistical Surveys Inc.
[pic]
If the pace of the first six months of 2004 holds, the year will see 188 new single-family homes, an increase of more than 50 percent over the average of the previous eight years.
The surge in construction indicates that the rise in Okeechobee land values is not simply speculative.
In the City, an average of 19 units per year were built from 1999 through August 2004.
As in the county, the pace of residential construction increased through the period, and in 2003, 36 units were added compared to 13 in 2000. The 2003 total included four duplexes.
The county is very much a single-family construction market. Only two multi-family buildings of more than ten units were built during the 94-04 period. Eleven small multi-family buildings were built.
New HUD-code manufactured housing averaged 96 per year, or 44 percent of the market during the 94-04 period. Manufactured housing has been maintaining its large share of the county’s occupied housing stock. Unless sites for high-density site-built units are made available, MH will probably continue to fill the county’s need for affordable ownership housing as builders follow higher margins and move up-market.
Unit Size Is Increasing
Okeechobee buyers of both site-built and manufactured homes have chosen larger and larger units over the past 40 years. Manufactured home size expanded dramatically as the industry evolved from producing mobile trailers to multi-section homes permanently installed. In 2003, 90 percent of MH sales in Okeechobee were multi-section; statewide their share was 82 percent.
Builders
A small number of local firms have served the Okeechobee home buyer’s market, building up to 35 homes per year. To date, no large-scale developers have built in the county. Planning director Bill Royce reports a recent increase in small subdivision applications. Many buyers find their own land and secure their own construction loan, and then hire a builder for construction.
John Abney, who has been building homes in the county since 1973, reports that the typical new starter home is 3 bedrooms, 2 baths, 1300 square feet, and costs about $92,000 to build, without garage or land—about $71 per square foot. In 1990 the same home cost about $70,000 to build, Abney says. This indicates that Okeechobee residential construction costs have risen hardly at all since 1990 in real terms, after adjusting for inflation.
The cost trend in the county mirrors national research showing that the inflation-adjusted cost of home construction rose by just 2.9 percent during the 1990’s decade.[xxxiii] For HUD-code manufactured homes, inflation-adjusted costs rose even more slowly, by just 1.6 percent during the decade. (In contrast, land costs have risen much faster than inflation, in the county and nationwide.)
The lowest-cost model Abney builds is a 2BR, 2BA, 1100 sq. ft. home, garage excluded, for $80,000. Abney’s company expects to build 36 homes this year, as the market booms. His five-year average has been in the 12-18 home range.
Jerry Jolicoeur of Homes by Jolicoeur, Inc. reports that costs for his American Dream modular homes run from $48 to $100 per square foot depending on quality, and excluding land. He says his buyers divide evenly between entry-level, mid-range, and high quality. Jolicoeur sold 82 modular units in the county between 1999 and 2004 according to company records. Other builders placed some 38 modular units during the same period, giving modular units a 14 percent share of the market for the five and one-half year period.
Despite the much higher-priced new homes being built just 60 minutes east of Okeechobee, local builders do not report that local subcontractors are migrating east to earn the extra $3-$5 per hour that trades people earn there.
Owner-builders were responsible for about 140 homes between 1999 and 2004, about 17 percent of the market.[xxxiv]
Residential Land Market
Land values were stable during the 1990’s, according to county planning director Bill Royce. Recently they have been rising at a startling rate. Phil Berger, who has been in the appraisal, realty, and residential construction business in the county for 34 years, says today’s land market is the hottest he has seen. The real estate business is slow because properties are in such demand that sellers need not list them.
Much of the rural agricultural land in the county is already platted, making it easy for landowners to decide to place land on the market. Prices for well-located agricultural land are now approaching levels that are too high for further speculation, and residential development is likely to be the next phase of the real estate cycle. The lowest-cost, serviced building lots are in the 1200-lot Basswood subdivision, where a ¼ to ½ acre lot costs about $12,000-$14,000. Dixie Ranch lots requiring well and septic are in the $15,000 range for a 125x125 lot. Only two years ago, the same lots were available for about $4,000. In Okeechobee Hammock, lots are $15,000. Near Everglades Elementary, 100x100 foot lots are selling for about $30,000. In the Taylor Creek subdivision, a 90x150 serviced lot sells for $35-50k; directly on Taylor Creek, prime lots have sold in 2004 for $100,000. Real estate agents say a high percentage of land sales are to cash buyers. Removing banks and appraisers from many transactions contributes to rapid increases in land prices, moderated only by what individual buyers consider reasonable.
Proximity to coastal jobs and shopping makes land in the eastern part of the county very desirable, and values have been rising especially fast there. In the R-bar subdivision, 1.5 to 2 acre lots began selling for $45,000 in early 2003. There were seven lots remaining in August 2004, priced from $69,500.
In a remote northwest location, the Prairie/Viking subdivision is in a class of its own. Its 12,000 thousand, 1 1/4 acre lots with no roads, water, or sewer have been rising in value at a rapid pace, with many speculative buyers paying cash and holding lots vacant. Others have retired to the area, and some have chosen to commute from Viking to jobs in Okeechobee or east. The latest verified arm-length sales for 1 ¼ acre lots have averaged $18,000, but in this volatile market, prices range from $5,000 to $35,000. As recently as the first quarter of 2002, verified sales averaged about $5,700. An experienced local Realtor described Viking as a speculative market where buyers are paying cash. The area has poor drainage and is susceptible to flooding. Legal access to many of the lots is by easement, not right-of-way. Land sale activity in Viking has fluctuated widely over the past 10 years, from just 373 sales in 1997 to a high of 4,129 sales in 2002. The pace of sales has generally trended upward.
Land Sales in Prairie/Viking, 1995 through 2004
|Year |1995 |1996 |1997 |1998 |1999 |
|Number built |17 |19 |9 |2 |7 |
The average permit amount was $137,851 for 156 single-family CBS and frame-construction permits issued by Okeechobee County from January through September 2004 (excluding manufactured). The median was $129,278. Permit values exceeded $150,000 for 49 of these homes. (Permit values exclude land costs.)
It is common in hot real estate markets for builders to move upmarket and build higher-cost homes. Profit margins are larger, and buyers can readily qualify for financing. This is happening in Okeechobee now. For scattered-site development, the economic incentive to build high-end units (locally, about $100 per square foot including land) is strong. One builder said it would make economic sense for him to build 1600 square-foot townhouses in the $125,000 range, but said the lack of multifamily zoning makes that unrealistic.
Some very large developments are in early stages of planning and approval, including 121 acres near the intersection of Highways 70 and 710, owned by North Shore Village; the La Martin Acres property, 219 acres; and south of highway 441 on the east side of Okeechobee, up to 1000 housing units could be developed. The latter project is not yet on the official docket, but there is talk of a wide range of housing types including multifamily, at a range of prices beginning as low as $100,000. Another 200 units are proposed in a zone change request for a site on highway 710, southeast of Okeechobee.
Housing Finance
National Mortgage Market Serves Okeechobee
Twenty years ago, some areas of the country still experienced shortages of mortgage credit from time to time. Now the US mortgage market has evolved to provide a broad array of loan products in markets large and small. Real estate agents and lenders in Okeechobee report using familiar loan products available nationwide. Mortgage brokers, who now participate in more than half of loan originations nationwide, are partly responsible for expanding the availability of a wide range of loan options. Mortgage brokers specialize in staying abreast of a wide range of loan programs so they can qualify as many buyers as possible.
Two-thirds of Okeechobee homeowners were making mortgage payments as of Census 2000.
Loan products readily available in Okeechobee include FHA-insured mortgage loans, loans that conform to Fannie Mae and Freddie Mac guidelines and carry private mortgage insurance, and a dwindling share of loans that local lenders hold in their own portfolios. The county’s busy real estate market has caused a work backlog for lenders, appraisers, surveyors, and title attorneys.
Ms. Tabitha Trent at Riverside National Bank reports that most new home construction in the Okeechobee market is financed by the homebuyer. Few builders have their own credit lines with banks that would enable them to provide construction financing. New home construction loans are available with as little as 5 percent down.
One valuable loan program subsidized by the federal government is under-utilized in the county. The USDA Rural Housing Service 502 Guaranteed Housing Loan offers 100 percent loan-to-value financing and no private mortgage insurance is required. There is no price limit. Borrowers may earn up to $66,150 (family of four). Big Lake and Riverside Banks offer the program, but only six loans were originated in the county in all of FY 2004. New manufactured homes are eligible under national rules, but to date the Florida state office of RHS has boycotted MH.
FHA mortgage insurance is alive and well in the county, with modest loan volume, but surely more buyers could use its low downpayment and more flexible credit standards.
FHA Loans in Okeechobee County, FY 2004 & 2003
|FY |Loan Purpose |Number FHA Loans |Mortgage Amounts |
|2004 |Purchase Existing House |56 |$4,723,969 |
| | | | |
| | | | |
| | | | |
|2003 |Purchase Existing House |63 |$4,416,302 |
| | | | |
| | | | |
| | | | |
Source: HUD Homeownership Center, Atlanta.
The Florida Housing Finance Corporation’s First-Time Homebuyer’s Program may become valuable if interest rates rise as expected over the next few years. Record-low market interest rates currently make the FHFC program uncompetitive. The agency offered 30-year loans at 5.5 percent interest in October 2004. The very same financing resource has periodically been made available to Okeechobee homebuyers through a county partnership with Escambia County.
Controlling Default Risk: Cash Downpayment vs. Credit Quality
Over the past 12 years, the mortgage industry has come to rely more on credit quality and less on down payment in evaluating loan approvals. Sophisticated, computer-driven credit scoring has made the shift possible. Credit scores have proven to be highly accurate predictors of mortgage default. Because credit scores are so effective in controlling mortgage risk, lenders, the secondary mortgage market, and mortgage insurance companies have all embraced mortgage programs with small downpayments that would have been almost unthinkable 12 years ago.
It is good news for homebuyers that less cash is needed to access homeownership, but a good credit score is essential. And the credit marketing industry excels at tempting consumers to overextend themselves. Some young couples have dug a hole for themselves in terms of credit score by the time they are ready to buy their first homes. For years the manufactured housing finance industry specialized in stretching further than other home lenders would in order to qualify such borrowers. Buyers who had spoiled their credit ratings became a natural fit for manufactured housing. In this way, poor credit results in “almost homeownership” that does not build net worth, which in turn drives even more borrowing, and low-wealth households remain so.
The mortgage industry’s heavy reliance on credit scores means that improving credit scores of would-be homebuyers should be a key part of a strategy to promote wealth-building homeownership. Buyer education and counseling are proven methods for improving credit scores and informing buyers about how the homebuying process works. Large-scale research studies have shown that classroom and one-to-one buyer education and counseling do improve mortgage loan repayment.[xxxvi] At present these important services are not available in Okeechobee County, although Barnett Bank once offered buyer education in the past and reportedly got a strong response from consumers. The nationwide nonprofit Consumer Credit Counseling Services offers a range of financial counseling services, but they do not operate in Okeechobee. Okeechobee’s current Local Housing Assistance Plan calls for a partnership with the Cooperative Extension Service to “conduct and maintain an ongoing homebuyer education program” during the FY 04-07 cycle.
Financing Manufactured Housing
Manufactured home financing has many more variations than site-built financing, reflecting many kinds of homes in the MH marketplace, each with its own degree of collateral risk. Consumer education and active partnerships between the county and various public and private lending programs would help to improve financing prospects for Okeechobee households owning MH. Improving resale MH financing options would improve values because better financing puts homes within reach of more buyers.
Leased-land home loans cannot be sold to Fannie Mae or Freddie Mac, and they do not qualify for private mortgage insurance, USDA, or FHA financing. Okeechobee lender portfolio programs accommodate MH on leased land. Riverside finances units built after 1982 for up to 10 years with fixed and adjustable rate loans, with rates from 12 ¼ to 15 ¼ depending on credit score. Rates much closer to standard mortgage rates are offered for high credit scores of 660 and up. Downpayments are much higher than for site-built home loans, from 20 to 30 percent depending on the age of the home—terms that suit the area’s retiree market well.
MH retailers finance many first-time buyers through their own programs, with units on leased land financed at rates from 400 to 600 basis points (100 basis points equals one percentage point) higher than home mortgage rates. They rely on a faltering nationwide industry that provides “chattel” or personal property financing, usually through home retailers who earn a commission for originating the loan. The industry suffered severe losses due to lax underwriting in the late 1990’s and several major players such as Conseco and Greenpoint folded. Retailers are hoping for a chattel financing recovery, but meanwhile they have been forced to find other financing including standard home mortgage financing.
For homes placed on the owner’s land, including single-section units, standard FHA loans are the best option for consumers. Unfortunately for local buyers, this option seems to be a secret locally. No FHA loans for manufactured homes were originated in Okeechobee County during the 03 and 04 fiscal years.[xxxvii] FHA’s Atlanta office has ruled that any post-1976 MH installed which an engineer certifies to meet Florida’s 1999 standards will meet FHA’s permanent foundation requirements. Most pre-1999 homes can be retrofitted to meet the 1999 standards for a cost ranging from $750 to $2000. Once a home has been financed by FHA, future buyers can also use FHA financing, which helps to maintain MH resale value.
FHA, along with Rural Housing Service and private mortgage insurers, has normally required manufactured homes to have expensive masonry perimeter walls. Although they have termed this a “permanent foundation” requirement, in fact the great majority of manufactured homes are designed to be supported not at the perimeter, but beneath the steel I-beam frame. Mortgage lenders and insurers have in effect “taxed” manufactured homes with an expensive, structurally unnecessary requirement.[xxxviii] The Atlanta FHA director’s acceptance of Florida’s standards cuts through the confusion. The decision frees home buyers to choose less expensive perimeter enclosures. Florida standards are silent on perimeter enclosure, and address only the stability and wind-resistance of the installation. Okeechobee, along with many other local governments in Florida, has design standards for perimeter enclosures to harmonize manufactured homes with site-built neighbors. The county attempted to implement a requirement for a concrete stemwall for manufactured homes, but the state’s nondiscrimination law mandating equal treatment of MH and site-built homes made it impossible to do so.
For multi-section homes with land, Fannie Mae and Freddie Mac loans are available. Okeechobee County’s design standards should be sufficient to satisfy the private mortgage insurers who insure most Fannie/Freddie loans. Appraisers in the Okeechobee market are familiar with the secondary market’s tough 2003 standards for valuing MH, and at least one of them does not surcharge MH appraisals as is common in other markets. Any properly installed double-section home built after 1976 can qualify for Fannie/Freddie financing, except on leased land.
Home Improvement Financing
National data on home improvement financing from the Federal Reserve shows two distinct markets and product types. The traditional home equity loan, a fixed-rate, closed-end loan, is still most popular with lower income borrowers. They use loans most often to pay other debts, secondly for home improvements. The home equity line of credit, a variable-rate, open-end “checkbook” type of financing, is the most popular form of borrowing against one’s home. Nationwide, 13 percent of homeowners have second liens against their homes, and most of these were equity-lines of credit. Home improvement is the most common purpose for equity line borrowing.
In Okeechobee, equity-line financing is a mainstream product offering as it is everywhere in the US. Equity-line financing for owners of manufactured homes is available from at least one lender when the first lien is also held by that lender (Riverside).
Subsidized Finance Programs
The county receives $350,000 per year in SHIP funds from the state’s housing trust fund. Most funds are programmed to help homebuyers afford a home. Maximum price limit is currently $95,000 and administrator Linda Rucks says clients are still managing to find homes priced in this range. Loan amounts range from $8,000 to $25,000 depending on the buyer’s income. Loans carry no interest and are forgivable over a seven-year term.
Rehab funds up to $10,000 per unit are available, but there have been few takers because funds may be used for building code defects only. $80,000 per year is programmed for rehab financing.
The county allocates $2000 per year of SHIP funding for buyer education.
State statute prevents SHIP from assisting HUD-code homes, a provision that homebuilders fought hard for.
For low-income households, USDA’s Rural Housing Service offers deeply subsidized home purchase mortgages for site-built homes priced up to $111,203. Surprisingly, there is no waiting list. The program’s credit standards are high enough that they screen out many low-income households.
USDA also offers grants and subsidized loans for home repair through its Section 504 program. Grants up to $7,500 are available for elderly homeowners, and they need not be secured by a lien on the residence. Twenty-year loans carry a 1 percent interest rate for terms up to 20 years.
USDA Rural Housing Service Single-Family Assistance in Okeechobee County, FY 2002-04
| |FY 2004 |FY 2003 |FY 2002 |
| |Number |Amount |Number |
|502 Guaranteed Rural Housing |6 $450,000 |1 $93,480 |2 $162,000 |
|Loans (market rate) | | | |
|504 Home Repair Loans |3 $35,000 |2 $25,000 |0 |
|504 Home Repair Grants |3 $18,500 |0 |0 |
Source: RHS State Office.
Reverse Mortgages
As real estate values continue to rise in Okeechobee, some of the county’s seniors may want to investigate a reverse mortgage to increase retirement income and help with home maintenance. A reverse mortgage allows a senior to tap their home equity without incurring any repayment obligation. The program design ensures that a borrower will never owe more than the home is worth. As long as taxes and insurance are paid, the home cannot be foreclosed either. So far, no Okeechobee lender has made the program available.
Reverse mortgages are becoming popular after years of discussion. In the first five months of FY 2004, 12,848 loans were originated nationwide, compared to 6,638 for all of 2000. The Home Equity Conversion Mortgage, the most popular form of reverse mortgage, is FHA-insured. The American Association of Retired Persons maintains a network of trained counselors nationwide to explain the complex program to consumers. In West Palm Beach, Barbara Tyson is one such counselor at Consumer Credit Counseling (561-515-2273).
Rental Housing
One out of four households in the county rents a residence. About 1500 households rent manufactured homes; another 1000 rent site-built single-family homes; and the remaining 700 renter households rent apartments in multifamily dwellings. According to Realtor Hallie Davis, many units are owned by small-scale investors who own a few houses or mobile homes.[xxxix]
Income and Demographics
Median renter household income is $25,716. As of 1999, 28 percent of renter households were below the poverty line ($13,290 for a 3-person household).[xl]
Over two-thirds of renter householders are between 25 and 54 years of age. One renter out of eight is over 65.[xli]
Rental Housing Construction
Only 17 multifamily structures were built in the county between 1994 and June 2004, and 15 of those had fewer than 10 units.[xlii] Most of these were probably for ownership. A maximum of 18 units per acre is permitted inside the county’s designated development zones, subject to infrastructure capacity. Securing a zoning change from single-family to multi-family is usually difficult due to neighborhood opposition. A recent example was the August 2004 rejection of such an application for 10 large single-family lots near Everglades Elementary School. In the late 1990’s, church-sponsored attempt to rezone 10 acres for elderly rental housing was defeated by neighborhood opposition.
Aging single-family units, particularly older manufactured homes, are filtering down to the rental stock. About half of all rental units in the county (1,620) were built before 1980; 780 before 1970.
Fourteen percent of the county’s rental stock was built during the 1990’s (436 units).
Subsidized Rental Housing
The county has three subsidized rental projects, as follows:
Subsidized Rentals in Okeechobee County
|Project |Subsidy source |Units and BR |Rents and Max Income |Population served |Year built |
| | |count | | | |
|Tanglewood |RHS mortgage; RHS |10 1BR |Rent = 30% of income. |Elderly 9 units |Late 1980’s |
| |rental assistance |14 2BR |Up to $36,600 for family of|Disabled 5 units | |
| | |2 3BR |3. |Family 12 units | |
|El Mira Sol |HOME (FHFC) |15 s/f homes |$438 for HH at 50% of |Family |2002-3 |
| | | |median; $529 for HH at 60% | | |
| | | |of median. | | |
Source: Interviews with managers, Shimberg Center, U of Florida.
Eighteen people are waiting for an apartment at Tanglewood. It takes up to four years to reach the top of the list. Between June 2003 and September 2004, only three apartments turned over. One occupant moved out of state, and the other two left as their incomes rose and the 30 percent of income formula produced a rental amount that exceeded market rents. (Households must meet income limits when they move in, but they cannot be evicted when incomes increase.) All units at Tanglewood are wheelchair-accessible.
The longest-waiting person on the Okeechobee Commons list has been waiting three years for an apartment.
Okeechobee County does not have its fair share of subsidized rental housing. It has only one unit for every eight renter households with incomes between 20 and 60 percent of median income. The following table shows that the county’s ratio of 12.7 percent of low-income renters occupying a subsidized unit lags behind the ratio of neighboring counties and the state as a whole.
Subsidized Units as Percentage of Renters: Okeechobee, Counties East, and State (2001)
| |Subsidized Units as Percent of All Renters |Subsidized Units as Percent of Renters with Incomes |
| | |between 20% and 60% of Median |
|Okeechobee |4.9% |12.7% |
|Martin |8.7% |30.5% |
|Palm Beach |10.7% |37.9% |
|St. Lucie |11.8% |47.4% |
|Florida |11.3% |36.8% |
Source: Shimberg Center, Univ. of Florida, Rental Housing in Florida.
The county has no Section 8 Housing Choice vouchers or public housing units, HUD’s two major housing subsidy programs. Section 8 vouchers allow low-income renters to afford privately owned rentals. Public housing is owned by government entities. Neighboring counties have the following number of vouchers and units:
Section 8 Vouchers and Public Housing Units, Counties East of Okeechobee
| |Section 8 Vouchers |Public Housing Units |
|Palm Beach County Housing Authority |2,595 |543 |
|West Palm Beach Housing Authority |1,994 |712 |
|Housing Authority of the City of Stuart |77 |70 |
|Housing Authority of the City of Fort Pierce |709 |826 |
|Indian River County Board of County Commissioners |345 |0 |
Source: Supportive Housing Report 3-04 by Technical Assistance Corp for Florida Housing Coalition.
Manufactured Home Rentals
Manufactured housing plays the same major role in Okeechobee’s rental stock as in its ownership housing. Nearly one-half of the county’s renter households (1,518) rent a manufactured home. (Source: Census 2000) Renters occupy 27 percent of the occupied manufactured homes in the county.
Not many new manufactured homes are placed into rental service. Only 156 manufactured homes built in the 1990’s are rentals. Manufactured homes filter down to the rental stock as they age. About 45 percent of MH rentals were built before 1980. Renters occupy a disproportionate share (39 percent, 572 units) of the county’s year-round occupied old mobile homes built before the 1976 HUD code.[xliii] These 572 obsolete and unsafe units constitute a clear and urgent housing need in Okeechobee County.
Few senior households rent manufactured homes. The MH renter age distribution is as follows:
MH Renters: Age of Householder
|Age |15-24 |25-34 |35-44 |45-54 |
|Okeechobee |$410 |$449 |$508 |$630 |
|Martin/St. Lucie |$501 |$549 |$711 |$925 |
|Palm Beach |$570 |$665 |$823 |$1,092 |
Including utilities.
Source: HUD
HUD’s market rent estimates are low for Okeechobee as of 2004. The actual median rent, including utilities, paid by Okeechobee renters in 1999 was $486 as determined by Census 2000.
Town Center Apartments is a 48-unit complex built in 1987, located at 1799 South Parrot. All units are 2-bedroom and rent for $550/month plus utilities. There were no vacancies as of September 2004.
Oak Lake Apartments, built in 1981 and located at 2355 SW 28th St.., offers two-bedroom apartments for $575 per month/plus utilities. Townhomes with 2BR-2BA rent for $800/month, plus utilities.
At the bottom end of the rental market are rooming houses, occupied either by all-Hispanic or all-African American tenants. An example is the “yellow apartments” at 206 SW 6th Ave., occupied by Hispanic tenants who pay $25 per week per person. Douglas Park has a few units of this kind as well.
Estimated market rents in late 2004 are as follows, with coastal county rents for comparison:
Average Market Rents, Okeechobee and Counties East 2004 (Utilities not included)
| |0 BR |1 BR |2 BR |3 BR |
|Okeechobee Single-family house or double-section MH, |n/a |n/a |$650 |$800 |
|good condition | | | | |
|Okeechobee single-section MH, good condition | |n/a |$550 |$675 |
|Okeechobee apartment |$400 |$450 |$565 |no data |
|Martin County apartment* | |$632 |$883 |$1215 |
|Palm Beach County apartment* |$663 |$963 |$963 |$1210 |
|St. Lucie County apartment* |$409 |$523 |$666 | |
*2001 telephone survey data has been adjusted upward by 3.5% per year through 2004 (3 yrs).
Source: Housing & Community Insight and Shimberg Center, Rental Housing in Florida Market Survey of complexes 17+ units, December 2001. (Data for Okeechobee alone was not collected by Shimberg survey.)
Occupancy Rate
The occupancy rate in the rental apartment market is estimated at 98 percent. Overall rental vacancies including single-family and manufactured home rental units are higher, in the 8-10 percent range. A comprehensive study of Okeechobee’s apartment rental market performed for Florida Housing Finance Corporation in October 2002 found only 4 units vacant, and estimated overall apartment occupancy at 97.6 percent.[xlv] The overall rental market including apartment and single-family/MH units was 10.4 percent in 1999 according to Census data.
Rental Housing Needs
Renter Incomes
Renter incomes are substantially less than owner incomes. The county’s median renter household income in 2003 was $25,716.[xlvi] More than one renter household out of four in Okeechobee lives in poverty. Households with very low incomes have difficulty raising enough cash even to gain access to the rental market. Most Okeechobee rentals require at least the first and last month’s rent up-front. In addition, renters have to pay deposits for telephone and utility service.
To afford an average quality 2-bedroom apartment unit with utilities in Okeechobee, an adult in a single-earner household would need to earn $12.40 per hour ($25,800/year) in order to avoid spending more than 30 percent of income for rent. Half of Okeechobee renter households earn less. A worker at the minimum wage would need to work 19 hours per day, 5 days a week, to afford the average Okeechobee 2-bedroom apartment with utilities.
The following table shows how renter household incomes were distributed by family size in 2000 and how they are projected for 2010.
Okeechobee Renter Income Distribution by Household Size, 2000 and 2010
|Renter |Percent of HUD Median Income* |Number Renter HH 2000 |Number Renter HH 2010 |
|Household Size | | | |
|1-2 | ................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related searches
- statistics population and sample example
- population and sample meaning
- difference between a population and a sample
- population and sample in research
- examples of population and sample statistics
- population and sample problems
- identify population and sample
- census of population and housing
- us census population and housing
- population and demography pdf
- population and sample pdf
- example population and sample