MReport July 2022

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56 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA growth has surpassed home-price appreciation in Q2 of 2022 in only 65 of the counties in the report (11%), including Cook County, (Chicago), Illinois; Oakland County, Michigan (outside Detroit); Fairfield County, Connecticut (outside New York City); Erie County (Buffalo), New York; and San Francisco County, California. Homeownership costs now require more than 28% of average local wages in two-thirds of the nation. Major ownership costs on median-priced, single-family homes in the second quarter of 2022 consume more than 28% of average local wages in 388 of the 575 counties analyzed (67%), assuming a 20% down payment. That is up from 52% in Q1 of 2022 for the same group of counties and 44% in Q2 of last year. "Worsening affordability ap- pears to be having an impact on demand, which could lead to prices plateauing or even correct- ing modestly in some markets," Sharga said. "Many potential buy- ers may elect to continue renting until market conditions improve. Others might adjust their sights and look for smaller properties or homes that are further away from major metro areas. And it's possible that worsening affordabil- ity could accelerate the migra- tory trends that the COVID-19 pandemic started, as residents in high cost, high tax states who can now work from home look for less expensive places to live." All but two of counties ana- lyzed have seen an increase in the portion of average local wages consumed by major ownership expenses from both the first to Q2 of this year and from Q2 of last year to the same period in 2022. Counties that require the larg- est percentage of wages are Santa Cruz County, California (116% of annualized weekly wages needed to buy a home); Marin County, California (outside San Francisco) (109.6%); Kings County (Brooklyn), New York (102.9%); Maui County, Hawaii (92%); and San Luis Obispo County, California (88.2%). Aside from Kings County, New York, counties with a population of at least 1 million where major own- ership expenses typically consume more than 28% of average local wages in Q2 of 2022 include Orange County, California (outside Los Angeles) (82.1%); Alameda County (Oakland), California (77.2%); Queens County, New York (72.5%); and Riverside County, California (outside Los Angeles) (67.6%). Counties where the smallest portion of average local wages are required to afford the median- priced home during Q2 of this year are Schuylkill County, Pennsylvania (outside Allentown) (10.2% of annualized weekly wages needed to buy a home); Rock Island County (Moline), Illinois (12.4%); Cambria County, Pennsylvania (outside Pittsburgh) (12.9%); Macon County (Decatur), Illinois (13.4%); and Mercer County, Pennsylvania (outside Pittsburgh) (13.6%). Counties with a population of at least 1 million where major ownership expenses typically consume less than 28% of average local wages in Q2 of 2022 include Allegheny County (Pittsburgh), Pennsylvania (17.4%); Cuyahoga County (Cleveland), Ohio (18.4%); Philadelphia County, Pennsylvania (19.1%); St. Louis County, Missouri (21.4%); and Cook County (Chicago), Illinois (25.3%). Four in 10 counties require annual wages of more than $75,000 to afford a typical home. Amid the downward affordability trend, annual wages of more than $75,000 are now needed to pay Addressing Homelessness at the Real Estate Level Per an Urban Institute report, local governments and organizations, both public and private, should consider homelessness as a systemic issue, which can be solved with a multilayered approach. W orking to address the homelessness crisis throughout the country, the Urban Land Institute (ULI) has released a new report investigating how the real estate community is working to address this crisis on a nationwide scale. Overall, the report shows how to support people experiencing home- lessness through "creative housing solutions" and collaborations with community organizations, with the ultimate goal of providing abundant affordable and high-quality housing for affected and at-risk populations. According to numbers from the U.S. Department of Housing and Urban Development, 2020 was the fourth year in a row that experi- enced a higher homeless population than in the year past. The report goes on to say that homelessness should be treated as a systemic issue that necessitates the involvement and collaboration of the government, the private sector, philanthropic organizations, health and social ser- vices, faith-based organizations, and the public. In an effort to better inform players at every level, the ULI's report offers housing case studies, applicable lessons, and a blueprint that can be used at the community level that shows how the development com- munity can be an active partner in addressing homelessness. "More than ever before, homelessness is being driven by rapidly increasing housing costs, and the public and private sectors must work together both to meet the needs of the unhoused and to prevent more households from falling into homelessness," said Christopher Ptomey, Executive Director of the ULI Terwilliger Center for Housing. "This report offers creative models and examples of how the real estate com- munity is effectively leveraging its housing development, management, investment, and financing expertise to enable cities to overcome the growing challenge of homelessness." Key takeaways from the new report include: • Housing is important, but social services are essential: Housing is an essential first step in addressing homelessness, but it is not a solution in and of itself. Comprehensive social services are a criti- cal second component. Delivering one without the other offers little chance of successfully tackling the crisis. • Novel, creative solutions are needed: Nowhere is the need for in- novation more evident than in seeking to address homelessness. Two areas of focus are cost-effective construction methods and nongovern- mental funding sources. Private companies—both in real estate and in other sectors—have a vital role to play in the latter. • All segments of the community must play a role: Homelessness affects real estate, health care, social services, education, economic development, and more. Community collaboration is essential, par- ticularly among the private and public sectors. The real estate sector is obligated to provide cost-effective housing, and it is incumbent on governments to pursue bold policies that allow for more housing for people of all income levels. • Homelessness is a multifaceted issue, but in many cases links back to economics: Whether because of a lack of affordable housing, low wages, unexpected expenses, loss of employment, illness, lack of insurance, or a domestic issue, homelessness can be a result of economic stress.

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