Understanding housing affordability in Monmouth — Stephen Howard for Monmouth City Council

Being able to afford housing has been in the national news for years now. Over the last year I’ve been hearing about it in Monmouth too. People speak of startlingly high average sale prices of homes, and a lack of space to build more houses. The city has been in the process of calculating our housing needs for the next twenty years, and as the affordability issue got louder, I thought I would do some digging to see what affordability means in our community.

Determining “Affordable”

A common metric for housing affordability is that it should not cost more than thirty percent of a household’s income. The US Census Bureau’s annual American Community Survey gives us a breakdown of household income in our community. Although the margins of error are extreme, this should at least allow us to ballpark some rough percentages, giving us a graph like this:

Income distribution in Monmouth. Large portions of the community in the less-than 10k bracket, and at the 60k to 99k bracket

A piece of information that would make this exploration clearer, but that does not seem to be publicly available yet, is household size in each income bracket. It would make it much easier to understand how many households in our community fall below the poverty line, and, as we’ll see in a minute, how to better match family sizes to available housing.

Even without that information, though, pay attention to the numbers in the right hand column, which indicate an “affordable” cost of housing for that income bracket using the definition at the start of this discussion.

Determining housing prices

Here is a chart of currently available housing units for either sale or rental in Monmouth’s city limits:

Housing currently available in Monmouth. Housing prices cluster around the $1000 to $1200 price range, with a modest amount available above, and very little below this price point

This is a snapshot in time of properties listed on Zillow. I am sure there is better data out there than I found. I think it would be a good idea for the city to find this better data and review the income to housing prices comparison updated on a regular basis.

For the purposes of assembling this chart, I calculated monthly housing costs for buying a home assuming a 30-year fixed mortgage at 3.9% after 10% down.

Putting it all together

Taking the affordable monthly housing numbers from the first chart, and comparing them to the cost of housing on the market, we can get a sense of the mismatch between what’s affordable and what’s available:

Chart comparing what families can afford for housing, versus what is available. Shows an oversupply of housing at $1000 per month and up, and a shortage below.

While the data should be refined, the comparison here makes it easy to see the mismatches. There is far more housing available for families making at least $50k per year than for those making less.

Now what?

What is still missing here is an understanding of income by household size. A family of four will have very different housing needs than a couple or an individual. To that end I have put in a request for this information with the census bureau, and hope to revisit this analysis with better data in the future.

I hope that with better data on affordability and availability, the city can make smarter choices around housing. It might reveal a strong need for an inclusionary housing policy, or demand for more market-rate housing of various kinds. Very likely it will indicate an all-of-the-above approach, reflecting the diverse needs of those who live here.