Dire Straits

Hannah Edwards is on the frontlines of America’s housing crunch in the southernmost reaches of the U.S, and it’s a very tough battle.

Edwards works for Habitat for Humanity in the Florida Keys. The archipelago of small tropical islands offers some of the most expensive and housing constrained communities in the country.

“It’s pretty dire down here,” said Edwards, who is assistant director for the housing group’s affiliate in Key West and the Lower Keys, noting an entry-level home costs $700,000, with high costs driven by stricter building codes and exorbitant insurance costs because of hurricanes and the prevalence of short-term rentals and second homes. “We don’t have any more land. Land is at a premium.”

The average home price in the Florida Keys is more than $1.1 million, with Florida’s statewide home prices averaging $415,300, according to real estate firm RedFin. Home prices in Florida are up 67% since 2019.

Homeowners insurance rates in Florida averaged close to $11,000 annually in 2023 — more than $8,600 higher than the U.S. average — and are expected to approach $11,800 this year, according to Insurify, a Massachusetts-based insurance firm.

Apartment rents are just as burdensome, averaging more than $4,000 per month across the Keys, according to real estate firm Zumper Inc. That results in tourism-industry and other workers and their families living in crowded residences, older trailer parks or commuting significant distances.

‘JUST A DROP IN THE BUCKET’

But housing costs and the lack of affordable housing — especially for seniors, service workers and lower-income households — are not unique to the Keys or any other community.

Close to one out of three U.S. households (including more than 41% of renters) spend more than one-third of their income on housing, according to Harvard University.

Nationally, the median sales price for a home was $393,500, according to the National Association of Realtors. That’s up more than 57% from pre-pandemic levels in 2019.

The median asking apartment rent was $1,987 per month nationally in March, not far off the record high of $2,054 set in 2022, according to RedFin. That is roughly double pre-pandemic levels.

In the Mountain West, populations are growing, but don’t always have communities with critical mass to draw new construction and national builders. The lack of housing stock and affordable inventories is hitting middle-income and lower-income workers hard.

Scott Hoversland, executive director of the Wyoming Community Development Authority, said the situation is impacting service workers hardest, particularly in tourism-oriented areas.

“Rents have gone way up,” he said.

Average rents in Wyoming have risen from $652 in 2010 to $1,249 currently, according to numbers from Multinumeric LLC and RentalRealEstate.com.

That’s a 92% increase.

It’s a common trend across the region and the rest of the country, with average apartment rents also north of $1,200 in Idaho and Montana, approaching $1,800 in Colorado and Washington state, and above $1,600 in Florida and Oregon, according to RentalRealEstate.com.

Average monthly rents are even more expensive in big cities such as New York ($3,781), San Francisco ($2,825) and Boston ($3,369), according to Apartments.com

Meanwhile, available housing for middle-income and first-time buyers has decreased.

According to a new housing assessment in Wyoming, the median home value in 2010 was $174,000. The statewide figure now stands at more than $322,600, according to ATTOM Data Solutions.

That’s an 85% jump.

‘IT’S KIND OF CRAZY’

Hoversland said the rise in home prices and rents during the pandemic and the post-pandemic inflation wave and resulting interest rate hikes have discouraged entry level and move-up sales.

“The costs of most things have gone up,” he said. “Inflation is so high that it makes it tough for anybody to get in.”

Hoversland, who is also involved with Habitat for Humanity efforts, said the situation is tough in expensive areas, such as Jackson Hole, which struggles to keep and hire service workers (including snow plow drivers).

Hoversland said higher costs are also hitting builders, adding to their incentives to build more expensive homes.

He said the cost to build has gone from $150 per square foot in pre-pandemic real estate markets to $350 to $450 per foot now.

“It’s kind of crazy,” Hoversland said.

In Florida, Edwards said rising home values are stressing longtime homeowners with higher property taxes. She also worries about tourism workers (many of them living in trailers), teachers and public safety employees leaving the Keys.

“If they can’t buy a house, they are going to leave,” she said. “We aren’t going to have certain age groups. I think, in 20 years, I wonder how the economy is going to be working.”

Local Habitat for Humanity branches are helping seniors and other existing income-qualified homeowners with repairs and are developing some affordable units, but those are smaller projects trying to address a big challenge.

“That’s just a drop in the bucket, but it’s the best we can do,” Edwards said.

LEFT BEHIND

In northwestern Wisconsin’s Chippewa Valley, Susan Wolfgram and Paul Savides said housing challenges are pronounced, especially for lower-income workers and seniors making $30,000 or less per year.

They are part of an interfaith housing effort called JONAH (Joining our Neighbors, Advancing Hope) that aims to bring local developers, government planners and tenants together.

“We have 40% of our workforce that is making $30,000 or less per year,” said Wolfgram, who also serves on the Eau Claire Plan Commission and as co-director of the Eau Claire Tenant-Landlord Resource Center. “We don’t have any housing for those particular seniors and low-income folks.”

Like other regions, cost burdens and barriers have risen, with smaller apartments costing $1,000 per month and rental housing for families more than $2,000 per month, according to Wolfgram.

Savides said the entry point to buy a home is approaching $300,000.

“Wages are so far behind housing costs,” Wolfgram said.

But the Wisconsin pair, along with affordable housing cohorts in Wyoming, Florida and across the U.S., are working to overcome a host of challenges and implement creative ideas and best practices to address the housing crunch.

In Part 2 of this series, we will look at some of the impediments to building more affordable housing and how housing advocates are navigating those waters.