Housing

Develop an adequate supply of quality housing affordable to all income groups in the region, located in accordance with regional land use and transportation goals.

Policy Background
Affordable housing opportunities have become more limited across the region. Once an issue which concerned only low-income households, many moderate and median income households now have difficulty securing affordable housing.

The Consumer Price Index (CPI) is a measure of the change over time in the prices paid by urban consumers for a fixed market basket of consumer goods and services and is a U.S. City Average. The market basket's goods and services include: food, clothing, homes, automobiles, fuel, fees to doctors, lawyers and beauty shops, and rent, repair cost, public utility rates, and others. As opposed to the broadly defined CPI as a general measure of inflation, the CPI's housing component is more narrowly focused providing data for homeowners' and renters' cost, fuel, utilities, and household furnishings and operation. Many of these housing variables are higher in the Delaware Valley than in the nation.

In addition to changes in the cost of housing, regional wages must be at levels that allow a family earning the regional median income to be able to purchase a house. According to a 1990 DVRPC analysis of regional housing prices, a family earning the regional median could not afford to purchase the median priced home in 81% of the region's 353 municipalities. An affordability rule of thumb says that the proportion of a household's gross family income spent on rent or mortgage payments and other housing expenses should be less than 30%. To increase affordability, regional earnings should rise at the same rate, if not faster, than the rate of change in the cost of housing.

Measurement
This indicator measures the change in the cost of housing relative to the change in the cost of all other goods and services and the rate of wage increases. The CPI is produced by the U.S. Department of Labor's Bureau of Labor Statistics and reflects 1982-84 spending patterns, which are set as a benchmark of 100. This indicator is based upon data from the April 1990, 1995 and April of 1997 CPI. The Philadelphia Consolidated Metropolitan Statistical Area (CMSA) CPI data includes the nine-county DVRPC region and Cumberland and Salem Counties, New Jersey, New Castle County, Delaware and Cecil County, Maryland. Average annual wage data are found in the Regional Economic Information System maintained by the U.S. Department of Commerce's Bureau of Economic Analysis. This indicator will be compared over time and with the nation.

Results
Between 1990 and 1997, the cost of housing increased at a pace equal to the cost of goods and services in the region. The regional CPI rose 4.9% from 1995 to 1997, which was less than the national increase of 5.3%. The CPI Housing Component in the region rose 5.6% between 1995 and 1997 versus 5.5 for the nation. Average annual wages for the region increased by 8.5% from $31,359 in 1995 to $34,034 in 1997, while wages in the U.S. increased by 8.9% from $27,359 in 1990 to $29,814.

This data suggests that wage growth in both the region and across the nation surpassed the overall rate of inflation and the increase in housing costs. Thus, the affordability gap appears to be shrinking for the typical wage earner.

Policy Background
The lack of affordable housing is now recognized as a serious problem in the Delaware Valley. Limited affordable housing opportunities have numerous negative outcomes for residents and employers. A lack of affordable housing in proximity to the workplace may lead to difficulties in attracting and retaining a qualified workforce, and may act as a deterrent to prospective employers seeking to expand or relocate within the region. Moreover, air pollution and traffic congestion levels increase within the Delaware Valley as employees unable to secure housing close to employment centers are forced to commute long distances.

Measurement
This indicator measures how quickly housing prices are changing throughout the region. Data on county median sales prices in Pennsylvania are provided by the Bucks, Chester, and Montgomery County Planning Commissions, Delaware County Department of Housing and Community Development, Realist Company (Philadelphia County Data only), and the Philadelphia Inquirer. The Management Institute at Rowan University and the Philadelphia Inquirer provide data on county median sales prices in New Jersey. Data on the Metropolitan Statistical Area (MSA), Primary Metropolitan Statistical Area (PMSA) and national levels were provided by the National Association of Realtors. The Trenton MSA includes Mercer County only, while the PMSA includes data for Salem County, New Jersey. Median sales prices are updated annually. This indicator will be compared over time and with the nation.

Results
Between 1995 and 1999, the median sale price in the Philadelphia PMSA increased 5.1% from $118,700 to $124,800. Between 1995 and 1999 the median sale prices for the U.S. increased 17.8% from $113,100 to $133,300. The highest gains during this period were in Philadelphia County (28.2%) and Bucks County (14.5%).