PART FOUR. HOUSING MARKET ANALYSIS

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1 PART FOUR. HOUSING MARKET ANALYSIS A. Housing Composition Adequate and safe housing is a basic human need. The American Public Health Association ranks housing as one of the top three issues affecting personal and community health. In determining the status of housing affordability and access in the City of and the Housing Authority Service Area, an assessment of housing conditions must be considered to include existing housing stock, structural data, household characteristics, ownership and rental costs, availability and location of housing to accommodate special needs populations, and planned additions to the housing market. 1. Housing Supply and Type There were 14,658 housing units in the City of in 2000, an increase of 10% from As shown in Table 4-1, growth in Horry County has outpaced both the City and the State since Housing in Horry County grew by 35.7%, while housing grew only 23.1% statewide from 1990 to There were 74,463 housing units in the Census tracts within the MBHA Service Area in Table 4-1. Housing Unit Growth, 1990 to 2000 City of, Horry County and South Carolina % Change ,327 14, % Horry County 89, , % South Carolina 1,424,155 1,753, % Source: US Census, As shown in Table 4-2, the City of offers a diverse housing market in terms of housing type. Single-family (1-unit detached) units are detached from other houses, with open space on all four sides. The US Bureau of the Census includes single unit, modular housing (built off-site and transported to the site) in their definition of single-family units. Detached single-family homes comprise almost one-third (32.5%) of all housing units within. By comparison, this percentage is lower than the nearly 46% of housing units in the MBHA Service Area and the 44.7% of housing units in the County that are sitebuilt, single-family homes. Most single-family construction is constructed entirely on-site, in compliance with local building code standards. Although this is the most popular type of housing in many areas, it is also generally the most expensive to construct. Single units that are attached (1-unit attached) have one or more walls extending from ground to roof that separate the unit from adjoining structures. This type of unit is more prevalent within the City, where 8.5% of all housing units are single-family attached units, as compared to the 3.5% of units in the MBHA Service Area and only 2.7% countywide. Duplexes include 2 housing units in one structure. Again, duplexes comprise a much larger City of, South Carolina 4-1

2 percentage of the City s housing stock at 4.5% when compared to the MBHA Service area at 2.6% and the County at 2.4%. Costs for attached single-family and duplex construction are also generally less per housing unit than site-built, single-family homes. Multi-family buildings contain more than 2 housing units within the structure. Construction costs for multi-family development are generally less per housing unit than other types of residential construction. These lower construction costs are passed on to buyers of condominium units and renters, making this housing type generally a less expensive alternative for residents. Almost half of the housing units in (46.3%) are multi-family units, with 68% of these units in smaller developments of less than 20 units. The percentage of multi-family housing in the City is much higher than within the MBHA Service Area at only 28.3% and statewide at 29.6%. Mobile homes are constructed off-site and transported to the site on wheels that are attached to the structure. Manufactured/mobile housing offers an initially less expensive alternative to site-built housing, particularly in more rural areas where less stringent regulation, lower land costs and increased land availability make the location of manufactured homes and manufactured home developments attractive to prospective homeowners and developers. Manufactured housing comprises less than 1% of housing units in the City, but accounts for 19.5% of units in the MBHA Service Area and 20.2% of units in the County. As in most communities, the term manufactured home includes both manufactured homes (those built after the 1976 HUD code) and mobile homes (those units that predate the 1976 HUD code). It should be noted that the City of encourages the location of modular singlefamily housing units in small subdivisions and on infill lots throughout the City in an effort to help keep housing costs affordable. Modular units are similar to manufacture homes in that they are built off-site and transported to the home site. Modular units are generally more visually compatible with site-built, single-family homes and are built according to the International Building Code the same building code that governs construction of site-built homes. Manufactured housing and mobile homes are generally built to a separate HUD building code that is less stringent than the International Building Code. Table 4-2. Housing Unit Types, 2000 City of, MBHA Service Area (Census Tracts) and Horry County MBHA Area Horry County # % # % # % Total 14, % 74, % 122, % 1 unit, detached 4, % 34, % 54, % 1 unit, attached 1, % 2, % 3, % Duplex % 1, % 2, % Multi-Family, 3-19 Units % 17, % % Multi-Family, 20+ units % 3, % % Mobile home 1, % 14, % 24, % Boat, RV, van, etc % % % Source: US Census, City of, South Carolina 4-2

3 Table 4-3 provides a comparison of housing composition from 1990 to 2000 in the City of. The percentage of housing units that are single-family, detached units increased from 30% in 1990 to 32.5% in 2000, while the percentage of units that are singlefamily, attached units decreased from 10.3% to 8.5% during the 10-year period. The percentage of duplexes and mobile homes also decreased slightly from 1990 to While the overall percentage of units that were multi-family increased from 45.7% to 46.3% during the decade, larger developments of 20 units or more decreased slightly from 15.1% to 14.8%. The percentage of multi-family units in smaller developments (less than 20 units) actually increased slightly from 30.6% to 31.5% during that time period. Also included in Table 4-3 is the percentage change in the number of units by housing type from 1990 to Overall, the number of housing units in the City grew by 9.6% (1,281 units), with single-family detached units experiencing the highest growth rate during the decade at nearly 19% (751 units). The number of smaller multi-family units grew by 13% and the number of larger multi-family units increased by 7.4%. Mobile homes increased by only 4.3% (47 units), while the number of attached single-family and duplex units actually decreased slightly from 1990 to Table 4-3. Housing Unit Types, 1990 and 2000 City of Unit Type # % # % % Change Total Units 13, % 14, % 9.6% 1 unit, detached 3, % 4, % 18.8% 1 unit, attached 1, % 1, % -9.5% Duplex % % -5.2% Multi-Family, 3-19 units 4, % % 13.0% Multi-Family, 20+ units 2, % % 7.4% Mobile home 1, % 1, % 4.3% Boat, RV, van, etc % % -35.0% Source: US Census, 1990 and From an examination of the median number of rooms per occupied housing unit, it is possible to obtain an idea of the size of housing units in the area. According to data provided in Table 4-4, the median housing unit size is 4.7 rooms per housing unit in smaller than both Horry County at 5.3 rooms and the State at 5.5 rooms. The median size of owner-occupied units in the City is 5.5 rooms, as compared to the County at 5.7 rooms and the State at 5.9 rooms. This is an indication that much of the owneroccupied housing stock in the City is composed of smaller units, and is likely a reflection of the large number of attached single-family and multi-family units within. Rental units were much smaller at only 4.1 rooms per unit in the City and 4.3 rooms per unit in both the County and State. This data indicates that many of the rental units in the City are smaller units and can also be attributed to the larger percentage of multi-family and lower density units within the City. City of, South Carolina 4-3

4 Table 4-4. Median Number of Rooms per Occupied Housing Unit City of, Horry County and South Carolina Occupancy Horry County South Carolina Total Owner occupied Renter occupied Source: US Census, Housing Construction Trends According to permit data included in Table 4-5, the City added a total of 794 single-family homes and 2,987 total housing units from 1994 to A total of 42,047 new housing units were permitted in Horry County during the last 10 years, of which 21,599 were single-family homes. Single-family construction accounted for 29.6% of housing construction in and slightly more than half (51.4%) in Horry County during this time period. Table 4-5. Housing Unit Permits Issued, City of and Horry County Horry County Year Single-Family Multi-Family Total Single-Family Multi-Family Total # % # % Units # % # % Units % % 113 1, % % 2, % % 151 1, % 1, % 3, % % 94 1, % 2, % 4, % % 144 2, % 2, % 4, % % 183 2, % 3, % 5, % % 411 2, % 2, % 4, % % 900 1, % 2, % 4, % % 236 2, % 2, % 4, % % 190 2, % 1, % 4, % % 565 3, % 1, % 5,130 Total % 2, % 2,987 21, % 20, % 42,047 Source: US HUD, State of the Cities Data Systems, Single-family permitting has remained steady in over the years, dropping to a low of only 46 permits in 1998 and peaking at 119 permits in Permitting of singlefamily homes rose steadily from 1994 to 1997, dropping slightly in 1998 and then rising steadily to a 10-year high of 3,363 permits in Multi-family permitting in the City was steady from 1994 to 1997 and began a sharp increase in 1998 that peaked in 2000 with 850 permits, dropped in 2001 and 2002, and then rose again to 458 permits in Multi- City of, South Carolina 4-4

5 family permitting in Horry County rose steadily from 1994 to a peak in 1998 with 3,138 permits. Permitting decreased steadily after 1998 until beginning to rise again in 2003 at 1,767 permits. Figures 5-1 and 5-2 illustrate City and County housing construction trends from 1991 to Figure 4-1. Housing Construction Permits, City of Permits Single-Family Multi-Family Year Source: US HUD, State of the Cities Data Systems, Figure 4-2. Housing Construction Permits, Horry County Permits 4,000 3,500 3,000 2,500 2,000 1,500 1, Single-Family Multi-Family Year Source: US HUD, State of the Cities Data Systems, City of, South Carolina 4-5

6 3. Future Housing Demand Estimates provided by Claritas, a national marketing information resources company, project a 19.9% increase in total housing units in the City of, a 30.4% increase within the MBHA Service Area, and a 25.1% increase Horry County housing units from 2000 to 2010 (Table 4-6). These increases will generate a housing count of 17,579 in, 124,294 in the MBHA Service Area, and 152,776 in Horry County by the end of the decade. This represents an increase of almost 3,000 housing units in the City, with an annual average increase of 292 housing units. From 2000 to 2010, housing in the MBHA Service area is projected to increase by 28,976 units, with an average annual increase of 2,898 housing units. Housing is projected to increase by 30,691 units in Horry County during the current decade, with an average annual increase of 3,069 units. Table 4-6. Projected Housing Unit Growth, 2000 to 2010 City of and MBHA Service Area (Census Tracts) 2000 Housing Units 2004 Housing Units 2009 Housing Units 2010 Estimated Housing Units Percent Change Jurisdiction 14,658 15,794 17,287 17, % MBHA Area 95, , , , % Horry County 122, , , , % Sources: Claritas, 2004; and City of, As provided in Table 4-3, multi-family homes have a substantial share of the housing market in the City of, accounting for more than 46% of the housing units in Single-family homes come in a close second at 32.5%. Census data from 2000 indicate that duplex units comprise 4.5% and attached single-family units 8.5% of all housing units. Only 7.8% of housing units are manufactured housing. Residential permit data from 1999 to 2003 (included in Table 4-7) reveals that multi-family construction outpaced single-family construction by nearly 47%. The percentage of multifamily housing increased in every year except 2002, accounting for nearly three-fourths (71%) of permits issued in 1999, 81.1% of permits issued in 2003, and 94.4% of permits issued in While the size of multi-family projects greatly influences the numbers of units permitted each year, the percentage of multi-family units permitted has remained consistently high in recent years. The low housing market share of manufactured homes within the City of is not anticipated to change significantly in coming years. The primary reason is the high cost of land in the City. Another reason is that existing mobile home parks are being phased out, to be replaced by site-built housing and mobile home districts are somewhat limited within the City. Manufactured homes are allowed in only 3 districts, with one of these districts designated for mobile home parks. However, these zoning classifications are available through rezoning of existing properties and for newly annexed properties. Within the unincorporated area of the MBHA service area, manufactured housing will be more likely to retain its share of the housing market and may increase slightly in coming years in City of, South Carolina 4-6

7 response to improvements in the construction and appearance of manufactured housing products, the availability of less expensive land further from the oceanfront, and the unmet need among many residents for affordable housing. In response to negative feedback related to older mobile home parks in the County, lower density subdivisions catering to manufactured housing units that look similar to site-built housing may emerge as an alternative to existing higher density mobile home parks. It is expected that these housing trends within the City of will continue into the foreseeable future, with multi-family housing (including duplexes and attached singlefamily units) accounting for approximately 70% and single-family housing approximately 30% of all new housing. When these trends are applied to existing housing stock, it is likely that the housing mix will change slightly over time, with multi-family housing (including duplexes and attached single-family units) comprising an even larger percentage than the 59.3% it accounted for in 2000 and manufactured housing dropping to a lower percentage than the 7.8% it comprised in Although it is challenging to determine the direction that single and multi-family housing will take in coming years, it can be assumed that current trends will continue into the foreseeable future barring unforeseen and significant changes in factors such as interest rates, market trends, and changing technology. As increases in land and construction costs along the Grand Strand steadily drive home prices upward, residential developers are beginning to move in two distinct directions 1) building more expensive, upscale homes that offer higher profit margins, and 2) building higher density townhome projects that offer a more affordable option than single family homes. As this trend continues, the development of more affordable housing will occur outside the City of and closer to Conway and the Highway 707, 9, and 905 corridors that extend outside the MBHA service area. Table 4-7. Housing Trends for Permitted Residential Dwellings, City of Single-Family Homes Multi-Family Homes Total Housing Year # % # % Units % % % % % % % % % % 565 Total % 2, % 2,987 Source: US HUD, State of the Cities Data Systems, Projected housing unit growth by Census tract provided by Claritas and shown in Map 4-1 indicates that the future high growth areas within the MBHA Service Area will be concentrated to the north of the City of across US Highway 17 and to the east of the City of North. A small portion of the City of is included City of, South Carolina 4-7

8 in Census tract 603 a tract expected to grow by more than 53% from 2000 to Areas expected to lose housing units include tracts 601 and 701 located in the more rural portion of the MBHA Service Area, and tracts 501 and 511 both located just outside of the City of and attractive to commercial development. Map 4-1. Projected Housing Unit Growth by Census Tract, City of and MBHA Service Area (Census Tracts) Horry County 301 North Carolina Georgetown County MBHA Service Area Atlantic Ocean 402 Future Housing Units % % % % MBHA Service Area Source: Claritas, Housing Condition Reflecting the Grand Strand s emergence as a year-round tourist and popular retirement destination, housing stock in the City and County is considerably newer than the State as a City of, South Carolina 4-8

9 whole. The median year of construction for housing units in the City of is The median for both the MBHA Service Area and Horry County is The median year of construction statewide was much older at More than half (50.9%) of housing units in were built before 1980 and 18.5% (2,704 units) were built prior to Housing countywide was younger with 31.9% of housing units built before 1980 and only 9% built before More than half (53.5%) of housing units statewide were built before 1980 and 20.6% were built before Nearly 15% of housing units in have been constructed since 1990 considerably lower than the County at 37.1% and the State at 25.8%. Table 4-8. Year Housing Units Built, 2000 City of, Horry County and South Carolina Horry County South Carolina Year Units Built # % # % # % Total Housing Units 14, % 122, % 1,753, % Built 1999 to March % 6, % 63, % Built 1995 to % 23, % 206, % Built 1990 to % 14, % 184, % Built 1980 to , % 37, % 362, % Built 1970 to , % 19, % 349, % Built 1960 to , % 8, % 227, % Built 1950 to , % 5, % 166, % Built 1940 to % 2, % 87, % Built 1939 or earlier % 2, % 107, % Source: US Census, The HUD publication Barriers to the Rehabilitation of Affordable Housing, provides methodologies to estimate the number of housing units within the City of that are substandard and in need of rehabilitation (Table 4-9). Moderate rehabilitation involves extensive improvements such as new wiring and repair or installation of kitchen and/or bathroom fixtures. Substantial rehabilitation extends to structural improvements and replacement of mechanical equipment. Both moderate and substantial rehabilitations often require the involvement of a contractor or other professional. Using housing age as the primary criterion, it is estimated that more than 11% of the housing units in (1,638 units) are in need of moderate or substantial rehabilitation. Moderate rehab is needed for as many as 1,106 units, while more extensive rehabilitation is likely to be needed for 532 units within the City. City of, South Carolina 4-9

10 Table 4-9. Estimated Housing Units Needing Extensive Rehabilitation, 2000 City of Housing Moderate Substantial Year Units Built Units # % # % , % % , % % , % % or earlier % % 19 Total 14, % 1, % 532 Sources: US Census, 2000; and US HUD, Barriers to the Rehabilitation of Affordable Housing, Volume I, As illustrated in Map 4-2, of the tracts with the most recent median year built tracts 410, 501, 51601, 51602, 60401, 60402, and none were located in the City. Newer construction that occurred between 1990 and 1997 is concentrated in the Little River/Longs area in the northeastern corner of the County and along the Highway 501 corridor and south toward Murrell s Inlet in Georgetown County. The tracts with the oldest median year built are both located within the City of tract 507 and tract 510 that includes the former Air Force Base. City of, South Carolina 4-10

11 Map 4-2. Median Year Housing Units Built, 2000 City of and MBHA Service Area (Census Tracts) Horry County North Carolina Georgetown County MBHA Service Area Atlantic Ocean Median Year Built MBHA Service Area Source: US Census, While 2000 Census figures indicate that less than 1% of all housing units in lack complete plumbing and kitchen facilities, the reality is that 31 housing units are without complete plumbing facilities and 90 are without complete kitchen facilities (Table 4-10). The percentage of housing units in Horry County lacking complete plumbing and kitchen facilities is slightly higher but still under 1%. More than three-fourths (77.4%) of the occupied housing units in that lack complete plumbing were occupied by renters and less than one-quarter (23%) by owners. More than half (56%) of the County s occupied units that lacked complete plumbing facilities were owner-occupied. Nearly 84% of occupied housing units in the City lacking complete kitchen facilities were occupied by City of, South Carolina 4-11

12 renters, as compared to the County where more than half (56.2%) of the units lacking kitchen facilities were occupied by owners. Table Housing Lacking Complete Plumbing and Kitchen Facilities, 2000 City of and Horry County Horry County # % # % Total Housing Units 14, % 122, % Lacking Complete Plumbing Facilities % % Total Occupied Units % % Owner Occupied Units % % Renter Occupied Units % % Lacking Complete Kitchen Facilities % % Total Occupied Units % % Owner Occupied Units % % Renter Occupied Units % % Source: US Census, Another indicator of housing condition is evidence of overcrowding. Housing units are considered to be crowded when there are 1.01 or more household members per room (including baths and kitchens). Table 4-11 indicates that 3.8% of all occupied housing units (392) within the City of have 1.01 or more persons per room much higher than for the County at 2.9% and higher than the State at 3.2%. The percentage of housing units with 1.01 or more household members per room in owner-occupied units in equaled that of the County and was lower than the State average. Renter-occupied units were the most overcrowded units citywide, with 5.9% of units having 1.01 or more persons per room. While this percentage was lower than the 6.1% of rental units statewide with 1.01 or more household members per room, it was higher than the 5.7% of rental units countywide that were overcrowded in Table Persons per Room for Occupied Housing Units, 2000 City of, Horry County and South Carolina Units with 1.01 or more Persons per Room Owner Occupied Units All Occupied Units % of all Occupied HU # % of all Owner Occupied HU # Renter Occupied Units % of all Renter Occupied HU Jurisdiction # % % % Horry County 2, % 1, % 1, % South Carolina 49, % 23, % 25, % Source: US Census, City of, South Carolina 4-12

13 5. Occupancy and Tenure As provided in Table 4-12, the total number of housing units in Horry County grew by more than 35% from 1990 to 2000, while the increase in housing units in the City of grew by a more modest 10%. The number of occupied housing units in the County rose by nearly 47%, due in large part to the growing number of full-time, year-round residents. Owner-occupied housing increased as well during the last decade, with the number of owner-occupied units rising by more than 20,000 in the County and by more than 900 in the City. Although renter occupied housing also grew in the County by 25.7%, it declined in the City by 2%. The renter vacancy rate fell by approximately 7% in both the City and County from 1990 to 2000, reflective in part of the area s transition to a year-round economy. Table Housing Occupancy and Tenure, City of and Horry County Horry County Housing and Ownership Change % Change Change % Change Total Housing Units (HU) 13,327 14,658 1, % 89, ,085 32, % Occupied HU 9,603 10, % 55,764 81,800 26, % Vacant HU 3,724 4, % 34,196 40,285 6, % Owneroccupied HU 4,483 5, % 38,198 59,713 21, % Renteroccupied HU 5,120 5, % 17,566 22,087 4, % Homeowner Vacancy Rate 5.3% 4.1% % 3.2% Renter Vacancy Rate 25.5% 18.2% % 30.2% Source: US Census, More than 71% of housing units in and 63.3% of the housing units in the MBHA Service Area Census tracts are occupied. Approximately 29% of the City s housing units and 36.7% of the units in the MBHA Service Area are vacant (Table 4-13). Nearly half (47.9%) of occupied housing units in are rental units high when compared to the 28% of occupied units in the MBHA Service area, 27% in Horry County, and 27.8% statewide that are renter-occupied. City of, South Carolina 4-13

14 Table Housing Occupancy and Tenure, 2000 City of and MBHA Service Area (Census Tracts) MBHA Area Housing and Ownership # % # % Total housing units 14, % 95, % Occupied housing units 10, % 60, % Owner-occupied housing units 5, % 43, % Renter-occupied housing units 4, % 16, % Vacant housing units 4, % 35, % Source: US Census, As shown in Table 4-14, the percentage of vacant housing in is lower at 29% than the greater MBHA Service Area and Horry County at 36.7% and 33%, respectively, but more than twice as high as the percentage statewide at only 12.5%. The percentage of vacant units used for seasonal, recreational or occasional use in the MBHA Service Area at 68.7% was nearly 4 times than the City at 17.6% and more than 3 times the percentage countywide at 20.4%. The percentage of vacant units used for seasonal, recreational or occasional use in was four times larger than the State rate of only 4%. However, the Planning staff of the City of notes that the Census count of the City s vacant housing units is inaccurate due to difficulties in distinguishing a truly vacant unit (for sale or rent or unoccupied) from a unit that is used as a second or vacation home during Census field counts. City Planning staff estimate that the true vacancy rate for the City is actually much lower, while the number of vacation or second homes is substantially higher than indicated by 2000 Census figures. Table Percentage of Vacant Housing for Seasonal, Recreational or Occasional Use, 2000 City of, MBHA Service Area (Census Tracts), Horry County and South Carolina Percent Seasonal, Jurisdiction Percent Vacant Housing Units Recreational or Occasional Use City of 29.0% 17.6% MBHA Service Area 36.7% 68.7% Horry County 33.0% 20.4% South Carolina 12.5% 4.0% Source: US Census, As illustrated in Map 4-3, renter-occupied housing is concentrated in and near the City of. The tracts with the highest percentage of renter housing are either completely or partially within the City and include tracts 510 (including the former Air Force Base), 505, 506, 507 and 508. Census tracts with the lowest percentage of renters and therefore the highest percentage of owners include tracts 301, 401, 402, 511, 51401, 51602, 603, and City of, South Carolina 4-14

15 Map 4-3. Percentage of Renters in Occupied Housing Units, 2000 City of and MBHA Service Area (Census Tracts) Horry County North Carolina Georgetown County MBHA Service Area Atlantic Ocean Percent Renter Occupied % % % % MBHA Service Area Source: US Census, Housing Value and Rent Costs A recent report by The Sun News using data from the Housing Opportunity Index (HOI) published by the National Homebuilders Association noted that Horry County is among the least affordable areas for single-family homes in the State. The HOI is driven by two key variables income and housing cost. The Index ranking is determined by the share of homes sold in a particular region that would have been affordable to a family earning the region s median income as defined by the annual median family income estimates for metropolitan areas published by the Department of Housing and Urban Development. City of, South Carolina 4-15

16 The -Horry County area ranked well behind housing affordability in other MSAs such as Columbia, Greenville-Spartanburg-Anderson, and Charlotte-Gastonia-Rock Hill, and nearly even with the high-priced Charleston-North Charleston region. Based on an estimated 2004 median family income of $51,500, a family in Horry County could only afford approximately 61-66% of single family homes on the market. Comparatively, the Columbia MSA ranked as the third most affordable region in the South, in which a family earning the area s median income can afford 84% of the area s single-family homes. The median value for housing units in the City of in 2000 was $103,700 well above the median value of housing units countywide at $95,400 and statewide at $83,100 (Table 4-15). Median rent also mirrors value, with rent exceeding the County and State medians by $40 and $124, respectively. Table Housing Value and Rent for Occupied Units, 2000, Horry County and South Carolina Jurisdiction Median Housing Unit Value Median Gross Rent $103,700 $634 Horry County $95,400 $594 South Carolina $83,100 $510 Source: US Census, As shown in Map 4-4, tracts with median housing values in the highest range are located along or near the beachfront. Tracts with the highest median values in the MBHA Service Area include 405 (half of tract is within North ), 502, 503, 504, 507, 508 (nearly all of the tract is within the City of ), 512 (Surfside ), and tract (not located on the beach). Tracts with the lowest median housing values in the MBHA Service Area include 301, 509 (most of the tract is within ), 511 (includes State Park and several campgrounds), 601, and 701. City of, South Carolina 4-16

17 Map 4-4. Median Value for all Occupied Housing Units, 2000 City of and MBHA Service Area (Census Tracts) Horry County North Carolina Georgetown County MBHA Service Area Atlantic Ocean Median Housing Unit Value $60,200 - $74,000 $74,001 - $98,400 $98,401 - $132,900 $132,901 - $187,100 MBHA Service Area Source: US Census, At $634, median rent for occupied housing units in the City of was significantly higher than median rent countywide at $594 and statewide at only $510. As illustrated on Map 4-5, tracts with the highest median rent in the MBHA Service Area include 501, 502 (on the beach), 503 (within the City and on the beach, 510 (the former Air Force Base), 513 (on the beach), (along US Hwy 17), and (north of the City and across US Hwy 17). Tracts with the lowest median rents in the MBHA Service Area include 301 (west of the waterway), 506 and 507 (both on the beach and mostly within the City), 511 (although on the beach, the tract includes several campgrounds), 51601, 601, 603, and 701. City of, South Carolina 4-17

18 Map 4-5. Median Housing Unit Rent, 2000 City of and MBHA Service Area Census Tracts Horry County North Carolina Georgetown County MBHA Service Area Atlantic Ocean Median Gross Rent $431 - $583 $584 - $629 $630 - $660 $661 - $874 MBHA Service Area Source: US Census, The Horry County housing market is an active one characterized by a high demand, higher land and production costs, and a limited supply, especially for nontraditional and affordable housing. Multiple Listing Service (MLS) data for Horry County shows a growing number of residential listings, with rising average and median prices for homes, and a decreasing average number of days on the market. As shown in Table 4-16 the average number of days on the market for residential units (excluding condominiums and townhouses) in Horry County has dropped from 113 days in 2002 to only 93 days in The median price has risen from $131,400 in 2002 to more than $153,600 in 2004, while the average price has grown from $159,297 to nearly $200,000. Meanwhile, the average days on the market for townhouses and condos has City of, South Carolina 4-18

19 dropped 42 days from 137 days in 2002 to only 95 days in The median price for these units has risen from $96,500 in 2002 to more than $111,000 in 2004, while the average price has grown from $119,825 to $144,665 in just two years. Table Sold Housing Market Summary for Horry County, 2002 to 2004 Type of Unit/Year Number of Sales Average Price Median Price Average Days on Market Residential ,695 $159,422 $131, ,116 $172,567 $140, ,958 $196,181 $153, Condominium/Townhouse ,343 $119,799 $ 96, ,994 $125,467 $ 99, ,919 $144,665 $111, Source: MLS Sold Market Analysis Report Data, Real estate data published in The Sun News for January and February of 2004 and 2005 for the Grand Strand area indicates that the number of days single-family homes were on the market has dropped to 81 in 2005 from 112 in By comparison, the number of days that condominiums were on the market was nearly triple at 152 days in 2004 than the 57 days that homes are now on the market in This dramatic decrease in days on market is attributable to several factors including demand and interest rates. However, another factor that is overlooked, but is likely having a significant impact in this area, is a trend known as flipping. Flipping is the practice of buying properties for resale and has become very popular with former stock market investors who are turning away from disappointing market returns and are attracted by high property appreciation rates. Investors dabbling in flipping can drive up real estate prices and assessments, often resulting in a decrease of housing that is affordable to many potential buyers. Prices have increased by 25% for single-family homes and 17% for condominiums in the Grand Strand from January and February of 2004 to It is likely that these increases will continue and may even go higher as units bought by real estate flippers are sold to more conventional real estate buyers in the short term. 7. Residential Energy Costs While rent or mortgage payments represent the largest percentage of housing costs, additional costs such as electricity, heating fuel, and water and sewer charges can also play a major role in affordability. Heating and cooling account for more than 46% of energy usage in a new single-family home, and can represent an even greater percentage of energy usage in older housing units that lack adequate insulation, weatherproofing and thermal windows and doors. In an effort to reduce residential energy usage, the South Carolina General Assembly adopted a mandatory statewide building code in 1997 that includes the Council of American Building Officials Model Energy Code. The Energy Code establishes minimum insulation standards and requires double-paned or storm windows. Both the City of and Horry County operate under this code and enforce these City of, South Carolina 4-19

20 minimum energy efficiency standards. However, homes constructed prior to 1997 were built to much less stringent standards. This is particularly true for homes built prior to the mid-1970s and manufactured homes produced before As discussed previously and listed in Table 4-7, much of the housing stock within the City of and within the MBHA Service Area was built before the adoption of the Energy Code. Older homes in general have lower values and rent for less, making them attractive to families with low and moderate incomes. Unfortunately, the lower rents and mortgage payments are sometimes offset by the additional cost of heating and cooling an older, less energy-efficient structure. A family may move into an older home because of the lower rent, but may be forced to move because they simply can not afford the high electric or heating fuel bills. 8. Housing Affordability It is universally accepted that a housing unit is considered affordable if it costs no more than 30% of the occupant s income. Conversely, a household is considered cost-burdened if its occupants are paying more than 30% of their income for housing costs Census data is useful in developing a picture of housing affordability in the City of and the MBHA Service Area. In 1999, median rent comprised 26% of household income in the City of, as compared to 25% countywide and 24.4% statewide (Table 4-17). This comparatively high percentage suggests that housing affordability is a serious concern for many area residents. Table Owner and Renter Costs as a Percentage of Household Income for Specified Housing Units, 1999 City of, Horry County and South Carolina Median Selected Owner Costs as a Percentage of Household Income Median Gross Rent as Percentage of Household Income With a Mortgage Without a Mortgage Jurisdiction $ % $ % $ % $ % $256 >10% $ % Horry County $ % $228 >10% $ % South Carolina $ % $240 >10% $ % Source: US Census Bureau, A significant number of residents remain cost-burdened, sometimes spending so much for housing that other necessities of life such as medical care and food must take a back seat. Within the City of, residents in more than 1,900 rental housing units (38.2% of all rental units) and 807 homeowners (23.1% of all owner-occupied units) are costburdened (Table 4-17). This is a notable increase from the 30.6% of renters and 17.6% of homeowners who were cost-burdened a decade before. Within the larger MBHA service area, more than 6,000 renters and 6,188 homeowners spend more than 30% of their household income on monthly housing costs. While the percentage of renters in the MBHA City of, South Carolina 4-20

21 service area that are cost-burdened increased from 33.7% in 1989 to 35.8% in 1999, the percentage of cost-burdened homeowners decreased from 22.3% to 21.8% during the same period. Cost-burden within individual Census tracts varies widely throughout the MBHA service area. The percentage of cost-burdened renters in 15 tracts decreased from 1989 to Twelve (12) tracts experienced a decrease in homeowners who were cost-burdened during the ten-year period. The percentage of units that were cost-burdened decreased for both homeowners and renters in 8 tracts 301, 501 and 506 (both largely in the City), 512, 513, 514, 515, and 603 (a small portion within the City). Most notable is tract 506, where City of CDBG funds have been focused extensively in recent program years. The percentage of cost-burdened renters in tract 506 decreased from 45.7% in 1989 to 41.3% in 1999, while cost-burden for homeowners decreased from 23% to 20.7% during that time period. This decrease can be attributed in large part to the improvement efforts of the City of through their CDBG program and activities, as well as assistance programs provided by the Housing Authority. Cost-burden is on the rise in some of the poorest areas of the City. The percentage of homes that are cost-burdened rose substantially in tracts 507 and 509 from 1989 to All of tract 507 and most of tract 509 is defined as low and moderate income by HUD and will be the primary focus of CDBG activities in the coming program years. Table 4-18 provides data related to cost-burden for renters and homeowners in the City of and Census tracts within the MBHA Service Area. City of, South Carolina 4-21

22 Table Households Paying 30% or More of Household Income for Gross Rent or Monthly Owner Costs, 1989 and 1999 City of and MBHA Service Area (Census Tracts) Renters (Gross Rent) Owners (Monthly Owner Costs) Census Tracts # % # % # % # % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % 0 0.0% 5 3.5% % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % MBHA Area 4, % 6, % 3, % 6, % 1, % 1, % % % Source: US Census, 1990 and Map 4-6 depicts the percentage of occupied rental housing units that pay 30% or more of their household income for rent by Census tract. Tracts where the highest percentage of renters are cost-burdened (ranging from nearly half to more than half of renters) include 502 (on the beach), 507 (within the City and on the beach), 509 (most of tract is within the city), 60201, and Tracts in which the lowest percentage of renters are cost-burdened City of, South Carolina 4-22

23 are located in the less urbanized areas of the MBHA Service Area and include tracts 301, and 701. Map 4-6. Percentage of Rental Housing Units Paying more than 30% of Household Income for Rent, 1999 City of and MBHA Service Area (Census Tracts) Horry County North Carolina Georgetown County MBHA Service Area Atlantic Ocean 402 % Rental Units Paying 30% or More of Income for Rent % % % % MBHA Service Area Source: US Census, A more detailed analysis of housing affordability on the county level is provided by the National Low Income Housing Coalition (NLIHC). The NLIHC is an organization dedicated to ending the affordable housing crisis in America. The Coalition works toward this end by providing up-to-date information to the public, formulating policy, and educating the public on housing needs and strategies for solutions. One of the obstacles that the NLIHC has targeted is the lack of knowledge on the part of the general public on the extent of the affordability problem in their own communities. The NLIHC produces a City of, South Carolina 4-23

24 publication entitled Out of Reach that contains income and rental housing cost data by state, metropolitan area, and county. For each, it calculates the income that renter households need in order to afford rental housing and estimates the number of households that can not afford to pay the Fair Market Rent (FMR). The report also calculates what these households would need to earn in order to pay the rent and maintain housing costs at 30% of their income. FMRs for fiscal year 2004 are estimated by HUD based on 2000 base information. Likewise, State average owner median incomes and renter median incomes are based on 2000 median income data as a percent of household median income and assume the relationship between renter and owner incomes remains unchanged since NLIHC data reveals that an extremely low income Horry County household earning $15,450 (30% of the area median income of $51,500) can afford a monthly rent of no more than $386, while the Fair Market Rent for a two-bedroom housing unit is $665 in Horry County. A minimum wage earner ($5.15 per hour) can afford monthly rent of no more than $268. Social Security recipients (receiving $564 monthly) can only afford a monthly rent of $169 or less, less than one-third of the local Fair Market Rent of $569 for a one-bedroom unit. As shown in Table 4-19, a Horry County resident earning the Federal minimum wage ($5.15 per hour) must work 99 hours per week to afford a two-bedroom unit at the County s Fair Market Rent. A County resident would have to earn $12.79 per hour for 40 hours a week to afford a two-bedroom unit at the area s FMR. This represents 248% of the present minimum wage in South Carolina. While the housing wage for Horry County residents is higher than the State level of $11.04, it is much lower than the national housing wage of $ Between 2003 and 2004, the wage needed to afford a two-bedroom housing unit in Horry County increased by 12% more than double the statewide increase of 4.8%. Table Maximum Affordable Housing Cost, 2004 Horry County and South Carolina Hourly Wage Needed to Afford (@ 40 hours./week) One Two Housing Wage As % of Federal Minimum Wage ($5.15/hour) One Two Bedroom Bedroom Work Hours/Week Necessary at Federal Min. Wage to Afford One Two Bedroom Bedroom Bedroom Bedroom Location FMR FMR FMR FMR FMR FMR Horry County $10.94 $ % 248% South Carolina $9.74 $ % 214% Source: National Low Income Housing Coalition, Out of Reach, Affordable Housing Demand The supply and demand for affordable housing within the City of is impacted by a variety of factors including housing availability, rising housing costs, economic shifts, and seasonal employment trends. While an accurate projection of the need for additional housing that is affordable for a wide range of incomes is difficult to determine, an estimate City of, South Carolina 4-24

25 can be developed using information available from the 2000 Census and HUD s Comprehensive Housing Affordability Strategy (CHAS) Data. Table 4-20 includes estimates of annual incomes (high end) and the highest affordable rents for households within the City s LMI categories. Extremely low-income households with incomes of 30% or less of the median household income for the City can afford to spend only $266 per month for rent. Very low-income households with incomes of half or less of the City s median household income can afford $444 per month for rent and low-income households making 80% or less of median household income can afford to spend $710 per month on rent. Table Affordable Monthly Rent by LMI Category, 2000 City of Affordable Housing - 30% of Income Highest Affordable Monthly Rent Annual Income Group Income Median HH Income $35,498 $10,649 $887 Extremely Low-Income 30% MHHI Very Low-Income 50% MHHI Low-Income 80% MHHI $10,649 $ 3,195 $266 $17,749 $ 5,325 $444 $28,398 $ 8,520 $710 Source: US Census, 2000; City of Estimates, As presented in Table 4-21, there were 152 housing units in the City in 2000 within the price range that was affordable to extremely low-income renters. Assuming that most residents find the best possible home to rent within their price range, there were 500 housing units within that were affordable to very low-income renters. Nearly 2,600 of the City s rental units were affordable to households within the low-income category. The number of households within each LMI category for 2000 can be derived from HUD s Comprehensive Affordability Strategy (CHAS) Data. An analysis of available housing units and the number of households within each income category reveals a deficit of 480 housing units for extremely low-income households and a 184-unit deficit for very low-income households in. This represents a current unmet housing need of 664 units for households making 50% or less of median household income. More than 72% of the housing units needed to meet current demand are for the poorest City residents, with monthly rents of only $266 or less. Affordable housing projects currently under development in the area will meet some of this need, adding 169 units by the end of However, even after the new units enter the housing market there remains a need for an additional 495 units for households with extremely low and very low-incomes. The need for affordable housing is balanced to some extent by financial assistance such as Section 8 housing assistance vouchers. More than 730 residents in the MBHA Service Area are receiving financial assistance through Section 8 vouchers, with an additional 775 families on the waiting list. Section 8 assistance provides subsidies for privately owned City of, South Carolina 4-25