Hastings Introduces Legislation Investing $2.6 Billion in Affordable Housing Credits and Incentives FOR IMMEDIATE RELEASE Thursday, April 06, 2006   Washington, DC – U.S. Representative Alcee L. Hastings (D-Miramar) today introduced the Workforce Housing Act (WHA) of 2006, legislation which will dramatically increase the availability of affordable housing in South Florida and throughout the country. The bill invests $2.6 billion in working families struggling to find affordable housing and communities which want to provide incentives for its construction. “Owning a home embodies the core American values of individuality, responsibility and self-reliance. In 2005, however, only 11 percent of adults in America could afford to purchase a home at the national median purchase cost of $213,000. More and more, working class families are being priced out of the housing market by inflated property values and the lack of available affordable housing,” said Representative Hastings. “Affordable housing is not just an issue in South Florida and the Treasure Coast. It’s a problem nationwide. My legislation makes the necessary federal investment to help people become first-time home owners and encourages local governments to mandate the continued availability of affordable housing in their communities.” Highlights of the Workforce Housing Act include: · Establishes Tax-Exempt Mortgage Down Payment Accounts (MDPA): The WHA allows first-time home buyers to set aside up to $10,000 in tax-exempt wages into a Mortgage Down Payment Account (MDPA). The MDPA can be used to offset a down payment, closing costs, and other fees associated with purchasing a home. · Matches Low-Income and Middle Class Family MDPA Contributions: For individuals and families making up to 125 percent of the area median income (between $65,000 and $67,000 in Broward, Palm Beach, Martin and St. Lucie Counties and $52,000 in Hendry County), the federal government will match the contributions dollar-for-dollar in the form of a tax credit not to exceed $2,500 annually and $10,000 total. · Additional Down Payment Assistance to Low-Income Families: The WHA authorizes $1.6 billion over the next 8 years to provide individuals and families who make 80 percent or less of the area median income (between $52,000 and 54,000 in Broward, Palm Beach, Martin and St. Lucie Counties and $42,500 in Hendry County) and are purchasing a single-family home, townhouse, or condominium for the first time with a grant of up to 10 percent of the total cost of the home or unit up to $15,000. Individuals and families receiving the grant must participate in a financial counseling program to help them plan for the financial demands of homeownership. · Encourages Construction of Community-Based Affordable Housing: The WHA authorizes $1 billion over the next 8 years to provide financial incentives to developers who set aside no less than 25 percent of newly constructed homes at a price that does not exceed the median home purchase price in that area. Additional incentives are available to developers who build near mass transit routes and with energy efficient appliances and technology, including those which utilize solar technology. All homes constructed under this program must meet federal, state, and local wind-resistant and earthquake-protection codes. According to Florida Trend, South Florida and the Treasure Coast have seen the cost of a home skyrocket over the last five years, while wages have struggled to keep pace with inflation. In Ft. Lauderdale, the average cost of a home is now $383,900, a 116 percent 5-year increase compared with only a 6.6 percent income increase during the same time period. Ft. Pierce/Port St. Lucie residents have seen the cost of a home increase by 121 percent over the last 5 years to its current average of $267,500, while income has only increased by 5.8 percent during the same time period. In Miami, homes now cost an average of $363,000, a 108 percent 5-year increase, though wages have increased only by 6.1 percent. Finally, in the West Palm Beach area, the average home now costs $399,900. This is a 114 percent increase while, at the same time, wages in the area have only increased by 9.7 percent. These dramatic numbers compare to Florida’s statewide average of $248,600, a 90 percent 5-year increase in cost compared with a 15.2 percent income increase during the same time. “House prices have more than doubled in South Florida and the Treasure Coast over the last five years. Realize, a shortage in the number of affordable homes affects communities in terms of retail dollars, jobs, a stable tax base, and traffic-related environmental damage. The shortage has also limited hurricane victims’ ability to fully recover and move into non-damaged homes,” Representative Hastings noted. “The Workforce Housing Act creates incentives for developers to build affordable housing and actually helps people pay for that housing. It is a comprehensive and compassionate package aimed at helping working families who need a little help to realize first time homeownership.” ###