The city has set aside more than $5 million for affordable housing programs over the next five years, hoping to mitigate the trend of soaring housing costs in the city.
The sale of homes worth $400,000 or more in the Columbia school district increased by 49% from 2016 to 2018, and there remains an eight-month supply of such homes, according to a fact sheet published by the city’s Housing Programs Division on Sept. 3. Meanwhile, the sale of homes worth $200,000 or less decreased by 4%, and only a two-month supply exists.
Home prices in Boone County have also seen an increase. For single-family homes over the same time period, there was around a $30,000 increase in the average price of homes and about $25,000 increase in the median price from 2014 to 2018, according to statistics by the Columbia Board of Realtors.
The board’s monthly data points show an average increase of more $60,000 in the average price of homes and an increase of almost $55,000 in the median price of homes when comparing September 2015 to September 2019.
It is getting more and more challenging to own homes in Columbia because of the cost of materials, permit fees and land costs, said Brian Toohey, chief executive officer of the Board of Realtors.
“It just makes homeownership not affordable for some people because of the cost of ownership, unfortunately,” he said.
In Columbia, 55.7% of home renters and 26.9% of homeowners as of 2017 were spending more than 30% of their income on housing, which meets the definition of a housing cost burden, according to the fact sheet. Households that spend that much have less money available for healthy foods, health care or other vital household needs, the fact sheet noted.
Randy Cole, housing programs manager for the city, said the reasons for the rising home prices are national and state trends regarding demographics, market and policy.
Cole said expensive housing leads to housing instability that perpetuates the cycle of poverty. He noted that the mortgage interest tax deduction cost the federal government about $40.7 billion in 2018, but it spent less than $30 billion that year on rental assistance and public housing programs.
“There’s such a direct correlation to needing housing stability first before you can really improve your lives,” Cole said.
The 2020-24 consolidated plan, developed by the Housing Programs Division, won the approval of the City Council on Oct. 7. It calls for spending nearly $5.3 million on affordable housing initiatives.
The plan divides the money into programs in three categories: homelessness, rental assistance and homeownership/home rehabilitation. Here’s a breakdown of how the money will be spent:
- Establish a 24-hour resource center for homeless people with the help of the Division of Human Services.
- Provide rental vouchers for homeless populations. The fact sheet from Housing Services indicates the number of homeless people in the city rose from 135 in 2009 to 268 in 2019.
- Leverage additional tax credits from the state to support the construction of additional rental housing.
- Provide first-time homebuyers with up to $10,000 worth of down-payment assistance.
- Fund developers to build new affordable housing, creating chances for more people to become homeowners.
Cole said he also hopes to address racial disparities in the number of homeowners in Columbia. There was a gap of more than $100,000 in median wealth holdings between white and black people at the end of 2011, according to the fact sheet.
Cole said that during his eight years in Housing Services, the city and organizations such as Show-Me Central Habitat for Humanity and the Columbia Housing Authority have made good efforts to boost affordable housing but that the needs are outpacing the resources.
“A lot of people in the community have realized that housing is a really important item,” Cole said, adding that there is no need for the city “to reinvent the wheel.”
“Just support all the good efforts we already have,” he said.