MISSISSIPPI GULF COAST — New census numbers show that median rental prices for housing in South Mississippi increased by 55% from 1990 to 2000. The increased costs were attributed to the casino boom, increasing construction costs and an older and more affluent population.
Costs for purchasing a home have also increased dramatically. The problem is, it is estimated that about half of the 25,068 households projected to move annually on the Gulf Coast through 2004 have incomes of less than $35,000 per year, while only two of 25 new housing developments in Harrison County are offering homes under $100,000.
“While housing supply has increased over the past several years, so has the price of these housing units, and dramatically,” said Brynn W. Joachim, commercial development manager for the Harrison County Development Commission (HCDC). “These increases have largely been a result of higher land acquisition costs, which has created a challenge for builders who want to focus on the first tier of the Gulf Coast housing market where the majority of potential buyers are. Prospective homebuyers have opted for other types of ‘home ownership’ to deal with rising costs and the available housing stock. They are buying mobile homes.”
Nearly a third of all homes, or 7,900 units, added from 1990 to 2000 on the Gulf Coast were manufactured housing.
One effort to address the affordable housing problem is the Gulf Coast Housing Coalition formed by HCDC in 2000 in partnership with banks, non-profit organizations, homebuilders, developers, military personnel, and city and county officials.
One member of the coalition is the Hancock Mortgage Corporation. John McGalliard, vice president and manager, Hancock Mortgage Corporation, said if average wage owners can’t afford to live in an area — as has already happened elsewhere in U.S. where housing costs are high — it can have a big impact on business.
“Businesses like mine depend on a good supply of employees, and if we are unable to attract them because they can’t afford to live here, that puts us in a bind,” McGalliard said. “That is why business as well as government and non-profit organizations all need to bind together on this issue. I don’t know that just one entity can solve the problem. It is going to have to be a uniform collective effort.”
In other areas of the country, service industries can’t find enough people to man jobs because people can’t afford to live in the area. McGalliard said that could also happen to the Coast if the problem isn’t addressed.
Another partner in the housing coalition is Visions of Hope in Biloxi, a Community Housing Development Organization (CHDO) covering the six coastal counties. CHDO’s are non-profit organizations that provide affordable housing, as well as some supportive services.
Sarah Walker, co-founder and executive director of Visions of Hope, said many of their applicants are single mothers with several children. With their incomes, it is extremely hard to find homes priced low enough for these women to afford.
“We have three people we are working with this week who qualify for a home that costs in the range of $45,000 to $50,000,” Walker said. “There is next to nothing you can find in already livable condition at that price. You just can’t find it. That is something that has been really hard for us.”
To help, Visions of Hope finds a blighted property, fixes it up, and then sells to the client who wouldn’t have been able to get a bank loan on the property before renovation.
“There is a critical need for non-profit funding for blighted property,” Walker said. “We need funding available to purchase some properties so we may in turn fix them up so these people can qualify then for loans.”
Walker said home ownership is the only way to break the cycle of poverty. Most low-income people, even if frugal, just can’t save enough for a down payment on a house, and paying rent never builds any equity. Getting a low-income person into home ownership allows them to save thousands of dollar a year represented by the equity they are building in their homes.
“The easiest way for them to get on a good track financially is by home ownership, and building that equity instead of renting where the money is literally flushed down the toilet,” Walker said.
Visions of Hope particularly focuses on those lowest on the economic ladder. People who quality for a home in the range of $75,000 to $80,000 can probably find something suitable. But finding something for less than that is quite difficult. Visions of Hope recently put people into homes that cost less than $20,000. With incomes of less than $12,000 per year, that was all they could afford.
Another effort to address the problem is a cooperative effort between the Department of Housing and Urban Development, Fannie Mae and the City of Biloxi.
Maura Phillips, deputy director of the Mississippi Partnership Office for Fannie Mae, said the Hope 6 project will involve a $35-million grant from HUD for redevelopment of East Biloxi. Some existing housing projects will be demolished and new units constructed. A certain percentage of the new units will be available for home ownership instead of just rentals.
Another City of Biloxi project involves demolition of substandard housing along with acquisition and rehabilitation. Again, there will be a mixture of home ownership and rentals. Phillips said a lender training is planned in mid June for banks and mortgage companies interested in providing the type of flexible mortgage products needed for these developments.
Phillips said conditions on the Coast aren’t worse than a lot of other areas. In fact, rural areas like the Delta have even worse problems.
“It is a nationwide problem with the lower income levels,” Phillips said. “You can only build housing so cheap. We are starting to see more creative ways of developing modular housing so with volume they do they can make it more affordable to address the gap between affordability and income.”
Other efforts by the Gulf Coast Housing Coalition to address the housing affordability issue include working with city and county leaders to begin streamlining zoning, adjudication, and condemnation procedures to expedite the process of identifying land for infill housing that is near transportation and sources of employment, and facilitate the development of land banks and incentives to stimulate large tract affordable housing construction.
To find out more about the Gulf Coast Housing Coalition or to obtain a copy of the study, please contact the Harrison County Development Commission at (228) 863-3807.
Contact MBJ contributing writer Becky Gillette at firstname.lastname@example.org or (228) 872-3457.