Some Solve Housing Fix With Aid or Roommates
The family rents a four-bedroom home for $1,050 a month in Mission Viejo--not a bad deal for this time and that place.
But they really can’t afford it.
The only way they manage: Uncle Sam pays $828 of the rent. The family ends up paying a mere $222 a month for its share of the American Dream.
If everyone in Orange County were only so fortunate, the affordable housing problem wouldn’t exist. But the Mission Viejo family is an exception. Most renters do not qualify for government aid. Nor is there enough aid to meet the need these days.
Home buyers are not the only segment of the population straining under the high cost of housing in Orange County. So are renters, who account for about one-third of the county population.
Their monthly rent payments of $715 are virtually the same as the typical Orange County mortgage payment, according to The Times housing poll. Yet the median annual income for renters is $34,000, compared to $52,000 for the homeowner.
Perhaps as a consequence, only about 48% of Orange County renters are “very happy” with their housing situation, compared to 81% of homeowners, the poll found.
Furthermore, like the very poor, Orange County’s middle- to low-income residents increasingly feel the burden of high rents and low vacancy rates, housing experts said. They are forced to share apartments, take in boarders, cut back on household spending, even look outside the county for affordable homes.
“I have to be fairly careful in what I buy, clothes-wise, food-wise,” said Kay Seiver, 42, who with another woman rent rooms in a third woman’s Westminster house.
Seiver, who supports herself on an $8.10 hourly wage, pays $340 a month plus $20 for utilities--considerably less than if she were to rent a one-bedroom apartment.
“It’s a cheap way of housing,” she said.
Kim Le has found a way to cut housing costs, too. Le, 37, his wife and two young children live in a Westminster two-bedroom apartment they could not afford without a federal housing subsidy, he said.
Le attends Coastline Community College. His wife supports the family working at the minimum wage. Their $650-a-month rent is manageable only because of the $450 a month provided by the Orange County Housing Authority, Le said.
Marcy Booth, 21, a manufacturing firm service representative, also recently solved her housing problem.
Sharing an Apartment
Booth, who is single and makes $18,500 a year, had shared a two-bedroom apartment in La Palma with two other women, paying $325 a month for her portion of the rent. She had a prudent personal budget, for example buying a less expensive pickup truck rather than the new automobile she wanted. But even her economies left her pinched.
“I couldn’t afford it (the apartment) anymore,” Booth said. “Orange County, I have found, is the most expensive place to live. I shopped for one-bedrooms unfurnished, but the cheapest I found was $425 (a month). In Long Beach you could probably find it for about $350, but that was beyond my limits of driving” to work in Cerritos.
To ease her burden, Booth became a boarder in the Anaheim house of a family friend. Now she declares: “I’ve beat it. I’m only paying $200 a month.”
Orange County is a landlord’s market. The rental vacancy rate is about 3%, according to the Research Network, a Laguna Hills marketing research firm. The average rent is $644 a month for a one-bedroom apartment and $932 for scarce three-bedroom units.
Paying $550 in Bad Areas
“Even in the worst areas of Santa Ana, people are paying $550 for a one-bedroom--areas with gang problems and drug problems,” said Crystal Sims, an attorney with the Legal Aid Society of Orange County.
In affluent Orange County the median income for a family of four is $44,400, according to the Department of Housing and Urban Development. Traditionally, those making less than 80% of median income have been designated “low-income.” But in Orange County, 80% of median income is a healthy $35,520 a year.
Even so, said Alan Baldwin, executive director of the nonprofit Orange County Community Housing Corp., “Everybody out there in rental housing who earns less than 80% of the median income is 30 days away from homelessness.”
Orange County’s need is so great for affordable housing, its supply so limited and prices so volatile that should renters lose their apartments there is effectively “just no housing out there,” Baldwin said.
Comfortable Income
At $42,000, David Reeves’ annual income is comfortably above the 80% level. But his budget would be much tighter if he had to pay rent, he said.
In return for free rent, Reeves, 23, a food delivery driver, and his wife, Lisa, 25, manage the Buena Park apartment complex where they and their two children live. A two-bedroom apartment rents for $665 a month there.
“I have to sacrifice a lot of my personal time . . . on site,” Reeves said. “I spend about 90% of my time here. “It’s not just a cakewalk.”
While renting is difficult, some gains have been made:
- By April, the average rental rate in Orange County was $725 a month, down from $750 a year earlier, according to the Research Network.
- Though the occupancy rate is high at 96.9%, it was higher last year at 97.8%. “Selectively throughout the market and in specific unit types we have seen vacancies as high as 77% in the last year,” said Matthew Disston, a principal with Research Network. “We’re starting to see the first indications of high vacancies (and) some softening in the market.”
- Although county government no longer requires developers to make 25% of their units affordable for low-income buyers and renters, there are still more than 17,000 affordable units to be built in projects approved under those requirements.
- Despite the reduction in federal housing funds during the Reagan Administration, county authorities managed to launch a new loan program this year to help finance low-income housing. The 400-unit Vista Verde complex in Mission Viejo will be financed partly with a low-interest loan and tax exempt bonds. The developer will make 20% of the units available for very low-income renters, with incomes of $22,200.
- There are more apartments today in Orange County than ever before. While only 10,000 new units were built from 1980 to 1986, 12,400 were built in the past two years. Another 7,810 units were under construction early this year, an increase over the prior year.
However, even with the construction that has taken place, population growth has clearly outpaced it, said David T. Quezada, executive director of the Fair Housing Council of Orange County.
Changed Life Styles
The tight market has changed life styles.
Since 1980 Joy Rippeth’s Roommate Finders, a Century City-based firm, has helped about 100,000 people in search of housing by matching personal habits and preferences, much like a computer dating service.
A person “can get almost twice as much for his money in Orange County” as in some areas of Los Angeles County because “there’s an over-abundance of places to share,” Rippeth said.
Orange County residents also are more willing to open their homes to strangers, she said.
“They are a lot more trusting, willing to share just for economic reasons. And a lot of people want to share for more than just money. They want companionship.”
Rippeth cites Huntington Harbor condos as one unusual bargain. They are “quite expensive, but when people would list with us to share one, we’d get a listing for as low as $475 to $525 (a month), and yet the house was costing $275,000 to $300,000.”
Finding Roommates
Bridget Makaena and her 12-year-old daughter called on Roommate Finders to find someone to share their rented Cypress condominium. Makaena, whose annual income is about $30,000, said she found her $770-a-month rent very affordable when shared.
“My (share of the) rent is only $450,” Makaena said. “So I really don’t have to squeeze my budget.”
However, 51% of renters polled by The Times said they need more than one salary to afford their payments; 19% said they are financially overextended.
Truck driver George McDermott and his wife, Roberta, a cook, live on a combined $40,000 annual income but rent a two-bedroom Anaheim apartment rather than face the financial hardship of a larger home, he said. It means their two teen-age daughters must share a room.
“It’s awfully small,” McDermott said. “I’m not real happy with it. But with what’s out there . . . we’re talking $150 to $200 more a month for a three-bedroom.”
Last year about 5,000 Orange County families earning less than half the county’s median income received Section 8 federal housing assistance, the largest remaining subsidized housing program. Although their full rental rates averaged $568 a month, they paid only $187.
But the typicial waiting period for getting into the program is about three years.
OVERLOOKED AREAS
While bargains can still be found in many areas of Orange County, real estate agents say prospective buyers might do well to look into the following neighborhoods. These areas often offer lower prices, good schools, easy access to freeways and older, more established neighborhoods. The average prices listed below are calculated by TRW Real Estate Market Information as of June, 1988.
Fountain Valley, a favorite because it is close to the ocean and has good schools. Average price: $211,129.
Yorba Linda, where prices are rising fast because of its relatively low density. Many parts of Yorba Linda have become so expensive that they are out of the reach of first-time home buyers. Average price: $224,762.
Costa Mesa, offering a central location near employment centers and major freeways. Many older neighborhoods here are being renovated. Average price: $172,290.
Santa Ana, considered a bargain for first-time home buyers. It offers easy access to the freeways and a central location. Santa Ana also appeals to people who are turned off by the sameness of tract communities and are looking for older homes. Average price: $154,043.
Orange, a favorite because of its old-town appeal. Many parts of this city are enjoying a renaissance as younger people move in and purchase older homes. Average price: $197,004.
La Habra, Fullerton and Los Alamitos are attractive for first-time home buyers and offer easy commutes to Los Angeles. Average price respectively: $132,237, $205,968 and $250,103.
