Housing Official Says Affordability Is Key in Market

Orange County and affordable housing seem to be contradictory terms. After all, the median home price here is more than $250,000--far above the national figure.

So why would the president of the Government National Mortgage Assn.--better known as Ginnie Mae--come to the Irvine Marriott hotel on Thursday to talk about Federal Housing Administration loans for low-cost homes? To encourage builders and county governments to join hands in creating an affordable-housing market, said Raoul L. Carroll, who was appointed to the Ginnie Mae post by President Bush last year.

“The more affluent an area is, the more it depends on the service-oriented job sector--the gardeners and grocery-store managers,” Carroll said. “Yet those same people can’t afford to live anywhere near here. I think that eventually they are going to stop coming to Orange County; they are going to stop driving two hours each day when they can make their $25,000 income in an area (where) they can afford to live.”

It’s a simple matter of mutual benefit, Carroll said: “There is a risk of Orange County residents becoming under-serviced by the people they need the most.”

Carroll spoke at a real estate seminar sponsored by Lakeview Real Estate Inc. and Lighthouse Escrow, both based in Mission Viejo; and Orange Coast Title Co. in Santa Ana.

Nationally, the FHA guarantees home loans for amounts up to about $125,000, which means that few houses in Orange County qualify.

Affordable housing has gotten a bad name in white-collar areas, Carroll said. “People think that it’s synonymous with slums. . . . But what we’re talking about is building tastefully designed townhomes and detached homes that happen to be 1,000 square feet instead of 3,000 square feet. We’re talking about homes for firemen and secretaries.”

Local governments play a crucial role in encouraging the development of moderately priced neighborhoods, he said: “For instance, if you zone a development for half-acre lots, you’re not likely to have affordable housing in Orange County.”

The biggest danger in neglecting low-cost housing is that companies shy away from relocating to areas that their employees can’t afford, Carroll said.

“The prices here are fine for senior executives, but most employees make $15,000 to $30,000 a year,” he said.

“If all you want to be is a bedroom community where people come only to sleep--like many Connecticut suburbs--you don’t need to worry about affordable housing. But if you want to have a diversified economy, which Orange County clearly wants to have, you must ensure affordable housing to keep people here.”