Adopted 2014-2021 Housing Element - Garden Grove

Housing Element Needs AssessmentOverpayment and AffordabilityState and federal standards specify that households spending more than 30% of gross annualincome on housing experience a housing cost burden. Housing cost burdens occur when housingcosts increase faster than household income. When a household spends more than 30% of itsincome on housing costs, it has less disposable income for other necessities such as health care. Inthe event of unexpected circumstances such as loss of employment and health problems, lowerincomehouseholds with a burdensome housing cost are more likely to become homeless.Homeowners with a housing cost burden have the option of selling the homes and become renters.Renters, on the other hand, are vulnerable and subject to constant changes in the housing market.Table 22 demonstrates the extent of cost burden (overpaying for housing costs) by household type(elderly households, large households, all households), and income. In summary, renters and lowerincome households experienced cost burden more than homeowners and higher incomehouseholds. For example, 77 percent of very low income, elderly households who rent areoverpaying for housing costs (cost burden), while only 38 percent of very low income, elderlyhouseholds who own their home are overpaying for housing costs. This example demonstrates thatelderly, renter households are spending more of their income on housing. Table 22 also shows thatthe proportion of households experiencing cost burden declined significantly as income increased.So while 59 percent of very low income homeowners experienced cost burden, that figure wasmuch lower (25%) for moderate income homeowners. Overall, renter households in all incomecategories experienced cost burden at a higher levels than their homeowner households.Household TypeRenter-Occupied HouseholdsTable 22: Households Experiencing Cost BurdenExtremely LowIncome (0-30%)Very LowIncome (31-50%)Low Income(51-80%)Moderate/Above Moderate(81% +)All IncomeCategoriesElderly (62+ years) 78% 77% 47% 8% 69%Large Families (5+ persons) 95% 80% 29% 2% 55%Total Renters 83% 82% 44% 8% 56%Owner-Occupied HouseholdsElderly (62+ years) 60% 38% 27% 15% 29%Large Families (5+ persons) 84% 78% 63% 26% 47%Total Owners 71% 59% 58% 25% 41%Total Households 80% 71% 53% 21% 47%Source: HUD Comprehensive Housing Affordability Strategy (CHAS), 2005-2009.AffordabilityAffordability is determined by comparing the cost of housing to the income of local households. Ifcosts are high relative to income, housing problems such as overcrowding and cost burden aremore likely to occur. Orange County’s high costs of housing impact communities far beyond theaffordability problem. The lack of affordable housing contributes to cost burden, overcrowding, andeven homelessness. In assessing housing affordability, the California Health and Safety CodeSection 50052.5 provides the following definition of affordable housing cost based on the areamedian income level (AMI) adjusted by family size and income level:2014-2021 Housing Element 26 City of Garden Grove