Home ownership out of reach for a third of Georgia families

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Posted 9:03PM on Tuesday, July 16, 2002

ATLANTA - Housing prices that are rising faster than wages, and poor credit, are keeping about 1 million Georgia families nearly a third of all families in the state from buying their own homes, according to a University of Georgia study. The study, which was completed last year and released this week, looked at the availability of what the authors call ``workforce housing'' or housing that would be available for families earning as little as minimum wage to as much as $60,000 a year. While home ownership rates in Georgia are higher, at 71 percent, than in the country as a whole (66 percent), the study found that many families who want to own a home can't manage it. ``We just have a lot of people who are living on the margin,'' said Tom Rodgers, associate dean of UGA's College of Family and Consumer Sciences and one of the authors of the report. ``The working poor, as they are called, simply have a hard to making ends meet,'' Rodgers said. ``By the time a family pays for child care, transportation, food and shelter, there's not much left if anything.'' The high cost of housing is another factor keeping families from home ownership. ``Prices have outpaced income growth, there's no doubt about it,'' said Joe Walden, director of single-family housing in Georgia for the U.S. Department of Agriculture Rural Development. The UGA study showed that about 1 million Georgia households a third had a combined annual income of less than $30,000 in 2000. Experts say families at that income level should aim to pay no more than $75,000 for their home, but that's only about half of the average sale price of a new home in Georgia. Forrest Boone, president of Three Rivers Housing Foundation, said it's more difficult to find affordable single-family homes in some rural parts of the state, because most developers prefer larger, more profitable urban or suburban developments. ``You can't make a lot of money building 1,200 square foot houses in rural Georgia,'' Boone said. The foundation, a not-for-profit organization based in Tallahassee, Fla., brings together developers, bankers and local government officials to create affordable housing in rural Georgia and Florida and then helps low-income buyers close the deal. For many families, Boone said, poor credit is the biggest obstacle to home ownership. ``We see so many young families who have been inundated with credit offers and have high debt and blemishes on their credit record,'' he said. Both Boone and Walden said the first step toward solving the problem is teaching people about the risks and consequences of credit before they learn the hard way. ``We've got to get to young people early and teach them the skills of managing their resources,'' Walden said. ``These days, before kids get out of high school they often have negative information on their credit reports an unpaid cell phone or a credit card bill.'' Many would-be homeowners want to avoid the work and time it takes to repair bad credit, so they turn to manufactured housing mobile homes and trailers which is cheaper and easier to finance than traditional housing. The study shows manufactured housing accounted for only 21 percent of new homes in Georgia in 1997, but the rate was about twice that in central southwest Georgia and more than three times that in the southeast part of the state. And unlike traditional housing, which can bring construction money and tax revenue to an area and usually appreciates over time, manufactured housing does neither. ``With semi-permanent housing trailers the money spent goes to the urban center where the mobile home was built,'' Boone said. ``And they don't go up in value, only down.''