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The Affordable Housing Crisis in Northwest Florida

I believe that every family should be able to afford a decent home and have access to excellent public schools for their children. For decades, access to housing and a decent education defined the American Dream in the United States.

Sadly, Northwest Florida fails to deliver on the American dream, and the situation is becoming dire for many of the families who live here.

Housing costs continue to rise as our schools continue to fall behind.

Florida became the least affordable state to live in 2022, despite the fact that Florida was among the worst states to experience increases in adult and child poverty, food insecurity, and homelessness risk during COVID-19.

We’re going to break down how housing became an uncontrolled downward spiral in Northwest Florida, and a few of our ideas on how to fix it. In our next brief, we’ll dissect how migrating public dollars to privately-operated schools decimated public education, and how housing ties directly into the issue.

Let’s start with the basics.

First: What areas were assessed for this research?

We included only data from the areas included in the recently re-drawn Florida congressional District 1 (CD01). You can view an interactive map of the new boundaries here. Essentially, all of Escambia, Santa Rosa and Okaloosa counties, plus everything in Walton County west of Highway 83/331.

What do the experts say is the ideal cost of rent/mortgage?

Your ideal mortgage or rent should never be more than 30% of your income, though 20-25% has been the goal range since the post-World War II era. Discussions about lowering the maximum limit for lower-income earners suggests that 30% of $20,000 is far less manageable than 30% of $2 million, and as HUD strictly define 30% decades ago, they may revise those numbers downward in the near future. For the purposes of this review, we used 30%.

While many consider renting an apartment or home a “bridge” to buying your first house, rental costs now far exceed mortgage costs for the same properties. Younger generations increasingly find themselves unable to save for any period of time, with wages stagnant, costs increasing, and home-ownership often out of reach.

While some programs are available to help with a down-payment, like FHA loans, those programs typically expect you to have a minimum down payment of 3.5% or more. In 2018, the median home value was $185,300, so even if your credit score was high enough to qualify for the FHA loan, you would have still needed at least $6,500 down. That’s five months rent in 2018 with the median rent price at the time ($1,300).

A study in 2018 showed that less than 40% of Americans didn’t have enough in savings to cover a $1,000 emergency car repair or medical bill.

A second study by the federal reserve found even scarier economic conditions for the average American - in that survey, 46% of Americans said they could not cover a $400 emergency expense.

Needless to say, if nearly half the country does not have $400 in savings, they don’t have $6,500 for a down payment.

Long-term renting due to an ability to afford the down-payment on a home or loss of home ownership due to increased property taxes, job loss, or spousal death costs Americans an additional $365,180 over 30 years for an average three-bedroom home.

It’s expensive to be poor.

Income in the First District, Florida and USA:

The median household income in CD01 is $58,358 (wages actually decreased 1.24% since 2019, but we’ll get to that later). That means that half of the people living in the district make less than $58,358 per year.

That’s slightly more than our neighbors to the east in CD02, where the median household income is $54,087, but 12% less than the median income in the United States. Florida ranks 37th in the nation for median household income. Maryland is #1 at $84,805, and Mississippi is #50 at $45,081.

Our poverty rate here was 12.5% for adults and 18.2% for children in 2020, and income is not distributed equally above and below the median. The higher the average income is for an area compared to the median income, the greater the income equality. In CD1, the average income came out at $79,218 - a more than $20,000 departure from the median, suggesting a high level of income inequality in the area.

How is income inequality measured, and how does CD01, Florida and the United States compare to other places in the world?

The metric used for income inequality (Gini Index) scores nations, states and communities from 0 to 100, with 0 representing perfect income equality, and 100 reflecting the worst level of income inequality observed in any community on earth.

At both extreme, a “0” would indicate everyone in the community makes exactly the same amount of money, and a “100” would mean 1 person makes all of the money, and everyone else makes no money.

The United States has the highest Gini score of all western nations- 41.5, as of the most recent data. Other advanced nations reflect lower income inequality, like Japan (32.9), Germany (31.7) and Belgium (27.2). Our income inequality is on par with Djibouti (41.6), Malaysia (41.1) and Haiti (41.1).

Florida’s Gini score is 49 - making it tied with California for the third- highest and thus third-most unequal state in the nation by income. Only New York (51.2) and Louisiana (49.03) score worse on the Gini index than Florida and California. States like Alaska, New Hampshire and Vermont have the lowest Gini scores, meaning income inequality is less prevalent in those states than in New York, Florida and California. Florida’s Gini score would put us between the Congo (48.9) and Costa Rica (49.2) if we were our own nation.

Florida’s First District (CD01) has a Gini index score of 44 - making it one of lowest scores in the state, much lower than the state average, but still worse than the USA as a whole. If you were to compare CD01 to income inequality globally, we would look a lot like South Sudan, Peru and Rwanda.

The highest Gini score in Florida is Congressional District 27 (Gini index score of 57), and the lowest is Congressional District 9 (43).

Housing costs in the first district: Buying

The median home value in Florida was $328,576 as of October 2021 - representing a 23.9% increase over the previous year. The median sale price from July-September 2021 for all of Florida was $355,000 - an 18.4% increase for all single-family home sales over the previous year.

Data through March 31, 2022 shows no sign of the affordability crisis stopping - Florida’s median home value this year climbed to $367,175 - a 31.2% increase over the previous year.

In Escambia and Santa Rosa counties, the median sale price of homes in 2021 was $292,000. While considerably higher than the median property value in the area in 2019 ($206,600), that makes buying a home in the Pensacola-Ferry Pass-Brent area more affordable than most other areas of the state.

In Okaloosa and Walton counties, however, the median sale price was $378,000, making it the fourth-most expensive housing market of all the metro areas in the state of Florida last year.

Now our FHA loan down payments climb above $12,000 - after two years of a pandemic that resulted in massive layoffs, sickness, medical bills, children out of daycare, deflated wages, not many people have that right now.

Housing costs in the first district: Renting

The takeaway from the previous sections on how much you should spend a month on rent: The most a family making the median income in this area should pay in rent is $1,459 a month.

For renters in 2019, 84% of all renters in occupied units paid less than $1,499 a month, and 96% of all rental properties in District 1 rented for less than $2,000 - no matter the size, number of rooms, location, or school district.

A survey we conducted of rentals currently on the market shows that for all available rentals during the study period, only 22% were listed at below $1,459 a month, and about half were listed at under $2,000 a month.

From 84% of rental properties costing less than $1,499 a month to an abysmal 22% under $1,499 a month.

From 96% under $2,000 a month to only 53% under $2,000 a month in two years.

And for those making minimum wage, working a full 40-hour week and earning all of $22,880 per year? One-third would be $572 per month in rent. Only one unit was available at that rate across the entire district during the study period.


More than one-third of adults in CD01 live below the poverty line, earning about or less than the state’s minimum wage.

That means that only one available apartment in the entire region would be considered “affordable” for a third of the people living in the district. Everyone else is paying much more than the maximum 30%, unable to save toward buying, unable to save toward anything.

Adding insult to injury, you’ll find properties in Pensacola charging $2,200 a month for an “executive apartment” that is all of 600 square feet and could under no possible scenario be considered “luxury” by any stretch of the imagination. But do not chastise the owners who own multiple properties, upcharge rent four times beyond what it should be, and then market it as an “executive apartment” because they don’t see the problem.

Of course they don’t. They are the problem.

The rate at which hotels, investment companies (including ones from overseas) and multi-property-owning lords have gobbled up housing for the purpose of upcharging for rent has increased astronomically in the last five years. Charging $2,200 a month for an apartment in Pensacola, Florida because you labeled it an “Executive” apartment is offensive.

So we have an affordable housing crisis. What are the solutions?

One of the most successful means of confronting rising costs in the rental market is rent control. It’s been implemented across the United States with considerable success, but always draws the ire of developers and real estate tycoons.

Florida municipalities can do little to implement rent control measures on the local level.

Even if local municipalities wanted to enact rent control measures, which DeSantis would likely oppose, under current law, they can’t.

There isn't a single county in Florida that has imposed rent control because it is not allowed under state law. The exception to the law is rent control could be allowed if it was necessary to “eliminate an existing housing emergency which is so grave as to constitute a serious menace to the general public.”

If I were a mayor, county commissioner, or city council member, I would argue our current housing crisis qualifies as a serious menace to the general public. But going up against DeSantis comes with severe consequences - including violent attacks and threats. Even Disney dealt with his unhinged wrath, though Disney will undoubtedly get the better end of that deal.

While not all ideas may work for every community, here are just some of those which have been tested and/or implemented across the country. While we work to find solutions, we must consider how other communities have confronted similar crises, and whether a combination of old and new ideas can help us get within reach of the American Dream again.

  • Require all rentals, short term or not (so this would include airBnB), to be subject to the same rules as hotels - same zoning requirements, business liabilities and disclosure, tax requirements, etc

  • Suspend any government-backed loan, like FHA, if the property is being used as a rental or short-term residential leasing property

  • Ban foreign investment companies from buying property for the purpose of renting to Americans (there's an argument to be made that foreign companies shouldn't be buying residential housing in the USA AT ALL)

  • Expand HUD eligibility and refinance options for first-time home buyers and primary residences

  • Limit all affordable housing projects seeking government grants to charging under 30% of income and only renting to those at or below the median income for that census area

  • Create affordable housing trusts and/or municipal bonds to fund affordable housing projects and leases

  • Incentivize buying old, derelict and abandoned buildings that need repairs through tax credits and subsidies

  • Allow the federal government to increase tax credits for first-time home buyers and for primary homes, and eliminate them entirely for second and rental properties.

  • Allow the state and federal government to fund “returns on rent” programs to help provide tax credits to families who live in areas where affordable housing is not available

Florida has more vacant homes than any other state in the country. We have no need to keep building new homes as the rate of vacancy is around 20% here. Development in this area is already out of control, inconsistent, poorly planned, and exacerbating problems like flooding and traffic. There's no regional development board or plan in place, and there needs to be one.

There is no effort here to get federal dollars to help with this issue because our congressman only ever shows up to vote against Russian sanctions. No one is lobbying for dollars from the Build Back Better plan for Northwest Florida. No one is out there fighting to make sure our slice of heaven doesn’t collapse under the weight of our state’s failed economic policies.

Not every solution here will work for Northwest Florida, but there are certainly plenty of ideas worth looking at. Doing nothing is unacceptable.

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