Help for middle earners buying at high-earner prices
Earning 15% or 20% above median income — meaning that you earn that much more than the bottom half of earners in your area — sounds pretty good.
In fact, a so-called balanced housing market is usually defined as median earners being able to afford the medianpriced home in various government-designated areas in the U.S. But the current housing market is far out of balance after home prices vaulted higher in many places since the pandemic.
While state and federal governments provide some subsidized rental units for earners far below the median, those hovering just above the midpoint in the area struggle to move from renter to buyer.
Hope can be found, though, in the many municipalities with “inclusionary housing” policies, which offer homebuilders tax, zoning and other incentives to set aside a portion of their development for units that those median-adjacent earners can afford to buy or in some cases rent. Currently, the nonprofit Grounded Solutions Network counts some 1,059 localities with inclusionary housing (see www. inclusionaryhousing.org/ map/), but says there could be more untracked programs.
The recently enacted $711 million Live Local Act in Florida, which is focused on residents who earn 120% of median, may spur “more states to consider similar measures,” says Lesley Deutch, of John Burns Real Estate Consulting.
For hopeful middle earner homebuyers, Emily Thaden of Grounded Solutions Network suggests scouting out programs, noting:
“Some municipalities keep a list of affordable units for rent or sale on their websites. Others list the properties on the multiple listing service that real estate agents can access. Other municipalities rely on the housing developers and property management companies to market units when they are available. Homeownership counseling agencies (listed at hud.gov),” continues Thaden, “can be fantastic information hubs.”
After a lucky buyer lands a home in an inclusionary development, when he later moves, the home might be earmarked for another middle-earner. “The municipality may step in and market the home on the seller’s behalf. When the affordable unit is a rental, the management company for each property is usually charged with filling any vacancies when units turn over.”