Understanding the Need

WHAT LINCOLN’S HOUSING WOULD LOOK LIKE IF IT MET THE NEEDS OF AFFORDABILITY FOR MIDDLESEX COUNTY

Monthly cost estimations: Assuming housing affordability is capped at  ⅓ of a family’s income, we relied on the data found here to assess the quintiles of income in Middlesex County:

There are a number of other sources of income data, we relied on this. Our working data for this section is found here.

Using Google’s simple monthly mortgage cost estimator allows us to translate the family’s budget into a housing value. Let’s remember that the current property tax rate in Lincoln is $13.92 per $1000 of valuation. So this just takes repeated estimations to get the monthly costs to approximate the monthly housing budget per Income Level Bracket, and here’s what happens:

For a monthly housing budget of $604 a purchase price/house value of $92,000: 

For a monthly housing budget of $1,829 a purchase price/house value of $280,000:

For a monthly housing budget of $3,151 a purchase price/house valuation of $485,000:

For a monthly housing budget of $4,986 a purchase price/house valuation of $770,000:

For a monthly housing budget of $10,811 a purchase price/house valuation of $1,670,000:

So, we’d need 447 units, each averaging the valuations listed in the table here:

Lincoln’s existing housing stock looks like this:

In quintiles of 447 housing units, here are the quintiles’ average prices we need, compared to the quintiles’ average prices we have:

Now, the question becomes, how many units would we need to meet each quintile’s number of available housing units?

This is a tricky question to answer, because if we added many units at available to the bottom quintile, for example, the “averages” in each quintile move. The way we have approached this is to consider instead the upper bound of each quintile, found in the same census data, using that to determine where the affordability for each quintile ends, and identifying the existing number of units within that affordability. Then it becomes easy to see the number necessary per quintile such that each quintiles’ affordability is met by both new and existing units.

So that means that we need to see how many units are available under each upper bound, and how many we’d need to reach the 447 to represent ⅕ of the available housing stock. To do this, we follow the same process as above, using a mortgage calculator (assuming a 6.539% interest rate), get as close as possible to a monthly payment that would be the max affordability for that upper bound, and use that valuation to identify the number of housing units we are missing from each quintile: