Housing in Imperial County – Part I

0

Sold Home For Sale Sign in Front of New House on Deep Blue Sky

A time of transition; economic impacts significant

Part I

 

When Imperial Valley College opened at the intersection of Highway 111 and Aten Road west of Imperial in 1962 it was by design far from the urban areas of the time. Its founders knew the campus would need room to significantly expand and meet the demands of a growing Imperial County population and a modernizing workforce.

That time has come.

The county’s 2015 population of just over 180,000 as estimated by the U.S. Census Bureau is a 250 percent increase over 1960. Its civilian labor force was estimated in March 2015 by the state Employment Development Department at 76,000, meaning the number of people of working age in the county exceeds its total population from the time IVC was built.

All those people need somewhere to live. Due to a variety of factors, residents seeking housing in Imperial County face a challenge these days. Moreover, experts agree, whether or not people have adequate and stable housing has an impact on their own prosperity and the overall economic health of where they live.

“Inventory (of homes for sale) right now is very low, a three- to four-month supply,” said Sherry Picazo-Cowie, president of the Imperial County Association of Realtors and a Realtor for Prince and Associates in El Centro.

By comparison, she noted the inventory of available homes when the recession hit in 2008 was three years.

“Houses are selling relatively quickly. We stabilized from the market crash we had in 2008.There are more regular sales and few foreclosures,” Picazo-Cowie noted.

The result is increasing home prices. Picazo-Cowie said a real estate data base she uses shows a median price of $225,000 in Imperial County in late April, up even from the $180,000 to $200,000 range seen in the fourth quarter of 2015. By comparison, she said, the median price was as high as $270,000 in 2006 at the height of the housing boom and as low as $110,000 in the wake of the recession in 2011.

“Typically, when there is a lower inventory, it drives prices up. Since the end of 2014 the prices have been gradually going up,” she said, adding that she is starting to see what amounts to bidding contests for homes.

“There are homes for sale with multiple offers (from buyers). You will have frustrated buyers because you will have someone come in with a higher price” than they offered, Picazo-Cowie added.

Those seeking apartments face an equally thin market. In late April the website apartments.com listed eight of 46 apartment locations in El Centro as having vacancies totaling just 17 units. Choices in Brawley were even more limited–vacancies in only four of 39 properties with only five available units. There are several apartment projects under construction in the county, but local observers agreed more are needed.

Many families in Imperial County seeking housing, however, are ensnared by another obstacle–poverty. A 2014 Census Bureau estimate states 23.4 percent of the county’s population lived below the federal poverty level (about $24,000 annual income for a family of four) compared to the national rate of 15.6 percent. The county’s unemployment rate for March was 18.6 percent, compared to a national rate of 5.1.

As executive director of the Imperial Valley Housing Authority, Andrea Rourk sees the human side of those numbers and for nearly four decades has battled to reduce their damage to individuals and families. The agency assists nearly 9000 county residents with housing. Another 8000 linger on waiting lists.

“Affordable housing,” a formal designation used at all levels of government, has always been a dear and limited asset vital to communities.

“If they only have to pay 30 percent (for housing) they have money for other things. If they didn’t have our help, they could end up paying over 50 percent of their income for housing,” Roark said, explaining the IVHA assistance ensures its clients only must pay 30 percent of their income for housing.

Census data further defines the local need. By 2014 estimates, 34% of occupants of rental units in Imperial County spent more than 30% of their income on housing. Conversely, of homeowners making more than $75,000, only 1.7% did so.

The approach to meeting the demand for affordable housing is shifting from properties owned by housing agencies to hybrid projects involving private investors that get federal tax credits for building housing deemed affordable, Roark explained.

“Affordable housing can be expensive (to build) but is not as profitable” as standard housing, she said, adding, “Private developers do not do affordable” housing developments outside of the programs under which they get tax credits.

Due to the demand, those developments are big business in Imperial County. One firm that specializes in creating financing packages for investors seeking to build affordable housing, Chelsea Investment Corp. of Carlsbad, states on its website it has built more than $200 million worth of apartments in Imperial County.

“One of the Company’s specialties is developing apartment communities in small communities located in rural areas. These rural communities frequently have a housing stock that is substandard and unsafe,” the website states.

While Roark concedes those investments are filling a vital need, they come with a worrisome caveat: the tax credits expire after 15 years.

“What happens after the 15 years when they use up the tax credit? They don’t have an incentive to keep up the property. That’s the fear I have,” she said.

(Who is building, why and what affects will that have? See Part II Housing in Imperial County next week.)