Nesletter #12 - 2/16/19 - Housing- Part 2

Middletown Leads

Area #6 - Housing - Part 2

Data from 2014 Middletown Comprehensive Community Plan

Income 

The disparity between wages and home prices makes it incredibly difficult for workers to afford to live in Middletown. Sales prices of homes are equivalent in Newport and Portsmouth, meaning most workers cannot comfortably afford to live on Aquidneck Island, and instead must live elsewhere and commute. Middletown’s median household income was $70,766 (2008-2012) approximately $25,000 less than the required income to comfortably afford the median home price in Middletown.

Rents

Rents have also risen rapidly in recent decades, making it difficult for workers in Middletown to find housing they can afford. Middletown saw a 45% increase in average rent from 2000 to 2010. In 2010, the average rent for a 2-bedroom apartment in Middletown was $1,265 (considerably higher in 2019.)

Housing Costs & Affordability

Despite the recent (2014) decline in housing prices and low interest rates, the cost of the median home is still out of reach for many. As of 2013, the median income required to afford a median priced home in Middletown was over $95,000. Housing is considered affordable if a family or person pays less than 30 percent of their income on housing-related costs.

Housing Needs

By 2035, the projected population for Middletown is 12,822 and by 2040, that population is expected to decline to 12,121. These projected population figures were used as the basis for assessing future needs.

A basic assessment of future housing needs is to divide the projected population for the 20-year time period by the current average household size. Using the current household size, 2.34, and the projected population for Middletown in 20 years of 12,822, the town’s housing needs will be approximately 5,479 housing units.

This is 1,395 less than the current year-round housing stock of 6,874. Therefore, for Middletown, the future housing needs will more likely be related to the suitability and affordability of these units rather than the actual amount of housing stock.

Housing Plans

In recognition of the importance and its responsibility in promoting affordable housing, Middletown developed an action plan that lays out actions that will be taken over the next ten years to meet the town’s affordable housing goals.

The plan is intended to be reviewed annually to ensure progress is being made. Changes to the plan will be made as necessary and as new guidelines on affordable housing are made available from Statewide Planning, the Housing Resources Commission and Rhode Island Housing.

Middletown Housing Facts (2013) 

      1.       Median sales price of homes: $321,500

      2.       Typical monthly housing payment* for a $321,500 house: $2,393

      3.       Household income required to afford a $306,500 house: $95,735

      4.       Average monthly rent for a two-bedroom apartment: $1,390

      5.        Household income required for that rent to be affordable: $55,600

      6.      Average private-sector wage for jobs in Middletown: $44,668

Note:  *2013 calculation using a 30-year mortgage at 3.66% interest rate with a 3.5% down payment, municipal property taxes, hazard insurance ($100/month), and monthly mortgage insurance (1.25%/month). Source: HousingWorks RI