this morning on the news- edited with Article..

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Sassyz75
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Dina

this morning on the news- edited with Article..

I saw a piece that said on Long Island only 2% of homes are affordable to those house holds that make 100k a year-how scary is that!!!!

from the NYTimes:

By BRUCE LAMBERT
Published: January 26, 2007
GARDEN CITY, Jan. 24 — In 2000, 60 percent of the homes sold on Long Island could be classified as “affordable” for families earning up to $100,000 a year, under the old rule of thumb that buyers should spend no more than 2.5 times their income on places to live.

Last year, according to a new report, just 2 percent of the houses sold on Long Island were in that range for families with such earnings, which make up more than 60 percent of Long Island households.

The staggering drop over six years, according to the Long Island Index, an annual study of local economic and social trends, is the result of sluggish income growth and soaring housing costs, among other factors that have made the area increasingly unaffordable and driven many people away.

“It took our breath away, that the change has been so dramatic in such a short period of time,” said Ann Golob, director of the study, which is scheduled for official release Friday. The report, titled “In a Tough Spot,” puts it bluntly: “The image of our region as a wealthy suburb is far from reality for a growing number of Long Islanders who are struggling to keep up with high and rising costs.”

Though home prices have retreated in recent months, they remain at near-record levels, a bonanza for many homeowners, at least on paper. Those already living here are insulated from the entry barrier of high prices first-time buyers would face.

As the nation’s first post-World War II suburb, Long Island flourished for decades as a middle-income alternative to New York City and is now home to nearly three million people.

Factors contributing to the affordability problem include the loss of higher-paying jobs and growth of lower-paying ones. A decade ago, wages here exceeded the national average by 16 percent; that has shrunk to 5 percent, and average pay has stagnated since 2003.

At the same time, the number of residents using food stamps rose 20 percent from 2000 to 2003, the most recent data available.

“Now our income advantage is disappearing, pushing some families near the breaking point,” the report says. In the report’s survey of 808 residents, 58 percent complained of difficulty paying their monthly housing bills, while 54 percent said they were thinking of abandoning Long Island for lower-cost areas. Still, 82 percent called Long Island a good or excellent place to live, but only 48 percent said it was on the right track.

“I find it hard living on just a pension and Social Security, and I feel bad for the younger people,” said John Schnitzler, a retired banker in East Meadow, N.Y. Still, Mr. Schnitzler said he enjoyed his three-bedroom home and being “45 minutes from the city, 10 minutes to the beach, with the malls right here.”

The report, sponsored by the Garden City-based Rauch Foundation, has been produced annually since 2004, with the advice of academic, civic, labor and other groups.

“Taken as a whole, Long Island’s story has been a success story,” it says. “But our continued success is now in doubt. We face significant problems, which yearly grow worse.”

In a competitive economy, the report warned, Long Island will lose out to other areas unless it expands business and housing and reduces taxes. “In an era of easy mobility, a region defers change at its peril,” it said.

The 2.5-times-income formula for home prices is often ignored across the New York metropolitan area, where many residents spend disproportionately for shelter and shortchange other parts of their budget compared with other parts of the country.

The report did not adjust housing prices for changing mortgage rates, which were about two percentage points higher in 2000. But Ms. Golob noted that homeowners who bought then were able to cut carrying costs by refinancing as rates fell.

Beyond home prices and mortgage rates, an additional factor in the cost of housing is property taxes. They are notoriously high on Long Island and have jumped faster than inflation, the report said.

Many residents are under financial stress because of scant income growth, up 2 percent on average since 2000. Meanwhile, they are squeezed by the rising costs of taxes, heating, electricity and gasoline. Even for families with incomes above $110,000, 43 percent report difficulty in paying housing bills.

Long Island has yet to replace the aerospace and defense industry that once drove the economy, Ms. Golob said. Venture capital investment and federal research grants have fallen.

Research at Cold Spring Harbor Laboratory has generated businesses. Its president, Dr. Bruce W. Stillman, said the island needs more cooperation by government, academia and business. Finding housing for researchers is so difficult that the lab assigns an administrator to help place them, sometimes in houses it bought for that purpose.

“People love their hometown of Long Island — they just can’t afford it any more,” the Nassau County executive, Thomas R. Suozzi, said in response to the report. “We remodeled the Levitt houses, and now we have to remodel the suburban paradigm.”

Message edited 1/26/2007 11:36:59 AM.

Posted 1/26/07 10:56 AM