OKLAHOMA CITY -- City leaders plan to create a position and form a citizen advisory group to oversee a new action plan to address the lack of affordable housing in Oklahoma City.
Consultant David Schwartz presented the Housing Affordability Implementation Plan to the City Council at its Jan. 14 meeting.
Escalating housing costs are impeding many households seeking an affordable place to live, both homebuyers and renters, Schwartz said.
"When a household is spending more than 30% of its gross income on housing or rent, we say that they're cost-burdened," he said.
The latest available data show the number of cost-burdened households in Oklahoma City increased by nearly 9,000 from 2019 to 2022. About 6,500 of those households are renters, nearly all of whom are earning less than 60% of the area median income.
"We're talking about a sizeable number of people who don't share in that same sort of, shall we say, prosperity that the remainder of the community does," Schwartz said.
The city's 2021 Housing Affordability Study (HAS) showed approximately 68,000 households in Oklahoma City (28%) were cost-burdened. The population has grown by 27,000 households since then, creating "an immense growth pressure" on housing, he said.
The implementation plan, which builds on the HAS, was developed by Economic and Planning Systems Inc. Schwartz is a principal at the firm.
The plan outlines an action plan of strategies to guide the city and its partners in developing policies and programs to address the evolving needs for affordable housing options in Oklahoma City. It also articulates objectives, identifies priorities and resources, and provides a working guide for implementation with technical, financial and policy considerations.
"A lot of really nitty-gritty work needs to be done to make sure we're doing it right," Geoffrey Butler, the city's planning director, told council members. "So, a lot of exciting things ahead of us immediately. Adopt the plan and get to work."
The next steps are securing funding for a principal housing position to coordinate processes in the plan and creation of an advisory group. Schwartz said those steps will increase the chances "to leverage outside capacity and capital as much as possible through existing partners, emerging and non-traditional partnerships and investment opportunities."
City Manager Craig Freeman will request funding for the new housing position in his proposed fiscal year 2025-26 budget, and the Planning Department is working to establish an affordable housing advisory board, spokeswoman Kristy Yager said.
Schwartz said the 2021 study showed 65% of households were renters. Since then, that has flipped to 65% homeowners, a more normal owner-renters distribution.
The average existing home price in 2021 was approximately $200,000, an increase of about 4.7% per year from 2009 to 2020. Since then, the average price increased 50% to $300,000, which represents about 11% annual appreciation, he said.
"Households with today's median income of approximately $70,000 can afford not much more than they did in 2020," Schwartz said.
Rental rates from 2010 to 2020 grew at 2% per year and since then have escalated about 4.5% per year.
"This trend simply points to a continuous challenge for many households to find affordable rents, particularly when accounting for utilities costs," he said.
In terms of affordability, the consultants considered households earning 60% of the area median income, a population that comprises police officers, teachers, nurses and others in the community and service sector.
"The HAS pointed to a bit of a tale of two cities. There are two things going on. The city in large part is an affordable place to live, but that prosperity and that access to affordability and safe and inhabitable housing is not shared by all," Schwartz said.
For potential homebuyers, loan denial rates were above the national average in 2019 at 8.5% overall and 13.6% for Black applicants. In 2023, those numbers had increased to 11.5% and 17.8%.
"For renters, eviction rates have remained stubbornly high, also above national averages, at 14% of renters experiencing eviction," Schwartz said.
City Councilman Mark Stonecipher noted cities that continue to add to their housing stock have been able to lower rent growth rates. He said Milwaukee from 2017 to 2022 increased its housing stock by 12% and the rents grew by just 1%.
"The need for increased housing stock is essential and something we all really need to be focused on at this time," Stonecipher said.