On the House: Residential developers target 'eds and meds'

When you ask residential developers in Philadelphia who their target audience is, the typical response is "eds and meds," meaning those who work in education and health care.

Both seem impervious to the economic stresses and strains that affect other business sectors, so developers who focus on building for-sale and rental units near medical centers and universities are not taking great risks.

Health care is the fastest growing because America is aging rapidly and demand for services is increasing.

In fact, occupations and industries related to health care are projected to add the most new jobs through 2022, the U.S. Bureau of Labor Statistics has said.

That report, issued last December, sees total employment increasing 10.8 percent, or 15.6 million, from 2012 to 2022.

Is it any surprise that No. 2 on the growth list is construction?

The 30 occupations with the largest projected increase in employment will account for 7.4 million new jobs, almost half of the total, including health-care support occupations and health-care practitioners and construction.

Home health care jobs alone are projected to increase by 60 percent between 2012 and 2022.

That's the good news.

The bad news, a recent study says, is the big gap between what health-care workers earn and the housing costs in many of the 210 metro areas covered.

"Wages are not rising as fast as rents or home prices in many metro areas, and this is creating a severe housing cost burden for health-industry workers," said one of the study's authors, Janet Viveiros of the National Housing Conference.

"Housing-affordability challenges in some parts of the country may exacerbate the existing shortages of health workers," she says.

Rent and utilities are considered to be affordable if they do not exceed 30 percent of a worker's income.

Buying a home is considered to be affordable if the mortgage payment (for a 30-year fixed-rate mortgage with a 10 percent down payment) does not exceed 28 percent of a worker's income.

Before we talk about Philadelphia, let's identify the workers covered in the housing-conference study:

Medical records transcriptionists, median wage $31,404 to $48,304 a year.

Home health aides, $21,056 to $32,388 a year.

Medical billing clerks, $26,885 to $41,354.

Geriatric nurses, $48,589 to $74,738.

Case managers, $46,526 to $71,564.

In the Philadelphia region in 2014, the fair-market rent for a two-bedroom home is $1,135, and the required annual salary to afford to rent is $45,400 - which means that, of the above, only case workers and geriatric nurses could afford to do so.

The median price of a house given for the region in 2014 is $202,000, meaning that a salary of $55,000 is needed to buy it. Again, only case managers and geriatric nurses could.

That assumes households with one wage earner, and it appears to have been beyond the scope of this study to project how that situation could affect renting or home-buying.

What it does say is that in states such as Pennsylvania with an aging population and a shortage of health-care workers, the ability of these service providers to afford places to live is critical to meeting the need for them in both the short-term and over the long haul.

"Affordable housing solutions must be implemented to ensure that health workers have housing options in the places where they work," Viveiros says.

 


aheavens@phillynews.com

215-854-2472 @alheavens