Affordable housing for low-income families—seldom in the past few decades has this essential aspect of American life been harder to come by. Construction of new government-subsidized housing remains at a virtual standstill. High unemployment rates and increased nationwide poverty are exacerbating the scarcity of rental housing for those who are trying to get along on limited incomes. Such is the conclusion of Out Of Reach 2003, a report recently released by the National Low Income Housing Coalition, a nonprofit advocacy group based in Washington, D.C.
The report makes frequent use of the term “housing wage,” which is the amount a full-time worker must earn in order to afford a modest two-bedroom unit at fair market rent while paying no more than 30 percent of his or her income. (The fair market rent is the Department of Housing and Urban Development’s estimate of what a person would have to pay for modest but decent housing in a particular locality.) At the national level, the housing wage currently stands at $15.21 an hour. That is, a worker must earn $4.56 per hour just to cover the cost of housing alone. This figure represents an astonishing 37 percent increase since 1999.
The burden of high housing costs has weighed most heavily on people in low-paying service jobs, like restaurant and hotel workers. The households of many of them fall into the category of what the report refers to as “extremely low income,” people who earn less than 30 percent of their area’s median income. Thirty-two million people find themselves in this position. With average earnings of only $8.34 an hour, an extremely low-income household cannot afford the fair market rate on a two-bedroom home in any of the 50 states. Part of the problem lies in the growing loss of rental housing to home ownership—that is, former rental units that, once purchased, are no longer rentable. In big cities, too, gentrification has taken its toll on what were once affordable units. In New York City, for instance, many former tenement buildings have been renovated by owners who now charge several times what previous tenants had once paid.
According to the report, housing is least affordable in Massachusetts and California. In Massachusetts the housing wage for a modest two-bedroom apartment is $22.40. California follows close behind with a housing wage of $21.18. But in both states, the actual wage of many full-time employees falls below these two amounts. For these workers, finding any housing at all may require doubling or tripling up, or else settling for substandard housing. And paying the rent can still entail cutting back on other essentials, like food, which leads to growing dependence on soup kitchens and food pantries.
Even in Nebraska, which the report describes as “the least unaffordable state,” over a third of the residents cannot afford a two-bedroom unit at the fair market rent. Another recent report, from Harvard University’s Joint Center for Housing Studies, found that the number of people who must pay over 50 percent of their household income for rent has increased over the past few years by close to a million—thereby expanding the category of what HUD calls worst-case housing needs.
Minimum-wage workers have a particularly onerous time in paying for housing. The federal minimum wage has remained since 1997 at a shamefully low $5.15 an hour. If $4.56 of this amount were spent on housing, there would remain only 59 cents out of each hour’s pay to cover all other necessities. In 11 states, the housing wage is over three times the minimum wage. Although a few states, like California, set a higher minimum wage, many people are still unable to afford rental housing without spending more than 30 percent of their income. As a result, some who work end up in homeless shelters.
Section 8 tenant-based vouchers continue to be a significant help for those lucky enough to have them. They make up the difference between an apartment’s market rate rent and 30 percent of a household’s income. The program, though, serves only a fraction of the people who are eligible, and in many parts of the country long waiting lists are common. Congress is now working on HUD’s budget for fiscal 2004, but advocates fear that legislators may not provide enough funding to maintain the program at its current level, to say nothing of addressing additional needs—especially if the administration seeks to reduce voucher expenditures next year. The U.S. bishops spoke in 1975 of housing as “not a commodity but a basic human right.” It is a right presently denied to far too many low-income Americans.