Barriers to Affordable Housing

by Shannon Moriarty · 2009-04-22 21:20:00 UTC
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An individual working full-time at minimum wage cannot afford the average cost of a one-bedroom apartment in any state in the U.S., according to a new study. Now more than ever, low-wage workers are facing significant barriers to making ends meet, and the lack of affordable housing just complicates matters. This explains why most low-income families are one paycheck, one sickness, or one personal tragedy away from missing a rent or mortgage payment and becoming homeless.

The report, entitled "Out of Reach", was released last week by the National Low Income Housing Coalition (NLIHC). The report, in all of its detail, makes two notable observations.

First, there is a lack of affordable housing stock in every county in every state in the U.S.. Even before the current housing crisis began in 2007, our nation was short 2.8 million affordable housing units. What does this mean? That 2.8 million families must live in an unaffordable situation, spending a large portion of their income on housing expenses. This puts a family at a greater risk of not making ends meet and, even worse, becoming homeless.

Second, our modern day economic troubles have just exacerbated an already dire situation. With foreclosures and unemployment at historic levels, this is creating greater competition for the already scant supply of decent, affordable rental housing units. Here are some more impacts of our current economic situation, straight out of the report:

  • The unemployment rate has increased from 4.8% to 8.1% in the last 12 months, increasing the number of unemployed workers by 5 million.

  • The number of "involuntary" part-time workers has risen to 8.6 million.

  • An estimated 40 percent of foreclosures displace renter households.

  • The number of renter households has grown by 2.2 million in the last two years, while the number of owners has contracted.

  • As many as 1.5 million additional people could experience homelessness in the next two years.

The report is very data-rich, with ample findings for each state. Here are a few key summary findings that piqued my interest:
  • In 30 states, more than two full-time minimum wage jobs are required to afford the two-bedroom fair market rent.

  • In 17 states, a household must work at least 50 hours at the average renter wage to afford the two-bedroom fair market rent.

  • In 15 states, the fair market rent for an efficiency exceeds the entire monthly SSI payment.

  • In 11 states, a household must work at least two full-time jobs at the minimum wage to afford the two-bedroom FMR in the state's combined nonmetropolitan areas.

So what do these numbers mean? First, they show that for the past decade, the private market has not met the demand for decent, affordable rental housing units. This lack of market responsiveness has forced many low-wage workers to work significant overtime or hold down several jobs just to make their rent payment.

If anything, this report provides the facts to explain why being poor automatically puts a person at risk of becoming homeless. Just as demand for low-cost housing is up, opportunities for gainful employment have fallen. If anyone is going to fall of the edge, it's going to be those who were barely holding on in the first place.

Shannon Moriarty has worked in various homeless shelters and service organizations around the country. She is a graduate student studying housing and urban policy at Tufts University.
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