Rising Rents are Squeezing Low-and-Moderate Income Families

New Orleans   The National Low Income Housing Coalition released its 2017 annual report, “Out of Reach,” looking closely at the impact of rising rent throughout the country and how it is pushing lower income and working families into untenable situations because the gap between rent and wages is widening. Millions of families are joining the great poet Langston Hughes by living his haiku: “I wish the rent were heaven sent.”

The gut punch of the report is plain and simple:

The 2017 national Housing Wage is $21.21 per hour for a two-bedroom rental home, or more than 2.9 times higher than the federal minimum wage of $7.25 per hour. The 2017 Housing Wage for a one-bedroom rental home is $17.14, or 2.4 times higher than the federal minimum wage.

State by the state, county by county, the story of this growing crisis is stark. The gap is the largest in a bunch of overwhelmingly “blue” states, which may be one of the reasons Congressional representatives are not running up the aisles and going from desk to desk with a Paul Revere warning call to “Help, the Landlord is Coming!” Those states with the largest gap between wages and what it cost to rent the average two-bedroom house are led by Hawaii, then Maryland, California, New Jersey, Vermont, Connecticut, Massachusetts, Maine, New Hampshire, and then Washington, D.C. I don’t need to tell you that this is aggregate data because you were already scratching your head when you didn’t hear New York, so yes, thanks to lower average rents upstate that offset the New York City metro area, they didn’t make the ten.

Sure enough when you look at the data even states with relatively lower rent still find that urban metropolitan areas like New Orleans, Houston, Miami, Salt Lake City, Dallas, Seattle, San Antonio, Anchorage, Chicago and elsewhere would require a minimum wage worker to labor 80 hours a week to find a one-bedroom place where they could live. And, yes, the Coalition’s point is not that everyone is working 80 hours to do so, but that if they were able to swing a place that is what it would take. The cold, bitter truth on the ground is that they cannot, which leads to overcrowding, homelessness, and embracing rent-to-own predatory contracts or whatever is available until the eviction notice comes.

Even the states where the average wage required to rent a two-bedroom house is relatively low, it’s still astronomical in terms of a family budget. Want a two-bedroom in Arkansas, then you need to make $13.72 per hour, the lowest wage to rent ratio in the country. Neighboring states are a good comparison with Mississippi at $14.84, Louisiana at $16.16, and Texas at 18.38. The lowest wage required after Arkansas is Kentucky at $13.95. The problem is obvious though. Wages are pretty much stuck at $7.25 in those states and too many of the big whoops in these states are fighting to keep wages that way.

As the report makes clear, it’s not for lack of working or lack of looking. Other “key findings” include:

Six of the seven occupations projected to add the greatest number of jobs by 2024 provide a median wage that is not sufficient to afford a modest one-bedroom rental home.

An extremely low income (ELI) household whose income is less than the poverty level or 30% of their area’s median cannot afford the average cost of a modest one-bedroom rental home in any state.

In no state, metropolitan area, or county can a full-time minimum-wage worker afford a two-bedroom rental home. In only 12 counties can a full-time minimum-wage worker afford a modest one-bedroom rental home.

It’s easy to see where this is going: bad to worse to crisis. I’m seems like we’re already there.


The Neighborhood Gap: Racial and Income Segregation

indexLittle Rock    Three Stanford researchers are claiming to have discovered something new in the acknowledged huge divide between white and black families in addition to making less money and “blatant discrimination,” and that’s a so-called “neighborhood gap.” Meaning that through data crunching they found what the Times called “a striking pattern: White (and Asian-American) middle-income families tend to live in middle-income neighborhoods. Black middle-income families tend to live in distinctly lower-income ones.” Going further they argue that “A typical black child living in a household with $100,000 annual income lives in a neighborhood with a median income of $54,000. And a black child in a household making $50,000 typically lives in a neighborhood with a median income of $42,000.” The neighborhood gap means the obvious, that black families, even with higher incomes, have less access to the better schools, day care, transportation, parks, and needless to say jobs, access to healthcare, and other amenities that higher income neighborhoods attract.

I would love to really sit down and look eye-to-eye with any of these folks and ask, What’s the surprise? What’s new here? Are we trying to simply define the line more tightly between what constitutes “blatant discrimination” compared to run of the mill, everyday discrimination?

The Times concedes that discrimination plays a role, but pushes it off on historic legacies of public policies from the 20th century that included “essentially whites-only wealth creation” through federal housing policies, even while acknowledging that “subtle discrimination” continues citing a 21st century HUD study in 2013 that found that “black home shoppers were often shown fewer options than similar white shoppers.” This racial steering has been a persistent and unconquered problem for over fifty years for cry-eye! Remember block-busting! Remember whites-only advertising. Where’s the change?

Let’s also recall persistent efforts and continuing battles to economically integrate higher income housing enclaves. The Wall Street Journal recently featured a column written by someone from the Manhattan Institute with the provocative headline that President Obama was trying to integrate the Clinton’s 95% white neighborhood in Westchester County, New York, saluting the efforts of a newer Republican mayor trying to resist a court approved settlement with HUD to add 750 units of publicly subsidized housing in the county. Similar efforts in another 1200 plus communities were derided. Let’s be clear we are talking about a HUD federal policy to in fact place lower income families in communities with higher incomes and stop income and racial discrimination. This is not a new policy, but it certainly is an ongoing battle to maintain whatever you want to call it, a “neighborhood gap,” segregated communities, or what have you.

The increasing number of rental units and the percentage of families renting, partially trapped by the impact of the Great Recession, means that greater numbers of families, especially non-white families, are stuck in their neighborhoods, and these are going to be neighborhoods that technically have lower incomes, but given new and more conservative lending standards are going to wall in more moderate income families wherever they are.

The difference between so-called “choice” and “blatant” versus systemic discrimination is impossible to parse, but the clear fact that federal policy to create change is still being resisted tooth-and-nail doesn’t escape peoples’ information when they look for a home. Neither does the fact that federal policy, along with state and local policies, to make a difference here are tragically wanting, is going to continue to make such gaps enduring unless there are many more fundamental and sweeping changes.

Brother Ali – Work Everyday