Out of Reach
Statement of Sheila Crowley
President, National Low Income Housing Coalition
Press Event on Publication of Out of Reach 2000
September 20, 2000Good afternoon and welcome. I am Sheila Crowley, President of the National Low Income Housing Coalition. We are a membership organization solely dedicated to ending America’s affordable housing crisis.
We are here today to announce the publication of the 2000 edition of Out of Reach, our annual report on the gap between rental housing costs and incomes in every jurisdiction n the country. I want to acknowledge and thank the Housing Assistance Council, represented today by Joe Belden, for their contribution that made possible last year for the first time inclusion of all non-metro areas, allowing us to include every jurisdiction. Out of Reach is the only analysis of housing data done on a locality by locality basis. The methodology employed in Out of Reach was developed by Cushing Dolbeare, the Founder and Chair Emeritus of the coalition. This year’s report is the product of two able staff members of the Coalition, Jennifer Twombly, Research Director, and Winton Pitcoff, Communications Director.
This report confirms the findings of all other recent housing research – that low wage earners are simply unable to compete in today’s housing market without some form of housing assistance. NLIHC supports a multi-pronged approach to federal low income housing policy: preservation and improvement of existing public and assisted housing units, production of new housing, and expansion and improvement of tenant-based assistance or housing vouchers. We also support increasing the minimum wage, expansion of the Earned Income Tax Credit and other means of improving income levels for those at the bottom end of the income ladder.
Today and tomorrow, we are sending copies of this report to the President, to the Director of the Office of Management and Budget, to every member of the House and the Senate, to every Governor, and to the presidential candidates. We certainly encourage members of the press who cover the activities of any of these individuals to ask them for their reactions to the report.
We are honored to have three leaders in progressive housing policy join with us today in the release of the report. I will introduce the speakers and then turn the podium over to them. After their remarks, I discuss the findings of Out of Reach in more detail and open it up for questions for any of us, including Jennifer who is the principal investigator for the project.
HUD Secretary Andrew Cuomo is a passionate advocate for the poor and for the need to improve their social and economic well-being. His accomplishments as HUD Secretary and as Assistant Secretary for Community Planning and Development are so numerous and notable that NLIHC will honor him this year with our 18th annual housing leadership award. His latest initiative was announced last week with the policy decision to increase the fair market rents in jurisdictions with very tight rental housing markets or concentration of poor families in high poverty areas. This policy will greatly expand the housing options of voucher holders, and substantially improve the performance of the housing voucher program. Secretary Cuomo is also the author of the preface in the new edition of Out of Reach.
Senator John Kerry, Democrat of Massachusetts and Ranking Member of the Housing Subcommittee of the Senate Banking Committee, is the author of one of the most important pieces of housing legislation that we have seen in a long time. S.2997, the National Affordable Housing Trust Fund Act, establishes a dedicated source of new revenue to make grants to states and national non-profits for the production of new rental housing, most of which must be affordable for those with the most severe housing cost burden. We will work closely with Senator Kerry to insure passage of this landmark legislation.
Senator James Jeffords, Republican of Vermont, came forward at the outset of the burgeoning crisis in loss of Section 8 assisted units in which we have invested considerable resources to assure decent housing for low income people. He authored S.1318, the Preservation Matching Grant Program, last year, which will provide badly needed capital for the long term preservation of these properties as assisted housing and facilitate their transfer of ownership to socially motivated, non-profit housing organizations. That bill is now part of S.2733 and we are committed to its passage as well.
On behalf of the membership of NLIHC, I want to thank each of you for your steadfast dedication to the progressive housing policy and for being with us here today.
Now for the findings. This report is chock full of data and it is easy to get overwhelmed by it. So we have added a wonderful guide to understanding the data on pages 20-23 that we hope improves its usefulness for you.
Here are the most important things to know.
We are talking about a problem of national scope, not isolated communities. Nowhere in the country, not in any single jurisdiction, can a full time minimum wage worker afford to pay the fair market rent for a two bedroom unit. This year we added in state minimum wages that are higher than the federal wage and still we do not close the gap of unaffordability.
The measure of unaffordability that we add to the documentation of the crisis is what we call the Housing Wage, that is, the amount per hour a full time worker must earn in order to afford the fair market rent for a one, two, or three bedroom unit. As the chart indicates, the housing wage nationally is $12.47 an hour for a two bedroom apartment. There is great variability across the country with West Virginia at $8.12 an hour up to New Jersey at $16.88 an hour. On average, the housing wage is up 3% across the country. In the most extreme housing markets, it is up over 20%. In 2% of jurisdictions, the housing wage has actually declined. If low wage earners cannot afford housing without housing assistance, imagine the difficulty faced by elderly and disabled people who rely solely on SSI to support themselves.
Another way of analyzing these data is to look at the number of hours of minimum wage work a household must earn to afford the fair market rent, as illustrated in the second chart. On average nationally, it takes two and a half minimum wage workers per household to afford the two bedroom rent. In San Francisco, the most expensive housing market, it takes five and a half minimum wage worker per household to afford a two bedroom unit.
As staggering as the national averages are, the most important use of Out of Reach is at the local level, where poor families and advocates and elected officials and citizens must come to grips with the severe housing shortage every day. We urge them to use these data to document their housing needs, especially in their Consolidated Plans, their Public Housing Plans, and their Continua of Care. Data are available at NLIHC website, where you can look up any jurisdiction in the country.
We must be certain not to get caught up in the numbers and miss the meaning. The affordable housing crisis has real consequences for real people who cannot do everything they are expected to do to care for themselves and their families, let alone things they would like to do. Housing is foundational to successful family life and it is unfair to expect families to succeed in the absence of a secure place to live.
So what are the policy responses we recommend today?
First, of course, improve incomes, including increasing the minimum wage and expanding the Earned Income Tax Credit. We have calculated what will happen if the minimum wage goes up by $.50 and then by a $1.00, and in a few jurisdictions, the fair market rent becomes more reasonable.
Second, we need to hold on to the public and assisted units we have. Third, we need to build new housing that is affordable for the very lowest income households. Fourth, we need to add new housing vouchers and improve their utilization.
So we urge passage of the Preservation Matching Grant legislation with a $300 million appropriation, and we urge passage of the National Affordable Housing Trust Fund Act. We also note with great hope the Housing Needs Act of 2000 introduced last week by Senator Bond, and look forward to refinement of his proposal.
Finally we urge full funding of HUD’s FY2001 budget request, including an additional 120,000 new incremental vouchers and the voucher success fund.
Thank you.
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