Out of Reach
Thursday, October 8, 1998
Study Highlights Rental
Housing Gap,
Illustrates Need for More
Federal Housing Resources
The National Low Income Housing Coalition today released Out of Reach: Rental Housing at What Cost? The study analyzes the affordability problems renters looking for housing are likely to face in the private rental housing market in the United States.
"Out of Reach reminds us that an important part of the solution to the nation’s housing problems is to make available more affordable rental housing,” says Bill Faith, Coalition Interim President. “That means more resources are needed for the developers and the community based organizations. The good news is that a myriad of these groups have proven, successful track records providing affordable rental housing. The federal government needs to substainially increase resources for affordable rental housing in order to help fill the gap.”
The study estimates the affordability of the “fair market rents” (FMRs) established annually by the Department of Housing and Urban Development (HUD). FMRs are used for the Section 8 rental housing certificate and voucher programs. They are HUD’s best estimates, based on telephone surveys and other data, of gross rents (including utilities) of “privately owned, decent, safe, and sanitary rental housing of a modest (non-luxury) nature with suitable amenities” of units offered for rent in fiscal year 1998.
The major conclusion of the study is that Fair Market Rents are unaffordable for large numbers of renters, including many working families.
- In 255 of the 345 metropolitan areas and 661 of the 885 metro area counties, one out of every three renter households could not afford the FMR for a one bedroom apartment. That is, it would cost more than 30% of their incomes, the national standard for affordability.
- At least one-third of renters in all but one metro area and in 875 counties could not afford the Fair Market Rent for a two bedroom apartment. In 122 metro areas and 274 counties more than 40% of renter households cannot afford a two bedroom apartment.
- In every state, metro area, and county, renters needed more than a full time, minimum wage job to afford the fair market rent for a one bedroom apartment. In 168 metro areas and 473 counties renters need at least double the minimum wage to afford the fair market rent for a two bedroom apartment.
- In Nassau County, NY, Suffolk County, NY, and Fairfield County, CT, a minimum wage worker would need to work 160 hours per week to afford the fair market rent for a one bedroom unit.
| Hawaii | 147 hours | h | Connecticut | 113 hours |
| New Jersey | 124 hours | California | 112 hours | |
| New York | 122 hours | Illinois | 105 hours | |
| District of Columbia | 121 hours | Maryland | 103 hours | |
| Massachusetts | 117 hours | New Hampshire | 102 hours | |
| Alaska | 114 hours | Nevada | 102 hours |
This gap in affordability can be overcome with resources dedicated to developers and community based organizations who have the capacity to address this fundamental building block for healthy communities. “Community based developers around the country are successfully employing a variety of programs to build housing and assist working families and individuals,” continues Faith. “Out of Reach describes the needs of those workers.”
Faith cited four examples of successful locally based housing programs:
- Mercy Housing of Denver, CO uses the Department of Housing and Urban Development’s Section 8 rental assistance program to help single mothers earn a GED, go to college, and get back on their feet. Section 8 makes the difference because it allows families to have safe and decent housing.
- People’s Self Help Housing Corporation of San Luis Obispo, CA uses Community Development Block Grants, the HOME program, and other forms of assistance in its Mutual Self-Help Homeownership Program. Groups of ten families buy lots and work together to build each others’ homes. The program attracts young, upwardly mobile families who might not otherwise be able to afford a home of their own.
- Interfaith Housing of Western Maryland uses HUD’s HOPE III program and money from private sector lenders in its Local Initiative to Guide Homeownership Today (LIGHT), a home ownership program that also employs sweat equity. Homeowners receive assistance and perform some of the labor required to build or rehab their home.
- Thorpe Family Residences in The Bronx, NY uses HUD’s Homeless Assistance Programs and Section 8 rental assistance to provide permanent supportive housing for formerly homeless families. The program also provides child care, which assists mothers who are returning to school or training for jobs. Many of the 20 families in the program are escaping drugs or violent home situations. In two of the families, mothers were reunited with their children because of the availability of support services.
