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Report: U.S. rentals unaffordable to poor

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Report: U.S. rentals unaffordable to poor

By Genaro C. Armas, Associated Press Writer | December 20, 2004

WASHINGTON --Most Americans who rely on just a full-time job earning the federal minimum wage cannot afford the rent and utilities on a one- or two-bedroom apartment, an advocacy group on low-income housing reported Monday.

For a two-bedroom rental alone, the typical worker must earn at least $15.37 an hour -- nearly three times the federal minimum wage, the National Low Income Housing Coalition said in its annual "Out of Reach" report.

That figure assumes that a family spends no more than 30 percent of its gross income on rent and utilities -- anything more is generally considered unaffordable by the government.

Yet many poor Americans are paying more than they can afford because wage increases haven't kept up with increases in rent and utilities, said Danilo Pelletiere, the coalition's research director.

The median hourly wage in the United States is about $14, and more than one-quarter of the population earns less than $10 an hour, the report said.

"A lot of people continue to be squeezed out," said Judy Levey, executive director of the Homeless and Housing Coalition of Kentucky. "Housing here is relatively inexpensive, but because the wages are so low, people can't afford housing,"

The report quoted federal Bureau of Labor Statistics data that showed hourly wages rising about 2.6 percent over the past year, slower than the 2.9 percent rise in rents recorded in the Consumer Price Index.

In addition, Pelletiere said, government spending on Section 8 rental vouchers, which helps 2 million Americans -- mainly poor -- pay rent hasn't kept up with demand.

The study analyzed data from the Census Bureau and the Housing and Urban Development Department to derive the hourly wage figures.

In only four of the nation's 3,066 counties could a full-time worker making the federal minimum wage afford a typical one-bedroom apartment, the coalition said. Three were in Illinois: Clay, Crawford and Wayne counties; the other was Washington County, Fla.

California topped all states in the hourly wage needed to afford a two-bedroom apartment, at $21.24, followed by Massachusetts, New Jersey, Maryland and New York.

States with more residents in rural areas were generally the most affordable, although no state's housing wage was lower than the federal minimum wage of $5.15 an hour, which has not changed since 1997.

West Virginia was the lowest at $9.31 an hour for a two-bedroom rental, followed by North Dakota, Arkansas, Mississippi and Alabama.

Pelletiere said the coalition's data for 2004 could not be compared with previous years because of changes in the way that HUD calculated "Fair Market Rents," which is the cost of rent and most utilities for a typical apartment. The fair rent varies widely by metropolitan area.

Overall, though, utility costs appear to be rising at a faster rate than rents, Pelletiere said. Add in stagnant wages and the housing situation for the nation's poor "has gotten worse over the last year," he said.

On the Net:

National Low Income Housing Coalition

HUD

From Boston.com

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A few solutions/comments:

1. People must just adjust and live bellow their means for a few years more until they save up to by their own property so they can build up some equity of ther own.

2. Require developers to build a certain amount of affordable units for every certain amount of complexes they build.

3. The high cost of rent is somewhat offset by the declining cost of goods such as groceries and consumber products.

4. Somehow make greedy corporation less greedy.

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LOL, it takes a study to show that people making less then $10/hour can't afford to rent a livable apartment?

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LOL, it takes a study to show that people making less then $10/hour can't afford to rent a livable apartment?

<{POST_SNAPBACK}>

It takes a study to prove anything in this country.

I think it is also unrealistic to think that owning your own property will suddenly make you more able to afford living. There are other costs associated with owning your own property that, if not careful, could cost more than renting. Plus some people have no desire to own their own home and much prefer renting.

The minimum wage needs to be increased and its a shame that no one is not more outraged at this in our government. Not a surprise, but just a damn shame.

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no matter how educated you are, you still have the problem of high rents.

In my opinion the solution should be to force developers to provide different sizes of units. Then let the free market take over. That way you have varying income levels living together by default and opening units to a subset of people that may not have been able to afford them before.

another solution is to put the nimby's in their place and zone some high density residential buildings. it's the law of supply and demand. the rents are high because the demand is so high. Of course a lot of homeowners wouldn't like that, but there's got to be a balance between the two.

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The best solution I can think of is getting an education.

<{POST_SNAPBACK}>

I agree totally. However, some of the wealthiest people in the world have a high school education or less.

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You can buy a multifmaily house with 0% down, rent two units and live for free... If you know how to work the system.. So I guess thats "education"..

The problem, is that the housing prices are out of whack with income, and investors have to pay X to buy them.. Then they need to get Y in rent to make it a good investment.. Add in the GOV mandated inflation per year of 3%, and there you go..

Not affordable..

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