— by Quinton Young, Program Assistant —
The affordable housing crisis facing the nation is rapidly spiraling out of control. Given the large income disparities facing families and individuals across the country, more and more people are facing skyrocketing housing prices and a stagnant wage. Affordable housing plays a large role in the ability of low-income families to move towards a self-sufficient lifestyle.
Recently, the Atlantic ran a news article featuring research from the Joint Center for Housing Studies (JCHS) at Harvard, which concluded that “About half of all renters in the U.S. are using more than 30 percent of their income to cover housing costs, and about 25 percent have rent that exceeds 50 percent of their monthly pay.” While spending no more than 30 percent of household income on rent is standard financial wisdom, “an estimated 12 million renter and homeowner households now pay more than 50 percent of their annual incomes for housing. A family with one full-time worker earning the minimum wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States.” (Donovan, n.d.)
In sum, there is not even one state in the United States of America that makes it possible to afford a fair market rent for a 2-bedroom apartment on one person’s full-time minimum wage salary. According to the National Low Income Housing Coalition, a household would have to work 102 hours a week to afford the $959 national average monthly rent at the federal minimum wage of $7.25. Additionally, since many low-income families live in sub-standard housing due to the rising costs of rental units, their health and safety increase dramatically as they are able to move into a safe, affordable, home or apartment. Meanwhile, income growth has been concentrated among citizens of higher incomes. This means that the incomes of the low-income household has not kept up with the prices on the housing market.
The housing crisis is not limited to the sky-rocketing price of rent nationwide; it also affects long-term transferable wealth and asset building. As the cost of buying a home outright has also risen, people unable to afford to purchase a home can end up spending more in the long-run on rent, since living in poverty is often cumulatively more expensive. Whether owning or renting a home, the cost of rent or mortgage is used to estimate how comfortable a living situation is for a household. The U.S. Department of Housing and Urban Development (HUD) has stated that people who spend more than 30 percent of income on housing are cost burdened and may have difficulties in meeting vital needs such as food and transportation.
The Joint Center for Housing Studies of Harvard University states that the homeownership rate for minorities as a group remains 25.5 percentage points lower than that of whites as of 2014. Since homeownership is one of the primary forms of wealth accumulation in the U. S., this means that minority groups are more asset-poor than whites, and are not able to inherit housing or intergenerational possession of assets. Therefore, first time homebuyers might lack the knowledge as well as the financial means to become homeowners ((Colton, Housing in the Twenty-First Century, 2003)). Additionally, the high price tag of home ownership can mean that more low-income families rent their homes out of necessity.
Community Action Agencies (CAAs) are rising to this challenge and working with renters and hopeful homeowners all over America. For families facing the difficult choice between paying rent or utility bills, community action programs helped more than 4,000,000 low-income individuals obtain non-emergency energy assistance for their homes. CAAs also worked to create over 23,200 safe and affordable housing units in communities around the nation, and through construction, weatherization or rehabilitation efforts, CAA programs and staff preserved or improved an additional 145,000 safe and affordable housing units. More than 285,000 individuals obtained or maintained safe and affordable housing as a result of community action programs. In addition to affordable rental units, more than 4,400 low-income individuals purchased their own home last year in their community as a result of Community Action assistance. Whether it’s through a program to help families and individuals secure safe, healthy, and affordable housing, grow their savings to invest in their own homes, reduce their energy bills, or build essential skills to reduce barriers to employment, low-income families and individuals collaborate with Community Action staff nationwide to access programs and services that help them respond directly to the affordable housing crisis.