By Brian Peters, Housing Policy Advocate
The Center for Housing Policy released a new study on Friday (2/24/12), Housing Landscape 2012, that examines the housing affordability for working households. The report focuses on households with someone working at least 20 hours a week, and that are low to moderate income. It found that many of those households are struggling to make ends meet. Be sure to check it out!
What they looked at is something called “severe housing cost burden” which means when people pay more than half of their income toward housing costs. For renters, this includes rent and utilities. For homeowners, it’s mortgage, property taxes, insurance, homeowner fees, and utilities.
What they found is that if you make less than 80% of area median wage, the odds you’re experiencing severe housing cost burden goes up. Median is the “middle point” so when they say median income, it means the income of the person in the middle between the poorest person and the richest person. In this case, “area” includes the income of people in Milwaukee, Ozaukee, Washington, and Waukesha counties. You can get an idea of what the dollar amounts are by looking at HUD’s income guidelines for Wisconsin.
The less you make, the more likely you’re going to have problems paying the rent or mortgage. A LOT more likely that you’ll have problems. Let’s look at the different income categories and what percentage of people nationally are having problems with housing costs. From Housing Landscape 2012:
What this graph shows is that the poorer you are, the harder it is to pay for your housing costs, often resulting in over 50% of your income being spent on housing. If you’re living on fixed income and maybe working a part-time low-paying job, you’re probably one of the 80.9% of those with income at 30% or less of the area median wage who are spending over half of your income toward rent!
It also doesn’t help that while rental housing costs have increased, people’s income have gone down, as shown by this next graph from Housing Landscape 2012. While many owners have seen their housing costs go down, their income also has gone down.
In Wisconsin for the year 2010, they found that there are 951,877 working households, of which 181,968 are struggling with their housing costs. This is 19%, up from 16% in 2008.
In the Milwaukee metro area—which includes Milwaukee, Ozaukee, Washington, and Waukesha counties—they found 257,057 working households, with 55,803 having problems with their housing costs. This is 22%, up from 19% in 2008. But let’s be honest here—we know that the City of Milwaukee has very high poverty, while the three counties outside Milwaukee County includes two of the most affluent communities in Wisconsin. So within the City of Milwaukee, the number of families struggling with housing is very likely much, much higher, and it’s only the suburbs that brings this rate down to 22%. That doesn’t mean there aren’t families struggling in the other communities in the metro area—there are. And in rural areas in the state, there are many problems, including housing costs, especially because so many households are aging.
Much of this is due to the economy, of course, but there are some things that can be changed.
So what can we do to help those families?
1) Contact your federal Senator and Representative and ask them to increase the appropriations for the “THUD” which means the part of the budget that is for Transportation and HUD. Right now, many housing programs are seeing cuts. Tell them that it is important to help families struggling with housing costs, and ask to increase the THUD appropriations so that housing programs are fully funded. Do this NOW, before the end of the month.
2) Keep an eye on your local communities. Do they have ordinances and policies designed to increase the cost of housing? Examples: lack of zoning for multi-family housing, fighting proposed multi-family developments, zoning that requires large lots so housing is more expensive, ordinances that require things like bricks all around the house, not just the front, which makes homes more expensive, etc. Talk to your alderperson and the mayor and tell them that housing affordability is important to the community so people can live near where they work. You can compare your community to others in Southeastern Wisconsin by following SEWRPC’s ongoing housing study.
3) Insist on fair wages for workers, so they can live on what they earn. Do they make a decent wage? Do they have access to medical benefits?
4) Ask your state legislators and Governor Walker to use the foreclosure settlement money to help with the foreclosure crisis in many communities instead of plugging holes in the state budget.
