And the news about Affordable Housing is...

From the March 2015 Housing Spotlight from the National Low Income Housing Coalition:

•             The number of extremely low income (ELI) renter households rose from 9.6 million in 2009 to 10.3 million in 2013 and they made up 24% of all renter households in 2013.

•             There was a shortage of 7.1 million affordable rental units available to ELI renter households in 2013. Another way to express this gap is that there were just 31 affordable and available units per 100 ELI renter households. The data show no change from the analysis a year ago.

•             For the 4.1 million renter deeply low income (DLI) renter households in 2013, there was a shortage of 3.4 million affordable rental units available to them. There were just 17 affordable and available units per 100 DLI renter households.

•             Seventy-five percent of ELI renter households spent more than half of their income on rent and utilities; 90% of DLI renter households spent more than half of their income for rent and utilities.

•             In every state, at least 60% of ELI renters paid more than half of their income on rent and utilities.

•             No state had more than 56 units of rental housing affordable and available for every 100 ELI households, and no state had more than 37 units of rental housing affordable and available for every 100 DLI households.

•             Among the 50 metropolitan areas with the largest renter household populations, the number of affordable and available rental units for every 100 ELI households ranged from 10 in Las Vegas-Henderson-Paradise, NVto 47 in Boston-Cambridge-Newton, MA.

Housing Matters: Affordable Housing, It's a Necessity

By Housing Specialist II Shaunte’ Abernathy Cox

An estimated 12 million renters and homeowners pay more than 50 percent of their annual income for housing. A family with one full-time worker earning the minimum wage can’t afford the local fair-market rent for a two-bedroom apartment anywhere in the United States (HUD, 2015). 

However, at Community LINC, Sara, a 28 year old, mother of three, who entered the Interim Housing Program unemployed, is finding a way to beat the odds.  Within her first month of being in the program, she secured employment.  Her minimum wage job, combined with the money she receives for child support, has allowed her to start the process to transition to permanent housing. 

During her time at Community LINC, she’s been able to establish a financial safety net, which will help decrease her chances of cycling back into homelessness.  Through the direct assistance funds we receive, we will be able to eliminate some of Sara’s barriers by paying her outstanding utility debt. 

In addition, she was able to connect with a private landlord to secure housing with cable, water, trash and sewer fees all included in the rent.  The only utility Sara will be responsible for is electricity. 

In a couple of weeks, she will leave Community LINC with a job, money in a savings account, a budget, a furniture voucher, restored confidence in herself and most importantly, HOUSING! 

By all accounts, Sara succeeded. She participated in services at multiple levels and utilized the tools she received from each area to help her succeed.  However, without the availability of private, affordable housing, things could have been a lot different for Sara.  For example, the average wait for Public Housing in Kansas City is 1-3 years while the average wait for Section 8 is 3-5 years.  Furthermore, the wait for many low-income tax credit properties in Kansas City is 12-18 months. 

Establishing partnerships with private landlords is critical when it comes to helping our clients transition.  It ultimately boils down to education…taking the time to explain to landlords who we are, what we do, who we serve and why our clients should be given a second chance at housing. 

It’s a never-ending task, but I’m up for the challenge and I hope you will join me as we work together to Educate & Celebrate! 

Source:  The U.S. Department of Housing & Urban Development

www.portal.hud.gov (Who Needs Affordable Housing), 2015

*Low-income tax credit properties are indirect Federal subsidy used to finance the development of affordable rental housing for low-income households (HUD, 2015)

**The client’s name was changed to protect her identity.

There isn't enough affordable housing

By CEO/Executive Director Laura Gray

I read a lot of studies that tell us there isn’t enough affordable rental housing in the U.S. One such report from The Joint Center for Housing Studies at Harvard - The State of the Nation’s Housing – was released last Thursday.

The report states that in 2012 nearly 41 million households paid more than 30% of their income for housing. Nearly half of all renters are considered housing burdened, meaning they pay more than 50% of their income for housing. Four out of five people who made less than $15,000 per year (roughly equal to full time work at minimum wage) paid more than 30% of their income for housing and two thirds paid more than 50%.

Logic tells us that a family spending more than 50% of their income on housing have less to spend on food and healthcare. The report confirms it.

What really caught my eye was a blog posting on the Urban Institute’s MetroTrends blog back on November 18, 2013. Erika Poethig posted that “The federal resources subsidizing homeownership far exceed those dedicated to subsidizing rental housing for America’s lowest income citizens. All the subsidies for homeownership – the mortgage interest deduction, the deduction for property taxes, and the housing value that is not taxable – add up to about $300 billion annually. Compare this to the $37.4 billion the US Department of Housing and Urban Development spends on rental housing assistance. Throw in the tax subsidies for developers of affordable housing, which is about $8 billion a year, and there is still room for improvement.”

Don’t get me wrong. I take all of the deductions associated with owning a home. But, something feels wrong about so little assistance going to help ensure that children in extremely low income families have a home.

The housing burden

The Federal Reserve Bank of Kansas City’s Low to Moderate Income Survey for the 3rd quarter showed a slight decrease. Employment improved slightly, but the improvement was offset by the decline in the availability of affordable housing and credit.

Our homeless families, of course, fall into the low income segment the survey measures. We saw some of the same improvement in employment recently. The average wage for the adults who found jobs was hovering around $10/hour until September when it rose to $12.

At $12/hour, a single parent will earn about $25,000 per year. Housing costs will start to become a burden if rent and utilities climb together are above 30% of income = $7,500/year or $624/mo. Rent alone averages $784 for a two bedroom apartment in the Kansas City area, which means our families will remain financially fragile.

However, our families will not be alone. A study from the Joint Center for Housing Studies at Harvard University, a record 20.2 million people spent more than 50% of their income on housing as far back as 2010. Most of these families will live in or on the brink of poverty, but the vast majority will not become homelessness.

If history prevails, 80% of our parents will not become homeless again. They may struggle, but they leave better equipped to provide for themselves and their children. And, the children leave knowing they have options that may break the cycle of poverty.

From Poor to Homeless

The National Alliance to End Homelessness and Enterprise Community Partners commissioned a review of the existing research on family homelessness. Marybeth Shinn of Vanderbilt University wrote the brief, released on the 27th - Ending Homelessness for Families: The Evidence for Affordable Housing.

Just one of the many insights in the brief is about the differences between the families that became homeless and poor families that never became homeless.

Homeless families resemble poor families in many ways. They have limited education and work histories – only about half have a high school diploma or GED. Both groups experience high levels of depression and are exposed to high levels of community and domestic violence.

A major difference though is that the homeless families are younger. Having a baby can stretch resources even for middle class families. About a quarter of all episodes of poverty begin with the birth of a child, so it isn’t surprising that having a baby can coincide with homelessness.

As a side note, “Nationally, infancy is the age at which a person is most likely to stay in a homeless shelter. Risk of homelessness remains high in the preschool years, when parents struggle to juggle child care and jobs, but is lower during the elementary and high school years than in adulthood.”

The three most important differences between homeless families and poor families are: (1) they have extremely low incomes, which is less than 30% of area median income (2) they have less access to housing subsidies, and (3) their social networks are not able to provide sufficient help.

So what does all of this mean? First, homeless families have far too little income to both rent housing at the market rate and provide for any other needs. Second, they many never have had the resources to rent their own place. They are more likely to have doubled up, moving frequently among friends and family to avoid literal homelessness. Finally, their community of friends and family are smaller and poorer, so they are less able to help the family prevent homelessness.

A final variation in the rate of homelessness is geographic, because of varying availability of affordable housing. For example, a high rate of homelessness in California coincides with few vacancies and costly housing.

According to the National Low Income Housing Coalition, the 2009 “housing wage” in Kansas City is $15.21 per hour. That is the hourly wage a household must earn (working 40 hours per week, 52 weeks per year) to afford the fair market rent on a two-bedroom apartment at 30% of income. It requires 2.2 jobs per household at minimum wage.

In 2009 extremely low income in Kansas City meant the family made less than $21,120. Affordable housing should be no more than 30% of income, or $528 per month. Fair market rent for a two bedroom apartment in Kansas City is $791. A family needs to make $31,640 per year to afford fair market rent. Obviously, families with extremely low income can’t afford fair market rent.

Because there wasn’t enough affordable housing in Kansas City, about 14,000 people became homeless last year. We know there will be more this year.

Next time, I’ll share more from the brief about ending homelessness for families.

- Laura Gray