What Is “Affordable” Housing?
A recent study conducted by the National Low Income Housing Coalition highlighted the complexity of affordable housing issues in communities around the country. Lack of access to employment, a living wage and quality affordable housing combine to create an environment where it is exceedingly difficult for people to procure and retain housing that is affordable for their incomes.
“The affordable housing crisis…is as much an income issue as it is a housing one.”
The affordable housing crisis, for individuals not receiving subsidies, is as much an income issue as it is a housing one. The Out of Reach report should serve as a call to action for communities to expand the dialogue around housing to include discussions of stagnant wages and underemployment.
The Out of Reach report helps to highlight the issue of affordable housing with empirical data.
— At the federal minimum wage affordable housing (30% of income) would only be $377 a month.
— In Louisville the fair market rent for a one bedroom unit is $592 a month which is 47% of a minimum wage worker’s income.
— In Louisville the fair market rent for a two bedroom unit is $737 a month which is 57% of a minimum wage worker’s income.
— In Louisville a resident would need to earn $14.92 an hour to afford a two bedroom unit; for workers earning minimum wage ($7.25) they would need to work 78 hours a week.
— These numbers, in a city where 1 in 5 workers earns less than $10.10 an hour, should be guiding our conversations about affordable housing.
Residents earning at or near minimum wage are often faced with the lose-lose proposition of spending over 50% of their income on rent, or finding an option within their price range which often comes with many “hidden” costs. A housing unit costing $377 will typically be very non-energy efficient, which can add several hundreds to the utility bill. Additionally, lower cost housing situations often cause tenants to move more frequently; due to pressure from utility bills, landlord disputes, dissatisfaction, and other issues. This increased frequency of moves comes with a host of other expenses such as security deposits, utility connection fees, moving costs, setup, etc. These “hidden” costs are a drain on assets and continue to keep low income individuals low wealth.
Lower cost housing situations often cause tenants to move more frequently due to pressure from utility bills, landlord disputes, dissatisfaction, and other issues.
We at Access Ventures approach investments in communities from a Neighborhood Strategy perspective. We do not want to limit our vision of the problems communities face to just one issue; housing, jobs, education, safety, etc. Rather we seek to identify organization and individuals with which we can collectively impact the holistic needs of a community. We believe that to adequately address affordable housing we must increase access to gainful employment, aid in building wealth (assets other than immediate income), increase livability of communities, and provide housing solutions that seek to lower overall housing expenses (rent, utilities, and decreased transiency).
