Climbing home and rental prices are hurting the chances of poorer people putting roofs over their heads.
By Jim Parker
CTW Features
Coast to coast, the housing industry currently favors the home seller as prices are rising, sales surging and inventories dwindling, which leave the residences on the market more valuable.
Take Seattle as a caffeinated example.
The northwest city of 3.5 million people boasts the hottest housing market in the country since last fall, according to the Case-Shiller home price index and reported this summer in the Seattle Times. The typical single-family house in metro Seattle cost 12.9 percent more in April than a year ago, as stated in the report.
Other fast-rising markets are Portland, Oregon; Dallas; Denver; and Detroit, up 9.3 to 7.4 percent respectively. Those totals compare with a 5.5 percent national price growth rate.
What’s good for owners and well-off buyers can be doubly troubling for at least one group: lower income property shoppers, including first-time homebuyers that can’t afford average and midpoint home prices or apartment rents.
According to studies, the nation has been suffering from an affordable housing crisis. Most hurt are an estimated 11.4 million “extremely low income” American households, which earn below the poverty line, or at 30 percent or less of the area’s median income.
A new report by the National Low Income Housing Coalition picked out eight states that count fewer than 30 affordable homes available for each 100 households in “extreme poverty.”
The tightest situation is in Nevada, which estimates 15 homes available per 100 extremely low-income renters, according to the report.
“There is a dire shortage of affordable housing in Nevada,” Leanna Garfield, of Business Insider on AOL.com, wrote in an article this spring on the national housing market. According to Garfield, Nevada saw its economy jump after the 2008 recession, but the state’s housing market hasn’t kept up with its recent influx of new residents, especially in cities like Las Vegas and Reno.
Seven other states in which low-income homebuyers are struggling include, in order, California, Arizona, Oregon, Colorado, Florida, New Jersey and Texas, according to the National Low Income Housing Coalition.
High prices and shrinking inventories can attack impoverished home seekers even in states without a full-fledged crisis.
According to the Joint Center for Housing Studies at Harvard, nearly half of all renters in the U.S. are using more than 30 percent of their income to pay for housing, and about 25 percent of people pay rent that exceeds 50 percent of their monthly income.
According to Affordable Housing Online, whose parent ApartmentSmart.com serves as a marketplace for less expensive rentals and subsidized housing, households that pay more than 30 percent of their gross income for living costs are rent overburdened.
Another category, fair market rents, can be used to better understand the average housing costs of an area, according to Affordable Housing Online. The rental rates are employed to establish payment standards for the national Housing Choice Voucher Program, in which families seek suitable homes, townhomes or apartments and then pay the difference between the rent charged by the landlord and a subsidy paid to the property owner (If the rent was $1,000 a month and the landlord’s subsidy $250 a month, then the tenant would pay $750 a month).
“If you find it hard to find an affordable apartment or house in the U.S., you’re not alone,” Garfield wrote.
© CTW Features
