Rent vs. wages: What's available unaffordable

June 2, 2011
by Gary Pettus

As a cashier making above minimum wage, Christale Thomas could easily do the math: Her paycheck minus expenses equaled a renter's nightmare.

"I couldn't even afford a one-bedroom apartment that cost more than $500," said Thomas of Jackson, a single parent with three children.

"I was trying to find a place in a decent neighborhood with a decent school; I finally had to get on a waiting list for low-income housing. It was a very long list."

The predicament Thomas described is part of a national trend identified in a report from the National Low Income Housing Coalition.
Titled "Out of Reach 2011," the study says there is a large gap between what low-income renters can afford and what they can find.

It reasons the housing crisis is hitting low-income people the hardest.
To be able to pay for a "modest" apartment, the report says, an American renter must earn on average at least $18.46 an hour.

Yet, the average renter is making only $13.52.

This Housing Wage, as the report dubs it, is lower for Mississippi, at $13.22 - little consolation since the estimated mean hourly wage for a renter here is only $9.77.
The figures are based on the generally accepted standard of committing no more than 30 percent of income to housing costs.

They are also based on a particular area's monthly Fair Market Rent, which, for a two-bedroom apartment in the Jackson area is $764, the report says.
"This highlights the fact that in Mississippi our families work hard, but over one-third don't earn enough to make ends meet," said Ed Sivak, executive director of the Mississippi Economic Policy Center.

"The Housing Wage threshold isn't set high, but in Mississippi's wage environment, it becomes high."

It is certainly high for Deidre S. Milton, a mother of three, who makes one cent above Mississippi's minimum wage of $7.25 an hour, the federal standard.

In Hinds County, where she lives, a minimum-wage earner must work 81 hours per week to afford the Fair Market Rent for a two-bedroom apartment, the NLIHC report says.

But Milton, a public-school employee, said she was doing OK until last September; that's when her divorce became final.

"It's pretty much a start-over for me and the kids," said Milton, 38, of Jackson.
She and her children lived with Milton's parents until they could move into a three-bedroom apartment in Jackson for $588 a month, the cheapest she could find.

Still, she is struggling, and has applied for Section 8 housing assistance.
"I'm number 3,000-and-something on the waiting list," she said.
Finding a decent place to live is especially burdensome for people like Milton, said Carol Penick, executive director of the Women's Fund of Mississippi.

"It's very hard to live on minimum wage, and it's nearly impossible to support a child on minimum wage.

"If you are black or female or a single parent, the deck is really stacked against you."
Even making $8.50 an hour, or $1.25 more than minimum wage, Thomas, the department-store cashier, lived with her grandparents for several months until she secured low-income housing.

"I had to wait a year for the apartment," she said. "I prayed and prayed for it."
Once she moved in, Thomas paid only $114 a month for rent, a big help for a single parent supporting children ages 5, 3 and 1, she said.

Then, on May 2, she was laid off, she said.

"They said I could stay in my apartment, as long as I pay the utilities, and they'll even help me pay if I need it.

"But I don't know for how long. I've been looking for another job, but I guess things are at a standstill.

"If you try to get into these apartments without a job, they won't let you in.
"But now that I'm in and lost my job, I can stay, at least for a while.

"So, in a way, I guess I'm lucky."

Being able to find affordable housing is "one of those unknown problems," said Beth Orlansky, advocacy director for the Mississippi Center for Justice.

"This (Out of Reach) report points out the difficulties for low-income families with single parents, as well as difficulties for seniors.

"And these are rentals we are talking about, not houses to own.

"There should be some type of incentive for developers to build affordable housing. As foreclosures continue to rise, people will be looking for more housing to rent."

That is true, according to an analysis released last week by Harvard's Joint Center for Housing Studies and The Associated Press.

The percentage of households that are for renters has jumped since 2007, from 31.6 to 33.6 percent.

That means nearly 3 million households have become renters over the last four years, the report says.

By 2015, another 3 million are expected.

And although apartment construction has skyrocketed by 115 percent since October 2009, the report says, that pace won't meet demand.

That demand is being boosted further by younger adults, many of whom prefer renting over buying.

All of which means rental housing is only going to get more expensive.

"But if we say this is just a housing problem, we miss the bigger picture," said Sivak, of the Mississippi Economic Policy Center.

"The single, most effective way to raise wages is to make proper investments in education.

"We haven't done that in a long time, and we have never done it consistently. It's what we must do in order for more people to move up the economic ladder."

That's the lesson Thomas takes away from this.

"You used to be able to find a decent job if you had a high school diploma," she said.
"Now you have to have at least some college. I'm seriously thinking about going to college in the fall.

"One day, I'm going to have to find a job that pays more."

But for now, she said, she just needs a job.