Housing Crunch Intensifies for Working Families
The number of low- to moderate-income working family renters paying more than half their income for housing more than doubled from 1 million in 1997 to 2.1 million in 2005, according to a new study from the Center for Housing Policy.
The number of working family home owners paying more than half their income for housing also was on the rise during that period, although at a slower pace — climbing 75% from 1.4 million to 2.4 million, according to “The Housing Landscape for America’s Working Families 2007” study.
The study looked at working family renters and home owners in 31 U.S. metropolitan areas.
Almost 40 million U.S. households meet the study’s definition of working families — those households that work the equivalent of a full-time job and earn at least the annual minimum wage of $10,712 but no more than 120% of median income in their area.
Among the study’s findings:
- From 1997 to 2005, the number of working families with critical housing needs — those paying more than half their income for housing or living in severely dilapidated conditions — increased 73%, from 3 million to 5.2 million.
- In 2005, while nearly 40%, or about 2.1 million, of all working families with critical housing needs lived in central cities, a similar number, 2.2 million or 43%, lived in the suburbs. The remainder, less than one out of five, lived in non-metro locations. When comparing working family renters and home owners with critical housing needs, 51% of working family renters lived in central cities, compared to 28% of their home-owning counterparts. Approximately 38% of renters with critical housing needs lived in the suburbs, compared to 48% of working family home owners.
- Since 1997, the highest rates of critical housing needs have been in the West — one in six working families — and the Northeast — one in seven. However, all four regions saw rising rates of critical housing needs from 1997 to 2005. Although the Midwest continues to have the lowest rate of housing problems among working families at 10.1% in 2005, it is the region with the most dramatic growth in critical housing needs, rising 80.4% over the eight-year period.
- Among the markets with the sharpest increases in the share of working families with critical housing needs are: Denver, up 162% between 1995 and 2004; Charlotte, N.C., up 86% between 1995 and 2002; and other relatively affordable places such as Kansas City, Pittsburgh, Indianapolis and San Antonio. Sacramento is the only West Coast city where the rate of critical housing needs for working families increased by more than 60% during the time period studied.
- Measuring the percentages of working families experiencing critical housing needs, the study found the share ranging from a high of 28% in Los Angeles to a low of 6% in Columbus, Ohio. While critical housing needs were most severe in the West Coast cities of Los Angeles, Anaheim and San Diego and the East Coast markets of New York and Miami, significant numbers of working families in every metro area — including those in Atlanta, Denver and Indianapolis — pay more than half their income for housing. In several markets, such as Los Angeles, New York and Newark, N.J., substantial numbers of working families also live in severely dilapidated housing.
The Center for Housing Policy is the research affiliate of the National Housing Conference. The study was funded by Freddie Mac.