Many local, Minnesota families struggle to afford housing
As the recession continues, families struggle to make ends meet with rents unaffordable across the state.
A two-bedroom apartment remains beyond the means of many average renters statewide, according to a recent report. And anecdotal evidence from those helping low-income renters with their finances demonstrates that more people are looking for help, and an increasingly larger percentage of many families’ budgets is being spent keeping a roof overhead.
Koochiching County is not immune to the same troubles felt in other Minnesota counties. The report says that 57 percent of renters in Koochiching are unable to afford fair-market rent (FMR) on a two-bedroom apartment, listed as $588. The rent affordable at the median renter household income is $511.
“I think it is a big problem,” said Sharon Frank, asset and housing specialist for Kootasca Community Action, talking about disproportionate rents to income. “I’m seeing more and more people in my office looking for help.”
Frank is among those locally working with low-income families to help them budget for housing and other household expenses, as well as find resources when in need.
She said it is very difficult for families to stay in housing when rents are up to 50 or 60 percent of their income. “It really is a struggle for people,” she said.
The report, “Out of Reach 2010,” was jointly released by the National Low Income Housing Coalition in Washington, D.C. and the Minnesota Housing Partnership. The report provides data for every state, metropolitan area and county in the nation.
The report compares several factors in each county, including the estimated area median income, fair-market rent, and average wages paid to those who rent. The report crunches the numbers to find what is affordable, based on percentages of the average salary.
In Koochiching County, the rent deemed affordable at the average renter’s wage is $415, while the FMR for a similar two-bedroom apartment is $588. The estimated mean renter hourly wage is $7.98, while the report says that the hourly wage necessary to afford rent is $11.31.
The news for Minnesota is twofold: rural areas in general saw the fastest rent increases, and the Twin Cities’ already-high rents continued to increase.
To be affordable, a Twin Cities two-bedroom apartment now requires an annual income of $35,960. The Minnesota average is $32,247. In 86 of the state’s 87 counties, a worker earning the average wage for renters needs to work overtime to afford a two-bedroom apartment.
Topping the list of least-affordable counties based on full-time jobs at mean wage needed to afford two-bedroom FMR are: Isanti, Chisago, Wright, Sherburne, Pine, Clay, Cass and Scott counties. In each of these counties, more than two full-time jobs are necessary.
Koochiching County residents fair better here, with 1.4 full-time jobs needed. The county with the most renter-friendly ratio is Faribault County, the only county where renters can afford such rent with less than one mean wage (0.7 wages needed).
The income needed to afford rent on a two-bedroom apartment is drastically lower in Koochiching County, at $23,520. However, that number can be compared to the county’s estimated median renter household income of $20,450, showing that the average worker still cannot afford the rent despite seemingly lower prices.
Rent is deemed “affordable” if it is below 30 percent of the household wages. That rate is also deemed appropriate by the U.S. Department of Housing and Urban Development’s Housing Choice Voucher Program (Section 8), for which 30 percent of monthly adjusted income is used as one way of finding the total tenant payment for rent and utilities.
Minnesota is among the middle of the pack for two-bedroom housing wages, or the hourly wage that a person would need to earn to spend 30 percent of their salary on a FMR two-bedroom apartment, when compared to other states. At $15.50, Minnesota is ranked 29 of 52 states, including Washington D.C. and Puerto Rico. If Koochiching County were ranked among this list, it would be the third-least expensive location, with a two-bedroom housing rate of $11.31. Koochiching County’s rate has increased 35 percent since 2000.
“Out of Reach 2010 shows once again that prevailing incomes and wages are simply not enough to allow a family to afford a decent home in their community,” said Sheila Crowley, president of the National Low Income Housing Coalition.
Chip Halbach, MHP executive director, says one of the best ways to promote an economic recovery for Minnesota is through a stable housing market with a variety of housing choices.
“We need an affordable supply of both rental and owner-occupied homes,” said Halbach. “The Out of Reach data again demonstrates how hard it is for the growing number of low-income families to find decent homes they can afford in Minnesota. The recession made a bad situation worse. We need to act now for families to have access to the safe and affordable housing they desperately need.”
Peggy Olson, executive director of the Koochiching County Housing Redevelopment Authority, said that there are 117 people receiving assistance through “Section 8” housing vouchers through her office.
Another 94 families are on a list awaiting assistance with their rents. The waiting list to get into the program will take about two years to complete, so the list has been closed to non-Koochiching County residents.
The list has doubled in size and wait-time in the last two years, Olson said. Two-thirds of those in the county HRA program are below the median household income, she added. She said that when people call and explain sometimes dire circumstances that necessitate their asking for assistance, she has to tell them that all of the people on her list are in a similar situation.
The full report, including county and metro area statistics, is at the National Low Income Housing Coalition’s Web site at www.nlihc.org/oor2010.
BY THE NUMBERS
20 — Percent of Koochiching County residents who rent
$588 — 2010 fair market rent for two-bedroom apartment
57 — Work hours/week at mean renter wage needed to afford that rent
$11.31 — Hourly wage needed to afford two bedroom fair market rent
$415 — Rent affordable at average renter wage
1,184 — Renter households in Koochiching County
