As prices rose, incomes did not, and the average earnings of renters in Butler, Champaign, Clark, Greene, Miami, Montgomery and Warren counties fall short of the wages needed to reasonably afford modest two-bedroom apartments, according to a new report by the National Low Income Housing Coalition.
The coalition and local housing counselors said the Miami Valley is sorely in need of more economical housing, but a lack of federal funding support makes it unlikely conditions will improve anytime soon.
“Unless we have a very big economic change and incomes rise substantially, the only other way to address this issue is to create more affordable housing,” said Joyce Probst MacAlpine, Montgomery County’s manager of Housing and Homeless Solutions.
Average wages of renters in the seven-county region range between $8.70 per hour in Clark County and $11.61 per hour in Montgomery County, according to the coalition’s report.
Like in most counties across the nation, there is a divide between the average hourly wages of renters in the region and the earnings they would need to make so that rental costs would only account for 30 percent of their income, the report said.
Housing or rental costs that exceed 30 percent of a household’s income are considered unaffordable.
Renters in Clark County on average would need to earn 44.1 percent more, or about $12.54 per hour, to afford modest two-bedroom rental units, the report said.
Two-bedroom units are the most popular rental options nationwide, and the coalition estimated the fair market rent for those units for all U.S. counties.
In Greene County, the average renter earns about $10.02 per hour, 31.4 percent less than he or she would need to reasonably afford a two-bedroom unit.
In Miami County, renters on average earn $11.61 per hour, 30.5 percent less than needed to afford a modest unit. Renters in Montgomery County on average would need to earn 13.4 percent more, or about $13.17 per hour, to afford a two-bedroom unit.
Blue-collar and low-income renters in the region who must spend more than 30 percent of their income on rent have reduced living standards and less money to spend on other basic necessities, such as medications, child care and transportation, Probst MacAlpine said.
“People make all kinds of trade-offs,” she said. “They double up so they have more people in the household, which causes its own problems, or they forgo things, or in the worse situations they lose their housing.”
Unlike food or health care, housing is not a guaranteed entitlement to low-income people, and residents cannot even apply to be on the waiting list for Section 8 housing in the Dayton area because of a large backlog, Probst MacAlpine said. She said all subsidized public housing options in Montgomery County have waiting lists.
Adding to the problem is rising rents, which are up because high unemployment and widespread foreclosures have convinced many people to shun home ownership, said Sheila Crowley, president and CEO of the National Low Income Housing Coalition.
“There are more people competing for an insufficient supply of units, which pushes rents up, and that means people at the bottom end are further squeezed,” Crowley said.
Median rents rose 8.1 percent in Ohio between January 2011 and this January, and rent prices were up year over year between November and January, according to Zillow, a home and real estate marketplace firm. Median rental prices in the state increased or stayed the same every month between March 2011 and January 2012.
Although median rent prices in the Dayton metro area decreased slightly year over year between November and January, the area’s apartment vacancy rate fell to 10.1 percent in the fourth quarter of 2011 from 26.4 percent in 2010, according to U.S. Census data.
Although many households are home to multiple wage earners, which helps keep rental costs affordable, analysts said there are still many units occupied by only one wage earner, and the economic downturn has reduced the number of two-income households.
Minimum-wage earners and Social Security recipients are especially affected by increasing rent prices because those costs devour such large chunks of their paychecks.
It would take between 1.5 and 1.8 minimum wage jobs for renter households in the seven-county region to reasonably afford two-bedroom units at fair market rent, the report said. Social Security recipients at a maximum receive $698 per month, meaning they can only afford $209 per month in rent.
Finding rent that cheap is not easy. Dale Young, 54, of Dayton, said he rents a one-bedroom apartment, and between rent and utility bills he spends 60 percent of his Social Security income on housing needs.
“There just ain’t nothing left after rent,” said Young, who added he often relies on friends and family for help and transportation.
The housing coalition and housing advocacy groups said the federal government is struggling to fund affordable housing projects because it is so expensive to build low-rent units and subsidize their operations. Advocates said private companies cannot build units cheap enough to charge affordable rents for low-income workers and still earn a profit.
Dayton’s Homeless Solutions Policy Board recommended in 2006 building 1,800 units within 10 years to help address a shortage of economical housing, but only 450 units have been opened or are in development, and Probst MacAlpine said she would be surprised if they met half their goal. She said the obstacle is a lack of funding.
Housing advocates urge Congress to help close the rent affordability gap by funding the National Housing Trust Fund, which was established by legislation signed into law in 2008 by President George W. Bush.
The fund seeks to provide money for affordable housing construction across the country, but its financing sources were supposed to come from the profits of Freddie Mac and Fannie Mae. Those organizations are losing money, said Bill Faith, executive director for the Coalition on Homelessness and Housing in Ohio.
He said the federal government needs to capitalize the trust fund, but he fears it will not be anytime soon.
“There needs to be a renewed public commitment to invest in this,” Faith said. “But with the current stalemate in Congress, we are not holding our breath.”
Contact this reporter at (937) 225-0749 or cfrolik@DaytonDailyNews.com.
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