Spiraling
housing costs hurting Americans
By Siobhan McDonough, Associated Press Writer
April 29, 2005
WASHINGTON -- The American dream of having a job and owning
a tidy home is becoming a fantasy for more people.
Housing prices are outstripping wage increases
in many areas, meaning more people are either spending above
their means or living in dilapidated conditions, according
to a pair of studies being released Friday by the Center
for Housing Policy, a coalition pushing for more affordable
housing.
It's generally accepted that a family should
not spend more than 30 percent of its income on housing
to ensure there is enough money for other necessities.
But in a recent six-year period, the number
of low- and middle-income working families paying more than
half their income for housing has increased 76 percent.
In 2003, 4.2 million working families spent more than half
their income on housing, up from 2.4 million in 1997.
The problem is even more acute for immigrant working families:
They are 75 percent more likely than native-born working
families to pay more than half their income for housing.
Barbara Lipman, the research director for the center, said
a full-time job doesn't guarantee families a decent, affordable
place to live.
"The problem seems to be impervious
to economic conditions because the number of working families
in this situation has grown during the boom-boom '90s and
early 2000s," she said. "More families are competing
for a limited supply of affordable housing. The price is
going up faster than the wages of working families."
One out of every eight families in the United
States -- or 14 million -- had critical housing needs in
2003, defined as either paying more than half of income
for housing or living in run-down quarters. The center found
homeowners now are more likely than renters to have critical
housing needs -- 55 percent of the 14 million are people
who own their homes.
Meanwhile, the median-priced home in 2003
was $176,000, up more than 11 percent from 2001. During
this time, national median salaries went up only 4 percent
for licensed practical nurses (to $33,000), 3 percent for
elementary schoolteachers ($43,000) and 7 percent for police
officers $45,000).
And even though some people buy houses farther
out that are more affordable, their commuting costs increase
and consume a chunk of their savings.The group found that
for every $1,000 families saved on housing by moving some
place cheaper farther out, they're only $225 ahead because
their transportation costs go up so much.
"Choices are a bit grim -- commuting
longer distances, working longer hours, having another wage-earner
in the family, taking a second job," Lipman said.
For renters, the center found a worker needed
to earn $15.21 an hour in 2003 to have a two-bedroom apartment
that did not consume more than 30 percent of income. But
the national median wages of retail sales workers and janitors,
for example, were under $9 an hour.
In Los Angeles, the median income for a construction laborer
was $29,050, more than $70,000 short of what was needed
to qualify for a mortgage on a median-priced home, which
cost $335,000. A laborer made only about half the salary
required for such a mortgage in Atlanta, New York and nationally.
A stock clerk making the median income of
$22,210 in Grand Rapids, Mich., earned just more than half
of what was necessary to buy the median priced home for
$130,000, and the gap was wider still in St. Louis, where
the median home cost $139,000.
In the rental market, a paralegal earning the median income
of $21.26 in New York City made more than enough to get
a two-bedroom apartment that did not consume more than 30
percent of the paycheck.
But a paralegal earning the median $16.32
an hour in Chicago would fall short of the $17.85 an hour
needed to have a two-bedroom apartment without an undue
stress on the budget.
The findings also indicate that housing problems are far
from limited to central cities. Most homeowners with critical
housing needs lived in the suburbs. For renters, more than
half lived in central cities.
Lipman said government must do more to encourage
construction of affordable housing through zoning regulations.
Communities need to work with developers and allow them
to increase the density for market rate housing. In exchange,
the developers have to allow for a certain amount of houses
to be sold at affordable rates.
http://www.boston.com/business/spiraling_housing_costs_hurting_americans/
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