Rental Housing a Growing Burden on Low Wage Earners
Finding an affordable place to rent within a reasonablerndistance of employment is becoming increasingly difficult according to FreddiernMac executive David Leopold. Leopold,rnwriting in the company’s ExecutivernPerspectives blog says that there is no state in the U.S. where a full-time minimumrnwage worker can afford the market-rate rent for a one or two bedroomrnapartment.</p
More than one of every four renters must pay over half theirrnfamily income to pay for housing and utilities. rnSince the recession ended new jobs have been heavily concentrated inrnlow-wage industries while the growth of affordable housing has failed to meetrnthe growing demand. Leopold cites arnrecent Joint Center for Housing Studies (Harvard University) that found thatrneven families with incomes at high at $75,000 can be burdened with housingrncosts. Housing costs are generallyrnconsidered burdensome when they consume more than a third of householdrnincome. </p
Leopold says most people agree that more affordable housing is needed, butrnfew focus on how it benefits families and our communities, or how the lack ofrnit affects society. Cost-burdenedrnhouseholds are forced to cut back on food, healthcare, and other criticalrnexpenses. But if they were spending less on housing and utilities, then theyrncould have more money to put toward serving nutritious food, receivingrnnecessary medical care, and providing reliable day care for their children. These families often must cut back further tornafford the additional expense of commuting to work. </p
Further, sometimes the impact of unaffordable housing can resonate throughoutrnthe community. The author citesrnemergency situations such as a snow storm when bus drivers, day care workers,rnmedical assistants, ambulance drivers, and other low wage workers may not bernable to get to work because they can only afford housing far from their jobs. Services – perhaps critical ones – become unavailablernand business have to close for lack of staffing, costing the economy as a whole.rn</p
Building affordable housing provides jobs during constructionrnand new consumer spending after it’s occupied. The increased spending for goodsrnand services boosts the local economy and is a revenue source for localrngovernments. The National Association of Home Builders estimates building 100rnapartment units generates $11.7 million in local income, $2.2 million in taxesrnand other revenue for local governments, and 161 local jobs in one year. Andrnwhen workers have shorter commutes, their transportation costs go down, roadsrnare less congested, and they have time for other activities.</p
Leopold,rnvice president for affordablernhousing production, Freddie Mac Multifamily, touts his company’srncontributions to affordable housing. Morernthan 90 percent of the apartment loans purchased by Freddie Mac, he says, arernfor properties offering rents that are affordable to individuals who earn ArearnMedian Income or less and many would likely have trouble securing fundingrnelsewhere. A large majority of thesernproperties are more than 10 years old, and many are in need of capitalrnimprovements, which Freddie Mac’s funding helps to provide. The TargetedrnAffordable Housing group of Multifamily provides financing for properties thatrnare specifically restricted for low-income households, often with rent levelsrnaffordable as low as 50 percent of Area Median Income. Freddie Mac Multifamilyrnsettled roughly $2.7 billion in targeted affordable loans last year and expectsrnto do even more this year to support this important market and help familiesrnhave safe, stable housing.
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