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When the affordable choice is no longer affordable

by Laura Williams, Center for Housing Policy

When we talk about housing, and housing affordability, it almost always seems like we’re talking about owning a single-family home (or not, as the case may be). Today, as we release another edition of Paycheck to Paycheck, I’d like to talk about housing affordability for renters.

Renting, slowly but surely, seems to be getting more expensive in many places and, for workers who are not seeing their incomes rise, more unaffordable. We found that even in the most affordable cities, only 85% of the jobs we looked at paid enough for a worker to afford a two-bedroom apartment based on the local Fair Market Rent. Who can’t afford it? Bus drivers, carpenters, janitors, retail sales staff, bank tellers and waiters, among many others. In more expensive cities, as few as 8 percent of jobs pay enough for a two-bedroom unit – that’s 6 out of 74 jobs. (Who can? In Honolulu: only nurses, civil engineers, dental hygienists, programmers, physical therapists and construction managers. The lists in San Francisco and Long Island look similar.)

But that’s not even the whole story. Traditionally, renting is more affordable than owning. With the ongoing foreclosure crisis, however, that’s not necessarily true everywhere. Parts of Florida, in particular, are seeing this phenomenon (though we are, admittedly, not accounting for some of the irregular expenses of ownership such as the costs of repairs and maintenance). But this doesn’t mean stock clerks and bank tellers should or even want to go out and buy a home. Aside from the additional expenses and trouble that go into having to repair your own toilet or call in a contractor when the shingles start going bad on the roof, ownership is rather, well, permanent. (This is particularly true in a down market where ownership tends to be affordable.) In today’s job market, that can be a real hurdle; rental housing gives our workforce mobility (so they can pick up and move to North Dakota for jobs). So renting isn’t only a more affordable choice (most of the time), but also a preferable one.

So we should be concerned that rents seem to be less affordable, and watching to make sure all of our working families can afford to live near where they work. Or afford to move where there is work.

Paycheck to Paycheck looks at housing affordability in over 200 metro areas based on the prevailing wages for 74 occupations. We get our data from the National Association of Home Builders, the National Association of Realtors, HUD and For the past several years, this has been an annual exercise, though this is our second edition for 2011 and, at least for now, we plan to continue it on a bi-annual basis.

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