by Layne Scopano
As a college student living in an apartment with three other women with what we lovingly refer to as a “one-butt kitchen” (because only one of us can functionally cook at a time), affordable housing is a prevalent conversation. Affordable housing is a buzz word for many a college student balancing jobs and course work, young professionals shouldering student debt, and of course, people with housing instability. So, what does affordable housing really mean?
In the 1940s, maximum affordable housing was defined as 20% of income, but over the years, that threshold of affordability has climbed to 30%(1). In many cases throughout the U.S., a much more significant portion of income is doled out to rent. Renters can be defined as either cost-burden, meaning more than 30% of income is spent on rent, or severely cost-burdened, meaning more than 50% is spent on rent. In Columbia, SC, 49.3% (almost half!) are considered cost burdened, and 27.6% are severely cost-burdened (Figure 2)(2).
Though people typically make a connection between low-income households and affordable housing, this is a concern at all levels of socioeconomic status. There has been a rise in keeping-up-with-the-Jones’ mentality for first-time home buyers. First-timers in the world of real estate began to base their expectations of a first home based on the homes of their parents. The logical disconnect there is that the homes they were comparing themselves to were attained after years of income and saving. Because of this trend, there is a near exponential rise of people falling behind on their mortgage payment leading into and following the Housing Crisis of 2008 (Figure 3)(3). Not only is homelessness as issue of poverty, but foreclosure can quickly become housing instability, which snowballs to homelessness.
There are fewer and fewer low-cost housing options, but the other component of affordable housing is income. In South Carolina, minimum wage is $7.25 per hour. Many people make the argument that homeless people are lazy and should just get a job, even though 56% homeless adults report a receiving monthly income4. In response to this statement, other than the one I just made about receiving an income, I propose some basic math. The typical work week is 40 hours, meaning that the paycheck for the month (four weeks) comes out to be $1,160. According to the definition of affordable housing, a rule that considers other expenditures of day-to-day living such as food, gas, and insurance, rent for someone earning minimum wage should be $348/month. I challenge anyone to find many options at this price, considering the fair market rent (FMR) for a one-bedroom in South Carolina ranges from $621 to $1,204. Not attainable at minimum wage. Table 1 at the beginning of the article explores the relationship between rent, minimum wage, and homelessness in the ten counties with the highest rates of homelessness in South Carolina (4,5). In places where rent rises to even 32% of income, there is a notable increase in instances of homelessness (Figure 4)(6).
So, a job is not enough. At minimum wage, a full work schedule does not come close to the cost of a single bedroom apartment, nor does this begin to touch the issue of single mothers experiencing homelessness that may need more space than a single bedroom apartment to accommodate their children. It also does not yet take into account the added difficulty of finding a job without ready access to bathing facilities to tidy up for interviews, or the requirement of an address on many job applications. Affordable housing can be the difference between a people experiencing homelessness being able to find a place that they can cover with their monthly wage, or the difference between a housed family becoming homeless after a foreclosure.
Works Cited
1. PD&R (2017). Defining Housing Affordability. U.S. Department of Housing and Urban Development. https://www.huduser.gov/portal/pdredge/pdr-edge-featd-article-081417.html
2. Joint Center for Housing Studies (2018). Many Renters Burdened by Housing Costs in 2018. Harvard University. https://www.jchs.harvard.edu/many-renters-are-burdened-housing-costs.
3. Dwyer, R. E., Neilson, L. A., Nau, M., & Hodson, R. (2016). Mortgage worries: young adults and the US housing crisis. Socio-economic review, 14(3), 483–505. https://doi.org/10.1093/ser/mwv018
4. South Carolina Interagency Council on Homelessness (2020). 2020 South Carolina State of Homelessness Report. https://www.schomeless.org/media/1172/final-edits-actual-final-scich-state-of-homelessness_final.pdf
5. U.S. Department of Housing and Urban Development (2020). Fair Market Rents (40th Percentile Rents). https://www.huduser.gov/portal/datasets/fmr.html.
6. Glynn, C. (2018). Homelessness Rises Faster Where Rent Exceeds a Third of Income. Zillow Economic Research. https://www.zillow.com/research/homelessness-rent-affordability-22247/.
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