Murfreesboro Realtor explains. Rising Rental Cost. In Middle Tennessee for Buyers & Sellers

May 14, 2010 - PRLog -- With the Housing Market Down Many Americans are now Struggling with Rising Rental Costs

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Now the gap between the cost of renting a modest apartment and the wages of working families continues to widen, according to a new report from the National Low Income Housing Coalition.
“Out of Reach 2010″ paints a gloomy picture for the nation’s nearly 38 million renters, who make up a third of U.S. households.

The average. Now a family must earn $38,355 a year, $18.44 an hour, to afford a simple two-bedroom apartment at the 2010 national average fair market rent of $959.

The average wage for U.S. renters is $14.44 an hour, down from $14.69 last year. Further, more than 60% of U.S. renters live in counties where even the average one-bedroom fair market rent of $805 isn’t affordable for average wage earners, the study found.

Minimum wage earners are at the greatest disadvantage. Under the standard measure of affordability—housing costs should account for no more than 30% of income—full-time minimum wage earners can’t afford one-bedroom apartments in any county in the country, even though Congress hiked the minimum wage from $6.55 an hour to $7.25 last year.

After adjusted for inflation, though, the average hourly wage fell by half a percentage point last year and probably will stagnate for the next few years, said economist Dean Baker, the co-director of the Center for Economic Policy and Research. “So the ability of people to be able to afford decent housing is not likely to get any better” in the next few years, Baker said. “It’s more likely to be worse than better. We aren’t on a good path.”

These findings help explain why the number of renters who moved in with family and friends, or “doubled up,” increased by 25% from 2005 to 2009. So-called affordable housing is becoming harder to find. Harvard’s Joint Center for Housing Studies has estimated that 200,000 such apartments, for which tenants pay less than 30% of their income for rent and utilities, are lost each year in the U.S.

For every new affordable-housing unit that’s constructed, two are demolished, abandoned or converted to condominiums or expensive rentals, according to the John D. and Catherine T. MacArthur Foundation.

The number of renters is growing because of foreclosures and the deflated housing market, the Low Income Housing Coalition says it’s time for policymakers to put more money into rental assistance and affordable housing.

And now throughout the housing crisis and recession, lawmakers have focused resources and attention mainly on helping troubled homeowners avoid foreclosure, but roughly 40% of foreclosures also displace renter households, according to the report.

Many want Congress to fund the National Housing Trust Fund, which establishes a permanent funding source to construct, renovate and preserve 1.5 million units of rental housing for low-income families over a 10-year period. The trust fund legislation passed in 2008, but because of the economic downturn, Congress hasn’t funded it.

The fund wouldn’t increase government spending or taxes because it was supposed to be funded through contributions from mortgage giants Fannie Mae, Freddie Mac and the Federal Housing Administration.

The president of the coalition, said now is the time to act.
“Providing $1 billion for the National Housing Trust Fund will help address the growing shortage of affordable housing, which is one of the most serious economic problems facing the country,” she said.

They expect the House of Representatives to begin floor debate on the Section 8 Voucher Reform Act, which passed the House Financial Services Committee last July. “We are very much hoping that the Senate will take it up as well,” she said.
The bill would provide rent subsidies for 150,000 low-income families, Crowley said, and the coalition is seeking another 2 million Section 8 housing vouchers over the next 10 years, which would double the current number.

In a statement, House Speaker Nancy Pelosi, D-Calif., said the coalition report showed the urgency of the hardship that low-income renters faced. “We are grateful for the NLIHC’s efforts, and we will continue our partnership to ensure that more Americans have better access to decent and affordable rental housing,”

What a great time to buy. But you have to get your credit score up to current milestones. Talk to a trusted realtor and get the help you need and deserve.

Please feel free to call or email me anytime.
Mike O'Donnell
615-473-5684
Tema@comcast.net
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