Renting A Dream

While I talk about the housing depression often and how it will continue to affect our economy, it's not just homeowners who are finding themselves in real trouble here.  People who can't afford homes have to live somewhere, and that means there's increased demand for rental living in apartments.  Even worse, the number of apartments is going down in many places in the country because of the commercial real estate bust.

Whether it's rising demand and falling supply, or landlords having to raise more money to cover their own commercial loans, rent is going up...at the same time that wages and hours are falling for many Americans.

On average, 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.

However, the average wage for U.S. renters is $14.44 an hour, down from $14.69 last year. Further, more than 60 percent 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 percent of income — full-time minimum wage earners can't afford one-bedroom apartments in any county in the country, even though Congress increased the minimum wage from $6.55 an hour to $7.25 last year.

When 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."

The findings help explain why the number of renters who moved in with family and friends, or "doubled up," increased by 25 percent 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 percent 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.

That's pretty rough.  I'm lucky that Kentucky rent is relatively cheap, even this close to Cincy, but there are a lot of places where an apartment like I have now would easily cost twice as much or more.  If you have a job, you should be able to afford a place to live.  Increasingly, that's not the case.  We're not talking about giving away free apartments, we're talking about working people who can't even afford to live where they work.

And this is increasingly getting worse.  Apartment owners are in the business of making money off the rentals, not providing affordable living space.  Many states have some laws to redress this, but there's still the basic economic fact that you have to pay for shelter in America.  Increasingly, that's getting harder and harder.

And it will only get worse.  This is one of those situations where government can and should do some good here.