February 24, 2020

Housing Insecurity: It’s Not Just for Low Earners

author photoBy Karen Sternheimer

Housing insecurity, or the difficulty in obtaining and maintaining housing due to its high cost, is something that we hear a lot about in the news. Housing insecurity is the consequence of incomes not keeping pace with the rise in the cost of housing; it’s not just that people can’t manage their money effectively, but that many don’t earn enough to afford the median rent in their communities.

And it’s not just people in low-wage, dead-end jobs that are impacted. A recent strike by graduate students at UC Santa Cruz highlighted the challenges that Ph.D. students face in paying for housing, which one student estimated at 60 to 70 percent of her income, even within university subsidized housing. The students called for a cost of living increase to help offset some of the costs, and had suspended their work grading papers at the end of the fall 2019 quarter.

Graduate students aren’t the only ones who may find themselves struggling to find housing. San Francisco and other Bay Area teachers often earn too little to live near the schools where they work. This San Francisco Chronicle story detailed how only the highest paid teachers in 47 Bay Area districts earned enough to comfortably afford a one-bedroom apartment in the area.

According to a 2018 report by the Pew Charitable Trusts, about 38 percent of American households were considered “rent burdened,” meaning that their housing costs more than 30 percent of their pretax income. The percent of rent-burdened households doubled between 2001 and 2015. The study found that median rent increased by 32 percent during this time frame, while median income actually declined slightly.

In high-priced parts of the country the increases are even larger. Another study, released in 2019, found that Los Angeles rents increased by 65 percent between 2010 and 2019. Between 2010 and 2017 median household incomes rose by less than 10 percent. A 2014 analysis found that in order to afford the median rent for a house in the area one would need nearly a six-figure income.

As Todd Schoepflin recently blogged about, this is a nationwide problem for many low-wage workers. Sociologist Matthew Desmond’s Pulitzer Prize-winning book Evicted: Poverty and Profit in the American City details the plight of low-income people’s struggle to stay housed and cope with eviction. Desmond found through his ethnographic research that eviction itself contributes to poverty. Time spent missing work looking for housing and the costs of moving create a severe burden to already disadvantaged people.

Traditionally the way that we have reacted to hearing stories about the struggles of low-income people is to encourage them to get more training or education and better jobs. But what happens when people with college degrees and good jobs can’t find affordable housing?

People may live farther from work and take on longer commutes, as Todd Schoepflin blogged about, which means more time spent away from family and a potentially negative environmental impact. Alternatively, housing in lower income communities might become more appealing and thus displace lower earning households. Gentrification, as Jonathan Wynn has written about, becomes problematic when it makes previously affordable housing unaffordable for the group that is displaced.

The high cost of housing affects other parts of the economy as well. The Pew study concludes that, ”This widening gap between rent and income means that after paying rent, many Americans have less money available for other needs than they did 20 years ago.” If housing costs eat into a large share of income, this means less money available to pay for other necessities, like food and healthcare, and less money to spend on education. Higher costs of living mean less discretionary spending, which can affect the economy as well.

A colleague of mine will be looking for a new home soon, since his rental situation is coming to an end. Even though he is a college professor, he is nervous. The median cost of buying a home in Los Angeles County, where our university is located, is now just under $650,000. The minimum income to qualify for a mortgage is $127,200, which is nearly double the median household income in Los Angeles. But the median is the midpoint, meaning half of all homes cost less and half cost more. Los Angeles County is 4,751 square miles, and finding homes at or below the median might mean a very long commute.

What other consequences of housing insecurity can you think of? What possible solutions might help with this issue?

Comments

Housing insecurity and homelessness aren't mysterious. phenomena, they are practical problems that can be solved with reasonable measures.

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