01 December 2009

Housing Dilemma: Low-Wage Workers Face A Struggle

Fort Worth Business Press

While Fort Worth’s cost of living is lower than many similarly-sized cities in the United States, making ends meet is still a struggle for those living on a minimum-wage income.

With average rental rates hovering around $800 for a two bedroom apartment in Tarrant County, the National Low Income Housing Coalition estimates that a person looking to afford fair market rent in Fort Worth, while spending 30 percent of their income on housing, must make more than twice the minimum wage, or almost $32,000 per year before taxes.

A full-time worker with consistent 40 hour work weeks earning the minimum wage in Texas, $7.25 per hour, would bring in a yearly income of about $15,000. A single person making less than $10,800 per year is considered below the federal poverty guideline, according to the U.S. Census Bureau, and a household with two people – such as a single parent with one child – making less than $14,500 is considered below the poverty guideline as well.

“For folks at that [minimum wage] level, their life is one of extreme uncertainty,” said Danilo Pelletiere, research director for the National Low Income Housing Coalition. “If you are housed and earning that kind of money, the housing portion of your budget is going to be 50, 60, even sometimes 70 percent of your income. Now, again, most folks aren’t earning a consistent income, they’re earning an hourly wage, which can fluctuate with seasons such as the [holiday] retail season. Sometimes things are fine and you’re paying your rent fine, and sometimes they’re not.”

North Texas apartment statistics

Fair market rent in the Fort Worth and Arlington areas average around $650 for an efficiency apartment, $700 for a one bedroom, $800 for a two bedroom, and more than $1,000 for a three bedroom, according to data from a number of organizations.

Occupancy and rental rates, or the price per square foot, for apartments in Tarrant County rose from late 2007 through late 2008, but have dropped since, and are continuing to fall through the last quarter of 2009.

Rental rates have taken a steep downward turn in the last few months in Tarrant County, said Leah Christian, Apartment Data Services’ Dallas regional manager. The 12 month rental rate trend for the area is -1.5 percent, and the area’s three month rental growth trend is showing a sharper decline at -5.3 percent, she said.

And while rental rates are dropping, finding housing at a cost that will stay within 30 percent of yearly income for a person making minimum wage is nearly impossible, Pelletiere said. In order to follow the 30 percent rule, a person on minimum wage would have to find an apartment with rent under $375 per month.

Fort Worth’s affordability and new affordable housing efforts

“Compared to other parts of the country, [Fort Worth] is absolutely affordable,” said Fort Worth City Council Member Sal Espino, who represents District 2.

Compound the cost of living with stagnant and sometimes declining wages, and residents experience a tight squeeze, Espino said, adding that the city is planning programs to work on Fort Worth’s housing issues once the economy recovers.

A few years ago, Mayor Mike Moncrief put together a Quality Affordable Housing Task Force to look into the city’s housing issues, and the group found that Fort Worth has an affordable housing need of $1.8 billion, Espino said.

“That’s how much is needed to rehabilitate and build existing housing that would stay within 30 percent of annual median income, and infill housing,” he said. “What we’re doing now is, the city owns a lot of tax foreclosed properties, and we’re trying to target areas in the city, in individual council districts, where we could get some tax credits to build housing that is affordable.”

Espino added that any efforts on renovating the foreclosed properties would have to wait until the city’s budget is stronger and the economy is moving forward.

Life on the minimum wage

Workers who earn minimum wage incomes are often moving, Pelletiere of the Low Income Housing coalition said. They move often sometimes because they may not be able to afford their rent, or may have found cheaper rent, or maybe because they are moving into a shelter, he said.

“You’re always sort of one step away from that kind of move, and the feeling that the next move will be into a shelter or into your car,” he said. “Whether it’s a car accident, or an unexpected bill, or a family member who is sick, that will mean a move of some kind and possibly an eviction. The issue for these folks again is not only that they can’t afford rent, it’s that they’re always at risk of not being able to afford it, and the anxiety that creates,” he said. “And, there’s the tradeoffs you make. Tradeoffs in terms of health care, in terms of food, in terms of living in abusive situations to have secure housing.”

Andrea Helms, director of communications for the Tarrant Area Food Bank, said a food budget is what people believe is the most flexible tier of their budget.

“You have to pay your rent and utility bills, but food, that’s where you can skimp,” she said.

The Tarrant Area Food Bank collects donated food to send out to more than 300 food pantries in the Dallas-Fort Worth area. Since July of 2009, those pantries have seen a 28 percent increase over 2008 in the number of households served, Helms said.

‘Directions Home’

The high-risk pool for people living on low incomes who are at risk of becoming homeless has grown during the last two years with the recession, said Otis Thornton, homelessness coordinator for the city of Fort Worth.

“If you think about everything you need to have to function well in our society today, and you begin to total that up, it’s a little easier to see how it can overwhelm a low-wage household,” Thornton said.

In Fort Worth, the Directions Home program adopted by the City Council in 2008 aims to make chronic homelessness – defined as a period of more than 12 months without a secure living environment – rare, short-term, and non-recurring by 2018 by combining housing with supportive services.

As of Nov. 2, the Directions Home program provided housing, Fort Worth apartments and services for 144 people, Thornton said.

While programs such as Directions Home are cropping up across the United States as cities work to help homeless citizens find housing and work, awareness of the issues low- and minimum-wage income earners face is increasing, Pelletiere said.

“People certainly are more aware of how quickly one can become poor,” he said. “In a way, a few years ago most people probably felt that there was a lot of room between them and poverty, and the quick speed with which you can lose a home and find yourself driving around in an expensive car and not knowing where your next meal will come from. There’s recognition suddenly of our vulnerability.”

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