Beyond Seattle's skyrocketing housing prices, an affordability problem looms larger for millions of families nationwide. This is the rental prices that the lowest income encounter — and they're brutal.
The worst metro for an extremely low-income household to find a place to rent is…Las Vegas.
This is the conclusion of a new report from the National Low Income Housing Coalition. Behind Vegas are LA, Houston, Orlando and San Diego. Housing-abundant Phoenix makes the top 10. Metro Seattle doesn’t. Perhaps counterintuitively, Boston does best among metros.
Here are some numbers: Las Vegas had 12 affordable units per 100 extremely low-income households. Seattle-Tacoma-Bellevue had 29 and Portland 27. All were below the national average.
Among states, Nevada (15 units), California, Arizona, Colorado and Florida ranked worst. But Washington wasn’t doing much better. The report calculated only 30 units are available for every 100 extremely low-income household. Such renters, numbering 11.4 million households, are at or below the poverty line, or 30 percent of area median income. Affordable is defined as rent and utilities costing 30 percent or less of total income. Of this cohort nationally, 71 percent spent more than half of their income on housing.
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Those without a fixed address — homeless — weren’t included in the report, which uses the Census Bureau’s American Community Survey as its database. Some in the lowest income are obviously at risk of losing shelter.
The report emphasizes that the problem, although higher in some places than others, is nationwide. The national average is 35 affordable homes per 100 households. It also offers a set of responses, including tinkering with the hot-button mortgage interest deduction to better assist the lowest income. All this has a snowball’s chance on a July day in Yuma, Ariz., in the Trump/GOP/Ben Carson era.
My observations beyond the report itself:
We continue to see not only an “affordability problem” but primarily an earnings problem. Earnings in the lowest fifth have barely moved over the past 40 years. Sure, people move among the five income groups (quintiles), but except for the top, the others haven’t seen the kind of sustained growth experienced from the 1940s into the 1970s. Labor’s share of national income is at a low not seen since stats started in the late 1940s. The richest 10 percent take a larger share of income than they did in 1913, the Gilded Age. This is not economic inevitability, but due to policies such as regressive taxes, lax antitrust enforcement and union busting — and under the new regime, we’re going to double down.
Second, the rungs up in the ladder that existed in the past have been undermined by offshoring, automation and the hollowing out of middle-wage jobs. If you buy the economic argument behind the ascension of Donald Trump (I mostly don’t), many of those hurt by these conditions hope the new regime will change things. Hope is nice. But these conditions have been implemented partly to drive income upwards to the richest, and the Republicans are most invested in continuing this.
Finally, a look at the national statistics shows that metros with the best “bargain” for the lowest income are mostly older cities that have grown very slowly compared with their earlier trajectories — or even seen population shrink in the main city — and have a large housing stock as a result. But at least in my experience, they also have deeply segregated poverty, so the cycle persists — cloaked by slow growth.
In other words, the affordability and wage problems are intertwined and won’t be constructively addressed until more people can move up into better-paying jobs.
Today’s Econ Haiku:
A better NAFTA?
But that was the TPP
We won’t trade up now