Pelosi Says ‘Strong Federal Action’ is Needed in Affordable Housing

By Anuradha Kher, Online News EditorWashington, D.C.–The cost of rental housing continued to climb in 2007 and into 2008, out-pacing the earnings of those in the low- and moderate-wage workforce, according to the National Low Income Housing Coalition’s (NLIHC) annual Out of Reach report released yesterday.The national two-bedroom housing wage climbed to $17.32, up from $16.31 in December 2006. The housing wage is the hourly wage a full-time worker must earn in order to afford the rent on a modest two-bedroom home in his or her community. The two-bedroom housing wage ranges from $29.02 in Hawaii to $9.10 in Puerto Rico. In no city or county in the entire country can a full-time worker who earns the minimum wage afford even a one-bedroom rental home. Speaker Nancy Pelosi issued the following statement on the report. “The report provides a sobering picture of the widening gap between the increasing costs of rental housing and the stagnating wages of working Americans. In showing a detailed picture of higher rental costs in communities across America, the report demonstrates the need for strong federal action to increase the supply of affordable housing.”The report provides data for every state, metropolitan area and county in the country showing how much a household must earn to afford a modest market-rate rental home. The report also provides local wage and income data for comparison purposes.“The current mortgage crisis has awakened everyone to what low-income renters have known for a long time,” says Sheila Crowley president of NLIHC. “Even modest homes are too costly for most low-income families. The growth in the national housing wage in the last 16 months is a stark illustration of how out of kilter the rental housing market is.” Crowley believes this will get worse as the rental market is flooded with families displaced by foreclosure. “As policy makers debate on how to respond to the mortgage crisis, they must not ignore the underlying problem of the mismatch between housing costs and incomes of people in the low- and moderate-wage work force,” she says. While the national two-bedroom housing wage stands at $ 17.32 in 2008, the median hourly wage for all workers is just under $16 and the estimated average renter wage is $13.94. The problem is particularly stark for the lowest wage earners. Although the federal minimum wage increased to $5.85 last year and 32 states and D.C. set higher minimum wages, 81 percent of renters in cities live in areas where the Fair Market Rent for a two-bedroom rental is not affordable even with two minimum wage jobs. Senator Christopher J. Dodd (D-CT), chairman of the U.S. Senate Committee on Banking, Housing and Urban Affairs wrote in the report’s preface, “This report shows that the gap between the wages of low-income Americans and their housing costs continues to widen.”