Report: Vermont housing costs pricing out working poor | Local News
Readers: This story was updated at 10 a.m. Thursday, July 15 to reflect the Vermont minimum wage of $11.75 per hour.
Vermont households earning the state’s minimum wage of $11.75 an hour have to work 64 hours a week to spend 30 percent of their income on a one-bedroom apartment, and 81 hours a week for a two-bedroom unit, according to a housing study released Wednesday morning.
The study, “Out Of Reach: The High Cost of Housing,” published by the National Low Income Housing Coalition, also reported Vermont has the nation’s sixth-largest gap between the average two-income renter wage and two-bedroom housing wage — a shortfall of $9.85 per hour.
The report said that Vermont has the 16th most expensive housing wage in the nation, and the eighth most expensive housing wage for rural areas.
According to the study, the average housing wage the money that a Vermont household would have to earn to spend 30 percent of its income on housing for the average fair market rent of $1,231 on a two-bedroom apartment is $23.68 per hour. That equates to $4,105 in monthly income, or $49,258 annually.
The average Vermont renter can afford $719 per month without stretching their budget beyond 30 percent of their income, the coalition said.
The average renter earns $13.83 an hour in Vermont, and 29 percent of the state’s households are renters, according to the study.
The figures were calculated before the impact of COVID-19 on the housing market, where prices have soared in Vermont over the past year.
“It is absolutely unacceptable to me that someone should have to work two jobs or pay over half their income to afford a decent place to live,” U.S. Sen. Bernie Sanders, I-Vt., said in a press release issued by the coalition. “We need more housing that everyday working Vermonters can afford.
“There is no question in my mind that housing is a basic human right ” Sanders said, adding that as chairman of the Senate Budget Committee, he’s working to invest “major new resources” into building and renovating affordable homes.
U.S. Sen. Patrick Leahy, D-Vt., and U.S Rep. Peter Welch, D-Vt., also pledged to work for affordable housing in Congress.
“Here in Vermont, housing is scarce, and too expensive for too many. Throughout the pandemic, I heard from Vermonters that when housing is out of reach, so are health, employment and education,” Leahy said.
“I appreciate Vermont’s housing advocates for their leadership and work in shining a light on this affordability gap,” Welch said. “As we make our way out of this pandemic, I will continue to advocate in Congress for increased investment in affordable housing programs to eliminate this gap for Vermont’s working families.”
According to the report, the findings point at continued difficulty for lower-income households in the United States affording housing, even before the COVID-19 pandemic plunged the country into an economic crisis.
“This year’s report shows the extent to which housing costs outpaced wages even before the economic crisis, and the situation many renters face today is even more challenging,” the report said. “COVID-19 was an economic catastrophe for many households, disproportionately people of color, precisely because so many already could not afford their homes.”
LOCAL DATA
In Bennington County, according to the study, the average rent for a fair market apartment is $940 monthly. To afford that, a household would need to earn $18.08 hourly, an income of $37,600. Minimum-wage earners would have to work 1.5 jobs to afford that unit.
That’s up from 2020, when the coalition reported a housing wage of $17.98 per hour for Bennington County.
Bennington County had 3,787 renter households between 2015 and 2019 — according to the report, 26 percent of all county households. With an estimated mean renter income of $13.33 hourly, the affordable rent works out to $699 monthly — a shortfall of $241 per month between the fair market apartment rent and what renters earn, according to the report.
In Windham County, the costs are slightly higher, according to the study. To afford the average two-bedroom fair market rent of $933, a household would need to earn $19.10 per hour, or $39,720 yearly. That works out to 1.6 minimum wage jobs to afford that two-bedroom unit.
That’s a slight decrease from a housing wage of $19.69 from last year’s study.
According to the study, Windham County had a higher percentage of renters between 2015 and 2019 — 6,201, or 33 percent of households. With an estimated mean renter income of $12.42 hourly, the affordable rent would be $646 monthly a gap of $287 per month between the fair market apartment rent and what renters earn.
Elizabeth Bridgewater, executive director of the Windham & Windsor housing trust, hadn’t seen the new report, but said its findings rang true with what her organization has seen in the local housing market.
“When you look at actual wages the picture gets even more dire,” Bridgewater said. “We might not have the most expensive housing, but the intersection of wages and [housing] cost is really difficult in Vermont.”
“I don’t think there is an easy answer. It just takes time,” Bridgewater said about the state’s response to its housing problems.
“On the production side, [building housing] in a way that’s affordable, what Vermont is investing in, it takes time,” she said. “The wage issue is the other side of the coin … that’s a bigger national problem in terms of wages and the wealth gap.”
Housing has been a policy focus in the past year, with the Scott administration and the Legislature agreeing to allocate $150 million in federal pandemic relief dollars to address the state’s housing crisis. That included funds to help bring out-of-code apartments back on line and assist first-time homebuyers.
But the soaring cost of real estate in Vermont, driven by newcomers drawn to the state’s enviable COVID safety record, has made buying and renting difficult. And last month, Scott vetoed a bill that would have established a rental unit registry and set statute for the apartment rehab and first-time homebuyer programs.
Bridgewater, whose agency had been running the rental rehab program with CARES Act funds, said she was surprised Scott vetoed the bill, S. 79. She hopes the administration will be able to use the funding to continue the program.
The state’s fair housing wages are highest in the Burlington-South Burlington metro area, at $31.31 per hour for a two-bedroom fair market apartment, with Washington County ($20.88) and Addison County ($20.35) second and third highest, respectively.
The 2021 National Housing Wage is $24.90 per hour for a modest two-bedroom rental home and $20.40 per hour for a modest one-bedroom rental home, according to the study. Rents are lowest in the Northeast Kingdom, but wages are also lower in those counties.
The same study found that the average U.S. renter’s hourly wage is $18.78. That’s $6.12 an hour less than the two-bedroom housing wage established in the study, and $1.62 less than the one-bedroom housing wage.
That means the average American renter must work 53 hours per week to afford a modest two-bedroom apartment.
Before the pandemic , according to the study, there were 37 affordable rental homes available for every 100 renter households with extremely low incomes in the U.S. That meant 85 percent of extremely low-income renters could not afford their rent, and 70 percent were pending more than half their incomes on housing, leading to sacrifices for other needs, such as food and medical care.
According to the study, extremely low-income hous
eholds account for just 25 percent of all renters, yet account for 72 percent of all severely housing cost-burdened renter households.
LOW WAGES, HIGH RENTS
The study ties the fair housing gap to low wages, especially for people of color.
According to the study, the Current Population Survey shows that between 1979 and 2019, inflation-adjusted hourly wages grew just 6.5 percent in the 10th percentile of wage earners, and 8.8 percent for median wage workers. Those wages fell for Black and Latino men, according to the report.
According to the report, 11 of the nation’s 20 largest occupations pay a lower median hourly wage than what workers need to afford a modest apartment at the national average fair market rent. That works out to 36 percent of the nation’s workforce, excluding farm workers, the study, said.
However, in recommending policy changes to address the affordability gap, the report focused on changes in the housing side of the equation, rather than higher wages.
“A stronger housing safety net is required to provide assistance to every household in need and to scale up automatically during crises, to prevent evictions and to reduce housing instability among the lowest-income renters who are already housing cost-burdened,” the report said.
“Addressing the roots of the housing affordability problem requires a sustained commitment to universal rental assistance for eligible households, investments in new affordable housing affordable to the lowest-income people, the preservation of the affordable rental homes that already exist, and the establishment of strong renter protections,” the report recommended.
