Posted on: Friday, July 23, 2004

Income not keeping up with cost of housing

By Genro C. Armas
Associated Press

WASHINGTON — Pay raises for many low- and moderate-income jobs generally aren't keeping up with soaring housing costs, with workers like janitors and sales clerks most often feeling the pinch, said a study by an affordable housing coalition.

In 2003, sales clerks and janitors earned just more than $18,000 a year, 3 percent higher than in 2001, not accounting for inflation, the report from the Center for Housing Policy said. The median monthly rent for a two-bedroom apartment in 2003 was $791, up 10 percent from $721.

Generally, housing is considered affordable if a family pays no more than 30 percent of its income. The study of 136 of the nation's largest housing markets found that in only 25 markets did both janitors and clerks make enough money to comfortably afford the rent if their families were relying on only one income.

Elementary school teachers, police officers and nurses typically won't have the same problem when renting, although they do encounter similar affordability problems when buying homes, the study found.

It found a median salary for nurses of almost $33,000 a year, up about 4 percent. Elementary school teachers made about $42,000 a year, up roughly 3 percent, and police officers $44,000, up almost 7 percent.

The median home price in 2003 was $170,000, up 9 percent from 2001. The change might be understated, however, because the 2003 figure covered existing homes, while the 2001 figure covered existing and new homes.

In 48 markets, including Boston and Seattle, families who relied only on the income of someone working in any of the five fields effectively were priced out of the market.

"You would think that on the homeownership side that lower interest rates would make a difference, but it doesn't really because the level of home prices has increased dramatically," said Barbara Lipman, who studied the data for the center, the research affiliate of the National Housing Conference coalition.

Looked at another way, to afford a two-bedroom apartment, a family would need an hourly wage of $15.21. It's a mark that nurses, police and teachers meet, although sales clerks have an hourly wage of just $8.70 and janitors $8.85.