Posted on: Friday, April 29, 2005
Housing costs outpace wage increases
By Siobhan McDonough
Associated Press
WASHINGTON — The American dream of having a job and owning a tidy home is becoming a fantasy for more people.
Housing prices are outstripping wage increases in many areas, meaning more people are either spending above their means or living in dilapidated conditions, according to a pair of studies being released today by the Center for Housing Policy, a coalition pushing for more affordable housing.
It's generally accepted that a family should not spend more than 30 percent of its income on housing to ensure there is enough money for other necessities.
But in the last five years, the number of low- and middle-income working families paying more than half their income for housing has increased 76 percent.
In 2003, 4.2 million working families spent more than half their income on housing, up from 2.4 million in 1997.
Barbara Lipman, the research director for the center, said a full-time job doesn't guarantee families a decent, affordable place to live.
"The problem seems to be impervious to economic conditions because the number of working families in this situation has grown during the boom-boom '90s and early 2000s," she said.
One out of every eight families in the United States — or 14 million — had critical housing needs in 2003, defined as either paying more than half of income for housing or living in run-down quarters.
The center found homeowners now are more likely than renters to have critical housing needs — 55 percent of the 14 million are people who own their homes.
Meanwhile, the median-priced home in 2003 was $176,000, up more than 11 percent from 2001. During this time, national median salaries went up only 4 percent for licensed practical nurses (to $33,000), 3 percent for elementary schoolteachers ($43,000) and 7 percent for police officers $45,000).
For renters, the center found a worker needed to earn $15.21 an hour in 2003 to have a two-bedroom apartment that did not consume more than 30 percent of income.
