By ANNIE LOWREY
WASHINGTON — Violeta Torres cannot afford her apartment.
Ms. Torres, a 54-year-old nanny, pays $828 a month for a rundown one-bedroom that she keeps spotlessly clean, making the rent by letting an acquaintance sleep on a mattress in the living room for about $400 a month. But her one-bedroom happens to be in the booming neighborhood of Columbia Heights, where such an apartment, once renovated, would easily command twice the price.
As a result, her landlords have been trying to drive the tenants out of the building, she explained in Spanish. The broken fire alarms go off in the middle of the night. The common areas are filthy, and the apartments have been infested by rats, bedbugs and cockroaches.
And in March, she said, the landlords raised the rent. She has simply ignored the additional $261 a month they have demanded, she said, as have her neighbors, most of them also immigrants from El Salvador.
“I don’t have the money,” Ms. Torres said.
She struggles to stay and cannot afford to leave. She makes about $1,000 a month caring for two toddlers. She sends $250 to her mother, who recently emerged from a diabetic coma and needs insulin. And $100 goes to her mother’s caretaker. After rent, that leaves just $200 or $250 for her.
Today, hundreds of thousands of households are caught in a similar trap, with the collapse of the housing boom helping stoke a severe shortage of affordable rental apartments. Demand for rental units has surged, with credit standards tight and many families unable to scrape together enough for a down payment for buying a home. At the same time, supply has declined, with homebuilders and landlords often targeting the upper end of the market.
“We are in the midst of the worst rental affordability crisis that this country has known,” Shaun Donovan, the secretary of housing and urban development, said at a conference on Monday.
And the less income a household has, the harder the sting. “These are the people with the fewest financial resources,” said Sheila Crowley, the president of the National Low Income Housing Coalition, a research and advocacy group based in Washington. “These are the people in danger of becoming homeless.”
The problem is national, and particularly acute among the working poor. The number of renters with very low incomes – less than 30 percent of the local median income, or about $19,000 nationally – surged by 3 million to 11.8 million between 2001 and 2011, according to a report released Monday by the Joint Center for Housing Studies at Harvard. But the number of affordable rentals available to those households held steady at about 7 million. And by 2011, about 2.6 million of those rentals were occupied by higher-income households.
That has left millions of families living in substandard housing, or housing they cannot afford. The share of renters paying more than 30 percent of their income for housing jumped to 50 percent in 2010 from 38 percent in 2000. For renters with incomes of less than $15,000 a year, 83 percent pay more than 30 percent of their income in rent.
Many of the worst shortages are in major cities with healthy local economies, like Seattle, San Francisco, New York and Washington. “We’ve seen a huge loss of affordable housing stock,” said Jenny Reed, the policy director at the D.C. Fiscal Policy Institute. “We have lost 50 percent of our low-cost units over the past 10 years, and at the same time, the number of high-cost apartments, the ones going for more than $1,500 a month, more than tripled.”
The squeeze comes both from supply and demand. Even as the housing market has started to turn around, the number of renting households has continued to climb -- by a million in 2011 alone, the biggest annual increase in three decades. Many Americans have lost their mortgaged homes and chosen to rent. Others were unable to obtain financing for a purchase, because of a loss of income or tighter credit standards.
In many markets, investors have rushed to meet the new demand by building new multifamily housing units or by buying up foreclosed homes and renting them out. But that has not translated into a surge of new units available to low-income renters.
“Builders always are aiming at that higher end,” said Jed Kolko, the chief economist at Trulia. “And eventually, as those new units age, they trickle down to lower-income borrowers.”
But not now. With demand surging, inventories are shrinking, vacancy rates are falling and rents are rising at the low end.
The long-term federal budget cuts known as sequestration are only adding to the problem, hitting housing programs especially hard. Many local housing authorities, which rely on federal funds, have stopped rolling over vouchers, leaving even more families on waiting lists, to fend for themselves in rental markets where prices keep rising.
“I can’t emphasize enough how draconian these cuts have been on the backs of the poorest folks in the country,” said Sunia Zaterman of the Council of Large Public Housing Authorities.
In some cases, the shortage of affordable rentals for the poor has meant an increased number of homeless people and families. That often means churning through housing options, spending a few days with friends, a few weeks with relatives, a few months in short-term rentals.
More often, housing advocates said, it means workers living in aging and often substandard housing, like Ms. Torres’ crowded apartment. The Latino Economic Development Center, which is helping Ms. Torres and her neighbors fight the rent increase, said it had heard increased complaints about mold, flooding, delayed maintenance repairs and other issues from low-income rentals.
It also means hundreds of thousands of poor Americans are paying far more for housing than they can really afford, squeezing out spending on other priorities. The Harvard study found that many low-income renters cut back most on food and transportation.
“If you’re putting 60, 70, 80 percent of a small income into housing, then obviously you have less to spend on everything else you need,” said Ms. Crowley of the National Low Income Housing Coalition. “There’s a squeeze on basic necessities. You end up making very hard choices. Am I going to fill a prescription, or do my kids get a birthday cake? Do I give up my car?”
To help with her housing costs, Ms. Torres has considered taking on a third roommate, and is eagerly searching for a second job.
Washington, like many other cities, has tried to tackle the problems with local government funds and regulations intended to protect low-income renters against eviction or undue rental increases. Recently, Mayor Vincent C. Gray announced a new $100 million campaign to increase affordable housing in the city.
Even more ambitiously, Bill de Blasio, the incoming mayor of New York, has put forward a plan to build or preserve about 200,000 affordable units.
But housing advocates described such campaigns as too little, too late, given the powerful economic forces at work and the cutbacks at the federal level.
“Are these cities going to be places that poor people can live?” asked Elizabeth Falcon, the campaign organizer for the Coalition for Nonprofit Housing and Economic Development, a local housing advocacy group.
“I think government investment is the only way that significant numbers of people are going to able to stay,” she said. “And right now we are not seeing government at any level commit enough to help a significant number of people.”
Monday, December 9, 2013
U.S: The Poor Are Squeezed as Rental Housing Demand Soars
By ANNIE LOWREY
WASHINGTON — Violeta Torres cannot afford her apartment.
Ms. Torres, a 54-year-old nanny, pays $828 a month for a rundown one-bedroom that she keeps spotlessly clean, making the rent by letting an acquaintance sleep on a mattress in the living room for about $400 a month. But her one-bedroom happens to be in the booming neighborhood of Columbia Heights, where such an apartment, once renovated, would easily command twice the price.
As a result, her landlords have been trying to drive the tenants out of the building, she explained in Spanish. The broken fire alarms go off in the middle of the night. The common areas are filthy, and the apartments have been infested by rats, bedbugs and cockroaches.
And in March, she said, the landlords raised the rent. She has simply ignored the additional $261 a month they have demanded, she said, as have her neighbors, most of them also immigrants from El Salvador.
“I don’t have the money,” Ms. Torres said.
She struggles to stay and cannot afford to leave. She makes about $1,000 a month caring for two toddlers. She sends $250 to her mother, who recently emerged from a diabetic coma and needs insulin. And $100 goes to her mother’s caretaker. After rent, that leaves just $200 or $250 for her.
Today, hundreds of thousands of households are caught in a similar trap, with the collapse of the housing boom helping stoke a severe shortage of affordable rental apartments. Demand for rental units has surged, with credit standards tight and many families unable to scrape together enough for a down payment for buying a home. At the same time, supply has declined, with homebuilders and landlords often targeting the upper end of the market.
“We are in the midst of the worst rental affordability crisis that this country has known,” Shaun Donovan, the secretary of housing and urban development, said at a conference on Monday.
And the less income a household has, the harder the sting. “These are the people with the fewest financial resources,” said Sheila Crowley, the president of the National Low Income Housing Coalition, a research and advocacy group based in Washington. “These are the people in danger of becoming homeless.”
The problem is national, and particularly acute among the working poor. The number of renters with very low incomes – less than 30 percent of the local median income, or about $19,000 nationally – surged by 3 million to 11.8 million between 2001 and 2011, according to a report released Monday by the Joint Center for Housing Studies at Harvard. But the number of affordable rentals available to those households held steady at about 7 million. And by 2011, about 2.6 million of those rentals were occupied by higher-income households.
That has left millions of families living in substandard housing, or housing they cannot afford. The share of renters paying more than 30 percent of their income for housing jumped to 50 percent in 2010 from 38 percent in 2000. For renters with incomes of less than $15,000 a year, 83 percent pay more than 30 percent of their income in rent.
Many of the worst shortages are in major cities with healthy local economies, like Seattle, San Francisco, New York and Washington. “We’ve seen a huge loss of affordable housing stock,” said Jenny Reed, the policy director at the D.C. Fiscal Policy Institute. “We have lost 50 percent of our low-cost units over the past 10 years, and at the same time, the number of high-cost apartments, the ones going for more than $1,500 a month, more than tripled.”
The squeeze comes both from supply and demand. Even as the housing market has started to turn around, the number of renting households has continued to climb -- by a million in 2011 alone, the biggest annual increase in three decades. Many Americans have lost their mortgaged homes and chosen to rent. Others were unable to obtain financing for a purchase, because of a loss of income or tighter credit standards.
In many markets, investors have rushed to meet the new demand by building new multifamily housing units or by buying up foreclosed homes and renting them out. But that has not translated into a surge of new units available to low-income renters.
“Builders always are aiming at that higher end,” said Jed Kolko, the chief economist at Trulia. “And eventually, as those new units age, they trickle down to lower-income borrowers.”
But not now. With demand surging, inventories are shrinking, vacancy rates are falling and rents are rising at the low end.
The long-term federal budget cuts known as sequestration are only adding to the problem, hitting housing programs especially hard. Many local housing authorities, which rely on federal funds, have stopped rolling over vouchers, leaving even more families on waiting lists, to fend for themselves in rental markets where prices keep rising.
“I can’t emphasize enough how draconian these cuts have been on the backs of the poorest folks in the country,” said Sunia Zaterman of the Council of Large Public Housing Authorities.
In some cases, the shortage of affordable rentals for the poor has meant an increased number of homeless people and families. That often means churning through housing options, spending a few days with friends, a few weeks with relatives, a few months in short-term rentals.
More often, housing advocates said, it means workers living in aging and often substandard housing, like Ms. Torres’ crowded apartment. The Latino Economic Development Center, which is helping Ms. Torres and her neighbors fight the rent increase, said it had heard increased complaints about mold, flooding, delayed maintenance repairs and other issues from low-income rentals.
It also means hundreds of thousands of poor Americans are paying far more for housing than they can really afford, squeezing out spending on other priorities. The Harvard study found that many low-income renters cut back most on food and transportation.
“If you’re putting 60, 70, 80 percent of a small income into housing, then obviously you have less to spend on everything else you need,” said Ms. Crowley of the National Low Income Housing Coalition. “There’s a squeeze on basic necessities. You end up making very hard choices. Am I going to fill a prescription, or do my kids get a birthday cake? Do I give up my car?”
To help with her housing costs, Ms. Torres has considered taking on a third roommate, and is eagerly searching for a second job.
Washington, like many other cities, has tried to tackle the problems with local government funds and regulations intended to protect low-income renters against eviction or undue rental increases. Recently, Mayor Vincent C. Gray announced a new $100 million campaign to increase affordable housing in the city.
Even more ambitiously, Bill de Blasio, the incoming mayor of New York, has put forward a plan to build or preserve about 200,000 affordable units.
But housing advocates described such campaigns as too little, too late, given the powerful economic forces at work and the cutbacks at the federal level.
“Are these cities going to be places that poor people can live?” asked Elizabeth Falcon, the campaign organizer for the Coalition for Nonprofit Housing and Economic Development, a local housing advocacy group.
“I think government investment is the only way that significant numbers of people are going to able to stay,” she said. “And right now we are not seeing government at any level commit enough to help a significant number of people.”
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