CommunityPam's House Blend

Question of the day – roof over your head

What percentage of your household income goes toward housing?

It’s quite apparent, from the folks I talk to around the country, that it’s all over the map, with the usual suspect cities completely out of control in terms of affordable housing (to rent or buy).

According to Habitat for Humanity, more than 13 million households pay more than 50 percent of their income for housing. The U.S. Department of Housing and Urban Development web site says that the generally accepted definition of affordability is for a household to pay no more than 30 percent of its annual income on housing.

In a place like NYC, it usually means that it’s mandatory to have a roommate if you don’t want to live in a hole or shoebox. Blenders out in Boston, SF and NYC will probably tell me that affordable housing these days means you live in a shoe box whether you have a roomie or not and you’re still paying more than 30% of your income.

The housing situation is a real crisis for the working poor, according to HUD:

An estimated 12 million renter and homeowner households now pay more then 50 percent of their annual incomes for housing, and a family with one full-time worker earning the minimum wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States.

In New York, it seems like an emergency to me; look at this article, Rising ‘Stabilized’ Rents Threaten New Yorkers’ Housing. It reports that the median monthly rental rate for a two-bedroom apartment in San Francisco is about $1,360, $940 in Boston and $760 in Chicago. Two thirds of New Yorkers live in rental housing, with the figure rising to 80 percent in Brooklyn, the Bronx and Manhattan, and 29 percent of New York City renters spend more 50% of their income on housing, up from about 25 percent in 2002.

For those of us outside the big cities, it’s better, though I can report that home prices here in the Triangle are starting to swell and something unheard of only a couple of years ago — bidding wars on homes going over the asking price — is not uncommon now. That’s nuts. I think this is being driven by all the people in more expensive markets cashing out and coming here with big bundles of money to buy twice the house for half the relative cost.

Kate drove by some new development in Cary that had houses starting in the $500Ks (these have to be McMansions). What?! That is outrageous, though Raleigh, Cary and Chapel Hill are way more expensive to buy in than Durham — by a lot. Mostly because the schools in the other areas have better reps. I remember several years ago when it was possible to buy a nice in-town bungalow for under $70K. No more. Since we bought long before the insanity began (and live in a modest place, not a huge McMansion), the percentage is actually quite favorable – 21%. Who can afford to heat and cool these places except the RTP exec programmer types.

A housing ratio calculator is here (renters can plug in your rent in the PITI field). Feel free to post as Anonymous in the comments if you wish.

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Pam Spaulding

Pam Spaulding