Editor’s note: Jon Margolis is a columnist with VTDigger.org.
As it has in the past, but more so, last month’s release of the annual “Between a Rock and a Hard Place” report from the Vermont Housing Finance Agency got lots of attention.
The story about the report, along with accompanying graphs and photos, took up almost half the front page in the April 22 Burlington Free Press. The treatment in other media – print and electronic – was comparable.
The report painted a bleak picture. The typical Vermont worker, it noted, didn’t earn enough to rent most two-bedroom apartments. A median-price house, it found, was too expensive for a Vermont household earning the median income. At first glance, the report seemed to suggest that most Vermonters can’t afford a decent place to live.
But they can. Almost all Vermonters have sturdy shelter with indoor plumbing, running water and other modern conveniences. Almost 72 percent of these homes are owner-occupied. That’s almost five percentage points higher than the national average. The people of Vermont, neither the homeowners nor the 28 percent who rent houses or apartments, are not ill-housed.
Many of them, the report reveals, pay more than 30 percent of their household income for rent and utilities, generally considered too much. At the other extreme, one-third of homeowners pay no mortgage at all.
That last fact, from the U.S. Census Bureau, is not in the “Rock/Hard Place” document. Neither is the fact that affordable apartments are available. Check a local newspaper or go online. There are apartments for rent which most Vermonters could afford, even after adding the cost of utilities.
“Without a doubt you can find an apartment,” said the report’s author, VHFA Policy and Planning Manager Maura Collins. The way the report calculates median rent, she said, “40 percent of the units are going to be cheaper.
The report doesn’t make that clear. While it never does say that most Vermonters can’t afford a decent place to live, it clearly accentuates the negative. Otherwise, it would have a different title.
This does not mean it is worthless, or even incorrect. It does raise the possibility that it is an advocate’s brief, not an objective analysis, a suggestion its writer, Collins, did not reject outright.
“I hope not,” she said, asked whether the report is more advocacy than examination. “Frankly, if we’re overstating the alarm it’s not going to serve anyone well.”
But the report is the product of advocates, whose instinct is to advocate. If anyone acted out of character, it is less the housing advocates than the news organizations which accepted its findings as unbiased truths, not assertions to be scrutinized.
Scrutinized, they don’t all hold up.
For instance, the report — and the news stories about it — made much about that disparity between what the typical Vermont worker earns and how much a two-bedroom apartment costs. But as been noted by others (starting with University of Vermont economist Art Woolf on the Vermont Tiger website on April 22), workers don’t buy or rent homes. Households do, and most wage-earning households which have more than one person have more than one worker.
Apparently anticipating this point, the report notes that “62 percent of Vermont’s households had only one, or less than one full-time worker.”
True, but perhaps misleading. In 2009, according to the Census Bureau, there were 250,375 households in the state. More than 69,000 are one-person households. In almost 35,000 more, the head of household is over 65 and does not live alone (another 25,000 seniors do live alone, but they’re already part of that 69,000). The vast majority of these people are retired, as are the members of several thousand households headed by people who have retired in their late 50s and early 60s.
So in only 190,000 or so households (at most) does anybody want or need a job. In March, Vermont’s labor force numbered 364,500, strongly suggesting that a substantial majority of two (or more)-person households of working age had two earners. They could afford that two-bedroom apartment.
Besides, why is the two-bedroom apartment the standard? Most Vermont households — and an even larger majority of lower-income households — consist of one or two persons. Most of them don’t need two bedrooms. The report does not indicate how many Vermont households earn enough to afford a one-bedroom apartment without spending more than 30 percent of their income on housing, but obviously it’s more than the number who can afford two bedrooms.
Maura Collins agreed that it would be useful to know the cost of one-bedroom apartments. In using two-bedroom units as the standard, she said, the report was simply “following the trend of what usually gets quoted.” The computations in the report, she said, are “not our math. We stole it, with permission, from the National Low-income Housing Coalition. They always picked the two-bedroom figure as their headline number.”
It is on the Coalition’s methodology, for instance, that the report bases its estimate that Vermont’s median two-bedroom rental is “$990 a month, on average,” including utilities.
The Census Bureau’s estimate is $781. It’s a five-year average from 2005 through 2009, so is not precisely comparable, and according to a Bureau spokesman, it uses different measurements than does the Department of Housing and Urban Development. The Coalition uses HUD’s numbers.
So it’s impossible to say that the report’s estimate is too high. But it seems noteworthy that it supports its finding by citing the estimate of another advocacy group. That doesn’t make it wrong. It does raise questions, as would, for instance, a report by the Democratic Party that supported its assertions by citing an analysis from the AFL-CIO (or the Republicans and the Chamber of Commerce). At some point, somebody – a journalist, perhaps? — might long to see the contribution of a disinterested observer.
None of this is to suggest that the report does not demonstrate a major housing problem in Vermont, this one supported, not contradicted, by government figures. Simply put, too many low-income Vermonters pay far too much for shelter.
In fact, most of the 41,208 households with less than $35,000 a year in income spend more than 35 percent of that income on rent and utilities. That’s not only hard on the members of these households; it’s bad for the state’s economy. After paying their rent, these folks have little left for buying anything else.
(Perhaps their landlords have more, but right now, with lagging demand, the state and the country need more money in the hands of lower-income people, who spend almost everything they have).
The report highlights this problem, but then almost obscures it by spending two of its eight pages lamenting that “buying a home remains a stretch for many,” because lenders increasingly insist on a 20 percent down payment before approving a mortgage.
They do, and perhaps they should. One reason for the Great Recession was that too many borrowers allowed themselves to be talked into taking out bigger mortgages than they could afford. In the view of many economists, quite a few people are better off renting their home.
At any rate, judged by the report’s own figures, the house-buying situation in Vermont does not appear all that dire. A median priced house last year, the report said, “would require a median income of $58,000.”
Vermont’s median income in 2009, figured the Census Bureau, was $51,284, enough to buy many a house in the state. Perhaps that explains why, caught “Between a Rock and a Hard Place” though they may be, Vermonters are more likely to own their homes than are most Americans.
