[A] Vermonter making minimum wage would need to work 1.7 jobs to afford a one-bedroom rental home or apartment, according to a report released Wednesday.
The National Low Income Housing Coalition, which wrote the report, calculates an annual “housing wage” for each state based on how much a full-time worker would have to make per hour to afford a two-bedroom home at fair market value without spending more than 30 percent of their income on housing.
In no state in the country can a worker earning that state’s minimum wage afford a two-bedroom rental home, and in only 22 out of over 3,000 counties surveyed could a minimum wage worker afford to rent a one-bedroom apartment.
“Make no mistake: while the housing market may have recovered for many, we are nonetheless experiencing an affordable housing crisis, especially for low-income families,” Sen. Bernie Sanders wrote in the report’s preface.
Vermont has a housing wage of $22.40 — the 13th highest in the country. The state also has the fifth largest gap between the average hourly wage renters make, $12.85, and housing wage.
Erhard Mahnke, coordinator of the Vermont Affordable Housing Coalition, said that those statistics show that although unemployment in Vermont has decreased in the past few years, most of the jobs created have been “lower wage, service sector jobs.”
“We thrive on tourism, but those jobs don’t pay the way old style manufacturing jobs did, where you could earn $60,000 a year with a high school education,” said Mahnke.
Nationally, as the demand for rental housing has increased in the past decade, most rental housing being built is “geared largely toward the high end of the market, due to increasingly high development costs,” according to the report. Federal funding needs to be increased for affordable housing programs like the Housing Trust Fund, which issues block grants to states to to build or upgrade housing, and rental assistance is needed, the authors conclude.
“Rather than address the affordable housing crisis, the (Trump) administration’s proposed spending cuts for FY 2019 would, if enacted, lead to the largest reduction in affordable housing and community development in decades,” said the report.
Vermont should appropriate more state funds to affordable housing by increasing rent subsidies from the Agency of Human Services, according to Mahnke.
“People on fixed incomes can’t live anywhere in Vermont without rental subsidies or other forms of assistance,” said Mahnke. The report found that a Vermonter on Supplemental Social Security Income, for example, could only afford to pay $241 toward rent a month.
The county-by-county comparisons in Vermont show dramatic differences in rental costs around the state. In the Burlington-South Burlington area, the housing wage is $27.73, but that wage drops to $15.21 in Orleans County.
“The rapid increase in rent in our region is shocking,” said Chris Donnelly, communications director of the Champlain Housing Trust, which provides affordable rental housing and pathways to home ownership for residents of Chittenden, Franklin and Grand Isle County.
Chittenden County currently has a 1.7 percent vacancy rate. New units are expensive and occupied rapidly, according to Donnelly. He added that the high price of newer apartments can cause landlords to increase rents on older units to keep up.
Champlain Housing Trust will build 76 new apartments this summer in Burlington and 60 additional units in South Burlington later in the year thanks to a $37 million bond to VHCB, Donelly said.
Rents are lower in more economically depressed parts of the state like Rutland and the Northeast Kingdom, but available housing can have “serious health concerns” from lead paint and mold, according to Mahnke.
“Those rents cannot support the kinds of renovations that are needed for our older housing stock,” Mahnke said.
Vermont towns need to examine their zoning laws to ensure that multi-family dwellings can be built, Mahnke said, which provide “greater value for lower cost.” Often housing developments can run into “not in my backyard” opposition from residents, he said.
Increasing Vermont’s minimum wage would be way to help lower income workers afford rent, Mahnke said. However, the report’s authors cautioned against thinking that increasing minimum wage would be a “silver bullet solution.”
“Wages are a big part of the problem,” said Diane Yentel, president of the National Low Income Housing Coalition, on Wednesday in a press conference about the report. “But even in places where advocates have successfully achieved a minimum wage of upwards of $15 an hour, housing is still out of reach.”
