Housing Bubble

Study finds essential occupations struggle to afford housing

May 05, 2003

Washington, DC – None of America’s elementary school teachers, police officers, licensed practical nurses, retail salespersons or janitors would qualify to purchase a median priced home based on median income, according to a compelling new study from the National Housing Conference (NHC) entitled Paycheck to Paycheck: Wages and the Cost of Housing in America. Compiled by NHC’s research affiliate the Center for Housing Policy, findings for the nation as a whole reveal that the median annual salaries for each of these five occupations fall short of the nearly $50,000 necessary to qualify for the median priced home of $156,000, with the earnings of licensed practical nurses, retail sales persons and janitors lagging by substantial margins. Of particular concern, families dependent solely on the salary of a janitor or retail salesperson pay in excess of what is considered affordable for a two-bedroom apartment in all of the 60 individual metropolitan areas studied.

While at the national level the data reveals that on average homeownership is out of reach for many working families, the 60 metropolitan area findings offer insight into concerns within specific communities. For example, the data show that families dependent on a police officer’s salary are priced out of almost half, or 28, of the 60 areas studied, while households dependent on one teacher’s salary alone cannot afford to buy a home in 32 localities. In addition, licensed practical nurses cannot afford to buy a home in all but three of the areas. Janitors and retail salespersons require more than double their salaries in many of the metropolitan areas, up to three times their salaries in expensive areas, and up to seven times their salaries in the most expensive areas.

On the rental side, the data also indicates that in all but two of the 60 metropolitan areas studied, both janitor’s and retail salesperson’s are unable to rent a one-bedroom apartment based on the accepted standard of 30 percent of their income. Although it is out of both choice and necessity that many working families have more than one wage earner to keep them from serious housing stress, in some of the hottest West Coast markets, as well as metropolitan areas as diverse as Boston, MA, Dallas, TX, Washington, DC, West Palm Beach, FL, and Middlesex, NJ, typical rents require more than 30 percent of two such salaries.

“While there is a growing understanding of the housing challenges we face as a nation, this new data prompts us to take an even closer look at the affordability concerns for working families, as well as the related social and financial implications for our communities,” said NHC Executive Director Conrad Egan. “We need to continue to develop policies at both the local and national level that recognize the challenges faced by police officers, firefighters, licensed practical nurses and others who provide vital services, yet they are unable to find affordable housing.”

Often affordable housing is a critical element of the future economic and social well-being of a community. For example, access to a suitable labor pool – one of the top three considerations in business location decisions – is hindered by the lack of affordable housing. A host of social problems can also occur where working families face a shortage of affordable housing. Family disruption, overcrowding and congestion degrade the quality of life in the community for all residents.

It is important to note that although the study focuses primarily on five selected occupations, the wages for other essential jobs, such as firefighters and security guards, are also outlined within this new study and demonstrate the broader effects of limited affordable housing nationwide. Details on the national and 60 individual metropolitan area data for this new study are available at www.nhc.org.

Source: National Housing Conference