Is Affordable Housing Really Affordable?
According to the 2017 Hennepin County housing profile, housing remains a challenge even for workers who are fully employed. The median earnings for most in-demand and high growth entry-level jobs (food prep and serving, cashiers, retail sales and personal care aides) do not cover housing costs at an affordable level. Your definition of affordable housing may be way different from what Hennepin county’s definition is. According to Affordable Housing Online, the term means housing, whether it is a rental unit or owner-occupied, that is affordable at any income. The U.S government defines “affordable” housing costs as 30% of household income.
The only set qualification for affordability is income, and this is calculated by the government when they determine an area median income for each housing market. Residents are broken into groups based on the percentage of the area median income (AMI) they earn in a year. In Minneapolis, 30 percent of the AMI is categorized as extremely low income, 50 percent is very low income, and 80 percent is low income. These levels are also determined by household size.
For example: my household size is two, and let’s say for the sake of argument that I make 30 percent of the Area Median Income. From this you can determine that my income is $20,600, using this chart from the Met Council. Typically when you look for affordable housing the qualifications say that a household of one to four occupants would have to make roughly $37,000 to $50,000 per year in order to qualify. If your income exceeds that amount (figured as a percentage of the area median income), you won’t qualify for affordable housing based either on Section 42 or Section 8 housing guidelines.
Section 42 is a segment of the tax code that provides tax credits to investors who build affordable housing. These rents are lower than similar market rate units in the community. The owners have to keep those units affordable for a specified number of years. Section 8 is a rent subsidy given to lower income families in the form of housing choice vouchers for project-based units. With the Section 8 voucher the government will either pay a portion of the rent or all of it, based on the family’s income.
This issue is very important to me because I will graduate from college in May, and my next step is to find a job and an apartment. So far I haven’t been able to find any apartments in Minneapolis that are a decent price. There are a number of new luxury apartments that cost up to $1,500 for a one bedroom apartment. I am a Family Social Science major, and the average amount of money I can expect to make right out of college is about $35,000 per year. This translates to $16.83 per hour. If you work 80 hours per pay period, you make roughly $1,092 after taxes.
So how does this match up with the actual housing market in the Twin Cities? The units that I have seen have rents that start at $800 and up. The minimum monthly income a potential tenant needs to make ranges from $1,000 to $2,596 per month. Can you imagine bringing $35,000 home per year and not being able to rent a home that is classified as “affordable”? This forces parents to work two jobs just to cover the so-called affordable rent.
There are several organizations that help renters find affordable housing. The one I’ve used is Aeon. Most of the apartments on the Aeon website are in the $1,000 range just for a studio. We haven’t yet factored in groceries, transportation, clothing and daycare expenses. I’m not sure if this is something to uplift people or to bring them down more.
The worst part of it all? In order to qualify for affordable housing you have to get on a list (which is mostly for Section 8 housing). This waiting list is very long, and as of now the wait to get an apartment is 10 years.
But hey, let’s not be discouraged just yet! There are organizations out there trying to combat this issue within our community. One such organization is Beacon Interfaith Housing Collaborative. They partner with congregations to build affordable housing for youth and working families. They have a project right now to build affordable housing for working families in Plymouth called Cranberry Ridge. Unfortunately, they have to deal with neighbors opposing the idea. I honestly don’t understand why anyone would oppose housing for families. The proposed income range for these families will be $20,000 to $45,000 a year in order to rent an apartment. Most families at Cranberry Ridge will pay $700 to $1,000 per month for their apartment depending on how many bedrooms. The rents are 20 to 25 percent lower than typical rents in Plymouth. Their monthly savings of $150 to $250 a month will give them enough money to pay for food, transportation etc. Ten of the units will be set aside for project-based Section 8, and those families will have lower rents. I think this is a great idea! The people who are opposing this development perhaps won’t understand why until it’s their children who have graduated from college and can’t afford housing.
To me, the best way to solve this solution is for city council members to see the real need for affordable housing in their cities, and not oppose these plans when they are brought forward. It’s not about setting an apartment’s income requirement at two to three times the rent. It’s about what the actual income will be after taxes. Not everyone is equally fortunate–do this so that affordable housing can actually be affordable.
This piece is part of a series written by college undergraduates enrolled in off-campus study programs through the Higher Education Consortium for Urban Affairs (HECUA). HECUA programs offer students a chance to think deeply about the issues that matter most, and we’d like to share a piece of that experience with you. Every student post on the HECUA Medium page considers a theory or reading that intersects with that student’s lived experience. For more information about HECUA programs, click here.
