Renter incomes not keeping pace with housing costs

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August 8, 2014
By: Sarah McKenzie
Sarah McKenzie

A new report from the Minnesota Housing Partnership (MHP) shows that 50 percent of renters in Hennepin County spend more than 30 percent of their income on rent — an unaffordable level for many people.

More than a third of the county's residents are renters and have seen incomes drop by 18 percent while rents have risen by 3 percent since 2000, according to the MHP. 

The supply of affordable housing for the county's residents with the most modest incomes has shrunk to 34 units for every 100 renters.

On average, a two-bedroom apartment in the county costs $946 a month. The median household income for a renter in the county is $37,840, according to the MHP. At that income level, an affordable rent would be $849 a  month.

About a quarter of the county's renters and 11 percent of owners spend more than half of their income on housing.

The high housing costs mean many of the county's residents don't have enough money for other basic expenses like food and medicine. Saving for emergencies is also a hardship for many. 

Overall, the MHP's County Profiles show that paying for rent has become more of a hardship for people in 84 of the state's 87 counties since 2000. Statewide, homelessness has increased for seniors and children.

An estimated 14,000 people experienced homelessness on a given night in Minnesota in 2012. Of that group, 4,316 people were in Hennepin County, which included 1,623 children with their parents, 384 youth living on their own and 327 seniors. 

Minnesota's median rents have increased 6 percent while renter incomes have dropped 17 percent, according to the MHP. 

Earlier this summer the MHP released a report that showed most of the new housing construction across the state is for apartments priced too high for low-income Minnesotans. The vacancy rate for Twin Cities apartments renting for under $1,000 a month is around 2 percent. 

Chip Halbach, executive director of the Minnesota Housing Partnership, said: "Vulnerable seniors and children are, unfortunately, far from immune to homelessness. In the area of housing we have a responsibility to those who have built our communities, and to those who will create the communities in the future." 

The Legislature passed $100 million in state bonding for affordable housing during the recent session, which will be used to preserve federally subsidized housing, invest in neighborhoods hit by foreclosures and create new housing for the homeless. 

Leigh Rosenberg, MHP’s research and communications director, said the bonding is a “great boon to housing,” but more resources will be needed to increase access to affordable housing.

“Many counties would need to double, triple, or quadruple their entire supply of housing affordable and available to extremely low-income renters to meet the need that exists,” she said. “While the $100 million is an important investment, the need is quite vast. Ensuring that Minnesota renters can all access rental housing they can afford will certainly require additional resources.”